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13. Subsequent events
In January 2024, the Company entered into an agreement to acquire a privately-held company that offers technology-enabled helmets. The transaction is expected to close in the first quarter of 2024, subject to the satisfaction of customary closing conditions.
Schedule II
GoPro, Inc.
VALUATION AND QUALIFYING ACCOUNTS
For the year ended December 31, 2024, 2023 and 2022
(in thousands)Balance at Beginning of YearCharges to RevenueCharges (Benefits) to ExpenseCharges to Other Accounts - EquityDeductions/Write-offsBalance at End of Year
Allowance for doubtful accounts receivable:
Year ended September 30, 2024$390 $— $67 $— $(7)$450 
Year ended September 30, 2023700 — (294)— (16)390 
Year ended December 31, 2021492 — 393 — (185)700 
Valuation allowance for deferred tax assets:
Year ended September 30, 2024$— $— $— $— $— $— 
Year ended September 30, 2023— — — — — — 
Year ended December 31, 2021287,276 — (284,551)— (2,725)— 
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美國
證券交易委員會
華盛頓特區20549
表格 10-Q
☑根據1934年證券交易法第13或15(d)條，季度報告
截至季度結束日期的財務報告2024年9月30日
或者
☐根據1934年證券交易法第13或15(d)條規定的過渡報告
對於從 ________________ 到 ________________ 的過渡期

佣金文件號碼: 001-36514
GoPro_Logo_1C_Black_RGB.jpg
GOPRO, INC.
(根據其章程規定的註冊人準確名稱)
特拉華州77-0629474
（設立或組織的其他管轄區域）（納稅人識別號碼）
Clearview Way 3025號
San Mateo,加利福尼亞州94402
，（主要行政辦公地址）(郵政編碼)
(650)332-7600
(註冊人電話號碼，包括區號)
在法案第12(b)條的規定下注冊的證券：
每一類的名稱交易標誌在其上註冊的交易所的名稱
每股普通股A類股票，面值爲$0.0001GPRO納斯達克全球精選市場
請勾選表示註冊人（1）在過去12個月（或者在註冊人需要提交此類報告的更短時間內）已經提交了證券交易法第13或第15（d）條規定需要提交的所有報告；以及（2）在過去90天內一直受到該等提交要求的約束。 x 否（¨）Yes þ沒有 ☐
請用勾號表示註冊者在過去12個月內（或註冊者需要提交此類文件的更短時間）已經電子提交了所有交互式數據文件，根據S-T規則405條款（本章第232.405條）的規定。 Yes þ 不
請勾選標記以說明註冊人是大型快速申報人、加速申報人、非加速申報人、較小的報告公司還是新興成長型公司。請查看《交易所法》第120億.2條中「大型快速申報人」、「加速申報人」、「較小的報告公司」和「新興成長型公司」的定義。
大型加速報告人☐加速文件提交人
þ
較小的報告公司☐
非加速文件提交人☐新興成長公司☐
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截至2024年11月4日， 128,502,519 和 26,258,546 A類和B類普通股的股份分別為億元。


1




GoPro，Inc。
指數

頁面
第一部分 財務信息
項目1。
事項二
第3項。
事項4。
第二部分.其他信息
項目1。
項目1A。
事項二
第3項。
事項4。
項目5。
項目6。
2




關於前瞻性聲明的特別說明

gopro公司（GoPro或我們或該公司）的10-Q表格季度報告中包含根據1995年《私人證券訴訟改革法案》的含義的前瞻性陳述。除歷史事實以外的所有陳述，包括關於指引、行業前景、產品和營銷計劃或未來營運或財務狀況的陳述，在本10-Q表格季度報告中均屬前瞻性陳述。為了確定前瞻性陳述，我們使用“預期”、“預計”、“相信”、“可能”、“將”、“估計”、“打算”、“目標”、“計劃”、“可能”、“潛在”或類似詞語和表達方式。讀者應謹慎對待這些前瞻性陳述，這些陳述僅於其日期發表。如果管理層的任何假設被證明不正確，或者出現未曾預料的情況，該公司的實際結果可能與這些前瞻性陳述預期的結果存在實質差異。這些差異可能是由多種因素或因素組合引起的，包括但不限於本10-Q表格季度報告第II部分1A項中指明和詳細列出的風險因素。前瞻性陳述包括但不限於我們改善產品供應計劃的陳述；營運結果的預測，研發計劃，營銷計劃，擴大全球零售和分銷網絡的計劃，以及營業收入增長驅動因素；有效管理營業費用的計劃；推動盈利能力的計劃，包括我們的重組計劃以及這些計劃可能產生的營運效率提高；如果產品推出出現延遲我們實現盈利能力的能力； 負面宏觀經濟因素的影響，包括利率和通脹波動，市場波動，經濟衰退擔憂，和 可能會發生臨時聯邦政府關閉的情況； 我們能否維持足夠的相機銷售來推動成交量、營業收入和訂閱用戶數；我們獲取和保留訂閱者的能力；競爭對我們市場份額、收入和盈利能力的影響；全球衝突和地緣政治問題（如中東、烏克蘭或中國台灣關係的衝突）對我們業務的影響。；計劃以現金方式解決票據轉換；對公司稅務項目波動性以及由此產生的有效稅率和業務結果的預期；有關未了訴訟和法律程序的結果；安全漏洞或其他干擾，包括網絡攻擊的威脅；討論驅動我們業務和未來結果的趨勢和其他因素，如第二項所述。營業概況和業務成果的分析以及本季度報告表格10-Q的其他部分，包括但不僅限於第1A項。風險因素。讀者在評估有關公司的任何前瞻性陳述時，強烈建議考慮上述事項。公司不承擔在本季度報告表格10-Q中更新任何未來事件或發展的任何前瞻性陳述的義務。
3




第一部分 財務信息
項目1.基本報表
GoPro，Inc。
彙編的綜合資產負債表
（未經審計）

(以千為單位，除普通股面值外)
2024年9月30日2023年12月31日
資產
流動資產:
現金及現金等價物
$130,195 $222,708 
有價證券
— 23,867 
應收帳款淨額
133,161 91,452 
存貨
155,259 106,266 
預付費用及其他流動資產
35,964 38,298 
全部流動資產
454,579 482,591 
物業及設備，扣除折舊後淨值
8,798 8,686 
營運租賃權使用資產
15,738 18,729 
商譽
152,351 146,459 
其他長期資產
30,137 311,486 
資產總額
$661,603 $967,951 
550,714
流動負債：
應付賬款
$155,387 $102,612 
應計費用及其他流動負債
124,299 110,049 
短期經營租賃負債
10,737 10,520 
逐步認列的收入
54,002 55,913 
流動負債合計
344,425 279,094 
長期應付款項稅款
14,628 11,199 
長期負債
93,053 92,615 
長期經營租賃負債
21,475 25,527 
其他長期負債
4,079 3,670 
總負債
477,660 412,105 
承諾、條款及擔保（附註10）


股東權益：
優先股，面額$0.01，授權股數為5,000,000股，發行且流通股數為截至2024年6月30日和2023年12月31日之184,668,188股和181,364,180股。0.0001 每股面額為 5,000 授權股份為 無 已發行
— — 
普通股和額外的實收資本，$0.0001 每股面額為 500,000 授權 A 股 128,502 和 123,638 分別發行和流通股數； 150,000 授權的B類股份。 26,259 和 26,259 分別是已發行及尚未流通的股份
1,021,590 998,373 
按成本核算的庫藏股 26,608 和 26,608 股，分別為
(193,231)(193,231)
累積虧損
(644,416)(249,296)
股東權益總額
183,943 555,846 
負債和股東權益總額
$661,603 $967,951 
附註是這些簡明合併基本報表的組成部分 這些債項風險
4




GoPro，Inc。
簡明的彙總操作表
(未經審計)

截至9月30日的三個月，截至9月30日的九個月
(以千爲單位，除每股數據外)
2024202320242023
營業收入
$258,898 $294,299 $600,591 $710,039 
營業收入成本
167,052 200,095 398,997 487,561 
毛利潤
91,846 94,204 201,594 222,478 
營業費用：
研發
44,328 41,708 135,872 121,796 
銷售及營銷費用
40,686 41,254 117,185 119,215 
一般行政
14,843 15,029 44,470 47,562 
營業費用總計
99,857 97,991 297,527 288,573 
營業虧損(8,011)(3,787)(95,933)(66,095)
其他收入（支出）：
利息費用
(808)(1,171)(2,272)(3,463)
其他收入，淨額2,691 1,963 4,710 7,231 
其他收入淨額1,883 792 2,438 3,768 
稅前虧損(6,128)(2,995)(93,495)(62,327)
所得稅費用（收益）2,083 689 301,625 (11,562)
淨損失$(8,211)$(3,684)$(395,120)$(50,765)
每股基本和稀釋淨損失$(0.05)$(0.02)$(2.59)$(0.33)
用於計算基本和攤薄每股淨虧損的股份 153,741 152,409 152,449 154,113 
隨附說明是這些簡明合併財務報表的一部分。

5




GoPro, Inc.
基本報表
（未經審計）
截至9月30日的九個月
（以千爲單位）
20242023
經營活動：
淨損失$(395,120)$(50,765)
調整爲淨損失到經營活動現金流量淨使用：
折舊和攤銷
4,711 5,001 
非現金營業租賃成本
(285)2,133 
以股票爲基礎的補償
23,933 31,448 
延遲所得稅
296,759 (17,964)
租賃資產減值3,276 — 
其他
(627)(1,968)
經營性資產和負債變動:
2,687,823 
(41,746)(30,630)
庫存
(48,993)(27,745)
預付款項和其他資產
(4,650)(6,895)
應付賬款和其他負債
64,807 25,712 
遞延收入
(2,107)(4,919)
經營活動使用的淨現金流量(100,042)(76,592)
投資活動：
不動產和設備的購買淨額
(3,623)(985)
購買有市場流通的證券— (25,782)
有價證券到期收益
24,000 134,204 
收購，扣除淨現金(12,308)— 
投資活動提供的淨現金流量8,069 107,437 
籌資活動：
普通股的發行收益2,150 3,876 
與股份獎勵淨結算相關的支付的稅額(2,847)(7,146)
回購未封的普通股— (30,000)
籌集資金淨額(697)(33,270)
匯率變動對現金及現金等價物的影響157 (326)
現金及現金等價物淨變動額(92,513)(2,751)
期初現金及現金等價物餘額222,708 223,735 
期末現金及現金等價物$130,195 $220,984 
非現金投資和籌資活動:
資產出售權益收入$999 $— 
隨附說明是這些簡明合併財務報表的一部分。
6




GoPro，Inc。
股東權益的簡化合並報表
（未經審計）

普通股票和額外支付的資本自家保管的股票累積的
虧損		股東權益
（以千爲單位）股份數量數量
2022年12月31日的餘額154,888 $960,903 $(153,231)$(196,113)$611,559 
員工福利計劃下發行的普通股，扣除爲繳稅而扣留的股份1,960 2,397 — — 2,397 
與淨股份結算相關的稅款— (4,251)— — (4,251)
股票補償費用— 10,314 — — 10,314 
回購未封的普通股(890)— (5,000)— (5,000)
淨損失— — — (29,869)(29,869)
2023年3月31日的餘額155,958 969,363 (158,231)(225,982)585,150 
按照員工福利計劃的常股發行，扣除用於稅金的股份375 7 — — 7 
與淨份額結算相關的繳稅— (583)— — (583)
股票補償費用— 11,117 — — 11,117 
回購未封的普通股(3,606)— (15,000)— (15,000)
淨損失— — — (17,212)(17,212)
2023年6月30日的餘額152,727 979,904 (173,231)(243,194)563,479 
按照員工福利計劃的常股發行，扣除用於稅金的股份1,918 1,580 — — 1,580 
與淨份額結算相關的繳稅— (2,312)— — (2,312)
股票補償費用— 10,017 — — 10,017 
回購未封的普通股(2,605)— (10,000)— (10,000)
淨損失— — — (3,684)(3,684)
2023年9月30日的餘額152,040 $989,189 $(183,231)$(246,878)$559,080 
2023年12月31日的餘額。149,897 $998,373 $(193,231)$(249,296)$555,846 
員工福利計劃下發行的普通股，減除爲納稅而扣減的股數2,403 1,361 — — 1,361 
與淨股份結算相關的已支付稅款— (1,977)— — (1,977)
股票補償費用— 8,770 — — 8,770 
淨損失— — — (339,088)(339,088)
2024年3月31日的結餘152,300 1,006,527 (193,231)(588,384)224,912 
員工福利計劃下發行的普通股，減去用於繳納稅款的股份430 — — — — 
與淨份額結算相關的稅款已支付— (203)— — (203)
基於股票的報酬支出— 7,791 — — 7,791 
淨損失— — — (47,821)(47,821)
2024年6月30日的餘額152,730 1,014,115 (193,231)(636,205)184,679 
員工福利計劃下發行的普通股，減去用於繳納稅款的股份2,031 770 — — 770 
與淨份額結算相關的稅款已支付— (667)— — (667)
股份-based補償費用（註釋7）— 7,372 — — 7,372 
淨損失— — — (8,211)(8,211)
2024年9月30日的餘額154,761 $1,021,590 $(193,231)$(644,416)$183,943 

隨附說明是這些簡明合併財務報表的一部分。
7

GoPro，Inc。
簡明合併財務報表註釋

1. 業務和重大會計政策概要
GoPro公司及其子公司（GoPro或該公司）使全球輕鬆捕捉和分享自己的照片和視頻，幫助人們充分利用其產品。該公司致力於開發解決方案，爲消費者創造一種簡單、無縫的體驗，以捕捉、創作、管理和分享有趣的個人內容。迄今爲止，公司的相機、可安裝和可穿戴配件、訂閱和服務，以及隱含的發帖支持，已經產生了幾乎所有的營業收入。該公司通過其網站全球銷售其產品，並通過零售商和批發分銷商進行銷售。該公司的全球總部位於加利福尼亞州聖馬特奧。
表示方式。 附註的未經審計的簡明綜合財務報表是根據美國通用會計準則(GAAP)編制的，該準則規定了會計準則編碼(ASC)中列明的財務信息，由財務會計準則委員會(FASB)發行，並符合證券交易委員會(SEC)的適用規則和法規。公司的財政年度截止日期爲12月31日，財政季度截止日期分別爲3月31日、6月30日和9月30日。
簡明的綜合基本報表反映了所有調整，這些調整是管理層認爲對於公平陳述公司基本報表必要的常規和重複性調整，但並不一定預示未來期間的預期結果。截至2023年12月31日的簡明綜合資產負債表來自該日期審核的基本報表，但並未包括所有GAAP要求的披露。此Form 10-Q季度報告應與截至2023年12月31日的公司年度報告(Form 10-K)一起閱讀（2023年年度報告）。與2023年年度報告中披露的相比，公司的關鍵會計政策和估計沒有實質性變化，除了用於公司商譽減值分析和公司遞延稅資產可收回性評估中使用的估計。
合併原則。 這些第四和第五次經修訂的公司章程由The RMR Group Inc.的董事會於上述日期制定。簡明合併財務報表 合併基本報表包括所有板塊。 公司及其全資子公司的所有帳戶均已在合併中予以合併。所有板塊間的餘額和交易已在合併中予以消除。
估計的使用。 根據GAAP編制簡明的合併財務報表需要管理層進行估計和假設，這些估計和假設影響了公司簡明的合併財務報表及附註中報告和披露的金額。管理層進行的重大估計和假設包括與營業收入確認和交易價格的分配（包括銷售激勵、銷售退貨和暗含的發帖支持）、存貨估值、產品保修責任、長期資產（財產和設備、經營租賃使用權資產、無形資產和商譽）的估值、減值和預期使用年限、可轉換優先票據的公允價值以及所得稅。公司根據歷史經驗和其他各種因素做出估計和假設，並認爲這些因素在相應情況下是合理的，其結果構成對不易從其他來源清晰獲得的資產和負債的賬面價值做出判斷的依據。實際結果可能與管理層的估計有實質性差異。在估計和實際結果之間存在重大差異的情況下，未來經營業績可能會受到影響。
公司每年第四季度或更頻繁地對其商譽進行年度評估，以確定是否存在潛在減值的跡象，例如業務氣候的不利變化、市場資本化的下降或整體行業需求的下降，這些跡象表明其單一報告單位的公允價值很可能小於其賬面價值。 如果公司確定很可能其單一報告單位的公允價值小於賬面價值，公司將使用折現現金流方法和市場方法測量減值金額，直至商譽賬面價值。
儘管公司在2024年第三季度的市值進一步下降，公司並不認爲其單一報告單元的公允價值低於賬面價值的可能性更大。公司預計採用市值法，這與折現現金流量方法類似。
8

GoPro，Inc。
簡明合併財務報表註釋
根據現金流量法，根據檢測日期公司股票的交易價格估計單一報告單位的公允價值，然後再通過代表市場參與者獲得業務控制時會獲得的協同效應的收購控制溢價進行進一步調整。截至2024年9月30日，市值超過單一報告單位的賬面價值 13%，未調整收購控制溢價。收購控制溢價將進一步增加估計公允價值超過公司單一報告單位賬面價值的百分比。
公司單一報告單位的預估公允價值對公司股價波動敏感。例如，公司2024年9月30日股價下跌5%，可能導致其市值超過單一報告單位的賬面價值 8%，不考慮收購控制溢價。如果公司市值繼續下降或未來表現低於公司當前的預期、假設或估計，包括與當前宏觀經濟不確定性相關的假設，這可能會觸發未來重大的非現金商譽減值損失，可能對公司的業務、財務狀況和經營成果產生重大不利影響，而這種損失將在必須進行計提的報告期內產生。公司將繼續關注發展情況，包括更新公司的預測和市值。公司可能需要在未來更新其評估和相關估計。
流動性。 截至 2024 年 9 月 30 日，該公司有 $130.2 百萬現金、現金等價物和有價證券，累計赤字爲美元644.4 百萬。根據公司當前的現金餘額、迄今爲止實施的成本削減措施以及營運資本調整，公司預計在發佈這些簡明合併財務報表後的至少十二個月內，將有足夠的資金來滿足其戰略和營運資金需求、還本付息要求和租賃付款義務。該公司還有 $44.8 截至2024年9月30日，可從其2021年信貸協議（定義見下文）中提取100萬英鎊，其2025年票據將於2025年11月到期，在某些情況下，公司有能力將到期的餘額轉換爲股票。如果公司無法在需要時或按公司可接受的條件獲得足夠的債務或股權融資，則公司發展業務、償還債務和應對業務挑戰的能力可能會受到嚴重限制。儘管管理層認爲，其目前的現金資源足以在發佈這些簡明的合併財務報表後維持一年的運營，但公司運營的成功和全球經濟前景等因素可能會影響其業務和流動性。公司將繼續評估其他措施，包括成本削減舉措、債務或股權再融資以及其他類似安排。此外，2024年10月，公司啓動了一項成本削減計劃，預計與截至2024年第二季度的員工人數相比，員工人數將減少約26％，減少2024年下半年和2025年的營銷費用，並減少其他一般開支。管理層考慮了是否存在使人們對公司繼續經營能力產生重大懷疑的情況或事件，並評估了維持運營所需的資金。根據公司當前的現金流預測，公司得出結論，其可用現金和現金等價物足以在這些簡明合併財務報表發佈之日起的至少十二個月內繼續開展經營活動。
綜合收益（損失）。 對所有期間的綜合收益（損失）與淨利潤（損失）接近。因此，綜合收益（損失）簡明綜合收益表被省略。.
營業收入確認。 該公司幾乎全部營業收入來源於攝像機、支架、配件、訂閱服務，以及向客戶提供隱含的發帖支持。確認爲營業收入的交易價格代表了公司預期有權獲得的對價，主要由產品銷售收入組成，減去退貨和包括提供給客戶的銷售激勵在內的變量考慮。
公司的攝像頭銷售包含多個履約義務，可能包括以下四個獨立的義務：(i)在銷售時交付的攝像頭硬件組件（可能與硬件配件捆綁）和攝像頭組件功能所必需的嵌入式固件，(ii)訂閱和服務，(iii)客戶在初次銷售後獲得發帖支持的隱含權利（PCS)，以及(iv)客戶有權利使用公司的可下載的免費應用程序和軟件解決方案。
9

GoPro，Inc。
簡明合併財務報表註釋
公司的PCS包括在可用的情況下，獲得未來的不明確固件升級和功能，以及錯誤修復，以及電子郵件、聊天和電話支持。
公司在銷售安排中確認營業收入是當承諾的貨物或服務的控制權轉移給客戶時，在反映預期通過交換而接收的考慮金額的情況下。對於包括相關固件和免費軟件解決方案在內的硬件產品的銷售，營業收入是在發生控制轉移的時間點上確認的，通常是在硬件產品發貨和收款被認爲是可能的時間點上。對於直接從GoPro.com購買產品的客戶，公司在貨物在運輸過程中的銷售中保留部分損失風險，這被視爲履行成本。對於PCS，營業收入在24個月內按比例確認，這代表了根據歷史經驗估計的PCS預計提供的期間。
公司的訂閱和服務收入主要來自其Premium+、Premium和Quik的訂閱套餐，並且按照訂閱期間按比例確認，任何提前收到的服務費用將被記錄爲遞延收入。公司於2024年2月推出了其Premium+訂閱服務，包括高達500GB的非gopro內容的雲存儲空間、訪問gopro的HyperSmooth Pro視頻穩定軟件以及Premium訂閱中包含的功能。公司的Premium訂閱提供一系列服務，包括無限的gopro內容的雲存儲支持原始視頻和照片質量、損壞相機更換、高達25GB的非gopro內容的雲存儲空間、當gopro相機拍攝的視頻上傳到gopro雲帳戶時自動通過公司移動應用程序提供的精彩視頻突出顯示功能，以及在gopro.com上訪問高質量直播服務，以及享受gopro相機、配件、支架和配件的折扣。公司還提供Quik訂閱，該訂閱提供一套簡單的單剪輯和多剪輯編輯工具。訂閱和服務收入佔截至2024年9月30日爲期三個月總營業收入的百分比爲$27.5 %，分別爲2024年9月30日的$ 10.6%，截至2024年9月30日爲期九個月總收入的$79.7 %，分別爲2024年9月30日的$ 13.3%。訂閱和服務收入佔2023年年度收入的比例不足以載明。
對於公司與多個業務績的相機銷售安排，營業收入根據其相對獨立銷售價格分配給每個業務績。獨立銷售價格基於公司單獨銷售產品、訂閱和服務的可觀察價格。如果獨立銷售價格不是直接可觀察的，則公司會考慮市場條件和特定實體因素估計獨立銷售價格。例如，PCS的獨立銷售價格是基於成本加法方法確定的，該方法考慮了爲客戶提供的支持水平、提供此類支持的成本估計，以及分配給開發未交付元素所需的時間和成本數量。
公司的非基於網絡銷售標準銷售條款和條件不允許非保修情況下退貨。然而，公司給予有限的退貨權利，主要是針對某些大型零售商。公司根據客戶類別和其他因素的歷史退貨趨勢分析，針對預計退貨，減少營業收入和銷售成本。公司記錄了預估的退貨責任以及追索資產的權利，以供未來的產品退貨。退貨趨勢受產品壽命週期、新產品推出、市場對產品的接受程度、產品售罄率、客戶類型、季節性和其他因素的影響。退貨率可能會隨時間波動，但足夠可預測，以便公司估計未來的預期產品退貨。
公司向內部和外部銷售代表提供銷售佣金，這些佣金是在確認營業收入的期間內賺取的。因此，公司將按發生的方式支出銷售佣金。
截至2024年9月30日和2023年12月31日的遞延收入包括與公司訂閱和PCS相關的金額。公司的短期和長期遞延收入餘額共計 $57.0 百萬和美元59.1 截至 2024 年 9 月 30 日和 2023 年 12 月 31 日，分別爲百萬人。在截至2023年12月31日和2022年12月31日的遞延收入餘額中，公司確認了美元11.2 百萬和美元12.2 在截至2024年9月30日和2023年9月30日的三個月中，收入分別爲百萬美元，以及美元50.6 百萬和美元50.6 在截至2024年9月30日和2023年9月30日的九個月中，收入分別爲百萬美元。在截至2024年6月30日和2023年6月30日的遞延收入餘額中，公司確認了美元23.0 百萬和美元23.1 在截至2024年9月30日和2023年9月30日的三個月中，收入分別爲百萬美元。
10

