Earnings call transcript Q2 2023

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Operator

Hello, and welcome to GoPro Second Quarter 2023 Earnings Conference Call. My name is Elliot, and I'll be coordinating your call today. [Operator Instructions]

I would now like to hand over to Christopher Clark, Vice President of Corporate Communications. The floor is yours, please go ahead.

Christopher Clark

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

Today's Brian, Nick commentary agenda Q&A. by and will include followed from

please commentary about GoPro's information website. section press XXXX our XXXX second For to read the the detailed QX management our our and of posted performance quarter and outlook, we release Relations earnings Investor

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

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

could statements Additionally, a and assumptions are time future of any change we made do on not results new to of based events. as at today statements any update these undertake any today. forward-looking or as information obligation result that This means

the differ December may report the reports cause XX-K Exchange risks which recent and could annual the and on that commentary, To file on we is other to XXXX, most Commission Securities you file ended year SEC. our that better from refer with for time-to-time the from and understand our uncertainties to XXst, Form results with actual we

on operating and per basis. loss non-GAAP Today, adjusted we with margin, share basic profit a net may in discuss and expense, and loss, profit GAAP as net diluted gross EBITDA, as and accordance well

of A issued in afternoon, on this operating Relations the posted reconciliation the press our can GAAP of which to that website. was non-GAAP section release expenses found is be Investor

remarks non-GAAP. today, the related numbers other management income than all commentary are that noted, are statement discussed otherwise revenue, in made and Unless

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

Nicholas Woodman

into the management share and thanks going posted QX on commentary to our read on our our the encourage commentary as will Brian website. us Chris I Investor detailed outlook well Today, I before all everyone on Q&A. want call Relations as performance Thanks and to today. joining for we

included we a on a Xth, serve May which and lower go-to-market our to strategy, consumers to post-pandemic emphasis return On retail channels better pre-pandemic announced pricing, an behavior. shopping updated renewed

report We're our this expectations. revenue a growth quarter and subscriber and on positive business our second impact exceeded to happy had that has

improved thus into retail channels. driven Our by QX, sell-through sustained has far our

Revenue X.XX of in to the as million, was the above lift cameras our opportunity. year-over-year our subscribers and expectations. the cannibalize a the HEROX did category priced It's Black not XX% higher quarter combined sequential Sell-through to HEROX $XXX was surpassing GoPro entry sales incremental our expanding XX% also enjoyed more million, entry of of XX%, priced a than grew $XXX and level importance $XXX level our TAM product important highlighting note products. that lift guidance.

restoring our QX pricing camera at pre-pandemic points of of the to reminder, a go-to-market the strategy subscription As related points, price lower key purchase camera discounts included GoPro.com. updated at and time discontinuing

and awareness pandemic Reintroducing distribution drive at entry volume and time. restoring retailers increasing drive spend and global presence growth, our levels cameras to our world-class scaling marketing best-in-class that sell-through, can meaningful level retail, over subscriber pre to to price by help

raised GoPro.com reduced the our retail from due a $XXX our focused of spend over pandemic, of camera to and two-year approximately on of COVID shops by globally, constraints. business driving our We significantly exited At period home. prices start we chain doors XX% to much consumers supply the marketing as and primarily

partners. and the team working retail distribution adding go-to-market With our for global our saw during ground updated reengaging This former and existing regions. pandemic, partners, new strategy, our uptick closely strategy at running, demand the enabled across limited worked hit growth to extremely all well in an post-pandemic. partners, immediate sales us we retail motivated highly yet with This

box grow best specialty to brand who drive of retailers our in larger is who enhance market span influential products. big and awareness with from our who our strategy to core and class the Our retailers, distributors spectrum retailers volume business mass

retailers of and high the distributors our as recognize is our our grow businesses the brand, line, strength they product amongst opportunity respected our and Enthusiasm together. to

the about excited at opened doors To-date, doors. we're XXXX. additional door which opening XXXX which growth X,XXX new EMEA, targeting We're new and in end pace total XXX was approximately pandemic count we're hit by with reductions. worldwide new and particularly the hardest doors EMEA XXXX the in we've in our by of nearly

