GoPro (GPRO) Q4 2025 Earnings Call Transcript

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Date

Thursday, March 5, 2026 at 5 p.m. ET

Call participants

• Founder and CEO — Nicholas Woodman
• EVP, CFO, and COO (President effective March 17, 2026) — Brian T. McGee

Takeaways

• Revenue -- $202 million for the quarter, which was below the guidance range of $220 million plus or minus $5 million.
• Adjusted EBITDA -- Positive $1 million for the quarter, with a full-year loss of $29 million that improved from a $72 million loss the prior year.
• Cash flow from operations -- Positive $16 million in the quarter, marking the third consecutive quarter of positive cash flow and representing a $41 million year-over-year improvement.
• Gross margin -- 33.8% for the year, stable with the prior year despite a negative impact of about $20 million from tariffs.
• Operating expenses -- Reduced $93 million to $261 million for the year, a 26% decrease from 2024, due to restructuring and expense controls.
• Loss per share -- GAAP loss per share of $0.59 and non-GAAP loss per share of $0.30, both significantly improved from prior year losses of $2.82 and $2.42, respectively, which included a $1.93 per share tax valuation allowance impact.
• Subscription and service revenue -- Flat at $106 million for the year, or 16% of total revenue.
• Average selling price (ASP) -- $357 in 2025, an eight percent year-over-year rise.
• Channel revenue composition -- Retail channel contributed $482 million (74% of revenue), with gopro.com contributing $170 million (26%), reflecting a slight year-over-year shift.
• Inventory management -- Thirty-five percent reduction in inventory during 2025; quarter-end saw a 30,000 unit decrease in channel inventory, with fourth quarter sell-through at 625,000 cameras.
• AI content licensing initiative -- Over 500,000 hours of subscriber content submitted for licensing since third quarter launch; revenue from the program to be recognized in first quarter 2026, with participant payouts later in the year.
• Product launches and pipeline -- Multiple products launched in 2025, including Max 2 360 camera, Lit Hero camera, and Fluid Pro AI gimbal, with the GP3-powered camera line set to launch in second quarter 2026.
• Processor innovation -- Introduction of in-house GP3 processor, featuring a five-nanometer process and more than two times the pixel processing power of predecessor; internal tests show up to 40%-90% longer camera run times versus competition.
• 2026 revenue guidance -- Projected $750 million to $800 million, representing nearly 20% growth at the midpoint, driven by new product launches and AI content licensing.
• 2026 subscription and service revenue outlook -- Expected approximately 10% growth from ARPU and retention improvements, offset by a forecasted seven percent decline in subscriber count to 2,200,000.
• 2026 operating expense guidance -- Targeting $220 million to $230 million, following the prior year’s $261 million, citing reduced litigation and employee-related costs.
• 2026 adjusted EBITDA guidance -- Forecasted range of $10 million to $20 million, reflecting anticipated margin pressure from memory price increases of approximately 500 basis points.
• Liquidity position and financing -- Closed $25 million of a $50 million financing; expect to end 2026 with $50 million in cash plus $35 million available on ABL and $25 million from recent financing.
• Patent and litigation update -- U.S. International Trade Commission issued exclusion and cease-and-desist orders blocking Insta360 infringing products from the U.S. and affirmed GoPro's design patent rights.
• AI training program partnerships -- Working with AI partners for content licensing, and preparing to close additional third-party agreements in 2026.
• Tech-enabled helmet program -- Ongoing collaboration with AGV on a motorcycle helmet integrating digital imaging technology, with public updates planned later in the year.

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Risks

• Management cited "heightened uncertainty that exists due to volatility in tariff rates, memory pricing, memory availability, consumer confidence, competition, component supply chain, and global economic uncertainty."
• Memory price increases are expected to impact gross margin by approximately 500 basis points year over year in 2026.
• 2026 subscription revenue growth projection is "slightly offset by subscribers projected to be down seven percent year over year to 2,200,000."

Summary

GoPro (NASDAQ:GPRO) announced key leadership changes, naming Brian T. McGee as President and COO and Brian Trapp as CFO, with both positions effective March 17, 2026. Management highlighted successful cost-reduction initiatives and a streamlined operating structure, resulting in a significant turnaround in adjusted EBITDA and cash flows from operations versus the prior year. The company introduced its proprietary GP3 processor, touting major efficiency and performance gains ahead of the second quarter camera launch, and expects this innovation to drive increased market share across both core and new product segments. Substantial progress in new revenue initiatives included the AI content licensing program—with over 500,000 hours of user submissions—and active pursuit of additional third-party partnerships to scale monetization through 2026. The U.S. International Trade Commission’s ruling favoring GoPro against Insta360 strengthened intellectual property protections and was cited as validation of GoPro's innovation-centric business model.

