Q4 2020 GoPro Inc Earnings Call
Good day and welcome to the go Crows Q4, 'twenty 'twenty earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Christopher Clark. Please go ahead Sir.
Thank you operator, good afternoon, everyone and welcome to Gopro, its fourth quarter and full year earnings conference call.
With me today of Gopro, CEO, Nicholas Woodman, and CFO in Cielo, Brian Mcgee.
Before we get started I'd like to remind everyone that our remarks today may include forward looking statements.
Forward looking statements and all of the 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 could differ materially.
Additionally, any forward looking statements made today are based on assumptions as of today.
But not limited to the uncertainty related to the duration and impact of the COVID-19 pandemic.
Yeah.
This means the results could change the anytime in the commentary about as much of results and outlook is based on the information available as of today's date.
We do not undertake any obligation to update these statements as the result of new information of feature of that.
Information concerning our risk factors is available in our most recent annual report on form 10-K for the year ended December 31st 2019.
The quarterly report on form 10-Q for the quarter ended September 30th 2020.
Each of which is on file with the Securities and Exchange Commission.
And as updated in the future filings with the SEC, including the annual report on form 10-K for the year ended December 31st 2020.
Today, we may discuss gross margin operating expense net profit and loss as well as basic and diluted net profit and loss per share in accordance with GAAP and Additionally on the non-GAAP basis.
We believe the non-GAAP information is useful because it can handle.
Can enhance the understanding of our ongoing economic performance.
We use non-GAAP reporting internally to evaluate and manage our operations.
To provide this information to enable investors to perform comparisons of operating results in a manner similar to how we analyze our own the operating result.
A reconciliation of GAAP to non-GAAP operating expenses can be found in the press release issued this afternoon.
And which is posted on our website.
In addition to the earnings press release, we have posted management commentary and slides containing detailed financial data and metrics for the fourth quarter and full year 2020.
The management commentary implied as long as the link to today's live webcast and a replay of this conference call. The posted on the Gopro Investor Relations websites ROI reference.
Well the income statement related numbers that are discussed today during the call other than revenue are non-GAAP unless otherwise noted.
Now I'll turn the call over to Nick the Gopro is founder and CEO Nicholas Woodman.
Thank you, Chris and good afternoon, everyone before we get started I'd like to encourage everybody to read the commentary we posted earlier today to the Gopro Investor Relations page on our website.
In addition to providing an overview of our quarterly financial results plus forward looking guidance.
The commentary provides our thoughts on our business going forward.
I will now share some brief remarks, and then we'll go directly to the Q&A.
In 2020, we have all the gopro into a more efficient subscription oriented direct to consumer business.
We grew our gopro subscriber base by 145 per cent year over year to 601000.
Subscribers and generated more than 200 million of cash flow of operations in the second half of a year.
This represented 33 per cent of our second half revenue.
And contributed to a year end cash balance of $328 million.
Strong Q4 performance resulted in 39 cents of non-GAAP EPS for the quarter.
At eight cents of non-GAAP EPS for the year.
We achieved this with disciplined expense management.
And the approach we are committed to maintain.
Our 2020 performance of amidst the pandemic demonstrates gopro is enduring relevance of the personal experience sharing solution for consumers.
Powerful creative tool for professionals.
Looking ahead.
Our plan at the continue Super serving our core customers with outsized gopro subscriber benefits, while expanding our relevance to users of other cameras and smartphones three software subscription offerings.
We believe we can maintain our rapid pace of innovation.
Watching exciting new hardware and software products backed by significant world class marketing.
All within reasonable spend levels that are directionally in line with 2020.
We're excited about 2021, you can that's the pandemic.
We've proven time and again, the gopro can thrive during challenging times.
We believe the steps, we're taking to strengthen our business today will benefit of some stage when the world eventually rebounds from the pandemic in earnest.
Fortunately as the business we.
We do not have to wait for that day.
I want to thank our employees around the world for their resilience and adaptability throughout 2020.
Your dedication and World class execution is why we are well positioned for the future.
And now operator, we're ready to take questions.
Yeah.
All right. If you would like to ask a question you may signal by pressing star one on your telephone keypad, if you kind of go.
The speakerphone. Please share your mute function is true signal to reach our equipment of which comes on the phone line of indicating your line is open.
Again that the star one to ask a question I will pause for just a moment to allow everyone an opportunity to signal.
