GoPro Inc.
11/06/2025 | Press release | Distributed by Public on 11/06/2025 15:59
Quarterly Report for Quarter Ending 9/30/2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading Management's Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2024 included in our 2024 Annual Report on Form 10-K filed with the SEC. This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, include forward-looking statements that involve risks and uncertainties as described under the heading Special Note About Forward-Looking Statements in this Quarterly Report on Form 10-Q. You should review the disclosures under the heading Risk Factors in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. Our MD&A is provided in addition to the accompanying condensed consolidated financial statements and accompanying notes to assist readers in understanding our results of operations, financial condition and cash flows.
This MD&A is organized as follows:
•Overview. Discussion of our business, overall analysis of our financial performance and other highlights affecting the business in order to provide context for the remainder of the MD&A.
•Results of Operations. Analysis of our financial results comparing the third quarter and first nine months of 2025 to 2024.
•Liquidity and Capital Resources.Analysis of changes in our balance sheets and cash flows, and discussion of our financial condition and potential sources of liquidity.
•Critical Accounting Policies and Estimates. Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.
•Non-GAAP Financial Measures. A reconciliation and discussion of our GAAP to non-GAAP financial measures.
Overview
GoPro helps the world capture and share itself in immersive and exciting ways. We are committed to developing solutions that create an easy, seamless experience for consumers to capture, create and share engaging personal content. When consumers use our cameras, accessories, and subscription and services, they often generate and share content that organically increases awareness for GoPro, driving a virtuous cycle and a self-reinforcing demand for our cameras, accessories and subscription and services. We believe revenue growth may be driven by the introduction of new cameras, accessories, lifestyle gear, and software and subscription offerings. We believe new camera features drive a replacement cycle among existing users and attract new users, expanding our total addressable market. Our investments in image stabilization, mobile app editing and sharing solutions, modular accessories including lens mods, auto-upload capabilities, local language user-interfaces and voice recognition in more than 11 languages with 6 accents are designed to drive the expansion of our global market.
In September 2025, we began shipping our True 8-K MAX2 waterproof 360-camera featuring 10-bit color video in 8K at 30 frames per second (FPS), 29-megapixel resolution for 360-degree photos, and easily replaceable lenses made from water-repelling optical glass. In addition, MAX2 includes in-camera POV and Selfie Video Modes, six built-in microphones that provide 360 audio and wireless Bluetooth functionality, built-in GPS, MAX HyperSmooth image stabilization, 360-degree MAX TimeWarp Video, and MAX SuperView. MAX HyperSmooth provides high performance video stabilization, while MAX SuperView provides a wide field of view. Our MAX2 camera also includes a MAX Enduro battery which increases recording time and improves cold-weather performance. The Quik app includes editing tools for our MAX2 camera such as AI Object Tracking and MotionFrame editing.
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Also in September 2025, we began shipping our compact lifestyle camera, LIT HERO, which can shoot videos in 4K at 60 FPS, capture photos with 12-megapixel resolution, has a slow-motion setting of up to 4K at 60 FPS, includes a built-in light, is waterproof up to 16 feet, and weighs 93 grams. The LIT HERO camera captures content with a wide field of view lens so that HyperSmooth image stabilization can be applied in the Quik app.
In September 2024, we began shipping our HERO13 Black flagship camera that includes our GP2 processor, HyperSmooth 6.0 image stabilization, hybrid-log gamma (HLG) high dynamic range (HDR) photos and videos in 5.3K at 60 FPS and 4K at 60 FPS, and a higher capacity battery resulting in longer runtimes and improved thermal performance. HyperSmooth 6.0 image stabilization features AutoBoost, which analyzes up to 4x more data compared to HyperSmooth 5.0 while supporting 360-degree Horizon Lock. The HERO13 Black also includes 10-bit color video at up to 5.3K video at 60 FPS, 27-megapixel photo resolution, 8:7 aspect ratio video for a larger vertical field of view, and HyperView, which allows for a 16:9 field of view, Superview and Horizon Leveling. The HERO13 Black also includes a front-facing and rear touch display, TimeWarp 3.0, a Timecode Sync feature, and a Night Effects Time Lapse feature. In March 2025, we shipped a limited edition HERO13 Black in a Polar White colorway, and in June 2025, we shipped another limited edition HERO13 Black in a Forest Green colorway, both of which included all of the features of our flagship camera. We also offer our Ultra Wide Lens Mod, Macro Lens Mod, Anamorphic Lens Mod and a ND Filter 4-Pack for HERO13 Black. The Ultra Wide Lens Mod allows for an ultra wide-angle digital lens for 4K video at 60 FPS, the Macro Lens Mod allows the HERO13 Black to focus on objects 4x closer than prior generation cameras, and the Anamorphic Lens Mod captures ultra wide-angle footage with reduced distortion and lets anyone tell their stores using the 21:9 aspect ratio used in feature films. The ND Filter 4-Pack allows the HERO13 Black to create motion blur. Additionally, we offer our HERO13 Black Creator Edition, which combines the HERO13 Black, Volta, Enduro Battery, Media Mod, and Light Mod to create professional-quality videos.
Our HERO13 Black, HERO13 Black Creator Edition, LIT HERO, HERO, HERO12 Black, HERO12 Black Creator Edition, MAX2, and MAX cameras are compatible with our ecosystem of mountable and wearable accessories.
We offer our Premium subscription, which includes unlimited cloud storage of GoPro content supporting source video and photo quality, damaged camera replacement, cloud storage up to 25 gigabytes (GB) of non-GoPro content, the delivery of highlight videos automatically via our mobile app when GoPro camera footage is uploaded to the user's GoPro cloud account using Auto Upload or when GoPro camera footage is uploaded to the user's GoPro cloud account via the user's mobile phone. Our Premium subscription also provides access to a high-quality live streaming service on GoPro.com, as well as discounts on GoPro cameras, gear, mounts and accessories. In February 2024, we launched our Premium+ subscription which includes cloud storage up to 500 GB of non-GoPro content, HyperSmooth Pro and all of the same features included in the Premium subscription.
In addition to the Premium+ and Premium subscriptions, we offer our Quik subscription which makes it easy for users to get the most out of their favorite photos and videos, captured on any phone or camera, using our Quik mobile app's editing tools. These editing tools include features such as trim, color, crop, filtering, auto-sync of edits to music, and the ability to change video speed. We also offer our GoPro Reframe plugin for Adobe Premier Pro and Adobe After Effects which provides users with creative control over footage and enabling reframing, animated movements, motion blur transitions, and adjustments to lens curvature.
We continue to monitor the current evolving macroeconomic landscape. Inflation, fluctuating interest rates, tariffs and recession concerns places increasing pressure on many areas of our business, including hardware and software product pricing, operating expenses, component pricing and consumer spending. In the past, the strength of the U.S. dollar relative to other foreign currencies largely impacted our revenue and gross margin. Revenue from the U.S. was 48.7% and 34.0% of revenue in nine months ended September 30, 2025 and 2024, respectively. If the U.S. dollar strengthens relative to other foreign currencies in the future, our financial results will be negatively impacted. See Item 1A. Risk Factors for further discussion of the possible impact of evolving macroeconomic conditions on our business.
