GoPro Announces Fourth Quarter And Full Year 2014 Results

Fourth Quarter Revenue of $634 Million Up 75% vs. Q4 2013; Full-Year Revenue of $1.4 Billion Up 41% vs. 2013

5.2 Million Capture Devices Shipped in 2014, Up 35% vs. 2013

Feb 05, 2015, 16:05 ET from GoPro, Inc.

SAN MATEO, Calif., Feb. 5, 2015 /PRNewswire/ -- GoPro, Inc. (NASDAQ: GPRO), maker of the world's most versatile camera and enabler of some of today's most immersive and engaging content, today announced financial results for its fourth quarter and full year ended December 31, 2014.

"We're feeling good. GoPro was one of the best-selling products this holiday, selling-in an average of 1,000 units per hour for the entire quarter," said GoPro Founder and CEO, Nicholas Woodman. "With this many new recruits to the GoPro movement, we're sure to see some incredible content in 2015."

Summary of Fourth Quarter 2014 GAAP Results:

  • Revenue of $633.9 million, compared to $361.5 million in the fourth quarter of 2013
  • Gross margin of 47.9%, compared to 41.9% in the fourth quarter of 2013
  • Operating income of $173.7 million, compared to $70.6 million in the fourth quarter of 2013
  • Net income attributable to common stockholders of $122.1 million or $0.83 per diluted share, compared to $33.3 million or $0.33 per diluted share in the fourth quarter of 2013
  • Cash, cash equivalents and marketable securities of $422.3 million, compared to $101.4 million at December 31, 2013

GoPro reports gross profit, operating expenses, operating income, net income and diluted net income per share in accordance with GAAP and additionally on a non-GAAP basis. Non-GAAP net income excludes, where applicable, the effect of stock-based compensation, amortization of acquired intangible assets and the tax impact of these excluded items. Additionally, GoPro reports non-GAAP adjusted EBITDA.  A reconciliation of preliminary GAAP financial measures to non-GAAP financial measures, as well as a description of items excluded in the calculation of non-GAAP financial measures including adjusted EBITDA, is presented in the financial statement portion of this release.

Summary of Fourth Quarter Non-GAAP Results:

  • Gross margin of 48.0%, compared to 42.0% in the fourth quarter of 2013
  • Operating income of $193.2 million, compared to $74.4 million in the fourth quarter of 2013
  • Adjusted EBITDA of $202.9, compared to $81.9 million in the fourth quarter of 2013
  • Net income of $144.9 million or $0.99 per diluted share, compared to $46.4 million or $0.33 per diluted share in the fourth quarter of 2013

Fourth Quarter, Full Year 2014 and Recent GoPro Highlights Include:

  • According to NPD data October through December, GoPro capture devices accounted for three of the top five products, including #1, by dollar share in the combined digital camera and camcorder category.
  • Internationally GoPro made significant progress in 2014, including establishing a European Sales and Marketing Headquarters in Munich, Germany, developing in-region product assembly in Brazil, and taking first steps into China by launching with the country's two largest online retailers, Tmall and JD, as well as other select retailers; in Q4 EMEA and APAC combined revenue grew approximately 70% year-over-year.
  • GoPro shipped 2.4 million capture devices in Q4 and 5.2 million in the full year 2014. GoPro capture devices shipped in Q4 2014 exceeded that of the full year 2012.
  • GoPro App downloads exceeded 2.8 million in Q4 bringing the life to date total to more than 13 million downloads; installs of GoPro Studio exceeded 1.5 million in Q4 with average daily exports of over 30,000.
  • Google reports more than 3.9 years of content was uploaded to YouTube in 2014 with GoPro in the title, 40% above of the 2.8 years posted in 2013.
  • For the full year 2014, videos published on GoPro's YouTube Channel were up 71%, views were up 84%, and video minutes watched were up more than 140% year-over-year.
  • GoPro released a firmware update enhancing HERO4 cameras with new features including Time Lapse Video, 30/6 Burst Photo and ultra high frame rates for slow-motion playback. 
  • Marriott Hotels launched a program at select Caribbean and Latin American resorts offering GoPro HERO4 cameras for guests to use during their stay and to share their experiences.
  • GoPro announced a partnership with Vislink to bring affordable live-broadcast capability to GoPro devices. The new technology was showcased in the NHL All Star Weekend – GoPro's first agreement with a Big 4 team sports league. Live Broadcast was also featured in ESPN's coverage of the Winter X Games.
  • GoPro announced an agreement with Roku to bring GoPro content to millions of viewers this spring; GoPro also launched the GoPro Channel App for LG Smart TVs.

