GoPro, Inc.

Good afternoon. Thank you for attending the Go Pro second 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 one on your telephone keypad. And I would now like to pass the conference over to your host, Robin Stecker, Director of Corporate Communications. You may proceed.

Thank you, Cameron. Good afternoon and welcome to GoPRO's second 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 second quarter, as well as outlook, please read our QT 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 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 31st, 2024, which is on file with the Securities and Exchange Commission, and other reports that we may file from time to time with the SSE. 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 will 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. In Q2, we reached the high end of our revenue guidance, delivered compelling new hardware and software products, and are on track to launch exciting new products in the second half of the year. Our ongoing focus on efficiency drove operating expenses down 32% year over year, achieving our highest gross margin since Q3 2022. In addition, We refreshed our board of directors and executed a capital raise. GoPro continues to hit its marks. Last week, we announced that GoPro raised $50 million in debt financing to bolster our balance sheet as we prepare to repay approximately $94 million in convertible debt due this November. Our priorities for the balance of 2025 and into 2026 continue to be managing operating expenses, protecting our IP, and launching new products, which we believe will return GoPro to both unit and revenue growth and improved profitability starting in the fourth quarter of this year. Turning to product highlights, during the second quarter, we launched Hero 13 Black Ultra Wide Edition, a special edition of our flagship Hero 13 Black camera bundled in box with our ultra wide lens mod pre-installed on the camera, making it simple to capture low distortion, incredibly wide angle, 177 degree perspectives that make you feel like you're fully immersed in the moment. We also introduced a limited edition forest green colorway of Hero 13 Black, offering a bold nature inspired aesthetic designed to appeal to outdoor enthusiasts. On the software front, we added new, easy, and powerful 360 degree editing tools to the GoPro app, including MotionFrame and POV. MotionFrame makes it simple to reframe your 360 content into easy to share clips by using your phone to look around and reframe what part of your 360 video or photo you want to share. And POV is a fast and simple way to create immersive, see what I saw, POV videos from your 360 content. These new tools add to the growing 360 editing experience in the GoPro app and lay the groundwork for the upcoming launch of our Max 2 360 camera. Our software ecosystem continues to create value for our users, particularly for our subscribers. Our subscription attach rate from cameras sold across all channels was 56% compared to 45% in Q2 2024, a 24% improvement. Aggregate retention has been above 67% for the past seven quarters. We believe ongoing software enhancements coupled with increased camera sales from the launch of new products later this year and in 2026 will resume subscriber growth in 2026. And on July 30, 2025, we announced a new opt-in program that enables U.S. subscribers to monetize their GoPro cloud-based video content by making it available to help train AI models. GoPro subscribers can opt in to make their user-generated content available for GoPro to license to leading technology companies seeking diverse real-world footage to enhance the performance and accuracy of their AI models. GoPro subscribers will earn 50% of the license revenue that GoPro expects to generate on their behalf. The GoPro subscriber community's vast data lake contains more than 450 petabytes of cloud-based, high-quality video content which translates into more than 13 million hours of video. This vast trove of video content represents a valuable opportunity for AI developers to train their models with a rich and varied data set across a wide range of experiences and environments. We are excited to participate in the demand for authentic real-world video to train AI models while growing a new diversified revenue stream for GoPros. Industry analysts expect the AI data licensing market for photo and video content to reach $1.3 billion in 2025 with a projected 20% CAGR. And now, an update on our IP projection efforts. On July 10, 2025, the United States Administrative Law Judge, ALJ, with the International Trade Commission, or ITC, issued an initial determination that one of our China-based competitors, Insta360, violated federal law by importing and selling products that infringe a patent covering GoPro's iconic hero camera design in the United States. We are pleased with the ALJ's recommendation that the commission issue both a cease and desist order against further infringing acts and an inclusion order barring further importation of Insta360's infringing products. We are also pleased with the initial determinations validation of multiple patent claims covering GoPro's industry-leading HyperSmooth video stabilization. The case is ongoing, and the next phase is a review by the Commission where we believe we have the opportunity to gain further rulings in GoPro's favor. The commission is expected to issue its final determination on all of GoPRO's infringement claims on or before November 10th, 2025. And any resulting exclusion orders would go into effect in January, 2026, subject to presidential review. And in Q2, we refreshed our board of directors with the addition of three seasoned executives. Mick Lopez brings decades of strategic and financial governance expertise from leadership roles at Vista Outdoors, L3 Harris, IBM, and Cisco Systems. Emily Culp is the Chief Brand and Strategy Officer of Body Health and adds value expertise in omni-channel marketing and consumer brand strategy. And Mike Dennison is CEO of Fox Factory Holding Corp. and brings a deep understanding of global manufacturing and product innovation to GoPro's board. We believe their diverse industry experience and insights will be instrumental to GoPro's efforts to grow our TAM, revenue, and profitability going forward. We believe GoPro is poised to return to revenue growth and deliver meaningful, adjusted EBITDA in the second half of 2025 and into 2026. while expanding our TAM by participating in key growth categories. GoPro remains the U.S. market leader in the estimated global 3 million unit action camera category. New growth areas include the 360 camera segment, which we estimate to be nearly 2 million units annually. We're excited to regain share in this 360 market with the launch of our Max 2 360 camera later this year. Additionally, the low-light capable camera segment, estimated at 2 to 2.5 million units annually, represents a significant opportunity for GoPro, as we do not currently participate in that market. And GoPro's tech-enabled motorcycle helmet development in partnership with AGV remains on track. We expect to bring meaningful innovation, improved safety, and performance to the world of motorcycling, which we believe represents a meaningful business opportunity for GoPro with a SAM of approximately $3 billion. To summarize, we're excited to launch an expanded, diversified suite of hardware and software products in the second half of 2025 and throughout 2026, which we believe will enable GoPro to grow into markets that we're not participating in today. We expect to resume revenue growth in the fourth quarter and expect second half adjusted EBITDA to be approximately $20 million compared to a prior year period loss of $9 million, a nearly $30 million improvement. GoPro's teams are focused and highly motivated to realize the exciting opportunities that lie ahead. Now, I'll turn the call over to Brian McGee.