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Second Quarter Results Summary: |
|||||||||||
Three Months Ended |
|||||||||||
($ in thousands, except per share amounts) |
June 30, 2015 |
June 30, 2014 |
% Change |
||||||||
Revenue |
$ |
419,919 |
$ |
244,605 |
71.7 |
% |
|||||
Gross margin |
|||||||||||
GAAP |
46.3 |
% |
42.1 |
% |
420 bps |
||||||
Non-GAAP |
46.4 |
% |
42.2 |
% |
420 bps |
||||||
Operating income (loss) |
|||||||||||
GAAP |
$ |
46,138 |
$ |
(16,666 |
) |
376.8 |
% |
||||
Non-GAAP |
$ |
65,845 |
$ |
17,803 |
269.9 |
% |
|||||
Net income (loss) |
|||||||||||
GAAP |
$ |
35,031 |
$ |
(19,841 |
) |
276.6 |
% |
||||
Non-GAAP |
$ |
50,715 |
$ |
11,774 |
330.7 |
% |
|||||
Diluted net income (loss) per share |
|||||||||||
GAAP |
$ |
0.24 |
$ |
(0.24 |
) |
200.0 |
% |
||||
Non-GAAP |
$ |
0.35 |
$ |
0.08 |
337.5 |
% |
|||||
Adjusted EBITDA |
$ |
75,349 |
$ |
25,724 |
192.9 |
% |
• |
Launched HERO4 Session featuring simple one-button control and an exciting new form factor 50% smaller and 40% lighter than other HERO4 cameras. Innovative, water-proof design eliminates the need for a separate housing, reducing complexity and vastly improving audio performance. |
• |
Introduced HERO+ LCD, adding touch screen convenience, in-camera video trimming and Wi-Fi/Bluetooth integration to the entry-level camera line-up. |
• |
Released new accessories including the Ball Joint Buckle and Floaty for HERO4 Session and The Strap, The Jam, and Casey to enhance the versatility of GoPro products. |
• |
GoPro products are now sold in more than 40,000 stores worldwide, reflecting the addition of new retail customers, increased store counts with existing customers, and international expansion. |
• |
According to NPD, GoPro accounted for 4 of the top 5 products on a unit basis in the combined digital camera and camcorder category, in the US for Q2. In the same category, on a dollar basis, GoPro capture devices accounted for 3 of the top 5 products. GoPro was also the leader in accessory unit sales with 8 of the top 10 selling accessories. |
• |
Increased shipments of Point-of-Purchase (POP) displays by over 40%; linear feet of new POP displays increased over 75% for the first six months of 2015, year-over-year. |
• |
International sales totaled more than 50% of Q2 revenue; combined EMEA and APAC revenue was up 126% year-over-year. China is now a top ten revenue-generating country for GoPro. |
• |
Announced a GoPro-branded quad-copter to debut in the first half of 2016. Also announced a Six-Camera Spherical Array for shooting virtual reality and Odyssey, a 16-Camera Array unveiled in partnership with Google’s Jump initiative. |
• |
GoPro is the official camera of the Tour de France. GoPros are mounted on riders and their bikes, providing never-before-seen perspectives on the world’s most prestigious cycling race. |
• |
GoPro Motorrad Grand Prix of Deutschland viewed live by more than 9 million people across Europe; millions more viewed the broadcast in other countries. Each GoPro Course Preview video generated more than a half million views each. |
• |
The GoPro Mobile App was downloaded 2.5 million times in Q2, totaling over 18 million cumulative downloads; Q2 installs of GoPro Studio exceeded 1.7 million, up over 100% year-over-year.