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following is a summary of measures presented in our condensed consolidated financial statements and key metrics used to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions.
| % Change | |||||||||||||||||||||||||||||
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(units and dollars in thousands, except per share amounts)
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Q3 2025 | Q2 2025 | Q3 2024 | Q3 2025 vs. Q2 2025 | Q3 2025 vs. Q3 2024 | ||||||||||||||||||||||||
| Revenue | $ | 162,918 | $ | 152,643 | $ | 258,898 | 7 | % | (37) | % | |||||||||||||||||||
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Camera units shipped (1)
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459 | 408 | 881 | 13 | % | (48) | % | ||||||||||||||||||||||
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Gross margin(2)
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35.1 | % | 35.8 | % | 35.5 | % | (70) | bps | (40) | bps | |||||||||||||||||||
| Operating expenses | $ | 73,052 | $ | 68,670 | $ | 99,857 | 6 | % | (27) | % | |||||||||||||||||||
| Net loss | $ | (21,252) | $ | (16,422) | $ | (8,211) | 29 | % | 159 | % | |||||||||||||||||||
| Diluted net loss per share | $ | (0.13) | $ | (0.10) | $ | (0.05) | 30 | % | 160 | % | |||||||||||||||||||
| Cash provided by (used in) operations | $ | 12,162 | $ | 8,752 | $ | (2,244) | 39 | % | (642) | % | |||||||||||||||||||
| Other financial information: | |||||||||||||||||||||||||||||
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Adjusted EBITDA (3)
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$ | (7,903) | $ | (5,690) | $ | 5,447 | 39 | % | (245) | % | |||||||||||||||||||
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Non-GAAP net loss (4)
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$ | (13,907) | $ | (11,957) | $ | (463) | 16 | % | 2,904 | % | |||||||||||||||||||
| Non-GAAP diluted net loss per share | $ | (0.09) | $ | (0.08) | $ | (0.00) | 13 | % | 100 | % | |||||||||||||||||||
(1) Represents the number of camera units that are shipped during a reporting period, net of any returns.
(2) One basis point (bps) is equal to 1/100th of 1%.
(3) We define adjusted EBITDA as net income (loss) adjusted to exclude the impact of income tax expense (benefit), interest income, interest expense, depreciation and amortization, point of purchase (POP) display amortization, stock-based compensation, (gain) loss on insurance proceeds, (gain) loss on extinguishment of debt, restructuring and other costs, including right-of-use asset impairment charges (if applicable), and goodwill impairment charges.
(4) We define non-GAAP net income (loss) as net income (loss) adjusted to exclude stock-based compensation, acquisition-related costs, restructuring and other costs, including right-of-use asset impairment charges (if applicable), (gain) loss on insurance proceeds, (gain) loss on extinguishment of debt, gain on sale and/or license of intellectual property, goodwill impairment charges, and income tax adjustments. Acquisition-related costs include the amortization of acquired intangible assets and impairment charges (if applicable), as well as third-party transaction costs for legal and other professional services.
Reconciliations of GAAP measures to the most directly comparable non-GAAP adjusted measures and explanations for why we consider non-GAAP measures to be helpful for investors are presented under Non-GAAP Financial Measures.
Third Quarter 2025 financial performance
Revenue for the third quarter of 2025 was $162.9 million, which represented a 37.1% decrease from the same period in 2024 of $258.9 million. The year-over-year decrease in revenue and camera units shipped was primarily due to the timing and mix of product launches in the third quarter of 2025 and 2024. Camera units shipped in the third quarter of 2025 decreased 47.9% year-over-year to 459 thousand, compared to 881 thousand in the same period in 2024. In the third quarter of 2025, our average selling price increased 20.6% year-over-year to $355. Average selling price is defined as total reported revenue divided by camera units shipped. Our third quarter of 2025 camera revenue mix from cameras with an MSRP equal to or greater than $400 was 72% compared to 74% for the same period in 2024. Retail revenue was $122.9 million in the third quarter of 2025 and represented 75.4% of total revenue, compared to 80.3% of total revenue for the same period in 2024. GoPro.com revenue, which includes subscription and service revenue, was $40.0 million in the third quarter of 2025 and represented 24.6% of total revenue, compared to 19.7% of total revenue for the same period in 2024. Third quarter overall subscription attach rate from both sales on GoPro.com and from post-camera purchases at retail improved sequentially from 54% to 57% and was up from 45% in the prior year quarter. Our aggregate retention rate for annual subscribers was 68% in the third quarter of 2025, compared to 67% in the same period in 2024. Our gross margin percentage for the third quarter of 2025 was 35.1%, compared to 35.5% in the same period in 2024. Net loss for the third quarter of 2025 was $21.3 million, compared to a net loss of $8.2 million for the same period in
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
2024. Adjusted EBITDA for the third quarter of 2025 was negative $7.9 million, compared to positive $5.4 million in the same period in 2024.
Our overall subscription attach rate from camera purchases through both GoPro.com and at retail represents the number of new GoPro subscribers in the period over the corresponding number of estimated camera units sold through both GoPro.com and retail channels. Our aggregate retention rate for annual subscribers represents the percent of annual subscribers that renewed their subscription in the period, over the total corresponding renewal events.
Factors affecting performance
We believe that our future success will be dependent on many factors, including those further discussed below. While these areas represent opportunities for us, they also represent challenges and risks that we must successfully address in order to operate our business and improve our results of operations.
Driving profitability through improved efficiency, lower costs, and better execution.We incurred operating losses in the first nine months of 2025 and for the full year 2024. We continue to make strategic decisions to drive volume, growth, and profitability in our business. Restructuring actions in 2024and prior restructuring actions, along with continued cost management have resulted in a more efficient global organization that has allowed for improved communication and alignment among our functional teams. We are changing our approach to operate in a leaner, more focused manner that we believe is sustainable and strategic for long-term success and improved financial performance. This includes pursuing a hardware and software product roadmap we believe will drive innovation, differentiation, and growth. In the longer term, this includes increasing our total addressable market by introducing new, innovative hardware and software products, increasing unit sales volume of our new and existing products, and increasing our subscriber base. Our expectation is that sales from our retail channel will continue to increase relative to sales on GoPro.com. While growth insubscribers and subscription and service revenue has slowed, we continue to make strategic decisions to enhance our subscription offerings to grow subscribers and increase subscriber retention that results in an increase in subscription and service revenue.
Investing in research and development and enhancing our customer experience. Our performance is significantly dependent on the investments we make in research and development, including our ability to attract and retain highly skilled and experienced research and development personnel. We expect the timing of new hardware product releases to continue to have a significant impact on our revenue and we must continually develop and introduce innovative new cameras, software, and other new offerings. We plan to further build upon our integrated mobile and cloud-based storytelling solutions, as well as our subscription offerings. Our investments, including those for marketing and advertising, and those related to development efforts associated with our most recent acquisition, may not successfully drive increased revenue and our customers may not accept our new offerings. Further, we have and will continue to incur substantial research and development expenses and if our efforts are not successful, we may not recover the value of these investments.
Improving profitability. We believe that our continued focus on growing our total addressable market from our retail and GoPro.com channels, including subscription and service revenue, and broadening our range of hardware products will support our ability to return to profitability on an annual basis due to timely and effective product launches, increases in unit volume, subscribers and related revenue, and continued operating expense control.While the total market for digital imagery has seen an increase in competition, we believe that our consumers' differentiated use of GoPro cameras, our mobile app and cloud solutions, our continued innovation of product features desired by our users, and our brand, all help support our competitiveness within the market for digital cameras. However, we expect that the markets in which we conduct our business will remain highly competitive as we face new or improved product introductions from competitors such as enhanced phone capabilities and technology-enabled glasses. Sales in international locations subject us to foreign currency exchange rate fluctuations and regional macroeconomic conditions that may cause us to adjust pricing which may make our hardware and software products more or less attractive to the consumer. Continued fluctuations in foreign currency exchange rates and regional macroeconomic conditions could have a continued impact on our future operating results. Our profitability also depends on the continued success of our subscription and service offerings.
