GoPro Inc
For the period ended Mar 31, 2025. Filed May 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 12, 2025
GPRO$0.90+4.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001500435-24-000154
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001500435-25-000034
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 110 current paragraphs.
58 unchanged; 40 reworded; 11 added; 25 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 14 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
In February 2025, we reintroduced our MAX waterproof 360-camera featuring MAX HyperSmooth image stabilization, 360-degree MAX TimeWarp Video, MAX SuperView, PowerPano, built-in mounting, high-quality audio, live streaming, voice control and a front facing touch display. MAX HyperSmooth provides high performance video stabilization, while MAX SuperView provides a wide field of view. PowerPano allows users to capture a 6.2mp, 270-degree panoramic photo with the push of a button and creates an artifact-free shot of action or movement. Our MAX camera features six built-in microphones that allows users to capture immersive 360-degree audio and directional audio for vlogging, and includes a MAX Enduro battery which increases recording time and improves cold-weather performance. The Quik app also includes editing tools for our MAX camera such as subject tracking and keyframe-based reframing.
Current report
First Quarter 2025 financial performance
Current report
Gross margin of 32.1% for the first quarter of 2025 decreased from 34.1% in the same period of 2024, or 200 bps, primarily due to lower accessory revenue and higher promotional activity, including promoting sales of our remaining, slower-moving product (760 bps), which was partially offset by an increase in subscription and service revenue (270 bps) and lower operational costs (290 bps).
Current report
The year-over-year decrease of $15.1 million, or 33.7%, in total research and development expense for the first quarter of 2025 compared to the same period of 2024 was primarily driven by a $6.7 million decrease in cash-based personnel-related costs, a $6.0 million decrease in consulting and professional services primarily for development work on our next generation system-on-chip, and a $1.4 million decrease in stock-based compensation expense.
Current report
There have been no significant changes to our contractual obligations and commitments disclosed in our 2024 Annual Report.
Current report
The accompanying Condensed Consolidated Financial Statements have been prepared assuming we will continue as a going concern, which contemplates the continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. In the period ended March 31, 2025, our performance continued to be impacted by consumer related-macroeconomic issues resulting in a softer global consumer market, an increasingly global competitive landscape and the delay of our next generation 360-camera. During the three months ended March 31, 2025, our revenue declined 13.6% from the same period of 2024 which resulted in operating losses of $45.2 million and operating cash outflows of $57.2 million. As of March 31, 2025, we had $69.6 million in cash and cash equivalents and an accumulated deficit of $728.3 million. The 2025 Notes with an outstanding principal of $93.8 million matures on November 15, 2025, unless earlier repurchased or converted at the option of the holder into shares of our Class A common stock under certain circumstances. In the ordinary course of business, we drew $25.0 million from our 2021 Credit Agreement in February 2025, and we had $19.8 million available to draw as of March 31, 2025.
Current report
We have considered and assessed our ability to continue as a going concern for at least 12 months from the issuance of these Condensed Consolidated Financial Statements. Our assessment included the preparation of a cash flow forecast taking into account the restructuring actions already implemented in 2024. We considered additional actions within our control that we would implement, if necessary, to maintain liquidity and operations in the ordinary course of business including payment of the 2025 Notes upon maturity. The 2025 operational plan is structured to i) realize the savings in wages and benefits from the headcount reductions as part of our 2024 restructuring plans; ii) lower research and development costs from the completion of a next generation system-on-chip and rationalized product roadmap, and the reduction of sales and marketing expenses to a reduced level consistent with the business size; and iii) effectively manage working capital, specifically our intention to manage inventory levels to better align with our current run rates and seasonality of the business, and our intention to continue to effectively manage the collection of accounts receivables.
Current report
We estimate such actions will be sufficient to allow us to maintain liquidity and operations in the ordinary course, including payment of the 2025 Notes upon maturity on November 15, 2025, for at least 12 months from the issuance of these Condensed Consolidated Financial Statements. While we estimate such actions will be sufficient to allow us to maintain liquidity and operations in the ordinary course for at least 12 months from the issuance of these Condensed Consolidated Financial Statements, there can be no assurance we will generate sufficient future cash from operations. Factors that can impact our future cash generation include, but are not limited to, further inflation, rising interest rates, tariffs, ongoing recessionary conditions or continued competition. If we are not successful in maintaining demand for our products or if macroeconomic conditions further constrain consumer demand, we may continue to experience adverse impacts to revenue and profitability. Additional actions within our control to maintain liquidity and operations include further reducing discretionary spending in all areas of the business and further headcount restructuring actions. In addition, we may need additional financing to execute on our current or future business strategy, and additional financing may not be available or on terms favorable to us.
Current report
Cash used in investing activities of $1.3 million for thethree months ended March 31, was primarily attributable to net purchases of property and equipment of $1.3 million.
Current report
In the first quarter of 2025, our market capitalization declined 38% from December 31, 2024, in part due to recent tariff and geopolitical events, resulting in our market capitalization no longer exceeding the carrying value of our single reporting unit as of March 31, 2025. As a result, we performed a quantitative goodwill impairment analysis and estimated the fair value of our single reporting unit utilizing the income approach using a discounted future cash flow model and a market approach. The analysis required estimates which required significant judgment related to the estimation of future cash flow and discount rates. The analysis was dependent on internal forecasts, estimation of the long-term revenue growth rates, terminal growth rates, profitability measures and determination of the discount rate. As a result of the quantitative impairment test, we concluded that the carrying value of our single reporting unit exceeded its fair value, resulting in the recognition of a $18.6 million goodwill impairment charge.
Current report
•adjusted EBITDA and non-GAAP net income (loss) excludes goodwill impairment charges as they do not reflect ongoing operating results in the period and hinders our ability to assess core operational performance;
Removed paragraphs (25)
Previous report
Third quarter 2024 financial performance
Previous report
If we are unable to generate adequate unit sales and revenue growth, successfully increase our total addressable market, successfully increase retail sales, successfully manage sales incentive levels, grow subscribers and subscription and service revenue, effectively manage our expenses, and navigate the volatile macroeconomic environment (including fluctuating interest rates and currency exchange rates, and recession concerns), we may incur significant losses in the future and may not be able to return to profitability.
Previous report
Our profitability also depends on the continued success of our subscription and service offerings. If we are not successful in maintaining our product sales, and subscription and service offerings, increasing our paid subscriber base, retail mobile app attach, and improving subscriber retention, we may not be able to return to profitably and we may not recognize benefits from our investment in new areas.
Previous report
Revenue for the first nine months of 2024 was $600.6 million, or a 15.4% decrease from the same period in 2023. This was primarily driven by the impact of our May 2023 strategic pricing decision to reduce the MSRPs across our camera line up and a corresponding shift in camera revenue mix as we offered entry level cameras at a sub-$300 price point for the first time since 2019, and an 11.4% decrease in units shipped for the first nine months of 2024 of 1.9 million, compared to 2.1 million in the same period in 2023, partially offset by a $30.9 million decrease in price protection charges. In the first nine months of 2024, our average selling price decreased 4.5% year-over-year to $325 and our camera revenue mix from cameras with an MSRP equal to or greater than $400 was 74% compared to 78% for the same period in 2023. In the first nine months of 2024, our subscription and service revenue increased 10.1% to $79.7 million, which is included in the GoPro.com channel. GoPro.com revenue represented 24.8% and 32.9% of total revenue for the first nine months of 2024 and 2023, respectively, while retail revenue represented 75.2% and 67.1% of total revenue for the first nine months of 2024 and 2023, respectively. The growth of the retail channel was partially due to adding more than 6,300 new retail doors since the third quarter of 2023.
Previous report
Gross margin of 35.5% for the third quarter of 2024 increased from 32.0% in the same period of 2023, or 350 bps, primarily due to lower operational costs primarily related to reduced tariff expenses and improved warranty expenses (260 bps), a cost reduction of our entry level price point camera (240 bps), improved subscription related operating costs, an increase in annual revenue per user and an increase in subscription revenue as a percentage of total revenue (130 bps), and lower prior generation camera costs (65 bps). These improvements were partially offset by an increase in promotions (300 bps) and fluctuations in foreign currency (75 bps).
