Form 8-K GoPro, Inc. For: Feb 05
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 5, 2015
GOPRO, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-36514 | 77-0629474 |
(State or Other Jurisdiction of Incorporation) | (Commission File No.) | (I.R.S. Employer Identification No.) |
3000 Clearview Way, San Mateo, California 94402
(Address of Principal Executive Offices) (Zip Code)
Registrants telephone number, including area code: (650) 332-7600
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
On February 5, 2015, GoPro, Inc. (the Registrant ) issued a press release to report its financial results for its fourth quarter and full year ended December 31, 2014.
A copy of the press release is furnished as Exhibit 99.1 to this report.
The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to this or such filing. The information in this report, including the exhibit hereto, shall not be deemed to be filed for purposes of Section�18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections�11 and 12(a)(2) of the Securities Act of 1933, as amended.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On February 2, 2015, Nina Richardson tendered her resignation as the Registrant's Chief Operating Officer effective as of February 27, 2015.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit Number | Description of Document |
99.1 | Press Release of GoPro, Inc. dated February 5, 2015 to report its financial results for its fourth quarter and full year ended December 31, 2014. |
SIGNATURE
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 hereunto duly authorized.
Date: February 5, 2015 | |||
GoPro, Inc. | |||
By: | /s/ Jack Lazar | ||
Name: | Jack Lazar | ||
Title: | Chief Financial Officer (Principal Financial Officer) | ||
EXHIBIT INDEX
Exhibit Number | Description of Document |
99.1 | Press Release of GoPro, Inc. dated February 5, 2015 to report its financial results for its fourth quarter and full year ended December 31, 2014. |
EXHIBIT 99.1
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GOPRO ANNOUNCES FOURTH QUARTER AND FULL YEAR 2014 RESULTS
Fourth Quarter Revenue of $634 Million Up 75% vs Q4 2013; Full Year Revenue of $1.4 Billion Up 41% vs. 2013
5.2 Million Capture Devices Shipped in 2014, Up 35% vs. 2013
SAN MATEO, Calif., February 5, 2015 - GoPro, Inc. (NASDAQ: GPRO), maker of the worlds most versatile camera and enabler of some of today's most immersive and engaging content, today announced financial results for its fourth quarter and full year ended December 31, 2014.
We're feeling good. GoPro was one of the best-selling products this holiday, selling-in an average of 1,000 units per hour for the entire quarter, said GoPro Founder and CEO, Nicholas Woodman. With this many new recruits to the GoPro movement, were sure to see some incredible content in 2015.
Summary of Fourth Quarter 2014 GAAP Results:
" | Revenue of $633.9 million, compared to $361.5 million in the fourth quarter of 2013 |
" | Gross margin of 47.9%, compared to 41.9% in the fourth quarter of 2013 |
" | Operating income of $173.7 million, compared to $70.6 million in the fourth quarter of 2013 |
" | Net income attributable to common stockholders of $122.1 million or $0.83 per diluted share, compared to $33.3 million or $0.33 per diluted share in the fourth quarter of 2013 |
" | Cash, cash equivalents and marketable securities of $422.3 million, compared to $101.4 million at December 31, 2013 |
GoPro reports gross profit, operating expenses, operating income, net income and diluted net income per share in accordance with GAAP and additionally on a non-GAAP basis. Non-GAAP net income excludes, where applicable, the effect of stock-based compensation, amortization of acquired intangible assets and the tax impact of these excluded items. Additionally, GoPro reports non-GAAP adjusted EBITDA. A reconciliation of preliminary GAAP financial measures to non-GAAP financial measures, as well as a description of items excluded in the calculation of non-GAAP financial measures including adjusted EBITDA, is presented in the financial statement portion of this release.
