GoPro, Inc.

Good afternoon. Thank you for attending today's Go Pro fourth quarter 2024 earnings call. My name's Cole, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to queue for a question, you can do so by pressing star 1 on your telephone keypad. I'd now like to pass the call over to Robin Stecker. Please go ahead.

Thank you, Cole. Good afternoon and welcome to GoPost's fourth quarter and full year 2024 earnings conference call. With me today are GoPost CEO Nicholas Woodman and CFO and CFO Brian McGee. Today's agenda will include brief commentary from Nick and Brian, followed by Q&A. For detailed information about our fourth quarter and full year 2024 performance, as well as outlook, please read our Q4 and full year earnings press release and management commentary. we posted to the investor relations section of GoPro's website. Before I pass the call to Nick, I'd like to remind everybody 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. Additionally, any forward-looking statements made today are based on assumptions as of today. This means that results could change at any time, and we do not undertake any obligation to update these statements as a result of new information or future events. To better understand the rates and uncertainties that could cause actual results to differ from our commentary, we refer you to our most recent annual report on Form 10-K for the year ended December 31st, 2023, which is on file with the Securities and Exchange Commission and other reports that you may file from time to time with the SEC. Today, we may discuss gross margin, operating expense, net profit and loss, adjusted EBITDA, as well as basic and diluted net profit and loss per share in accordance with GAAP and on a non-GAAP basis. A reconciliation of GAAP to non-GAAP operating expenses can be found in the press release that was issued this afternoon, which is posted on the investor relations section of our website. Unless otherwise noted, All income statement related numbers that are discussed in the management commentary and remarks made today, other than revenue, are non-GAAP. Now, I'll turn the call over to GoPost founder and CEO, Nicholas Woodman.

Thanks, Robin, and thanks everybody for joining us today. As Robin mentioned, Brian and I will share brief remarks before going into Q&A. And I want to encourage all on the call to read the detailed management commentary we posted on our investor relations website. I'd like to start the call by addressing recent U.S. tariff announcements on inbound goods to be sold in the U.S., which we do not expect to materially impact our U.S. consumer pricing or gross margin due to our proactive supply chain management. This is thanks to the terrific job our teams have done to diversify our manufacturing and sourcing over the years. GoPros Q4 results landed largely in line or slightly better than our guidance. During the quarter, we took action to right-size operating expenses. We're now focused on delivering our 2025 and 2026 products in an efficient manner, which includes a broadening of our portfolio that we believe will yield profitable returns for GoPro and our shareholders over time. The GoPro subscription is the most profitable product we sell, and our retention numbers demonstrate the strength and the value we offer subscribers, as illustrated by ARPU improving 8% year over year. Aggregate subscription retention in Q4 was 69%, up from 67% both sequentially and year over year and our annual retention rates continue to be consistent with what we previously reported, including positive numbers for fourth-year renewals of nearly 90%. In 2024, in addition to our flagship Hero 13 Black, we introduced an entry-level product, an exciting, tiny 4K camera we call Hero. This ultra-small, 86-gram, featherweight camera has enormous potential that we're excited to continue to tap into. Just last week, via a firmware update, we added a wider, more immersive in-camera 4x3 aspect ratio for video capture along with a super view digital lens setting in the app, which combined to enable an immersive, it feels like you're there, point of view perspective during any activity. The immersive capture our engineering teams have enabled in this tiny entry-level GoPro is staggering. We expect sales to grow over time as we continue to champion its capabilities with updates. And it goes without saying that we're excited to grow our presence in the 360-degree camera market, a market we pioneered and led for several years with category-defining IP and products. As we've shared, the 360-degree camera market represents a robust growth segment in the broader digital imaging category, and it's an understatement to say that we're excited about the opportunity to grow our share in this important market. Recent and upcoming events related to the 360-degree camera market include our recent release of a powerful, totally new and enhanced 360-degree editing experience. and the Quick app, complete with impressive subject tracking, intuitive keyframe-based reframing, and more. And later this month, we'll begin selling a refreshed Max 360-degree camera to serve as an entry-level 360 SKU ahead of the highly anticipated availability of our Max 2 360 camera later this year. And of course, Max, will be compatible with all the new aforementioned features in the updated quick app. And speaking of Max 2, we're excited about the progress we've made on what we believe are innovative capabilities that will redefine the 360 camera market and position Max 2 as the world's most impressive 360 camera. Innovation can be hard, and we're proud of our engineers who've stayed committed to making Max 2 into something truly special. We cannot wait to launch it later this year. Further on the innovation front, I'm excited to share that we've completed the validation of our next generation SOC GP3. Everything we know about the competitive landscape for market available SOCs leads us to believe GP3 will once again set new performance standards, not only in our categories of cameras, but for the digital imaging industry as a whole. As we noted on our last earnings call in 2025, we expect units and revenues to be lower than 2024, primarily driven by macroeconomic headwinds, competition, and the previously mentioned delay of our new MAXII 360 camera that we intend to launch later this year in 2025. We've substantially reduced operating expenses for 2025 and believe this lower level of spending enables us to continue to innovate and will lead us to an exciting year of new relations in 2026 and beyond. To be clear, we are focused on returning GoPro to unit and revenue growth, along with improved profitability. We plan to do this through a broader, more diversified and innovative roadmap that we believe will expand our TAM and further establish GoPro as a market-leading innovator while restoring unit and revenue growth in 2026. It can be challenging to simultaneously be an innovator and a leader, yet we maintain an unwavering commitment to realizing the long-term rewards that perseverance, innovation, and super-serving our end users can yield. With that, I'll turn the call over to Brian.