Previous report
Gross margin of 33.6% for the first nine months 2024 increased from 31.3% in the same period of 2023, or 230 bps, primarily due to lower camera costs (360 bps), lower operational costs (210 bps), and an increase in subscription and service revenue (160 bps), partially offset by a decrease in camera pricing, net of promotions (390 bps), and less accessory revenue (110 bps).
Previous report
The year-over-year increase of $2.6 million, or 6.3%, in total research and development expense for the third quarter of 2024 compared to the same period of 2023 was primarily driven by a $5.0 million increase in consulting and professional services, a $0.8 million increase in restructuring costs, partially offset by a $1.4 million decrease in allocated facilities, depreciation, and supporting overhead expenses, a $1.1 million decrease in cash-based personnel-related costs, a $1.0 million decrease in stock-based compensation expense, and a $0.2 million decrease in travel related expenses.
Previous report
The year-over-year increase of $14.1 million, or 11.6%, in total research and development expense for the first nine months of 2024 compared to the same period of 2023 was primarily driven by a $9.8 million increase in consulting and professional services, a $3.4 million increase in restructuring costs, and a $3.2 million increase in cash-based personnel-related costs, partially offset by a $2.4 million decrease in stock-based compensation expense.
Previous report
The year-over-year decrease of $2.0 million, or 1.7%, in total sales and marketing expense for the first nine months 2024 compared to the same period of 2023 was primarily driven by a $3.3 million decrease in credit card fees and a $1.9 million decrease in allocated facilities, depreciation, and supporting overhead expenses, partially offset by a $1.9 million increase in restructuring costs, a $0.8 million increase in advertising and marketing expenses primarily attributable to sponsorships and point of purchase display depreciation expense, and a $0.5 million increase in travel related expenses.
Previous report
The year-over-year decrease of $3.1 million, or 6.5%, in total general and administrative expense in the first nine months of 2024 compared to the same period of 2023 was primarily driven by a $2.9 million decrease in stock-based compensation expense, a $1.7 million decrease in cash-based personnel-related costs, a $0.9 million decrease in allocated facilities, depreciation, and supporting overhead expenses, and a $0.4 million decrease in bad debt expense, partially offset by a $1.2 million increase in restructuring costs, a $1.0 million increase in consulting and professional services, a $0.8 million increase in acquisition-related costs, and a $0.2 million increase in travel related expenses.
Previous report
In 2021, the Organization for Economic Co-operation and Development (OECD) established an inclusive framework on base erosion and profit shifting and agreed on a two-pillar solution (Pillar Two) to global taxation, focusing on global profit allocation and a 15% global minimum effective tax rate. On December 15, 2022, the EU member states agreed to implement the OECD’s global minimum tax rate of 15%. The OECD issued Pillar Two model rules and continues to release guidance on these rules. The inclusive framework calls for tax law changes by participating countries to take effect in 2024 and 2025. Various countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax. We assessed the impact of Pillar Two and there is no material impact to our provision for income taxes for the three and nine months ended September 30, 2024. We will continue to monitor future guidance issued and assess the potential impact to our condensed consolidated financial statements.
Previous report
Other Contractual Commitments
Previous report
In the ordinary course of business, we enter into multi-year agreements to purchase sponsorships with event organizers, resorts, and athletes as part of our marketing efforts, software licenses related to our financial and IT systems, operating lease arrangements to support our operations in the U.S. and international locations, and various other contractual commitments. The following table summarizes our other contractual obligations as of September 30, 2024, and the expected timing of those payments:
Previous report
(1)Operating lease obligations exclude cash inflows from existing contractual facility subleases through the end of 2026.
Previous report
See Note 10 Commitments, contingencies, and guarantees, for a discussion regarding facility leases and other contractual commitments in the Notes to Condensed Consolidated Financial Statements.
Previous report
Based on our most current projections, we believe that our available cash and cash equivalents, and amounts available under our credit facility, will be sufficient to address our working capital needs, capital expenditures, outstanding commitments, and other liquidity requirements for at least one year from the issuance of these financial statements.
Previous report
•We expect that operating expenses and inventory purchases will constitute a material use of our cash balances. We intend to continue to manage our operating activities in line with our existing cash and available financial resources.
Previous report
•In January 2021, we entered into the 2021 Credit Agreement, which provides for a revolving credit facility under which we may borrow up to an aggregate amount of $50.0 million. As amended in March 2023, our credit facility will terminate and any outstanding borrowings become due and payable on the earlier of (i) January 2027 and (ii) unless we have cash in a specified deposit account in an amount equal to or greater than the amount required to repay our 1.25% convertible senior notes due November 2025, 91 days prior to the maturity date of such convertible notes. As of September 30, 2024, we could borrow up to $44.8 million under the 2021 Credit Agreement. No borrowings have been made from the credit facility to date (See Note 5 Financing arrangements, in the Notes to Condensed Consolidated Financial Statements for additional information).
Previous report
As of September 30, 2024, we had $130.2 million in cash and cash equivalents. Based on our current cash balance, our proactive cost reductions implemented to date, and working capital adjustments, we anticipate we will have sufficient funds to meet our strategic and working capital requirements, debt service requirements and lease payment obligations for at least twelve months from the issuance of these condensed consolidated financial statements. We also have $44.8 million available to draw from our 2021 Credit Agreement as of September 30, 2024 and as our 2025 Notes are due in November 2025, we have the ability to convert the balance due into stock. If we are unable to obtain adequate debt or equity financing when we require it or on terms acceptable to us, our ability to grow our business, repay debt and respond to business challenges could be significantly limited. Although we believe our current cash resources are sufficient to sustain operations for one year from issuance of these condensed consolidated financial statements, the success of our operations and the global economic outlook, among other factors, could impact our business and liquidity. We will continue to evaluate additional measures, including cost reduction initiatives, debt refinancing, and other similar arrangements. In addition, in October 2024, we initiated a cost reduction effort that will reduce headcount by approximately 26% compared to our headcount ending Q2 2024, reduce marketing expenses in the second half of 2024 as well as 2025, and reduce other general expenses. We considered whether there were conditions or events that raise substantial doubt about our ability to continue as a going concern and evaluate the funds necessary to maintain operations. Based on our current cash flow projections, we concluded that our cash, cash equivalents and marketable securities are sufficient to continue operating activities for at least twelve months following the issuance date of these condensed consolidated financial statements.
Previous report
Cash provided by investing activities of $8.1 million for the nine months ended September 30, 2024 was primarily attributable to maturities of marketable securities of $24.0 million, partially offset by $12.3 million of net cash used to acquire Forcite Helmet Systems, and net purchases of property and equipment of $3.6 million.
Previous report
Although our market capitalization further declined in the third quarter of 2024, we do not believe that it is more likely than not that the fair value of our single reporting unit is less than the carrying value. Using the market capitalization approach, which we would expect to be similar to the discounted cash flow method, the fair value of our single reporting unit is estimated based on the trading price of our stock at the test date, which is further adjusted by an acquisition control premium representing the synergies a market participant would obtain when obtaining control of the business. As of September 30, 2024, the market capitalization exceeded the carrying value of our single reporting unit by 13%, which was not adjusted for an acquisition control premium which would further increase the percentage the fair value exceeded the carrying value.
Previous report
The estimated fair value of our single reporting unit is sensitive to the volatility in our stock price. For example, a 5% decrease in our September 30, 2024 stock price would result in our market capitalization exceeding the carrying value of our single reporting unit by 8%, which is not adjusted for an acquisition control premium. If our market capitalization continues to decline or future performance falls below our current expectations, assumptions, or estimates, including assumptions related to current macroeconomic uncertainties, this may trigger a future material non-cash goodwill impairment charge, which could have a material adverse effect on our business, financial condition, and results of operations in the reporting period in which a charge would be necessary. We will continue to monitor developments, including updates to our forecasts and market capitalization. An update of our assessment and related estimates may be required in the future.
Previous report
Income taxes
Previous report
We are subject to income taxes in the United States and multiple foreign jurisdictions. Our effective tax rates differ from the United States federal statutory rate, primarily due to changes in our valuation allowance, the effect of non-United States operations, deductible and non-deductible stock-based compensation expense, state taxes, federal and state research and development tax credits and other adjustments. The calculation of our provision for income taxes involves the use of estimates, assumptions and judgments while taking into account current tax laws, our interpretation of current tax laws and possible outcomes of future tax audits. We review our tax positions quarterly and adjust the balances as new information becomes available.
