GPRO - Earnings call transcript Q2 2021

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Operator

Please stand by. Good day and welcome to GoPro's Q2 2021 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn things over to Mr. Christopher Clark, Vice President of Corporate Communications. ahead. go Please

Christopher Clark

Good quarter Operator. GoPro and to Brian welcome Nicholas Thank conference afternoon, call. second McGee. COO, and earnings and are With GoPro's Woodman, you, CFO everyone me CEO, today

include will Q&A. today for agenda a introduction followed from brief by Nick Our

information second quarter commentary read management out please performance about our detailed website. posted on and we the GoPro's For outlook Investor Relations

our statements. to Before I'd like that the everyone forward-looking include call Nick, remarks pass may I remind today to

are that to not facts statements risks and statements Forward-looking performance actual subject other guarantees not are and cause future materially. a historical of to may all are of differ results uncertainties, and which number

enhance forward-looking for XX, This time, and today, update outlook any the and on and could recent future from factors year and with as the We A any of non-GAAP on comparisons that or understanding can of to may information our assumptions We this basic GAAP and this operations. of we with our new concerning duration afternoon, reporting perform ongoing is investors any profit and made Commission not use performance. Form gross means issued website. on undertake manner change a Information Exchange of on as in at accordance December posted additionally related is be which not based as non-GAAP can We including in the events. file similar of as to available non-GAAP COVID-XX with we our time-to-time the to reconciliation our information because statements obligation the a well is on results GAAP that may non-GAAP XX-K to Additionally impact loss choose report discuss how of that business and loss share and in ended internally net we Today our expense, release on SEC. it is useful do these annual based XXXX enable a most to operating evaluate that basis. results per the operating reports to diluted economic is today's believe which operating net to result profit to available and as our We date. pandemic. operating results press was today provide Securities the of limited file manage risk analyze results. other statements information in in and our are and but to about commentary found information uncertainty own margin, the expenses

a replay a call, have conference unless All webcast live In as numbers are release and for slides of related the website addition to commentary, than well non-GAAP, and we posted metrics during the commentary to financial the that your reference. and otherwise call income discussed today on this are are Relations noted. GoPro revenue other second Investor management statement earnings slides, press data as quarter detailed of posted management and The XXXX. the containing today's for link

Nicholas I'll over call and Now, Founder turn the CEO, GoPro's to Woodman.

Nicholas Woodman

profits unit thanks retail its good and improved through GAAP also second profitable to and of on to with in find margins, both revenue operating year-over-year very GoPro million. QX substantial benefitted $XXX fourth relationships respectively, $X.XX the a $XX EPS businesses. a and We the non-GAAP quarter Direct-to-consumer grew which basis. on quarter subscription everyone. afternoon up our And continues Chris, increased Thanks, world X% as to drove GoPro.com basis increase sequentially. sell-through $XX profitable by revenue, increased XX% consecutive GoPro totaled strong quarter pandemic. million QX, the and and margins our from non-GAAP cash year-over-year the from and way second million, $X.XX, a direct-to-consumer XX% our Revenue in strong XX% up had improve year-over-year. expanding generating and was to

Our us XXX% exceed year-over-year. share XX% number it that the and the subscription as half subscribers, App to revenue And impress, Quik million this to subscriber grew X.XX report still of XXX% milestone GoPro same days, businesses year-over-year are and nearly the paying reach subscribers. GoPro of time with sequentially has subscribers while to early growing a subscribers, continue XXX,XXX in achieve took it's to excited we

our live feel flexible reflect champions the been Our strength the and their We've from of results strength continue seen culture desire embracing strategy, yield not of also employees and thrive life work ultimate the year-and-a-half. work our business last approach only to productive. able and to pursuit but by our a QX employees that results. people over they our we've supporting consistently to balance excited most the strong work of We're wherever

revenue our for As earnings better XXXX. we of outlook expected and a second half margin result momentum QX raising the our and are than

As be I Brian outlined a please sure our take Relations and visit questions. give at management Investor page our now it and to in commentary, will read. gopro.com

Operator

to Instructions] Morgan. JP you. Chung Thank [Operator And we'll Paul go first of