All right, we'll take the first question from Paul Chung with J P. Morgan.
Okay.
Hi, Thanks for taking my question.
So just on your full year 'twenty, one guidance given the large kind of seasonal mix in the second half what kind of gives you the confidence.
Providing some visibility there.
You know what kind of large factors can can sway the it's higher.
Maybe possibly rebounds of about 4 million kind of unit salad per year.
In the past and then I have a follow up.
Okay.
Yeah, Hi, Paul This is Brian well, let's talk about 2020, we sold through 3.6 million of index and we shipped them about 2.8 million units and that Delta is because we took channel inventory down about 800000 units and ended the year at about six.
Kind of 50000 units in the channel. So that's an important distinction to make and and we think we've got the right channel inventory and.
In place as we look to 'twenty one.
We expect to continue on.
On the do you just see the transition and shift our revenue up from the 30 <unk>.
The 2% that we had in 2022, 38% to 42%.
And Ah in 2021 at the favorite have very good visibility until the first quarter and our trends some of the sell through and selling perspective are hitting the mark are related.
Related to our guide of 185.
No end of Q1.
And so we.
We think on a range that the sell through is kind of being a true.
For the $2 6 million units.
Right now and selling and in the kind of.
Three two to three four so we may see about 100000 unit or sort of reduction in the channel.
Even in 'twenty, one and that's really due to the fact that we're growing our expectation is to grab more of M. P. D. C and so we would continue the trend our retail inventories a bit and keep them at healthy levels.
And going into the end of 'twenty, one and into 2022.
Gotcha, thanks of that.
And then Doug.
The unit sell through was off by maybe around 100, K relative to guidance kind of what drove the difference there I noticed regionally EMEA and Asia were a bit softer and you mentioned the pandemic, but you know it is.
Is there kind of more preference for north American consumers of the kind of go to the website and what's been the split overseas for Gopro Dot com sales and how you're driving more traffic there.
The comments you can make thanks.
Yeah, a good part of the great record quarter, Yeah, we doubled the business young of year over year basis of about 92% sequentially.
Sequentially sales terrific performance on broker Dot com era of.
The revenue came in.
Within our guidance.
But then the split between retail and consumer.
Then like 5% of our of our revenue, what's the kind of split between the little bit more heavy to retail of empty the.
See we definitely saw some slowness and EMEA.
And APAC channel are largely related to COVID-19.
North America did do well in.
Better than what we expected.
<unk> made up for for some of that in Europe and in Asia. We've also are taking that into account as we looked at our forecast for Q1 and the trending on sell through.
We think it's trending right into the 700000 units that I was provided on the commentary.
Okay, Great and then part of last had so just to add to that.
One more of a bit of color.
Specifically to your slide that there seem to be of preference.
With consumers for shopping offline versus online in certain regions like of beer or.
Our Asia.
And the answer to that is no.
We definitely saw a strong dotcom performance.
Then some softness as a COVID-19 lockdowns.
<unk> ramped up and.
The consumer.
Online shopping.
Did take the hit.
As a part of that so we could map of the softness to COVID-19.
Covid lockdowns intensifying in certain regions.
So they're just sort of does not seem to get the.
Not seem to be a.
A headwind for us as it relates to growth our business internationally with the husband.
Specifically the tender.
And then my last question is on you know the Gopro subs of very good progress there or what kind of features of our users engaging with the boats and then next year when we kind of lap that large cohort of subs from your line sales what kind of gives you the cough sensing and low churn rates and retention than you know are there.
The kind of cumbersome.
The high switching costs for consumer maybe related to the stores that would kind of the deter them from moving off Gopro.
So the subscription service.
Well the consumer behavior.
They're taking advantage of the various.
Gopro subscription benefits is mapping too.
The consumer insights research that we did and that we do ongoing.
Understand what are the biggest drivers where people are signing up as the subscriber.
And I'm happy to say that they are taking advantage of the key benefits.
Benefits and that gives us the good.
Your line as it relates to.
Subscribers getting value out of the subscription.
They're making use of the the subscription benefits ongoing.
And that just <unk>.
Wants to engage customer that we believe we're going to be able to do a good job of retaining.
We have as we've shared.
Very impressive.
Uh-huh and low churn rates, we're really happy with those we continue to drive those down as we continue to improve both the marketing of subscription and driving awareness of the benefits of that consumers can take advantage of them and they're happier customers and you get better retention and that's all moving in the right direction. So we feel really good about.
