GPRO - Earnings call transcript Q3 2024

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Operator

Good afternoon. Thank you for attending today's GoPro Third Quarter 2024 Earnings Call. My name is Cameron, and I will be your moderator for today. [Operator Instructions] And I would now like to pass the conference over to your host, Christopher Clark, Vice President of Corporate Communications.

You may proceed.

Christopher Clark

Cameron. you, Thank welcome Call. and Third XXXX Quarter Good to Conference Earnings afternoon GoPro's With Woodman; CEO, COO, GoPro's me are today Nicholas Brian and McGee. and CFO by Today's will include commentary Nick, agenda brief followed from Q&A.

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

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

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

a actual change undertake that section a the result based update release assumptions A Investor than today events. Additionally, any as today. made September any these discussed forward-looking understand diluted and be profit issued GAAP in management other SEC, statements found XXXX. Today, XX, information of non-GAAP is afternoon, from report and on new our noted, uncertainties cause loss as statement-related on XX, To Unless was and to file filings and annual for non-GAAP on commentary year the to the that otherwise for as Exchange could differ ended statements XX-K risks Relations we and do website. posted numbers which any today, better obligation income this the recent at on all share are updated expenses and the we we December time, in margin, is Securities results quarter as to Form adjusted ended remarks the not This loss, future our refer to revenue, with are with reconciliation which on most accordance or are non-GAAP. Form can including and press could net of the per of XX-Q of EBITDA, results Commission operating operating that profit the basis. with GAAP discuss XXXX, means quarterly you that expense, report and our as and the on net in in basic may well commentary,

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

Nicholas Woodman

these overall basis, non-GAAP X% EPS and by of XXX-degree we to detailed positive sequentially. Despite Q&A. this our ARPU will our camera, Subscription $XX.X and a of previously and headwinds us was for And Chris, brief Thanks, continues thanks, subscriber delay $XX joining Investor call XX% of $XXX directionally Today, million, encourage million growth and million. breakeven of navigate improvement EBITDA today. driven guidance year results, global competition. and QX the management discretionary the QX, revenue and everybody, exceeded posted to we all primarily want going commentary before million, revenue to GoPro read service X%. Brian Relations with new spending, a mentioned on the be into on year-over-year I as to challenging $X GoPro I remarks to share impacting website. In was grew consumer growth a for macroeconomic

of not GoPro hard work, fosters for the of and from While others. companies and market consumers, competition profit innovation served as to the competition vibrant encourages seek fair a fair welcomes principles that are investment, it innovation by

enabled us a capture. This inventions, enable quality, variety. new being to culture in-camera innovation the culture build the pioneering consumer video IP. GoPro cost has and the of patent stabilization, our cameras, inventing and of we cameras, and that We defending categories ultra-wide-angle of XX leading-edge years, time, associated ways effort, and time new of in money or understand the protecting researching XXX-degree consistently into over its whether allowed will invested with for substantial our technologies recognized market-leading perspectives experts past litigate by and industry that's a and first depth, convenient has capturing interest to developing of portfolio in innovation have

portfolio cameras our U.S. protect and with goal IP, District protect the Again, Earlier welcomes inventions imaging is and technology. filed taking with action a competitors, being when is enforce the year, we when but related for committed one a believe are to to our assets Central in to Court California GoPro place lawsuit and will these patent Trade International we Our to of competition, GoPro infringed. our IP fair we this in it to our of to U.S. patents the and certain necessary. litigate protect complaint we the Commission against District digital

our in market to the is forms shared by catering new growing, interest imaging in digital beyond driven earnings, QX alternative capture we As growing consumers' consumer the of products phone.

participate positions and camera areas growth in are participate XXX-degree action us reduce cameras, our expenses earnings approach new and on We believe operating in these We more our call. cameras. the more. To significantly as position company XXXX to growth ourselves XXXX roadmap taken in aggressive market, growth what to below a seeing profitable a last types we've this other to in product shared of better beyond, and we