Summary of 2014 GAAP Results:

  • Revenue of $1,394.2 million, compared to $985.7 million in 2013
  • Gross margin of 45.0%, compared to 36.7% in 2013
  • Operating income of $187.0 million, or 13.4% of revenue, an increase of $88.3 million year-over-year

Summary of 2014 Non-GAAP Results:

  • Gross margin of 45.1%, compared to 36.9% in 2013
  • Operating income of $259.6 million, or 18.6% of revenue, an increase of $148.9 million year-over-year
  • Adjusted EBITDA of $293.4 million, or 21.0% of revenue, up 119.4% year-over-year
  • Earnings per diluted share of $1.32, up 164.0% from 2013

Conference Call
GoPro management will host a conference call and live webcast for analysts and investors today at 2 p.m. Pacific Time (5 p.m. Eastern Time) to discuss the Company's financial results.

To listen to the live conference call, please dial toll free (800) 776-9057 or (913) 312-1393, access code 5030065, approximately 15 minutes prior to the start of the call. A live webcast of the conference call will be accessible on the "Events & Presentations" section of the Company's website at http://investor.gopro.com. To access the live webcast, please log in 15 minutes prior to the start of the call to download and install any necessary audio software. The webcast will be recorded and the recording will be available on GoPro's website, http://investor.gopro.com, approximately two hours after the call and for six months thereafter.

About GoPro, Inc. (NASDAQ: GPRO):
GoPro, Inc. is transforming the way consumers capture, manage, share and enjoy meaningful life experiences. We do this by enabling people to self-capture engaging, immersive photo and video content of themselves participating in their favorite activities. Our customers include some of the world's most active and passionate people. The quality and volume of their shared GoPro content, coupled with their enthusiasm for our brand, virally drives awareness and demand for our products.

What began as an idea to help athletes document themselves engaged in their sport has become a widely adopted solution for people to document themselves engaged in their interests, whatever they may be. From extreme to mainstream, professional to consumer, GoPro has enabled the world to capture and share its passions. And in doing so the world, in turn, is helping GoPro become one of the most exciting and aspirational companies of our time.

For more information, visit www.gopro.com or connect with GoPro on YouTube, Twitter, Facebook, Pinterest or LinkedIn.

GOPRO® and HERO® are trademarks or registered trademarks of GoPro Inc. in the United States and other countries.

Note on Forward-looking Statements
This press release may contain projections or other forward-looking statements regarding future events. These statements involve risks and uncertainties, and actual events or results may differ materially. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are the effects of the highly competitive market in which we operate; our dependence on sales of our capture devices for substantially all of our revenue; our reliance on third-party suppliers, some of which are sole-source suppliers, to provide components for our products; the fact that we do not expect to continue to grow in the future at the same rate as we have in the past, and profitability in recent periods might not be indicative of future performance;  difficulty in accurately predicting our future customer demand; the importance of maintaining the value and reputation of our brand; any inability to successfully manage frequent product introductions and transitions; the effects of international business uncertainties; our reliance on our Chief Executive Officer; and other factors detailed in the Risk Factors section of the final prospectus that we filed with the Securities and Exchange Commission in connection with our public offering.  These forward-looking statements speak only as of the date hereof or as of the date otherwise stated herein.  GoPro disclaims any obligation to update these forward-looking statements.