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Marketing the improved GoPro experience. We intend to focus our marketing resources on highlighting our camera features, subscription and service benefits, and further improve brand recognition. Historically, our growth has largely been fueled by the adoption of our hardware products by people looking to self-capture images of themselves participating in exciting physical activities. Our goal of returning to profitability depends on continuing to reach, expand and re-engage with this core user base in alignment with our strategic priorities. Sales and marketing investments will often occur in advance of any sales benefits from these activities, and it may be difficult for us to determine if we are efficiently allocating our resources in this area.
Seasonality. Historically, we have typically experienced the highest levels of total revenue and channel inventory sell-through in the fourth quarter of the year, coinciding with the holiday shopping season, particularly in the United States and Europe. However, total revenue in the fourth quarter of 2024 did not continue this trend due to a number of factors, including macroeconomic conditions, competition, and a delay in an expected hardware product release. In the fourth quarter of 2024, channel inventory sell-through continued the historical trend. While we have implemented operational changes aimed at reducing the impact of fourth quarter seasonality on full year performance, timely and effective product introductions, whether just prior to the holiday season or otherwise, and forecasting, are critical to our operations and financial performance.
Macroeconomic risks. Macroeconomic conditions affecting the level of consumer spending include market volatility and fluctuations in tariffs, foreign exchange rates, inflation, and interest rates. Some hardware product costs have become subject to inflationary pressure, and we may not be able to fully offset such higher costs through price increases.
Results of Operations
The following table sets forth the components of our condensed consolidated statements of operations for each of the periods presented, and each component as a percentage of revenue:
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
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(dollars in thousands)
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2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 162,918 | 100 | % | $ | 258,898 | 100 | % | $ | 449,869 | 100 | % | $ | 600,591 | 100 | % | |||||||||||||||||||||||||||||||
| Cost of revenue | 105,751 | 65 | 167,052 | 65 | 294,890 | 66 | 398,997 | 66 | |||||||||||||||||||||||||||||||||||||||
| Gross profit | 57,167 | 35 | 91,846 | 35 | 154,979 | 34 | 201,594 | 34 | |||||||||||||||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||||||||
| Research and development | 34,603 | 21 | 44,328 | 17 | 94,663 | 21 | 135,872 | 23 | |||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 24,956 | 15 | 40,686 | 16 | 73,489 | 16 | 117,185 | 20 | |||||||||||||||||||||||||||||||||||||||
| General and administrative | 13,493 | 8 | 14,843 | 6 | 43,327 | 10 | 44,470 | 7 | |||||||||||||||||||||||||||||||||||||||
| Goodwill impairment | - | - | - | - | 18,600 | 4 | - | - | |||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 73,052 | 44 | 99,857 | 39 | 230,079 | 51 | 297,527 | 50 | |||||||||||||||||||||||||||||||||||||||
| Operating loss | (15,885) | (9) | (8,011) | (4) | (75,100) | (17) | (95,933) | (16) | |||||||||||||||||||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | (2,715) | (2) | (808) | 1 | (4,948) | (1) | (2,272) | - | |||||||||||||||||||||||||||||||||||||||
| Other income (expense), net | (1,881) | (1) | 2,691 | 1 | (603) | - | 4,710 | - | |||||||||||||||||||||||||||||||||||||||
| Total other income (expense), net | (4,596) | (3) | 1,883 | 2 | (5,551) | (1) | 2,438 | - | |||||||||||||||||||||||||||||||||||||||
| Loss before income taxes | (20,481) | (12) | (6,128) | (2) | (80,651) | (18) | (93,495) | (16) | |||||||||||||||||||||||||||||||||||||||
| Income tax expense | 771 | - | 2,083 | 1 | 3,732 | 1 | 301,625 | 50 | |||||||||||||||||||||||||||||||||||||||
| Net loss | $ | (21,252) | (12) | % | $ | (8,211) | (3) | % | $ | (84,383) | (19) | % | $ | (395,120) | (66) | % | |||||||||||||||||||||||||||||||
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Revenue
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(camera units and dollars in thousands, except average selling price)
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Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | ||||||||||||||||||||||||||||||
| Camera units shipped | 459 | 881 | (48) | % | 1,252 | 1,850 | (32) | % | |||||||||||||||||||||||||||
| Average selling price | $ | 355 | $ | 294 | 21 | $ | 359 | $ | 325 | 10 | |||||||||||||||||||||||||
| Retail | $ | 122,916 | $ | 207,934 | (41) | $ | 328,279 | $ | 451,352 | (27) | |||||||||||||||||||||||||
| Percentage of revenue | 75.4 | % | 80.3 | % | 73.0 | % | 75.2 | % | |||||||||||||||||||||||||||
| GoPro.com | $ | 40,002 | $ | 50,964 | (22) | $ | 121,590 | $ | 149,239 | (19) | |||||||||||||||||||||||||
| Percentage of revenue | 24.6 | % | 19.7 | % | 27.0 | % | 24.8 | % | |||||||||||||||||||||||||||
| Total revenue | $ | 162,918 | $ | 258,898 | (37) | % | $ | 449,869 | $ | 600,591 | (25) | % | |||||||||||||||||||||||
| Americas | $ | 91,901 | $ | 109,332 | (16) | % | $ | 272,536 | $ | 274,648 | (1) | % | |||||||||||||||||||||||
| Percentage of revenue | 56.4 | % | 42.2 | % | 60.6 | % | 45.7 | % | |||||||||||||||||||||||||||
| Europe, Middle East and Africa (EMEA) | $ | 49,073 | $ | 84,416 | (42) | $ | 124,277 | $ | 200,907 | (38) | |||||||||||||||||||||||||
| Percentage of revenue | 30.1 | % | 32.6 | % | 27.6 | % | 33.5 | % | |||||||||||||||||||||||||||
| Asia and Pacific (APAC) | $ | 21,944 | $ | 65,150 | (66) | $ | 53,056 | $ | 125,036 | (58) | |||||||||||||||||||||||||
| Percentage of revenue | 13.5 | % | 25.2 | % | 11.8 | % | 20.8 | % | |||||||||||||||||||||||||||
| Total revenue | $ | 162,918 | $ | 258,898 | (37) | % | $ | 449,869 | $ | 600,591 | (25) | % | |||||||||||||||||||||||
Revenue for the third quarter of 2025 was $162.9 million, which represented a 37.1% decrease from the same period in 2024. The year-over-year decrease in revenue and camera units shipped was primarily due to the timing and mix of product launches in the third quarter of 2025 and 2024. Camera units shipped in the third quarter of 2025 decreased 47.9% year-over-year to 459 thousand, compared to 881 thousand in the same period in 2024. Our third quarter of 2025 average selling price increased 20.6% year-over-year to $355. Our third quarter of 2025 camera revenue mix from cameras with an MSRP equal to or greater than $400 was 72%, compared to 74% for the same period in 2024. Retail revenue was $122.9 million in the third quarter of 2025 and represented 75.4% of total revenue, compared to 80.3% of total revenue for the same period in 2024. GoPro.com revenue, which includes subscription and service revenue, was $40.0 million in the third quarter of 2025 and represented 24.6% of total revenue, compared to 19.7% of total revenue for the same period in 2024.