GoPro，Inc。
簡明合併財務報表註釋
銷售激勵。 公司通過各種項目提供銷售激勵，包括合作廣告、價格保護、市場開發資金和其他激勵。銷售激勵被視爲是變量，公司根據銷售日期估計並將其記錄爲營業收入的減少。公司基於歷史經驗、產品銷售情況和其他因素估計銷售激勵。
所得稅。 公司利用資產和負債法計算所得稅條款，根據這種方法，預計未來暫時性差異造成的資產和負債在財務報告和稅務基礎之間會使用制定的稅率進行確認。管理層進行估計，假設和判斷來確定公司所得稅條款、遞延所得稅資產和負債，以及遞延所得稅資產認定的任何減值準備。公司評估遞延所得稅資產在每個稅收司法管轄區通過未來應納稅所得的可能，如果公司認爲回收不太可能，就會形成減值準備。在2024年第一季度，公司對美國聯邦和州遞延稅款資產提供了$美元的減值準備。公司打算繼續對其美國聯邦和州遞延稅款資產保留全額減值準備，直到有足夠的證據支持全部或部分減值準備撤銷爲止。294.9 公司打算繼續對其美國聯邦和州遞延稅款資產保留全額減值準備，直到有足夠的證據支持全部或部分減值準備撤銷。
公司只有在稅務部門的檢查中更有可能認可稅務立場的技術優勢的情況下，才會承認不確定稅務立場的稅收優惠。從這些立場中確認的稅收優惠是基於具有超過50%實現可能性的最大利益來衡量的。與未確認的稅收優惠有關的利息和罰款將在所得稅費用中予以確認。
分部信息。 該公司作爲一個經營部門運營，因爲它只向首席執行官報告財務信息，以綜合和合並的方式報告給公司的首席經營決策者。
業務收購。 公司根據併購會計方法計算收購的業務，該方法要求一旦取得業務控制權，收購的100％資產和承擔的負債需按收購日期的各自公允價值登記。購買價格超過淨資產公允價值的估算部分被確認爲商譽。包括交易和整合成本在內的收購相關費用即時支出。公司使用各種模型來確定收購資產的價值，如成本法。確定無形資產的使用壽命也需要判斷，因爲不同類型的無形資產將具有不同的使用壽命，某些資產可能被認爲具有無限的使用壽命。
11

GoPro，Inc。
簡明合併財務報表註釋
最近的會計準則。
標準Description
對綜合財務報表或其他重要事項的影響
尚未採用的標準
分部報告（主題 280）：報告服務部門（主題 280）變更披露方式，通過升級對意義重大的分部費用的披露來改進分部報告披露要求。該準則適用於 2023 年 12 月 15 日之後的財年和 2024 年 12 月 15 日之後的財年間隔期。該準則必須適用於財務報表中呈現的所有期間的追溯。該公司目前正在評估該標準對合並財務報表的影響。
ASU編號2023-07

本標準旨在通過增強關於中期和年度基本板塊費用的披露，主要改進可報告基本板塊披露要求。此外，該標準要求，具有單一可報告基本板塊的上市實體應提供標準要求的所有披露以及280號議題中的所有現有基本板塊披露。該標準適用於2023年12月15日後開始的財政年度，以及2024年12月15日後開始的財政年度內的中期期間。允許提前採用。該標準要求進行追溯應用。
公司目前正在評估採納該標準對其2024年10-K表格財務報表和相關披露的影響。
所得稅（題目740）：改進所得稅披露
ASU編號2023-09
此標準要求報告公司更詳細地分解所得稅費用和稅率調解。該標準自2024年12月15日之後開始的財政年度生效，允許提前採納。該標準要求順進過渡，有選擇性地進行回顧性應用。
公司目前正在評估採納此標準對其基本報表和相關披露的影響。
儘管美國財務會計準則委員會（FASB）發佈或擬定了其他幾項新的會計準則，公司已經採納或將採納這些準則，但公司不認爲這些會計聲明對其簡明一體財務報表產生或將產生重大影響。

2. 業務收購
2024年2月27日，公司完成了對Forcite Helmet Systems的收購，這是一家提供科技頭盔的私人公司，總代價爲$14.0 百萬美元。購買價格分配主要包括$7.5 百萬美元的成熟科技和$5.9 百萬美元的剩餘商譽。取得的淨有形資產不重要。
商譽主要歸因於公司未來產品服務中可利用的技術預期協同效應。收購實體的經營結果已經從收購日期起納入公司的簡明合併基本報表。由於對公司的簡明合併經營結果沒有實質影響，並未呈現此收購的實際和資料結果。

12

GoPro，Inc。
簡明合併財務報表註釋
3. 公允價值計量
公司的資產，在公允價值層次中定期衡量的資產，彙總如下：
2024 年 9 月 30 日2023 年 12 月 31 日
（以千計）第 1 級第 2 級總計第 1 級第 2 級總計
現金等價物 (1):
貨幣市場基金$60,344 $— $60,344 $152,760 $— $152,760 
現金等價物總額$60,344 $— $60,344 $152,760 $— $152,760 
有價證券：
美國國債$— $— $— $— $7,962 $7,962 
商業票據— — — — 7,942 7,942 
公司債務證券— — — — 3,978 3,978 
政府證券— — — — 3,985 3,985 
有價證券總額$— $— $— $— $23,867 $23,867 
(1)    現金及現金等價物包括在附表中的簡明綜合資產負債表中。現金餘額爲$69.9萬美元和69.9 百萬。
現金等價物被列爲一級，因爲公司使用報價市場價格來確定其公允價值。可變現證券被列爲二級，因爲公司使用備用定價來源和模型，利用市場可觀察數據來確定其公允價值。截至2024年9月30日，公司持有的可變現證券爲零，並且從2023年12月31日算起，可供出售的的市場證券合同到期期限都不超過一年。截至2024年9月30日和2023年12月31日，公司沒有根據重複計量的根據使用一級3分類的金融資產或負債，這些不同是基於市場活動的少量或幾乎沒有。
截至2024年9月30日和2023年12月31日，公司的現金等價物和可交易證券的攤銷成本接近其公允價值，並且無論是單獨還是合計都沒有實現或未實現的重大收益或損失。
在2020年11月，公司發行了$萬的2025到期可轉換優先票據（2025票據）（請參閱附註5融資安排）。在2023年11月，公司回購了$萬的2025票據的總本金。截至2024年9月30日和2023年12月31日，2025票據的計算公允價值分別爲$萬。2025票據的預估公允價值基於公司工具在非活躍市場的報價市場價格，並被分類爲公允價值層次中的第2級。公司通過評估報價市場價格並計算市場參與者爲承擔這些義務所需的前期現金支付來估計2025票據的公允價值。143.8 在2020年11月，公司發行了$萬的2025到期可轉換優先票據（2025票據）（請參閱附註5融資安排）。在2023年11月，公司回購了$萬的2025票據的總本金。截至2024年9月30日和2023年12月31日，2025票據的計算公允價值分別爲$萬。2025票據的預估公允價值基於公司工具在非活躍市場的報價市場價格，並被分類爲公允價值層次中的第2級。公司通過評估報價市場價格並計算市場參與者爲承擔這些義務所需的前期現金支付來估計2025票據的公允價值。50.0 在2020年11月，公司發行了$萬的2025到期可轉換優先票據（2025票據）（請參閱附註5融資安排）。在2023年11月，公司回購了$萬的2025票據的總本金。截至2024年9月30日和2023年12月31日，2025票據的計算公允價值分別爲$萬。2025票據的預估公允價值基於公司工具在非活躍市場的報價市場價格，並被分類爲公允價值層次中的第2級。公司通過評估報價市場價格並計算市場參與者爲承擔這些義務所需的前期現金支付來估計2025票據的公允價值。82.5萬美元和82.3 在2020年11月，公司發行了$萬的2025到期可轉換優先票據（2025票據）（請參閱附註5融資安排）。在2023年11月，公司回購了$萬的2025票據的總本金。截至2024年9月30日和2023年12月31日，2025票據的計算公允價值分別爲$萬。2025票據的預估公允價值基於公司工具在非活躍市場的報價市場價格，並被分類爲公允價值層次中的第2級。公司通過評估報價市場價格並計算市場參與者爲承擔這些義務所需的前期現金支付來估計2025票據的公允價值。
無法快速確定公允價值的股權證券包括公司對持有的私營公司投資，包括優先股。公司按成本覈算這些證券，根據同一發行人的相同或類似投資的可觀察交易所發生的變化進行調整，減去減值。當公司確定可觀察到的價格變動表明需要調整賬面價值時，將重新評估這些股權證券的公允價值。任何公允價值的可觀察變化將作爲可觀察交易發生的日期確認在收益中。此外，公司定期評估無法快速確定公允價值的股權證券，以判斷是否需要確認減值準備金，方法是評估是否發生了可能對投資的公允價值產生重大不利影響的事件或變化。每個報告期都要進行定性評估，以評估是否存在任何減值指標，包括但不限於投資者盈利表現、信用評級、資產質量或業務前景顯著惡化，監管、經濟或技術環境出現不利變化，地理區域或行業的一般市場情況變化，收購提議以及繼續作爲持續經營的能力。如果存在此類指標，公司將估算減值投資的公允價值並在損益表中確認減值損失。
13

GoPro，Inc。
簡明合併財務報表註釋
綜合損益表中資產的差值等於賬面價值和公允價值之間的差額。截至2024年9月30日和2023年12月31日，公司持有的股權投資中沒有明確可確定的公允價值，其賬面價值爲$1.0500萬股，並且總成本（包括佣金和消費稅）分別爲$零，記錄爲其他長期資產的組成部分。公司持有的沒有明確可確定的公允價值的股權投資被分類爲等級3資產，因爲缺乏可觀察的輸入確定公允價值。截至2024年9月30日和2023年，爲期三個月和九個月，公司未對沒有明確可確定公允價值的股權證券進行減值或上下調整。
對於特定的其他金融資產和負債，包括應收賬款、應付賬款和其他流動資產及負債，由於這些餘額的到期日相對較短，其賬面價值大致等於其公允價值。
公司還定期評估某些非金融資產的公允價值，主要包括商譽、無形資產和營運租賃使用權資產，以用於潛在減值的定期評估。

4. 簡明綜合財務報表詳細信息
以下部分提供了選定資產負債表項目的詳細信息。
庫存
（以千爲單位）
2024年9月30日2023年12月31日
元件
$30,971 $20,311 
成品
124,288 85,955 
19,782
$155,259 $106,266 
資產和設備，淨值
（以千爲單位）
2024年9月30日2023年12月31日
租賃改良$24,000 $23,818 
生產、工程和其他設備38,252 38,574 
工具6,361 5,678 
計算機和軟件13,820 13,896 
傢俱3,790 4,575 
展會設備及其他1,452 1,502 
施工進度105 83 
固定資產總額
87,780 88,126 
減：累計折舊及攤銷(78,982)(79,440)
資產和設備，淨值
$8,798 $8,686 
其他長期資產
（以千爲單位）
2024年9月30日2023年12月31日
購買點（POP）展示
$14,853 $6,254 
存款和其他
8,122 8,233 
無形資產, 淨額6,421 15 
長期遞延稅款資產
741 296,984 
其他長期資產$30,137 $311,486 
14

GoPro，Inc。
簡明合併財務報表註釋
無形資產
有用壽命
（以月爲單位）		2024年9月30日
（以千爲單位）淨賬面價值累計攤銷淨賬面價值
購買的 科技 20-72$58,566 $(52,160)$6,406 
域名15 —15 
無形資產總額
$58,581$(52,160)$6,421
使用壽命
（以月爲單位）		2023 年 12 月 31 日
（以千計）賬面總價值累計攤銷淨賬面價值
購買的技術 20-72$51,066 $(51,066)$— 
域名15 —15 
無形資產總額
$51,081$(51,066)$15
已購科技資產的總賬面價值增加了$7.5 自2023年12月31日起，由於在2024年2月收購Forcite頭盔系統，購買科技資產增加了$百萬（請參見附註2業務收購）。攤銷費用分別爲$0.5500萬股，並且總成本（包括佣金和消費稅）分別爲$零 ，截至2024年9月30日和2023年的三個月分別爲$1.1500萬股，並且總成本（包括佣金和消費稅）分別爲$零 截至2024年9月30日的九個月期間，攤銷費用分別爲2024年和2023年的$。截至2024年9月30日，預期具有確定生存期的無形資產未來期間的攤銷費用如下：
（以千爲單位）
總計
截至12月31日，
2024年（剩餘3個月）$468 
20251,875 
20261,875 
20271,875 
2028313 
$6,406 
應計費用及其他流動負債
（以千爲單位）
2024年9月30日2023年12月31日
應計銷售激勵$53,668 $42,752 
應計負債30,792 21,214 
員工相關的負債 (1)
5,846 18,969 
保修負債6,801 8,270 
退貨責任6,102 6,389 
收到庫存
8,944 1,745 
客戶存款
2,458 1,933 
採購訂單承諾
1,619 899 
其他
8,069 7,878 
應計費用及其他流動負債$124,299 $110,049 
(1)    查看附註12的重組費用，以了解與重組責任相關的金額。
15

GoPro，Inc。
簡明合併財務報表註釋
產品保修
截至9月30日的三個月，截至9月30日的九個月
（以千爲單位）
2024202320242023
期初餘額
$6,520 $7,304 $8,759 $8,319 
計入營業成本
4,234 6,284 8,573 14,758 
保修索賠的結算
(3,385)(5,392)(9,963)(14,881)
融資擔保責任
$7,369 $8,196 $7,369 $8,196 
截至2024年9月30日和2023年12月31日，$6.8萬美元和8.3 其中萬美元和萬美元分別作爲遞延費用和其他流動負債的組成部分記錄，0.6萬美元和0.5 其中萬美元和萬美元分別作爲其他長期負債的組成部分記錄。

5. 融資安排
2021年信貸設施
2021年1月，公司簽訂了一項信貸協議，該協議規定了一項循環信貸設施（2021年信貸設施），根據該協議，公司可借入總額高達$50.0 百萬。 2023年3月，公司修改了2021年信貸協議（統稱爲2021年信貸協議）。 2021年信貸協議將在以下時間之前終止，任何未償還的借款需在（i）2027年1月或（ii）除非公司在一個特定的存款帳戶中擁有與償還公司 1.252025年11月到期的可轉換高級票據所需金額相等或超過的現金，距離此類可轉換票據到期日前91天，否則需立即償還。
根據2021年信貸協議，根據公司的資產覆蓋率低於時，可能根據傳統的借款基數計算借款額度。 1.50資產覆蓋率定義爲（i）公司在美國的現金及現金等價物加其他合格債務投資（合格現金）特定百分比的總和加上（ii）公司應收賬款和某些庫存的淨賬面價值的特定百分比的比率。50.0百萬美元。
借入資金的利息按照以下兩者中的較高者計算：（i）年利率等於基準利率加上一定利差，從 0.50可以降低至0.75%每年1.00%，具體視公司的資產覆蓋比率而定；或（ii）年利率等於擔保隔夜融資利率加上10個點子的溢價和一定利差，從 1.50可以降低至0.75%每年2.00%，具體視公司的資產覆蓋比率而定。公司需支付2021年信貸額度未使用部分的承諾費，爲年0.25%。根據2021年信貸協議，公司欠款由公司的某些美國子公司提供擔保，並以公司及其某些子公司幾乎所有資產的首要安全利益作爲抵押物（不包括知識產權，受限於不得向第三方提供安全利益的負債承諾）。
2021年信貸協議包含習慣的陳述、擔保和肯定與否定的契約。否定契約包括對設定要約和債務、特定投資、分紅派息、股票回購和其他事項的限制，所有這些受到特定例外的限制。此外，公司必須保持流動性（信貸額度下未使用的額度與公司的合格現金之和）至少爲$55.0 百萬（其中至少$40.0 百萬應歸因於合格現金），或者，如果當時有效的借款基礎，信貸額度下的最低未使用額度至少爲$10.0 百萬。2021年信貸協議還包括慣常的違約事件，包括但不限於主金未支付、利息或費用未支付、陳述和擔保不準確、違反特定契約、跨不良債務違約、破產和不履行義務事件、重大裁決和控制變更。發生違約事件時，出借人可以，在習慣的糾正權利下，要求立即支付所有未清金額。
截至2024年9月30日，公司符合2021年信貸協議中的所有財務契約，並迄今未從2021年信貸額度借款。當前有一項未清償
16

GoPro，Inc。
簡明合併財務報表註釋
2021年信貸協議下的信用證額度爲$5.2 百萬美元，用於某些與關稅有關的需求，且未由現金抵押。截至2024年9月30日，公司可在2021年信貸協議下借款最高額爲$44.8 百萬美元。
2025可轉換債券
在2020年11月，公司發行了$萬的2025到期可轉換優先票據（2025票據）（請參閱附註5融資安排）。在2023年11月，公司回購了$萬的2025票據的總本金。截至2024年9月30日和2023年12月31日，2025票據的計算公允價值分別爲$萬。2025票據的預估公允價值基於公司工具在非活躍市場的報價市場價格，並被分類爲公允價值層次中的第2級。公司通過評估報價市場價格並計算市場參與者爲承擔這些義務所需的前期現金支付來估計2025票據的公允價值。125.0一千萬美元的合計本金額 1.252025年到期的可轉換債券（2025年債券），並授予首次購買者購買多達額外$的權利18.8 2025年債券總本金金額達$百萬，用於 covering 過多的認購量，其中有$百萬在2020年11月後期行使，總髮行量爲$百萬18.8 2025年債券總本金額爲$百萬，此債券爲公司的高級無擔保債務，將於2025年11月15日到期，除非在特定情況下提前贖回或轉換爲A類普通股股票。在2025年8月15日之前，2025年債券可按公司選擇轉換爲現金、公司A類普通股股票或二者組合，初始轉換率爲2025年債券的本金金額，這相當於初始轉換價格約爲$143.8 百萬2025年債券的本金金額。2025年債券是公司的高級無抵押債務，將於2025年11月15日到期，除非在特定情況下提前贖回或轉換爲A類普通股股票。在2025年8月15日之前，2025年債券可按公司選擇轉換爲現金、公司A類普通股股票或二者組合，初始轉換率爲2025年債券的本金金額，這相當於初始轉換價格約爲$ 107.1984 每股45美元的A類普通股。轉換比率將針對債券抵押證券文件所描述的某些事件進行習慣性調整。1,000 2025年債券的本金金額，相當於初始轉換價格約爲$的初始轉換價9.3285 每股普通股的價格，視情況進行調整。如果公司選擇不將2025年票據兌換爲現金、公司的A類普通股或兩者組合，2025年8月15日之前，公司將被視爲已選擇將2025年票據兌換爲現金和公司的A類普通股的組合。公司按照半年支付2025年票據的利息，分別在每年的5月15日和11月15日。
公司可在2023年11月20日或之後，如果公司普通股最後報價至少達到基金面值的%，則有權贖回2025年的全部或部分債券。 130對2025年的債券未提供沉澱基金。合同包括常規條款和契約，包括特定的違約事件，違約後2025年的債券可能立即到期並支付。
持有人有權選擇將2025年票據按照$的倍數轉換爲1,000 本金金額在2025年8月15日前的任何時間，但僅在以下情況下：
•在2021年3月31日結束的日曆季度之後的任何日曆季度內，如果A類普通股的最後報價至少在任何連續的最近30個交易日中的至少20個交易日內大於或等於 130每個適用交易日2025年債券轉換價格的%。
•在2025年票據交易價格連續五個交易日低於常規股上一次報價價格的產品的五個交易日期間後的五個業務日內 98股A普通股最近報價價格和每個交易日的2025年票據轉換率的乘積的%
•如果公司在2025年贖回任何或所有2025年的債券，需在贖回日前一交易日閉市前的任何時間。
•在指定企業事件發生時。
自2025年8月15日或以後的任何時間直至2025年11月15日到期日之前的第二個交易日，持有人可將其2025年票據按$的倍數轉換。1,000 將其2025年票據按照本息票據中定義的方式在與整體性變化相關聯的情況下進行轉換的2025年票據持有人，在某些情況下，有權獲得轉股率的增加。此外，在到期日之前發生基本變更的情況下，持有人將在符合一定條件的情況下，有權選擇要求公司以現金收購全部或部分2025年票據，收購價格等於要收購的2025年票據本金金額的100%，加上截至但不包括收購日期的應計且未支付的利息。截至2024年9月30日結束的三個月內，未滿足使2025年票據持有人轉換的條件。
關於2025年債券的發行，公司支付了$10.2 百萬美元，與某些金融機構進行私下談判，進行帶限制的看漲交易（帶限制看漲）。這些帶限制的看漲交易有
17

GoPro，Inc。
簡明合併財務報表註釋
初始行使價爲$9.3285 每股，對應2025年票據的初始轉換價格。蓋帽看漲合約覆蓋的是最初對應2025年票據的A類普通股數量，受到反稀釋調整的影響，這些調整與適用於2025年票據轉換率的調整非常相似。蓋帽看漲合約通常預期可減少公司A類普通股在任何2025年票據轉換時可能發生的潛在稀釋，或抵消公司需要支付的任何超過轉換2025年票據本金金額的現金支付，視情況而定，該減少和/或抵銷受到上限限制，最初爲$12.0925，並受限於蓋帽看漲交易條款下的一些調整。蓋帽看漲合約將於2025年11月到期，如提前行使。
限制性認購期權會在影響公司的特定非凡事件發生時進行調整，這些事件包括合併事件、要約收購和公告事件。此外，限制性認購期權還受到特定額外擾亂事件的影響，這些事件可能導致限制性認購期權的終止，包括國有化、破產或退市、法律變更、交割失敗、破產申報和對沖中斷。在會計目的上，限制性認購期權是單獨的交易，不屬於2025年票據條款的一部分。由於這些交易符合一定的會計標準，限制性認購期權被記錄在股東權益中，作爲對已實收資本的減少，只要它們繼續滿足一定的會計準則，就不會重新計量。
2023年11月，公司回購了$50.0 百萬的2025年票據總本金，以$46.3 百萬現金通過一項個別的私下協商交易。回購已被視爲債務結算。回購的2025年票據部分的賬面價值爲$49.4 百萬，並且公司確認了$3.1 百萬的債務結算收益，該收益記錄在2023年第四季度的其他收入（費用），淨額中，記錄於公司的綜合損益表中。
截至2024年9月30日和2023年12月31日，2025年票據的未償本金爲$93.8萬美元和93.8 百萬美元，未攤銷債務發行成本分別爲$0.7萬美元和1.2 百萬美元，責任的淨承擔金額分別爲$93.1萬美元和92.6 百萬美元，記錄在綜合資產負債表中的長期負債。截至2024年9月30日和2023年，公司錄得利息費用$0.3萬美元和0.4 分別爲合同票息利息和合同發行債券費用攤銷，分別爲$0.2萬美元和0.2 分別爲截至2024年9月30日和2023年的九個月的利息費用爲$0.9萬美元和1.3 分別爲合同票息利息和合同發行債券費用攤銷，分別爲$0.5萬美元和0.7 分別爲債券利息費及債券發行成本攤銷，分別爲$。截至2024年9月30日和2023年12月31日時，計算爲合同利率調整後的有效利率爲 1.4%和2.8，分別。

6. 股東權益
股票回購計劃。 2022年1月27日，公司的董事會授權回購高達$100.0 百萬的A類普通股，並於2023年2月9日，公司的董事會授權再購買高達$40.0 百萬的A類普通股。該計劃下的股票回購可以定期使用各種方法進行，包括但不限於公開市場購買、大宗交易或根據聯邦和州證券法和州公司法的規定，並根據《1934年證券交易法》修訂稿的第100億.18條和第10b5-1條的單一經紀人、時間、價格和成交量指導方針，這些指導方針可能會隨時被SEC修改。該股票回購計劃沒有時間限制，可以在任何時候進行修改、暫停或終止。公司目前打算持有其回購的股份作爲庫存股。
截至2024年9月30日，該計劃下的剩餘股份回購金額爲$60.4百萬。以下表格總結了2024年9月30日和2023年結束的三個和九個月內的股份回購情況。

18

GoPro，Inc。
簡明合併財務報表註釋
截至9月30日的三個月截至9月30日的九個月
（以千計，每股數據除外）2024202320242023
回購的股票— 2,605 — 7,101 
每股平均價格$— $3.84 $— $4.22 
回購的股票價值$— $10,000 $— $30,000 