Summary of Fourth Quarter Non-GAAP Results:
" | Gross margin of 48.0%, compared to 42.0% in the fourth quarter of 2013 |
" | Operating income of $193.2 million, compared to $74.4 million in the fourth quarter of 2013 |
" | Adjusted EBITDA of $202.9, compared to $81.9 million in the fourth quarter of 2013 |
" | Net income of $144.9 million or $0.99 per diluted share, compared to $46.4 million or $0.33 per diluted share in the fourth quarter of 2013 |
Fourth Quarter, Full Year 2014 and Recent GoPro Highlights Include:
" | According to NPD data October through December, GoPro capture devices accounted for three of the top five products, including #1, by dollar share in the combined digital camera and camcorder category. |
" | Internationally GoPro made significant progress in 2014, including establishing a European Sales and Marketing Headquarters in Munich, Germany, developing in-region product assembly in Brazil, and taking first steps into China by launching with the countrys two largest online retailers, Tmall and JD, as well as other select retailers; in Q4 EMEA and APAC combined revenue grew approximately 70% year-over-year. |
" | GoPro shipped 2.4 million capture devices in Q4 and 5.2 million in the full year 2014. GoPro capture devices shipped in Q4 2014 exceeded that of the full year 2012. |
" | GoPro App downloads exceeded 2.8 million in Q4 bringing the life to date total to more than 13 million downloads; installs of GoPro Studio exceeded 1.5 million in Q4 with average daily exports of over 30,000. |
" | Google reports more than 3.9 years of content was uploaded to YouTube in 2014 with GoPro in the title, 40% above of the 2.8 years posted in 2013. |
" | For the full year 2014, videos published on GoPros YouTube Channel were up 71%, views were up 84%, and video minutes watched were up more than 140% year-over-year. |
" | GoPro released a firmware update enhancing HERO4 cameras with new features including Time Lapse Video, 30/6 Burst Photo and ultra high frame rates for slow-motion playback. |
" | Marriott Hotels launched a program at select Caribbean and Latin American resorts offering GoPro HERO4 cameras for guests to use during their stay and to share their experiences. |
" | GoPro announced a partnership with Vislink to bring affordable live-broadcast capability to GoPro devices. The new technology was showcased in the NHL All Star Weekend - GoPros first agreement with a Big 4 team sports league. Live Broadcast was also featured in ESPNs coverage of the Winter X Games. |
" | GoPro announced an agreement with Roku to bring GoPro content to millions of viewers this spring; GoPro also launched the GoPro Channel App for LG Smart TVs. |
Summary of 2014 GAAP Results:
" | Revenue of $1,394.2 million, compared to $985.7 million in 2013 |
" | Gross margin of 45.0%, compared to 36.7% in 2013 |
" | Operating income of $187.0 million, or 13.4% of revenue, an increase of $88.3 million year-over-year |
Summary of 2014 Non-GAAP Results:
" | Gross margin of 45.1%, compared to 36.9% in 2013 |
" | Operating income of $259.6 million, or 18.6% of revenue, an increase of $148.9 million year-over-year |
" | Adjusted EBITDA of $293.4 million, or 21.0% of revenue, up 119.4% year-over-year |
" | Earnings per diluted share of $1.32, up 164.0% from 2013 |
Conference Call
GoPro management will host a conference call and live webcast for analysts and investors today at 2 p.m. Pacific Time (5 p.m. Eastern Time) to discuss the Company's financial results.
To listen to the live conference call, please dial toll free (800) 776-9057 or (913) 312-1393, access code 5030065, approximately 15 minutes prior to the start of the call. A live webcast of the conference call will be accessible on the "Events & Presentations" section of the Company's website at http://investor.gopro.com. To access the live webcast, please log in 15 minutes prior to the start of the call to download and install any necessary audio software. The webcast will be recorded and the recording will be available on GoPros website, http://investor.gopro.com, approximately two hours after the call and for six months thereafter.
About�GoPro, Inc.�(NASDAQ: GPRO):
GoPro, Inc. is transforming the way consumers capture, manage, share and enjoy meaningful life experiences. We do this by enabling people to self-capture engaging, immersive photo and video content of themselves participating in their favorite activities. Our customers include some of the world's most active and passionate people. The quality
and volume of their shared GoPro content, coupled with their enthusiasm for our brand, virally drives awareness and demand for our products.