Revenue for the first nine months of 2025 was $449.9 million, which represented a 25.1% decrease from the same period in 2024. The decrease in revenue and camera units shipped was primarily due to the timing and mix of product launches in the first nine months of 2025 and 2024, consumer-related macroeconomic issues resulting in a softer global consumer market, and an increasingly global competitive landscape. Camera units shipped in the first nine months of 2025 decreased 32.3% year-over-year to 1.3 million, compared to 1.9 million in the same period in 2024. In the first nine months of 2025, our average selling price increased 10.6% year-over-year to $359, and our camera revenue mix from cameras with an MSRP equal to or greater than $400 was 73%, compared to 74% for the same period in 2024. Retail revenue was $328.3 million for the first nine months of 2025 and represented 73.0% of total revenue, compared to 75.2% of total revenue for the same period in 2024. GoPro.com revenue was $121.6 million for the first nine months of 2025 and represented 27.0%, compared to 24.8% of total revenue for the same period in 2024.
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Cost of revenue and gross margin
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
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(dollars in thousands)
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2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
| Cost of revenue | $ | 105,510 | $ | 166,690 | (37) | % | $ | 294,160 | $ | 397,716 | (26) | % | |||||||||||||||||||||||
| Stock-based compensation | 238 | 349 | (32) | 726 | 1,103 | (34) | |||||||||||||||||||||||||||||
| Restructuring costs | 3 | 13 | (77) | 4 | 178 | (98) | |||||||||||||||||||||||||||||
| Total cost of revenue | $ | 105,751 | $ | 167,052 | (37) | % | $ | 294,890 | $ | 398,997 | (26) | % | |||||||||||||||||||||||
| Gross margin | 35.1 | % | 35.5 | % | (40) | bps | 34.4 | % | 33.6 | % | 80 | bps | |||||||||||||||||||||||
Gross margin of 35.1% for the third quarter of 2025 decreased from 35.5% in the same period of 2024, or 40 bps, primarily driven by higher tariff costs (400 bps), partially offset by an increase in subscription and service revenue as a percentage of total revenue (240 bps) and a favorable product mix (120 bps).
Gross margin of 34.4% in the first nine months of 2025 increased from 33.6% in the same period of 2024, or 80 bps, primarily driven by product mix and less sales promotional activity (290 bps) and an increase in subscription and service revenue as a percentage of total revenue (220 bps), partially offset by an increase in camera costs (250 bps) and higher tariff costs (180 bps).
Research and development
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
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(dollars in thousands)
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2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
| Research and development | $ | 31,546 | $ | 39,365 | (20) | % | $ | 84,831 | $ | 119,408 | (29) | % | |||||||||||||||||||||||
| Stock-based compensation | 2,573 | 3,669 | (30) | 8,074 | 11,950 | (32) | |||||||||||||||||||||||||||||
| Acquisition-related costs | 468 | 469 | - | 1,406 | 1,094 | 29 | |||||||||||||||||||||||||||||
| Restructuring costs | 16 | 825 | (98) | 352 | 3,420 | (90) | |||||||||||||||||||||||||||||
| Total research and development | $ | 34,603 | $ | 44,328 | (22) | % | $ | 94,663 | $ | 135,872 | (30) | % | |||||||||||||||||||||||
| Percentage of revenue | 21.2 | % | 17.1 | % | 21.0 | % | 22.6 | % | |||||||||||||||||||||||||||
The year-over-year decrease of $9.7 million, or 21.9%, in total research and development expense for the third quarter of 2025 compared to the same period of 2024 was primarily driven by a $4.7 million decrease in cash-based personnel-related costs, a $3.5 million decrease in consulting and professional services, and a $1.1 million decrease in stock-based compensation expense.
The year-over-year decrease of $41.2 million, or 30.3%, in total research and development expense in the first nine months of 2025 compared to the same period of 2024 was primarily driven by a $16.9 million decrease in cash-based personnel-related costs, a $15.8 million decrease in consulting and professional services primarily due to the substantial completion of our next generation system-on-chip in 2024, a $3.9 million decrease in stock-based compensation expense, a $3.1 million decrease in restructuring costs, and a $0.9 million decrease in allocated facilities, depreciation, and supporting overhead expenses.
Sales and marketing
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
|
(dollars in thousands)
|
2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
| Sales and marketing | $ | 24,117 | $ | 38,686 | (38) | % | $ | 70,324 | $ | 110,426 | (36) | % | |||||||||||||||||||||||
| Stock-based compensation | 885 | 1,603 | (45) | 2,702 | 4,892 | (45) | |||||||||||||||||||||||||||||
| Restructuring costs | (46) | 397 | (112) | 463 | 1,867 | (75) | |||||||||||||||||||||||||||||
| Total sales and marketing | $ | 24,956 | $ | 40,686 | (39) | % | $ | 73,489 | $ | 117,185 | (37) | % | |||||||||||||||||||||||
| Percentage of revenue | 15.3 | % | 15.7 | % | 16.3 | % | 19.5 | % | |||||||||||||||||||||||||||
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
The year-over-year decrease of $15.7 million, or 38.7%, in total sales and marketing expense for the third quarter of 2025 compared to the same period of 2024 was primarily driven by a $9.2 million decrease in advertising and marketing expenses, primarily attributable to online campaigns, activation events and sponsorships, a $2.4 million decrease in cash-based personnel-related costs, a $1.7 million decrease in consulting and professional services, a $0.7 million decrease in stock-based compensation expense, a $0.4 million decrease in restructuring costs, a $0.4 million decrease in travel related expenses, and a $0.3 million decrease in allocated facilities, depreciation, and supporting overhead expenses.
The year-over-year decrease of $43.7 million, or 37.3%, in total sales and marketing expense in the first nine months of 2025 compared to the same period of 2024 was primarily driven by a $24.7 million decrease in advertising and marketing expenses, primarily attributable to online campaigns, sponsorships and activation events, a $6.9 million decrease in cash-based personnel-related costs, a $5.3 million decrease in consulting and professional services, a $2.2 million decrease in stock-based compensation expense, a $1.4 million decrease in restructuring costs, a $1.1 million decrease in allocated facilities, depreciation, and supporting overhead expenses, and a $0.8 million decrease in travel related expenses.
General and administrative
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
|
(dollars in thousands)
|
2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
| General and administrative | $ | 12,416 | $ | 12,930 | (4) | % | $ | 37,694 | $ | 36,509 | 3 | % | |||||||||||||||||||||||
| Stock-based compensation | 967 | 1,751 | (45) | 3,647 | 5,988 | (39) | |||||||||||||||||||||||||||||
| Acquisition-related costs | 9 | 15 | (40) | 12 | 796 | (98) | |||||||||||||||||||||||||||||
| Restructuring costs | 101 | 147 | (31) | 1,974 | 1,177 | 68 | |||||||||||||||||||||||||||||
| Total general and administrative | $ | 13,493 | $ | 14,843 | (9) | % | $ | 43,327 | $ | 44,470 | (3) | % | |||||||||||||||||||||||
| Percentage of revenue | 8.3 | % | 5.7 | % | 9.6 | % | 7.4 | % | |||||||||||||||||||||||||||
The year-over-year decrease of $1.4 million, or 9.1%, in total general and administrative expense for the third quarter of 2025 compared to the same period of 2024 was primarily driven by a $1.0 million decrease in cash-based personnel-related costs and a $0.8 million decrease in stock-based compensation expense, partially offset by a $0.3 million increase in allocated facilities and supporting overhead expenses, and a $0.3 million increase in consulting and professional services.
The year-over-year decrease of $1.1 million, or 2.6%, in total general and administrative expense for the first nine months of 2025 compared to the same period of 2024 was primarily driven by a $3.6 million decrease in cash-based personnel-related costs, a $2.3 million decrease in stock-based compensation expense, and a $0.8 million decrease in acquisition-related costs, partially offset by a $4.6 million increase in consulting and professional services, a $0.8 million increase in restructuring costs, and a $0.2 million increase in allocated facilities and supporting overhead expenses.