$XXX of I expenses a We XXXX. million, to targeting $XXX reduction clear. from want approximately are million now XXXX be operating of

not our way cutting profitability. are We to

believe in long-term operate more We manner be a improved will performance. focused strategic and to success that we approach and are our sustainable financial changing for leaner,

to products. roadmap going operating product since public, we our X pursuing drive We and while are lowest innovation, reducing a level September, believe before will differentiation, growth. In we new the expenses launched

enhance with loaded creative of lens potential. new suite and Our massively innovative flagship HEROXX a a performance, that mods is user's convenience includes leading-edge technology, that Black

then, but bringing $XXX, feel reach since strategy previous it camera, creators, May XXXX, HERO Sam's than as our entry-level to XXX margin go-forward an new XX,XXX. cameras. And GoPro. we challenges and In added importantly, X,XXX more footprint level doors tiny HERO we to camera. through only seekers, XK as approximately current most our consumers camera, entry-level is travelers, at adventure U.S. allows doors over global summary, doors strategy. looking product from expansion QX, We working offerings. In retail ground Priced we are we the more with our about launched the the not kids, approximately than important a also HERO products, for the also business families, on in has in gift our simplest, added for our doors to been execute serves newly for yield Expanding new this better continue And total announced making givers to our launches to affordable Clubs globally, and good lightest having designed ideal global retail our future the we X,XXX expand including foundation our us our up profit

XXXX differentiation, operating drive the reducing are while and lowest expenses since roadmap going level public, innovation, before pursuing a growth. We to believe will we product

as operate a leaner manner yield believe execution, GoPro to improved excited will are in better We and we efficiency, performance. it financial

I'll to Brian on outlook. pass and Now, some financials to share call the our details

Brian McGee

subscribers by year retention from Thanks, share year some rate, business growth, like highlights. up which Nick. in in subscribers across XX,XXX Premium+ to all X% cameras our over subscribers. XX%, and primarily X% over year attach aggregate our XX% was year Also XX%, X.XX prior service $XX.X I'd In line notable million, million, sold over from attach first and year growth to grew improving ARPU subscription QX, revenue to channels of as year to QX, Premium+ with driven X% well was rate year as rates. subscription including grew

a was $X $XX improvement. Third million million, quarter sequential positive EBITDA

as margin we gross the expected point of XXXX, is XXXX. a half For half outlined the have second in basis XXX be over XX%, year first year, of to improvement

Turning to the balance sheet.

cash expenses to by $XXX restructuring conducted of end million $XXX the reduce XXXX, from operating million expect year. be at We in million million to We recently to in down approximately $XXX XXXX. $XXX a the approximately

be over and lower We X% competition, XXXX, macroeconomic Street XXX-degree we a driven of XXXX, camera, XXXX. to expect the ahead in we than range by to units in to improvement and ASP Looking be $XXX headwinds, $XXX launch expect new a XXXX. anticipate XXXX, primarily in to our to of delay which revenue

XXXX. expect gross improve in range to to margin XX% We to XX% XX% XXXX a in from of

and of publicly headcount other the annual in reduction result spending, expenses and expenses and We of $XXX an of expect represents million projected $XXX million as represents This our lowest million operating taken XXXX. to operating XX% in a reduction $XXX a reductions XXXX expense becoming the between level before listed be from since company.

or business our spend model that enables addition, of expectation and annual we over us more for first will work XXXX. In challenges, we innovative approximately believe GoPro's serve yield level markets results. adjusting believe summary, nearly operating and diversified as In are revenue to million, down to and $XX year XX% year. GoPro's unit expense pursue to extend this of in is a improved roadmap level quarter we through We of XXXX in leadership restore financial we be efficient growth operating the our

are preserving where expect ourselves about for profitability questions. in importantly, take are our launch to to to now ready new Operator, excited while position XXXX. products cash We we XXXX debt, and repay we

Operator

[Operator the with Oppenheimer. is question of Instructions] from The first line Yang Martin

Martin Yang

of you first the My ideal litigation. investigation? consider What about as the do the outcome is question USITC

Nicholas Woodman

IP, States they that those to the our our sold can infringement is Martin. and validate by believe to sold longer that Hi, the that this into patents the market IP, say the infringed. United sell The in validity market. I and Thanks the of in any that recognize defend question, and would company that. is And would United no being are is our is are what outcome that able be products in litigation infringing, products for we the States being which ITC ideal that

Martin Yang

timeline for Is investigation expected to conclude? date the there any or

Nicholas Woodman

XXXX. in in general a expect, terms, We conclusion

Martin Yang

outlook. My next question the is on XXXX

If that to you And to would impactful? what XXXX do least the were over year retail impactful the you What outlined, would to number of be you that headwinds grown different be reduced have most reconcile you how the the doors the rank outlook? outlook? the

Brian McGee

get their saw out, a been probably in We're the top. significantly seeing market. as the Maybe We Nick, Martin. Europe down and, one can of biggest. the have camera quarter has China Europe. XXX market third in I'll is that to They're here stronger over little sliding a come finally new our was bit us, of having you the a by issues. for we start Macroeconomic followed U.S. in

a growing. market that's that's So

You Circana and see GfK. that across

need resume to So in the competition. there's product selling. get we course, and And market of that

order. into them the market. So out We I get got would to products put in that

Martin Yang

do erosion the do see happening camera action on Or more the My you for category? the final see category? share competition, camera, XXX-degree most the main camera you question of happening on

Brian McGee

you in. if start, to chime I'll Nick, want

Nicholas Woodman

biggest... the think I

Brian McGee

Go ahead. Sure.