What began as an idea to help athletes document themselves engaged in their sport has become a widely adopted solution for people to document themselves engaged in their interests, whatever they may be. From extreme to mainstream, professional to consumer, GoPro has enabled the world to capture and share its passions. And in doing so the world, in turn, is helping GoPro become one of the most exciting and aspirational companies of our time.
For more information, visit www.gopro.com or connect with GoPro on�YouTube, Twitter, Facebook, Pinterest or LinkedIn.
GOPRO� and HERO� are trademarks or registered trademarks of GoPro Inc. in the United States and other countries.
Note on Forward-looking Statements
This press release may contain projections or other forward-looking statements regarding future events. These statements involve risks and uncertainties, and actual events or results may differ materially. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are the effects of the highly competitive market in which we operate; our dependence on sales of our capture devices for substantially all of our revenue; our reliance on third-party suppliers, some of which are sole-source suppliers, to provide components for our products; the fact that we do not expect to continue to grow in the future at the same rate as we have in the past, and profitability in recent periods might not be indicative of future performance;� difficulty in accurately predicting our future customer demand; the importance of maintaining the value and reputation of our brand; any inability to successfully manage frequent product introductions and transitions; the effects of international business uncertainties; our reliance on our Chief Executive Officer; and other factors detailed in the Risk Factors section of the final prospectus that we filed with the Securities and Exchange Commission in connection with our public offering.� These forward-looking statements speak only as of the date hereof or as of the date otherwise stated herein.� GoPro disclaims any obligation to update these forward-looking statements.
# # # # #
Investor Contact:
Peter Salkowski (855) GOPROHD�or (855) 467-7643
Media Contact:
Jeff Brown (650) 332-7600 x 9997
GoPro, Inc. | |||||||||||
Preliminary Condensed Consolidated Statements of Operations | |||||||||||
(in thousands, except per share amounts, unaudited) | |||||||||||
� | � | � | � | � | � | ||||||
� | � | � | � | � | � | ||||||
� | Three months ended | ||||||||||
� | December 31, 2014 | � | September 30, 2014 | � | December 31, 2013 | ||||||
� | � | � | � | � | � | ||||||
Revenue | $ | 633,913 | � | $ | 279,971 | � | $ | 361,452 | |||
Cost of revenue | 330,100 | � | 155,932 | � | 209,948 | ||||||
Gross profit | 303,813 | � | 124,039 | � | 151,504 | ||||||
Operating expenses: | � | � | � | � | � | ||||||
���Research and development | 46,074 | � | 42,376 | � | 25,451 | ||||||
���Sales and marketing | 61,226 | � | 48,109 | � | 45,620 | ||||||
���General and administrative | 22,825 | � | 20,097 | � | 9,858 | ||||||
Total operating expenses | 130,125 | � | 110,582 | � | 80,929 | ||||||
Operating income | 173,688 | � | 13,457 | � | 70,575 | ||||||
Other expense, net | (1,115 | ) | � | (1,784 | ) | � | (2,224 | ) | |||
Income before income taxes | 172,573 | � | 11,673 | � | 68,351 | ||||||
Income tax (benefit) expense | 50,313 | � | (2,947 | ) | � | 24,622 | |||||
Net income | $ | 122,260 | � | $ | 14,620 | � | $ | 43,729 | |||
Less: Net income attributable to participating securities - basic | 152 | 36 | 12,094 | ||||||||