Restructuring costs
Third quarter 2024 restructuring. In August 2024, we approved a restructuring plan (the Original Restructuring Plan) and in October 2024, we approved an amended restructuring plan (the Updated Restructuring Plan). In connection with the Original Restructuring Plan and Updated Restructuring Plan, we reduced our global workforce by 25% compared to our headcount ending Q2 2024, and we recorded restructuring charges of $18.7 million, including $12.7 million related to severance and $6.0 million of project cancellation costs.
First quarter 2024 restructuring. In March 2024, we approved a restructuring plan to reduce operating costs and drive stronger operating leverage by reducing our global workforce by approximately 4% and closing certain office space. Under the first quarter 2024 restructuring plan, we recorded restructuring charges of $2.3 million related to severance, $3.3 million related to a right-of-use asset impairment upon ceasing the use of part of our headquarters campus and $0.6 million related to office space charges. The right-of-use asset impairment charge was recorded as a restructuring expense, primarily in the operating expense financial statement line items in the condensed consolidated statements of operations. The unused portion of our headquarters campus has its own
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
identifiable expenses and is not dependent on other parts of our business, and thus was considered its own asset group. As a result, we impaired the carrying value of the related right-of-use asset to its estimated fair value using the discounted cash flows method. The discounted future cash flows were based on a discount rate based on the weighted-average cost of capital. As of March 31, 2025, all restructuring charges related to the first quarter 2024 restructuring plan have been paid.
See Note 12 Restructuring charges, to the Notes to condensed consolidated financial statements.
Other income (expense)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
|
(dollars in thousands)
|
2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
| Interest expense | $ | (2,715) | $ | (808) | 236 | % | $ | (4,948) | $ | (2,272) | 118 | % | |||||||||||||||||||||||
| Other income (expense), net | (1,881) | 2,691 | (170) | (603) | 4,710 | (113) | |||||||||||||||||||||||||||||
| Total other income (expense), net | $ | (4,596) | $ | 1,883 | (344) | % | $ | (5,551) | $ | 2,438 | (328) | % | |||||||||||||||||||||||
Total other income (expense), net was expense of $4.6 million for the third quarter of 2025 compared to income of $1.9 million in the same period of 2024. The year-over-year change of $6.5 million was primarily due to a $2.6 million loss on the revaluation of the warrants issued in connection with the 2025 Credit Agreement as discussed in Note 5 Financing arrangements, a $1.9 million increase in cash interest expense primarily related to the 2025 Credit Agreement and draws on our 2021 Credit Agreement, and a $1.0 million gain on the sale of intellectual property in the prior year quarter.
Total other income (expense), net was expense of $5.6 million for the first nine months of 2025 compared to income of $2.4 million in the same period of 2024. The year-over-year change of $8.0 million was primarily due to a $2.7 million increase in cash interest expense primarily related to the 2025 Credit Agreement and draws on our 2021 Credit Agreement, a $2.6 million loss on the revaluation of the warrants issued in connection with the 2025 Credit Agreement as discussed in Note 5 Financing arrangements, and a $2.1 million decrease in interest income primarily due to an overall lower cash and investments balance in the first nine months of 2025.
Income taxes
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||||||||
|
(dollars in thousands)
|
2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
| Income tax expense | $ | 771 | $ | 2,083 | (63) | % | $ | 3,732 | $ | 301,625 | (99) | % | |||||||||||||||||||||||
We recorded an income tax expense of $0.8 million for the three months ended September 30, 2025 on pre-tax net loss of $20.5 million. Our income tax expense for the three months ended September 30, 2025 primarily resulted from a tax expense of $0.7 million on pre-tax book income in certain tax jurisdictions, discrete items that included $1.1 million of nondeductible equity tax expense for employee stock-based compensation, and tax expense of $0.1 million related to restructuring charges, partially offset by a net decrease in the valuation allowance of $1.3 million.
We recorded an income tax expense of $3.7 million for the nine months ended September 30, 2025 on pre-tax net loss of $80.7 million. Our income tax expense for the nine months ended September 30, 2025 primarily resulted from a tax expense of $4.0 million on pre-tax book income in certain tax jurisdictions and discrete items that included $3.7 million of nondeductible equity tax expense for employee stock-based compensation, partially offset by a net decrease in the valuation allowance of $3.3 million, an income tax benefit of $0.4 million related to restructuring charges, a net tax benefit on goodwill impairment of $0.3 million and foreign provision to income tax return adjustments of $0.2 million.
Each quarter, we assess the realizability of our deferred tax assets under ASC Topic 740. We assess available positive and negative evidence to estimate whether sufficient future taxable income will be generated to realize our deferred tax assets. In the assessment for the period ended September 30, 2025, we concluded that it remains more likely than not that our United States federal and state deferred tax assets would not be realizable. We will continue to monitor our financial results and future projections to assess the realizability of our deferred
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
tax assets. In the event there is a need to release the valuation allowance, a corresponding tax benefit would be recognized. Our foreign deferred tax assets in each jurisdiction are supported by taxable income or in the case of acquired companies, by the future reversal of deferred tax liabilities. It is more likely than not that our foreign deferred tax assets will be realized and thus, a valuation allowance is not required on our foreign deferred tax assets.
On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law which makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, U.S. research and experimental cost expensing, and the business interest expense limitation. ASC 740, Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which new tax legislation is enacted. We have evaluated the OBBBA enacted during the third quarter of 2025 and estimated its impact on the condensed consolidated financial statements to be immaterial.
See Note 9 Income taxes, to the Notes to condensed consolidated financial statements for additional information.
Liquidity and Capital Resources
The following table presents selected financial information as of September 30, 2025 and December 31, 2024:
| (dollars in thousands) | September 30, 2025 | December 31, 2024 | |||||||||
| Cash and cash equivalents | $ | 58,431 | $ | 102,811 | |||||||
| Marketable securities | - | - | |||||||||
| Total cash, cash equivalents and marketable securities | $ | 58,431 | $ | 102,811 | |||||||
| Percentage of total assets | 11 | % | 19 | % | |||||||
Our primary source of cash is receipts from sales of our hardware products, and subscription and service. Other sources of cash are from proceeds from the issuance of convertible notes, borrowings under our credit facility and credit agreement, employee participation in the employee stock purchase plan, the exercise of employee stock options, and facility subleases. Our primary uses of cash are for inventory procurement, payroll-related expenses, general operating expenses, including advertising, marketing, office rent, purchases of property and equipment, other costs of revenue, share repurchases, repurchases of convertible notes, acquisitions, interest, and taxes.
Our liquidity position has been historically impacted by seasonality, which is primarily driven by higher revenues during the second half of the year as compared to the first half. For example, net cash usedin operating activities during the second half of 2024 was $27.3 million, compared to cash used in operating activities of $97.8 million during the first half of 2024.
As of September 30, 2025, our cash, cash equivalents, and marketable securities totaled $58.4 million, and we had restricted cash of $94.3 million, which will be used to pay the 2025 Notes and related interest upon maturity in November 2025. The overall cash used in operating activities of $36.3 million for the nine months ended September 30, 2025 was primarily attributable to a net loss of $84.4 million, partially offset by net cash inflows from other non-cash expenses of $23.0 million, an $18.6 milliongoodwill impairment charge, and changes in our working capital of $6.5 million. Working capital changes for the nine months ended September 30, 2025 of $6.5 million were the result of a decrease in inventory of $36.7 million, partially offset by a decrease in accounts payable and other liabilities of $22.3 million, a decrease in deferred revenue of $4.6 million, an increase in prepaid expenses and other assets of $2.1 million, and an increase in accounts receivables of $1.2 million. As of September 30, 2025, $2.3 million of cash was held by our foreign subsidiaries.