Paul Chung

taking great Thanks for questions my quarter. and Hi.

free flexibility, for So is to are XQ with your maybe year, since what this guide Brian added cash? and are for that intentions on like cash kind on of your it, your double reiterate flow looks XQ track

Nicholas Woodman

was Paul, about QX Yes, we had XXXX, thank much. cash in on some but year we're really last nicely earnings largely sheet excited and our position up really balance you management. very – earnings, good in Yes,

to same guide continue strength and balance QX earnings the We QX. sheet that our management, the but for do is in in and

perspective, of we're an with from our coming in cash given guidance. quality pleased earnings the the So very

and returns year post do balance – of on options XXXX. in the and up cash million the convertible to for I through then let's April then have think have sheet, possibly and We we XXXX. get this in $XXX repay shareholder

for other return. do at cash can have obviously We plenty options to shareholder of we and then look that, also

Paul Chung

million nice mix at so it. No, maybe to on to Got then you're X higher of cameras, out pretty kind working also that revenues, products is GoPro.com. nearly And with ASP, fewer and shift XXXX great, levels.

can you the maybe that you're on argue sales. mean, feeling I of still and – impact pandemic So kind

you wanted million normal? So question plus X really or this do a new to year, just is I you think hear your units per back can get of there? to is, kind that thoughts

Nicholas Woodman

XX% No, had guidance. I revenue XXXX and to I a don't kind think it's than more lot comparing a we even of what's – normal, know comparing in the you're shipped of new and but units XXXX, about our more much where

Our to that's of and more market high end make to money. operating higher, the the able We're we driving direct-to-consumer so been subscription. we've more profit product move line, clearly to is much where and our

ahead That's revenue As we It's plus would driving XX look to of about million margin. the be always not annual tonnage. XX business. the points what's about recurring $XX at

we drive today, any more I as operating we it's travel can on I units back. expand Now, in what think and and saying drive on the lost, expand look of our particularly ASP. that's it snaps we've opportunity deliver at for I we – for on help as we'll kind the we're leverage. semiconductors to XX got that's think in the them think travel we've and supply all. XXXX, margin, don't real revenue. to of to Again, that more said more that's revenue to And on the provided and particularly stay shortages. commentary And is We at as destination We you get back real our do can company. we can earnings, will in units have expand we've that OpEx comes and of And a the the international We're GoPro, a business improves, going company more believe do back, commentary until points controlling also unit milestone no to what's drive happened and then given quality with to outlet units. Clearly to

So we're that. excited about

bottom-line, driving improvements cash, it's shareholders. for Now driving and driving margin,

Paul Chung

Okay, then you really podcasting potential about and you Is verticals about Nick, And efforts? the how opportunity API there there. any leagues selling it and the we through other but great. see cameras on mentioned, that sports is do Thanks. think more API effort, lastly that that

Nicholas Woodman

relevance that strategically tools enables using offering, the just people, really It's seamlessly products their a the That's more easily used into and effect sound of comes more increasing GoPro thus that. versatility, to other Yes. offering service a the network from effort that other there's to obviously by – GoPro their utility, and important as we own own are product the because companies more reaching used a customers, a about utility. third-party our API integrate as the products camera wonderful are companies our and

wait represent from a growth what I of see. can terms and think In it that's perspective;

and gives and growth development because perceived it's the to in helps minimum; brand the fortifies some a our I reach be our as the better utility for position of businesses, a nice product leader fortifies it just opportunities. think – our market efforts products. scale it marketing and at of other breakout potential And always included efforts, it us

it's great still wait ways see, contribute, I in how terms mentioned, the the but that's terrific I've a that business. going contributing it's for and of, if that to it's even that's a So think thing, but only in

Paul Chung

Thank you. Great.