|
• |
Unveiled GoPro Licensing, a content licensing portal that professionals can use to search, sort, and request a license to content from GoPro’s rapidly growing library. |
Three months ended |
Six months ended |
||||||||||||||
(in thousands, except per share data) |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 |
|||||||||||
Revenue |
$ |
419,919 |
$ |
244,605 |
$ |
783,028 |
$ |
480,321 |
|||||||
Cost of revenue |
225,579 |
141,736 |
424,955 |
280,938 |
|||||||||||
Gross profit |
194,340 |
102,869 |
358,073 |
199,383 |
|||||||||||
Operating expenses: |
|||||||||||||||
Research and development |
58,453 |
34,663 |
107,890 |
63,402 |
|||||||||||
Sales and marketing |
63,494 |
43,701 |
119,863 |
85,042 |
|||||||||||
General and administrative |
26,255 |
41,171 |
61,914 |
51,049 |
|||||||||||
Total operating expenses |
148,202 |
119,535 |
289,667 |
199,493 |
|||||||||||
Operating income (loss) |
46,138 |
(16,666 |
) |
68,406 |
(110 |
) |
|||||||||
Other income (expense), net |
122 |
(1,536 |
) |
(2,122 |
) |
(3,161 |
) |
||||||||
Income (loss) before income taxes |
46,260 |
(18,202 |
) |
66,284 |
(3,271 |
) |
|||||||||
Income tax expense |
11,229 |
1,639 |
14,501 |
5,521 |
|||||||||||
Net income (loss) |
$ |
35,031 |
$ |
(19,841 |
) |
$ |
51,783 |
$ |
(8,792 |
) |
|||||
Net income (loss) per share attributable to common stockholders: |
|||||||||||||||
Basic |
$ |
0.26 |
$ |
(0.24 |
) |
$ |
0.39 |
$ |
(0.11 |
) |
|||||
Diluted |
$ |
0.24 |
$ |
(0.24 |
) |
$ |
0.35 |
$ |
(0.11 |
) |
|||||
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: |
|||||||||||||||
Basic |
133,150 |
82,936 |
132,716 |
82,263 |
|||||||||||
Diluted |
146,781 |
82,936 |
147,720 |
82,263 |
(in thousands) |
June 30, 2015 |
December 31, 2014 |
|||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
338,031 |
$ |
319,929 |
|||
Marketable securities |
178,953 |
102,327 |
|||||
Accounts receivable, net |
118,551 |
183,992 |
|||||
Inventory |
219,272 |
153,026 |
|||||
Prepaid expenses and other current assets |
80,636 |
63,769 |
|||||
Total current assets |
935,443 |
823,043 |
|||||
Property and equipment, net |
52,252 |
41,556 |
|||||
Intangible assets and goodwill |
78,524 |
17,032 |
|||||
Other long-term assets |
45,313 |
36,060 |
|||||
Total assets |
$ |
1,111,532 |
$ |
917,691 |
|||
Liabilities and Stockholders' Equity |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
156,450 |
$ |
126,240 |
|||
Accrued liabilities |
133,442 |
115,775 |
|||||
Deferred revenue |
13,298 |
14,022 |
|||||
Income taxes payable |
4,691 |
2,732 |
|||||
Total current liabilities |
307,881 |
258,769 |
|||||
Other long-term liabilities |
20,678 |
17,718 |
|||||
Total liabilities |
328,559 |
276,487 |
|||||
Stockholders’ equity: |
|||||||
Common stock and additional paid-in capital |
622,986 |
533,000 |
|||||
Retained earnings |
159,987 |
108,204 |
|||||
Total stockholders’ equity |
782,973 |
641,204 |
|||||
Total liabilities and stockholders’ equity |
$ |
1,111,532 |
$ |
917,691 |
|||
Three months ended |
Six months ended |
||||||||||||||
(in thousands) |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 |
|||||||||||
Operating activities: |
|||||||||||||||
Net income (loss) |
$ |
35,031 |
$ |
(19,841 |
) |
$ |
51,783 |
$ |
(8,792 |
) |
|||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|||||||||||||||
Depreciation and amortization |
6,422 |
4,177 |
11,791 |
7,988 |
|||||||||||
Stock-based compensation |
18,189 |
34,193 |
44,690 |
38,230 |
|||||||||||