2021 Credit Facility
In January 2021, we entered into a Credit Agreement which provides for a revolving credit facility (2021 Credit Facility) under which we may borrow up to an aggregate amount of $50.0 million. In March 2023 and August 2025, we amended the 2021 Credit Agreement (collectively, the 2021 Credit Agreement). The 2021 Credit Agreement will terminate, and any outstanding borrowings become due and payable in January 2027.
The amount that may be borrowed under the 2021 Credit Agreement may be based on a customary borrowing
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
base calculation if our Asset Coverage Ratio is at any time less than 1.50. The Asset Coverage Ratio is defined as the ratio of (i) the sum of (a) our cash and cash equivalents in the United States plus specified percentages of other qualified debt investments (Qualified Cash) plus (b) specified percentages of the net book values of our accounts receivable and certain inventory to (ii) $50.0 million.
Borrowed funds accrue interest at the greater of (i) a per annum rate equal to the base rate plus a margin of from 0.50% to 1.00% depending on our Asset Coverage Ratio or (ii) a per annum rate equal to the Secured Overnight Financing Rate plus a 10 basis point premium and a margin of from 1.50% to 2.00% depending on our Asset Coverage Ratio. We are required to pay a commitment fee on the unused portion of the 2021 Credit Facility of 0.25% per annum. Amounts owed under the 2021 Credit Agreement are guaranteed by certain of our United States subsidiaries and secured by a first priority security interest in substantially all of our assets and certain of our subsidiaries (including intellectual property registrations and applications, which is subject to an intercreditor agreement).
The 2021 Credit Agreement contains customary representations, warranties, and affirmative and negative covenants. We are required to maintain Liquidity (the sum of unused availability under the credit facility and our Qualified Cash) of at least $40.0 million from the date we entered into the 2025 Credit Agreement as discussed in Note 5 Financing arrangements through October 30, 2025, $45.0 million from October 31, 2025 through November 14, 2025, $50.0 million from November 15, 2025 through November 30, 2025, and $55.0 million from December 1, 2025 through the maturity date (of which at least $40.0 million shall be attributable to Qualified Cash during all periods), or, if the borrowing base is then in effect, minimum unused availability under the credit facility of at least $10.0 million.
As of September 30, 2025, we were in compliance with all financial covenants contained in the 2021 Credit Agreement. There is an outstanding letter of credit under the 2021 Credit Agreement of $5.2 million for certain duty-related requirements which was not collateralized by any cash on hand. We had fully drawn on our 2021 Credit Agreement as of September 30, 2025.
2025 Credit Agreement
On August 4, 2025, we entered into a Credit Agreement with Farallon Capital Management, L.L.C., as administrative agent and collateral agent (the Agent), and Mateo Financing LLC (the Lender). In November 2025, we amended the Credit Agreement (collectively, the 2025 Credit Agreement). The 2025 Credit Agreement provides for a second lien credit facility up to $50.0 million (the 2025 Term Loan). The 2025 Credit Agreement will mature, and any outstanding borrowings become due and payable on January 22, 2028.
Borrowed funds accrue interest, at our option, at a rate equal to (i) the applicable one or three-month secured overnight financing rate (SOFR) plus 7.5%, or (ii) the Base Rate plus 6.50%. The base rate is defined as the greatest of (i) the Wall Street Journal prime rate, (ii) the federal funds rate plus 0.50% or (iii) a per annum rate equal to the SOFR plus 1.00%. During an event of default, the applicable interest rates are increased by 2.0% per annum. For Base Rate loans, we will pay interest on a quarterly basis and at the maturity date. For SOFR rate loans, we will pay interest at least quarterly, or more frequently, as defined in the 2025 Credit Agreement, and at the maturity date. We will make quarterly principal payments on the 2025 Term Loan, with the remaining principal due on the maturity date. Under the 2025 Credit Agreement, we may be obligated to pay additional amounts which would allow for a minimum return, as defined by the 2025 Credit Agreement. The 2025 Term Loan is subject to mandatory prepayment in certain cases involving asset dispositions, debt issuances, certain receipts of cash proceeds from insurance and other extraordinary receipts, and change in control. We are required to apply 25% of excess cash flow to repay the 2025 Term Loan. Prepayments of the 2025 Term Loan, whether optional, mandatory, before, on or after January 22, 2028, or as a result of any acceleration of the 2025 Term Loan as a result of an event of default, require a prepayment premium in an amount set forth in the 2025 Credit Agreement. Amounts owed under the 2025 Credit Agreement are guaranteed by certain domestic subsidiaries, and are secured by a second lien security interest in substantially all of our assets and certain of our subsidiaries.
The 2025 Credit Agreement contains customary representations, warranties, and affirmative and negative covenants, including financial covenants. The negative covenants include restrictions on the incurrence of liens and indebtedness, certain investments, dividends, stock repurchases and other matters, all subject to certain exceptions. The financial covenants require (a) us to maintain liquidity (defined as unrestricted cash, cash
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
equivalents and availability under the 2021 Credit Agreement) of at least $40.0 million; (b) us not to have EBITDA (as defined in the 2025 Credit Agreement) of (i) less than $10.0 million for the fiscal quarter ending December 31, 2025, (ii) less than negative $12.5 million, subject to adjustment, for the period of four consecutive fiscal quarters ending March 31, 2026, (iii) less than zero, subject to adjustment, for the period of four consecutive fiscal quarters ending June 30, 2026, (iv) less than $25.0 million, subject to adjustment, for the period of four consecutive fiscal quarters ending September 30, 2026 or (v) less than $40.0 million for any period of four consecutive fiscal quarters ending on or after December 31, 2026; and (c) us not to permit an asset coverage ratio (defined as the ratio of (x) the sum of unrestricted cash, cash equivalents, and certain accounts and inventory, divided by (y) the sum of accounts payable and total debt) of less than (i) on or prior to December 31, 2025, 1.25:1.00 or (ii) thereafter, 1.15:1.00. The EBITDA thresholds for the period of four consecutive fiscal quarters ending in 2026 are subject to potential adjustments in the event of a reduction in tariff amounts in Malaysia or Thailand (or both) to a level that is 10% or lower, as described in further detail in the 2025 Credit Agreement. To the extent there are adjustments to the tariff rates of only one of the countries, the corresponding adjustments will be apportioned accordingly. Additionally, from August 4, 2025 through the maturity of the 2025 Notes, the 2025 Credit Agreement requires us to hold the full amount due upon the maturity of the 2025 Notes in a restricted account.
The 2025 Credit Agreement also includes customary events of default that include, among other things, non-payment of principal, interest or fees, inaccuracy of representations and warranties, violation of certain covenants, cross default to certain other indebtedness, bankruptcy and insolvency events, material judgments, change of control and certain material ERISA events. An event of default would also occur in the event we fail to maintain the listing of our common stock on the Nasdaq stock market for a period of 30 consecutive days. The occurrence of an event of default could result in the acceleration of the obligations under the 2025 Credit Agreement and 2021 Credit Agreement.
As of September 30, 2025, the outstanding principal under the 2025 Term Loan was $50.0 million, and we were in compliance with all of the financial covenants contained in the 2025 Credit Agreement.
On August 4, 2025, as amended on November 5, 2025, and in connection with the 2025 Credit Agreement, we issued an aggregate of 11,076,968 warrants to purchase shares of our common stock at an exercise price of $0.75. The warrants may be exercised at any time prior to 5:00 p.m. Eastern time, on August 1, 2035. Any warrants not exercised prior to such time will expire.
