Q3 2025 GoPro Inc Earnings Call
Hello, everyone and welcome to the Gopro third quarter 2025 earnings call. My name is Shirley and I'll be coordinating the call. Today, you will have the opportunity to ask questions at the end of the presentation.
To Register your question based press Star followed by one on your telephone keypad.
102 host Robyn circa director corporate Communications at Gopro, Inc. To begin from Ing. Please go ahead.
Thank you Charlie.
Afternoon, and welcome to go over the third quarter of 2025 earnings Conference call.
Today, our Gopro, CEO, Nicholas Woodman, and CFO and CFO, Brian Mcgee.
His agenda will include a brief commentary from Nick and Brian followed by Q&A.
For detailed information about our third quarter as well as outlook. Please read our Q3 earnings press release and management commentary, we posted to the Investor Relations section of Cafepress website.
Before I pass the call to Nick I'd like to remind everybody that our remarks today may include forward looking statements.
We're 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 Adil.
Additionally, any forward looking statements made today are based on assumptions as of today. This means that results could change at any time and we do not undertake any obligation to update these statements as a result of new information or future events.
To better understand the risks and uncertainties that could cause actual results to differ from our commentary. We refer you to our most recent annual report on Form 10-K for the year ended December 31, 2024, which is on file with the Securities and Exchange Commission and other reports that we may file from time to time with the SEC.
Today, we may discuss gross margin operating expense net profit and loss adjusted EBITDA as well as basic and diluted net profit and loss per share in accordance with GAAP and on a non-GAAP basis.
A reconciliation of GAAP to non-GAAP operating expenses can be found in the press release that was issued this afternoon, which is posted on the Investor Relations section of our website.
Unless otherwise noted all income statement related numbers that are discussed in the management commentary and remarks made today other than revenue are non-GAAP now I'll turn the call over to go cause founder and CEO Nicholas Woodman.
Thanks, Robin and thanks to everybody for joining us today.
Robin mentioned, Brian and I will share a brief remarks before going into Q&A and I want to encourage all on the call to read the detailed management commentary posted on our Investor Relations website.
The third quarter marked significant progress in our strategy to grow our business by developing our hardware and software offerings.
And diversifying our hardware and software offerings.
In Q3, we launched three new hardware products and several new software products that helped us exceed our Q3 revenue guidance.
Our teams are executing with efficient precision and we're excited to build on this momentum as youll hear from Brian. We believe we have turned an important corner and we expect to return to unit revenue and profitability growth on a year over year basis. This Q4 and for 2026.
Our.
<unk> machine is accelerating to increase our Tam beyond the 3 million unit action camera category.
In Q3, we launched our highly anticipated match to 360 camera, our new ultra compact lift hero camera and fluid pro AI, our new multi camera compatible gimbal designed for creators that own multiple types of cameras and need one gimbal to meet their multi camera stable.
<unk> needs.
Max two to 360 camera opens up a new growth segments, which we estimate the tam to be nearly 2 million units annually.
We're excited to regain market share with the launch of our Max two to 360 camera and where you are.
And we're fully further expanding our Tam with lit hero with its playful aesthetic ease of use and versatility, making it especially appealing to a younger demographic looking to capture and share moments on the go.
Additionally, the low light capable camera segment, which we estimate the Tam to be two to $2 5 million units annually represents a significant opportunity for gopro as we do not currently participate in this market but plan to.
Our tech enabled motorcycle helmets initiative is progressing and collaboration with HGV is already underway.
Both teams are working closely to deliver innovative safety and performance features combined with the fun of effortlessly, capturing immersive Gopro video while riding we.
We look forward to providing updates as development progresses.
Starting with Max to what a game changer.
Its industry, leading 360 technology combines with its true video resolution to capture up to 21% more resolution than the competition.
<unk> also features convenient and durable twist and go replaceable lenses, making it easy to swap out a lens in the field without tools, our calibration and inconvenience inherent with competitive products.
And we recently launched an innovative and expansive new line of 16, 360 centric accessories and mounts that expand Max two's creative potential and versatility.
Early customer feedback has been resoundingly positive with many praising Max twos superior image quality ease of use and durability.
And then September Gopro on a 2025 technology and Engineering Emmy Award in recognition of our innovative <unk> technology, which is core to our 360 cameras and software.
This is <unk> third Emmy for innovations related to digital imaging and our first in the 360 technology category.
We believe Max two will help grow share in the global 360 camera market.
Max two is now available online and on shelf at retailers globally.
We're also excited about our second new camera, we launched in Q3 lit hero and ultra compact lifestyle camera designed for whatever whenever capture with its built in photo and video light.