Foreign currency remeasurement and transaction losses |
(604 |
) |
— |
1,586 |
— |
||||||||||
Deferred taxes |
(5,066 |
) |
(469 |
) |
(6,656 |
) |
(799 |
) |
|||||||
Other |
731 |
51 |
1,370 |
298 |
|||||||||||
Changes in operating assets and liabilities: |
|||||||||||||||
Accounts receivable, net |
(12,122 |
) |
(1,920 |
) |
65,562 |
73,439 |
|||||||||
Inventory |
(55,028 |
) |
9,810 |
(66,045 |
) |
31,617 |
|||||||||
Prepaids and other assets |
(23,049 |
) |
(40,572 |
) |
(21,598 |
) |
(39,504 |
) |
|||||||
Accounts payable and other liabilities |
100,399 |
936 |
50,382 |
(96,106 |
) |
||||||||||
Deferred revenue |
971 |
(530 |
) |
(724 |
) |
378 |
|||||||||
Net cash provided by (used in) operating activities |
65,874 |
(14,165 |
) |
132,141 |
6,749 |
||||||||||
Investing activities: |
|||||||||||||||
Purchases of property and equipment |
(16,062 |
) |
(7,668 |
) |
(21,269 |
) |
(12,369 |
) |
|||||||
Purchases of marketable securities |
(32,958 |
) |
— |
(112,326 |
) |
— |
|||||||||
Sales and maturities of marketable securities |
21,943 |
— |
34,446 |
— |
|||||||||||
Acquisitions, net of cash acquired |
(52,606 |
) |
— |
(57,706 |
) |
(3,200 |
) |
||||||||
Net cash used in investing activities |
(79,683 |
) |
(7,668 |
) |
(156,855 |
) |
(15,569 |
) |
|||||||
Financing activities: |
|||||||||||||||
Proceeds from issuance of common stock, net of repurchases |
9,176 |
(13 |
) |
21,501 |
509 |
||||||||||
Taxes paid related to net share settlement of equity awards |
(3,041 |
) |
— |
(4,362 |
) |
— |
|||||||||
Excess tax benefit from stock-based compensation |
22,072 |
20,767 |
28,139 |
20,836 |
|||||||||||
Payment of deferred public offering and debt issuance costs |
— |
(2,257 |
) |
(903 |
) |
(3,056 |
) |
||||||||
Repayment of debt |
— |
(3,000 |
) |
— |
(6,000 |
) |
|||||||||
Net cash provided by financing activities |
28,207 |
15,497 |
44,375 |
12,289 |
|||||||||||
Effect of exchange rate changes on cash and cash equivalents |
468 |
— |
(1,559 |
) |
— |
||||||||||
Net increase (decrease) in cash and cash equivalents |
14,866 |
(6,336 |
) |
18,102 |
3,469 |
||||||||||
Cash and cash equivalents at beginning of period |
323,165 |
111,215 |
319,929 |
101,410 |
|||||||||||
Cash and cash equivalents at end of period |
$ |
338,031 |
$ |
104,879 |
$ |
338,031 |
$ |
104,879 |
|||||||
Three months ended |
Six months ended |
||||||||||||||
(in thousands, except per share data) |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 |
|||||||||||
GAAP net income (loss) |
$ |
35,031 |
$ |
(19,841 |
) |
$ |
51,783 |
$ |
(8,792 |
) |
|||||
Stock-based compensation: |
|||||||||||||||
Cost of revenue |
350 |
154 |
633 |
322 |
|||||||||||
Research and development |
3,710 |
1,657 |
7,245 |
3,058 |
|||||||||||
Sales and marketing |
2,932 |
1,654 |
5,998 |
3,068 |
|||||||||||
General and administrative |
11,197 |
30,728 |
30,814 |
31,782 |
|||||||||||
Total stock-based compensation |
18,189 |
34,193 |
44,690 |
38,230 |
|||||||||||
Acquisition-related costs: |
|||||||||||||||
Cost of revenue |
295 |
222 |
517 |
444 |
|||||||||||
Research and development |
612 |
20 |
699 |
40 |
|||||||||||
Sales and marketing |
33 |
34 |
66 |
76 |
|||||||||||
General and administrative |
578 |
— |
578 |
— |
|||||||||||
Total acquisition-related costs |
1,518 |
276 |
1,860 |
560 |
|||||||||||
Income tax adjustments |
(4,023 |
) |
(2,854 |
) |
(11,999 |
) |
(3,942 |
) |
|||||||
Non-GAAP net income |
$ |
50,715 |
$ |
11,774 |
$ |
86,334 |
$ |
26,056 |
|||||||
GAAP shares for diluted net income per share |
