GoPro, Inc.

Good day and welcome to the GoPro Second Quarter 2020 Earnings Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Christopher Clark, Vice President of Corporate Communications. Please go ahead, sir.

Thanks, operator. Good afternoon, everyone, and welcome to GoPro's Second Quarter 2020 Earnings Conference Call. With me today are GoPro CEO Nicholas Woodman and CFO and COO Brian McGee. Before we get started, I'd like to remind everyone that our remarks today may include forward-looking statements. Forward-looking statements and all other statements that are not historical facts are not guarantees of future performance and are subject to a number of risks and uncertainties which may cause actual results to differ materially. Any forward-looking statements made today are based on assumptions as of today, including but not limited to the assumption that consumer confidence does not further erode due to the global pandemic. We do not undertake any obligation to update these statements as a result of new information or future events. Information concerning our risk factors is available in our most recent annual report on Form 10-K for the year ended December 31, 2019, which is on file with the Securities and Exchange Commission. and in other reports that we may file from time to time with the SEC. Today we may discuss gross margin, operating expense, net profit and loss as well as basic and diluted net profit and loss per share in accordance with GAAP and additionally on a non-GAAP basis. We believe that non-GAAP information is useful because it can enhance the understanding of our ongoing economic performance. We use non-GAAP reporting internally to evaluate and manage our operations. We choose to provide this information to enable investors to perform comparisons of operating results in a manner similar to how we analyze our own operating results. A reconciliation of GAAP to non-GAAP operating expenses can be found in the press release that was issued this afternoon. In addition to the earnings press release, we have posted management commentary and slides containing detailed financial data and metrics for the second quarter of 2020. The management commentary and slides, as well as a link to today's live webcast and replay of this conference call are posted on the GoPro Investor Relations website for your reference. All income statement related numbers that are discussed today during the call, other than revenue, are non-GAAP, unless otherwise noted. Now I'll turn the call over to GoPro's founder and CEO, Nicholas Woodman.

Thanks, Chris, and good afternoon, everyone. As we did during our Q1 2020 earnings report, we've chosen to post management commentary for the second quarter of 2020, including Brian's financial overview, to the GoPro Investor Relations page on our website, and we encourage all to read the commentary. I will give brief remarks now, and then we'll go directly into Q&A. As we shared in the management commentary, GoPro's shift to a more direct-to-consumer business with lower operating costs is working. While COVID-19 continues to negatively impact society globally, GoPro has adapted to the pandemic, and we believe our consumers are learning to live with the pandemic too. Demand for GoPro cameras consistently improved throughout the second quarter, and we've seen a faster than expected rebound in sell-through at retail. Despite obvious challenges, we've been able to improve our efficiency and output in all areas of the business, including significantly reducing both channel inventory and operating expenses. We remain on track with our product launches slated for the second half of 2020, which includes hardware, software and subscription offerings. We expect these new product launches to contribute to our momentum, resulting in positive results for the rest of 2020 and continued growth and earnings expansion in 2021. Assuming that many of you on the call have read our written commentary, we'll now move on to Q&A.