That and that's just where we are today in February.
So we've got a lot of untapped for the rest of the year to further improve our retention and keep.
Current law.
And part of the thing I guess I would add on top of of it.
Have that the visibility we are seeing solid traction you're going into Q1, when you go up the dot com.
And that's also what's helping to drive up our ask Jeeves, we're seeing margin improvement you saw.
In Q4.
Given a little bit of the expanded margin in our guide for 'twenty, one after the Sept, 39%.
And the the implied guidance for.
And the management commentary wood wood.
0.2 of very profitable growth in 2021 with solid again solid cash generation in the 150 million of short range. So we're very happy with how the results went in Q4 and the look ahead in 'twenty one.
Great. Thank you.
Alright, once again that is star one to ask a question. If you find your question has been answered you may remove yourself from the queue by pressing star two.
Our next question is from Andrew <unk> with Oppenheimer and company.
Hey, gentlemen, thanks for the last couple of questions the.
The first one I guess is probably for Nick.
With the with the new I guess the.
New subscription the 999 subscription.
Yeah. The presumably this is trying to capture the the the and they use they are using the gopro app that don't have cameras. So what what's the how should we think about that number.
As it fits into your subscription number for the year.
And if you could shed any light on.
Hi.
Hopefully convert those those folks too.
The traditional gopro users.
Sure. Thanks, Andrew Yeah.
Yeah, we're really excited about the upcoming revamp.
And subscription based offerings of the Gopro App you're spot on it's the away for us to serve as a <unk>.
Personal content.
The solution, helping users of any camera of including smartphones get the most out of their personal photos and videos are we all suffer from the bottomless pit that is our camera roll you know the <unk>.
When you get a great capture of great photo or video or have one sent to you and you say the to your camera role and do you have that moment, where you guys totally look at look at it and you acknowledged as the good chance you're never going to see that again.
And that's a very widespread problems.
Share by everybody that uses the phone.
With the phone, they're lucky because they they actually know where their photos and videos are.
<unk>.
And so with the the.
The upcoming Gopro App revamp with the Bureau of Wall feature.
It makes it really easy for you at the user to send that photo or video that you know the moment you can see it but thats something that youre going to want to keep track of and revisit later and you said of the App. None of you have to open the app too.
Could it go there.
Right from your camera roll and it'll be presented to you on your euro which serves as a chronological feet of.
Your personal.
Favorite moments and then combined with that our all of our.
The top tier powerful editing tools out of video of generation.
The capabilities and ultimately the Gopro app is going to scale over time as the most enabling yet simple.
The help you get the most out of your personal content.
And we think that this is a.
Significant sized market globally.
We think our brand is really well positioned to solve this problem for people and importantly, we have the brands to drive awareness to grow.
Usage of this out at what we believe will be impressive scale.
It's directly in our wheelhouse, we don't have to take on.
Very much additional opex to go and make this possible per.
The people that don't on adult probably because we're already building the solution or a gopro users.
But by making of subscription based.
We can extend access to it too.
Anybody that owns the smartphone or another camera and over time, we think that this is going to be a really meaningful solution for people that is going to punch way above its weight class in terms of its value proposition to what the user will pay to use it on an annual basis.
So we're pretty excited.
Yeah got it I appreciate the additional color this is.
The next question I guess.
Yes.
Sorry to answer the last one part of your question and the answer is the.
Quick App, which we sunset at the year half of gel.
Uh huh.
Has roughly 8.6 million monthly active users that's of free App.
It's very outdated relative to the new Gopro App experience and it's a pretty significant opportunity for us to.
Market, the new Gopro App experience to these quick users and migrate them over time to the Gopro App and then of course, we have the roughly 5 million monthly active users of the Gopro App itself.
Debt.
Assuming they are not already.
Gross subscribers for 49 99 a year.
It's also an opportunity for us to upsell them to the $10 a year of functionality that the.
Well.
It includes the Bureau.
The experience as well as.
A slew of premium editing tools that we're going to roll out over time. So those are just too many growth initiatives that we've got.
For this new subscription service.
Got it got it that's helpful and then.
And I guess what.
When I when I think about you got your unit guidance for net.
For 'twenty and 'twenty one.
It looks like it's coming in a.
A little bit down year over year is that all of a sell through basis, sorry, all of the software version.
Is that is that mostly just cost of your caution around COVID-19.