Convertible Notes
In November 2020, we issued $143.8 million aggregate principal amount of 2025 Notes in a private placement to purchasers for resale to qualified institutional buyers. In November 2023, we repurchased $50.0 million in aggregate principal amount of the 2025 Notes, reducing the amount owed on the 2025 Notes to $93.8 million. The 2025 Notes mature on November 15, 2025, unless earlier repurchased or converted into shares of Class A common stock subject to certain conditions. We plan to repay the 2025 Notes in cash on or prior to maturity with restricted cash on hand as of September 30, 2025. Prior to August 15, 2025, the 2025 Notes were convertible at the option of the holder. We pay interest on the 2025 Notes semi-annually, which is due on May 15 and November 15 of each year.
In connection with the offering of the 2025 Notes, we entered into privately negotiated capped call transactions with certain financial institutions (Capped Calls). We used $10.2 million of the net proceeds from the sale of the 2025 Notes to purchase the Capped Calls and $56.2 million of the net proceeds to repurchase $50.0 million of the $175.0 million aggregate principal amount of the 2022 Notes, which we issued in April 2017. The remaining net proceeds were used for general corporate purposes.
As market and financial conditions warrant, we may, from time to time, repurchase our outstanding debt securities in the open market, in privately negotiated transactions, by tender offer, by exchange transaction or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity and other factors and may be commenced or suspended at any time. The amounts involved and total consideration paid may be material.
There have been no significant changes to our contractual obligations and commitments disclosed in our 2024 Annual Report.
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity
The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. In the nine months ended September 30, 2025, our performance continued to be impacted by consumer related-macroeconomic issues resulting in a softer global consumer market, an increasingly global competitive landscape and the delay of our next generation 360-camera MAX2, which was introduced in September 2025. During the nine months ended September 30, 2025 and 2024, revenue was $449.9 million and $600.6 million, respectively, representing a 25.1% decline year-over-year. As a result, we incurred operating losses of $75.1 million and operating cash outflows of $36.3 million during the nine months ended September 30, 2025. As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $58.4 million and $102.8 million, respectively, and an accumulated deficit of $766.0 million and $681.6 million, respectively. We also had $94.3 million of restricted cash as of September 30, 2025, which will be used to pay the 2025 Notes and related interest upon maturity in November 2025. We had fully drawn on our 2021 Credit Agreement as of September 30, 2025.
We have considered and assessed our ability to continue as a going concern for at least 12 months from the issuance of these condensed consolidated financial statements. Our assessment included the preparation of a cash flow forecast taking into account the restructuring actions already implemented in 2024 and the 2025 Credit Agreement, as discussed in Note 5 Financing arrangements, which provided $50.0 million in August 2025. We considered additional actions within our control that we would implement, if necessary, to maintain liquidity and operations in the ordinary course of business including payment of the 2025 Notes upon maturity. The 2025 operational plan is structured to: (i) realize the savings in wages and benefits from the headcount reductions as part of our 2024 restructuring plans; (ii) lower research and development costs from the completion of a next generation system-on-chip and rationalized product roadmap, and the reduction of sales and marketing expenses to a reduced level consistent with the business size; and (iii) effectively manage working capital, specifically our intention to manage inventory levels to better align with our current run rates and seasonality of the business, and our intention to continue to effectively manage the collection of accounts receivables.
We estimate such actions will be sufficient to allow us to maintain liquidity and operations in the ordinary course, including payment of the 2025 Notes upon maturity on November 15, 2025, for at least 12 months from the issuance of these condensed consolidated financial statements. While we estimate such actions will be sufficient to allow us to maintain liquidity and operations in the ordinary course for at least 12 months from the issuance of these condensed consolidated financial statements, there can be no assurance we will generate sufficient future cash from operations. Factors that can impact our future cash generation include, but are not limited to, further inflation impacting consumer demand and cost of components, rising interest rates, tariffs, ongoing recessionary conditions or continued competition. If we are not successful in maintaining demand for our products or if macroeconomic conditions further constrain consumer demand, we may continue to experience adverse impacts to revenue and profitability. Additional actions within our control to maintain liquidity and operations include further reducing discretionary spending in all areas of the business and further headcount restructuring actions. In addition, we may need additional financing to execute on our current or future business strategy, and additional financing may not be available or on terms favorable to us.
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Summary of Cash Flow
The following table summarizes our cash flows for the periods indicated:
| Nine months ended September 30, | |||||||||||||||||
|
(in thousands)
|
2025 | 2024 | % Change | ||||||||||||||
| Net cash provided by (used in): | |||||||||||||||||
| Operating activities | $ | (36,272) | $ | (100,042) | (64) | % | |||||||||||
| Investing activities | $ | (2,717) | $ | 8,069 | (134) | % | |||||||||||
| Financing activities | $ | 87,835 | $ | (697) | (12,702) | % | |||||||||||
Cash flows from operating activities
Cash used in operating activities of $36.3 million for the nine months ended September 30, 2025 was primarily attributable to a net loss of $84.4 million, partially offset by net cash inflows from other non-cash expenses of $23.0 million, an $18.6 milliongoodwill impairment charge, and changes in our working capital of $6.5 million. Working capital changes for the nine months ended September 30, 2025 of $6.5 million were the result of a decrease in inventory of $36.7 million, partially offset by a decrease in accounts payable and other liabilities of $22.3 million, a decrease in deferred revenue of $4.6 million, an increase in prepaid expenses and other assets of $2.1 million, and an increase in accounts receivables of $1.2 million.
Cash flows from investing activities
Cash used in investing activities of $2.7 million for the nine months ended September 30, 2025 was primarily attributable to net purchases of property and equipment of $2.7 million.
Cash flows from financing activities
Cash provided by financing activities of $87.8 million for the nine months ended September 30, 2025 was primarily attributable to net proceeds of $113.2 million from our 2021 Credit Facility and 2025 Credit Agreement and $0.7 million of cash inflows from stock purchases made through our employee stock purchase plan, partially offset by repayments of $22.6 million on our 2021 Credit Facility, payment of debt issuance costs of $2.3 million related to our 2025 Credit Agreement, and $1.2 million in tax payments for net restricted stock unit settlements.
Indemnifications
The information set forth under Note 10 Commitments, contingencies, and guarantees in the Notes to condensed consolidated financial statements under the caption Indemnifications is incorporated herein by reference.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies and estimates from those disclosed in our 2024 Annual Report, except for estimates used in our goodwill impairment analysis.
Impairment of goodwill
We perform an annual assessment of our goodwill during the fourth quarter of each calendar year or more frequently if indicators of potential impairment exist, such as an adverse change in business climate, declines in market capitalization or a decline in the overall industry demand, that would indicate it is more likely than not that the fair value of our single reporting unit is less than the carrying value. If we determine that it is more likely than not that the fair value of our single reporting unit is less than the carrying value, we measure the amount of impairment as the amount the carrying value of our single reporting unit exceeds the fair value, up to the carrying value of goodwill, by using a discounted cash flow method and market approach method.
In the first quarter of 2025, our market capitalization declined 38% from December 31, 2024, in part due to tariff and geopolitical events, resulting in our market capitalization no longer exceeding the carrying value of our single reporting unit as of March 31, 2025. As a result, we performed a quantitative goodwill impairment analysis and
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
estimated the fair value of our single reporting unit utilizing the income approach using a discounted future cash flow model and a market approach. The analysis required estimates which required significant judgment related to the estimation of future cash flow and discount rates. The analysis was dependent on internal forecasts, estimation of the long-term revenue growth rates, terminal growth rates, profitability measures and determination of the discount rate. As a result of the quantitative impairment test, we concluded that the carrying value of our single reporting unit exceeded its fair value, resulting in the recognition of an $18.6 million goodwill impairment charge in the first quarter of 2025.