Previous report
Each quarter, we assess the realizability of our existing deferred tax assets under ASC Topic 740. We assess available positive and negative evidence to estimate whether sufficient future taxable income will be generated to realize our deferred tax assets. For the year ended December 31, 2023, we continued to believe that it was more likely than not that our United States federal and state and foreign deferred tax assets would be realized and thus, a valuation allowance was not required on our deferred tax assets. Key considerations included a three-year cumulative income position with two years of income and a positive trend in our retail strategy in 2023, and we expected this retail strategy would favorably impact profitability in 2024 with a full year positive impact expected in 2025. During the first quarter of 2024, recent developments negatively impacted our assessment, and these included increased and accelerated costs associated with our future product strategy and roadmap, an increased competitive environment, integration and product development costs related to the recent acquisition of Forcite Helmet Systems, restructuring costs and other negative factors. Thus, as of March 31, 2024, we concluded that it was more likely than not that the United States federal and state deferred tax assets were not realizable and established a valuation allowance.
Reworded paragraphs (40)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2023 included in our 2023 Annual Report. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading Special Note About Forward-Looking Statements in this Quarterly Report on Form 10-Q. You should review the disclosures under the heading Risk Factors in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. Our MD&A is provided in addition to the accompanying condensed consolidated financial statements and accompanying notes to assist readers in understanding our results of operations, financial condition and cash flows.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2024 included in our 2024 Annual Report on Form 10-K filed with the SEC. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, include forward-looking statements that involve risks and uncertainties as described under the heading Special Note About Forward-Looking Statements in this Quarterly Report on Form 10-Q. You should review the disclosures under the heading Risk Factors in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. Our MD&A is provided in addition to the accompanying condensed consolidated financial statements and accompanying notes to assist readers in understanding our results of operations, financial condition and cash flows.
Previous wording
•Results of Operations. Analysis of our financial results comparing the third quarter and first nine months of 2024 to 2023.
Current wording
•Results of Operations. Analysis of our financial results comparing the first quarter of 2025 to 2024.
Previous wording
GoPro helps the world capture and share itself in immersive and exciting ways. We are committed to developing solutions that create an easy, seamless experience for consumers to capture, create and share engaging personal content. When consumers use our products and services, they often generate and share content that organically increases awareness for GoPro, driving a virtuous cycle and a self-reinforcing demand for our products. We believe revenue growth may be driven by the introduction of new products, accessories, lifestyle gear, and software and subscription offerings. We believe new camera features drive a replacement cycle among existing users and attract new users, expanding our total addressable market. Our investments in image stabilization, mobile app editing and sharing solutions, modular accessories, auto-upload capabilities, local language user-interfaces and voice recognition in more than 11 languages with 6 accents are designed to drive the expansion of our global market.
Current wording
GoPro helps the world capture and share itself in immersive and exciting ways. We are committed to developing solutions that create an easy, seamless experience for consumers to capture, create and share engaging personal content. When consumers use our cameras, accessories, and subscription and services, they often generate and share content that organically increases awareness for GoPro, driving a virtuous cycle and a self-reinforcing demand for our cameras, accessories and subscription and services. We believe revenue growth may be driven by the introduction of new cameras, accessories, lifestyle gear, and software and subscription offerings. We believe new camera features drive a replacement cycle among existing users and attract new users, expanding our total addressable market. Our investments in image stabilization, mobile app editing and sharing solutions, modular accessories including lens mods, auto-upload capabilities, local language user-interfaces and voice recognition in more than 11 languages with 6 accents are designed to drive the expansion of our global market.
Previous wording
In September 2024, we began shipping our HERO13 Black flagship camera that includes our GP2 processor, HyperSmooth 6.0 image stabilization, hybrid-log gamma (HLG) high dynamic range (HDR) photos and videos in 5.3K at 60 frames per second (FPS) and 4K at 60 FPS, and a higher capacity battery resulting in longer runtimes and improved thermal performance. HyperSmooth 6.0 image stabilization features AutoBoost, which analyzes up to 4x more data compared to HyperSmooth 5.0 while supporting 360-degree Horizon Lock. The HERO13 Black also includes 10-bit color video at up to 5.3K video at 60 FPS, 27-megapixel photo resolution, 8:7 aspect ratio video for a larger vertical field of view, and HyperView, which allows for a 16:9 field of view. The HERO13 Black also includes a front-facing and rear touch display, TimeWarp 3.0, a Timecode Sync feature, and a Night Effects Time Lapse feature. We also offer our Ultra Wide Lens Mod, Macro Lens Mod and a ND Filter 4-Pack for HERO13 Black. The Ultra Wide Lens Mod allows for an ultra wide-angle digital lens for 4K video at 60 FPS, the Macro Lens Mod allows the HERO13 Black to focus on objects 4x closer than prior generation cameras and the ND Filter 4-Pack allows the HERO13 Black to create motion blur. Additionally, we offer our HERO13 Black Creator
Current wording
In September 2024, we began shipping our HERO13 Black flagship camera that includes our GP2 processor, HyperSmooth 6.0 image stabilization, hybrid-log gamma (HLG) high dynamic range (HDR) photos and videos in 5.3K at 60 frames per second (FPS) and 4K at 60 FPS, and a higher capacity battery resulting in longer runtimes and improved thermal performance. HyperSmooth 6.0 image stabilization features AutoBoost, which analyzes up to 4x more data compared to HyperSmooth 5.0 while supporting 360-degree Horizon Lock. The HERO13 Black also includes 10-bit color video at up to 5.3K video at 60 FPS, 27-megapixel photo resolution, 8:7 aspect ratio video for a larger vertical field of view, and HyperView, which allows for a 16:9 field of view, Superview and Horizon Leveling. The HERO13 Black also includes a front-facing and rear touch display, TimeWarp 3.0, a Timecode Sync feature, and a Night Effects Time Lapse feature. In March 2025, we shipped a limited edition HERO13 Black in Polar White, which includes all of the features of our flagship camera. We also offer our Ultra Wide Lens Mod, Macro Lens Mod, Anamorphic Lens Mod and a ND Filter 4-Pack for HERO13 Black. The Ultra Wide Lens Mod allows for an ultra wide-angle digital lens for 4K video at 60 FPS, the Macro Lens Mod allows the
Previous wording
Edition, which combines the HERO13 Black, Volta, Enduro Battery, Media Mod, and Light Mod to create professional-quality videos.
Current wording
HERO13 Black to focus on objects 4x closer than prior generation cameras, and the Anamorphic Lens Mod captures ultra wide-angle footage with reduced distortion and lets anyone tell their stores using the 21:9 aspect ratio used in feature films. The ND Filter 4-Pack allows the HERO13 Black to create motion blur. Additionally, we offer our HERO13 Black Creator Edition, which combines the HERO13 Black, Volta, Enduro Battery, Media Mod, and Light Mod to create professional-quality videos.
Previous wording
In September 2024, we also began shipping our smallest and lightest version of a HERO camera which features a one-button design and touch display. The HERO camera can shoot videos at up to 4K at 30 FPS, captures photos with 12-megapixel resolution, and has a slow-motion setting of up to 2.7K at 60 FPS. The HERO camera captures content with a wide field of view lens so that HyperSmooth image stabilization can be applied in the Quik app.
Current wording
In September 2024, we also began shipping our smallest and lightest version of a HERO camera which features a one-button design and touch display. The HERO camera can shoot videos at up to 4K at 30 FPS and in 4:3 aspect ratio for a wider, more immersive video, captures photos with 12-megapixel resolution, and has a slow-motion setting of up to 2.7K at 60 FPS. The HERO camera captures content with a wide field of view lens so that HyperSmooth image stabilization can be applied in the Quik app.
Previous wording
We offer our Premium subscription, which includes unlimited cloud storage of GoPro content supporting source video and photo quality, damaged camera replacement, cloud storage up to 25 gigabytes (GB) of non-GoPro content, the delivery of highlight videos automatically via our mobile app when GoPro camera footage is uploaded to the user’s GoPro cloud account using Auto Upload. Our Premium subscription also provides access to a high-quality live streaming service on GoPro.com, as well as discounts on GoPro cameras, gear, mounts and accessories. In February 2024, we launched our Premium+ subscription which includes cloud storage up to 500 GB of non-GoPro content, HyperSmooth Pro and all of the same features included in the Premium subscription.
