GoPro, Inc. (GPRO) CEO Nick Woodman Presents at JMP Securities Technology Conference (Transcript)

GoPro, Inc. (NASDAQ:GPRO) Conference Call Summary Company Overview - Company: GoPro, Inc. - Date: March 1, 2021 - Participants: Nick Woodman (CEO), Brian McGee (CFO, COO) Key Industry Insights - Transition to Direct-to-Consumer (DTC): The company accelerated its shift to a DTC model due to COVID-19, which allowed for reduced operating expenses and a focus on subscription offerings [4][6] - Subscription Growth: GoPro ended 2020 with approximately 760,000 subscribers, marking a 145% year-over-year increase and a 52% sequential increase. The goal is to reach about 1 million subscribers by Q2 2021 and approach 2 million by the end of 2021 [4][5] - Annual Recurring Revenue (ARR): With a target of 2 million subscribers, GoPro anticipates generating approximately $100 million in ARR, with gross profit margins above 70% and operating profit margins above 50% [5][6] Financial Performance and Projections - **Revenue Growth**: GoPro expects revenue to increase by 20% to 25% in 2021, driven by unit sales and an average selling price (ASP) growth of 5% to 10% [25][28] - **Unit Sales**: The company projects sell-through of approximately 3.6 million units in 2021, which is flat compared to 2020 [25][26] - **Operating Expenses**: Operating expenses are guided to be around$ 310 million for 2021, slightly up from $298 million in 2020, reflecting investments in innovation and direct-to-consumer strategies [30][34] - **Cash Position**: GoPro ended 2020 with about$ 328 million in cash and expects to generate free cash flow of $470 million to$ 500 million in 2021 [35] Strategic Initiatives - Customer Engagement: The subscription model enhances customer lifetime value and engagement, allowing for better communication and follow-on purchases [7][10] - New App Launch: GoPro is set to release a new app aimed at managing personal photos and videos, targeting users who do not own a GoPro camera. This app will offer a low-cost subscription service to help users organize their content [14][18] - Market Expansion: The new app is seen as a significant opportunity to expand the total addressable market (TAM) beyond traditional GoPro users [14][20] Additional Insights - Content Management: The new app aims to solve the content management problem for users, making it easier and more enjoyable to manage personal photos and videos [41][42] - Branding Opportunities: While there are discussions about potential branding opportunities in markets like automotive, the company remains focused on its core strengths and existing product lines [37][38] Conclusion - GoPro is strategically positioned for growth in 2021, with a strong focus on direct-to-consumer sales, subscription services, and innovative product offerings. The company is optimistic about its financial outlook and market opportunities, particularly with the upcoming app launch aimed at enhancing user engagement and expanding its customer base.