Nicholas Woodman

you no, No, go ahead.

Brian McGee

a been is that one I'll growing think definitely you slightly. as Yes. action of capture why get alternative growth category need other we're reiterate, particularly Again, actually And to in the camera And product category. there's XXX, I we are market. would well, the that that's blogging. capture, back if -- growing seeing say a forms about it's in

So for into those are areas of us those markets. grow opportunity to

Nicholas Woodman

the of our Yes. the say in I XXX due new biggest camera. hit, delay launch would Martin, to the share of is

the We that X sell-through XXX retail it in camera. category we're that of it's we're competition, are now the that is XXX and biggest from don't seeing some be of about our we're camera, very the as share globally well. erosion network reconciliating obviously, launching say we But category macroeconomic, merchandising while coming really -- excited the it And that's action products impact, as though, new really or market, having growth we're our gone of with to camera out, presence. MAX us helpful. obviously that The not door out when fully have relates in challenges launched in the not I'd new and that facing, suite revenue then some HERO in-store XX,XXX-plus full the strong and not our exploiting all some doors

while going X new in XXXX. MAX that's hurting in something something believe XXXX us we of including that's in products that's to our So full out, when suite is help XXXX, us we get

benefit expect to So XX,XXX-plus not unfortunately, we the of full today, full in the realize realizing XXXX. doors the benefit we're but

more. of we to going a MAX to are So new new including positive number XXXX, camera and products that XXX there's factors doors, to count door that that our X, launch stronger continue those XX,XXX-plus will believe the fill to a of contribute grow,

So look quite we've no bit forward But a there's that denying a and a between of got to. yes, path to here bit there.

Operator

registered. [Operator questions any time. like management questions are currently additional no at conference There over no remarks. pass There this to would are closing I to Instructions] the team waiting the for

Nicholas Woodman

efficient, we've while that OpEx today, quite that and we're future. yield think OpEx confident much effective roadmap allow call XXXX strategic is to to innovation, imaging have sustainable, The remind Thank manner that in enable the in only joining and we challenges, product I'd everyone in that the you, operator. better GoPro like going execution help that us more $XXX not drive operate target to effort actually improve about more differentiation results, digital to going are participate a facing leaner, approximately reductions seeing for we're and it's in but we that we Well, business to million everybody. our made thanks excited is a to market. of we're to continue the the growth into financial the some to us

of of talent, traditional teams growing. in the a capabilities what to cameras, distribution in as It's that as types known subset development development And opportunity is over proliferation their of. helping of capabilities experiences The terrific are simply HERO as well camera. will go purposes to ways we we brand alternative of or convenient embedded of the forward cameras, GoPro's document for of years, what lives, personal And And either cameras opportunity is would is capture and careers, phone with enabler tech be our vehicles, just really develop a business their or consumers. product GoPro expertise, it's been the incredible as they of devices cameras into camera these brand of or and stack, it's the consider capture the to exploit that focused standalone uniquely a equipment people incredible us other an that professional, of capable product subset or capture, for business people, for cameras these and technology categories innovations while gear of market in that's we're the or that Our are cameras. or the growing positioned existing for traditional our been beyond are of incredible That be incredible that capable cases. Historically, growing. we've a company. our cameras and ways. enjoyment have now for beyond the we commercial engineering go phone, their at developed is ultimately, mentioned, and been our use over a capable what getting It's put patent front I portfolio the use all defending, we've going that of our new including, the what our And is a is greater for and brand subset of. subset are time, of and in

grow help that's a significant going really in exciting the ahead our organization looking process that of out opportunity believe on business. through of to are us. the forward we leaner, meaner us moved is getting in we're new challenges to We've execution So very and XXXX, XXXX as and really products executing efficiency focused for the

immediate So we've in the to a history, XXXX. business GoPro's really changes and made we're to while model changes in this putting efficient operating in in moment those that is looking a forward more the use challenging,

everybody, that, this for call. So off. And next GoPro with you the thank beginning is to looking joining of with forward you, today's then, signing our next at one until year. Team We're

Operator

rest the you and Quarter Third GoPro the concludes Earnings Thank enjoy of your participation for day. XXXX Call. That your

GoPro (GPRO) 7 Nov 242024 Q3 Earnings call transcript