Current wording
We offer our Premium subscription, which includes unlimited cloud storage of GoPro content supporting source video and photo quality, damaged camera replacement, cloud storage up to 25 gigabytes (GB) of non-GoPro content, the delivery of highlight videos automatically via our mobile app when GoPro camera footage is uploaded to the user’s GoPro cloud account using Auto Upload or when GoPro camera footage is uploaded to the user’s GoPro cloud account via the user’s mobile phone. Our Premium subscription also provides access to a high-quality live streaming service on GoPro.com, as well as discounts on GoPro cameras, gear, mounts and accessories. In February 2024, we launched our Premium+ subscription which includes cloud storage up to 500 GB of non-GoPro content, HyperSmooth Pro and all of the same features included in the Premium subscription.
Previous wording
In addition to the Premium+ and Premium subscriptions, we offer our Quik subscription which makes it easy for users to get the most out of their favorite photos and videos, captured on any phone or camera, using our Quik mobile app’s editing tools. These editing tools include features such as trim, color, crop, filtering, auto-sync of edits to music, and the ability to change video speed. We believe the Quik subscription is an important offering in expanding our total addressable market to those who may not own a GoPro camera.
Current wording
In addition to the Premium+ and Premium subscriptions, we offer our Quik subscription which makes it easy for users to get the most out of their favorite photos and videos, captured on any phone or camera, using our Quik mobile app’s editing tools. These editing tools include features such as trim, color, crop, filtering, auto-sync of edits to music, and the ability to change video speed. We also offer our GoPro Reframe plugin for Adobe Premier Pro and Adobe After Effects which provides users with creative control over footage and enabling reframing, animated movements, motion blur transitions, and adjustments to lens curvature.
Previous wording
We continue to monitor the current evolving macroeconomic landscape. Inflation, fluctuating interest rates, a strengthening United States dollar (U.S. dollar), and recession concerns places increasing pressure on many areas of our business, including product pricing, operating expenses, component pricing and consumer spending. In the past, the strength of the U.S. dollar relative to other foreign currencies largely impacted our revenue and gross margin. If the U.S. dollar strengthens relative to other foreign currencies in the future, our financial results will be negatively impacted. See Item 1A. Risk Factors for further discussion of the possible impact of evolving macroeconomic conditions on our business.
Current wording
We continue to monitor the current evolving macroeconomic landscape. Inflation, fluctuating interest rates, tariffs and recession concerns places increasing pressure on many areas of our business, including hardware and software product pricing, operating expenses, component pricing and consumer spending. In the past, the strength of the U.S. dollar relative to other foreign currencies largely impacted our revenue and gross margin. Revenue from the U.S. was 46.8% and 36.2% of revenue in three months ended March 31, 2025 and 2024, respectively. If the U.S. dollar strengthens relative to other foreign currencies in the future, our financial results will be negatively impacted. See Item 1A. Risk Factors for further discussion of the possible impact of evolving macroeconomic conditions on our business.
Previous wording
(3)We define adjusted EBITDA as net income (loss) adjusted to exclude the impact of income tax expense (benefit), interest income, interest expense, depreciation and amortization, point of purchase (POP) display amortization, stock-based compensation, (gain) loss on extinguishment of debt, and restructuring and other costs, including right-of-use asset impairment charges (if applicable).
Current wording
(3)We define adjusted EBITDA as net income (loss) adjusted to exclude the impact of income tax expense (benefit), interest income, interest expense, depreciation and amortization, point of purchase (POP) display amortization, stock-based compensation, gain on insurance proceeds, (gain) loss on extinguishment of debt, restructuring and other costs, including right-of-use asset impairment charges (if applicable), and goodwill impairment charges.
Previous wording
(4)We define non-GAAP net income (loss) as net income (loss) adjusted to exclude stock-based compensation, acquisition-related costs, restructuring and other costs, including right-of-use asset impairment charges (if applicable), (gain) loss on extinguishment of debt, gain on sale and/or license of intellectual property, and income tax adjustments. Acquisition-related costs include the amortization of acquired intangible assets and impairment charges (if applicable), as well as third-party transaction costs for legal and other professional services.
Current wording
(4)We define non-GAAP net income (loss) as net income (loss) adjusted to exclude stock-based compensation, acquisition-related costs, restructuring and other costs, including right-of-use asset impairment charges (if applicable), gain on insurance proceeds, (gain) loss on extinguishment of debt, gain on sale and/or license of intellectual property, goodwill impairment charges, and income tax adjustments. Acquisition-related costs include the amortization of acquired intangible assets and impairment charges (if applicable), as well as third-party transaction costs for legal and other professional services.
Previous wording
(5) In the first quarter of 2024, we revised the income tax adjustment to reflect current and deferred income tax expense (benefit) and the effect of non-GAAP adjustments to better align with SEC guidance. For comparative purposes, we have revised our prior period income tax adjustments to reflect current and deferred income tax expense (benefit) and the effect of non-GAAP adjustments. Additionally, in the second quarter of 2024, we revised the first quarter of 2024 income tax adjustment to exclude the establishment of a valuation allowance on United States federal and state deferred tax assets.
Current wording
(5) In the second quarter of 2024, we revised the first quarter of 2024 income tax adjustment to exclude the establishment of a valuation allowance on United States federal and state deferred tax assets.
Previous wording
Reconciliations of non-GAAP adjusted measures to the most directly comparable GAAP measures and explanations for why we consider non-GAAP measures to be helpful for investors are presented under Non-GAAP Financial Measures.
Current wording
Reconciliations of GAAP measures to the most directly comparable non-GAAP adjusted measures and explanations for why we consider non-GAAP measures to be helpful for investors are presented under Non-GAAP Financial Measures.
Previous wording
Revenue for the third quarter of 2024 was $258.9 million, which represented a 12.0% decrease from the same period in 2023. The year-over-year decrease was primarily driven by a 4.6% decrease in units shipped in the quarter of 881 thousand, compared to 923 thousand in the same period in 2023 and an increase in third quarter sales incentives, partially offset by a 10.6% increase in our subscription and service revenue. The continued consumer-related macroeconomic issues resulting in a softer consumer market in the Americas and Asia-Pacific regions, particularly in China, and an increasingly global competitive landscape, notably in China, negatively impacted the third quarter of 2024 sell-in and sell-through. Our third quarter of 2024 camera revenue mix from cameras with an MSRP equal to or greater than $400 was 74% compared to 75% for the same period in 2023. Our third quarter of 2024 average selling price decreased 7.8% year-over-year to $294, primarily due to a 38.2% increase in unit sales of entry level priced cameras, a reduction of $300 and above camera unit sales, as well as an increase in promotional activity, partially offset by an increase in our subscription and service revenue. Average selling price is defined as total reported revenue divided by camera units shipped. Retail revenue was $207.9 million in the third quarter of 2024 and represented 80.3% of total revenue, compared to 78.5% of total revenue for the same period in 2023. GoPro.com revenue, which includes subscription and service revenue, was $51.0 million in the third quarter of 2024 and represented 19.7% of total revenue, compared to 21.5% of total revenue for the same period in 2023. Our overall subscription attach rate from both sales on GoPro.com and from post-camera purchases at retail was 45% in the third quarter of 2024. Our aggregate retention rate for annual subscribers was 67% in the third quarter of 2024, compared to 65% in the same period in 2023, a 4% improvement. Our gross margin percentage for the third quarter of 2024 was 35.5%, an increase of 3.50% year-over year. Net loss for the third quarter of 2024 was $8.2 million compared to a net loss of $3.7 million in the same period in 2023. Adjusted EBITDA for the third quarter of 2024 was $5.4 million, compared to $7.2 million for the same period in 2023. Cash was down slightly sequentially, and inventory was slightly up year-over-year in preparation for the upcoming holiday season in the fourth quarter of 2024.