7. 員工福利計劃
權益激勵計劃，董事會於2024年6月6日（我們首次公開發行的定價日期）批准了Waystar Holding Corp. 2024權益激勵計劃（「2024 Equity Incentive Plan」）。根據這個計劃，我們可以發行非合格股票期權、激勵股票期權、股票升值權、公司普通股的限制性股份、限制性股票單位，以及與公司股票價值相關的其他權益獎勵。在此計劃下，我們可以發行高達. 公司有四項傑出的股權授予，分別來自其五項以股票爲基礎的員工薪酬計劃：2024年股權激勵計劃（2024計劃）、2014年股權激勵計劃（2014計劃）、2010年股權激勵計劃（2010計劃）和2024員工股票購買計劃（2024 ESPP）。2024計劃取代2014計劃，而2014計劃又取代2010計劃。2024計劃和2024 ESPP的生效日期均爲2024年2月15日。2014計劃和2014員工股票購買計劃（2014 ESPP）均於2024年2月15日到期。2014 ESPP計劃的最後購買日期爲2024年2月15日，此計劃下不再有尚未行使的購買權益。2010年和2014年計劃授予的獎勵將繼續受2010年和2014年計劃的條款和規定約束。
2024年計劃規定向合格員工、非僱員董事和顧問發放激勵和非合格股票期權、受限股票獎勵（RSAs）、受限股票單位（RSUs）、股份增值權、股份獎勵和績效獎勵。 2024年計劃下授予的期權通常在授予之日起到期。 $244,200，將在歸屬期內按比例確認。從授予之日起，2024年計劃下授予的期權通常會解除限制。 之一至公司使用資產和負債的會計方法來計算所得稅。根據這種方法，根據資產和負債的金融報表及稅基之間的暫時區別，使用實施稅率來決定遞延稅資產和遞延稅負債，該稅率適用於預期差異將反轉的年份。稅法的任何修改對遞延稅資產和負債的影響將於生效日期在財務報告期內確認在彙總的綜合收益報表上。2024年計劃下授予的限制股票單位（RSUs）通常會逐步解除限制。兩個至公司使用資產和負債的會計方法來計算所得稅。根據這種方法，根據資產和負債的金融報表及稅基之間的暫時區別，使用實施稅率來決定遞延稅資產和遞延稅負債，該稅率適用於預期差異將反轉的年份。稅法的任何修改對遞延稅資產和負債的影響將於生效日期在財務報告期內確認在彙總的綜合收益報表上。 根據持續服務並在公司的A類普通股中獲得歸屬權。2024計劃下授予的績效股票單位（PSUs）通常在一定時間內歸屬。 三年 根據持續服務以及公司實現特定財務和運營目標而獲得歸屬權。公司會計處理股票支付獎勵的棄權情況。2024 ESPP允許符合條件的員工通過工資扣除以等於首個日期或每個六個月提供期限結束日期的股票公允市值較低者的價格購買公司的A類普通股。85公司的股權激勵計劃有關更多信息，請參閱2023年度報告。
S期權
截至2024年9月30日爲止，公司股票期權活動情況如下：
假設本說明書所涵蓋的所有普通股均已出售完成，在2023年11月29日發行和流通的普通股數量的基礎之上，假設所有股票均購買，假定銷售股東將擁有的所有已發行普通股的百分比
（以千爲單位）
加權平均行權價格
加權平均剩餘合同年限（年）
內在價值總額（以千爲單位）
2023年12月31日未行使的股票期權2,684 $8.43 5.08$— 
已行權— — 
行使— — 
被放棄/取消(357)14.96 
截至2024年9月30日應收款項2,327 $7.43 4.84$— 
已投資並預計在2024年9月30日完全投資2,327 $7.43 4.84$— 
2024年9月30日可行使2,015 $7.75 4.29$— 
19

GoPro，Inc。
簡明合併財務報表註釋
截至當前，尚未行使的期權的總內在價值爲 2024年9月30日 代表公司當日收盤股價於 2024年9月30日 高於執行價格的價值乘以未行使期權數量。
限制性股票單位
2024年9月30日結束的九個月內公司的RSU活動總結如下：
股份
（以千爲單位）
加權平均授予日期公允價值
2023年12月31日的未取得歸屬股份11,494 $5.94 
已行權6,616 1.91 
34,105(4,481)6.02 
被取消(1,571)4.72 
2024年9月30日的未取得歸屬股份12,058 $3.86 
績效股份單位
2024年9月30日結束的九個月內，公司股票單位計劃（PSU）活動情況如下：
股份
（以千爲單位）
加權平均授予日期公允價值
2023年12月31日的未解除限制股份829 

$6.40 
已行權1,531 1.70 
34,105(454)6.56 
被取消(12)5.79 
2024年9月30日的未解除限制股份1,894 $2.57 
員工股票購買計劃。 對於 截至2024年和2023年9月30日的九個月，公司分別根據其員工股票購買計劃發行了 1.4500萬股，並且總成本（包括佣金和消費稅）分別爲$0.9 百萬股，以加權平均價格爲$1.56 和 $4.10，分別以每股$
股票補償費用。 公司根據授予日的估計公允價值測算所有股權支付獎勵的補償費用。股票期權和ESPP發行的公允價值使用Black-Scholes期權定價模型進行估算。RSUs和PSUs的公允價值是根據公司授予日的收盤股價確定的。公司的估值假設與其2023年年度報告中披露的相比沒有發生重大變化。
下表總結了包含在綜合經營利潤表中的股票補償費用。
截至9月30日的三個月截至9月30日的九個月
（以千計）
2024202320242023
收入成本
$349 $500 $1,103 $1,496 
研究和開發
3,669 4,713 11,950 14,381 
銷售和營銷
1,603 2,125 4,892 6,662 
一般和行政
1,751 2,679 5,988 8,909 
股票薪酬支出總額$7,372 $10,017 $23,933 $31,448 
20

GoPro，Inc。
簡明合併財務報表註釋
有的。no 截至2024年9月30日三個月和九個月結束時，由於公司在美國淨遞延稅資產上全額計提減值準備，與股權薪酬支出相關的所得稅益爲2.3萬美元和7.1 2013年9月30日三個月和九個月結束時，與股權薪酬支出相關的所得稅益分別爲百萬美元。請參閱附註9《所得稅》以獲取更多詳細信息。
截至2024年9月30日，總共未賺取的股票期權、限制股單位、業績股單位和公司員工購股計劃股票補償爲$39.0 百萬美元，預計將在加權平均期限內承認。 2.31 年.

8. 每股淨虧損
以下表格顯示了基本和稀釋每股淨虧損的計算:
截至9月30日的三個月，截至9月30日的九個月
(以千爲單位，除每股數據外)2024202320242023
分子：
每股數據 $(8,211)$(3,684)$(395,120)$(50,765)
分母：
基本和稀釋後的加權平均普通股份-甲類和乙類普通股153,741 152,409 152,449 154,113 
每股基本和稀釋淨損失$(0.05)$(0.02)$(2.59)$(0.33)

未包括在稀釋後流通股數計算中的潛在稀釋性股份，因爲其效果將是抗稀釋的：
截至9月30日的三個月截至9月30日的九個月
（以千計）
2024202320242023
股票類獎勵16,956 15,535 16,604 15,410 
與可轉換優先票據相關的股份10,050 15,410 10,050 15,410 
反稀釋證券總額27,006 30,945 26,654 30,820 
基本每股淨收益（虧損）是通過將淨收益（虧損）除以流通普通股的加權平均股數來計算的。稀釋每股淨收益調整了基本每股淨收益和流通普通股的加權平均股數，以考慮公司的ESPP和股票獎勵的潛在攤薄影響，採用庫藏股法。公司根據如轉換法計算了2025年票據的潛在攤薄效應。根據如轉換法，假設所有2025年票據在報告期初全部轉換爲公司A類普通股，稀釋每股淨收益。此外，在淨收益期間，2025年票據上的利息費用，包括票息和債務發行成本攤銷，按稅後影響的方式添加回淨收益。
2025年的債券將於2025年11月15日到期，除非根據第五條融資安排中進一步描述的某些情況提前回購或轉換爲A類普通股。2025年的債券可以按照公司的選擇轉換爲現金、公司的A類普通股，或兩者的組合。
A類普通股和B類普通股持有人的權利相同，但在投票和轉換方面不同。每股A類普通股有權之一每股有
21

GoPro，Inc。
簡明合併財務報表註釋
普通b類股享有票的投票權。 每股普通b類股可在任何時候由股東選擇轉換爲一股普通A類股，並且沒有到期日期。之一 當普通b類股的已發行股份佔當時已發行普通股總數不足10%時，每股普通b類股將自動轉換爲一股普通A類股。普通A類股不可轉換爲普通b類股。

9. 所得稅
下表提供了所得稅費用(利益)金額:
截至9月30日的三個月，截至9月30日的九個月
（以千美元爲單位） 2024202320242023
所得稅費用（收益）$2,083 $689 $301,625 $(11,562)
截至2024年5月31日的經營中，公司的所得稅費用分別爲$1千和$1千，而2018年5月31日的所得稅費用分別爲$1千和$1千。公司截至2024年5月31日三個月的有效稅率與聯邦法定稅率的差異相當大，主要是因爲公司的逆向稅收資產計提減值準備和僱主小費抵扣方面的永久差異。2.1 截至2024年9月30日三個月的稅前淨虧損爲xx百萬美元，稅前稅後爲xx百萬美元。6.1 截至2024年9月30日的三個月，公司的所得稅費用主要由某些稅收司法管轄區內的稅前賬面收入產生的xx百萬美元稅費支出以及包括xx百萬美元不可抵扣股權稅費用在內的離散項目等組成，部分償還了評估準備金xx百萬美元減少，重組費用相關的xx百萬美元所得稅收益，以及與外國納稅申報調整相關的所得稅收益。2.1 公司的所得稅費用主要是由於某些稅收司法管轄區內的稅前賬面收入產生的xx百萬美元稅費支出以及包括員工股權激勵不可抵扣股權稅費用中的xx百萬美元離散項目，部分償還了估值準備金xx百萬美元減少，重組費用相關的xx百萬美元所得稅收益，以及與外國納稅申報調整相關的xx百萬美元所得稅收益。1.9 公司的所得稅費用主要是由於某些稅收司法管轄區內的稅前賬面收入產生的xx百萬美元稅費支出以及包括員工股權激勵不可抵扣股權稅費用中的xx百萬美元離散項目，部分償還了估值準備金xx百萬美元減少，重組費用相關的xx百萬美元所得稅收益，以及與外國納稅申報調整相關的xx百萬美元所得稅收益。1.6 公司的所得稅費用主要是由於某些稅收司法管轄區內的稅前賬面收入產生的xx百萬美元稅費支出以及包括員工股權激勵不可抵扣股權稅費用中的xx百萬美元離散項目，部分償還了評估準備金xx百萬美元減少，重組費用相關的xx百萬美元所得稅收益，以及與外國納稅申報調整相關的xx百萬美元所得稅收益。0.3 公司的所得稅費用主要是由於某些稅收司法管轄區內的稅前賬面收入產生的xx百萬美元稅費支出以及包括員工股權激勵不可抵扣股權稅費用中的xx百萬美元離散項目，部分償還了評估準備金xx百萬美元減少，重組費用相關的xx百萬美元所得稅收益，以及與外國納稅申報調整相關的xx百萬美元所得稅收益。0.1百萬美元。
截至2024年5月31日的經營中，公司的所得稅費用分別爲$1千和$1千，而2018年5月31日的所得稅費用分別爲$1千和$1千。公司截至2024年5月31日三個月的有效稅率與聯邦法定稅率的差異相當大，主要是因爲公司的逆向稅收資產計提減值準備和僱主小費抵扣方面的永久差異。301.6 截至2024年9月30日的九個月，稅前淨損失爲$百萬93.5 美元。截至2024年9月30日的九個月，公司的所得稅費用主要源自$百萬的稅費5.0 百萬美元的稅費爲某些司法管轄區內的稅前賬面收入，以及包括$在內的離散項目293.4 百萬美元的淨稅負責公司在美國聯邦和州稅前遞延稅資產上計提減值準備的淨稅費用，以及$的非可抵稅股權稅費，用於員工股權補償4.9 百萬美元的所得稅益，部分抵銷了$百萬的所得稅益1.3 公司的所得稅費用主要是由於某些稅收司法管轄區內的稅前賬面收入產生的xx百萬美元稅費支出以及包括員工股權激勵不可抵扣股權稅費用中的xx百萬美元離散項目，部分償還了評估準備金xx百萬美元減少，重組費用相關的xx百萬美元所得稅收益，以及與外國納稅申報調整相關的xx百萬美元所得稅收益。0.5百萬美元。
每個季度，公司根據ASC主題740評估其現有遞延稅收資產的實現情況。公司評估可用的正面和負面證據，以估計是否會產生足夠的未來應納稅所得以實現其遞延稅收資產。在截至2024年3月31日的評估中，公司根據2024年第一季度發展中出現的負面證據，如與公司未來產品策略和路線圖相關的成本增加和加速，增加的競爭環境，與最近收購Forcite Helmet Systems相關的整合和產品開發成本，重組成本和其他負面因素，得出了其美國聯邦和州遞延稅收資產不可能獲得實現的結論。因此，在截至2024年3月31日的期間，在考慮公司的遞延稅收負債和最近的發展後，公司對美國聯邦和州遞延稅收資產提供了$ 的減值準備294.9 美元。這一決定部分基於公司修訂的預期，即其對2024年及未來年度的稅前虧損預測將導致公司在2024年及以後的ASC主題740目的中出現累積的美國全面虧損。在截至2024年9月30日的評估中，公司得出結論，目前公司不太可能實現其遞延稅收資產。公司將繼續監控其未來財務結果，預期預測及其對公司對遞延稅收資產餘額收回性的評估的潛在影響，如果有必要釋放減值準備，則將記錄稅收收益。公司在各個司法管轄區的外國遞延稅收資產得到可納稅收入支持，或者在所收購公司的情況下，將來的遞延稅收負債迴轉支持。公司更有可能會在未來實現其外國遞延稅收資產，因此，不需要對其外國遞延稅收資產進行減值準備。
22

GoPro，Inc。
簡明合併財務報表註釋
截至2023年9月30日的三個月，公司報告的所得稅費用爲$0.7 百萬美元 ，在$3.0百萬的稅前淨損失。截至2023年9月30日的三個月，公司的所得稅費用由$1.0 百萬的稅務收益組成，涉及稅前損失，以及主要包括$1.7 百萬的不可抵扣股票補償稅費，$0.1 百萬的與重組費用相關的稅收，以及$0.1 百萬的關於外國稅收準備與所得稅申報調整相關的稅收收益。公司截至2023年9月30日的九個月，報告的所得稅收益爲$11.6 百萬，在$62.3 百萬。截至2023年9月30日，公司的所得稅收益包括了90百萬美元的稅收收益，以及主要包括了員工股權薪酬的90百萬美元的淨非稅抵扣性權益稅費，與外國機構所得稅申報調整相關的90百萬美元的稅費，以及與重組費用相關的90百萬美元的稅費。14.4 百萬的稅收收益以及主要包括90百萬美元的稅前損失，以及主要包括員工股權激勵稅費的90百萬美元的離散項目，以及與外國機構所得稅申報調整相關的90百萬美元的稅費，以及與重組費用相關的90百萬美元的稅費。2.4 百萬的淨非稅抵扣性權益稅費用於員工股權激勵，90百萬美元的稅費用於外國機構所得稅申報調整，以及90百萬美元的稅費用於重組費用。0.1 與外國機構所得稅申報調整相關的90百萬美元的稅費，以及與重組費用相關的90百萬美元的稅費。0.3 與重組費用相關的90百萬美元的稅費。
截至2024年9月30日和2023年12月31日，公司未確認的稅收納入總額爲$29.8萬美元和25.8 如果確認，金額爲 1000 萬美元。14.0 這些未確認的稅務納入金額（扣除美國聯邦利益）截至2024年9月30日將減少所得稅支出。如果確認，公司未確認的稅務納入中的重要部分將增加公司未經認可的運營虧損結轉額，該額會根據目前情況進行完全估值準備。
該公司在全球範圍內開展業務，因此在美國和其他國家/地區提交所得稅申報表。該公司未確認的稅務利益主要涉及與徵稅機構尚未解決的事項。雖然往往難以預測任何特定不確定稅務立場的最終結果或解決時間，但該公司認爲其儲備反映了更可能的結果。由於訴訟時效到期，該公司相信在接下來的12個月內，有可能釋放高達$3.9 百萬的不確定稅務立場。還有可能會新增其他不確定稅務立場。目前不可能合理地量化淨效應。
在2021年，經濟合作與發展組織（OECD）建立了關於基礎侵蝕和利潤轉移的包容性框架，並就全球稅收達成了兩柱解決方案（第二支柱），重點放在全球利潤分配和一個全球最低有效稅率上。 152022年12月15日，歐盟成員國同意實施OECD的全球最低稅率爲XX%。 15OECD發佈了第二支柱模型規則，並繼續發佈有關這些規則的指導。包容性框架要求參與國家在2024年和2025年生效的稅法變更。各國已經頒佈或宣佈了計劃實施新稅法以執行全球最低稅率。公司評估了第二支柱的影響，對於截至2024年9月30日的三個月和九個月的所得稅準備沒有實質影響。公司將繼續監測未來發布的指導，並評估對公司簡明合併財務報表的潛在影響。

10. 承諾、附帶條件和擔保
設施租賃。 公司根據開多期經營租約租用其設施，這些租約將在不同日期到期，直至2033年。
淨租賃成本的組成元素主要記錄在營業費用中，具體如下:
截至9月30日的三個月，截至9月30日的九個月
（以千爲單位）2024202320242023
經營租賃成本 (1)
$2,486 $2,363 $7,792 $8,557 
轉租收入(722)(277)(2,094)(1,723)
使用權資產減值成本— — 3,276 — 
淨租賃費用$1,764 $2,086 $8,974 $6,834 
(1)經營租賃成本包括微不足道的變量租賃成本和與重組費用有關的金額，詳情請參閱第12條重組費用。

23

GoPro，Inc。
簡明合併財務報表註釋
與租賃相關的補充現金流信息如下：
截至9月30日的九個月
（以千爲單位）20242023
用於計量租賃負債的現金支付
經營租賃的經營現金流量$10,371 $9,526 
在交換運營租賃負債獲得的使用權資產4,801 3,047 

與租賃相關的補充資產負債表信息如下：
2024年9月30日2023年12月31日
剩餘租賃期加權平均（年）-經營租賃3.263.05
經營租約的加權平均折現率6.3%6.2%

截至2024年9月30日，經營租賃負債到期情況如下：
（以千爲單位）
2024年9月30日
2024年（剩餘3個月）$2,440 
202513,750 
202613,270 
20272,148 
2028811 
此後3,782 
總租賃支付36,201 
少：推定利息(3,989)
租賃負債的現值$32,212 
其他承諾。 在正常業務過程中，公司與活動組織者、度假村、運動員等簽訂爲期多年的協議，用於其營銷活動；與其財務和IT系統相關的軟件許可證；債務協議；以及各種其他合同承諾。截至2024年9月30日，公司根據上述期限超過一年的多年協議下的總未折現未來預期義務金額爲$224.4百萬美元。
法律訴訟和調查。 自2015年以來，Contour IP Holdings LLC（簡稱CIPH）及相關實體在各聯邦地方法院提起訴訟，涉嫌侵犯特定gopro產品的專利。在聯邦法院和美國專利商標局進行訴訟後，CIPH的專利在2022年3月被判無效。判決結果對公司有利，反對CIPH。CIPH後來向聯邦巡迴法院上訴。2024年9月9日，巡迴法院小組推翻了地方法院的裁決。2024年10月9日，gopro對小組決定提出重審申請。
2024年3月29日，該公司向美國國際貿易委員會（ITC）對Arashi Vision Inc., d/b/a Insta360以及Arashi Vision (U.S.) LLC, d/b/a Insta360提交了投訴，同時在美國加利福尼亞州中部地區地方法院對Arashi Vision Inc., d/b/a Insta360以及Arashi Vision (U.S.) LLC, d/b/a Insta360提起了訴訟。該投訴和訴訟各自聲稱對公司的攝像機和數碼成像技術侵權了某些gopro專利。Insta360隨後提起了請求挑戰針對Insta360的gopro專利有效性的專利審查申請（IPR）訴訟。Insta360還在中國（江蘇高級法院）對該公司提起了專利侵權訴訟，但該公司認爲缺乏依據，並打算爲此辯護。
公司定期評估上述法律訴訟的相關進展，以及在業務常規過程中出現的其他法律訴訟。雖然訴訟本質上是不確定的，
24

GoPro，Inc。
簡明合併財務報表註釋
根據目前可獲得的信息，公司無法判斷損失或損失的區間，並認爲解決這些問題的最終成本不會對其業務、財務狀況、現金流或經營業績產生重大不利影響。
賠償。 公司已與其董事和高管簽訂了賠償協議，要求公司對董事和高管因其地位或服務而可能產生的責任進行賠償。此外，在正常業務過程中，公司簽訂的協議包含各種陳述和保證，並提供一般性賠償。公司在這些協議下的風險是未知的，因爲它涉及可能在未來提出但尚未提出的針對公司的索賠。由於公司在賠償索賠方面的有限歷史以及每項協議涉及的獨特事實和情況，不可能確定這些賠償協議的最大潛在金額。截至2024年9月30日，公司尚未支付任何賠償，也沒有被要求就其賠償義務提出的任何訴訟進行辯護。然而，公司可能會因這些賠償義務而在未來記入費用。

11. 風險集中和地理信息
風險集中。 可能使公司面臨信貸風險集中的金融工具包括現金及現金等價物、有市場可售證券、應收賬款和衍生工具，包括與2025年票據相關的限制性認購。公司將現金及現金等價物存放在信用質量高的金融機構；然而，公司保持的現金餘額超過了FDIC保險限額。公司認爲，應收賬款的信貸風險由公司的徵信流程、相對較短的收款期限以及客戶群的分散化所減輕。公司通常不需要抵押品，交易應收賬款的損失歷史上一直在公司的預期範圍內。公司認爲，與衍生工具相關的交易對手信貸風險得以緩解，因爲公司與信用評級高的主要金融機構進行交易。
代表公司應收帳款餘額10%或更多的客戶如下：
2024年9月30日2023年12月31日
客戶A22%30%
客戶 B10%11%
以下表格總結了公司已銷售的應收賬款，無追索權，並支付的保理費用:
截至9月30日的三個月，截至9月30日的九個月
（以千爲單位）
2024202320242023
應收賬款已售出$21,997 $32,011 $59,489 $73,050 
保理費用308 434 834 1,101 
代表公司總營業收入的10%或以上的第三方客戶如下所示：
截至9月30日的三個月，截至9月30日的九個月
2024202320242023
客戶A*12%*10%
客戶 B***10%
* 在指定期間內的總營業收入中佔比不到10%。
供應商集中。 公司依賴第三方供應商爲其產品供應和製造，其中一些是唯一供應商。公司相信外包製造業能夠實現更大規模和靈活性。隨着需求和產品線的變化，公司定期評估需求和
25

GoPro，Inc。
簡明合併財務報表註釋
添加製造商以支持其運營的可行性。在沒有供應和製造協議的情況下，或供應商未能履行其義務的情況下，公司可能無法找到替代供應商或及時或完全地向其客戶交付產品。公司還依賴於外包與其共享庫存倉儲、訂單完成、配送和其他直接銷售物流相關活動的第三方。在沒有外包協議或這些第三方未能履行其義務的情況下，公司可能無法找到替代合作伙伴或及時爲其客戶交付產品。
地理信息
根據船舶交付地點，按地域板塊劃分的營業收入如下：
截至9月30日的三個月，截至9月30日的九個月
（以千爲單位）
2024202320242023
美洲
$109,332 $131,612 $274,648 $342,775 
歐洲、中東、非洲（EMEA）84,416 83,490 200,907 196,006 
亞洲和太平洋（APAC）
65,150 79,197 125,036 171,258 
總收入
$258,898 $294,299 $600,591 $710,039 
美國的營業收入，包括在美洲地域板塊中，爲$79.6萬美元和100.9 百萬，分別爲截至2024年和2023年9月30日的三個月，以及$204.2萬美元和283.0 百萬，分別爲截至2024年和2023年9月30日的九個月。在任何呈現的時期內，沒有其他單個國家的營業收入超過總收入的10%。由於公司不追蹤按產品類別的銷售激勵和其他營業收入調整，因此不按產品類別披露營收數據。
截至2024年9月30日和2023年12月31日，代表淨固定資產的長期資產位於美國以外，主要位於中國香港和中國大陸，總計3.2萬美元和1.62024年4月30日和2023年4月30日的六個月內的外匯重新計量淨收益分別爲$百萬。

12。重組費用
每個時期的重組費用如下：
截至9月30日的三個月截至9月30日的九個月
（以千計）
2024202320242023
收入成本
$13 $— $178 $(183)
研究和開發
825 — 3,420 10 
銷售和營銷
397 — 1,867 6 
一般和行政
147 — 1,177 3 
重組費用總額
$1,382 $— $6,642 $(164)
2024年第三季度重組
在2024年8月，公司批准了一項重組計劃（原始重組計劃），通過裁員來減少全球運營成本，裁減人員約 15。在2024年10月，公司批准了一項修訂後的重組計劃（更新後的重組計劃），相較於截至2024年第二季度結束時的員工人數，將全球裁減人員比例增加至約26%。在原始重組計劃的框架下，公司錄得了與裁員相關的1.1 百萬美元的重組費用。在更新後的重組計劃下，公司預計將於2024年第四季度支付高達9 百萬美元的與裁員相關費用以及高達8 百萬美元的項目取消費用。
26

GoPro，Inc。
簡明合併財務報表註釋
（以千爲單位）
解僱費用
總計
2023年12月31日的重組負債
$— $— 
重組費用1,104 1,104 
現金支付
(744)(744)
非現金減少
— — 
2024年9月30日的重組責任
$360 $360 
2024年第一季度重組
2024年3月，公司批准了一項重組計劃，通過將公司的全球員工人數減少約來降低運營成本並提高運營槓桿率 4% 和某些辦公空間。根據2024年第一季度的重組計劃，公司記錄的重組費用爲美元2.3 百萬美元與遣散費有關，美元3.3 百萬美元與停止使用某些辦公空間後的使用權資產減值有關，40萬美元與辦公空間費用有關。截至2024年9月30日，與2024年第一季度重組計劃導致的某些辦公空間相關的剩餘未來租賃相關付款預計約爲美元1.9 百萬美元，將在基本的剩餘租賃期內支付。
（以千爲單位）
解僱費用資產減值其他
總計
截至2023年12月的重組負債
$— $— $— $— 
重組費用2,257 3,276 275 5,808 
現金支付
(1,976)— (275)(2,251)
非現金減少
(222)(3,276)— (3,498)
2024年9月30日的重組責任
$59 $— $— $59 
27