• Management confirmed, "We expect adjusted EBITDA to be in a range of $10 million to $20 million in 2026," contrasting with a loss of $29 million in 2025 and citing margin compression from memory costs.
• GoPro outlined a forecast for operating expenses to decline further in 2027, targeting $200 million to $210 million.
• The company described current cash plus untapped ABL facilities and new financing as sufficient to support operations through anticipated product launches and ongoing initiatives.
• The collaboration with AGV for a tech-enabled helmet signifies GoPro's entrance into adjacent markets, with public teasers promised soon.

Industry glossary

• GP2 / GP3 processor: GoPro's internally developed systems-on-chip (SoC) powering its camera lineup, with GP3 representing the newest generation and offering enhancements in processing power, efficiency, and AI support.
• AI content licensing: Program enabling opt-in subscribers to monetize their video content by licensing it for machine-learning model training to AI partners.
• ABL facility: Asset-based lending credit line, allowing the company to borrow against eligible assets such as receivables or inventory.
• Sell-through: Actual sales of product by distributors or retailers to end customers, a metric tracked to monitor true product demand.
• ASP (average selling price): The average price realized per unit sold across all channels or a specific channel.

Full Conference Call Transcript

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 fourth quarter and full year 2025 performance, as well as outlook, please read our Q4 and full year 2025 earnings press release and management commentary we posted to the investor relations section of GoPro, Inc.’s website. Before I pass the call to Nick, I would 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 12/31/2024, 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 and remarks made today other than revenue are non-GAAP. I will now turn the call over to GoPro, Inc.’s founder and CEO, Nicholas Woodman.

Nicholas Woodman: Thanks, Robin. Thanks, everybody, for joining us today. As Robin mentioned, Brian and I will share brief remarks before going into Q&A, and I want to encourage all on the call to read the detailed management commentary we posted on our investor relations website. I would like to begin by congratulating Brian McGee, GoPro, Inc.’s current EVP, CFO, and COO, on his appointment to the role of President and COO. In his expanded role as President, Brian will further strengthen company-wide alignment and execution, enabling cross-functional teams to move faster and more cohesively towards our strategic goals. Brian is a very talented and passionate operator with a collaborative approach to problem-solving and strategy development.

I am very excited for what GoPro, Inc. can accomplish with Brian in his new role. I am also pleased to share that Brian Traff, GoPro, Inc.’s current VP of Finance, will serve as our CFO. Brian Trapp has served as an integral part of GoPro, Inc.’s finance team for 13 years and has earned the respect and trust of the entire GoPro, Inc. organization. I am excited for him to bring his deep understanding of our business and his fresh perspectives to the CFO role, leading our accounting and finance teams. These leadership changes will become effective on March 17.

In 2025, we broadened our hardware and software offerings, delivering on the first stage of our mission to diversify our business and expand our TAM. During the year, we launched our new 360 camera, Max 2, delivering the only true 8K video resolution in the consumer 360 camera category, featuring durable Twist-and-Go replaceable lenses, trademark GoPro, Inc. durability and versatility, and a new ecosystem of 16 360-centric accessories. We also launched our new Lit Hero camera, an ultra-compact, lightweight, rugged action and lifestyle camera that has the widest field-of-view lens in its class and an integrated light enabling captivating photos and video in even no-light, pitch-black scenarios.

And we launched our new professional-grade gimbal, Fluid Pro AI, a best-in-class multi-camera AI subject-tracking gimbal that is compatible with GoPro, Inc. cameras, smartphones, and point-and-shoot cameras weighing up to 400 grams. In addition, we launched a steady cadence of new software functionalities, including new 360 content editing features such as AI-powered subject tracking and cloud-based 360 editing via our Qwick mobile app. Additionally, we launched a GoPro reframe plugin for DaVinci Resolve, low-light denoise enhancements in the GoPro Player desktop app, and Apple projected media profile support for the highest fidelity video playback in Apple Vision Pro.

And in Q4, we made progress on several strategic initiatives, including GoPro, Inc.’s AI training program and development of our tech-enabled motorcycle helmet with our partner and leading Italian motorcycle helmet brand, AGD. We are pleased to share a meaningful update on our AI training program. We are now working with select AI partners, providing them access to authentic, high-quality GoPro, Inc. content contributed by U.S. subscribers who opted in to monetize their GoPro, Inc. cloud-based content for AI model training. We plan to recognize revenue from the program in Q1, and later this year we will make our first monetary payouts to participating GoPro, Inc. subscribers whose content was selected. The program creates value for all stakeholders.

AI partners gain real-world video to train their models, participating GoPro, Inc. subscribers earn money through a revenue share, and GoPro, Inc. benefits from a new scalable, high-margin revenue stream. Since launching the program in Q3 2025, we have seen strong subscriber enthusiasm, with more than 500,000 hours of diverse, high-quality video content submitted to date and steady growth as we continue expanding the program to more subscribers globally. We expect to close further agreements with additional third-party licensing partners throughout 2026. Shifting gears, we continue to advance on our tech-enabled motorcycle helmet program developed jointly in partnership with AGV.