GoPro, Inc.


Preliminary Condensed Consolidated Statements of Operations


(in thousands, except per share amounts, unaudited)



















Three months ended




December 31, 2014


September 30, 2014


December 31, 2013











Revenue

$                  633,913


$                   279,971


$                  361,452



Cost of revenue

330,100


155,932


209,948



Gross profit

303,813


124,039


151,504



Operating expenses:








   Research and development

46,074


42,376


25,451



   Sales and marketing

61,226


48,109


45,620



   General and administrative

22,825


20,097


9,858



Total operating expenses

130,125


110,582


80,929



Operating income

173,688


13,457


70,575



Other expense, net

(1,115)


(1,784)


(2,224)



Income before income taxes

172,573


11,673


68,351



Income tax (benefit) expense 

50,313


(2,947)


24,622



Net income

$                  122,260


$                     14,620


$                    43,729











Less: Net income attributable to participating securities - basic

152


36


12,094



Less: Net income attributable to participating securities - diluted

132


35


10,389











Net income attributable to common stockholders - basic

$                  122,108


$                     14,584


$                    31,635



Net income attributable to common stockholders - diluted

$                  122,128


$                     14,585


$                    33,340











Net income per share attributable to common stockholders:








   Basic

$                        0.96


$                         0.12


$                        0.39



   Diluted

$                        0.83


$                         0.10


$                        0.33











Shares used in computing net income per share attributable to common stockholders:







   Basic

126,849


125,713


81,197



   Diluted

146,723


145,186


99,621










 


GoPro, Inc.


Preliminary Condensed Consolidated Statements of Operations


(in thousands, except per share amounts)













Year ended



December 31, 2014


December 31, 2013



(unaudited)









Revenue

$               1,394,205


$                  985,737


Cost of revenue

766,970


623,953


Gross profit

627,235


361,784


Operating expenses:





   Research and development

151,852


73,737


   Sales and marketing

194,377


157,771


   General and administrative

93,971


31,573


Total operating expenses

440,200


263,081


Operating income

187,035


98,703


Other expense, net

(6,060)


(7,374)


Income before income taxes

180,975


91,329


Income tax expense 

52,887


30,751


Net income

$                  128,088


$                    60,578







Less: Net income attributable to participating securities - basic

16,512


16,727


Less: Net income attributable to participating securities - diluted

14,235


14,418







Net income attributable to common stockholders - basic

$                  111,576


$                    43,851


Net income attributable to common stockholders - diluted

$                  113,853


$                    46,160







Net income per share attributable to common stockholders:





   Basic

$                        1.07


$                        0.54


   Diluted

$                        0.92


$                        0.47







Shares used in computing net income per share attributable to common stockholders:




   Basic

104,453


81,018


   Diluted

123,630


98,941






 



GoPro, Inc.

Preliminary Condensed Consolidated Balance Sheets

(in thousands)










December 31,


December 31,

2014


2013


(unaudited)



ASSETS




Current assets:




   Cash and cash equivalents

$        319,929


$        101,410

   Marketable securities

102,327


-

   Accounts receivable, net

183,992


122,669

   Inventories, net

153,026


111,994

   Prepaid expenses and other current assets 

63,769


21,967

      Total current assets

823,043


358,040

Property and equipment, net

41,556


32,111

Intangible assets and goodwill

17,032


17,365

Other long-term assets

36,060


32,155

      Total assets

$        917,691


$        439,671





LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)




Current liabilities:




   Accounts payable 

$        126,240


$        126,423

   Accrued liabilities

115,775


86,391

   Other current liabilities

16,754


27,483

   Current portion of long-term debt

-


60,297

      Total current liabilities

258,769


300,594

Long-term debt, less current portion

-


53,315

Other long-term liabilities

17,718


13,930

      Total liabilities

276,487


367,839





Redeemable convertible preferred stock

-


77,198

Total stockholders' equity (deficit)

641,204


(5,366)

      Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)

$        917,691


$        439,671





 


GoPro, Inc.

