GoPro, Inc. Q1 FY2025 earnings call

• Launched new hardware and software products including updated 360-degree camera app experience, refreshed MAX camera, Limited Edition Polar White HERO13 Black, and Anamorphic Lens Mod for HERO13 Black.
• GoPro subscription has strong aggregate retention above 67% over past six quarters, with ARPU up 5% year-over-year and Q1 2025 retention at 70%.
• Diversified supply chain to mitigate tariff impacts, expecting to offset tariff costs with modest price increases and potential U.S. production.
• OpEx reduced 26% to $62 million in Q1 2025 due to restructuring, reduced marketing, and completion of GP3.
• Joint development partnership with AGV for tech-enabled motorcycle helmets to tap into $3 billion SAM.

In the first quarter, GoPro's revenue was $134 million. The retail channel contributed $94 million, which is 70% of Q1 2025 revenue. The GoPro.com channel, including subscription and service revenue, was $40 million, making up 30% of Q1 2025 revenue. Subscription and service revenue grew 4% year-over-year to $27 million, with ARPU improving 5% year-over-year and aggregate subscription retention reaching a record 70%.

• Q2 2025 revenue expected at mid-point of $145 million, non-GAAP loss per share $0.07, nearly $30 million improvement in adjusted EBITDA year-over-year.
• 2025 expects units and revenue lower than 2024 due to macro environment, competition, and delay of new 360-camera, partially offset by FX.
• Full-year 2025 operating expenses expected to be $240 million to $250 million, down over $100 million year-over-year.
• Expect subscription ARPU growth, subscription cost improvements, and end 2025 with 2.4 million subscribers.

• Macro-economic issues and competition in Asia-Pacific, particularly in China, Japan, and South Korea impacting sell-through.
• Tariff impacts on business, though supply chain diversification is mitigating this.
• IP litigation risks as GoPro defends its patents against competitors.

Q: Could you help understand sources of stronger sell-through in the quarter and if it was pull-forward ahead of pricing increases?

A: No pull-forward demand, sales were linear with back-end loading.

Q: Sell-through in US down 10% Y/Y but sell-in up 7% Y/Y, and Asia revenue down over 50% Y/Y. Contextualize?

A: Asia down 54% due to macro and competition; US had best sell-through, sell-in included one-time $5M sale of products.

Q: Tariff situation, inventory from China, price elasticity?

A: Cameras to US are manufactured outside China (Thailand) with 10% tariff vs prior 150%; accessories have small tariffs offset by small price increases.

Q: Dynamics in Asia and Americas?

A: Asia has nationalistic buying and more competition; US improved in last quarter and expected to continue in Q2.

Q: Plans for reverse stock split?

A: Performance hitting numbers and driving growth should help move stock up.