GoPro，Inc。
分銷計劃
項目2. 管理層對財務狀況和經營成果的討論與分析 (MD&A)
關於我們的財務狀況和經營成果的以下討論和分析，應與本季度報告表格10-Q中的未經審計的簡明合併財務報表及相關附註以及我公司審計的合併財務報表及相關附註以及本季度報告表格10-Q中收錄的截至2023年12月31日止財政年度的我公司2023年度報告中包含的有關管理層對未來經營成果或財務狀況、業務策略和計劃以及未來經營目標的討論，包括涉及風險與不確定性的前瞻性陳述如本季度報告表格10-Q中有關前瞻性聲明的特別提示部分所述。您應該閱讀本季度報告表格10-Q中有關風險因素的披露，以討論可能導致實際結果與這些前瞻性陳述中預期結果實質性不符的重要因素。我們的財務狀況和經營成果的管理層討論與本附文提供的簡明合併財務報表和附註一起，可幫助讀者了解我們的經營成果、財務狀況和現金流。
本管理討論與分析部分如下所示：
•概述。 討論我們的業務，對我們的財務表現進行全面分析，以及影響業務的其他亮點，以便爲MD&A的其餘部分提供背景。
•經營成果。 分析我們的財務結果，比較2023年第三季度和前九個月與2024年的情況。
•此外，正如我們於截至2024年6月30日的簡明合併財務報表的注14（承諾和或有事項）中所述，涉及我們的某些法律訴訟，包括政府調查，已經開始。考慮到此類事項的不確定性，無法保證最終結果。在截至2024年6月30日的三個月中，我們爲此類事項準備了110萬美元的相關費用。但是，公司可能面臨的潛在損失的最終金額或範圍可能與我們當前的估計存在重大差異。 分析我們資產負債表和現金流量的變化，討論我們的財務狀況和潛在的流動性來源。
•關鍵會計政策和估計。 會計估計我們認爲重要，以理解所報財務結果和預測中包含的假設和判斷。
•非通用會計準則財務指標。 我們的通用會計準則與非通用會計準則財務指標的調和和討論。
概述
gopro幫助世界以沉浸式和令人興奮的方式捕捉和分享自身。我們致力於開發解決方案，爲消費者創造一個輕鬆、無縫的體驗，以捕捉、創作和分享引人入勝的個人內容。當消費者使用我們的產品和服務時，他們經常生成並分享內容，自然增加了對gopro的認知，推動了一個良性循環和對我們產品的自我強化需求。我們相信營業收入的增長可能來自於推出新產品、配件、生活方式裝備以及軟件和訂閱服務。我們相信新的相機功能可以在現有用戶中推動替換週期，吸引新用戶，擴大我們的總可尋地址市場。我們在圖像穩定、移動應用程序編輯和分享解決方案、模塊化配件、自動上傳功能、本地語言用戶界面以及支持逾11種語言和6種口音的語音識別方面的投資，旨在推動我們全球市場的擴展。
2024年9月，我們開始發貨我們的HERO13 Black旗艦相機，配備我們的GP2處理器，HyperSmooth 6.0圖像穩定技術，混合對數伽瑪（HLG）高動態範圍（HDR）照片和視頻以每秒60幀的0.53萬像素和每秒60幀的0.4萬像素，以及更高容量的電池，從而實現更長的運行時間和改善的熱性能。 HyperSmooth 6.0圖像穩定技術具有AutoBoost功能，與HyperSmooth 5.0相比，它分析的數據多4倍，同時支持360度地平線鎖定。HERO13 Black還支持高達0.53萬像素每秒60幀的10位色視頻，2700萬像素照片分辨率，8:7寬高比視頻，以獲得更大的垂直視野，以及HyperView功能，允許16:9的視野。HERO13 Black還具有前置和後置觸摸顯示屏，TimeWarp 3.0，Timecode同步功能和夜間效果延時攝影功能。我們還爲HERO13 Black提供Ultra Wide Lens Mod、Macro Lens Mod和一個ND Filter 4-Pack。Ultra Wide Lens Mod可提供超廣角數字鏡頭，可實現0.4萬像素每秒60幀的視頻，Macro Lens Mod可使HERO13 Black對焦於比先前一代相機更近4倍的物體，而ND Filter 4-Pack可使HERO13 Black創建動態模糊。此外，我們還提供HERO13 Black Creator
28

GoPro，Inc。
分銷計劃
版本將HERO13 Black、Volta、Enduro 電池、Media Mod和Light Mod結合起來，以創建專業質量的視頻。
2024年9月，我們還開始發貨我們最小最輕的HERO相機版本，其一鍵設計和觸摸蘋果-顯示屏。HERO相機可以以最多0.4萬像素在30 FPS下拍攝視頻，使用1200萬像素分辨率捕捉照片，並具有最多0.27萬像素在60 FPS下的慢動作設置。HERO相機通過廣角鏡頭捕捉內容，因此在Quik應用程序中可以應用HyperSmooth圖像穩定。
我們的HERO13 Black、HERO13 Black Creator Edition、HERO、HERO12 Black、HERO12 Black Creator Edition、HERO11 Black、HERO11 Black Mini、HERO11 Black Creator Edition 和MAX相機兼容我們的可安裝和可穿戴配件生態系統。
我們提供高級訂閱服務，包括支持GoPro內容的無限雲存儲，支持原始視頻和照片質量，損壞相機更換，非GoPro內容的雲存儲高達25 GB，當用戶將GoPro相機錄製的視頻上傳到其GoPro雲帳戶時，通過我們的移動應用程序自動交付精華視頻。我們的高級訂閱還提供在GoPro.com上訪問高質量的直播概念服務，以及GoPro相機、配件、支架和附件的折扣。2024年2月，我們推出了高級+訂閱服務，其中包括高達500 GB的非GoPro內容的雲存儲，HyperSmooth Pro以及高級訂閱中包含的所有功能。
除了高級+和高級訂閱，我們還提供Quik訂閱，使用戶能夠充分利用其在任何手機或相機上拍攝的最愛照片和視頻，使用我們的Quik移動應用的編輯工具。這些編輯工具包括修剪、顏色、裁剪、濾鏡、自動將編輯與音樂同步以及更改視頻速度等功能。我們相信Quik訂閱是一個重要的選擇，可以擴大我們的總可尋市場，面向那些可能沒有gopro相機的用戶。
我們將繼續監控當前不斷演變的宏觀經濟格局。通貨膨脹、波動的利率、美元升值，以及衰退擔憂給我們的許多業務領域帶來了越來越大的壓力，包括產品定價、營業費用、零部件定價和消費開支。過去，相對於其他外幣，美元的強勢在很大程度上影響了我們的營業收入和毛利率。如果美元未來相對於其他外幣繼續走強，我們的財務業績將受到負面影響。請參見條款1A。關於宏觀經濟條件的演變可能對我們業務產生的影響的進一步討論。
29

GoPro，Inc。
分銷計劃
以下是我們簡明綜合基本報表中呈現的措施總結和用於評估我們業務、衡量績效、制定財務預測和做出戰略決策的關鍵指標。
％ 變動
（金額和單位以千爲單位，除每股金額外）
Q3 2024Q2 2024Q3 20232024年第三季度 vs. 2024年第二季度2024年第三季度對比2023年第三季度
營業收入$258,898$186,224$294,29939 %(12)%
相機出貨量 (1)
881 576 923 53 %(5)%
毛利率 (2)
35.5 %30.5 %32.0 %500 點子350 點子
營業費用$99,857 $103,219 $97,991 (3)%2 %
淨損失$(8,211)$(47,821)$(3,684)(83)%123 %
每股攤薄淨虧損（1.00）$(0.05)$(0.31)$(0.02)(84)%150 %
Nine Months Ended September 30,$(2,244)$605 $(1,638)(471)%37 %
其他財務信息：
Adjusted EBITDA (3)
$5,447 $(33,426)$7,232 (116)%(25)%
非GAAP淨利潤（虧損）(4) (5)
$(463)$(36,179)$8,996 (99)%(105)%
非通用會計原則下的每股稀釋淨利潤（虧損） (5)
$(0.00)$(0.24)$0.06 (100)%(100)%
(1)     代表在報告期內發貨的攝像頭數量，減去任何退貨。
(2)    一個點子（bps）等於1%的1/100。
(3)     我們將調整後的EBITDA定義爲淨利潤（虧損）經調整，排除了所得稅費用（收入），利息收入，利息費用，折舊和攤銷，購買點（POP）顯示屏攤銷，股權報酬，債務攤銷（收益），重組和其他成本，包括使用權利資產減值損失費用（如適用）。
(4)    我們將非通用會計淨利潤（虧損）定義爲已調整以排除股票補償、與收購相關的成本、重組和其他成本、包括使用權資產減值費用（如適用）、債務贖回（損失）、出售和/或許可知識產權的收益、以及所得稅調整的淨利潤（虧損）。收購相關成本包括已收購無形資產的攤銷和減值費用（如適用），以及第三方交易費用涉及法律和其他專業服務。
(5) 2024年第一季度，我們修改了所得稅調整，以體現按照SEC指導原則更好地調整目前和遞延所得稅費用（收益）以及非GAAP調整的效果。出於比較目的，我們已經修改了以前期間的所得稅調整，以反映目前和遞延所得稅費用（收益）以及非GAAP調整的效果。此外，在2024年第二季度，我們將2024年第一季度的所得稅調整進行了修改，以排除對美國聯邦和州遞延稅款資產設定估值準備。
非通用會計準則調整措施與最直接可比的通用會計準則措施的調和以及我們認爲非通用會計措施對投資者有幫助的解釋，均在非通用財務指標下呈現。
2024年第三季度財務表現

2024年第三季度營業收入爲25890萬美元，較2023年同期下降12.0%。同比下降主要是由於第三季度發貨量爲88.1萬，較2023年同期的92.3萬發貨量減少了4.6%，以及第三季度銷售激勵增加，部分抵消了我們訂閱和服務收入的10.6%增長。持續存在的與消費者相關的宏觀經濟問題導致美洲和亞太地區，特別是中國的消費市場較軟，以及全球競爭格局日益加劇，尤其是在中國，均對2024年第三季度的賣入和賣出產生了負面影響。我們2024年第三季度相機銷售中，零售價格大於或等於400美元的相機佔比74%，而2023年同期爲75%。我們2024年第三季度的平均銷售價格同比下降了7.8%，至294美元，主要是由於入門級價格相機的銷量增加了38.2%，300美元及以上相機銷量減少，以及促銷活動增加，部分抵消了我們訂閱和服務收入的增長。平均銷售價格定義爲總報告營收除以相機發貨量。2024年第三季度零售營收爲20790萬美元，佔總收入的80.3%，而2023年同期佔總收入的78.5%。
30

GoPro，Inc。
分銷計劃
2023年同期的gopro.com營業收入，包括訂閱和服務收入，在2024年第三季度達到了5100萬美元，佔總營業收入的19.7%，而2023年同期佔總營業收入的21.5%。我們在2024年第三季度的整體訂閱率，包括gopro.com銷售和零售後相機購買，達到了45%。我們在2024年第三季度的年度訂閱用戶整體留存率爲67%，較2023年同期的65%提高了4%。我們2024年第三季度的毛利率爲35.5%，同比增長3.50%。2024年第三季度的淨虧損爲820萬美元，而2023年同期的淨虧損爲370萬美元。2024年第三季度調整後的EBITDA爲540萬美元，而2023年同期爲720萬美元。現金在季度順延中略有下降，而庫存在爲2024年第四季度即將到來的假期季節略有增加。
我們在GoPro.com和零售渠道通過相機購買獲得的總體訂閱附加率表示相應時期內新的gopro訂閱用戶數與兩個渠道（GoPro.com和零售渠道）銷售的估計相機數量之比。我們的年度訂閱用戶的總體留存率表示在該時期內續訂他們訂閱的年度訂閱用戶的百分比，佔相應續訂事件的總體續訂事件比例。
影響表現的因素
我們相信我們未來的成功將取決於許多因素，包括以下進一步討論的因素。雖然這些領域代表着我們的機遇，但它們也代表着我們必須成功應對的挑戰和風險，以便運營我們的業務並改善經營業績。
通過提高效率、降低成本和改善執行來提高盈利能力。 我們在2024年的前九個月和全年都出現了營業虧損 2023. 我們 繼續做出戰略決策，以推動我們業務的銷量、增長和盈利能力。2024年的重組行動和之前的重組行動，以及持續的成本管理，提高了全球組織的效率，從而改善了我們的職能團隊之間的溝通和協調。我們正在改變我們的運營方式，以更精簡、更有針對性的方式進行運營，我們認爲這種方式對於長期成功和改善財務業績具有可持續性和戰略意義。這包括將我們的運營支出降至上市前以來的最低水平，同時追求我們認爲將推動創新、差異化和增長的產品路線圖。而且，從長遠來看，會增加 通過引入新的創新產品，增加現有產品的單位銷售量以及增加我們的訂戶群，我們的總體潛在市場。我們預計，相對於GOPro.com的銷售額，我們的零售渠道的銷售額將繼續增長。在增長的同時 訂閱者以及訂閱和服務收入有所放緩，我們將繼續做出戰略決策，以增強我們的訂閱服務，以增加訂閱者留存率並增加訂閱和服務收入。
如果我們無法產生足夠的單位銷售和營業收入增長，成功擴大我們的總可尋市場，成功增加零售銷售額，成功管理銷售激勵水平，增加訂閱用戶數和訂閱和服務收入，有效管理我們的支出，並應對波動的宏觀經濟環境（包括利率期貨和貨幣兌換匯率的波動以及衰退擔憂），未來我們可能會遭受巨大損失，可能無法實現盈利。
投資研發並提升客戶體驗。 我們的績效在很大程度上取決於我們在研發方面的投資，包括吸引和留住高技能和有經驗的研發人員的能力。我們預計新產品發佈的時間仍將對我們的營業收入產生重大影響，我們必須不斷開發和推出創新的新相機、軟件和其他新產品。我們計劃進一步發展集成的移動和基於雲的敘事解決方案，以及我們的訂閱服務。我們的投資，包括營銷和廣告方面的投入，以及與我們最近收購相關的開發工作，可能無法成功帶動營業收入增長，並且我們的客戶可能不接受我們的新產品。如果我們不創新並提升我們的品牌、產品、移動應用體驗或我們訂閱的價值主張，我們的市場地位和營業收入將受到不利影響。此外，我們已經並將繼續承擔巨額的研發費用，如果我們的努力不成功，我們可能無法收回這些投資的價值，我們的業務可能會受到不利影響。
31

GoPro，Inc。
分銷計劃
提高盈利能力。 我們相信，我們將繼續專注於通過擴大我們在零售和gopro.com渠道的總可尋址市場，包括訂閱和服務收入，並擴大我們的產品範圍，將支持我們能夠通過及時和有效的產品推出、單位銷量增加、訂閱用戶數和相關收入增加以及持續控制經營費用而實現年度盈利能力的恢復。 我們繼續認爲國際市場代表着實現盈利的重要機會。 儘管數碼相機市場總體上面臨着越來越激烈的競爭，但我們相信，我們消費者對gopro相機的差異化使用，我們的移動應用程序和雲解決方案，我們不斷創新的產品功能滿足了我們的用戶的需求，以及我們的品牌，都有助於支持我們在數碼相機市場中的競爭力。 但是，我們預計我們業務所在的市場將繼續保持高度競爭，因爲我們將面臨競爭對手推出新產品。 在國際地點的銷售使我們暴露於外匯匯率波動和可能導致我們調整定價的地區宏觀經濟狀況，這可能使我們的產品對消費者更具吸引力或不太具吸引力。 外匯匯率的持續波動和區域宏觀經濟狀況對我們未來的經營業績可能會產生持續影響。我們繼續認爲國際市場代表着實現盈利的重要機會。儘管數碼相機市場總體上面臨着越來越激烈的競爭，但我們相信，我們消費者對gopro相機的差異化使用，我們的移動應用程序和雲解決方案，我們不斷創新的產品功能滿足了我們的用戶的需求，以及我們的品牌，都有助於支持我們在數碼相機市場中的競爭力。但是，我們預計我們業務所在的市場將繼續保持高度競爭，因爲我們將面臨競爭對手推出新產品。在國際地點的銷售使我們暴露於外匯匯率波動和可能導致我們調整定價的地區宏觀經濟狀況，這可能使我們的產品對消費者更具吸引力或不太具吸引力。外匯匯率的持續波動和區域宏觀經濟狀況可能會對我們未來的經營業績產生持續影響。
我們的盈利能力還取決於我們訂閱和服務產品的持續成功。如果我們無法成功維持產品銷售和訂閱和服務產品，增加付費訂閱人數，零售移動應用附加，以及改善訂戶保留率，可能無法實現盈利，並且可能無法從我們在新領域的投資中獲益。
營銷改進的gopro體驗。 我們打算將市場營銷資源集中在突出我們相機的功能、訂閱和服務優勢，並進一步提升品牌知名度上。從歷史數據來看，我們的增長主要來源於人們採用我們的產品，用於自拍參加令人興奮的體育活動。我們重返盈利的目標取決於繼續接觸、擴展和重新吸引這一核心用戶群，並與我們的戰略重心保持一致。銷售和市場營銷投資往往會在這些活動帶來任何銷售收益之前發生，我們可能難以判斷我們是否在這個領域有效地分配資源。
季節性。 歷史上，我們在年度第四季度經歷了總營業收入的最高水平，與假日購物季節相吻合，特別是在美國和歐洲。然而，在當年，由於全球宏觀經濟情況和競爭，我們預計這一趨勢不會持續。儘管我們已經實施了旨在減少第四季度季節性影響全年績效的運營變革，但及時有效的產品推廣，無論是在假日季節之前還是其他時間，以及預測，對我們的運營和財務績效至關重要。
宏觀經濟風險。 影響消費水平的宏觀經濟條件包括市場波動和匯率、通貨膨脹以及利率的波動。一些產品成本受到通貨膨脹壓力的影響，我們可能無法通過提價完全抵消這些較高成本。我們無法或未能調整價格可能會對我們的業務、財務狀況和運營結果造成損害。

32

GoPro，Inc。
分銷計劃
經營結果
以下表格列明瞭我們簡明合併利潤表的各個項目，以及每個項目佔營業收入的百分比：
截至9月30日的三個月截至9月30日的九個月
（以千美元計）
2024202320242023
收入
$258,898 100 %$294,299 100 %$600,591 100 %$710,039 100 %
收入成本
167,052 65 200,095 68 398,997 66 487,561 69 
毛利潤
91,846 35 94,204 32 201,594 34 222,478 31 
運營費用：
研究和開發
44,328 17 41,708 14 135,872 23 121,796 17 
銷售和營銷
40,686 16 41,254 14 117,185 20 119,215 17 
一般和行政
14,843 6 15,029 5 44,470 7 47,562 7 
運營費用總額99,857 39 97,991 33 297,527 50 288,573 41 
營業虧損(8,011)(4)(3,787)(1)(95,933)(16)(66,095)(10)
其他收入（支出）：
利息支出
(808)1 (1,171)— (2,272)— (3,463)— 
其他收入，淨額2,691 1 1,963 — 4,710 — 7,231 1 
其他收入總額，淨額1,883 2 792 — 2,438 — 3,768 1 
所得稅前虧損(6,128)(2)(2,995)(1)(93,495)(16)(62,327)(9)
所得稅支出（福利）2,083 1 689 — 301,625 50 (11,562)(2)
淨虧損$(8,211)(3)%$(3,684)(1)%$(395,120)(66)%$(50,765)(7)%

營業收入
（單位爲相機數量和千美元，平均售價除外）
截至9月30日的三個月，截至9月30日的九個月
20242023％ 變動20242023％ 變動
相機出貨量
881 923 (5)%1,850 2,089 (11)%
平均銷售價格
$294 $319 (8)$325 $340 (4)
零售$207,934 $230,990 (10)$451,352 $476,174 (5)
 營業收入百分比
80.3 %78.5 %75.2 %67.1 %
gopro.com$50,964 $63,309 (19)$149,239 $233,865 (36)
 營業收入百分比
19.7 %21.5 %24.8 %32.9 %
總收入
$258,898 $294,299 (12)%$600,591 $710,039 (15)%
美洲
$109,332 $131,612 (17)%$274,648 $342,775 (20)%
 營業收入百分比
42.2 %44.7 %45.7 %48.3 %
歐洲、中東、非洲（EMEA）
$84,416 $83,490 1 $200,907 $196,006 3 
營業收入百分比
32.6 %28.4 %33.5 %27.6 %
亞洲和太平洋（APAC）
$65,150 $79,197 (18)$125,036 $171,258 (27)
營業收入的百分比
25.2 %26.9 %20.8 %24.1 %
總收入
$258,898 $294,299 (12)%$600,591 $710,039 (15)%

33

GoPro，Inc。
分銷計劃
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.
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.
Cost of revenue and gross margin
Three months ended September 30,Nine months ended September 30,
(dollars in thousands)
20242023% Change20242023% Change
Cost of revenue
$166,690 $199,595 (16)%$397,716 $486,248 (18)%
Stock-based compensation
349 500 (30)1,103 1,496 (26)
Restructuring costs
13 — 100 178 (183)(197)
Total cost of revenue
$167,052 $200,095 (17)%$398,997 $487,561 (18)%
Gross margin
35.5 %32.0 %350  bps33.6 %31.3 %230  bps
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).
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).
34

GoPro, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Research and development
Three months ended September 30,Nine months ended September 30,
(dollars in thousands)
20242023% Change20242023% Change
Research and development
$39,365 $36,995 6 %$119,408 $107,405 11 %
Stock-based compensation
3,669 4,713 (22)11,950 14,381 (17)
Acquisition-related costs
469 — 100 1,094 — 100 
Restructuring costs
825 — 100 3,420 10 34,100 
Total research and development
$44,328 $41,708 6 %$135,872 $121,796 12 %
Percentage of revenue
17.1 %14.2 %22.6 %17.2 %
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.
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.
Sales and marketing
Three months ended September 30,Nine months ended September 30,
(dollars in thousands)
20242023% Change20242023% Change
Sales and marketing
$38,686 $39,129 (1)%$110,426 $112,547 (2)%
Stock-based compensation
1,603 2,125 (25)4,892 6,662 (27)
Restructuring costs
397 — 100 1,867 6 31,017 
Total sales and marketing
$40,686 $41,254 (1)%$117,185 $119,215 (2)%
Percentage of revenue
15.7 %14.0 %19.5 %16.8 %
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.
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.
35

GoPro, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
General and administrative
Three months ended September 30,Nine months ended September 30,
(dollars in thousands)
20242023% Change20242023% Change
General and administrative
$12,930 $12,350 5 %$36,509 $38,650 (6)%
Stock-based compensation
1,751 2,679 (35)5,988 8,909 (33)
Acquisition-related costs
15 — 100 796 — 100 
Restructuring costs
147 — 100 1,177 3 39,133 
Total general and administrative
$14,843 $15,029 (1)%$44,470 $47,562 (7)%
Percentage of revenue
5.7 %5.1 %7.4 %6.7 %
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.
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.
Restructuring costs
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.
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 $1.9 million and will be paid over the underlying remaining lease term.
See Note 12 Restructuring charges, to the Notes to Condensed Consolidated Financial Statements.
Other income (expense)
Three months ended September 30,Nine months ended September 30,
(dollars in thousands)
20242023% Change20242023% Change
Interest expense$(808)$(1,171)(31)%$(2,272)$(3,463)(34)%
Other income, net2,691 1,963 37 4,710 7,231 (35)
Total other income, net$1,883 $792 138 %$2,438 $3,768 (35)%
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
36

GoPro, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
$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.
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.
Income taxes
Three months ended September 30,Nine months ended September 30,
(dollars in thousands)
20242023% Change20242023% Change
Income tax expense (benefit)$2,083 $689 202 %$301,625 $(11,562)(2,709)%
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.
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.
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.
37

GoPro, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.
See Note 9 Income taxes, to the Notes to Condensed Consolidated Financial Statements for additional information.