Less: Net income attributable to participating securities - diluted | 132 | 35 | 10,389 | ||||||||
Net income attributable to common stockholders - basic | $ | 122,108 | � | $ | 14,584 | � | $ | 31,635 | |||
Net income attributable to common stockholders - diluted | $ | 122,128 | � | $ | 14,585 | � | $ | 33,340 | |||
� | � | � | � | � | � | ||||||
Net income per share attributable to common stockholders: | � | � | � | � | � | ||||||
���Basic | $ | 0.96 | � | $ | 0.12 | � | $ | 0.39 | |||
���Diluted | $ | 0.83 | � | $ | 0.10 | � | $ | 0.33 | |||
� | � | � | � | � | � | ||||||
Shares used in computing net income per share attributable to common stockholders: | � | � | |||||||||
���Basic | 126,849 | � | 125,713 | � | 81,197 | ||||||
���Diluted | 146,723 | � | 145,186 | � | 99,621 | ||||||
GoPro, Inc. | |||||||
Preliminary Condensed Consolidated Statements of Operations | |||||||
(in thousands, except per share amounts) | |||||||
� | � | � | � | ||||
� | � | � | � | ||||
� | � | � | � | ||||
� | Year ended | ||||||
� | December 31, 2014 | � | December 31, 2013 | ||||
� | (unaudited) | � | � | ||||
Revenue | $ | 1,394,205 | � | $ | 985,737 | ||
Cost of revenue | 766,970 | � | 623,953 | ||||
Gross profit | 627,235 | � | 361,784 | ||||
Operating expenses: | � | � | � | ||||
���Research and development | 151,852 | � | 73,737 | ||||
���Sales and marketing | 194,377 | � | 157,771 | ||||
���General and administrative | 93,971 | � | 31,573 | ||||
Total operating expenses | 440,200 | � | 263,081 | ||||
Operating income | 187,035 | � | 98,703 | ||||
Other expense, net | (6,060 | ) | � | (7,374 | ) | ||
Income before income taxes | 180,975 | � | 91,329 | ||||
Income tax expense | 52,887 | � | 30,751 | ||||
Net income | $ | 128,088 | � | $ | 60,578 | ||
� | � | � | � | ||||
Less: Net income attributable to participating securities - basic | 16,512 | 16,727 | |||||
Less: Net income attributable to participating securities - diluted | 14,235 | 14,418 | |||||
Net income attributable to common stockholders - basic | $ | 111,576 | � | $ | 43,851 | ||
Net income attributable to common stockholders - diluted | $ | 113,853 | � | $ | 46,160 | ||
� | � | � | � | ||||
Net income per share attributable to common stockholders: | � | � | � | ||||
���Basic | $ | 1.07 | � | $ | 0.54 | ||
���Diluted | $ | 0.92 | � | $ | 0.47 | ||
� | � | � | � | ||||
Shares used in computing net income per share attributable to common stockholders: | � | � | |||||
���Basic | 104,453 | � | 81,018 | ||||
���Diluted | 123,630 | � | 98,941 | ||||
GoPro, Inc. | |||||||
Preliminary Condensed Consolidated Balance Sheets | |||||||
(in thousands) | |||||||
� | � | � | � | ||||
� | � | � | � | ||||
� | December 31, | � | December 31, | ||||
2014 | � | 2013 | |||||
(unaudited) | |||||||
ASSETS | � | � | |||||
Current assets: | � | � | � | ||||
Cash and cash equivalents | $ | 319,929 | � | $ | 101,410 | ||
Marketable securities | 102,327 | ||||||
Accounts receivable, net | 183,992 | � | 122,669 | ||||
Inventory, net | 153,026 | � | 111,994 | ||||
Prepaid expenses and other current assets | 63,769 | � | 21,967 | ||||
Total current assets | 823,043 | � | 358,040 | ||||
Property and equipment, net | 41,556 | � | 32,111 | ||||
Intangible assets and goodwill | 17,032 | � | 17,365 | ||||
Other long-term assets | 36,060 | � | 32,155 | ||||
Total assets | $ | 917,691 | � | $ | 439,671 | ||
� | �� | � | �� | ||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS EQUITY (DEFICIT) | � | � | |||||