Together, GoPro, Inc. and AGV are leveraging each other's design, engineering, and brand strengths to deliver significant innovations that enhance safety, performance, and enjoyment for motorcyclists, all wrapped into a helmet design that is simply stunning in every regard. We look forward to providing investors with more substantial updates on this program later this year, and we plan to publicly share a few product teasers in the near future, so stay tuned for that. Turning to recent developments, on February 26, the U.S. International Trade Commission reaffirmed our design patent rights by issuing exclusion and cease-and-desist orders against Insta360, blocking their infringing products from the U.S. market.

This decision, combined with the Patent Trial and Appeal Board's rulings last year upholding multiple patents covering our HyperSmooth technology, validates what we have always known: GoPro, Inc. is built on original innovation. Our patent portfolio now exceeds 1,500 U.S. patents, and we will continue to defend against competitors who choose to copy rather than create. Our commitment to innovation has driven many advancements in digital imaging, from the world's far-and-away best in-camera video stabilization HyperSmooth, to industry-leading image quality, resolutions, and frame rates, best-in-class wide-angle fields of view, and more, all in rugged and versatile small form factor cameras.

Our custom GP2 processor played an important role in many of these innovations and helped power our flagship cameras to market-leading positions. At the same time, GoPro, Inc. imposed a few constraints that limited how far we could push our cameras in certain areas of performance—specifically power efficiency, thermal performance, and low-light use cases. Most notably, GP2's low-light constraint hampered GoPro, Inc.’s ability to compete in the fast-growing premium low-light–capable camera category, a market segment we estimate to have been approximately 2.0 to 2.5 million units annually in 2025.

Enter GP3, GoPro, Inc.’s soon-to-be-released next-generation processor, which is designed to deliver industry-leading power efficiency, run times, and thermal performance, along with best-in-class low-light performance not yet seen in a small form factor camera, or even many professional cameras. As we announced earlier this week, our new exclusive GP3 processor represents the most significant advancement in processing power and image quality in GoPro, Inc.’s history. Whereas GP2 was a 12-nanometer SoC, GP3 is a 5-nanometer SoC that delivers more than 2x the pixel processing power of GP2, resulting in industry-leading resolutions and frame rates that go far beyond what the competition is capable of.

GP3 also features a dedicated AI MPU that enables significant gains in low-light image quality when combined with low-light image sensors, and industry-leading power efficiency and thermal performance that significantly outperforms the competition. To quantify how efficient and far ahead GP3 is, in our own internal testing we are seeing camera run times ranging from 40% to 90% longer than the competition, and similarly impressive thermal performance advantages over the competition, in addition to demonstrably better image quality. To say that we are fired up about GP3 and the new GP3-based cameras we are launching in Q2 would be an understatement.

We expect GP3 to serve as a pivotal growth catalyst for GoPro, Inc., setting new performance benchmarks for the digital imaging industry as a whole, enabling GoPro, Inc. to lead in our existing core and gain meaningful share in new professional product categories, including the quickly growing low-light camera equipment segment, beginning this Q2. I encourage you to visit the news section of gopro.com to check out several jaw-dropping images captured with one of our soon-to-be-released GP3 cameras. I think you will agree with me that GoPro, Inc. is about to enable a new dimension of performance and capability.

Additionally, despite ongoing macroeconomic pressures facing the consumer sector, including tariffs and rising memory costs and supply constraints, we are working towards strengthening our operating profile, as Brian will outline, while also advancing our next product cycle with meaningful technological enhancements. We are at the start of a new era of technological and performance leadership for GoPro, Inc., with a clear opportunity to grow revenue and operating income, as Brian will share in his remarks. We are highly motivated by what is ahead for GoPro, Inc. and want to thank our employees, suppliers, retail and distribution partners, and our shareholders for your support. We are very excited. Now I will turn it over to Brian.

Brian T. McGee: Thanks, Nick. Fiscal 2025 improved substantially over 2024 in a number of key areas, including operating expense reductions of $93,000,000, flat gross margins of 34% despite a $20,000,000 impact due to Aika tariffs, inventory reduction of 35%, all culminating in an improvement in cash flow from operations of $104,000,000. In Q4 2025, revenue was $202,000,000 versus our guidance of $220,000,000 plus or minus $5,000,000, and we generated positive adjusted EBITDA of $1,000,000. Cash flow from operations was positive again for the third quarter in a row at $16,000,000, a $41,000,000 improvement year over year. Sell-through was at the midpoint of guidance at 625,000 camera units, which resulted in a 30,000 unit decrease in channel inventory.