Current wording
Revenue for the first quarter of 2025 was $134.3 million, which represented a 13.6% decrease from the same period in 2024 of $155.5 million. The year-over-year decrease was primarily driven by lower accessory sales and increased price promotions, partially offset by a 3.9% increase in our subscription and service revenue to $26.9 million in the first quarter of 2025. Camera units shipped in the first quarter of 2025 also decreased 2.0% year-over-year to 385 thousand, compared to 393 thousand in the same period in 2024, primarily due to consumer-related macroeconomic issues resulting in a softer global consumer market and an increasingly global competitive landscape. Our first quarter of 2025 average selling price decreased 11.8% year-over-year to $349. Average selling price is defined as total reported revenue divided by camera units shipped. Our first quarter of 2025 camera revenue mix from cameras with an MSRP equal to or greater than $400 was 71% compared to 70% for the same period in 2024. Retail revenue was $93.9 million in the first quarter of 2025 and represented 69.9% of total revenue, compared to 68.4% of total revenue for the same period in 2024. GoPro.com revenue, which includes subscription and service revenue, was $40.4 million in the first quarter of 2025 and represented 30.1% of total revenue, compared to 31.6% of total revenue for the same period in 2024. Our overall subscription attach rate from both sales on GoPro.com and from post-camera purchases at retail was 49% in the first quarter of 2025, up from a 48% attach rate in the same period in 2024. Our aggregate retention rate for annual subscribers was 70% in the first quarter of 2025, compared to 69% in the same period in 2024. Our gross margin percentage for the first quarter of 2025 was 32.1% compared to 34.1% in the same period in 2024. Net loss for the first quarter of 2025 was $46.7 million, compared to a net loss of $339.1 million for the same period in 2024. Our net loss for the first quarter of 2025 included an $18.6 million goodwill impairment charge. In the first quarter of 2024, we recorded a $294.9 million valuation allowance on all of our U.S. federal and state deferred tax assets as it was more likely than not that our U.S. federal and state deferred tax assets would not be realizable in the foreseeable future primarily due to macroeconomic factors, competition, acquisition integration expenses, restructuring costs, and development of our product road map. Adjusted EBITDA for the first quarter of 2025 was negative $15.7 million, compared to negative $29.3 million in the same period in 2024.
Previous wording
Driving profitability through improved efficiency, lower costs, and better execution. We incurred an operating loss in the first nine months of 2024, and for the full year 2023. Wecontinue to make strategic decisions to drive volume, growth, and profitability in our business. Restructuring actions in 2024 and prior restructuring actions, along with continued cost management have resulted in a more efficient global organization that has allowed for improved communication and alignment among our functional teams. We are changing our approach to operate in a leaner, more focused manner that we believe is sustainable and strategic for long-term success and improved financial performance. This includes reducing our operating expenses to the lowest level since before going public, while pursuing a product roadmap we believe will drive innovation, differentiation, and growth. And, in the longer term, increasingour total addressable market by introducing new and innovative products, increasing unit sales volume of our existing products, and increasing our subscriber base. Our expectation is that sales from our retail channel will continue to increase relative to sales on GoPro.com. While growth in subscribers and subscription and service revenue has slowed, we continue to make strategic decisions to enhance our subscription offerings to increase subscriber retention and increase subscription and service revenue.
Current wording
Driving profitability through improved efficiency, lower costs, and better execution. We incurred operating losses in the first quarter of 2025 and for the full year 2024. Wecontinue to make strategic decisions to drive volume, growth, and profitability in our business. Restructuring actions in 2024 and prior restructuring actions, along with continued cost management have resulted in a more efficient global organization that has allowed for improved communication and alignment among our functional teams. We are changing our approach to operate in a leaner, more focused manner that we believe is sustainable and strategic for long-term success and improved financial performance. This includes pursuing a hardware and software product roadmap we believe will drive innovation, differentiation, and growth. In the longer term, this includes increasingour total addressable market by introducing new, innovative hardware and software products, increasing unit sales volume of our new and existing products, and increasing our subscriber base. Our expectation is that sales from our retail channel will continue to increase relative to sales on GoPro.com. While growth in subscribers and subscription and service revenue has slowed, we continue to make strategic decisions to enhance our subscription offerings to grow subscribers and increase subscriber retention that results in an increase in subscription and service revenue.
Previous wording
Investing in research and development and enhancing our customer experience. Our performance is significantly dependent on the investments we make in research and development, including our ability to attract and retain highly skilled and experienced research and development personnel. We expect the timing of new product releases to continue to have a significant impact on our revenue and we must continually develop and introduce innovative new cameras, software, and other new offerings. We plan to further build upon our integrated mobile and cloud-based storytelling solutions, as well as our subscription offerings. Our investments, including those for marketing and advertising, and those related to development efforts associated with our most recent acquisition, may not successfully drive increased revenue and our customers may not accept our new offerings. If we fail to innovate and enhance our brand, our products, our mobile app experience, or the value proposition of our subscription, our market position and revenue will be adversely affected. Further, we have and will continue to incur substantial research and development expenses and if our efforts are not successful, we may not recover the value of these investments and our business may be adversely affected.
Current wording
Investing in research and development and enhancing our customer experience. Our performance is significantly dependent on the investments we make in research and development, including our ability to attract and retain highly skilled and experienced research and development personnel. We expect the timing of new hardware product releases to continue to have a significant impact on our revenue and we must continually develop and introduce innovative new cameras, software, and other new offerings. We plan to further build upon our integrated mobile and cloud-based storytelling solutions, as well as our subscription offerings. Our investments, including those for marketing and advertising, and those related to development efforts associated with our most recent acquisition, may not successfully drive increased revenue and our customers may not accept our new offerings. Further, we have and will continue to incur substantial research and development expenses and if our efforts are not successful, we may not recover the value of these investments.
Previous wording
Improving profitability. We believe that our continued focus on growing our total addressable market from our retail and GoPro.com channels, including subscription and service revenue, and broadening our range of products will support our ability to return to profitability on an annual basis due to timely and effective product launches, increases in unit volume, subscribers and related revenue, and continued operating expense control. We continue to believe that international markets represent a significant opportunity to achieve profitability. While the total market for digital cameras has seen an increase in competition, we believe that our consumers’ differentiated use of GoPro cameras, our mobile app and cloud solutions, our continued innovation of product features desired by our users, and our brand, all help support our competitiveness within the market for digital camera. However, we expect that the markets in which we conduct our business will remain highly competitive as we face new product introductions from competitors. Sales in international locations subject us to foreign currency exchange rate fluctuations and regional macroeconomic conditions that may cause us to adjust pricing which may make our products more or less attractive to the consumer. Continued fluctuations in foreign currency exchange rates and regional macroeconomic conditions could have a continued impact on our future operating results.
Current wording
Improving profitability. We believe that our continued focus on growing our total addressable market from our retail and GoPro.com channels, including subscription and service revenue, and broadening our range of hardware products will support our ability to return to profitability on an annual basis due to timely and effective product launches, increases in unit volume, subscribers and related revenue, and continued operating expense control. While the total market for digital imagery has seen an increase in competition, we believe that our consumers’ differentiated use of GoPro cameras, our mobile app and cloud solutions, our continued innovation of product features desired by our users, and our brand, all help support our competitiveness within the market for digital cameras. However, we expect that the markets in which we conduct our business will remain highly competitive as we face new or improved product introductions from competitors such as enhanced phone capabilities and technology-enabled glasses. Sales in international locations subject us to foreign currency exchange rate fluctuations and regional macroeconomic conditions that may cause us to adjust pricing which may make our hardware and software products more or less attractive to the consumer. Continued fluctuations in foreign currency exchange rates and regional macroeconomic conditions could have a continued impact on our future operating results. Our profitability also depends on the continued success of our subscription and service offerings.
Previous wording
Marketing the improved GoPro experience. We intend to focus our marketing resources on highlighting our camera features, subscription and service benefits, and further improve brand recognition. Historically, our growth has largely been fueled by the adoption of our products by people looking to self-capture images of themselves participating in exciting physical activities. Our goal of returning to profitability depends on continuing to reach, expand and re-engage with this core user base in alignment with our strategic priorities. Sales and marketing investments will often occur in advance of any sales benefits from these activities, and it may be difficult for us to determine if we are efficiently allocating our resources in this area.
Current wording
Marketing the improved GoPro experience. We intend to focus our marketing resources on highlighting our camera features, subscription and service benefits, and further improve brand recognition. Historically, our growth has largely been fueled by the adoption of our hardware products by people looking to self-capture images of themselves participating in exciting physical activities. Our goal of returning to profitability depends on continuing to reach, expand and re-engage with this core user base in alignment with our strategic priorities. Sales and marketing investments will often occur in advance of any sales benefits from these activities, and it may be difficult for us to determine if we are efficiently allocating our resources in this area.