Or is there something more to it are related to just.
The fewer stores and and just a further decline in the retail any color there would be helpful.
Yeah, Hi, Andrew it's Brian.
It's related to the number of covered for one and being cautious I think of as the world opens up the opportunity to expand that sort of if you recall last year early on in 2020, we were worried about the $2 2 million to three quite small and we ranked the vector.
The $3 six same of sell through so we have the ability to.
The step it up.
That would increase profitability further back because we get a lot of some of which 11 of them that and so but I think that's that's all of that but we will also see more movement to the to the high end of 303 hundred dollar of more price point and the last one the <unk>.
Lower end as well so.
That's helping to drive the S P.
The support and Gopro dot com, the suffering with margins and profitability. So.
We think you know it's it's on balance we're thinking about the we have today and I think those are hopefully upside of the world a ton.
The back.
Got it and then just last question it looks like based on your guidance.
Your cash balance by the end of the year.
A healthy amount of one we haven't seen it a while.
How is that affecting your view on potential.
And that investment opportunities, whether it's M&A or internal.
How are you thinking about that kind of net use of cash going forward.
Yeah well.
Most of your uses of cash in 'twenty, two will pay back the $125 million of Jack right on the convert and Theres more in 2025.
The split that up and actually paid some off early in Q4.
Which is good.
I think from an Opex perspective, we said we would continue to be hawkish, we will continue to invest in innovation and technology and improving the website experience for Gopro Dot com.
So those are key initiatives for the company will take investment.
There's other areas that we'll be able to do.
The more prudent and cut back so we want US day, you know in the $305 million to $315 million range for Opex in 2021.
It's upside because you know of revenues up too so that that's also contributing it to go up but.
Definitely going to make those investments and be prudent about our cash balances and actually to your point we were.
The 328 million ending the year of 2020, we Havent had a 300 million the number in cash for a member of the year. So.
The cash generation in the second half was all above $200 million AR, which was Oh those are the records of the company now two quarters in the World, where we have 100 million in operating cash flow.
Got it. Thank you. Thank you so much guys great quarter.
Thank you.
Oh I'm sorry, we'll take the next question, Jim Suva with Citigroup investment research.
Thank you, Nick and Brian and I sincerely want to say congratulations on managing through a very very very challenging year of 2020 quite.
Quite quite remarkable results.
One question for Brian and one for Nick Brian you being CFO the norm.
Emily we talked to you about seasonality quarter to quarter and I realize 2020 was very difficult. When you gave in your commentary of some very good 2021 outlooks for revenues and EPS seasonality kind of still in place largely or with Covid lapping Dallas.
And you have to think about vaccines being prevalent more as we increase through the year of maybe people go on vacation and travel and do more extreme stuff later on the year is there a chance the second half could be.
You didn't seasonally.
Longer stronger stronger than expected or I'm, just kind of wondering what you built into your guidance and then for Nick.
CEO.
You moved to a subscription model has been fantastic are there a couple of apps or interface items or variables, whether it be video editing of the upload function that really surpassed your expectations. It seems to really draw the subscriber base and even more I was just kind of wondering because I know the you have a lot.
[noise] of enhancements, which one two or three really are bringing.
Bringing in the bringing in so much. Thank you.
Yeah, Hi, Tim Thank you let me.
We expect the of year over year basis to grow in every quarter in 'twenty. One over 2020 of the biggest growth of course will be in quarter, one and COVID-19 too.
And because of what will be a true guidance implies 55% growth in Q1, 'twenty one of our Q1 'twenty of.
Obviously in the first half was one of the depends on the cat.
Of 'twenty so.
There will be some seasonality Q2, and Q4 10 of the seasonally stronger for the company and so you should expect that kind of in the modeling.
Yeah.
Great, Thanks, Brian and Nick anything out of that that the haps. It really is bringing the sub so much.
Yeah, It's a good question as I share before.
We're happy to see that.
Both of our research and the reality of how consumers are taking advantage of subscription benefits are aligning but of course the.
The savings of Gopro Dot com are important and we're seeing the lion's share of.
Lifestyle goods and.
In accessories sales.
Going to our subscribers.
Taking advantage of the 30% to 50% savings that they get out of Gopro Dot com.
Non camera items.
That's really good to see because that shows one that there's a comprehension of those savings and.
And two yes, we're seeing subscribers came for the 49 99 annual subscription very quickly.