displays. updated to addition with In doors, of presence purchase retail, at point we're new brand enhancing GoPro's

awareness growth are we greater in second half of marketing. investment revenue of To to GoPro in increasing our year, the support and drive this

the We are a meaningful way to pandemic. excite that amplify launch consumers collective partners It's throughout awareness, to great partnering be again reach retail aligning with the upcoming our holiday since with haven't once in do before leveraging our to able during season. our to key been and retailers we

decrease can same were period by An unit saw post found GoPro during and channels in America, sales unit contrast X% general the X% year-over-year shift total that retail Amazon Circana through includes and Day the camera our up merchandise North Amazon's with over GoPro.com sales discretionary X% momentum during Prime be both which indication July sales results down for year-over-year. sales Day our strategy spending Prime reported of period. GoPro's consumer

to be continues a highlight. Our business subscription

from As with increase. of at retail in mentioned, a ahead million XX% rate year second the app our ago. quarter, our XX% exceeded attach approximately expectations The X.XX subscribers, a cameras from closed XX% QX purchased via up year-over-year we

offering. attach well. shift exceeded see Attach rates as go-to-market in These our via cameras purchased our from our the GoPro.com subscription customers post subscription value rates confirm strategy XX%

subscribers we're will all that organize make content. easy excited GoPro to desktop an for to app it edit GoPro introduce In their and new QX,

new with to subscriber's provide convenient Our platforms. mobile across desktop experience sync app consistent app the cloud a will and and

be consumers we footage intend pursue expanding to a any will its premium also for want enjoy will the powerful digital level desktop app opportunity software a an imaging features to all camera, subscription relevance to charge. GoPro broader much access solution to aggressively additional from offering no import as and GoPro's There a time. audience, subscribers over at full of that

thank our employees execute again. a to time at level such to and time want who continued have I high

for a brand. our our are and passion such customers GoPro powerful Your make products what

also grateful and our And distribution retail want thank excited and for I we partnership. to and response are with for strategy partners We're to shift. brand you go-to-market their our grow positive our our to business

excited to opportunity GoPro's season. our represents experiential front phenomenal consumers in and more products channel this upcoming in way, retail a of holiday be brand and for couldn't we an get

QX share rest of the the year. outlook on some I'll for call Now, and hand our Brian over to the to color

Brian McGee

which revenue performance Stronger sell-through Thanks carry is purchase. than supply revenue combined at discounts larger expected to of in products level contributing GoPro.com, retailers as weeks a continuing quarter a off Nick. to softer guidance. guide, of a with over of over also than drop performance to expected of time camera entry subscription sales second contributed QX million related discontinuation is lower This QX contributing of $XX the at to

primarily are margin. As a customers flagship ASP in higher reminder, our GoPro cameras that and purchase

in and this with take increasing scaling purchase activations of it with growth retail collaborative in to are all doors the by longer accomplished which doors, GoPro.com number increasing seeing drop sales. growth anticipated going to brand refresh is retail point will display, sell-through, This marketing, presence significant the of retailers. we our than includes for offset be retail in While

Additionally, to ongoing product including sales We tactics have support initiative CRM, GoPro.com, dedicated conversion. bundle, on to marketing, and improve

down $XX $XXX, $XXX For million, plus be year-over-year. of revenue the X% quarter the year-over-year. ASP to X% in approximately expect down approximately XXXX, third or million third we of minus estimate to We deliver quarter

as sell-through shift increase expectation XXX,XXX and result Our is XX% move of will to price year-over-year our units. approximately a strategy associated unit

inventory quarter. there We during macro also pressures the the guidance flat second Our in will believe impact may that half. channel be be consumer spending macroeconomic assumes