Previous wording
Seasonality. Historically, we have experienced the highest levels of total revenue in the fourth quarter of the year, coinciding with the holiday shopping season, particularly in the United States and Europe. However, in the current year, we do not expect this trend to continue due to macroeconomic conditions and competition globally. While we have implemented operational changes aimed at reducing the impact of fourth quarter seasonality on full year performance, timely and effective product introductions, whether just prior to the holiday season or otherwise, and forecasting, are critical to our operations and financial performance.
Current wording
Seasonality. Historically, we have typically experienced the highest levels of total revenue and channel inventory sell-through in the fourth quarter of the year, coinciding with the holiday shopping season, particularly in the United States and Europe. However, total revenue in the fourth quarter of 2024 did not continue this trend due to a number of factors, including macroeconomic conditions, competition, and a delay in an expected hardware product release. In the fourth quarter of 2024, channel inventory sell-through continued the historical trend. While we have implemented operational changes aimed at reducing the impact of fourth quarter seasonality on full year performance, timely and effective product introductions, whether just prior to the holiday season or otherwise, and forecasting, are critical to our operations and financial performance.
Previous wording
Macroeconomic risks. Macroeconomic conditions affecting the level of consumer spending include market volatility and fluctuations in foreign exchange rates, inflation, and interest rates. Some product costs have become subject to inflationary pressure, and we may not be able to fully offset such higher costs through price increases. Our inability or failure to adjust pricing could harm our business, financial condition, and operating results.
Current wording
Macroeconomic risks. Macroeconomic conditions affecting the level of consumer spending include market volatility and fluctuations in tariffs, foreign exchange rates, inflation, and interest rates. Some hardware product costs have become subject to inflationary pressure, and we may not be able to fully offset such higher costs through price increases.
Previous wording
Revenue for the third quarter of 2024 was $258.9 million, which represented a 12.0% decrease from the same period in 2023. The year-over-year decrease was primarily driven by a 4.6% decrease in units shipped in the quarter of 881 thousand, compared to 923 thousand in the same period in 2023 and an increase in third quarter sales incentives, partially offset by a 10.6% increase in our subscription and service revenue. The continued consumer-related macroeconomic issues resulting in a softer consumer market in the Americas and Asia-Pacific regions, particularly in China, and an increasingly global competitive landscape, notably in China, negatively impacted the third quarter of 2024 sell-in and sell-through. Our third quarter of 2024 camera revenue mix from cameras with an MSRP equal to or greater than $400 was 74% compared to 75% for the same period in 2023. Our third quarter of 2024 average selling price decreased 7.8% year-over-year to $294, primarily due to a 38.2% increase in unit sales of entry level priced cameras, a reduction of $300 and above camera unit sales, as well as an increase in promotional activity, partially offset by an increase in our subscription and service revenue. Retail revenue was $207.9 million in the third quarter of 2024 and represented 80.3% of total revenue, compared to 78.5% of total revenue for the same period in 2023. GoPro.com revenue, which includes subscription and service revenue, was $51.0 million in the third quarter of 2024 and represented 19.7% of total revenue, compared to 21.5% of total revenue for the same period in 2023.
Current wording
Revenue for the first quarter of 2025 was $134.3 million, which represented a 13.6% decrease from the same period in 2024 where revenue was $155.5 million. The year-over-year decrease was primarily driven by lower accessory sales and increased price promotions, partially offset by a 3.9% increase in our subscription and service revenue to $26.9 million in the first quarter of 2025. Camera units shipped in the first quarter of 2025 also decreased 2.0% year-over-year to 385 thousand, compared to 393 thousand in the same period in 2024, primarily due to consumer-related macroeconomic issues resulting in a softer global consumer market and an increasingly global competitive landscape. Our first quarter of 2025 average selling price decreased 11.8% year-over-year to $349. Our first quarter of 2025 camera revenue mix from cameras with an MSRP equal to or greater than $400 was 71% compared to 70% for the same period in 2024. Retail revenue was $93.9 million in the first quarter of 2025 and represented 69.9% of total revenue, compared to 68.4% of total revenue for the same period in 2024. GoPro.com revenue, which includes subscription and service revenue, was $40.4 million in the first quarter of 2025 and represented 30.1% of total revenue, compared to 31.6% of total revenue for the same period in 2024.
Previous wording
The year-over-year decrease of $0.6 million, or 1.4%, in total sales and marketing expense for the third quarter of 2024 compared to the same period of 2023 was primarily driven by a $0.7 million decrease in consulting and professional services and a $0.5 million decrease in credit card fees, partially offset by a $0.4 million increase in restructuring costs, and a $0.3 million increase in advertising and marketing expenses primarily attributable to activation activities and sponsorships.
Current wording
The year-over-year decrease of $11.9 million, or 33.8%, in total sales and marketing expense for the first quarter of 2025 compared to the same period of 2024 was primarily driven by a $6.1 million decrease in advertising and marketing expenses, primarily attributable to online campaigns and sponsorships, a $2.3 million decrease in cash-based personnel-related costs, a $1.7 million decrease in consulting and professional services, and a $0.9 million decrease in stock-based compensation expense.
Previous wording
The year-over-year decrease of $0.2 million, or 1.2%, in total general and administrative expense for the third quarter of 2024 compared to the same period of 2023 was primarily driven by a $1.6 million decrease in cash-based personnel-related costs, and a $0.9 million decrease in stock-based compensation expense, partially offset by a $2.5 million increase in consulting and professional services.
Current wording
The year-over-year increase of $2.2 million, or 15.3%, in total general and administrative expense for the first quarter of 2025 compared to the same period of 2024 was primarily driven by a $4.6 million increase in consulting and professional services, partially offset by a $1.4 million decrease in cash-based personnel-related costs, a $0.9 million decrease in stock-based compensation expense, and a $0.7 million decrease in acquisition-related costs.
Previous wording
Third quarter 2024 restructuring. In August 2024, we approved a restructuring plan (the Original Restructuring Plan) to reduce operating costs by reducing our global workforce by approximately 15%. In October 2024, we approved an amended restructuring plan (the Updated Restructuring Plan) to increase the reduction of our global workforce to approximately 26% compared to our headcount ending Q2 2024. In connection with the Original Restructuring Plan, we recorded restructuring charges of $1.1 million related to severance. Under the Updated Restructuring Plan, we expect to incur up to $9 million of severance related charges and up to $8 million of project cancellation costs in the fourth quarter of 2024.
Current wording
Third quarter 2024 restructuring. In August 2024, we approved a restructuring plan (the Original Restructuring Plan) and in October 2024, we approved an amended restructuring plan (the Updated Restructuring Plan). In connection with the Original Restructuring Plan and Updated Restructuring Plan, we reduced our global workforce by 25% compared to our headcount ending Q2 2024, and we recorded restructuring charges of $18.7 million, including $12.7 million related to severance and $6.0 million of project cancellation costs. As of March 31, 2025, headcount decreased 30% year-over-year.
Previous wording
First quarter 2024 restructuring. In March 2024, we approved a restructuring plan to reduce operating costs and drive stronger operating leverage by reducing our global workforce by approximately 4% and certain office space. Under the first quarter 2024 restructuring plan, we recorded restructuring charges of $2.3 million related to severance and $3.3 million related to a right-of-use asset impairment upon ceasing the use of certain office space and $0.4 million related to office space charges. As of September 30, 2024, the remaining future lease related payments associated with certain office space vacated as a result of the first quarter 2024 restructuring plan are anticipated to be approximately $1.9 million and will be paid over the underlying remaining lease term.
Current wording
First quarter 2024 restructuring. In March 2024, we approved a restructuring plan to reduce operating costs and drive stronger operating leverage by reducing our global workforce by approximately 4% and closing certain office space. Under the first quarter 2024 restructuring plan, we recorded restructuring charges of $2.3 million related to severance, $3.3 million related to a right-of-use asset impairment upon ceasing the use of part of our headquarters campus and $0.6 million related to office space charges. The right-of-use asset impairment charge was recorded as a restructuring expense, primarily in the operating expense financial statement line items in the Condensed Consolidated Statements of Operations. The unused portion of our headquarters campus has its own identifiable expenses and is not dependent on other parts of our business, and thus was considered its own asset group. As a result, we impaired the carrying value of the related right-of-use asset to its estimated fair value using the discounted cash flows method. The discounted future cash flows were based on a discount rate based on the weighted-average cost of capital. As of March 31, 2025, all restructuring charges related to the first quarter 2024 restructuring plan have been paid.