With the savings that theyre getting through the backpacks or thereabouts and accessories with our cameras are the <unk>.
Hats and shirts that they're buying.
There's real value there and it adds up quickly to the 49 99 handle the gopro of subscription so that's a really positive sign.
But the as relates to the App.
The content backup is really important to our customers, whereas the company that helps people capture some of the most exciting of meaningful moments in their lives when they want it safeguards to at the moment.
Cloud backup.
There's a significant value and we're seeing.
Good usage, there and then the editing tool.
That we offer and the Gopro App are really important to our.
Our subscribers and that's one of the reasons, we're really excited about.
The upcoming Gopro App revamped the because we're going to be Charles.
Introducing do editing tools that of <unk>.
Click per our customers' ongoing.
And as well of course the euro.
Content management wall, which is going to do a phenomenal job of helping people keep track of the content that they're capturing them and generating the easily share from the wall.
It's going to be a significant enhancement to the overall experience.
Building on <unk>.
What our customers are already using in capitalizing on the feedback, they're giving us a whole day amongst the Max So kudos.
Kudos to our research consumer research team.
And our product teams for.
Both going out of the learning what our customers want from us.
Then going and building it for them.
Paying off in spades, and I think thats each.
Underlying strength in the business that you see is that.
This is still approach serving of real purpose of People's lives and we are doing a terrific job of it and I think thats why youre seeing the business performed so well.
Sincere congratulations to you and your team on the on a great year and looking forward to 2021. Thank you.
Thank you Jack we're realists, we're really looking forward to.
2021, because if gopro can perform this way of amidst the pandemic as I mentioned in my prepared remarks, we don't need the pet we all want the pandemic to go away for obvious reasons, but as the business.
Not sitting around waiting for that to happen, we're driving a successful and growing business and we're well poised for one of the world. The begins the snapback.
All right, we'll take the next question from Nick toward of with the.
Longbow Research.
Yes, the things guys.
Brian I think when you guys announced your plans to transition to the direct business model into two of the time I think you expected Gopro dot com to become a majority of your sales in 2021.
You got of below 50% for of Gopro Dot Com in 2021, and I think the fourth quarter was the second quarter in a row of Gopro dotcom sales came a little bit lower than our expectations. I. Just wonder has anything changed as of the original comment you made when you the amount of the plants to go direct and true we think that Gopro dot com.
Will you should we expect gopro dot com to become the majority of those sales at some point in time.
Let me start with that one.
When we first talked about that back in May.
May retail was completely shut.
Quite frankly, and we saw it on our website in the I believe were over 40% in Q2 2020.
And it also wasn't clear how.
Our retail is going to come back quite frankly, when the pandemic within the end.
We can have.
Early on on the run business.
On our site, we double that on the year over year basis.
<unk>.
And so since then we've seen retail come back it's still an important channel. So we have two strong channels.
At we get product to consumers a gopro.
The comp plus the retail channel.
Globally.
That's actually a.
Our real advantage I think from the distribution perspective for.
The company that we have that reach whether it be gopro dot com or retail.
Oprah Dot Com is obviously, a more profitable channel for us and will continue to drive that and subscriptions.
But no.
We're very happy with the fact that we were able to throughout 2020, you raise the numbers and part of that was due to retail coming back in a good chunk of it was the dot com.
The driving of quite a lot of business.
Yeah, I would add to that.
You're never going to hear us complaining about retail coming back better than expected and being a healthy channel for us.
Yeah, Thank god for our retailers and many thanks to them for their continued support of Gopro.
Out of saying one of our core values of gopro strength of numbers right.
Going it alone is.
A lot riskier than when you've got a number of strategic partners to help you succeed and that's the case of Gopro that said the.
The bounce back of.
Our retail channels our performance.
Is actually helpful to gopro because of it.
It reduces the risk significantly as we continue to make investments to improve.
Our direct to consumer capabilities.
Whether it's you know being able to do a better job.
Direct marketing to consumers.
As bars that an individual as opposed to just of mass market blast of everybody in it.
Not even sure who owns the camera in all of those are investments that we're making that are going to yield significant returns for us this year.
And as well, we're investing significantly in our E commerce platform.
To do a much better job of merchandising the cameras upsell them.
Accessories, and again, having a better understanding of who the customer is and what they might actually want to buy from us of where they are in their gopro lifecycle and.