Preliminary Condensed Consolidated Statement of Cash Flows

(in thousands, unaudited)




























Three months ended


Year ended











December 31, 2014


December 31, 2013


December 31, 2014


December 31, 2013

















Operating activities:














Net income







$ 122,260


$   43,729


$ 128,088


$   60,578


Adjustments to reconcile net income to cash provided by operating activities:










Depreciation and amortization





5,176


3,526


17,945


12,034



Deferred taxes






(13,112)


(7,055)


(16,920)


(8,129)



Excess tax benefit from stock-based compensation



(53,542)


578


(77,134)


(323)



Stock-based compensation






19,256


3,540


71,399


10,887



Provision for doubtful accounts and inventory obsolescence


1,786


332


5,046


4,745



Other adjustments






257


230


1,865


1,224



Changes in assets and liabilities:















Accounts receivable






(89,989)


(66,579)


(62,294)


(43,117)




Inventories






(37,239)


(7,950)


(45,108)


(55,664)




Prepaid expenses and other assets




(4,475)


(270)


(30,317)


(15,355)




Accounts payable and accrued liabilities




87,029


110,003


98,354


135,197




Deferred revenue






5,783


2,246


5,998


400





Net cash provided by operating activities



$   43,190


$   82,330


$   96,922


$ 102,477



















Investing activities:














Purchases of property and equipment





(4,644)


(3,747)


(27,498)


(18,325)


Purchases of marketable securities, net of maturities




(102,744)


-


(102,744)


-


Proceeds from sale of property and equipment




-


-


288


-


Net cash used in acquisitions






(750)


(2,912)


(3,950)


(2,912)





Net cash used in investing activities


$(108,138)


$    (6,659)


$(133,904)


$  (21,237)



















Financing activities:














Net proceeds from issuance of common stock




97,429


327


301,577


527


Payment of debt issuance costs and deferred public offering costs


(1,283)


(139)


(5,730)


(1,165)


Repayments of debt, net of issuances




-


(21,500)


(114,000)


(16,000)


Excess tax benefit from stock-based compensation




53,542


(578)


77,134


323


Other financing activities






(2,560)


-


(3,480)


-





Net cash provided by (used in) financing activities

$ 147,128


$  (21,890)


$ 255,501


$  (16,315)





Net increase (decrease) in cash and cash equivalents

$   82,180


$   53,781


$ 218,519


$   64,925


Cash and cash equivalents:














Beginning of period






$ 237,749


$   47,629


$ 101,410


$   36,485


End of period







$ 319,929


$ 101,410


$ 319,929


$ 101,410

 

GoPro, Inc.

Reconciliation of Preliminary GAAP to Non-GAAP Financial Measures

(in thousands, except per share data, unaudited)














Three months ended


December 31, 2014


September 30, 2014


December 31, 2013







GAAP NET INCOME

$                  122,260


$                     14,620


$                    43,729

Stock-based compensation






      Cost of revenue

280


233


160

      Research and development

6,154


2,428


1,266

      Sales and marketing

4,135


3,225


1,593

      General and administrative

8,687


8,027


521

      Total stock-based compensation

19,256


13,913


3,540







Amortization of acquisition-related intangible assets






      Cost of revenue

221


223


222

      Research and development

43


20


16

      Sales and marketing

33


33


48

         Total amortization of acquisition-related intangible assets

297


276


286

Income tax adjustments

3,085


(10,850)


(1,194)

Non-GAAP NET INCOME 

$                  144,898


$                     17,959


$                    46,361













GAAP SHARES FOR DILUTED NET INCOME PER SHARE

146,723


145,186


99,621

    Add: preferred shares conversion

-


-


30,523

    Add: initial public offering shares

-


-


8,900

Non-GAAP SHARES FOR DILUTED NET INCOME PER SHARE

146,723


145,186


139,044







Non-GAAP diluted net income per share

$                        0.99


$                         0.12


$                        0.33













 



GoPro, Inc.