Previous wording
Total other income, net was income of $2.4 million in the first nine months of 2024 compared to income of $3.8 million for the same period of 2023. The year-over-year change of $1.3 million was primarily due to overall lower cash and investment balances resulting in a $4.1 million decrease in interest income, partially offset by a $1.2 million decrease in cash interest expense as we extinguished part of our 2025 Notes in the fourth quarter of 2023, a $1.0 million gain on the sale of intellectual property, and a $0.5 million decrease in net foreign exchange rate-based losses.
Current wording
Total other income, net was income of $0.2 million for the first quarter of 2025 compared to income of $0.5 million in the same period of 2024. The year-over-year change of $0.4 million was primarily due to overall lower cash and investment balances resulting in a $1.4 million decrease in interest income, partially offset by a $0.7 million decrease in net foreign exchange rate-based losses, a $0.4 million gain on insurance proceeds, and a $0.1 million increase in cash interest expense primarily driven by our $25.0 million draw from our 2021 Credit Agreement in February 2025.
Previous wording
We recorded an income tax expense of $301.6 million for the nine months ended September 30, 2024 on pre-tax net loss of $93.5 million. Our income tax expense for the nine months ended September 30, 2024 primarily resulted from a tax expense on pre-tax book income in certain jurisdictions of $5.0 million, and discrete items that included $293.4 million of net tax expense from the recording of a valuation allowance on United States federal and state net deferred tax assets, and nondeductible equity tax expense for stock-based compensation of $4.9 million, partially offset by an income tax benefit of $1.3 million related to restructuring charges, and an income tax benefit related to the foreign provision to income tax return adjustments of $0.5 million.
Current wording
We recorded an income tax expense of $1.7 million for the first quarter of 2025 on pre-tax net loss of $45.1 million. Our income tax expense for the first quarter of 2025 primarily resulted from a tax expense of $1.6 million on pre-tax book income in certain tax jurisdictions and discrete items that included $2.1 million of nondeductible equity tax expense for employee stock-based compensation, partially offset by a net decrease in the valuation allowance of $1.6 million and an income tax benefit of $0.5 million related to restructuring charges. We evaluated the impact of goodwill impairment on tax-deductible goodwill and determined that it did not materially impact the tax provision due to a full valuation allowance on our United States federal and state net deferred tax assets.
Previous wording
Each quarter, we assess the realizability of our existing deferred tax assets under ASC Topic 740. We assess available positive and negative evidence to estimate whether sufficient future taxable income will be generated to realize our deferred tax assets. In the assessment for the period ended March 31, 2024, we concluded based on the introduction of negative evidence resulting from developments in the first quarter of 2024, such as increased and accelerated costs associated with our future product strategy and roadmap, an increased competitive environment, integration and product development costs related to the recent acquisition of Forcite Helmet Systems, restructuring costs and other negative factors, that it was more likely than not that our deferred tax assets related to United States federal and state deferred tax assets would not be realizable. Therefore, in the period ended March 31, 2024, after consideration of our deferred tax liabilities and recent developments, we provided a valuation allowance of $294.9 million on United States federal and state deferred tax assets. We intend to continue maintaining a full valuation allowance on our United States federal and state deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. That determination was also based, in part, on our revised expectation that our projections of pre-tax losses in 2024 and future years will cause us to be in a cumulative GAAP loss for ASC Topic 740 purposes in 2024 and forward. In the assessment for the period ended September 30, 2024, we concluded that it remains more likely than not that we will not be able to realize our deferred tax assets. We will continue to monitor our future financial results, expected projections and the potential impact on our assessment regarding the recoverability of our deferred tax asset balances and in the event there is a need to release the valuation allowance, a tax benefit would be recorded. Our foreign deferred tax assets in each jurisdiction are supported by taxable income or in the case of acquired companies, by the future reversal of deferred tax liabilities. It is more likely than not that our foreign deferred tax assets will be realized and thus, a valuation allowance is not required on our foreign deferred tax assets.
Current wording
Each quarter, we assess the realizability of our deferred tax assets under ASC Topic 740. We assess available positive and negative evidence to estimate whether sufficient future taxable income will be generated to realize our deferred tax assets. In the assessment for the period ended March 31, 2025, we concluded that it remains more likely than not that our United States federal and state deferred tax assets would not be realizable. We will continue to monitor our financial results and future projections to assess the realizability of our deferred tax assets. In the event there is a need to release the valuation allowance, a corresponding tax benefit would be recognized. Our foreign deferred tax assets in each jurisdiction are supported by taxable income or in the case of acquired companies, by the future reversal of deferred tax liabilities. It is more likely than not that our foreign deferred tax assets will be realized and thus, a valuation allowance is not required on our foreign deferred tax assets.
Previous wording
Our primary source of cash is receipts from sales of our products, and subscription and service. Other sources of cash are from proceeds from the issuance of convertible notes, employee participation in the employee stock purchase plan, the exercise of employee stock options, and facility subleases. Our primary uses of cash are for inventory procurement, payroll-related expenses, general operating expenses, including advertising, marketing, office rent, purchases of property and equipment, other costs of revenue, share repurchases, repurchases of convertible notes, acquisitions, interest, and taxes.
Current wording
Our primary source of cash is receipts from sales of our hardware products, and subscription and service. Other sources of cash are from proceeds from the issuance of convertible notes, employee participation in the employee stock purchase plan, the exercise of employee stock options, and facility subleases. Our primary uses of cash are for inventory procurement, payroll-related expenses, general operating expenses, including advertising, marketing, office rent, purchases of property and equipment, other costs of revenue, share repurchases, repurchases of convertible notes, acquisitions, interest, and taxes.
Previous wording
Our liquidity position has been historically impacted by seasonality, which is primarily driven by higher revenues during the second half of the year as compared to the first half. For example, net cash provided by operating activities during the second half of 2023 was $42.1 million, compared to cash used by operating activities of $75.0 million during the first half of 2023.
Current wording
Our liquidity position has been historically impacted by seasonality, which is primarily driven by higher revenues during the second half of the year as compared to the first half. For example, net cash used in operating activities during the second half of 2024 was $27.3 million, compared to cash used in operating activities of $97.8 million during the first half of 2024.
Previous wording
As of September 30, 2024, our cash, cash equivalents, and marketable securities totaled $130.2 million. Our cash, net of the outstanding principal balance of the 2025 Notes, as of September 30, 2024, was $36.4 million. The overall cash used in operating activities of $100.0 million for the nine months ended September 30, 2024 was primarily attributable to a net loss of $395.1 million and net cash outflows from changes in our working capital of $32.7 million, partially offset by a deferred tax asset expense of $296.8 million, and net cash inflows from other non-cash expenses of $31.0 million. Working capital changes for the nine months ended September 30, 2024 of $32.7 million were the result of an increase in inventory of $49.0 million, an increase in accounts receivable of $41.7 million, an increase in prepaid expenses and other assets of $4.7 million and a decrease in deferred revenue of $2.1 million, partially offset by an increase in accounts payable and other liabilities of $64.8 million. As of September 30, 2024, $15.5 million of cash was held by our foreign subsidiaries.
Current wording
As of March 31, 2025, our cash, cash equivalents, and marketable securities totaled $69.6 million. Our cash, net of the outstanding principal balance of the 2025 Notes, as of March 31, 2025, was negative $49.1 million. The overall cash used in operating activities of $57.2 million for the three months ended March 31, 2025 was primarily attributable to a net loss of $46.7 million and net cash outflows from changes in our working capital of $36.2 million, partially offset by an $18.6 million goodwill impairment charge, andnet cash inflows from other non-cash expenses of $7.1 million. Working capital changes for the three months ended March 31, 2025 of $36.2 million were the result of a decrease in accounts payable and other liabilities of $63.1 million, an increase in prepaid expenses and other assets of $5.1 million, and a decrease in deferred revenue of $1.8 million, partially offset by a decrease in inventory of $24.4 million, and a decrease in accounts receivables of$9.3 million. As of March 31, 2025, $4.7 million of cash was held by our foreign subsidiaries.