These are all investments of developments of that take time and it's it's fantastic that our teams were able to double our direct to consumer Gopro Dot com revenues last year, but the.
About how quickly we have to do that and what <unk>.
Treatments, we were able to make sure our approach from the technical standpoint, the team got a ton done, but it's just a fraction of the opportunity we have to enhance our capabilities. So while we have.
A strong retail.
Channel to help us drive our business, while we make investments and improve our direct to consumer capabilities I, just I don't see how that could possibly be seen as a negative.
That's another way of answering the question that we absolutely see significant opportunities to grow our direct.
The business over time and this isn't this is a marathon not of sprint and Theres just the.
A lot of greenfield opportunity of our approach.
Got it.
The Nick maybe a more.
A question on overall demand trends and sell it through I mean.
I look at the implied full year guidance it sounds like youre still expecting to sell through to be down in the second half of the calendar year.
Most people are operating under the impression that there's going to be some normalization from the COVID-19, but maybe this is you know you're thinking differently and that's part of the reason for that guidance I think if you look at the broader consumer electronics space.
The expectations of that there's it's not growth for 2021 that demand will be at least flat versus very challenging there.
The very easy compare from 2020, how are you thinking about overall demand environment. So of Gopro as the go forward.
Well I'll pick that up in the Brian do you want to add anything.
We shared our demand outlook.
In terms of our guide.
At the I think where we differ from.
Traditional consumer electronics per se is that.
In many ways, we're tied the human activity.
And the more active humans are consumers are the more of they're out and about the more of their celebrating life and sharing experiences the more.
More of a.
Valued proposition, we represent two of those consumers.
So if youre talking about.
Streaming video game sales or video game platforms consoles or things of that remain in the house when somebody finally goes outside and travels more and this is more active.
We don't fall into that same stay at home consumer electronics category.
So that the that relates to my point that we're very well positioned for to succeed during the pandemic.
And even better positioned to thrive on another level as the world.
Even if it take baby steps bounced.
Bouncing back, but you can imagine the the outsized positive impact that that can have on our business now we're not factoring that into our guide.
Our our outlook is that.
You know the the World continues to go along the way that it's been in certain areas of the of the world there'll be a better condition as it relates to the pandemic and others of it might be hit harder.
But net net we think that we're positioned to succeed.
And make no mistake the world will bounce back at some point and we will be there waiting.
Yes.
And Nick of I think the other point to make a sort of looked at.
The distribution by quarter.
It's more evenly distributed which is actually kind of the more normal at least with them.
Currently we have two full going up for seasonality of of course.
Of that enables us to be profitable in quarters, two three of them for the salary guided our purpose of breakeven.
Or minus I think true in Q1, so you have the app.
We can be.
Profitable in Q1.
We haven't done that in quite a long time, so in the very possible gopro in 2021, and continuing to generate a lot of cash and if if the demand profile comes back stronger as Nick had mentioned.
The World comes back.
The opportunity to drive more profitability of more revenue growth, but you know, what we're forecasting 20% to 25%.
On the year over year basis, which is pretty darn. Good most of that on the unit, but also some on the SP as we continue the shift of the high end of strategy, we've taken on the.
2019, that's worked very well for the company and for the consumers for the product they get.
Yeah.
Okay.
As Brian and I and the last question.
Nick I think it was last quarter just share some metrics about the conversion rate.
On the subscription on purchases to Gopro Dot com I believe if not mistaken and that number was $80 85 per se on people, who bought flagship cameras, maybe can you provide us an update on that metric and.
How should we think about the conversion rates on on the retail.
It seems like you mentioned, it's much lower I wonder if you can give us some numbers. Thanks.
Yeah, Yeah, maybe act since the start on that one and then Mike can chime in.
Yeah on the conference call back in November.
Southern initial uptake for subscription of broker dot com in the 80 to 85 per cent range as you had mentioned.
Through the quarter that continue to decline.
Recently ended at close to 90%.
The conversion on <unk> dot com, so definitely stepped up the tough with subscriber growth number.
And that's continued quite frankly, even into Q1. So that's the that's the very nice metric and organic through retail is obviously much lower and I think those rates are somewhere around.
Seven of 12% kind of range. So obviously the lions share.
The subscribers coming from Gopro Dot com.
Okay got it thanks, guys. Good luck.
Thank you.
You May go out.
Once again, if you would like to ask a question. Please press star one on your telephone keypad.