Operator

now And with to Martin move we Oppenheimer. will Yang

Martin Yang

you Nick, taking thank my Hi, Brian for and question.

raised major in year guidance, you for for you the words, later guidance? globally do recently guidance. or on risk question In account the shutdown extended First potential any how a your other do assume reopening

Brian McGee

its us of open a still I Hi, that's Domestic Martin and on We're particularly probably been have think to. Brian. for We've on the wait tailwind international benefiting markets and Yes. international that. open. destinations consistent that's travel, more, see company

a we're will participating. there, COVID, that more been more international think be not that's we're markets free assuming XXXX? duty that and for Is helps? an probably cruise think that's resurgence in from definitely not impact really I big ships, I GoPro And greater are

Martin Yang

how a I'm us adapt Maybe Yes, in this marketing new provide this any you product? release very unique environment, market another assuming definitely. different year, to if on to so you plan can looking way and a strategy? with the your to associated camera potential the when at, I context do And this you in current new macro is, will question macro-environment,

Brian McGee

What the can all is I and serve – people's them. they utility the can ways upon a the be GoPro share different that building we'll of that utility of understanding

and of a being GoPro storytelling them about value every that a what what people that usage in the is at traditional is streaming products greater webcam done for team is that more, use Our I ways – relative compelling of our and in a capabilities, for execution has need of year's all the lifestyle. needs addition active proposition previous makes and utility to more products an part outstanding versatile consumer improves to why their unique job consistently so has the believe year where today's the our

but same, us years, strategy that I the of quite confirm over relates past going more the been building upon well GoPro year. say products for will And product yes, it that to I'd new So there from be proven new has few can launches. this as

Martin Yang

Excellent. And your is regarding growing the question your around plan subscriber base. next

subscribers? How cohorts features do So to larger holiday of the the – there GoPro's Can to will renew in coming and additional are this plan their being value plan have you who think the talk plan season, to those a what subscription? to plan may what be are them renew now retain you present subscription. to added face into the to you about to maybe I whether your choice

Nicholas Woodman

then, first that of and want the take to part Brian? take you I'll it

Brian McGee

ahead. go no, No,

Nicholas Woodman

have date of that Where say they matters with to more subscription to to more our a to and continue their value proposition to new that team for we is doing goal in what are reducing on for attractive sweeten going I offering about to hitting was robust think do that continue of with clear. really them. of ongoing is comprehend to build understand are the and the upon churn roadmap we are that's annual It's just annual continually I'm in to roadmap the job positive because to we there and pot? And easy subscription value Kudos impressive While excited GoPro resulting that going consumers base, and momentum out of very where that momentum add margin research of – subscriber finally value engaging opportunities frankly a GoPro we're very future laid by terrific retention the I building with adding the there? same to rates GoPro; to time seeing. have. amongst at very the renewal subscribers that's engaging hiccups our to doing a are value getting very – Well, the

cohort that newer became results at the promising very showing this camera. say HEROX ongoing. behaving not is the respects, subscription is with are relative GoPro the point in cohort cohort for to that that the order purchase I so the new same very And And a subscriber should if of similarly, most that

quite expecting add want anything So And similarly you to to we're those cohorts to that? forward. behave going Brian,

Brian McGee

thing Actually – it's to having year-over-year. I one covered very our is our subscription XXX,XXX added more difficult business everyone think We've than think I mind just and subscribers growing it. strongly.

readout terrific guide. a Those over actually reminder, are to margin reasons And about imply our able in primary margin our And points of improve XXXX XXXX. will on guidance that. Our XX, as million X we're we're the that's results. making XX on one of subscribers outlook

XXXX. the of we as second look at So going then and into half XXXX,

fact doing? continue be cohorts that about we're we're how going? mentioned, strong. subscriber excited renewal rate How as And business the very annual for to our the So Nick

Martin Yang

the provide rates are? high for answer. detailed thank can you on Any renewal Well, you inside how very us

Nicholas Woodman

No.

We strong, say into the are can they're good. numbers, we they're get going but to not very

Martin Yang

so you Thank Great. much.