Reconciliation of Preliminary GAAP to Non-GAAP Financial Measures

(in thousands, except per share data, unaudited)










Year ended


December 31, 2014


December 31, 2013





GAAP NET INCOME 

$                  128,088


$                    60,578

Stock-based compensation




      Cost of revenue

835


690

      Research and development

11,640


3,003

      Sales and marketing

10,428


5,670

      General and administrative

48,496


1,524

Total stock-based compensation

71,399


10,887





Amortization of acquisition-related intangible assets




      Cost of revenue

888


888

      Research and development

103


29

      Sales and marketing

142


189

Total amortization of acquisition-related intangible assets

1,133


1,106

Income tax adjustments

(11,707)


(3,745)

Non-GAAP NET INCOME

$                  188,913


$                    68,826





GAAP SHARES FOR DILUTED EARNINGS PER SHARE

123,630


98,941

    Add: preferred shares conversion

15,136


30,523

    Add: initial public offering shares

4,414


8,900

Non-GAAP SHARES FOR DILUTED EARNINGS PER SHARE

143,180


138,364





Non-GAAP diluted net income per share

$                        1.32


$                        0.50





GoPro, Inc.
Reconciliation of Preliminary GAAP to Non-GAAP Financial Measures

To supplement our unaudited selected financial data presented on a basis consistent with Generally Accepted Accounting Principles, or GAAP, we disclose certain non-GAAP financial measures, including non-GAAP gross profit, operating expenses, operating income, net income, earnings per share and adjusted EBITDA. These non-GAAP measures are not in accordance with, nor serve as an alternative for GAAP. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our GAAP results of operations. These non-GAAP measures should only be viewed in conjunction with corresponding GAAP measures.

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our core operating performance on a period-to-period basis. The excluded items represent stock-based compensation and charges that are primarily driven by discrete events that we do not consider to be directly related to core operating performance. We use non-GAAP measures to evaluate the core operating performance of our business, for comparison with forecasts and strategic plans and for calculating return on investment. In addition, management's incentive compensation is determined using non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results reviewed by management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with our GAAP financials, provide useful information to investors by facilitating:

  • the comparability of our on-going operating results over the periods presented;
  • the ability to identify trends in our underlying business; and
  • the comparison of our operating results against analyst financial models and operating results of other public companies that supplement their GAAP results with non-GAAP financial measures.

The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:

  • Stock-based compensation expense relates to equity awards granted primarily to our workforce. We exclude stock-based compensation expense because we believe that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance. In particular, we note that companies calculate stock-based compensation expense for the variety of award types that they employ using different valuation methodologies and subjective assumptions. These non-cash charges are not factored into our internal evaluation of net income as we believe their inclusion would hinder our ability to assess core operational performance. We believe that excluding this expense provides greater visibility to the underlying performance of our business operations, facilitates comparison of our results with other periods, and may also facilitate comparison with the results of other companies in our industry.
  • Acquisition-related charges include the amortization of acquired intangible assets primarily consisting of acquired technology, customer relationships, tradenames and covenants not to compete related to our acquisitions. These charges are not factored into our evaluation of potential acquisitions, or of our performance after completion of acquisitions, because they are not related to our core operating performance, and the frequency and amount of such charges vary significantly based on the timing and magnitude of our acquisition transactions and the maturities of the businesses being acquired.
  • Adjustment for taxes relates to the tax effect of the adjustments that we incorporate into non-GAAP measures in order to provide a more meaningful measure of non-GAAP net income. We believe that these adjustments provide us with the ability to more clearly view trends in our core operating performance.
  • Adjustment to shares includes the conversion of the redeemable convertible preferred stock into shares of common stock as though the conversion had occurred at the beginning of the period and the initial public offering shares issued July 2014, as if they had been outstanding since the beginning of the period.