Current liabilities: | � | � | |||||
Accounts payable | $ | 126,240 | � | $ | 126,423 | ||
Accrued liabilities | 115,775 | � | 86,391 | ||||
Other current liabilities | 16,754 | � | 27,483 | ||||
Current portion of long-term debt | � | 60,297 | |||||
Total current liabilities | 258,769 | � | 300,594 | ||||
Long-term debt, less current portion | � | 53,315 | |||||
Other long-term liabilities | 17,718 | � | 13,930 | ||||
Total liabilities | 276,487 | � | 367,839 | ||||
� | � | � | |||||
Redeemable convertible preferred stock | � | 77,198 | |||||
Total stockholders equity (deficit) | 641,204 | � | (5,366 | ) | |||
Total liabilities, redeemable convertible preferred stock and stockholders equity (deficit) | $ | 917,691 | � | $ | 439,671 | ||
GoPro, Inc. | |||||||||||||||
Preliminary Condensed Consolidated Statement of Cash Flows | |||||||||||||||
(in thousands, unaudited) | |||||||||||||||
� | � | � | � | � | � | ||||||||||
� | Three Months | � | Year Ended | ||||||||||||
� | December 31, 2014 | � | December 31, 2013 | � | December 31, 2014 | � | December 31, 2013 | ||||||||
� | � | ||||||||||||||
Operating activities: | |||||||||||||||
Net income | $ | 122,260 | $ | 43,729 | $ | 128,088 | $ | 60,578 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 5,176 | 3,526 | 17,945 | 12,034 | |||||||||||
Deferred taxes | (13,112 | ) | (7,055 | ) | (16,920 | ) | (8,129 | ) | |||||||
Excess tax benefit from stock-based compensation | (53,542 | ) | 578 | (77,134 | ) | (323 | ) | ||||||||
Stock-based compensation | 19,256 | 3,540 | 71,399 | 10,887 | |||||||||||
Provision for doubtful accounts and inventory obsolescence | 1,786 | 332 | 5,046 | 4,745 | |||||||||||
Other adjustments | 257 | 230 | 1,865 | 1,224 | |||||||||||
Changes in assets and liabilities: | |||||||||||||||
Accounts receivable | (89,989 | ) | (66,579 | ) | (62,294 | ) | (43,117 | ) | |||||||
Inventories | (37,239 | ) | (7,950 | ) | (45,108 | ) | (55,664 | ) | |||||||
Prepaid expenses and other assets | (4,475 | ) | (270 | ) | (30,317 | ) | (15,355 | ) | |||||||
Accounts payable and accrued liabilities | 87,029 | 110,003 | 98,354 | 135,197 | |||||||||||
Deferred revenue | 5,783 | 2,246 | 5,998 | 400 | |||||||||||
Net cash provided by operating activities | $ | 43,190 | $ | 82,330 | $ | 96,922 | $ | 102,477 | |||||||
Investing activities: | |||||||||||||||
Purchases of property and equipment | (4,644 | ) | (3,747 | ) | (27,498 | ) | (18,325 | ) | |||||||
Purchases of marketable securities, net of maturities | (102,744 | ) | (102,744 | ) | |||||||||||
Proceeds from sale of property and equipment | 288 | ||||||||||||||
Net cash used in acquisitions | (750 | ) | (2,912 | ) | (3,950 | ) | (2,912 | ) | |||||||
Net cash used in investing activities | $ | (108,138 | ) | $ | (6,659 | ) | $ | (133,904 | ) | $ | (21,237 | ) | |||
Financing activities: | |||||||||||||||
Net proceeds from issuance of common stock | 97,429 | 327 | 301,577 | 527 | |||||||||||
Payment of debt issuance costs and deferred public offering costs | (1,283 | ) | (139 | ) | (5,730 | ) | (1,165 | ) | |||||||
Repayments of debt, net of issuances | (21,500 | ) | (114,000 | ) | (16,000 | ) | |||||||||
Excess tax benefit from stock-based compensation | 53,542 | (578 | ) | 77,134 | 323 | ||||||||||
Other financing activities | (2,560 | ) | (3,480 | ) | |||||||||||
Net cash provided by (used in) financing activities | $ | 147,128 | $ | (21,890 | ) | $ | 255,501 | $ | (16,315 | ) | |||||
Net increase in cash and cash equivalents | $ | 82,180 | $ | 53,781 | $ | 218,519 | $ | 64,925 | |||||||