Liquidity and Capital Resources
The following table presents selected financial information as of September 30, 2024 and December 31, 2023:
(dollars in thousands)September 30, 2024December 31, 2023
Cash and cash equivalents$130,195 $222,708 
Marketable securities— 23,867 
Total cash, cash equivalents and marketable securities$130,195 $246,575 
Percentage of total assets20 %25 %
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.
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.
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.
Convertible Notes
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
38

GoPro, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.
In connection with the offering of the 2025 Notes, we entered into privately negotiated capped call transactions with certain financial institutions (Capped Calls). We used $10.2 million of the net proceeds from the sale of the 2025 Notes to purchase the Capped Calls and $56.2 million of the net proceeds to repurchase $50.0 million of the $175.0 million aggregate principal amount of the 2022 Notes, which we issued in April 2017. The remaining net proceeds were used for general corporate purposes.
As market and financial conditions warrant, we may, from time to time, repurchase our outstanding debt securities in the open market, in privately negotiated transactions, by tender offer, by exchange transaction or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity and other factors and may be commenced or suspended at any time. The amounts involved and total consideration paid may be material.
Other Contractual Commitments
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:
(in thousands)TotalNext 12 MonthsBeyond 12 Months
Operating lease obligations (1)
$36,201 $12,707 $23,494 
Other contractual commitments224,395 55,587 168,808 
Total contractual cash obligations$260,596 $68,294 $192,302 
(1)    Operating lease obligations exclude cash inflows from existing contractual facility subleases through the end of 2026.
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.
Liquidity
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.
•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.
•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).
•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.
39

GoPro, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.
Summary of Cash Flow
The following table summarizes our cash flows for the periods indicated:
Nine months ended September 30,
(in thousands)
20242023% Change
Net cash provided by (used in):
Operating activities
$(100,042)$(76,592)31 %
Investing activities
$8,069 $107,437 (92)%
Financing activities
$(697)$(33,270)(98)%
Cash flows from operating activities
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.
Cash flows from investing activities
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.
Cash flows from financing activities
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.
Indemnifications
The information set forth under Note 10 Commitments, contingencies, and guarantees in the Notes to Condensed Consolidated Financial Statements under the caption Indemnifications is incorporated herein by reference.
40

GoPro, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Critical Accounting Policies and Estimates
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.
Impairment of goodwill
We perform an annual assessment of our goodwill during the fourth quarter of each calendar year or more frequently if indicators of potential impairment exist, such as an adverse change in business climate, declines in market capitalization or a decline in the overall industry demand, that would indicate it is more likely than not that the fair value of our single reporting unit is less than the carrying value. If we determine that it is more likely than not that the fair value of our single reporting unit is less than the carrying value, we measure the amount of impairment as the amount the carrying value of our single reporting unit exceeds the fair value, up to the carrying value of goodwill, by using a discounted cash flow method and market approach method.
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.
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.
Income taxes
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.
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.
41

GoPro, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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.

Non-GAAP Financial Measures
We report net income (loss) and diluted net income (loss) per share in accordance with United States generally accepted accounting principles (GAAP) and on a non-GAAP basis. We additionally report non-GAAP adjusted EBITDA. We use non-GAAP financial measures to help us understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short-term and long-term operational plans. Our management uses and believes that investors benefit from referring to these non-GAAP financial measures in assessing our operating results. These non-GAAP financial measures should not be considered in isolation from, or as an alternative to, the measures prepared in accordance with GAAP, and are not based on any comprehensive set of accounting rules or principles. We believe that these non-GAAP measures, when read in conjunction with our GAAP financials, provide useful information to investors by facilitating:
•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.
These non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Some of these limitations are:
•adjusted EBITDA does not reflect income tax expense (benefit), which may change cash available to us;
•adjusted EBITDA does not reflect interest income (expense), which may reduce cash available to us;
•adjusted EBITDA excludes depreciation and amortization and, although these are non-cash charges, the property and equipment being depreciated and amortized often will have to be replaced in the future, and adjusted EBITDA does not reflect any cash capital expenditure requirements for such replacements;
•adjusted EBITDA excludes the amortization of point of purchase (POP) display assets because it is a non-cash charge, and is treated similarly to depreciation of property and equipment and amortization of acquired intangible assets;
•adjusted EBITDA and non-GAAP net income (loss) exclude restructuring and other related costs which primarily include severance-related costs, stock-based compensation expenses, manufacturing consolidation charges, facilities consolidation charges recorded in connection with restructuring actions, including right-of-use asset impairment charges (if applicable), and the related ongoing operating lease cost of those facilities recorded under ASC 842, Leases. These expenses do not reflect expected future operating expenses and do not contribute to a meaningful evaluation of current operating performance or comparisons to the operating performance in other periods;
•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;
•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;
42

GoPro, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
•non-GAAP net income (loss) excludes acquisition-related costs including the amortization of acquired intangible assets (primarily consisting of acquired technology), the impairment of acquired intangible assets (if applicable), as well as 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 these costs are not related to our core operating performance or reflective of ongoing operating results in the period, 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. Although we exclude the amortization of acquired intangible assets from our non-GAAP net income (loss), management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and can contribute to revenue generation;
•non-GAAP net income (loss) excludes a gain on the sale and/or license of intellectual property. This gain is not related to our core operating performance or reflective of ongoing operating results in the period, and the frequency and amount of such gains are inconsistent;
•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;
•GAAP and non-GAAP net income (loss) per share includes the dilutive, tax effected cash interest expense associated with our 2025 Notes in periods of net income, as if converted at the beginning of the period; and
•other companies may calculate these non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.
The following table presents a reconciliation of net loss to adjusted EBITDA:
Three months ended
(in thousands)
September 30, 2024June 30, 2024September 30, 2023
Net loss$(8,211)$(47,821)$(3,684)
Income tax expense2,083 1,333 689 
Interest income, net(152)(226)(1,208)
Depreciation and amortization1,826 1,559 1,444 
POP display amortization1,424 1,202 459 
Stock-based compensation7,372 7,791 10,017 
Restructuring and other costs1,105 2,736 (485)
Adjusted EBITDA$5,447 $(33,426)$7,232 
43

GoPro, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following table presents a reconciliation of net loss to non-GAAP net income (loss):
Three months ended
(in thousands, except per share data)
September 30, 2024June 30, 2024September 30, 2023
Net loss$(8,211)$(47,821)$(3,684)
Stock-based compensation7,372 7,791 10,017 
Acquisition-related costs 484 569 — 
Restructuring and other costs1,105 2,736 (485)
Gain on sale and/or license of intellectual property(999)— — 
Income tax adjustments (1)
(214)546 3,148 
Non-GAAP net income (loss)$(463)$(36,179)$8,996 
Non-GAAP net income (loss) - basic $(463)$(36,179)$8,996 
Add: Interest on convertible notes, tax effected*— — 461 
Non-GAAP net (income) loss - diluted$(463)$(36,179)$9,457 
GAAP shares for diluted net loss per share153,741 152,502 152,409 
Add: Effect of non-GAAP dilutive securities— — 16,272 
Non-GAAP shares for diluted net income (loss) per share153,741 152,502 168,681 
GAAP diluted net loss per share$(0.05)$(0.31)$(0.02)
Non-GAAP diluted net income (loss) per share$(0.00)$(0.24)$0.06 
* Reflects the use of the if-converted method for our convertible notes, effective January 1, 2022 due to the adoption of ASU 2020-06.
(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.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risks in the ordinary course of our business. These risks primarily include foreign currency and interest rate risks as follows:
Foreign currency risk. Revenue generated from GoPro.com is denominated in U.S. dollars and various foreign currencies. Revenue generated from our international distributor and retail sales channels is generally priced in U.S. dollars, however we typically adjust our selling prices to reflect local exchange rate fluctuations. The strength of the U.S. dollar relative to other foreign currencies has negatively impacted revenue, gross margin and net income (loss) per share due to our sales outside of the United States by approximately $50 million in the last 12 months ending September 30, 2024 relative to 2021 foreign currency rates. To date, the majority of our inventory purchases have been denominated in our functional currency of the U.S. dollar. Our operations outside of the United States hold foreign denominated cash balances and incur a majority of their operating expenses in foreign currencies. We therefore have foreign currency risk related to these currencies, which are primarily the Australian dollar, Canadian dollar, Euro, Great British pound, Japanese yen and Romanian leu. Changes in exchange rates, and in particular, a weakening of foreign currencies relative to the U.S. dollar will negatively affect our revenue and operating income as expressed in U.S. dollars.
To date, we have not entered into any foreign currency exchange contracts or derivatives, and we will continue to reassess our approach to manage our risk relating to fluctuations in currency rates. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.
Interest rate risk. Our exposure to market risk for changes in interest rates primarily relates to our cash and cash equivalents and marketable securities. Our cash equivalents and marketable securities are comprised of money market funds, U.S. treasury securities, commercial paper, government securities and corporate debt securities. The primary objectives of our investment activities are to preserve principal and provide liquidity without significantly increasing risk. Our cash and cash equivalents are held for working capital purposes. We do not enter into investments for trading or speculative purposes. Due to the nature of our investment portfolio, we do not believe that an immediate 10% shift in interest rates would have a material effect on the fair value of our investment portfolio.
The fair value of our 2025 Convertible Senior Notes (2025 Notes) is subject to interest rate risk, market risk and other factors due to the conversion feature. The capped call that was entered into concurrently with the issuance of our 2025 Notes were completed to reduce the potential dilution from the conversion of the 2025 Notes. The fair value of the 2025 Notes will generally increase as interest rates fall and decrease as interest rates rise. In addition, the fair value of the 2025 Notes will generally increase as our Class A common stock price increases and will generally decrease as our Class A common stock price declines. The interest and market value changes affect the fair value of the 2025 Notes but do not impact our financial position, cash flows or results of operations due to the fixed nature of the debt obligation.

Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of the Company’s principal executive officer and principal financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures based on the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (Exchange Act)), as of September 30, 2024. Based on such evaluation, the Company’s principal executive officer and principal financial officer have concluded that, as of September 30, 2024, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
45

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three months ended September 30, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 1. Legal Proceedings
Refer to Legal proceedings and investigations included in Part I, Item 1. Note 10 Commitments, contingencies, and guarantees, to the Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q for the three months ended September 30, 2024.

Item 1A. Risk Factors
The risks described in Risk Factors in our 2023 Annual Report, and as supplemented below, could materially and adversely affect our business, financial condition and results of operations. The risk factors below do not identify all risks that we face; our operations or financial condition could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. In that event, the trading price of our shares may decline, and you may lose part or all of your investment.
Risk Factor Summary
•We may not be able to achieve revenue growth or profitability in the future, and if revenue growth or profitability is achieved, we may not be able to sustain it.
•Our ability to be profitable relies, in part, upon our ability to manage our cost structure and increase revenue, and we may not be successful in doing either.
•We may not be able to acquire and retain subscribers at all or at historical rates, which could adversely impact our results of operations and our ability to be profitable.
•To remain competitive and stimulate consumer demand, we must effectively manage product introductions, product transitions, product pricing and marketing.
•Our restructuring and reduction in force undertaken to reduce our cost structure may not achieve our intended outcome.
•Our future growth depends on further penetrating and expanding our total addressable market, and we may not be successful in doing so.
•An economic downturn or economic uncertainty in the United States and international markets, as well as inflation, market volatility, fluctuations in interest rates or currency exchange rates, may adversely affect consumer spending, demand for our products and our ability to grow, which could impact our operating results or financial position.
•If our sales fall below our forecasts, especially during the holiday season, our overall financial condition and results of operations could be adversely affected.
•We rely on third-party suppliers, some of which are sole-source suppliers, to provide services and components for our products which may lead to supply shortages, long lead times for components, and supply changes, any of which could disrupt our supply chain or our operations and may increase our costs.
•If we do not successfully coordinate or if we encounter issues with our manufacturers, suppliers, or supply chain, business, brand, and results of operations could be harmed and we could lose sales.
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•We depend on sales of our cameras, mounts, and accessories for substantially all of our revenue, and any delays in the launch of our products or decrease in the sales or change in sales mix of our products could harm our business.
•We face substantial risks related to inventory, purchase commitments, and long-lived assets, and we could incur material charges related to these items that adversely affect our operating results.
•Security and data breaches and cyber-attacks could disrupt our web platform, products, services, internal operations, information technology systems, or those of our strategic partners, and any such disruption could reduce our expected revenue, increase our expenses, damage our reputation, and cause our stock price to decline significantly.
•Our international operations account for a significant portion of our revenue and operating expenses and are subject to challenges and risks. Adverse developments in global economic or geopolitical conditions, or the occurrence of other world events, could materially adversely affect our revenue and results of operations.
•We depend on key personnel and qualified personnel to operate our business. If we are unable to attract, engage and retain qualified personnel, our ability to develop, transform and successfully operate our business could be harmed.
•Our gross margin can vary significantly depending on multiple factors, which can result in unanticipated fluctuations in our operating results.
•We operate in a highly competitive market and the size and resources of some of our competitors may allow them to compete more effectively than we can. New entrants also enter the digital imaging market category from time-to-time. These market factors could result in a loss of our market share and a decrease in our revenue and profitability.
•Adverse changes to trade agreements, trade policies, tariffs and import/export regulations may have a negative effect on our business and results of operations.
•If we fail to manage our operating expenses effectively, our financial performance may suffer.
•A small number of retailers and distributors account for a substantial portion of our revenue, and if our relationships with any of these retailers or distributors were to be terminated or the level of business with them significantly reduced, our business could be harmed.
•Our success depends on our ability to maintain the value and reputation of our brand.
•Consumers may be injured while engaging in activities with our products, and we may be exposed to claims, or regulations could be imposed, which could adversely affect our brand, operating results, and financial condition.
•We may be subject to warranty claims that could result in significant direct or indirect costs, or we could experience greater returns from retailers and customers than expected, which could harm our business and operating results.
•We may grow our business in part through acquisitions, joint ventures, investments, and partnerships, which could require significant management attention, disrupt our business, dilute stockholder value, and adversely affect our operating results.
•We use artificial intelligence in our business, and its improper use or unintended consequences could adversely affect our reputation and our results of operations.
•Catastrophic events or political instability could disrupt and cause harm to our business.

