GoPro, Inc.

afternoon thank you for attending the gopro first quarter 2025 earnings call my name is cameron and i'll be your moderator for today all lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end if you would like to ask a question please press star 1 on your telephone keypad and i would now like to pass the conference over to your host robin stecker director corporate director of corporate communications at gopro may proceed thank you cam

Good afternoon and welcome to GoPro's first quarter 2025 earnings conference call. With me today are GoPro's CEO, Nicholas Woodman, and CFO and COO, Brian McGee. Today's agenda will include brief commentary from Nick and Brian, followed by Q&A. For detailed information about our first quarter 2025 performance, as well as outlook, please read our Q1 earnings press release and management commentary 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. Following this brief introduction is management commentary from GoPro CEO Nicholas Woodman and CFO and COO Brian McGee. This commentary 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 risks 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 31, 2024, which is on file with the Securities and Exchange Commission. and 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, 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, other than revenue, are non-GAAP. Now, I'll turn the call over to GoPost founder and CEO, Nicholas Whitman.

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 everyone to read the detailed management commentary we posted on our investor relations website. In the first quarter, we hit our marks for revenue, launched new hardware and software products, and are on track to launch exciting new products later this year. Our focus for the balance of 2025 and into 2026 is to continue making strategic investments in product innovation to return GoPro to growth, vigorously protecting our IP and further diversifying our supply chain including exploring domestic production for some products. During the first quarter, we launched several new hardware and software products, including our updated 360-degree camera app experience, and we introduced a refreshed Max camera, positioning us to recapture share in the 360 market and setting the stage for the launch of Max 2 later this year. We also released a limited edition polar white colorway of Hero 13 Black, bringing a fresh new look to our flagship camera. And we recently released the highly anticipated anamorphic lens mod for Hero 13 Black, offering creators and professional filmmakers a cost-effective solution for capturing stunning cinematic video. Our new anamorphic lens mod joins our previously released ultra-wide lens mod macro lens mod, and auto-detectable ND filters, which significantly enhanced Hero 13 Black's versatility and performance. The GoPro subscription continues to be a highlight, with strong aggregate retention numbers above 67% over the past six quarters. ARPU improved 5% year-over-year, and aggregate subscription retention in Q1 set a record at 70%, up from 69% both sequentially and year-over-year. We expect subscriber and revenue growth to resume in tandem with a return to camera unit growth in 2026, and as we add new editing and content management features that help subscribers get more out of their GoPro content. Our patent portfolio protects our IP and we are committed to taking action to protect these assets when necessary. GoPro welcomes fair competition, but we will litigate to protect our IP when we believe it is being infringed. In January 2025, the US International Trade Commission held a five-day trial regarding a complaint we filed against one of our competitors. with the goal to enforce certain GoPro patents related to our cameras and digital imaging technology. We look forward to the ITC's ruling, which is now expected in July of this year. This quarter, we continue to diversify our supply chain to position GoPro as favorably as possible amidst highly variable tariffs, and we expect to offset tariff costs with modest price increases continue to supply chain diversification outside of China and potentially with the production of certain products in the United States. We are continuously assessing the evolving international trade situation to mitigate the impact of tariffs on our business. We are pleased to report that the OpEx reduction work we began in 2024 is largely behind us. and is starting to yield improvements in our operating model. Operating expenses were down 26% to $62 million from $83 million in Q1 2024. Next, we are excited to provide an update on our tech-enabled motorcycle helmet initiatives. As we shared in 2024, when we acquired Foresight Helmet Systems, GoPro plans to launch tech-enabled motorcycle helmets, which we believe will help us grow a meaningful business with a SAM of approximately $3 billion. To help us realize this opportunity, we recently kicked off a joint development partnership with AGV, a leading premium Italian motorcycle helmet brand known for legendary performance, styling, and safety. This partnership between GoPro and HEV represents the exciting potential of two powerhouse brands coming together to bring meaningful innovation, improve safety and performance to the world of motorcycling, leveraging each other's design, engineering, and brand strengths. We look forward to sharing updates as we move closer towards launching our first product together. Overall, GoPro's performance in Q1 and our outlook for Q2 demonstrate our progress in operating as a leaner, more efficient organization, which is beginning to positively impact our financial results. And we continue to advance our mission to deliver innovative and differentiated products to our existing markets, as well as new adjacent markets, in order to expand our TAM and drive growth in revenue and profitability. Our product roadmap is on track, and we believe that consumers will be very excited about the innovation we intend to bring to market in 2025 and 2026. Now, I'll turn the call over to Brian.