Operator

next from Research. And Todorov of come will Longbow our Nik question

Nik Todorov

Hey chain see guys, for been that, are units supply or congrats assuming facing you constraints, results. have quarter? sell-through sell-through follow-up third component on how do you can And a think strong unit you update as to XXXX? you us Brian, not the in would on

Brian McGee

Actually, definitely at we've make because shifted and right, while of don't I got of money. constraints – got don't some to we've we high-end where much just kind low-tier the the think mid-tier expense we've

in ballpark. is million maybe million the For going range; X.X net, the year through be tickets sell-through to X.X

we've metric had million you've we'll important in we inventories company units seen headwind less reduced real since beginning channel, So is now the of for nearly XXX,XXX which a because units, that's channel to been than really XXX,XXX. a XXXX, X.X now below the when continue, it's the

that of a us. becomes for more So tailwind

balanced. to have can drive down. that can So – more don't inventory we We channel be

approach out, end margin reflective we've and think too. it's taken that's So on the proving the understand I I business,

Operator

go to And now will of we Citigroup. Jim Suva

Jim Suva

and Nick you, Brian. Thank

First, in congratulations I such, to kind and it of here August truly and for a to the turning I on funny that. sincerely point company making we say mean in want Christmas. going then and really ask just and subscribers sit a such and subscriptions pivot question remarkable about It's reoccurring I'm

With in like Christmas and going in component I'm the shortages the comments, Brian season, in even think of wondering put you're I which lot can about prepared are the type mentioned just supply it I because designs it how this. seems before everywhere or need constraints ahead order within, things, in A feeling read mass, times a kind percolating of his for of beta to be economy mass production. you tested

important in you variable, supply thoughts is chain the this company? around and us now give which QX, of any thoughts newer into So coming kind around Christmas can your to the that's

Brian McGee

Hi, Jim, it’s Brian.

me that. Let take

a challenge, what remarks from this been ago about to year As just I were a very needed on and investor you're products problem. not have continuously done wherever we We've on a chain good said going us, forecasting prepared in has be, for we job got suppliers it's the that. supply got right, and

just earlier have We the make So call you've visibility management a us that's commentary outlined We forecast that That we from this then out but and the and we said had tremendously. really supply it's and chain supply. numbers still, to believe really our also that's helped there, [indiscernible] need perspective. got us year. for on probably helped

feel holiday good as and season. about we QX well So very QX as the

Jim Suva

it QX just average If price I read, for the be need end higher I more prepared you're right higher are to higher or I'm see absolutely I'm any compared which if possible that, then selling kind outlook And shifting right believe results. to $X about is in is comments increase we off? your bigger that your I as to the you to a that to allocations variables on just than $X there is guidance do. products, the could shifting follow-up; reminded wondering Okay. And quarter-over-quarter, some of QX end, thing mentioned a you're that more

Brian McGee

we plus there's were on in $XXX, at as of we a Anything's think kind think unit. possible. But a how about minus always be, ASP QX of reminder, and XXXX. first, I QX We look I

So in uptick million $XXX a this to QX. is ASP nice in

will in we're more in continue high up right? XX%, why outlined at guidance, higher reason the very continue our in $XXX with get to XX and to margin margin to into we QX, QX. helping We're Subscribers points than which to to able direct are consumer, growth front. expected is all the Another on we've grow margins into market products, point products as moving price greater ASP

So, we're bottom the in than subscription we business to is excited about and to margin transformed more and consumer as able direct off been what we've do paying line.

Jim Suva

for on you great execution. Thank transformation and congratulations again details, the and

Brian McGee

Jim. Thank you,

Nicholas Woodman

you, Thank Jim.

Operator

Erik And Woodring we will now of go Stanley. Morgan to

Erik Woodring

afternoon, quarter. wanted Good ask you to the another question the Quik months fresh I since guys. the Hey, launched app. been it's about and four obviously congrats App; on guess I

sources that active can there You monthly various there. through really growth data has been in see strong users

So kudos to guys. you

what that curious, users the with app, you trying the new partially in resemble engaging you this apple do. photo what that summer I with, and ask Just context to features coming features guys out of somewhat are see to

curious then keep them how quick kind the on of App users new users keep to follow-up. you're old just your have a App or Quik engaged? able Quik onto so, I move And the And the and