Cash and cash equivalents: | |||||||||||||||
Beginning of period | $ | 237,749 | $ | 47,629 | $ | 101,410 | $ | 36,485 | |||||||
End of period | $ | 319,929 | $ | 101,410 | $ | 319,929 | $ | 101,410 | |||||||
GoPro, Inc. | |||||||||||
Reconciliation of Preliminary GAAP to Non-GAAP Financial Measures | |||||||||||
(in thousands, except per share data, unaudited) | |||||||||||
� | � | � | � | � | � | ||||||
� | � | � | � | � | � | ||||||
� | Three months ended | ||||||||||
� | December 31, 2014 | � | September 30, 2014 | � | December 31, 2013 | ||||||
� | � | � | � | � | � | ||||||
GAAP NET INCOME | $ | 122,260 | � | $ | 14,620 | � | $ | 43,729 | |||
Stock-based compensation | � | � | � | ||||||||
Cost of revenue | 280 | � | 233 | � | 160 | ||||||
Research and development | 6,154 | � | 2,428 | � | 1,266 | ||||||
Sales and marketing | 4,135 | � | 3,225 | � | 1,593 | ||||||
General and administrative | 8,687 | � | 8,027 | � | 521 | ||||||
Total stock-based compensation | 19,256 | � | 13,913 | � | 3,540 | ||||||
� | � | � | � | � | � | ||||||
Amortization of acquisition-related intangible assets | � | � | � | � | � | ||||||
Cost of revenue | 221 | � | 223 | � | 222 | ||||||
Research and development | 43 | � | 20 | � | 16 | ||||||
Sales and marketing | 33 | � | 33 | � | 48 | ||||||
Total amortization of acquisition-related intangible assets | 297 | � | 276 | � | 286 | ||||||
Income tax adjustments | 3,085 | � | (10,850 | ) | � | (1,194 | ) | ||||
Non-GAAP NET INCOME | $ | 144,898 | � | $ | 17,959 | � | $ | 46,361 | |||
� | � | � | � | � | � | ||||||
� | � | � | � | � | � | ||||||
GAAP SHARES FOR DILUTED NET INCOME PER SHARE | 146,723 | � | 145,186 | � | 99,621 | ||||||
����Add: preferred shares conversion | � | � | 30,523 | ||||||||
����Add: initial public offering shares | � | � | 8,900 | ||||||||
Non-GAAP SHARES FOR DILUTED NET INCOME PER SHARE | 146,723 | � | 145,186 | � | 139,044 | ||||||
� | � | � | � | � | � | ||||||
Non-GAAP diluted net income per share | $ | 0.99 | � | $ | 0.12 | � | $ | 0.33 | |||
GoPro, Inc. | |||||||
Reconciliation of Preliminary GAAP to Non-GAAP Financial Measures | |||||||
(in thousands, except per share data, unaudited) | |||||||
� | � | � | � | ||||
� | � | � | � | ||||
� | Year ended | ||||||
� | December 31, 2014 | � | December 31, 2013 | ||||
� | � | � | � | ||||
GAAP NET INCOME | $ | 128,088 | � | $ | 60,578 | ||
Stock-based compensation | � | ||||||
Cost of revenue | 835 | � | 690 | ||||
Research and development | 11,640 | � | 3,003 | ||||
Sales and marketing | 10,428 | � | 5,670 | ||||
General and administrative | 48,496 | � | 1,524 | ||||
Total stock-based compensation | 71,399 | � | 10,887 | ||||
� | � | � | � | ||||
Amortization of acquisition-related intangible assets | � | � | � | ||||
Cost of revenue | 888 | � | 888 | ||||
Research and development | 103 | � | 29 | ||||
Sales and marketing | 142 | � | 189 | ||||
Total amortization of acquisition-related intangible assets | 1,133 | � | 1,106 | ||||
Income tax adjustments | (11,707 | ) | � | (3,745 | ) | ||
Non-GAAP NET INCOME | $ | 188,913 | � | $ | 68,826 | ||
� | � | � | � | ||||
GAAP SHARES FOR DILUTED EARNINGS PER SHARE | 123,630 | � | 98,941 | ||||
����Add: preferred shares conversion | 15,136 | � | 30,523 | ||||
����Add: initial public offering shares | 4,414 | � | 8,900 | ||||
Non-GAAP SHARES FOR DILUTED EARNINGS PER SHARE | 143,180 | � | 138,364 | ||||
� | � | � | � | ||||
Non-GAAP diluted net income per share | $ | 1.32 | � | $ | 0.50 | ||
GoPro, Inc.