Reconciliations of non-GAAP financial measures are set forth below ($ in thousands):


Three months ended


December 31, 2014


September 30, 2014


December 31, 2013

GAAP gross profit

$                  303,813


$                  124,039


$                  151,504

  Stock-based compensation 

280


233


160

  Amortization of acquisition-related intangible assets 

221


223


222

Non-GAAP gross profit

$                  304,314


$                  124,495


$                  151,886







GAAP gross profit as a % of revenue

47.9%


44.3%


41.9%

  Stock-based compensation 

0.1%


0.1%


-

  Amortization of acquisition-related intangible assets 

-


0.1%


0.1%

Non-GAAP gross profit as a % of revenue

48.0%


44.5%


42.0%







GAAP operating expenses

$                  130,125


$                  110,582


$                    80,929

  Stock-based compensation 

(18,976)


(13,680)


(3,380)

  Amortization of acquisition-related intangible assets 

(76)


(53)


(64)

Non-GAAP operating expenses

$                  111,073


$                    96,849


$                    77,485







GAAP operating income

$                  173,688


$                    13,457


$                    70,575

  Stock-based compensation 

19,256


13,913


3,540

  Amortization of acquisition-related intangible assets 

297


276


286

Non-GAAP operating income

$                  193,241


$                    27,646


$                    74,401







GAAP operating income as a % of revenue

27.4%


4.8%


19.5%

  Stock-based compensation 

3.1%


5.0%


1.0%

  Amortization of acquisition-related intangible assets 

-


0.1%


0.1%

Non-GAAP operating income as a % of revenue

30.5%


9.9%


20.6%







Reconciliations of non-GAAP financial measures are set forth below ($ in thousands):


Year ended


December 31, 2014


December 31, 2013

GAAP gross profit

$                  627,235


$                  361,784

  Stock-based compensation 

835


690

  Amortization of acquisition-related intangible assets 

888


888

Non-GAAP gross profit

$                  628,958


$                  363,362





GAAP gross profit as a % of revenue

45.0%


36.7%

  Stock-based compensation 

-


0.1%

  Amortization of acquisition-related intangible assets 

0.1%


0.1%

Non-GAAP gross profit as a % of revenue

45.1%


36.9%





GAAP operating expenses

$                  440,200


$                  263,081

  Stock-based compensation 

(70,564)


(10,197)

  Amortization of acquisition-related intangible assets 

(245)


(218)

Non-GAAP operating expenses

$                  369,391


$                  252,666





GAAP operating income

$                  187,035


$                    98,703

  Stock-based compensation 

71,399


10,887

  Amortization of acquisition-related intangible assets 

1,133


1,106

Non-GAAP operating income

$                  259,567


$                  110,696





GAAP operating income as a % of revenue

13.4%


10.0%

  Stock-based compensation 

5.1%


1.1%

  Amortization of acquisition-related intangible assets 

0.1%


0.1%

Non-GAAP operating income as a % of revenue

18.6%


11.2%





Reconciliations of non-GAAP financial measures are set forth below ($ in thousands):











Three months ended



December 31, 2014


September 30, 2014


December 31, 2013

    GAAP net income


$                  122,260


$                     14,620


$                    43,729

    Income tax (benefit) expense


50,313


(2,947)


24,622

    Interest income and expense


1,029


1,284


1,889

    Depreciation and amortization


5,176


4,781


3,526

    POP display amortization


4,820


4,524


4,550

    Stock-based compensation


19,256


13,913


3,540

    Adjusted EBITDA


$                  202,854


$                     36,175


$                    81,856








 



Year ended



December 31, 2014


December 31, 2013

    GAAP net income


$                  128,088


$                    60,578

    Income tax expense


52,887


30,751

    Interest income and expense


5,038


6,018

    Depreciation and amortization


17,945


12,034

    POP display amortization


18,023


13,458

    Stock-based compensation


71,399


10,887

    Adjusted EBITDA


$                  293,380


$                  133,726






 

SOURCE GoPro, Inc.



RELATED LINKS

http://www.gopro.com