Looking back on the year, notable financial performance highlights include revenue from our retail channel was $482,000,000, or 74% of revenue, compared to 75% of 2024 revenue. Revenue from gopro.com channel, which includes subscription and service revenue, was $170,000,000, or 26% of revenue, compared to 25% of 2024 revenue. Subscription and service revenue was flat year over year at $106,000,000, or 16% of revenue. 2025 street ASP was $357, an 8% improvement year over year. Gross margin was 33.8% compared to 34.1% in the prior year, despite negative impacts related to IFRS of approximately $20,000,000 incurred in 2025. Operating expenses reduced $93,000,000 from $354,000,000 to $261,000,000, a 26% decrease year over year.

GAAP and non-GAAP loss per share was $0.59 and $0.30, respectively, compared to prior year loss per share of $2.82 and $2.42, respectively. 2024 GAAP and non-GAAP loss per share were impacted by $1.93 per share due to the establishment of a $295,000,000 tax valuation allowance that was recorded in 2024. Adjusted EBITDA was negative $29,000,000 compared to negative $72,000,000 in the prior year. Cash flow used in operations was $21,000,000 compared to cash used in operations of $125,000,000 in 2024, a $104,000,000 improvement. Turning to 2026, our outlook is prefaced by heightened uncertainty that exists due to volatility in tariff rates, memory pricing, memory availability, consumer confidence, competition, component supply chain, and global economic uncertainty.

To provide color on our expectations and priorities for the year, we expect revenue to grow in 2026 to approximately $750,000,000 to $800,000,000, or nearly 20% growth at the midpoint, based on our existing lineup of products, the introduction of several new products starting in Q2, and additional AI content licensing this year. We expect subscription and service revenue to grow approximately 10% due to improvements in ARPU growth of 10% and improvements in attach rates and retention rates, which is slightly offset by subscribers projected to be down 7% year over year to 2,200,000. We expect operating expenses to be in the range of $220,000,000 to $230,000,000, down from $261,000,000 in 2025, or a 14% reduction.

The anticipated decrease is primarily due to a reduction in litigation expenses, prior restructuring actions which resulted in reduced employee-related costs in 2025, and a continued strong focus on expense management. The cumulative effect of our planned actions is expected to result in a reduced operating expense range in 2027 of between $200,000,000 and $210,000,000. We expect memory price increases, both DRAM and NAND, to impact margin by approximately 500 basis points year over year. We expect to have enough memory to meet our unit and revenue goals for 2026. Today, we announced a $50,000,000 financing, of which we closed $25,000,000.

In addition, we amended loan covenants for our ABL and debt agreement, the key details of which can be found in the 8-K we filed concurrent with today's earnings. We expect our liquidity position to be adequate, and we expect to end 2026 with approximately $50,000,000, plus or minus $5,000,000, in cash, along with an additional $35,000,000 available under our ABL facility and $25,000,000 available under our recent financing agreement. We expect adjusted EBITDA to be in a range of $10,000,000 to $20,000,000 in 2026, an improvement from losses of $29,000,000 in 2025 and $72,000,000 in 2024.

Relative to our prior outlook of trailing twelve-month adjusted EBITDA of $40,000,000 for 2026, it is worth noting that memory pricing impacted the trailing $40,000,000 EBITDA by $40,000,000 for a total impact of nearly $60,000,000 in 2026. In closing, we believe our strategy is working. We are in the midst of an exciting innovation cycle with the launch of leading products, continued AI content licensing, and other services expected over the next several years that we believe will bolster our market position while expanding our TAM. We expect to continue operating expense reduction initiatives in 2026 that we initiated in 2024 to mitigate memory cost increases.

We believe we will restore revenue growth and deliver adjusted EBITDA in a range of $10,000,000 to $20,000,000 in 2026. Operator, we are now ready to take questions.

Operator: Thank you. We will now open for questions. Again, to ask a question, please press star followed by one on your telephone keypad. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question. We will pause here briefly as questions are registered. The first question comes from the line of Erik Woodring with Morgan Stanley. You may proceed. Erik, your line may be muted. Erik, your line may be muted. There are currently no questions registered at this time. As a brief reminder, if you would like to ask a question, please press star followed by one on your telephone keypad. There are no questions waiting at this time.

I would now like to pass the conference back to the management team for any closing remarks.

Nicholas Woodman: Thank you, operator, and thanks, everybody, for joining today's call. As we shared, we are excited for the year ahead and particularly for this Q2 and the launch of our new GP3-based cameras that we believe will mark a new era of technical and performance leadership for GoPro, Inc. We believe this will ultimately result in revenue and profit growth for the company. Be sure to stay tuned to our social channels for product teases and more as we approach the launch of our new products. Thanks again, everyone. This is Team GoPro, signing off.

Operator: That concludes today's call. Thank you for your participation, and enjoy the rest of your day.

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