Reconciliation of Preliminary GAAP to Non-GAAP Financial Measures
To supplement our unaudited selected financial data presented on a basis consistent with Generally Accepted Accounting Principles, or GAAP, we disclose certain non-GAAP financial measures, including non-GAAP gross profit, operating expenses, operating income, net income, earnings per share and adjusted EBITDA. These non-GAAP measures are not in accordance with, nor serve as an alternative for GAAP. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our GAAP results of operations. These non-GAAP measures should only be viewed in conjunction with corresponding GAAP measures.
In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our core operating performance on a period-to-period basis. The excluded items represent stock-based compensation and charges that are primarily driven by discrete events that we do not consider to be directly related to core operating performance. We use non-GAAP measures to evaluate the core operating performance of our business, for comparison with forecasts and strategic plans and for calculating return on investment. In addition, managements incentive compensation is determined using non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results reviewed by management in addition to seeing GAAP results. 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. |
�
�The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:
" | Stock-based compensation expense relates to equity awards granted primarily to our workforce. We exclude stock-based compensation expense because we believe that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance. In particular, we note that companies calculate stock-based compensation expense for the variety of award types that they employ using different valuation methodologies and subjective assumptions. These non-cash charges are not factored into our internal evaluation of net income as we believe their inclusion would hinder our ability to assess core operational performance. We believe that excluding this expense provides greater visibility to the underlying performance of our business operations, facilitates comparison of our results with other periods, and may also facilitate comparison with the results of other companies in our industry. |
" | Acquisition-related charges include the amortization of acquired intangible assets primarily consisting of acquired technology, customer relationships, tradenames and covenants not to compete related to our acquisitions. These charges are not factored into our evaluation of potential acquisitions, or of our performance after completion of acquisitions, because they are not related to our core operating performance, and the frequency and amount of such charges vary significantly based on the timing and magnitude of our acquisition transactions and the maturities of the businesses being acquired. |
" | Adjustment for taxes relates to the tax effect of the adjustments that we incorporate into non-GAAP measures in order to provide a more meaningful measure of non-GAAP net income. We believe that these adjustments provide us with the ability to more clearly view trends in our core operating performance. |
" | Adjustment to shares includes the conversion of the redeemable convertible preferred stock into shares of common stock as though the conversion had occurred at the beginning of the period and the initial public offering shares issued July 2014, as if they had been outstanding since the beginning of the period. |
Reconciliations of non-GAAP financial measures are set forth below ($ in thousands):
� | Three months ended | ||||||||||
� | December 31, 2014 | � | September 30, 2014 | � | December 31, 2013 | ||||||
GAAP gross profit | $ | 303,813 | $ | 124,039 | � | $ | 151,504 | ||||
��Stock-based compensation | 280 | 233 | � | 160 | |||||||
��Amortization of acquisition-related intangible assets | 221 | 223 | � | 222 | |||||||
Non-GAAP gross profit | $ | 304,314 | $ | 124,495 | � | $ | 151,886 | ||||