XX% quarter at in in from from margin guidance, quarter, midpoint XX.X% second prior gross XXXX. the the down third quarter the expect XX.X% of the up of We but be year in to

in margin higher demand camera gross is primarily pricing price our margin point. reduced year-over-year to percentage decline lower entry-level related and camera at The

is we're that near-term level rates subscriber subscription impact. GoPro these and of in entry seeing offset and service which attach buyers margin growth to subscribers a pointing worth XX%, amongst helping revenue It's range XX% and to out camera drive

to million XX% subscribers the end third year-over-year. quarter the to expect growth or of by We grow X.X

share non GAAP expect We the midpoint QX per guidance. XXXX at income of net $X.XX of per share for

We our on outstanding shares XXX to million current stock approximately share repurchases based expect anticipated shares third be quarter. in quarter and in the price the

billion, X% expect down approximately XXXX. from For XXXX, $X.XX revenue we of

units guided as off drop is to primarily sold to camera the on of grow a sales discounts our the million X reduction X% to expect to of GoPro.com recent This moves. camera X.X units million a related larger fell result expected call unit units, due by approximately at through from year-over-year earnings discontinuation we to price of We time of due in which flagship our purchase. subscription at than approximately QX

While channel sell-through we it sales anticipated camera offset to the to decline longer is will in it expect than our at expected larger for of retail flagship grow, cameras than previously take Gopro.com. expected

XXXX, to previous of million on in expectation to while the earnings to units addition, factors above In a approximately this of down million call, in X.X units range of stated million push our X could XXXX. X.X sales million X.X our we shared

X.X our million in with subscribers. million to with of expect subscribers, to X.X We to previous end between XXXX million guide X.X X.XX million line

gross achieve price margin and be related drive of at to guidance reflects XXXX, volume. the in costs expect both required We protection lower pricing midpoint the lower at to retail XX% ASPs which to

to margin gross expect We sequentially each in quarter XXXX. improve

million development to impact and we have investments $XXX to expenses We increased in largely XXXX. expect which marketing, in operating XX%. be expect driven and research XXXX, nearly QX XXXX, in approximately into by an up and from

We expect midpoint the XXXX. non at GAAP approximately of for $X.XX EPS loss

in second of We million fourth EBITDA the $XX and in and approximately adjusted expect the be of XXXX. to profitable generate quarter third half

million, We with cash million repurchases. XXXX end includes to of $XX estimated an $XXX which share in expect

mix, strategic our Nick in of the to is and protection, already numbers albeit impact factors with summarize, due XXXX, shift other To the price discussed. I product some working, in and noise

strong to moving price $XX forward the our reap we change. with unburdened in full our XXXX shift, million XXXX protection and of nearly expense expect in strategic look We into when by year XXXX, associated of to benefit finishing price

range of continue units. retail expect X.X million XXXX improved we We X.X to to and million expect grow a as units sell-through to mentioned to above,

expect expand improve displays add We our globally of point additional presence. our to in-store to new rollout and of purchase to doors

retailers expand collaboration plan also to marketing We our drive to with sell-through. and awareness and

margin, all We beyond. level increase believe XXXX unit, substantially margin will camera, the with our profile and product profitability significantly entry revenue, improved new price with roadmap, in including a and aforementioned combined the XXXX

questions. to now take Operator, ready we are

Operator

[Operator Thank you. Instructions]

Martin a have We from question Oppenheimer. Yang with

Your open. is line

Martin Yang

new the about, of, key Thanks taking you're incentive the the Hi. for you your to users the Do GoPro new previous of ecosystem, camera know, are uses you new Can they sense in completely afternoon. maybe first cameras? question. previously to a those [Technical have Good price getting camera Difficulty] -- tiers, than years? -- my buyers from talk lower different you

Brian McGee

it. Nick know heard if Martin, don't I thanks.