And we'll take the next question from Erik Woodring with Morgan Stanley.
Eric Your line is open if you would like to ask a question.
As of the winter.
Yes, yes, we can hear you go ahead, okay, perfect sorry about the guys.
Just wanted to follow up on one of the Andrews questions earlier, just just obviously.
Significant cash balance.
But at the same time your Capex has fallen to lessen the was $5 million of in 2020, you start just I'd love to get your outlook on how you think about the growing if you think about that growing into the future why not ramp that higher as you're kind of building the business, becoming more profitable generating more cash.
I have a follow up.
Yeah, a lot of the Capex quite frankly is related to two things point of purchase displays and retail, which I think of the lion's share of it.
And then tooling in such a from an engineering perspective.
<unk> been able to.
We really do a good job of managing much more tightly.
And.
The engineering Capex spend.
The bid on the engineering team for.
Being much more prudent and efficient in how we go about doing that.
So that's important to note and then P. O P. Because we're reducing retail footprint, we don't need to spend as much money on P. L. P and that's another reason why going more direct is actually a more efficient and effective.
Our method for us to go to market and why.
The better from a profitability perspective.
Okay. That's helpful.
The second question would just be I love that Youre trying to solve this problem of having all of these pictures and videos loss in your camera all I can obviously.
And it's something I suffer from as well.
But I consider myself.
Some of it is aware of the brand how are you guys going too low.
Get that brand awareness out to those consumers that perhaps arent gopro users that are only smartphone users of perhaps don't know the gopro brand as well as that.
Just curious how you guys think about going about doing that.
Yeah.
Well.
There are a number of ways to drive awareness for apps.
The debt will be employing but we haven't really had the do before for the gopro app, because we really only target the gopro app at hardware Gopro hardware owners that's true.
But yeah it.
It's not rocket science, we we've had a lot of success with the Quik, App, which I mentioned, we sunset that almost two years ago and it still has $8 6 million monthly active users.
It's been quite of incredibly well regarded and consumer reviews are very highly ranked in the GAAP stores.
And so we'll be employing the same tactics that we use to grow the popularity of the quik app to scale. The gopro apps awareness of the Gopro App and its popularity outside of the Gopro community, but make no mistake I think the.
The gopro.
Fan base.
It's in the.
A neighborhood of $45 million and 46 million social followers.
Direct followers and then of course, you have the extended follower base of all of the Influencers.
I believe some celebrities that we work with it.
At the very large.
Brand network that we've got that we're gonna be leveraging to drive awareness of this new product that we've got.
So on the marketing front and on the branding front, we're feeling very good cause.
We're pretty well regarded for being a strong marketing organization.
And then it's all about value and really solving problems for people and as you know when you have a great product and you make your your customers successful. They also do a wonderful job of driving awareness for the through their advocacy and because.
The the Gopro App is centered around helping you get the most out of your photos videos, when you're doing that and sharing the more often from the gopro App that is also going to virally drive awareness for the yeah. So the list goes on and in terms of the number of ways that we have to drive awareness in <unk>.
Similarly scale.
Perhaps subscription into something meaningful over time.
No that's really helpful senses of that color.
I guess the last question for Brian just I'm just curious you guys obviously gave.
Guidance for Opex in 2021, but we're just curious how youre thinking about that from the sales and marketing relative to R&D relative to the G&A perspective, if you're a if your sales.
We're growing all of those line items of Youre pulling back and are growing some of them. Thanks.
Yeah, I think we will see some growth in R&D.
There'll be a little bit of growth in sales and marketing.
But some.
Some things we are able to spend less on.
Basically being offset by investment and will see reductions in G&A.
Okay. That's awesome. Thank you guys.
Thank you.
Alright. It appears there are no further questions at this time, Mr. Woodman I'd like to turn the conference back to you for any additional or closing remarks.
Thank you operator.
Thank you everyone I'd like to reiterate our excitement for gopro as future and for 2021, where we plan to super serve our customers through high value subscription offerings and in parallel scale Gopro as margin profitability and importantly predictability we.
We believe we can continue to succeed during this pandemic, which puts us in a strong position for when the world begins to recover in the Ernest.
Thank you again to all of the Gopro as employees and partners, who are making this possible. We're grateful for this group of win.
And thank you to everyone for joining today's call.
Genuinely appreciate your time and support.
This is team gopro signing off.
This concludes today's call. Thank you for your participation you may now disconnect.
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