Let hero opens up creative possibility in any setting day or night and delivers a fun retro inspired look to the images it captures.
And the third new hardware product, we launched in Q3 as fluid pro AI, our advanced multi camera AI subjects tracking gimbal designed for todays multi camera content creators looking for a high performance gimbal that meets their multi camera needs.
Fluid pro AI is compatible with all Gopro cameras smartphones end point and shoot cameras up to 400 grams, making it remarkably versatile for capturing smooth professional looking content, while blogging, capturing sports or documenting life's most meaningful moments.
Fluid pro AI represents an exciting opportunity for gopro to participate in the global gimbal market.
As we enter the holiday season Gopro now offers a diversified line of eight industry, leading camera skus that range from an MSRP of $199 to $649 more than 70 versatility expanding camera mounts and accessories.
And an industry, leading mobile app and subscription experienced that adds enormous convenience and value to gopro subscribers.
And we're just getting started we.
We believe our current offerings serve as an incredible foundation to build on with the planned launch of several exciting new products in 2026 that we believe will result in revenue profit and market share growth across our business.
Turning to software in Q3, we launched several new 360 related editing tools that make immersive 360 content creation easy for everyone.
And we updated our quik mobile app with several new 360 editing features including AI powered subject tracking convenient pov and selfie modes and cloud based 360 editing.
These powerful new features significantly enhance the convenience and creative experience for Max and Max to owners and Gopro subscribers.
Our subscription model continues to exceed our expectations contributing enormous value to both subscribers and our bottom line.
We anticipate renewed subscriber and associated revenue growth in 2026 fueled by camera unit growth and the launch of new editing and content management features that we expect to significantly enhance convenience capability and value.
And we continue to see strong engagement from subscribers opting into our AI training program, which will earn them, 50% of the third party licensing revenue, we expect to generate on their behalf.
<unk> subscribers have contributed more than 270000 hours of video content during the AI training programs invitation only outreach period, which began in July 2025.
We are in discussion with several AI data licensees to address their demand for authentic real world video content for AI model training.
We believe this program represents a meaningful opportunity over time for both our subscribers and Gopro and we look forward to sharing progress as the program continues to evolve.
As Brian will detail, we have amended our second lien credit agreement to address volatility in tariff rates, given our commitment and expectation to achieve the minimum $40 million in trailing 12 month adjusted EBITDA by year end 2026.
Personally backing our commitment with a $2 million equity infusion into the company.
In summary, we're executing against our strategy and we're seeing the results improved product diversification via the launch of industry, leading hardware and software products and an expected return to unit revenue and profitability growth in Q4 2025.
We expect to build on this momentum in 2026 with the launch of several new innovative and differentiated products and services that we believe will lead to consistent quarterly camera unit and revenue growth on a year over year basis, and a swing from losses in recent years to solid adjusted EBITDA profitability in 2012.
Six.
Many thanks to all of Gopro is incredibly talented passionate and committed employees.
Your execution is enabling us to realize our vision to the benefit of our customers and investors alike.
Now I will turn the call over to Brian to share some details on our financials and outlook.
Operator: Hello everyone, and welcome to the GoPro third quarter 2025 earnings call. My name is Charlie, and I'll be coordinating the call today. You will have the opportunity to ask a question at the end of the presentation. If you'd like to register a question, please press star followed by one on your telephone keypad. I'll now hand over to your host, Robin Stecker, Director, Corporate Communications at GoPro. To begin, Robin, please go ahead.
Subscribers, who contributed more than 270000 hours of video content during the AI training programs invitation only outreach period, which began in July 2025.
Thanks, Nick.
Third quarter of 2025 revenue was $163 million and gross profit was 35, 2% in line with guidance, which is the second consecutive quarter of positive cash flow from operations of $12 million, a $14 million improvement year over year.
We are in discussion with several AI data license fees to address their demand for authentic real world video content for AI model training.
We believe this program represents a meaningful opportunity over time for both our subscribers and Gopro and we look forward to sharing progress as the program continues to evolve.
Robin Stoecker: Thank you, Charlie. Good afternoon and welcome to GoPro's third quarter 2025 earnings conference call. With me today are GoPro CEO, Nicholas Woodman, and CFO and COO, Brian McGee. Today's agenda will include brief commentary from Nick and Brian, followed by Q&A. For detailed information about our third quarter, as well as outlook, please read our Q3 earnings press release and management commentary we've posted to the investor relations section of GoPro's website. Before I pass the call to Nick, I'd like to remind everybody that our remarks today may include forward-looking statements. Forward-looking statements and all other statements that are not historical facts are not guarantees of future performance and are subject to a number of risks and uncertainties, which may cause actual results to differ materially. Additionally, any forward-looking statements made today are based on assumptions as of today.