that take where economy recognize and We on maybe the they going what's me mean, on, top macro the in, me. this I March, about I of can Let and we're come meet customer a the and back trying clearly to in talked level, are. Nick over with

by the and wallets more getting fact squeezed another shopping we're That cost in experiencing. that they're that are recognizing, also retail consumer inflation,

us, a the $XXX lot And driven price point so entry pre-pandemic. and level we've for historically, between And $XXX. of growth reinstituted that's

had but that's soft in it right, sales, in course, of a usually so revenue of QX. of We chain, COVID of it XX% because XXXX, which immediately or represents what generated, hit when and it supply

anywhere haven't us demand represent So, to can that's and TAM, an units been driver for experiencing nearly X new four units important, from we million for growth and of XXX,XXX years. that

on front. kind that business that's of So,

really price point a good value proposition. The incentive, think, is I getting in

in we're seeing seeing -- the attached somebody price XX% level. point subscription level to who's entry when XX% the flagship just at addition over buying In on at on we're on XX%

year able we where it -- see been it's that's to less still rate were but to and a an move where encouraging we've now ago, that's nearly really that's -- attach up. obviously, of So,

measure So, HERO of to the and our into the good And I number more see uploads as in I'll HEROXX, even uploads. we're they people of all the Black, we are download, buying of and The they much measured seeing highlight on subscribers the saw it's ecosystem, subscription, how kind on cloud happen than well system, guess that. into characteristics taking as that even the it of advantage they're tend to before. what cameras. same can total also be people we've behavior coming We

the that's encouraging do mirror, now characteristics really behavioral our product. level very sign in the So, actually, entry people that flagship of the

that's So, encouraging. I think

Nicholas Woodman

entry The would entry where level that higher just the historically primarily buying the is then even behavior introduction our primarily and of add is I how bulk -- at buy. trend levels GoPro retail shift. Those Yes. of sells purchasing through HEROX customers pre-pandemic and with done retail. that customers And priced GoPro.com lowering where matching products. and of prices through sold the pricing didn't our cameras of entry -- the to HEROX reintroduction our that were on level cameras, level introduction

messaging We're pricing level, entry the shift. introduction. And for didn't also introduction, -- marketing, so our

in reaction to just a interest something pricing. would buyer, So, it type to they're but that doing our was GoPro enough but catalyst market when was consumer or to attract natural buying market high nothing of buy. have that products, quick afford that desire end shows a to been purchase, It people budget, to better different can't that the a matches they're we were not we have sometimes, be confident it the and their but yet -- that

that believe have right that are waiting for, to we the that for our a said, So, it's showing with that consumers customer, for same but in the what excitingly, There point. there's the the them products. reaching of Brian is market ready right and we type product wings combination at in bigger price GoPro buy when for many in this

Martin Yang

seeing, new landscape view lower both view you the and on landscape, competitive performing have A a over you saw you you're term higher Got competitor it. a competitor more a question updated generation the and share can quick of new on cameras. Thank price your announcing much. Do on we price? you -- and -- smaller how tier recently, their second is computer overall are very

Nicholas Woodman

products seriously. always and really develop leadership so consumers can offer GoPro highest competition them good. then also really the We it had never that feel competitors we very We astounding take at our position. to and that performance drives passionately We've to our lose us a at we value

only really that also aware year. out product up of but we're little we And really, planned competitive existing have feel not with we what about stack for with and good how comes new bit our launch really, a we this products, later

-- competition best-in-class. for can -- can that on drives lightly. no, where GoPro what but, today and our don't us us front, really customers So, competition because thank is we all It's take we good our pushes our consume it be to

Martin Yang

Thanks Nick.

Nicholas Woodman

outlook I There your anything -- wouldn't on for based new Yes. out change factor come GoPro any that's in in competitively.

Martin Yang

Got you. it. Thank

Operator

Q&A. back now management remarks. the to concludes This our for team hand I'll closing

Nicholas Woodman

you team & presenting look This earnings is as our signing GoPro you, call. Communications for then, updating Technology upcoming call. you again Internet for next at for said and Annual and Between Thank launch joining now Conference be forward to and Oppenheimer we'll week. earlier, the I And thanks next today's season, XXth joining off. thank today's call, we're excited and we Elliot on holiday our everybody

Operator

concluded. gentlemen, now We'd for your and you to call today's thank Ladies like participation. is

disconnect You lines. may your now

GoPro (GPRO) 3 Aug 232023 Q2 Earnings call transcript