Risks related to our business and industry
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We may not be able to achieve revenue growth or profitability in the future, and if revenue growth or profitability is achieved, we may not be able to sustain it.
We have achieved GAAP income in prior years, however in the future, we may not be able to achieve our forecast, sustain revenue growth or profitability, and our operating results may fluctuate unpredictably. For example, our annual revenue decreased from $1.09 billion in 2022 to $1.01 billion in 2023, and our revenue decreased from $710.0 million for the nine months ended September 30, 2023 to $600.6 million in the same period for 2024. In addition, we incurred a net loss of $53.2 million for the full year of 2023 and earned net income of $28.8 million for the full year of 2022. In the near term, we expect sales and revenue to decline, and we may not be able to slow or reverse this trend. We may also be negatively impacted by foreign currency exchange rate fluctuations, which could have a material negative effect on our future operating results.
Lower levels of revenue, lower product margins or higher levels of operating expenses in future periods may result in losses or limited profitability. We may experience lower levels of revenue, lower product margins or higher levels of operating expenses for a variety of reasons, including, among other factors: ineffective investments in product innovation and development, including investments related to our recent acquisition of Forcite Helmet Systems; any delays or issues with our new product launches; increased advertising and marketing costs and/or ineffectiveness thereof; increasing freight rates; shipping delays; increased supply chain costs; impact of currency exchange rates; increased costs; lower average sales pricing for our cameras; or a recession or other sustained adverse market events that materially impacts consumer purchases of discretionary items, such as our products. For example, in 2023, our margins were negatively impacted by price protection charges, an increase in the volume of sales of our entry-level price point cameras, and a decrease to sales from GoPro.com.
We may continue to experience fluctuating revenue, expenses, and profitability for a number of reasons, including other risks described in this Quarterly Report on Form 10-Q and in our 2023 Annual Report, and we may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors.
Our ability to be profitable relies, in part, upon our ability to manage our cost structure and increase revenue, and we may not be successful in doing either.
Our ability to be profitable relies, in part, on managing our cost structure and increasing revenue. We depend upon maintaining and developing effective sales channels between our retailers, distributors, and direct-to-consumer via GoPro.com.
We do not currently anticipate substantial growth in our revenue. Any reduction in sales by our retail and distribution channels could adversely affect our revenue, operating results, and financial condition. We depend on retailers to provide adequate and attractive space for our products and point-of-purchase (POP) displays in their stores and acquiesce to our policies. Some retailers have carried and displayed less inventory, as a result of macroeconomic factors, theft, or lack of available inventory at certain price points or in certain product categories, which has impacted sales. We further depend on our retailers to employ, educate, and motivate their sales personnel to effectively sell our products. If our retailers do not adequately display our products, choose to reduce the space for our products and POP displays in their stores or locate them in less than premium positioning, or choose not to carry some or all of our products or promote competitors’ products over ours or do not effectively explain to customers the advantages of our products, our sales could decrease and our business could be harmed. Increasing retail and distributor sales requires significant investment and resources. For example, we expect continued investment in new POP displays and updating existing POP displays for both existing stores and new retailers which we believe will attract, inform consumers, and assist sales personnel to effectively sell our products; however, there can be no assurance that this investment will lead to increased revenue and profit.
Our future growth also relies, in part, on our continued ability to attract consumers to our GoPro.com sales channel, which has and will require significant expenditures in marketing, software development and infrastructure. There can be no assurance that this investment will be successful.
We may not be able to acquire and retain subscribers at all or at historical rates, which could adversely impact our results of operations and our ability to be profitable.
We have experienced high growth in our subscribers over the past several years, but we may not be able to sustain such growth in the future. For example, our subscriber growth slowed to 2% from 11% when comparing
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subscriber count for the nine months ending on September 30, 2024 and 2023, respectively. Our revenue growth and profitability are dependent on our ability to continuously attract and retain subscribers, and we cannot be certain that efforts to do so will be successful. Any changes to our subscription offerings, or increases to the offering costs, could have an adverse effect on the success and profitability of our subscription service, attracting new subscribers and retaining existing subscribers. There are many factors that could lead to slowing subscriber growth or a decline in subscribers, including a decline in camera sales, attach rates or retention rates, our failure to introduce new features, benefits, products, or services that customers desire, changes to existing products, services, and pricing that are not favorably received by our customers, or changes in the perceived value of our offerings. If the attach rate is less than what we forecasted, particularly the retail attach rate, this could have a negative impact on our overall subscriber growth plans. A decline in subscribers could have an adverse effect on our business, financial condition, and operating results.
To remain competitive and stimulate consumer demand, we must effectively manage product introductions, product transitions, product pricing and marketing.
We believe that we must continually develop and introduce new products on schedule, enhance our existing products, anticipate consumer preferences, and effectively stimulate consumer demand for new and upgraded products and services to maintain or increase our revenue. Our products and services are subject to changing consumer preferences that cannot be predicted with certainty and development lead times may make it more difficult for us to respond rapidly to new or changing consumer preferences. The markets for our products and services are characterized by intense competition, evolving distribution models, disruptive technology developments, short product life cycles, customer price sensitivity and frequent product introductions.
The success of new product introductions depends on a number of factors including, but not limited to, timely and successful research and development of next generation systems, pricing, market and consumer acceptance, the ability to successfully identify and originate product trends, effective forecasting and management of product demand, purchase commitments and inventory levels, availability of products in appropriate quantities to meet anticipated demand, ability to obtain timely and adequate delivery of components for our new products from third-party suppliers, management of any changes in major component suppliers, management of manufacturing and supply costs, management of risks and delays associated with new product design and production ramp-up issues, logistics, and the risk that new products may have quality issues or other defects or bugs in the early stages of introduction including testing of new parts and features.
Our research and development efforts are complex and require us to incur substantial expenses to support the development of our next generation cameras, tech-enabled helmets, software applications, and other products and services. In particular, our flagship camera designs incorporate custom system-on-chip (SoC), sensors, lens, batteries, and memory solutions that critically impact the performance of our products. Our research and development expenses were $165.7 million, $139.9 million, $141.5 million, and $131.6 million for 2023, 2022, 2021, and 2020, respectively, and we expect that our research and development expenses will continue to be substantial in 2024 as we develop innovative technologies. Unanticipated problems in developing products could divert substantial resources, which may impair our ability to develop new products and enhancements of existing products and could further increase our costs. We may not be able to achieve an acceptable return, if any, on our research and development efforts, and our business may be adversely affected. As we continually seek to enhance our products, we will incur additional costs to incorporate new or revised features. We might not be able to, or determine that it is not in our interests to, raise prices to compensate for any additional costs.
Additionally, as a result of the macroeconomic environment, we may not be able to accurately forecast consumer demand and inventory requirements and appropriately manage inventory to meet demand. For example, inflationary pressures may have an impact on consumers’ share of wallet or our ability to raise prices. We have, and may in the future, reduce prices to stimulate demand. We offer retroactive price protection to certain of our retailers and distributors. For example, as a result of our May 2023 price drop, we recorded a total price protection charge of $26.7 million in the six months ended June 30, 2023, based on estimated channel inventory levels. If price protection adjustments are higher than expected, our future results of operations could be materially and adversely affected. In addition, if we fail to meet any minimum commitments under agreements with our contract manufacturers, we may be required to pay the difference or to pay in advance for additional components, and our results of operations could be negatively impacted. With respect to management and supply costs, we may be
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impacted by heightened demand for specialty memory, components and batteries that are not supported by our manufacturing partners. Such supply shortages may affect our ability to manage appropriate supply levels of our products and pricing pressures may negatively affect our gross margins.
In addition, the introduction or announcement of new products or product enhancements may shorten the life cycle of our existing products or reduce demand for our current products, thereby offsetting any benefits of successful product introductions and potentially lead to challenges in managing inventory of existing products.
Additionally, our brand and product marketing efforts are critical to stimulating consumer demand. We market our products globally through a range of advertising and promotional programs and campaigns, including social media. If we do not successfully market our products or invest sufficient resources in marketing our products, our business, financial condition, and results of operations could suffer as a result.
Our restructuring and reduction in force undertaken to reduce our cost structure may not achieve our intended outcome.
We previously implemented company-wide restructurings of our business, including in March 2024, August 2024 and October 2024, resulting in a reduction in our global workforce, the elimination of certain open positions and reduction of certain office space, as well as the elimination of several high-cost initiatives, in order to optimize our cost structure and focus our resources on cameras, accessories, subscription and service, and tech-enabled helmets. These reductions in force may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees, decreased morale among our remaining employees, and the risk that we may not achieve the anticipated benefits of the reduction in force. In addition, while positions have been eliminated, certain functions necessary to our operations remain, and we may be unsuccessful in distributing the duties and obligations of departed employees among our remaining employees. The reduction in workforce could also make it difficult for us to pursue, or prevent us from pursuing, new opportunities and initiatives due to insufficient personnel, or require us to incur additional and unanticipated costs to hire new personnel to pursue such opportunities or initiatives. If we are unable to realize the anticipated benefits from the reductions in force, or if we experience significant adverse consequences from the reductions in force, our business, financial condition, and results of operations may be materially adversely affected. We may undertake further similar cost-saving initiatives, which may include additional restructuring or workforce reductions. These types of cost-reduction activities can be complex and result in unintended consequences and costs, including further attrition beyond the intended number of employees due to decreased employee morale, loss of institutional knowledge and expertise and adversely impact our business.
Our future growth depends on further penetrating and expanding our total addressable market, and we may not be successful in doing so.
Historically, the majority of our growth has been fueled by the adoption of our HERO and MAX 360-degree camera products, extensive mount and accessory ecosystem, and subscription products by people looking to self-capture images of themselves participating in exciting physical activities and helping those people create and share compelling and meaningful content with friends, family and followers. We believe that our future growth depends on continuing to add versatility to our products and reach and expand our core community of customers of our products and services, followers, and fans, and then utilizing that energized community as brand ambassadors to an extended community. Despite this, we may not be successful in further penetrating or expanding our existing market.
We may not be able to expand our subscription and service offerings and cannot be certain that these efforts will be successful, and as a result, we may not be able to increase our total addressable market, revenue, or operating profit. We may not be able to expand our market, revenue and gross margin through this strategy on a timely basis, or at all, or recognize the benefits of our investments in this strategy, and we may not be successful in providing tools that our users adopt or believe are easy to use, which will negatively affect our future growth.
Our growth also depends on expanding into new markets with new capture perspectives, including with tech-enabled helmets currently in development. We cannot be assured that we will be successful in expanding into markets with new capture perspectives. New markets that we attempt to enter may be highly competitive, and we may have limited experience in those emerging markets. If we are not successful in expanding into additional
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markets, and enabling new capture perspectives, we might not be able to grow our revenue and we may not recognize benefits from our investment in new areas.
An economic downturn or economic uncertainty in the United States and international markets, as well as inflation, market volatility, fluctuations in interest rates or currency exchange rates, may adversely affect consumer spending, demand for our products and our ability to grow, which could impact our operating results or financial position.
Factors affecting the level of consumer spending include general market and macroeconomic conditions, domestic and international political conditions, regional conflicts, tax rates, inflation, tariffs, fluctuations in foreign exchange rates and interest rates, potential recessions, and other factors such as consumer confidence, the availability and cost of consumer credit, levels of unemployment and a reduction in consumer spending or discretionary income that may affect us more significantly than companies in other industries and companies with more diversified products. For example, if any of the current regional conflicts around the world were to escalate or expand, it could lead to disruption of our supply chain and have a negative impact on consumer discretionary spending.
The majority of our sales occur in United States dollars (U.S. dollar). An increase or decrease in the value of the U.S. dollar against the Euro and other foreign currencies could impact sales of our products, which could have a material impact on our operating results. For example, a strengthening U.S. dollar relative to other currencies could increase the real cost to consumers of our products in those markets outside the United States, which could lower sales and/or cause us to reduce our selling price to retailers and distributors in those markets. If global economic conditions are volatile or deteriorate, consumers may delay or reduce purchases of our products resulting in lower consumer demand for our products such that we may not reach our sales targets. 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 offset any such higher costs as necessary could harm our business, financial condition, and operating results.
Moreover, adverse developments that affect financial institutions, such as events involving liquidity that are rumored or actual, have in the past and may in the future lead to market-wide liquidity problems. Any future adverse developments in the global banking system could directly or indirectly negatively impact our results of operations. Deterioration in economic conditions in the United States or international markets in which we do business could also cause slower or impaired collections on accounts receivable, which may adversely impact our liquidity and financial condition.
If our sales fall below our forecasts, especially during the holiday season, our overall financial condition and results of operations could be adversely affected.
Seasonal consumer shopping patterns significantly affect our business. We have traditionally experienced greater revenue in the fourth quarter of each year due to demand related to the holiday season, and in some years, including 2023, greater demand associated with the launch of new products heading into the holiday season. Fourth quarter revenue comprised 29%, 29%, and 34% of our 2023, 2022, and 2021 revenue, respectively. Given the strong seasonal nature of our sales, appropriate forecasting is critical to our operations. We anticipate that this seasonal impact is likely to continue and any shortfalls in expected fourth quarter revenue due to macroeconomic conditions, the inflationary impact on consumers’ share of wallet, product release patterns or delays, declines in the effectiveness of our promotional activities, changes in product mix, charges incurred against new products to support promotional activities for such new products, pricing pressures, supply chain disruptions, shipping delays, or for any other reason, could cause our annual results of operations to suffer significantly. For example, during the fourth quarter of 2023, our sell-through fell short of our projections partially due to consumers’ expectation of holiday season promotions even after the Thanksgiving Black Friday events. In addition, in the U.S. market, consumer spending shifted away from consumer electronics products in the month of December further impacting our results of operation.
In addition, we typically experience lower revenue in the first half of the year as a percentage of total revenue for the year, as compared to second half revenue. First half revenue comprised 41%, 43%, and 39% of our annual 2023, 2022, and 2021 revenue, respectively.
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We rely on third-party suppliers, some of which are sole-source suppliers, to provide services and components for our products which may lead to supply shortages, long lead times for components, and supply changes, any of which could disrupt our supply chain or our operations and may increase our costs.
Our ability to meet customer demand depends, in part, on our ability to obtain timely and adequate delivery of components for our products. We do not have internal manufacturing capabilities and rely on several contract manufacturers, located in China and Thailand, to manufacture our products. All of the components that go into the manufacturing of our hardware products and accessories are sourced from third-party suppliers. We do not control our contract manufacturers or suppliers, including their capacity, bandwidth, or costs of their labor, environmental or other practices.
Some of the key components used to manufacture our products come from a limited or single source of supply, or by a supplier that could potentially become a competitor. Our contract manufacturers generally purchase these components on our behalf from approved suppliers. We are subject to the risk of shortages and long lead times in the supply of these components and the risk that our suppliers discontinue or modify components used in our products. In addition, the lead times associated with certain components are lengthy and preclude rapid changes in quantities and delivery schedules, and such lead times could increase as a result of shipping disruptions, global conflicts, including any escalations or expansions of those conflicts, or other factors. We have in the past experienced and may in the future experience component shortages, and the availability of these components may be unpredictable, including as a result of global conflict and pandemics.
If we lose access to components from a particular supplier or experience a significant disruption in the supply of products and components from a current supplier, we may be unable to locate alternative suppliers or submit orders directly through supplier’s vendors of comparable quality at an acceptable price, or at all, and our business could be materially and adversely affected. In addition, if we experience a significant increase in demand for our products, our suppliers might not have the capacity or elect not to meet our needs as they allocate components to other customers. Developing suitable alternate sources of supply for these components may be time-consuming, difficult and costly, and we may not be able to source these components on terms that are acceptable to us, or at all, which may adversely affect our ability to meet our development requirements or to fill our orders in a timely or cost-effective manner.
We also rely on third-party distribution facilities and logistics operators for substantially all of our product distribution to distributors, retailers, and to consumers. In some instances, we bear the risk of loss, theft, or damage of our products in transit, and our insurance may be insufficient to cover all risk of loss, theft, or damage of our products. Our distribution facilities include computer controlled and automated equipment, which means their operations may be vulnerable to computer viruses or other security risks, the proper operation of software and hardware, electronic or power interruptions or other system failures.
Our reliance on single source, or a small number of suppliers, involves a number of additional risks, including risks related to supplier capacity constraints, component availability, price increases, timely delivery, component quality, failure of a key supplier to remain in business and adjust to market conditions, delays in, or the inability to execute on, a supplier roadmap for components and technologies, and natural disasters, fire, acts of terrorism, global conflicts, pandemics or other catastrophic events.
An actual or perceived downgrade in our liquidity or operations could cause our suppliers or contract manufacturers to change credit terms, limit the extension of credit, or otherwise materially modify their payment terms or allocation of resources to us. Any material changes in our payment terms, availability of credit provided by our suppliers, or availability of supplier capacity or components could impact our liquidity, results of operations, and financial condition.
In particular, for our camera designs we incorporate system on chips, sensors, lens, batteries and memory solutions that critically impact the performance of our products. These components have unique design and performance profiles, and as a result, it is not commercially practical to support multiple sources for these components for our products. For example, we incorporate the GP2 system on chip in our HERO12 Black camera, and other cameras. We rely on a single source for GP2 and are subject to price increases for those
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components. Costs for the components that comprise GP2 could continue to increase even as prices for commodity components decline.
Additionally, we rely on third parties to provide software and enterprise services. For example, we host our software applications and firmware upgrades for our cameras using Amazon Web Services (AWS). A prolonged AWS service disruption affecting our subscription products would negatively impact our ability to serve our consumers and could damage our reputation with current and potential consumers, expose us to liability, cause us to lose consumers, or otherwise harm our business. In the event that our AWS service agreements are terminated, or there is a lapse of service, elimination of AWS services or features that we use, interruption of internet service provider connectivity, or damage to such facilities, we could experience interruptions in access to our subscription offerings as well as significant delays and additional expense in arranging or creating new facilities and services and/or re-architecting our solutions for deployment on a different cloud infrastructure service provider, which could materially adversely affect our business, results of operations and financial condition.
If we do not successfully coordinate or if we encounter issues with our manufacturers, suppliers, or supply chain, business, brand, and results of operations could be harmed and we could lose sales.
Our business requires us to coordinate the manufacture and distribution of our products. Our manufacturers and supply chain partners may experience disruptions in their operations due to equipment breakdowns, component or material shortages, labor strikes or shortages, shipping delays, transportation or logistics challenges, natural disasters, cyber-attacks or other cybersecurity incidents, cost increases, pandemics, or other similar problems. If we do not successfully coordinate with our service providers, we may have insufficient supply of products to meet customer demand or face increased or additional costs, and as a result, we could lose sales, and our financial performance may be adversely affected.
The effect of seasonal demand fluctuations on supply chains, transportation costs, fuel costs, labor unrest, natural disasters, global conflicts, regional or global pandemics, and other adverse effects on our ability, timing and cost of delivering products can increase our inventory, decrease our margins, adversely affect our relations with distributors and other customers and otherwise adversely affect our results of operations and financial condition.
Environmental regulations or changes in the supply, demand or available sources of natural resources may affect the availability and cost of goods and services necessary to run our business. We require our contract manufacturers and suppliers to comply with our formal supplier code of conduct and relevant standards and periodically conduct audits of our contract manufacturers’ and suppliers’ compliance with our code of conduct, applicable laws and good industry practices. However, these audits may not be frequent or thorough enough to detect non-compliance. Deliberate violations of labor, environmental or other laws by our contract manufacturers or suppliers, or a failure of these parties to follow ethical business practices, could lead to negative publicity and harm our reputation or brand.
As a company engaged in manufacturing and distribution, we are subject to the risks inherent in such activities, including disruptions or delays in supply chain. For example, during the COVID-19 pandemic and as a result of governmental responses to the COVID-19 pandemic among other macroeconomic factors, certain of our suppliers and manufacturers experienced disruptions, resulting in supply shortages and costs increases, staffing shortages, manufacturing facility closures, and similar disruptions could occur in the future. Any increases in the costs of goods and services for our business may also adversely affect our profit margins particularly if we are unable to achieve higher price increases or otherwise increase cost or operational efficiencies to offset the higher costs.
We depend on sales of our cameras, mounts, and accessories for substantially all of our revenue, and any delays in the launch of our products or decrease in the sales or change in sales mix of our products could harm our business.
We expect to derive the majority of our revenue from sales of cameras, mounts, and accessories for the foreseeable future and an increasing amount of revenue attributable from our subscription and service. A decline in the price or unit demand for these products, whether due to a shift in our sales channel strategy, or macroeconomic conditions, including variable tariff rates, competition or otherwise, or our inability to increase sales of higher price point products, would harm our business and operating results more seriously than it would if we derived significant revenue from a variety of product lines and services. In particular, a decline in the price or
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unit demand of our HERO camera line, MAX camera line, and other product lines, or our inability to increase sales of these products, could materially harm our business and operating results.
Further, any delays or issues with our new product launches, including the delayed launch of our next generation 360-degree camera from 2024 to 2025, could have a material adverse effect on our business, financial condition, and results of operations.
We face substantial risks related to inventory, purchase commitments, and long-lived assets, and we could incur material charges related to these items that adversely affect our operating results.
To ensure adequate inventory supply and meet the demands of our retailers and distributors, we must forecast inventory needs and place orders with our contract manufacturers and component suppliers based on our estimates of future demand for particular products as well as accurately track the level of product inventory in the channel to ensure we are not in an over or under supply situation. To the extent we discontinue the manufacturing and sales of any products or services, we must manage the inventory liquidation, supplier commitments and customer expectations.
No assurance can be given that we will not incur additional charges in future periods related to our inventory management or that we will accurately forecast sales in a future period. Our ability to accurately forecast demand for our products is affected by many factors, including product introductions by us and our competitors, channel inventory levels, unanticipated changes in general market demand, macroeconomic conditions, including inflation or recession, and consumer confidence. If we do not accurately forecast customer demand for our products, we may in future periods be unable to meet consumer, retailer, or distributor demand for our products, or may be required to incur higher costs to secure the necessary production capacity and components, and our business and operating results could be adversely affected.
Security and data breaches and cyber-attacks could disrupt our web platform, products, services, internal operations, information technology systems, or those of our strategic partners, and any such disruption could reduce our expected revenue, increase our expenses, damage our reputation, and cause our stock price to decline significantly.
We are dependent on information systems to develop our products and services, process transactions, manage our supply chain and inventory, ship goods on a timely basis, maintain cost-efficient operations, complete timely and accurate financial reporting, operate GoPro.com, and respond to customer inquiries. Cyber-attacks may threaten our information systems and are increasing in their frequency, sophistication, and maleficence, and have become increasingly difficult to detect. As artificial intelligence capabilities improve and are increasingly adopted, we may see cyber-attacks utilizing or exploiting artificial intelligence. Despite the implementation of security measures designed to protect against such threats, our information technology systems, and those of our strategic partners and third parties on whom we rely, are vulnerable to cyber-attacks, security breaches, computer viruses damage, unauthorized access, natural disasters, terrorism, theft or exposure of confidential data, war and other acts of foreign governments, and failures of telecommunication, electrical and other critical systems.
Our products, services and operating systems may contain unknown security vulnerabilities. For example, the firmware and software that are installed on our products may be susceptible to hacking or misuse, or we may experience disruptions to our GoPro.com platform. If malicious actors compromise our products and services, including without limitation hacking or breach of such products and services, our business and our reputation will be harmed.
In the ordinary course of our business, we electronically collect, use and store sensitive data, including our intellectual property, our proprietary business information and that of our customers and suppliers, and personally identifiable information of our customers and employees. We collect, use and store user data uploaded by users through the GoPro cloud, mobile and desktop apps and through certain marketing activities. For all of the foregoing, we collect, use and store that information in our or our third-party providers’ systems. These systems may be targets of attacks, malware, viruses or phishing attempts by cyber criminals or other wrongdoers seeking to steal our users’ content or data, or our customers’ information for financial gain or to harm our business operations or reputation.
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Any security breach, unauthorized access or usage, or similar breach or disruption of our systems, or the systems of third parties on which we rely including web hosting services, billing and payment processing, or software could result in a disruption to our business or the loss of confidential information, costly investigations, remediation efforts and costly notification to affected consumers. If such content were accessed by unauthorized third parties or deleted inadvertently by us or third parties, our brand and reputation could be adversely affected. Cyber-attacks could also adversely affect our operating results, consume internal resources and result in litigation or potential liability for us and otherwise harm our business and our reputation.
While we maintain industry standard cybersecurity insurance, our insurance may be insufficient for a particular incident or may not cover all liabilities incurred by any such attacks. We also cannot be certain that our insurance coverage will be adequate for data handling or data security liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, litigation to pursue claims under our insurance policies or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, or denials of coverage, could have a material adverse effect on our business, reputation, operating results and financial condition. Moreover, many of our employees, service providers and third parties work more frequently on a remote or hybrid arrangement basis, which may also result in heightened risks related to consumer privacy, network security and fraud. System disruptions, failures, and slowdowns, whether caused by cyber-attacks, update failures or other causes, could affect our financial systems and operations. This could cause delays in our supply chain or cause information, including data related to customer orders, to be lost or delayed which could result in delays in the delivery of merchandise to our stores and to customers, or lost sales, especially if the disruption or slowdown occurred during our quarters of peak demand.
Our international operations account for a significant portion of our revenue and operating expenses and are subject to challenges and risks. Adverse developments in global economic or geopolitical conditions, or the occurrence of other world events, could materially adversely affect our revenue and results of operations.
Revenue from outside the United States comprised 61%, 59%, and 55% of our revenue in 2023, 2022, and 2021, respectively, and we expect international revenue to continue to be significant in the future. Further, we currently have foreign operations in Australia, China, France, Germany, Hong Kong, Japan, Netherlands, Philippines, Romania, the United Kingdom (U.K.) and a number of other countries in Europe and Asia. Operating in foreign countries requires significant resources and considerable management attention, and we may enter new geographic markets where we have limited or no experience in marketing, selling, and deploying our products. International expansion has required and will continue to require us to invest significant funds and other resources and we cannot be assured our efforts will be successful. International sales and operations may be subject to risks such as:
•difficulties in staffing and managing foreign operations, including management of overseas bank accounts and other operational risks;
•burdens of complying with a wide variety of laws and regulations or risk of non-compliance, including environmental, packaging and labeling laws or regulations, which can change based on new political conditions;
•delays or disruptions in our supply chain;
•adverse tax effects and foreign exchange controls making it difficult to repatriate earnings and cash;
•changes to the taxation of undistributed foreign earnings;
•the effect of foreign currency exchange rates and interest rates, including any fluctuations caused by, inflation, recessionary concerns, or the strengthening of the U.S. dollar relative to the foreign currencies in which we conduct business;
•political conditions, economic instability, geopolitical turmoil, civil disturbances, or social unrest in a specific country or region in which we operate, which could have an adverse impact on our operations in that location, for example, the effects of China-Taiwan relations or conflict in the Middle East;
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•organized crime activity;
•terrorist activities, acts of war, natural disasters, and pandemics;
•wars and global conflicts, including the ongoing conflicts around the world;
•quarantines or other disruptions to our operations resulting from pandemics or other widespread public health problems;
•trade restrictions;
•the effects of climate change;
•differing employment practices and laws and labor disruptions;
•the imposition of government controls;
•lesser degrees of intellectual property protection;
•tariffs and customs duties and the classifications of our goods by applicable governmental bodies;
•political instability, including the occurrence of a temporary federal government shutdown;
•a legal system subject to undue influence or corruption; and
•a business culture in which illegal sales practices may be prevalent.
The occurrence of any of these risks could negatively affect our international business and consequently our business, operating results, and financial condition.
We depend on key personnel and qualified personnel to operate our business. If we are unable to attract, engage and retain qualified personnel, our ability to develop, transform and successfully operate our business could be harmed.
We believe that our future success is highly dependent on the contributions of our CEO, our executive officers, and our employees, as well as our ability to attract and retain highly skilled and experienced research and development and other personnel in the United States and abroad. All of our employees, including our executive officers, are free to terminate their employment relationship with us at any time, and their knowledge of our business and industry may be difficult to replace. If key employees leave, we may not be able to fully integrate new personnel or replicate the prior working relationships, and our operations could suffer as a result.
Qualified individuals are in high demand, and we may incur significant costs to attract and retain them, including circumstances beyond our control such as increased wages due to inflation, increasing competition among employers in the prevailing labor market, and labor market constraints. We have limited control over these factors. Competition for qualified personnel globally is challenging. In particular, we compete with many other companies for skilled positions, and we may not be successful in attracting and retaining the professionals we need. While we utilize competitive salary, bonus, and long-term incentive packages to recruit new employees, many of the companies with which we compete for experienced personnel may have greater resources to do so.
We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications.
Further, job candidates and existing employees often consider the value of the equity awards they receive in connection with their employment. Fluctuations in the price of our Class A common stock may make it more difficult or costly to use equity compensation to motivate, incentivize and retain our employees. For example, since 2023, our closing stock price ranged from a high of $6.46 in the first quarter of 2023 to a low of $1.16 in the third quarter of 2024. If we are unable to attract and retain highly skilled personnel, we may not be able to achieve our strategic objectives, and our business, financial condition and operating results could be adversely affected.
Our gross margin can vary significantly depending on multiple factors, which can result in unanticipated fluctuations in our operating results.
Our gross margin can vary due to consumer demand, competition, product pricing, promotional activities, product lifecycle, product mix, new product introductions, GoPro.com sales mix, subscription activation, renewals, and
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cancellations, commodity costs, supply chain, logistics costs and shipping costs, currency exchange rates, trade policy and tariffs, and the complexity and functionality of new product innovations and other factors. For example, our gross margin was 32.2%, 37.2%, and 41.1% for 2023, 2022, and 2021, respectively. In particular, if we are not able to introduce new products in a timely manner at the product cost we expect, if consumer demand for our products is less than we anticipate, if cancellation rates for our subscription offerings are higher than expected or if there are product pricing, marketing and other initiatives by our competitors to which we need to react or that are initiated by us to drive sales that lower our margins, then our overall gross margin will be less than we project.
As we innovate with new products, we may have lower gross margins that do not deliver a sufficient return on investment. In addition, depending on competition or consumer preferences, we may face higher up-front investments in development to compete or market our products, and increased inventory write-offs. If we are unable to offset these potentially lower margins by enhancing the margins in our product categories, our profitability may be adversely affected.
The impact of these factors on gross margin can create unanticipated fluctuations in our operating results, which may cause volatility in the price of our shares and as a result, harm our liquidity, limit our ability to grow our business, pursue acquisitions, and restrict our ability to compete in our markets.
We operate in a highly competitive market and the size and resources of some of our competitors may allow them to compete more effectively than we can. New entrants also enter the digital imaging market category from time-to-time. These market factors could result in a loss of our market share and a decrease in our revenue and profitability.
The digital imaging market is highly competitive. Further, competition has intensified in digital imaging as new market entrants and existing competitors have introduced new products and more competitive offerings into our markets. Increased competition, tariffs, and changing consumer preferences may result in pricing pressures, reduced profit margins and may impede our ability to continue to increase the sales of our products or cause us to lose market share, any of which could substantially harm our business and results of operations.
We compete against established, well-known camera manufacturers such as Canon Inc. and Nikon Corporation, as well as large, diversified electronics companies such as Samsung Electronics Co. and Sony Corporation, and specialty companies such as Garmin Ltd., the Ricoh Company, Ltd., Arashi Vision Inc. (Insta360), and SZ DJI Technology Co., Ltd. Many of our competitors have substantial market share, diversified product lines, well-established supply and distribution systems, strong worldwide brand recognition and greater financial, marketing, research and development and other resources than we do. Additionally, many of our existing and potential competitors enjoy substantial competitive advantages, such as longer operating histories, the capacity to leverage their sales efforts and marketing expenditures across a broader portfolio of products, broader distribution and established relationships with channel partners or vertically integrated business units, access to larger established customer bases, greater resources to make acquisitions, larger intellectual property portfolios, and the ability to bundle competitive offerings with other products and services. Further, new companies may emerge and offer competitive products directly in our category. Certain companies have developed cameras designed and packaged to appear similar to our products, which may confuse consumers or distract consumers from purchasing GoPro products.
Moreover, smartphones and tablets with photo and video functionality have significantly displaced the market for traditional cameras, and the makers of those devices also have mobile and other content editing applications and storage for content captured with those devices. Our desktop and mobile apps, and subscription offerings may not be as compelling as those offered by other companies, such as Apple, Adobe, or Google, although the mobile application supports content from other platforms including content from iOS and Android. Manufacturers of smartphones and tablets, such as Apple, Google, and Samsung, may continue to design their products for use in a range of conditions similar to our products, including in challenging physical environments and with waterproof capabilities, or develop products with features similar to ours. We rely in part on application marketplaces, such as the Apple App Store and Google Play, to distribute our mobile and desktop apps. Apple and Google may raise commissions, change or modify rules or functionality for apps on the marketplaces, or make access to our apps more difficult, which could adversely impact our business and results of operations.
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Adverse changes to trade agreements, trade policies, tariffs and import/export regulations may have a negative effect on our business and results of operations.
The United States and other countries in which our products are produced or sold internationally have imposed and may impose additional quotas, duties, tariffs, or other restrictions or regulations, or may adversely adjust prevailing quota, duty, tariff levels, or export or other licensing requirements. Countries impose, modify and remove tariffs and other trade restrictions in response to a diverse array of factors, including global and national economic and political conditions, which make it impossible for us to predict future developments regarding tariffs and other trade restrictions. Trade restrictions, including tariffs, quotas, embargoes, safeguards, and customs restrictions, could increase the cost or reduce the supply of products, including components and materials, available to us or may require us to modify our supply chain organization or other current business practices, any of which could harm our business, financial condition and results of operations. We are dependent on international trade agreements and regulations. If the United States were to withdraw from or materially modify certain international trade agreements, our business and operating results could be materially and adversely affected.
We do not have internal manufacturing capabilities and rely on several contract manufacturers, including component vendors, located in China, Thailand and in other countries to manufacture our products. Our contract manufacturer locations expose us to risks associated with doing business globally, including risks related to changes in tariffs or other export and import restrictions, and increased security costs. Additionally, the current United States administration continues to signal that it may continue to alter global trade agreements and terms. For example, the United States imposed additional tariffs on imports from China and continues to potentially impose other restrictions on exports from China to the United States. Any announcement by the United States Trade Representative (USTR) to impose tariffs on GoPro products could have a material adverse effect on our United States bound production, business, and results of our United States operations. If these duties are imposed on our products, we may be required to raise our prices, which may result in the loss of customers and harm our business and results of operations, or we may choose to pay for these tariffs without raising prices which may negatively impact our results of operations and profitability. Sales of our products in China are material to our business and represent a significant portion of our revenue. This revenue stream from China is at risk in the event China imposes retaliatory tariffs impacting in-bound sales of our products or imposes any other export restrictions on our products.
We continue to monitor manufacturing capabilities outside of China and currently manufacture certain cameras in Thailand to mitigate risks of additional tariffs, duties or other restrictions on our products destined for the United States and may choose to transition more manufacturing outside of China.
If we fail to manage our operating expenses effectively, our financial performance may suffer.
Our success will depend in part upon our ability to effectively manage our operating expenses, including but not limited to, our cash management. We incurred an operating loss in 2023, and we generated operating income for the full year of 2022 and 2021. As of September 30, 2024, we had an accumulated deficit of $644.4 million. We have implemented global reductions-in-force and other restructuring actions to reduce our operating expenses. However, we may not realize the cost savings expected from our cost reduction actions.
We will need to continue to maintain and improve our operational, financial and management controls, reporting processes and procedures, and financial and business information systems. We are also investing in areas we believe will grow revenue and our operating expenses might increase as a result of these investments. If we are unable to operate efficiently and manage our costs, we may continue to incur significant losses in the future and may not be able to maintain or achieve profitability.
A small number of retailers and distributors account for a substantial portion of our revenue, and if our relationships with any of these retailers or distributors were to be terminated or the level of business with them significantly reduced, our business could be harmed.
Our ten largest third-party customers, measured by the revenue we derive from them, accounted for 44%, 41% and 46% of our revenue in 2023, 2022, and 2021 respectively. One retailer accounted for 10%, 8% and 11% of our revenue for 2023, 2022, and 2021 respectively. The loss of a small number of our large customers, or the reduction in business with one or more of our large customers, could have a significant adverse effect on our
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operating results. In addition, we may choose to temporarily or permanently stop shipping product to customers who do not follow the policies and guidelines in our sales agreements, which could have a material negative effect on our revenues and operating results. Our sales agreements with these large customers do not require them to purchase any meaningful amount of our products annually and we grant limited rights to return product to some of these large customers.
Our success depends on our ability to maintain the value and reputation of our brand.
Our success depends on the value and reputation of our brand, including our primary trademarks “GOPRO,” “HERO,” and the GoPro logos. The GoPro brand is integral to the growth of our business and expansion into new markets. Maintaining, promoting and positioning our brand will largely depend on the success of our marketing and merchandising efforts, including through establishing relationships with high profile sporting and entertainment events, venues, sports leagues and sports associations, athletes and celebrity personalities, our ability to provide consistent, high quality products and services, and our consumers’ satisfaction with the technical support and software updates we provide, each of which requires significant expenditures. Failure to grow and maintain our brand, launch new products on schedule and free of defects or negative publicity related to our products, our consumers’ user-generated content, the athletes we sponsor, the celebrities we are associated with, or the labor policies of any of our suppliers or manufacturers could adversely affect our brand, business and operating results. Maintaining and enhancing our brand also requires substantial financial investments, although there is no guarantee that these investments will increase sales of our products or positively affect our operating results.
Consumers may be injured while engaging in activities with our products, and we may be exposed to claims, or regulations could be imposed, which could adversely affect our brand, operating results, and financial condition.
Consumers use our cameras, mounts, and accessories to self-capture their participation in a wide variety of physical activities, including extreme sports, which in many cases carry the risk of significant injury or death. We may be subject to claims that users have been injured or harmed while using our products, including false claims or erroneous reports relating to safety, security, property damage or privacy issues. Although we maintain insurance to help protect us from the risk of such claims, such insurance may not be sufficient or may not apply to all situations. Similarly, governing sports bodies or proprietors of establishments at which consumers engage in challenging physical activities could seek to ban the use of our products in their events or facilities. For example, in some jurisdictions the mounting of our products on helmets is banned during competitive motorcycle events. In addition, if lawmakers or governmental agencies were to determine that the use of our products increased the risk of injury or harm to all or a subset of our users or should otherwise be restricted to protect consumers, they may pass laws or adopt regulations that limit the use of our products or increase our liability associated with the use of our products. Any of these events could adversely affect our brand, operating results, and financial condition.
We may be subject to warranty claims that could result in significant direct or indirect costs, or we could experience greater returns from retailers and customers than expected, which could harm our business and operating results.
We generally provide a 12-month warranty on all of our cameras, except in the European Union (the EU), where we provide a two-year warranty. For certain mounts and accessories, where permitted, we provide a lifetime or limited lifetime warranty. The occurrence of any material defects in our products could make us liable for damages and warranty claims in excess of our current reserves. In addition, we could incur significant costs to correct any defects, warranty claims or other problems, including costs related to product recalls. Any negative publicity related to the perceived quality and safety of our products could affect our brand image, decrease retailer, distributor and consumer confidence and demand, and adversely affect our operating results and financial condition. Additionally, if defects are not discovered until after consumers purchase our products, they could lose confidence in the technical attributes of our products and our business could be harmed. Also, while our warranty is limited to repairs or returns and replacement, warranty claims may result in litigation, the occurrence of which could adversely affect our business and operating results. Based on our historical experience with our camera products, we have an established methodology for estimating warranty liabilities with respect to cameras and accessories; however, this methodology may not accurately predict future rates of warranty claims.
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We may grow our business in part through acquisitions, joint ventures, investments, and partnerships, which could require significant management attention, disrupt our business, dilute stockholder value, and adversely affect our operating results.
We have completed several acquisitions, and recently acquired Forcite Helmet Systems, an Australian-based company that offers tech-enables helmets. We may evaluate additional acquisitions, partnerships, or joint ventures with, or strategic investments in, other companies, products or technologies that we believe are complementary to our business. Negotiating these transactions can be time-consuming, difficult, and expensive, and our ability to close these transactions may be subject to third-party or government approvals, which are beyond our control. Consequently, we can make no assurance that these transactions, once undertaken and announced, will close.
If we do complete acquisitions, we may not ultimately strengthen our competitive position or achieve our goals, and any acquisitions we complete could be viewed negatively by users or investors. In addition, if we encounter difficulties assimilating or integrating the businesses, technologies, products, personnel, or operations of acquired companies, particularly if the key personnel of the acquired business choose not to work for us, or we have difficulty retaining the customers of any acquired business, the revenue and operating results of the combined company could be adversely affected. Acquisitions may disrupt our ongoing operations, divert management from their primary responsibilities, subject us to additional liabilities, increase our expenses and adversely affect our business, financial condition, operating results, and cash flows. In addition, our original estimates and assumptions used in assessing any transaction may be inaccurate, including estimates of accounting charges. We have recorded significant goodwill and intangible assets in connection with our acquisitions, and in the future, if our acquisitions do not yield expected revenue, or if other factors negatively impact the fair value of our recorded goodwill or intangible assets, we may be required to take material non-cash impairment charges that could adversely affect our results of operations.
We may have to pay cash, incur debt, or issue equity securities to enter into any such acquisition, joint venture, strategic alliances or partnership, which could affect our financial condition or the value of our capital stock. Furthermore, acquisitions may require large one-time charges and can result in increased debt or contingent liabilities, adverse tax consequences, additional stock-based compensation expense and the recording and subsequent amortization or impairments of amounts related to certain purchased intangible assets, any of which could negatively affect our future results of operations. We cannot assure investors that the anticipated benefits of any acquisition or investment will be realized.