Demand for our cameras as measured your sell through was 5% better than we predicted.
As Brian will detail, we've amended our second lien credit agreement to address volatility in tariff rates.
Inventory declined 30% in the prior year quarter and has reduced to four consecutive quarters as we prepare for the upcoming holiday quarter.
Given our commitment and expectation to achieve the minimum $40 million in trailing 12 month adjusted EBITDA by year end 2026.
As we look to the fourth quarter, our outlook is processed by highlighting by heightened uncertainty that exists due to volatility in tariff rates consumer confidence competition component supply chain and global economic uncertainty.
Personally backing our commitment with a $2 million equity infusion into the company.
In summary, we're executing against our strategy and we're seeing the results improved product diversification via the launch of industry, leading hardware and software products and an expected return to unit revenue and profitability growth in Q4 2025.
For the fourth quarter, we expect revenue growth at the midpoint of guidance of 10% to $220 million.
non-GAAP net income per share of three plus.
Plus or minus <unk>, <unk>, and adjusted EBITDA positive $12 million compared to our prior year adjusted EBITA loss.
We expect to build on this momentum in 2026 with the launch of several new innovative and differentiated products and services that we believe will lead to consistent quarterly camera unit and revenue growth on a year over year basis, and a swing from losses in recent years to solid adjusted EBITDA profitability in 2020.
Robin Stoecker: 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 31 December 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.
$14 million with 26 million dollar improvement.
All of these expected improvements are due to the actions we took in 2024 to launch new products in the second half of 2025.
Lease operating expenses diversify our supply chain and drive product cost reductions, which were partially offset by higher tariffs.
Six.
Many thanks to all of Gopro is incredibly talented passionate and committed employees.
Our execution is enabling us to realize our vision to the benefit of our customers and investors alike.
<unk> in the fourth quarter to be approximately $350 up slightly year over year.
Now I'll turn the call over to Brian to share some details on our financials and outlook.
We expect unit sell through to be down 18% year over year at the midpoint of guidance to 625000 units.
Robin Stoecker: A reconciliation of GAAP to non-GAAP operating expenses can be found in the press release that was issued this afternoon, which is posted on the investor relations section of our website. Unless otherwise noted, all income statement-related numbers that are discussed in the management commentary and remarks made today, other than revenue, are non-GAAP. Now, I'll turn the call over to GoPro's founder and CEO, Nicholas Woodman.
Thanks, Nick.
For the third quarter of 2025 revenue was $163 million and gross profit was 35, 2% inline with guidance, we achieved a second consecutive quarter of positive cash flow from operations of 12 million, a $14 million improvement year over year.
And channel inventory to be nominally up sequentially.
We continue to actively manage the balance sheet and expect to further reduce inventory sequentially in the fourth quarter. In addition, we expect to end the year with cash and cash equivalents in the range of 60 to.
65 million, along with an additional $50 million available under our ABL facility.
And for our cameras as measured yourself through 5% better than we predicted channel inventory declined 30% in the prior year quarter and has reduced to four consecutive quarters as we prepare.
Nicholas Woodman: Thanks, Robin, and thanks everybody for joining us today. As Robin mentioned, Brian and I will share brief remarks before going into Q&A. I want to encourage all on the call to read the detailed management commentary we posted on our investor relations website. The third quarter marked significant progress in our strategy to grow our business by developing our hardware and software offerings, and diversifying our hardware and software offerings. In Q3, we launched three new hardware products and several new software products that helped us exceed our Q3 revenue guidance. Our teams are executing with efficient precision, and we're excited to build on this momentum. As you'll hear from Brian, we believe we have turned an important corner, and we expect to return to unit, revenue, and profitability growth on a year-over-year basis this Q4 and for 2026.
We expect gross margin in the fourth quarter to be 32% at the midpoint of guidance.
Down compared to the prior year quarter of 35%, primarily due to tariffs excluding tariffs gross margin in the fourth quarter 2025 would be approximately 37%.
Upcoming holiday quarter.
As we look to the fourth quarter, our outlook is processed by highlighting by heightened uncertainty that exists due to volatility in tariff rates consumer confidence competition component supply chain and global economic uncertainty.
We expect fourth quarter 2025, operating expenses to be $63 million at the midpoint of our guidance range and more than 25% reduction from the prior year quarter due to lower spending on wages from lower head count reduced marketing and engineering expenses.