Previous wording
In November 2020, we issued $143.8 million aggregate principal amount of 2025 Notes in a private placement to purchasers for resale to qualified institutional buyers. In November 2023, we repurchased $50.0 million in aggregate principal amount of the 2025 Notes, reducing the amount owed on the 2025 Notes to $93.8 million. The 2025 Notes mature on November 15, 2025, unless earlier repurchased or converted into shares of Class A common stock subject to certain conditions. The 2025 Notes are convertible into cash, shares of the Class A common stock, or a combination thereof, at our election, at an initial conversion rate of 107.1984 shares of common stock per $1,000 principal amount of the 2025 Notes, which is equivalent to an initial conversion price of approximately $9.3285 per share of common stock, subject to adjustment. We pay interest on the 2025 Notes semi-annually, which is due on May 15 and November 15 of each year.
Current wording
In November 2020, we issued $143.8 million aggregate principal amount of 2025 Notes in a private placement to purchasers for resale to qualified institutional buyers. In November 2023, we repurchased $50.0 million in aggregate principal amount of the 2025 Notes, reducing the amount owed on the 2025 Notes to $93.8 million. The 2025 Notes mature on November 15, 2025, unless earlier repurchased or converted into shares of Class A common stock subject to certain conditions. Prior to August 15, 2025, the 2025 Notes are convertible at the option of the holder, at an initial conversion rate of 107.1984 shares of Class A common stock per $1,000 principal amount of the 2025 Notes, which is equivalent to an initial conversion price of approximately $9.3285 per share of common stock, subject to adjustment. Conversion will be settled in cash, shares of the Company’s Class A common stock, or a combination thereof, at the Company’s election. We pay interest on the 2025 Notes semi-annually, which is due on May 15 and November 15 of each year.
Previous wording
Cash used in operating activities of $100.0 million for the nine months ended September 30, 2024 was primarily attributable to a net loss of $395.1 million and net cash outflows from changes in our working capital of $32.7 million, partially offset by a deferred tax asset expense of $296.8 million, and net cash inflows from other non-cash expenses of $31.0 million. Working capital changes for the nine months ended September 30, 2024 of $32.7 million were the result of an increase in inventory of $49.0 million, an increase in accounts receivable of $41.7 million, an increase in prepaid expenses and other assets of $4.7 million and a decrease in deferred revenue of $2.1 million, partially offset by an increase in accounts payable and other liabilities of $64.8 million.
Current wording
Cash used in operating activities of $57.2 million for thethree months ended March 31, was primarily attributable to a net loss of $46.7 million and net cash outflows from changes in our working capital of $36.2 million, partially offset by an $18.6 million goodwill impairment charge, andnet cash inflows from other non-cash expenses of $7.1 million. Working capital changes for the three months ended March 31, 2025 of $36.2 million were the result of a decrease in accounts payable and other liabilities of $63.1 million, an increase in prepaid expenses and other assets of $5.1 million, and a decrease in deferred revenue of $1.8 million, partially offset by a decrease in inventory of $24.4 million, and a decrease in accounts receivables of$9.3 million.
Previous wording
Cash used in financing activities of $0.7 million for the nine months ended September 30, 2024 was primarily attributable to $2.8 million in tax payments for net restricted stock unit (RSU) settlements, partially offset by $2.2 million of cash inflows from stock purchases made through our employee stock purchase plan.
Current wording
Cash provided by financing activities of $24.9 million for thethree months ended March 31, was primarily attributable to a $25.0 million draw on our 2021 Credit Agreement, and $0.4 million of cash inflows from stock purchases made through our employee stock purchase plan, partially offset by $0.5 million in tax payments for net restricted stock unit (RSU) settlements.
Previous wording
There have been no material changes to our critical accounting policies and estimates from those disclosed in our 2023 Annual Report, except for estimates used in our goodwill impairment analysis and assessment of the recoverability of our deferred tax assets.
Current wording
There have been no material changes to our critical accounting policies and estimates from those disclosed in our 2024 Annual Report, except for estimates used in our goodwill impairment analysis.
Previous wording
•adjusted EBITDA and non-GAAP net income (loss) exclude stock-based compensation expense related 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 non-GAAP net income (loss) as we believe their inclusion would hinder our ability to assess core operational performance;
Current wording
•adjusted EBITDA and non-GAAP net income (loss) exclude stock-based compensation expense related 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 non-
Previous wording
•adjusted EBITDA and non-GAAP net income (loss) excludes any gain or loss on the extinguishment of debt because it is not reflective of ongoing operating results in the period, and the frequency and amount of such gains and losses vary;
Current wording
•adjusted EBITDA and non-GAAP net income (loss) excludes a gain on insurance proceeds because it is not reflective of ongoing operating results in the period, and the frequency and amount of such gains vary;
Previous wording
•non-GAAP net income (loss) includes income tax adjustments. In the first quarter of 2024, we revised our income tax adjustments to reflect the current and deferred income tax expense (benefit) and the effect of non-GAAP adjustments to better align with SEC guidance. For comparative purposes, we have revised the prior year income tax adjustments to reflect current and deferred income tax expense (benefit) and the effect of non-GAAP adjustments. Additionally, in the second quarter of 2024, we revised the first quarter of 2024 income tax adjustment to exclude the establishment of a valuation allowance on the United States federal and state deferred tax assets;
Current wording
•non-GAAP net income (loss) includes income tax adjustments which reflect the current and deferred income tax expense (benefit) and the effect of non-GAAP adjustments. In the second quarter of 2024, we revised the first quarter of 2024 income tax adjustment to exclude the establishment of a valuation allowance on the United States federal and state deferred tax assets;
Previous wording
The following table presents a reconciliation of net loss to non-GAAP net income (loss):
Current wording
The following table presents a reconciliation of net loss to non-GAAP net loss:
Previous wording
(1)In the first quarter of 2024, we revised the non-GAAP income tax adjustments to reflect current and deferred income tax expense (benefit) and the effect of non-GAAP adjustments to better align with SEC guidance. For comparative purposes, we have revised our prior period income tax adjustments to reflect current and deferred income tax expense (benefit) and the effect of non-GAAP adjustments. Additionally, in the second quarter of 2024, we revised the first quarter of 2024 income tax adjustment to exclude the establishment of a valuation allowance on United States federal and state deferred tax assets.
Current wording
(1)In the second quarter of 2024, we revised the first quarter of 2024 income tax adjustment to exclude the establishment of a valuation allowance on United States federal and state deferred tax assets.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
GAAP net income (loss) as we believe their inclusion would hinder our ability to assess core operational performance;
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Total other income, net was income of $1.9 million for the third quarter of 2024 compared to income of $0.8 million for the same period of 2023. The year-over-year change of $1.1 million was primarily due to a $1.1 million increase in net foreign exchange rate-based gains, a $1.0 million gain on the sale of intellectual property, and a
Previous report — wording carried elsewhere
$0.4 million decrease in cash interest expense as we extinguished part of our 2025 Notes in the fourth quarter of 2023, partially offset by overall lower cash and investment balances resulting in a $1.4 million decrease in interest income.
Previous report — wording carried elsewhere
We recorded an income tax expense of $2.1 million for the three months ended September 30, 2024, on pre-tax net loss of $6.1 million. Our income tax expense for the three months ended September 30, 2024 primarily resulted from a tax expense of $2.1 million on pre-tax book income in certain tax jurisdictions, and discrete items that included $1.9 million of nondeductible equity tax expense for employee stock-based compensation, partially offset by a net decrease in the valuation allowance of $1.6 million, an income tax benefit of $0.3 million related to restructuring charges, and an income tax benefit related to the foreign provision to income tax return adjustments of $0.1 million.
Previous report — wording carried elsewhere
•The $93.8 million aggregate principal amount of the 2025 Notes matures on November 15, 2025, unless earlier repurchased or converted into shares of Class A common stock subject to certain conditions. We intend to deliver cash up to the principal amount of the 2025 Notes, based on our current and projected liquidity levels.
Previous report — wording carried elsewhere
Our foreign deferred tax assets in each jurisdiction are supported by taxable income or in the case of acquired companies, by the future reversal of deferred tax liabilities. It is more likely than not that our foreign deferred tax assets will be realized and thus, a valuation allowance is not required on our foreign deferred tax assets.