Nicholas Woodman

the development forward. consumer for we're where some strong research going and because that. engagement, towards of of gravitate App great area it you exciting An going with using, users, people an number the consumers improve, Quik across side where forth, can what the in now feedback about how that the running see until features it of are areas wild as true It's three sense is to are tremendous of with is to Thanks. able the get or the to and app retention to out others, prioritize where going is a they're of more we're innovate getting significant such we to the terms continue don't the time, meaningfully is to very definitely get two new of in cadence every App with and experience can sure, which the and what app for subscriber that's wild. rates. which to at use the We continue in want than updates for so board, of editing doing tests really way we and differentiate and see is to And but gauging aspect app, conversion quite to in now and we're us helping can ballpark you were evolve usability that the in Quik release into a users week a to that and impact terms

So of which going directly you can to from the evolve app over and I we coming our user see, any material see course think positive sure the a is feedback, the a in growth changes on going way. be how mean, have fun rate it's to going of you the to impact are very be subscriber rest much to year, is

Erik Woodring

about DXC follow-up you. of mix, question; maybe Thank trending and coming helpful. I around at revenue really DXC. the XX.X% That's my you're half year, Okay. of around just so first would guess be

XX% to You're to so diving XX%.

the curious vis-à-vis just camera second second confidence of the your channel gives half that year? much. Thank direct-to-consumer in go-to-market going maybe any selling I'm just you you so the year in mix be the to your you're do change And you to plan there. not that add-on So maybe flagship to the perhaps then at of the of would half strategies what partners? – increase

Brian McGee

higher. Brian. Yes, It's

new and Nick say less Let putting largely little did can second. XX% me a expect to QX channels XX% In onto that first part the take just products we for that's than XX% prepared right. the bit DXC while to the due maybe in internationally, the within into our add to year, the we remarks be,

XX% more a towards range mix. So a substantially QX is than end that then reminder, QX, QX. bit our the it's as a of And little QX and bigger being seasonality higher XX% or in of obviously even to

into x-factor on is end, shifting mix into the top that of higher that that comes helps. So an of kind us gets there's that it, range, which up if

Nicholas Woodman

in that the building distribution of strategy, then it way And of proven I is Yes. strategy, terms strategy. modification upon characterize a any we're go-to-market

success risks, last puts materially whereas quarter. no see little And – positive in and be opportunistic, was went was and think with contributed will the risks would that to This we any an it big that all that takes there'll terrific. opportunistic. fourth and our So the business. enormous here change are of no changes you associated amount year the the year to moves to any that is introduce But are

taking one-year and So the those. to strategy, there's and of being this benefit of opportunities excel, where learning improve advantage be into we'll

Erik Woodring

X.X. you. for Thank The to Awesome. curious, at changed I And approaching language, million any slightly your could on just but get sneak otherwise then language why the Thanks. from thoughts, change exceeding maybe there, one. congrats last again? just a year-end your thoughts to in just the in quarter X I'm if subscribers

Nicholas Woodman

very margin. the X milestone so that high million of end it's talking thing massive recurring QX revenue of – great. maybe the Thanks, been milestone. the growth We've sight, to Yes. exceed and We're means year in last And revenue, at it's think would is expect word, first and have key million expect important to million subscription exceed the and kind we so we've line an of XXX%, subscribers annual the having versus subscribers by new for about year, we of which surpassed about; better QX million, XX of halfway XXX,XXX year. through X.X That Eric. and have XXXX X start a subscribers I

into partly we bit about that, of little kind to on but through. both subscription, think XXXX, the to are be strong selling definitive a of where looking we the even for selling we're channels ahead the And be in on which are excited outlook, the and more in So also strength margin strong, maybe continues what and year? to continues mix of our

Erik Woodring

Awesome. Thank you That's guys. really helpful.

Operator

conclude today's session. And closing for like I over to back turn question-and-answer with the that that, remarks. would call to does management

Nicholas Woodman

Well, I everybody. Well, outstanding. that. muted. was is you sorry thank about QX

and Our excited delivering our people, big mean its way, together it are see products to powerful we're strategy and on for strategy and forward, coming potential in things. going a what can GoPro

you thank today's This for So everyone signing-off. joining GoPro call. team is

Operator

And again again everyone We would today's like that conclude participation. thank does your you for to call.

You disconnect. now may

GoPro (GPRO) 6 Aug 212021 Q2 Earnings call transcript