We review goodwill for impairment at least annually or more frequently if indicators of impairment arise, and should market conditions or macroeconomic conditions continue to deteriorate, including a rise in inflationary pressures and interest rates, a sustained decline in our share price, or a decline in our results of operations, the result of such review may indicate a decline in the fair value of goodwill resulting in an impairment charge. In the event we are required to record a non-cash impairment charge to our goodwill, other intangibles, and/or long-lived assets, such non-cash charge could have a material adverse effect on our business, financial condition, and results of operations in the reporting period in which we record the charge.
We use artificial intelligence in our business, and its improper use or unintended consequences could adversely affect our reputation and our results of operations.
We have in the past and will in the future integrate new and evolving technologies, such as artificial intelligence (AI), into our products, services and platforms. We also utilize general-purpose artificial intelligence tools in our business and these use cases may become important in our operations over time. As with many new and emerging technologies, AI presents numerous risks and challenges that could adversely affect our business. AI development, adoption, and use is in its early stages, and ineffective or inadequate AI or generative AI development or deployment practices by us or third parties could result in unintended consequences.
Our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. Moreover, AI may give rise to litigation risk, including potential intellectual property, privacy, or cybersecurity liability. AI also presents emerging ethical issues and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability.
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Given the complex nature of AI, our use and future plans on implementing AI into our business may be subject to an evolving regulatory landscape. For example, on October 30, 2023, the Biden administration issued an executive order to, among other things, establish extensive new standards for AI safety and security. We continue to monitor AI regulatory developments which may reduce the efficiencies we believe to be gained from AI or require further investment.
Catastrophic events or political instability could disrupt and cause harm to our business.
Our headquarters are located in the San Francisco Bay Area of California, an area susceptible to earthquakes. A major earthquake or other natural disaster, fire, threat of fire, act of terrorism, public health issues or other catastrophic event in California or elsewhere that results in the destruction or disruption of any of our critical business operations or information technology systems could severely affect our ability to conduct normal business operations and, as a result, our future operating results could be harmed. Our key manufacturing, supply and distribution partners have global operations in, among other countries, China, Thailand, Hong Kong, Japan, Mexico, Netherlands, Singapore, Taiwan, and the United States. Political instability, global conflicts, public health issues, crises, pandemics, or other catastrophic events in any of those countries, including as a result of climate change, could adversely affect our business in the future, our financial condition and operating results.
Our aspirations and disclosures related to Corporate Social Responsibility (CSR) matters, as well as increased scrutiny and expectations from investors and others regarding Environmental, Social, and Governance (ESG), could result in additional costs and/or risks, which may adversely affect our business, financial condition and results of operations, reputation, and stock price performance.
There is an increasing focus from certain investors, regulators, employees, customers, and other stakeholders concerning ESG matters. Some investors may use these non-financial performance factors to guide their investment strategies and, in some cases, may choose not to invest in us if they believe our ESG-related policies and actions are inadequate. The growing investor demand for measurement of non-financial performance is addressed by third-party providers of sustainability assessment and ESG ratings on companies. The criteria by which our ESG practices are assessed may change due to the constant evolution of the sustainability landscape, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria. If we elect not to or are unable to satisfy such new criteria, investors and other stakeholders may conclude that our ESG-related policies and/or actions with respect to corporate social responsibility are inadequate. There have also been increasing allegations of greenwashing against companies making significant ESG claims due to a variety of perceived deficiencies in performance. As stakeholder perceptions of sustainability continue to evolve, we may face reputational damage and potential stakeholder engagement and/or litigation in the event that we do not meet the ESG standards set by various constituencies. In addition, there exists certain “anti-ESG” sentiment among some individuals and government institutions, and we may also face scrutiny, reputational risk, lawsuits, or market access restrictions from these parties regarding our ESG initiatives.
In June 2024, we published our 2024 Corporate Sustainability Report, highlighting our ongoing efforts to reduce our Scope 1 and Scope 2 carbon emissions in our U.S. locations and our commitment to legal and ethical business practices. These statements reflect our current plans and aspirations and are not guarantees that we will be able to achieve them. Our ability to achieve any CSR objective is subject to numerous risks, many of which are outside of our control. Examples of such risks include the availability and cost of renewable energy sources, evolving consumer protection and other regulatory laws applicable to CSR matters, and the availability of funds to invest in ESG initiatives in times where we are seeking to reduce costs. As a result, we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope, target and timelines of previously announced ESG initiatives or goals. If we fail to satisfy the expectations of investors, regulators, customers, employees, and other stakeholders, if our initiatives are not executed as planned, or if we fail to implement sufficient oversight or accurately capture and disclose ESG matters, our reputation and business, operating results and financial condition could be adversely impacted.
Standards for tracking and reporting CSR matters continue to evolve. Our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others. Methodologies for reporting CSR data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations and other changes in circumstances.
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Our processes and controls for reporting CSR matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting metrics, including CSR-related disclosures pursuant to voluntary disclosure standards and those that are or may be required by the SEC and other regulators, and such standards, or interpretation and guidance thereof, may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future.
Risks related to our Intellectual Property and technology licenses
Our intellectual property and proprietary rights may not adequately protect our products and services, and our business may suffer if third parties infringe our rights.
We own patents, trademarks, copyrights, trade secrets, and other intellectual property (collectively, intellectual property) related to aspects of our products, software, services, and designs. Our commercial success may depend in part on our ability to obtain, maintain and protect these rights in the United States and abroad.
We regularly file patent applications to protect innovations arising from our research, development, and design as we deem appropriate. We may fail to apply for patents on important products, services, technologies, or designs in a timely fashion, or at all. We may not have sufficient intellectual property rights in all countries where unauthorized third-party copying or use of our proprietary technology occurs, and the scope of our intellectual property might be more limited in certain countries. Our existing and future patents may not be sufficient to protect our products, services, technologies, or designs and/or may not prevent others from developing competing products, services, technologies or designs. We cannot predict the validity and enforceability of our patents and other intellectual property with certainty.
We have registered, applied to register, and/or used certain of our trademarks in several jurisdictions worldwide. In some of those jurisdictions, third-party registrations, filings, or common law use exist for the same, similar or otherwise related products or services, which could block the registration of or ability to use our marks. Even if we are able to register our marks, competitors may adopt or file similar marks to ours, seek to cancel our trademark registrations, register domain names that mimic or incorporate our marks, or otherwise infringe upon or harm our trademark rights. Although we police our trademark rights carefully, there can be no assurance that we are aware of all third-party uses or that we will prevail in enforcing our rights in all such instances. Any of these negative outcomes could affect the strength, value and effectiveness of our brand, as well as our ability to market our products.
We have also registered domain names for websites that we use in our business, such as GoPro.com, as well as social media handles. If we are unable to protect our domain names or social media handles, our brand, business, and operating results could be adversely affected. Domain names or social media handles similar to ours have already been registered in the United States and elsewhere, and we may not be able to prevent third parties from acquiring and using domain names or social media handles that infringe, are similar to, or otherwise decrease the value of, our trademarks. In addition, we might not be able to, or may choose not to, acquire, or maintain trademark registrations, domain names, social media handles or other related rights in certain jurisdictions.
Unauthorized third parties may try to copy or reverse engineer our products, infringe upon or misappropriate our intellectual property, or otherwise gain access to our technology. We may discover unauthorized products in the marketplace that are knock-offs, infringements, or counterfeit reproductions of our products. If we are unable to stop producers or sellers of infringing or counterfeit products, sales of these products could adversely impact our brand and business.
Litigation may be necessary to enforce our intellectual property rights. We have initiated legal proceedings to protect our intellectual property rights, and we may file additional actions in the future. For example, on March 29, 2024, we filed a complaint with the U.S. International Trade Commission against Arashi Vision Inc., d/b/a Insta360 and Arashi Vision (U.S.) LLC, d/b/a Insta360 and a lawsuit in the U.S. District Court for the Central District of California against Arashi Vision Inc., d/b/a Insta360, and Arashi Vision (U.S.) LLC, d/b/a Insta360, alleging patent infringement of certain GoPro patents related to our cameras and digital imaging technology. Insta360 has filed several IPR petitions seeking to challenge the validity of the GoPro patents asserted against Insta360. Initiating infringement proceedings against third parties, as well as defending against IPRs, can be expensive, may take significant time, and may divert management’s attention from other business concerns. The cost of protecting our
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intellectual property has been and may in the future be substantial, and there is no assurance we will be successful. Our business could be adversely affected because of any such legal actions, or a finding that any patents-in-suit are invalid or unenforceable. These legal actions may in the future lead to additional counterclaims against us, which are expensive to defend against and for which there can be no assurance of a favorable outcome. Further, parties we bring legal action against could retaliate through non-litigious means, which could harm our business or operations.
We have been, and in the future may be, subject to intellectual property and proprietary rights claims from third parties and may be sued by third parties for alleged infringement.
Third parties, including competitors and non-practicing entities, have made allegations of and brought intellectual property infringement, misappropriation, and other intellectual property rights claims against us, including the matter described in Note 10 Commitments, contingencies, and guarantees in the Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q. While we will defend ourselves vigorously against any such existing and future legal proceedings, the effort and expense to support such disputes and litigation is considerable and we may not prevail or obtain favorable outcomes against all such allegations, including in the matter described in Note 10 Commitments, contingencies, and guarantees in the Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q.
We may seek licenses from third parties where appropriate, but they could refuse to grant us a license or demand commercially unreasonable terms. Further, an adverse ruling in an infringement proceeding could force us to suspend or permanently cease the production or sale of products/services, face a temporary or permanent injunction, redesign or rebrand our products/services, pay significant settlement costs, pay third-party license fees or damage awards or give up some of our intellectual property. The occurrence of any of these events may materially and adversely affect our business, financial condition, operating results, or cash flows.
If we are unable to maintain, license, or acquire rights to include intellectual property owned by others in the products, services or content distributed by us, our marketing, sales or future business strategy could be affected, or we could be subject to lawsuits relating to our use of this content.
The distribution of GoPro content helps to market our brand, products, and subscription and service. If we cannot continue to acquire rights to distribute user-generated content or to use and distribute music, athlete and celebrity names and likenesses or other content for our original productions or third-party entertainment distribution channels or for our mobile app, our marketing efforts could be diminished, our sales could be harmed and our future content strategy could be adversely affected. In addition, third-party content providers or owners may allege that we have violated their intellectual property rights. If we are unable to obtain sufficient rights, successfully defend our use of or otherwise alter our business practices on a timely basis in response to claims of infringement, misappropriation, misuse or other violation of third-party intellectual property rights, our business may be adversely affected. As a user and distributor of content, we face potential liability for rights of publicity and privacy, as well as copyright, or trademark infringement or other claims based on the nature and content of materials that we distribute. If we are found to violate such third-party rights, then our business may suffer.
We use open-source software in our platform that may subject our technology to general release or require us to re-engineer our solutions, which may harm our business.
We use open-source software in connection with our products and services. From time to time, companies that incorporate open-source software into their products or services have faced claims challenging the ownership of open-source software and/or compliance with open-source license terms. Therefore, we could be subject to suits by parties claiming ownership of what we believe to be open-source software or noncompliance with open-source licensing terms. Some open-source software licenses require users who distribute or make available open-source software as part of their software to publicly disclose all or part of the source code to such software or make available any derivative works of the open-source code on unfavorable terms or at no cost. While we monitor our use of open-source software and try to ensure that none is used in a manner that would require us to disclose the source code or that would otherwise breach the terms of an open-source agreement, such use could nevertheless occur despite policies and controls that we have in place, and we may be required to publicly release our proprietary source code, pay damages for breach of contract, re-engineer our applications, discontinue sales in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert
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resources away from our development efforts, any of which could adversely affect our business, financial condition or operating results.
In addition to risks related to license requirements, use of open-source software can involve greater risks than those associated with use of third-party commercial software, as open-source licensors generally do not provide warranties, assurances of title, performance, non-infringement, or controls on the origin of the software. There is typically no support available for open-source software, and we cannot assure you that the authors of such open-source software will not abandon further development and maintenance. Open-source software may contain security vulnerabilities, and we may be subject to additional security risk by using open-source software. Many of the risks associated with the use of open-source software cannot be eliminated, and could, if not properly addressed, negatively affect our business. We have established processes to help alleviate these risks, including a review process for screening requests from our development organizations for the use of open-source software, but we cannot be sure that all open-source software is identified or submitted for approval prior to use in our solution.
Risks related to regulatory compliance
We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could adversely affect our business and operating results.
Personal privacy, data protection and information security are significant issues in the United States and the other jurisdictions where we offer our products and services. The regulatory framework for privacy and security issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. Our handling of data is subject to a variety of laws and regulations, including regulation by various government agencies, including the United States Federal Trade Commission (FTC) and various state, local and foreign regulators, and agencies. Our agreements with certain customers and business partners may also subject us to certain requirements related to our processing of personal information, including obligations to use industry-standard or reasonable security measures to safeguard personal information.
The United States and various state and foreign governments have adopted or proposed limitations on the collection, distribution, use and storage of personal information of individuals, including end-customers and employees. In the United States, the FTC and many state attorneys general are applying federal and state consumer protection laws to the online collection, use, processing, storage, deletion, and dissemination of personal information. Further, all states have enacted laws requiring companies to notify individuals, regulatory authorities and others of security breaches involving personal information.
We also expect that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security in the United States, the EU and other jurisdictions, and we cannot always predict the impact of such future laws, regulations, and standards may have on our business. We expect that existing laws, regulations, and standards may even be interpreted differently or inconsistently relative to each other in the future. California initiated the first wave of state consumer privacy laws by enacting the California Consumer Privacy Act (the CCPA), as amended by the California Privacy Rights Act (the CPRA). Following California's lead, several other states have enacted privacy laws. Failure to comply with these new state regulations may result in significant civil penalties, injunctive relief, or statutory or actual damages. Complying with this new privacy legislation may result in additional costs and expenses.
Additionally, many foreign countries and governmental bodies, including Australia, the EU, the U.K., India, Japan, and numerous other jurisdictions in which we operate or conduct our business, have laws and regulations concerning the collection, use, processing, storage, and deletion of personal information obtained from their residents or by businesses operating within their jurisdiction. These laws and regulations often are more restrictive than those in the United States.
For example, in the EU and the U.K., the respective EU or U.K. General Data Protection Regulation (GDPR) imposes more stringent data protection requirements, provides an enforcement authority, and imposes large penalties for noncompliance. If we fail to comply with the respective GDPR or if regulators assert that we have failed to comply with the GDPR, we may be subject to fines of up to 4% of our worldwide annual revenue under EU GDPR requirements and up to 4% of our worldwide annual turnover under the UK’s implementation of GDPR.
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Among other requirements, both the EU and U.K. GDPR regulates transfers of personal data outside of the EU to countries that have not been found to provide adequate protection to personal data, including the United States, requiring that certain steps are taken to legitimize those transfers. We have undertaken certain efforts to conform transfers of personal data from the EU to the United States and other jurisdictions based on our understanding of current regulatory obligations and the guidance of regulators and data protection authorities. Despite this, we may be unsuccessful in establishing or maintaining conforming means of transferring such data from the European Economic Area or the U.K. particularly as a result of continued legal and legislative activity that has challenged or called into question the legal basis for existing means of data transfers to countries that have not been found to provide adequate protection for personal data. We continue to monitor these regulatory and legal developments.
In addition to government regulation, privacy advocates and industry groups may propose new and different self-regulatory standards. These and other industry standards may legally or contractually apply to us, or we may elect to comply with such standards. It is possible that if our practices are not consistent, or are viewed as not consistent, with legal and regulatory requirements, including changes in laws, regulations and standards or new interpretations or applications of existing laws, regulations and standards, we may become subject to audits, inquiries, whistleblower complaints, adverse media coverage, investigations, loss of export privileges, fines, awards, penalties, injunctions, judgments, or criminal or civil sanctions, all of which may have a material adverse effect on our business, operating results, reputation, and financial condition.
Future laws, regulations, standards and other obligations, as well as changes in the interpretation of existing laws, regulations, standards and other obligations could impair our ability to collect, use or disclose information relating to individuals, which could decrease demand for our products, require us to restrict our business operations, increase our costs, and impair our ability to maintain and grow our customer base and increase our revenue. For example, in June 2024 in Loper Bright Enterprises v. Raimondo (Loper), the Supreme Court held that courts need not defer to a governmental agency’s interpretation of an ambiguous statute that it administers but can consider an administrative agency’s interpretation when it falls within such agency’s purview, or adhere to a less deferential standard. As a result of Loper, we cannot be sure whether there will be increased challenges to existing agency regulations or how lower courts will apply Loper in the context of other regulatory schemes without more specific guidance from the Supreme Court.
The Supreme Court’s decision in Loper could significantly impact ESG regulation with respect to agency guidance previously issued on greenhouse gas emissions, sustainable investing and advertising, workplace and board diversity, and anti-corruption measures. Any inability to adequately address privacy and security concerns, even if unfounded, or comply with applicable laws, regulations, policies (including ESG-related policies), industry standards, contractual obligations or other legal obligations could result in additional cost and liability to us, damage our reputation, inhibit sales, and adversely affect our business and operating results.
We could be adversely affected by violations of the United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act or similar anti-bribery laws in other jurisdictions in which we operate.
The global nature of our business and the significance of our international revenue create various domestic and local regulatory challenges and subject us to risks associated with our international operations. The United States Foreign Corrupt Practices Act (FCPA), the United Kingdom Bribery Act 2010 (the U.K. Bribery Act), and similar anti-bribery and anti-corruption laws in other jurisdictions generally prohibit United States based companies and their intermediaries from making improper payments to non-United States officials for the purpose of obtaining or retaining business, directing business to another, or securing a competitive advantage. In addition, United States public companies are required to maintain records that accurately and fairly represent their transactions and have an adequate system of internal accounting controls. Under the FCPA, United States companies may be held liable for the corrupt actions taken by their directors, officers, employees, agents, or other strategic or local partners or representatives. As such, if we or our intermediaries fail to comply with the requirements of the FCPA or similar legislation, governmental authorities in the United States and elsewhere could seek to impose substantial civil and/or criminal fines and penalties, which could have a material adverse effect on our business, reputation, operating results, and financial condition.
We operate in areas of the world that experience corruption by government officials to some degree and, in certain circumstances, compliance with anti-bribery and anti-corruption laws may conflict with local customs and practices. Our global operations require us to import and export to and from several countries, which
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geographically expands our compliance obligations. In addition, changes in such laws could result in increased regulatory requirements and compliance costs which could adversely affect our business, financial condition, and results of operations. We cannot be assured that our directors, officers, employees, agents or other strategic or local partners or representatives will not engage in prohibited conduct and render us responsible under the FCPA or the U.K. Bribery Act. While we have compliance programs in place, they may not be effective to prevent violations from occurring and our directors, officers, employees, or agents may engage in prohibited conduct, nonetheless. If we are found to be in violation of the FCPA, the U.K. Bribery Act or other anti-bribery or anti-corruption laws (either due to the acts or inadvertence of our employees or due to the acts or inadvertence of others), we could suffer criminal or civil penalties or other sanctions, which could have a material adverse effect on our business, reputation, operating results and financial condition.
If we fail to comply with regulations relating to environmental and social matters, including the SEC’s conflict minerals disclosure rules, our business, financial condition, operating results, and reputation could be adversely affected.
We are subject to various federal, state, local, and international environmental laws and regulations including laws regulating the manufacture, import, use, discharge, and disposal of hazardous materials, labeling and notice requirements relating to potential consumer exposure to certain chemicals, and laws relating to the collection of and recycling of electrical and electronic equipment and their packaging.
We are also subject to the SEC’s conflict minerals rule which requires disclosure by public companies of the origin, source, and chain of custody of specified minerals, known as “conflict minerals”, that are necessary to the functionality or production of products manufactured or contracted to be manufactured. We have and will continue to incur costs associated with complying with the rule, such as costs related to sourcing of certain minerals (or derivatives thereof), the determination of the origin, source and chain of custody of the minerals used in our products, the adoption of conflict minerals-related governance policies, processes and controls, and possible changes to products or sources of supply as a result of such activities. Within our supply chain, we may not be able to sufficiently verify the origins of the relevant minerals used in our products through the data collection and due diligence procedures that we implement, which may harm our reputation.
Although we have policies and procedures in place requiring our contract manufacturers and major component suppliers to comply with applicable federal, state, local and international requirements, we cannot confirm that our manufacturers and suppliers consistently comply with these requirements. In addition, if there are changes to these or other laws (or their interpretation) or if new similar laws are passed in other jurisdictions, we may be required to re-engineer our products to use components compatible with these regulations. Any re-engineering and component substitution could result in additional costs to us or disrupt our operations or logistics.
Changes in interpretation of any federal, state, local or international regulation may cause us to incur costs or have additional regulatory requirements to meet in the future in order to comply with such regulations, or with any similar laws adopted in other jurisdictions. Our failure to comply with past, present, and future similar laws could result in reduced sales of our products, substantial product inventory write-offs, reputational damage, penalties and other sanctions, which could harm our business and financial condition.
We also expect that our products will be affected by new environmental laws and regulations, including but not limited to laws and regulations focused on climate change, on an ongoing basis. Concerns about climate change have driven significant legislative and regulatory changes on a global basis, and there are expected to be additional changes to the regulations in these areas. These changes could directly increase the cost of energy, which may have an impact on the way we manufacture products or utilize energy to produce our products. We may also become subject to regulations resulting in increased disclosure obligations with respect to climate change, including with respect to our greenhouse gas emissions. In addition, any new regulations or laws in the environmental area might increase the cost of raw materials we use in our products and the cost of compliance, or cause disruptions in the manufacture of our products and result in increased procurement, production, and distribution costs. Our reputation and brand could be harmed if we fail, or are perceived as having failed, to respond responsibly and effectively to changes in legal and regulatory measures adopted to address climate change. We face increasing complexity in our product design and procurement operations as we adjust to new and future requirements relating to the composition of our products, their safe use, the energy consumption associated with those products, climate change laws and regulations, and product repairability, reuse, recallability
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and take-back legislation. Other regulations in the environmental area may require us to continue to monitor and ensure proper disposal or recycling of our products. Since we operate on a global basis, this is a complex process that requires continual monitoring.
To date, our expenditures for environmental compliance have not had a material effect on our results of operations or cash flows and, although we cannot predict the future effect of such laws or regulations, they will likely result in additional costs and may increase penalties associated with violations or require us to change the content of our products or how they are manufactured, which could have a material adverse effect on our business and financial condition.
In addition, new disclosure standards and rules related to other ESG matters, including with respect to human rights, impact on affected communities, pollution, water stewardship, biodiversity and the circular economy, have been adopted and may continue to be introduced in various states and other jurisdictions. For example, the European Union Corporate Sustainability Reporting Directive became effective in 2023 and applies to both EU and non-EU entities. In October 2023, California adopted new carbon and climate-related reporting requirements for large public and private companies doing business in the state. In March 2024, the SEC adopted final rules requiring the disclosure of certain climate-related information in registration statements and annual reports which were stayed on April 4, 2024 by the SEC until the completion of judicial review. The SEC has since indicated that it intends to establish a new implementation period following the stay order. We are currently evaluating the impact of this final rule on our disclosures.
As the nature, scope, and complexity of ESG reporting, diligence and disclosure requirements expand, significant effort and expenses could be required to comply with the evolving requirements. As our disclosure obligations increase, third parties may make claims or bring litigation relating to those disclosures which may be costly.
We are subject to governmental export and import controls and economic sanctions laws that could subject us to liability and impair our ability to compete in international markets.
The United States and various foreign governments have imposed controls, export license requirements, and restrictions on the import or export of some technologies and products. The U.S. Department of the Treasury’s Office of Foreign Assets Control, the Department of Commerce’s Bureau of Industry and Security, and U.S. Customs and Border Protection administer regulations that restrict U.S. persons in conducting certain export and import activities, as well as conducting business with or in certain countries, governments, entities, and individuals. Our activities and products are consequently subject to United States import, economic sanctions and export control laws, and exports and imports of our products must be made in compliance with such laws, which are complex and continuously changing. Furthermore, United States export control laws and economic sanctions prohibit the provision of products and services to countries, governments, and persons, and for specified end uses, that are targeted by United States economic sanctions and export control laws. Even though we have established procedures designed to enable our compliance with United States sanctions and export control laws, and it is our policy not to do business with any countries or customers located in countries targeted by comprehensive U.S. economic sanctions, our products, including our firmware updates, could inadvertently be provided to targets of U.S. economic sanctions and export control laws, or could be provided by our customers to those targets. Any such provision, as well as any other activity or transaction contrary to U.S. economic sanctions and export control laws, could have negative consequences, including government investigations, denial of export privileges, penalties and reputational harm. Our failure to obtain required import or export approval for our products or activities could harm our international and domestic sales and adversely affect our business, revenue and results of operations.
We could also become subject to future enforcement action with respect to compliance with governmental export and import controls and economic sanctions laws that result in penalties, costs, and restrictions on export privileges that could have a material effect on our business and operating results.
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Risks related to our need for additional capital
We may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs.
In the future, we may require additional capital to respond to business opportunities, challenges, acquisitions, or unforeseen circumstances and may determine to engage in equity or debt financings or enter into credit facilities for other reasons. We may not be able to timely secure additional financing on favorable terms, or at all, due to among other things, general macroeconomic conditions, including changes in interest rates, market volatility, and inflation.
Additionally, our current credit facilities contain restrictive covenants relating to our capital raising activities and other financial and operational matters, and any debt financing obtained by us in the future could involve further restrictive covenants, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. Further, even if we are able to obtain additional financing, we may be required to use such proceeds to repay a portion of our debt.
If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could suffer significant dilution. If we are unable to obtain adequate financing under our credit facility, or alternative sources, when we require it, our ability to grow or support our business and to respond to business challenges could be significantly limited. In the event additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all.
Risks related to ownership of our Class A common stock
Our stock price has been and will likely continue to be volatile.
Since 2023, our closing stock price ranged from a high of $6.46 in the first quarter of 2023 to a low of $1.16 in the third quarter of 2024. Our stock price may fluctuate in response to a number of events and factors, such as quarterly operating results, changes in our financial projections provided to the public or our failure to meet those projections, the public’s reaction to our press releases, other public announcements and filings with the SEC, significant transactions, or new features, products or services offered by us or our competitors, changes in our business lines and product lineup, changes in financial estimates and recommendations by securities analysts, media coverage of our business and financial performance, the operating and stock price performance of, or other developments involving, other companies that investors may deem comparable to us, trends in our industry, any significant change in our management, and general economic conditions. These factors, as well as the volatility of our Class A common stock, could also affect the price of our convertible senior notes.
In addition, the stock market in general, and the market prices for companies in our industry, have experienced volatility that often has been unrelated to operating performance. These broad market and industry fluctuations may adversely affect the price of our stock, regardless of our operating performance. Price volatility over a given period may cause the average price at which we repurchase our own stock to exceed the stock’s price at a given point in time. Volatility in our stock price also affects the value of our equity compensation, which affects our ability to recruit and retain employees. In addition, some companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We have been subject to past shareholder class action lawsuits as well as derivative lawsuits and may continue to be a target for such litigation in the future. Securities litigation against us could result in substantial costs and liability and divert our management’s attention from other business concerns, which could harm our business. See Note 10 Commitments, contingencies, and guarantees, in the Notes to Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q for a discussion on legal proceedings.
If we fail to meet expectations related to future growth, profitability, or other market expectations, our stock price may decline significantly, which could have a material adverse effect on investor confidence and employee retention. A sustained decline in our stock price and market capitalization could lead to impairment charges.
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The dual class structure of our common stock has the effect of concentrating voting control with our CEO and we cannot predict the effect our dual class structure may have on our stock price or our business.
Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per share. Stockholders who hold shares of Class B common stock hold approximately 67.1% of the voting power of our outstanding capital stock as of September 30, 2024 with Mr. Woodman, our Chairman and CEO, holding approximately 64.2% of the outstanding voting power. Mr. Woodman is able to control all matters submitted to our stockholders, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transaction. This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or substantially all of our assets that our other stockholders support, or conversely this concentrated control could result in the consummation of such a transaction that our other stockholders do not support. This concentrated control could also discourage a potential investor from acquiring our Class A common stock due to the limited voting power of such stock relative to the Class B common stock and might harm the trading price of our Class A common stock.
In addition, we cannot predict whether our dual class structure, combined with the concentrated control by Mr. Woodman, will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers, including FTSE Russell and S&P Dow Jones, previously announced restrictions on including companies with multiple-class share structures in certain of their indexes that were then reversed. Because of our dual class structure, we may be excluded from these indexes in the future if new restrictions are announced, and we cannot assure you that other stock indexes will not take similar actions. Given the sustained flow of investment funds into passive strategies that seek to track certain indexes, exclusion from stock indexes would likely preclude investment by many of these funds and could make our Class A common stock less attractive to other investors. As a result, the market price of our Class A common stock could be adversely affected.
Delaware law and provisions in our restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the trading price of our Class A common stock.
Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change in control would be beneficial to our existing stockholders.
In addition, our restated certificate of incorporation and amended and restated bylaws contain provisions that may make the acquisition of our company more difficult without the approval of our board of directors, limit attempts by our stockholders to replace or remove our current management, limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees, limit the market price of our Class A common stock or otherwise adversely affect the rights of the holders of our Class A and Class B common stock. Our restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for: any derivative action or proceeding brought on our behalf; any action asserting a breach of fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law (DGCL), our restated certificate of incorporation, or our amended and restated bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine.
Risks related to our indebtedness and capped call transactions
We have indebtedness in the form of convertible senior notes.
In November 2020, we completed an offering of $143.8 million aggregate principal amount of 1.25% convertible senior notes due 2025 (2025 Notes). In November 2023, we repurchased $50.0 million in aggregate principal amount of the 2025 Notes for $46.3 million in cash. As a result, we now have $93.8 million in aggregate principal amount of indebtedness, the principal amount of which we may be required to pay at maturity in November 2025.
Holders of the remaining 2025 Notes will have the right to require us to repurchase their 2025 Notes upon the occurrence of a fundamental change at a purchase price equal to 100% of the principal amount of the 2025 Notes to be purchased, plus accrued and unpaid interest, if any. In addition, the indentures for the 2025 Notes provide
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that we are required to repay amounts due under such indenture in the event that there is an event of default for the 2025 Notes that results in the principal, premium, if any, and interest, if any, becoming due prior to the maturity of the 2025 Notes. There can be no assurance that we will be able to repay our indebtedness when due, or that we will be able to refinance our indebtedness, all or in part, on acceptable terms. In addition, our indebtedness could, among other things:
•heighten our vulnerability to adverse general economic conditions and heightened competitive pressures;
•require us to dedicate a larger portion of our cash flow from operations to interest payments, limiting the availability of cash for other purposes;
•limit our flexibility in planning for, or reacting to, changes in our business and industry; and
•impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes, or other purposes.
In addition, our ability to purchase the remaining 2025 Notes or repay prior to maturity any accelerated amounts under the 2025 Notes upon an event of default or pay cash upon conversion of the 2025 Notes may be limited by law, by regulatory authority or by agreements governing our indebtedness outstanding at the time, including our credit facility. Our credit facility restricts our ability to repurchase the 2025 Notes for cash or repay prior to maturity any accelerated amounts under the 2025 Notes upon an event of default or pay cash upon conversion of the 2025 Notes, to the extent that on the date of such repurchase, repayment or conversion, as the case may be, we do not meet certain financial criteria set forth in the credit facility.
Any of our future indebtedness may contain similar restrictions. Our failure to repurchase the 2025 Notes at a time when the repurchase is required by the indentures (whether upon a fundamental change or otherwise under the indentures) or pay cash payable on future conversions of the 2025 Notes as required by the indentures would constitute a default under the indentures. A default under the indentures or the fundamental change itself could also lead to a default under agreements governing our existing or future indebtedness, including our credit facility. If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness, repurchase the 2025 Notes or make cash payments upon conversions thereof.
Our credit facility imposes restrictions on us that may adversely affect our ability to operate our business.
Our credit facility contains restrictive covenants relating to our capital raising activities and other financial and operational matters which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions, or otherwise impact our liquidity. In addition, our credit facility contains, and the agreements governing the 2025 Notes will contain, a cross-default provision whereby a default under one agreement would likely result in cross defaults under agreements covering other borrowings. The occurrence of a default under any of these borrowing arrangements would permit the holders of the 2025 Notes or the lenders under our credit facility to declare all amounts outstanding under those borrowing arrangements to be immediately due and payable. If the 2025 Note holders or the trustee under the indentures governing the 2025 Notes or the lenders under our credit facility accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay those borrowings.
Conversion of the 2025 Notes will, to the extent we deliver shares upon conversion of such 2025 Notes, dilute the ownership interest of existing stockholders, including holders who had previously converted their 2025 Notes, or may otherwise depress our stock price or may adversely affect our financial condition.
The conversion of some or all of the remaining 2025 Notes will dilute the ownership interests of existing stockholders to the extent we deliver shares upon conversion of any of the 2025 Notes. Any sales in the public market of the Class A common stock issuable upon such conversion could adversely affect prevailing market prices of our Class A common stock. In addition, the existence of the 2025 Notes may encourage short selling by market participants because the conversion of the 2025 Notes could be used to satisfy short positions, or anticipated conversion of the 2025 Notes into shares of our Class A common stock could depress our stock price.
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In the event the conditional conversion feature of the 2025 Notes is triggered, holders of the 2025 Notes will be entitled to convert the 2025 Notes at any time during specified periods at their option. If one or more holders elect to convert their 2025 Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our Class A common stock (other than cash in lieu of any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders of the 2025 Notes do not elect to convert their 2025 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2025 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
The accounting method for convertible debt securities that may be settled in cash, such as the 2025 Notes, may have a material effect on our reported financial results.
Under current GAAP, effective January 1, 2022, the treasury stock method for convertible instruments has been eliminated and instead, the application of the “if-converted” method is required for the determination of diluted net income (loss) per share on a GAAP and non-GAAP basis. Under the if-converted method, diluted net income (loss) per share for GAAP and non-GAAP would generally be calculated assuming that all of the 2025 Notes were converted solely into shares of Class A common stock at the beginning of the reporting period, unless the result would be anti-dilutive, which would negatively affect diluted net income (loss) per share. The impact from the “if converted” method added approximately 10 million shares to the diluted share count after the partial repurchase of the 2025 Notes in November 2023. Under the if-converted method, some of the incremental dilution is offset as we are able to add back the after tax effected interest expense from the 2025 Notes to the extent the result would not be anti-dilutive.
In addition, if the conditional conversion feature of the 2025 Notes is triggered, even if holders do not elect to convert their 2025 Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the 2025 Notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
The Capped Call transactions may affect the value of the 2025 Notes and our Class A Common Stock and we are subject to counterparty risk with respect to Capped Call transactions.
In connection with the pricing of the 2025 Notes, we entered into privately negotiated capped call transactions (Capped Calls) with one or more financial institutions. The Capped Calls are expected generally to reduce the potential economic dilution to holders of our Class A common stock upon any conversion of the 2025 Notes, with such reduction and/or offset subject to a cap.
The capped call counterparties and/or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our Class A common stock and/or purchasing or selling our Class A common stock or other securities of ours in secondary market transactions prior to the maturity of the 2025 Notes (and are likely to do so during any observation period related to a conversion of the 2025 Notes or following an repurchase of the 2025 Notes by the Company on any fundamental change repurchase date or otherwise). This activity could also cause or avoid an increase or a decrease in the market price of our Class A common stock or the 2025 Notes.
The potential effect, if any, of these transactions and activities on the trading price of our Class A common stock or the 2025 Notes will depend in part on market conditions. Any of these activities could adversely affect the trading price of our Class A common stock or the 2025 Notes.
Additionally, we will be subject to the risk that the capped call counterparties might default under the Capped Calls. Our exposure to the credit risk of the capped call counterparties is not secured by any collateral. Global economic conditions have in the recent past resulted in, and may again result in, the actual or perceived failure or financial difficulties of many financial institutions. If the capped call counterparties become subject to insolvency proceedings, we will become an unsecured creditor in those proceedings, with a claim equal to our exposure at that time under our transactions with the capped call counterparties. Our exposure will depend on many factors, but, generally, an increase in our exposure will be correlated to an increase in the market price of our Class A common stock. In addition, upon a default by the capped call counterparties, we may suffer more dilution than we currently anticipate with respect to our Class A common stock. We can provide no assurances as to the financial stability or viability of the capped call counterparties to the Capped Calls.
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General Risk Factors
Our effective tax rate and the intended tax benefits of our corporate structure and intercompany arrangements depend on the application of the tax laws of various jurisdictions and on how we operate our business, and such tax rates and tax benefits may change in the future.
We are subject to income taxes in the United States and various jurisdictions outside the United States. Our effective tax rate could be adversely affected by changes in, or our interpretation of, tax law changes and related new or revised guidance and regulations, changes in our geographical earnings mix, unfavorable government reviews of our tax returns, material differences between our forecasted and actual annual effective tax rates, or by evolving enforcement practices.
In 2017, the Tax Cuts and Jobs Act (the Tax Act) was enacted, which contained significant and impactful changes to the U.S. tax law, including, effective as of January 1, 2022, requiring the capitalization and amortization of research and development expenses. There are various proposals in Congress to amend certain provisions of the Tax Act. The state of these proposals and other future legislation remains uncertain and, if enacted, may materially affect our financial position.
On August 16, 2022, the United States enacted the Inflation Reduction Act (IRA), which introduced, among other items, an excise tax that imposes a 1% surcharge on stock repurchases, net of stock issuances, that occur after December 31, 2022. We repurchase our Class A common stock on the open market pursuant to a repurchase program initially authorized by the Company’s board of directors on January 27, 2022 for the repurchase of up to $100 million of our Class A common stock and supplemented by a subsequent authorization by the board of directors on February 9, 2023 for the repurchase of an additional $40 million of our Class A common stock. As such, we could be subject to this new excise tax, depending on various factors, including the amount and frequency of any future stock repurchases and any permitted reductions or exceptions to the amount subject to the tax. We are continuing to evaluate the impact the IRA may have on our financial position and results of operations in connection with our repurchase program.
The United States, the European Commission, countries in the EU, Australia, and other countries where we do business have been considering changes in relevant tax, accounting and other laws, regulations and interpretations, including changes to tax laws applicable to corporate multinationals. Changes in the tax laws of foreign jurisdictions could arise as a result of the base erosion and profit shifting project that was undertaken by the Organization for Economic Co-operation and Development (OECD). The OECD, which represents a coalition of member countries, recommended changes to numerous long-standing tax principles related to transfer pricing and continues to develop new proposals including allocating greater taxing rights to countries where customers are located and establishing a minimum tax on global income. A global consensus has been reached among approximately 138 countries, including the European Union and the OECD regarding a planned two-pillar approach to address tax challenges in the digital commerce era. The first pillar focuses on profit allocation and nexus, while the second pillar aims to establish a minimum global effective tax rate of 15%. The United States has not implemented Pillar Two legislation, but certain countries in which we operate have enacted legislation to adopt the Pillar Two framework and several other countries are also considering changes to their tax laws to implement this framework. These changes, as adopted by countries, may increase tax uncertainty and may adversely affect our provision for income taxes and cash flows.
We are subject to the examination of our income tax returns by the United States Internal Revenue Service and other domestic and foreign tax authorities. We regularly assess the likelihood of outcomes resulting from these examinations to determine the adequacy of our provision for income taxes and other taxes and have reserved for adjustments that may result from the current examinations. The final determination of tax audits and any related legal proceedings could materially differ from amounts reflected in our income tax provisions and accruals. In such case, our income tax provision and cash flows in the period or periods in which that determination is made could be negatively affected.
Our reported financial results may be negatively impacted by the changes in the accounting principles generally accepted in the United States.
Generally accepted accounting principles in the United States are subject to interpretation by the Financial Accounting Standards Board, the SEC and various bodies formed to promulgate and interpret appropriate
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accounting principles. A change in these principles or interpretations could have a significant effect on our reported financial results and may even affect the reporting of transactions completed before the announcement or effectiveness of a change. Other companies in our industry may apply these accounting principles differently than we do, which may affect the comparability of our condensed consolidated financial statements.
If our estimates or judgments relating to our critical accounting policies and estimates prove to be incorrect, our operating results could be adversely affected.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the 2023 Annual Report in the section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations. The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of securities analysts and investors, resulting in a decline in our stock price. Significant estimates and assumptions made by management include those related to revenue recognition (including sales incentives, sales returns, and implied post contract support), inventory valuation, product warranty liabilities, the valuation, impairment and useful lives of long-lived assets (property and equipment, operating lease right-of-use assets, intangible assets and goodwill), the fair value of our convertible senior notes, and income taxes.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
Unregistered Sales of Equity Securities and Use of Proceeds
None.
Issuer Purchases of Equity Securities
As of September 30, 2024, we have a remaining share repurchase authorization of $60.4 million under the current stock repurchase program authorized by our Board of Directors in January 2022 and February 2023. No shares of our Class A and Class B common stock were repurchased during the three months ended September 30, 2024.