In the third quarter of 2025, our market capitalization increased 183% from June 30, 2025, and as such, we do not believe that it is more likely than not that the fair value of our single reporting unit is less than the carrying value as of September 30, 2025. Using the market capitalization approach, the fair value of our single reporting unit is estimated based on the trading price of our stock at the test date, which is further adjusted by an acquisition control premium representing the synergies a market participant would obtain when obtaining control of the business. As of September 30, 2025, the market capitalization exceeded the carrying value of our single reporting unit by 76%, which was not adjusted for an acquisition control premium which would further increase the percentage the fair value exceeded the carrying value.
The estimated fair value of our single reporting unit is affected by the volatility in our stock price. For example, a 5% decrease in our September 30, 2025 stock price would result in our market capitalization exceeding the carrying value of our single reporting unit by 75%, which is not adjusted for an acquisition control premium. If our market capitalization declines or future performance falls below our current expectations, assumptions, or estimates, including assumptions related to current macroeconomic uncertainties, this may trigger a future material non-cash goodwill impairment charge, which could have a material adverse effect on our business, financial condition, and results of operations in the reporting period in which a charge would be necessary. We will continue to monitor developments, including updates to our forecasts and market capitalization. An update of our assessment and related estimates may be required in the future.
Non-GAAP Financial Measures
We report net income (loss) and diluted net income (loss) per share in accordance with United States generally accepted accounting principles (GAAP) and on a non-GAAP basis. We additionally report non-GAAP adjusted EBITDA. We use non-GAAP financial measures to help us understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short-term and long-term operational plans. Our management uses and believes that investors benefit from referring to these non-GAAP financial measures in assessing our operating results. These non-GAAP financial measures should not be considered in isolation from, or as an alternative to, the measures prepared in accordance with GAAP, and are not based on any comprehensive set of accounting rules or principles. 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.
These non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Some of these limitations are:
•adjusted EBITDA does not reflect income tax expense (benefit), which may change cash available to us;
•adjusted EBITDA does not reflect interest income (expense), which may reduce cash available to us;
•adjusted EBITDA excludes depreciation and amortization and, although these are non-cash charges, the property and equipment being depreciated and amortized often will have to be replaced in the future, and adjusted EBITDA does not reflect any cash capital expenditure requirements for such replacements;
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
•adjusted EBITDA excludes the amortization of point of purchase (POP) display assets because it is a non-cash charge, and is treated similarly to depreciation of property and equipment and amortization of acquired intangible assets;
•adjusted EBITDA and non-GAAP net income (loss) exclude restructuring and other related costs which primarily include severance-related costs, stock-based compensation expenses, manufacturing consolidation charges, facilities consolidation charges recorded in connection with restructuring actions, including right-of-use asset impairment charges (if applicable), and the related ongoing operating lease cost of those facilities recorded under ASC 842, Leases. These expenses do not reflect expected future operating expenses and do not contribute to a meaningful evaluation of current operating performance or comparisons to the operating performance in other periods;
•adjusted EBITDA and non-GAAP net income (loss) exclude stock-based compensation expense related 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 non-GAAP net income (loss) as we believe their inclusion would hinder our ability to assess core operational performance;
•adjusted EBITDA and non-GAAP net income (loss) excludes a gain (loss) on insurance proceeds because it is not reflective of ongoing operating results in the period, and the frequency and amount of such gains and losses vary;
•adjusted EBITDA and non-GAAP net income (loss) excludes a gain (loss) on the revaluation of warrants because it is not reflective of ongoing operating results in the period, and hinders our ability to assess core operational performance;
•adjusted EBITDA and non-GAAP net income (loss) excludes goodwill impairment charges as they do not reflect ongoing operating results in the period and hinders our ability to assess core operational performance;
•non-GAAP net income (loss) excludes acquisition-related costs including the amortization of acquired intangible assets (primarily consisting of acquired technology), the impairment of acquired intangible assets (if applicable), as well as third-party transaction costs incurred for legal and other professional services. These costs are not factored into our evaluation of potential acquisitions, or of our performance after completion of the acquisitions because these costs are not related to our core operating performance or reflective of ongoing operating results in the period, and the frequency and amount of such costs vary significantly based on the timing and magnitude of our acquisition transactions and the maturities of the businesses being acquired. Although we exclude the amortization of acquired intangible assets from our non-GAAP net income (loss), management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and can contribute to revenue generation;
•non-GAAP net income (loss) excludes a gain on the sale and/or license of intellectual property. This gain is not related to our core operating performance or reflective of ongoing operating results in the period, and the frequency and amount of such gains are inconsistent;
•non-GAAP net income (loss) includes income tax adjustments which reflect the current and deferred income tax expense (benefit) and the effect of non-GAAP adjustments;
•GAAP and non-GAAP net income (loss) per share includes the dilutive, tax effected cash interest expense associated with our 2025 Notes in periods of net income, as if converted at the beginning of the period; and
•other companies may calculate these non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.
GoPro, Inc.
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following table presents a reconciliation of net loss to adjusted EBITDA:
| Three months ended | |||||||||||||||||
|
(in thousands)
|
September 30, 2025 | June 30, 2025 | September 30, 2024 | ||||||||||||||
| Net loss | $ | (21,252) | $ | (16,422) | $ | (8,211) | |||||||||||
| Income tax expense | 771 | 1,309 | 2,083 | ||||||||||||||
| Interest (income) expense, net | 1,897 | 916 | (152) | ||||||||||||||
| Depreciation and amortization | 1,800 | 1,698 | 1,826 | ||||||||||||||
| POP display amortization | 1,765 | 1,751 | 1,424 | ||||||||||||||
| Stock-based compensation | 4,663 | 5,116 | 7,372 | ||||||||||||||
| (Gain) loss on insurance recovery | 158 | - | - | ||||||||||||||
| (Gain) loss on revaluation of warrants | 2,594 | - | - | ||||||||||||||
| Restructuring and other costs | (299) | (58) | 1,105 | ||||||||||||||
| Adjusted EBITDA | $ | (7,903) | $ | (5,690) | $ | 5,447 | |||||||||||
The following table presents a reconciliation of net loss to non-GAAP net loss:
| Three months ended | |||||||||||||||||
|
(in thousands, except per share data)
|
September 30, 2025 | June 30, 2025 | September 30, 2024 | ||||||||||||||
| Net loss | $ | (21,252) | $ | (16,422) | $ | (8,211) | |||||||||||
| Stock-based compensation | 4,663 | 5,116 | 7,372 | ||||||||||||||
| Acquisition-related costs | 477 | 469 | 484 | ||||||||||||||
| Restructuring and other costs | (299) | (58) | 1,105 | ||||||||||||||
| (Gain) loss on sale and/or license of intellectual property | - | - | (999) | ||||||||||||||
| (Gain) loss on insurance recovery | 158 | - | - | ||||||||||||||
| (Gain) loss on revaluation of warrants | 2,594 | - | - | ||||||||||||||
| Income tax adjustments | (248) | (1,062) | (214) | ||||||||||||||
| Non-GAAP net loss | $ | (13,907) | $ | (11,957) | $ | (463) | |||||||||||
| GAAP diluted net loss per share | $ | (0.13) | $ | (0.10) | $ | (0.05) | |||||||||||
| Non-GAAP diluted net loss per share | $ | (0.09) | $ | (0.08) | $ | (0.00) | |||||||||||
| GAAP and non-GAAP shares for diluted net loss per share | 158,933 | 157,843 | 153,741 | ||||||||||||||
GoPro Inc. published this content on November 06, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 06, 2025 at 22:00 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]