146,781 |
82,936 |
147,720 |
82,263 |
|||||||||||
Add: dilutive shares |
— |
17,345 |
— |
18,273 |
|||||||||||
Add: preferred shares conversion |
— |
30,523 |
— |
30,523 |
|||||||||||
Add: initial public offering shares |
— |
8,900 |
— |
8,900 |
|||||||||||
Non-GAAP shares for diluted net income per share |
146,781 |
139,704 |
147,720 |
139,959 |
|||||||||||
Non-GAAP diluted net income per share |
$ |
0.35 |
$ |
0.08 |
$ |
0.58 |
$ |
0.19 |
• |
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. |
• |
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 costs include the amortization of acquired intangible assets, primarily consisting of acquired developed technology, and third-party transaction costs incurred for legal and other professional services. These costs are not factored into our evaluation of potential acquisitions, or of our performance after completion of the acquisitions, because they are not related to our core operating performance, and the frequency and amount of such costs 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. |
Three months ended |
Six months ended |
||||||||||||||
(dollars in thousands) |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 |
|||||||||||
GAAP gross profit |
$ |
194,340 |
$ |
102,869 |
$ |
358,073 |
$ |
199,383 |
|||||||
Stock-based compensation |
350 |
154 |
633 |
322 |
|||||||||||
Acquisition-related costs |
295 |
222 |
517 |
444 |
|||||||||||
Non-GAAP gross profit |
$ |
194,985 |
$ |
103,245 |
$ |
359,223 |
$ |
200,149 |
|||||||
GAAP gross profit as a % of revenue |
46.3 |
% |
42.1 |
% |
45.7 |
% |
41.5 |
% |
|||||||
Stock-based compensation |
0.1 |
— |
0.1 |
0.1 |
|||||||||||
Acquisition-related costs |
— |
0.1 |
0.1 |
0.1 |
|||||||||||
Non-GAAP gross profit as a % of revenue |
46.4 |
% |
42.2 |
% |
45.9 |
% |
41.7 |
% |
|||||||
GAAP operating expenses |
$ |
148,202 |
$ |
119,535 |
$ |
289,667 |
$ |
199,493 |
|||||||
Stock-based compensation |
(17,839 |
) |
(34,039 |
) |
(44,057 |
) |
(37,908 |
) |
|||||||
Acquisition-related costs |
(1,223 |
) |
(54 |
) |
(1,343 |
) |
(116 |
) |
|||||||
Non-GAAP operating expenses |
$ |
129,140 |
$ |
85,442 |
$ |
244,267 |
$ |
161,469 |
|||||||
GAAP operating income (loss) |
$ |
46,138 |
$ |
(16,666 |
) |
$ |
68,406 |
$ |
(110 |
) |
|||||
Stock-based compensation |
18,189 |
34,193 |
44,690 |
38,230 |
|||||||||||
Acquisition-related costs |
1,518 |
276 |
1,860 |
560 |
|||||||||||
Non-GAAP operating income |
$ |
65,845 |
$ |
17,803 |
$ |
114,956 |
$ |
38,680 |
|||||||
GAAP operating income (loss) as a % of revenue |
11.0 |
% |
(6.8 |
)% |
8.7 |
% |
— |
% |
|||||||
Stock-based compensation |
4.3 |
14.0 |
5.7 |
8.0 |
|||||||||||
Acquisition-related costs |
0.4 |
0.1 |
0.3 |
0.1 |
|||||||||||
Non-GAAP operating income as a % of revenue |
15.7 |
% |
7.3 |
% |
14.7 |
% |
8.1 |
% |
|||||||
Three months ended |
Six months ended |
||||||||||||||
(in thousands) |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2014 |
|||||||||||
GAAP net income (loss) |
$ |
35,031 |
$ |
(19,841 |
) |
$ |
51,783 |
$ |
(8,792 |
) |
|||||
Income tax expense |
11,229 |
1,639 |
14,501 |
5,521 |
|||||||||||
Interest income and expense |
155 |
1,390 |
220 |
2,725 |
|||||||||||
Depreciation and amortization |
6,422 |
4,177 |
11,791 |
7,988 |
|||||||||||
POP display amortization |
4,323 |
4,166 |
8,871 |
8,679 |
|||||||||||
Stock-based compensation |
18,189 |
34,193 |
44,690 |
38,230 |
|||||||||||
Adjusted EBITDA |
$ |
75,349 |
$ |
25,724 |
$ |
131,856 |
$ |
54,351 |
|||||||