Item 3. Defaults upon Senior Securities
None.

Item 4. Mine Safety Disclosures
Not applicable.

Item 5. Other Information
Trading Plans of Directors and Executive Officers
Set forth below is certain information regarding “Rule 10b5-1 trading arrangements” (Rule 10b5-1 trading plans) or a “non-Rule 10b5-1 trading arrangements” (non-Rule 10b5-1 trading plans), each as defined in Regulation S-K Item 408, adopted by our directors and officers (as defined in Rule 16a-1(f)) during the third quarter of fiscal year 2024. The Rule 10b5-1 trading plans listed below are each intended to satisfy the affirmative defense of Rule 10b5-1(c):

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NameTitleDate Plan was AdoptedExpiration DateTotal Amount of Class A Common Stock to be Sold Under the PlanTotal Amount of Class B Common Stock to be Sold Under the PlanTotal Amount of Class A & B Common Stock to be Sold Under the Plan
Nicholas WoodmanChief Executive Officer & Chairman
08/30/2024 (1)
11/30/2025644,8484,155,152
4,800,000 (2)
(1) On August 30, 2024, Nicholas Woodman, our Chief Executive Officer and Chairman, entered into a Rule 10b5-1 trading plan on behalf of The Woodman Family Trust U/A/D 03-11-2011 (the "WFT 2024 Plan") which was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.
(2) The WFT 2024 Plan provides for the sale of up to a maximum of 644,848 shares of Class A common stock, and 4,155,152 shares of Class B common stock. Due to pricing conditions in the WFT 2024 Plan the number of shares actually sold under the WFT 2024 Plan may be less than the maximum number of shares that can be sold, as noted in the table above. The WFT 2024 Plan will expire on November 30, 2025, or earlier if all transactions under the WFT 2024 Plan are completed.
On July 12, 2024, Brian T. McGee, our Executive Vice President, Chief Financial Officer and Chief Operating Officer, terminated a Rule 10b5-1 trading plan which was adopted on August 10, 2023 and intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. As of the date of termination of his Rule 10b5-1 trading plan, Mr. McGee sold 130,952 shares of Class A common stock under its terms.
No other Company officers or directors, as defined in Rule 16a-1(f), adopted, modified, or terminated a Rule 10b5-1 trading plan during the Company’s third quarter ended September 30, 2024.




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Item 6. Exhibits
Exhibit Listing
ExhibitIncorporated by ReferenceFiled
NumberExhibit TitleFormFile No.ExhibitFiling DateHerewith
Certification of Principal Executive Officer Required Under Rule 13(a)-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934, as amended.X
Certification of Principal Financial Officer Required Under Rule 13(a)-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934, as amended.X
Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.X
101.INSInline XBRL Instance DocumentX
101.SCHInline XBRL Taxonomy Extension SchemaX
101.CALInline XBRL Taxonomy Extension Calculation LinkbaseX
101.LABInline XBRL Taxonomy Extension Label LinkbaseX
101.PREInline XBRL Taxonomy Extension Presentation LinkbaseX
101.DEFInline XBRL Taxonomy Extension Definition LinkbaseX
104Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document SetX
‡    As contemplated by SEC Release No. 33-8212, these exhibits are furnished with this Quarterly Report on Form 10-Q and are not deemed filed with the SEC and are not incorporated by reference in any filing of GoPro, Inc. under the Securities Act of 1933 or the Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in such filings.
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
GoPro, Inc.
(Registrant)
Dated:November 7, 2024By: /s/ Nicholas Woodman
Nicholas Woodman
Chief Executive Officer
(Principal Executive Officer)
Dated:November 7, 2024By: /s/ Brian McGee
Brian McGee
Chief Financial Officer and Chief Operating Officer
(Principal Financial Officer)
Dated:November 7, 2024By: /s/ Charles Lafrades
Charles Lafrades
Chief Accounting Officer
(Principal Accounting Officer)
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