� | � | ||||||||||
GAAP gross profit as a % of revenue | 47.9 | % | 44.3 | % | � | 41.9 | % | ||||
��Stock-based compensation | 0.1 | 0.1 | � | ||||||||
��Amortization of acquisition-related intangible assets | 0.1 | � | 0.1 | ||||||||
Non-GAAP gross profit as a % of revenue | 48.0 | % | 44.5 | % | � | 42.0 | % | ||||
� | � | ||||||||||
GAAP operating expenses | $ | 130,125 | $ | 110,582 | � | $ | 80,929 | ||||
��Stock-based compensation | (18,976 | ) | (13,680 | ) | � | (3,380 | ) | ||||
��Amortization of acquisition-related intangible assets | (76 | ) | (53 | ) | � | (64 | ) | ||||
Non-GAAP operating expenses | $ | 111,073 | $ | 96,849 | � | $ | 77,485 | ||||
� | � | ||||||||||
GAAP operating income | $ | 173,688 | $ | 13,457 | � | $ | 70,575 | ||||
��Stock-based compensation | 19,256 | 13,913 | � | 3,540 | |||||||
��Amortization of acquisition-related intangible assets | 297 | 276 | � | 286 | |||||||
Non-GAAP operating income | $ | 193,241 | $ | 27,646 | � | $ | 74,401 | ||||
� | � | ||||||||||
GAAP operating income as a % of revenue | 27.4 | % | 4.8 | % | � | 19.5 | % | ||||
��Stock-based compensation | 3.1 | 5.0 | � | 1.0 | |||||||
��Amortization of acquisition-related intangible assets | 0.1 | � | 0.1 | ||||||||
Non-GAAP operating income as a % of revenue | 30.5 | % | 9.9 | % | � | 20.6 | % | ||||
Reconciliations of non-GAAP financial measures are set forth below ($ in thousands):
� | Year ended | ||||||
� | December 31, 2014 | � | December 31, 2013 | ||||
GAAP gross profit | $ | 627,235 | $ | 361,784 | |||
��Stock-based compensation | 835 | 690 | |||||
��Amortization of acquisition-related intangible assets | 888 | 888 | |||||
Non-GAAP gross profit | $ | 628,958 | $ | 363,362 | |||
� | |||||||
GAAP gross profit as a % of revenue | 45.0 | % | 36.7 | % | |||
��Stock-based compensation | 0.1 | ||||||
��Amortization of acquisition-related intangible assets | 0.1 | 0.1 | |||||
Non-GAAP gross profit as a % of revenue | 45.1 | % | 36.9 | % | |||
� | |||||||
GAAP operating expenses | $ | 440,200 | $ | 263,081 | |||
��Stock-based compensation | (70,564 | ) | (10,197 | ) | |||
��Amortization of acquisition-related intangible assets | (245 | ) | (218 | ) | |||
Non-GAAP operating expenses | $ | 369,391 | $ | 252,666 | |||
� | |||||||
GAAP operating income | $ | 187,035 | $ | 98,703 | |||
��Stock-based compensation | 71,399 | 10,887 | |||||
��Amortization of acquisition-related intangible assets | 1,133 | 1,106 | |||||
Non-GAAP operating income | $ | 259,567 | $ | 110,696 | |||
� | |||||||
GAAP operating income as a % of revenue | 13.4 | % | 10.0 | % | |||
��Stock-based compensation | 5.1 | 1.1 | |||||
��Amortization of acquisition-related intangible assets | 0.1 | 0.1 | |||||
Non-GAAP operating income as a % of revenue | 18.6 | % | 11.2 | % | |||
Reconciliations of non-GAAP financial measures are set forth below ($ in thousands):
� | � | Three months ended | ||||||||||
� | � | December 31, 2014 | � | September 30, 2014 | � | December 31, 2013 | ||||||
����GAAP net income | � | $ | 122,260 | � | $ | 14,620 | � | $ | 43,729 | |||
����Income tax (benefit) expense | � | 50,313 | � | (2,947 | ) | � | 24,622 | |||||
����Interest income and expense | � | 1,029 | � | 1,284 | � | 1,889 | ||||||
����Depreciation and amortization | � | 5,176 | � | 4,781 | � | 3,526 | ||||||
����POP display amortization | � | 4,820 | � | 4,524 | � | 4,550 | ||||||
����Stock-based compensation | � | 19,256 | � | 13,913 | � | 3,540 | ||||||
����Adjusted EBITDA | � | $ | 202,854 | � | $ | 36,175 | � | $ | 81,856 | |||
� | � | Year ended | ||||||
� | � | December 31, 2014 | December 31, 2013 | |||||
����GAAP net income | � | $ | 128,088 | $ | 60,578 | |||
����Income tax expense | � | 52,887 | 30,751 | |||||
����Interest income and expense | � | 5,038 | 6,018 | |||||
����Depreciation and amortization | � | 17,945 | 12,034 | |||||
����POP display amortization | � | 18,023 | 13,458 | |||||
����Stock-based compensation | � | 71,399 | 10,887 | |||||
����Adjusted EBITDA | � | $ | 293,380 | $ | 133,726 | |||