For the fourth quarter, we expect revenue growth at the midpoint of guidance of 10% to $220 million.
non-GAAP net income per share of <unk>, plus or minus <unk> <unk>.
We expect shares outstanding to be approximately $177 million in the fourth quarter.
And adjusted EBITDA positive $12 million compared to our prior year, adjusted EBITDA loss of $14 million or $26 million improvement.
As we look ahead to 2026.
The following.
To grow units and revenue in 2026 based on both our existing lineup of products as well as new products and services expected to be introduced next year.
All of these expected improvements are due to the actions we took in 2024 to launch new products in the second half of 2025 reduce operating expenses diversify our supply chain and drive product cost reductions, which were partially offset by higher tariffs.
Nicholas Woodman: Our innovation machine is accelerating to increase our TAM beyond the 3 million unit action camera category. In Q3, we launched our highly anticipated MAX 2 360 camera, our new ultra-compact Lit Hero camera, and Fluid Pro AI, our new multi-camera compatible gimbal designed for creators that own multiple types of cameras and need one gimbal to meet their multi-camera stabilization needs. MAX 2 360 camera opens up a new growth segment, which we estimate the TAM to be nearly 2 million units annually. We're excited to regain market share with the launch of our MAX 2 360 camera, and we're further expanding our TAM with Lit Hero, with its playful aesthetic, ease of use, and versatility, making it especially appealing to a younger demographic looking to capture and share moments on the go.
Expectation is to grow units and revenue each quarter in 2026 on a year over year basis.
Full year 2026, operating expenses to be approximately $250 million slightly down year over year.
Estimates due to SG&A in the fourth quarter to be approximately $350 up slightly year over year.
To continue to offset approximately half of our expected tariff costs of $45 million.
We expect unit sell through to be down 18% year over year at the midpoint of guidance to 625000 units and channel inventory to be nominally up.
In 2026 with modest price increases and continued supply chain diversification.
Subscription <unk> growth of 5% and to end 2026 up 2% to $2 4 million subscribers.
Julie.
We continue to actively manage the balance sheet and expect to further reduce inventory sequentially in the fourth quarter. In addition, we expect to end the year with cash and cash equivalents.
Our liquidity position.
More than adequate during 2020.
Six and we expect to end 2026 with approximately $80 million.
Range of 60 to.
65 million, along with an additional $50 million available under our ABL facility.
And cash plus or minus 5 million, along with an additional $50 million available under our ABL facility.
We expect gross margin in the fourth quarter to be 32% at the midpoint of guidance down compared to the prior year quarter of 35% primarily due to the tariffs excluding tariffs gross margin in the fourth quarter 2025 would be approximately 37%.
Nicholas Woodman: Additionally, the low-light capable camera segment, which we estimate the TAM to be 2 to 2.5 million units annually, represents a significant opportunity for GoPro, as we do not currently participate in this market but plan to. Our tech-enabled motorcycle helmets initiative is progressing, and collaboration with AGV is already underway. Both teams are working closely to deliver innovative safety and performance features, combined with the fun of effortlessly capturing immersive GoPro video while riding. We look forward to providing updates as development progresses. Starting with MAX 2, what a game changer. Its industry-leading 360 technology combines with its true 8K video resolution to capture up to 21% more resolution than the competition. MAX 2 also features convenient and durable twist-and-go replaceable lenses, making it easy to swap out a lens in the field without tools or calibration, an inconvenience inherent with competitive products.
They are experienced some margin pressure year over year due to.
Tariffs and increase in component prices, which we expect to partially offset with improvements in supply chain.
As detailed in the management commentary in our filing we have amended our debt agreements due to changes in tariff rates, we expect adjusted EBITDA to be greater than $40 million in 2026.
We expect fourth quarter 2025, operating expenses to be $63 million at the midpoint of our guidance range and more than 25% reduction from the prior year quarter due to lower spending on wages from lower head count reduced marketing and lower engineering expenses.
Improvements from losses of $18 million in 2025 and $72 million in 2024.
We expect shares outstanding to be approximately $177 million in the fourth quarter.
In closing we believe our strategy is working.
In the midst of an innovation cycle with the continued launch of new products and services are expected over the next several years.
As we look ahead to 2026.
The following.
To grow units and revenue in 2026 based on both our existing lineup of products as well as new products and services expected to be introduced next year.
<unk> lift and initiatives, we undertook in 2020 forward to reduce operating expenses and improve supply chain. In 2025, we do believe we will restore unit and revenue growth and deliver strong adjusted EBITDA of at least $40 million in 2026.
Expectation is to grow units and revenue each quarter in 2026 on a year over year basis.
Full year 2026, operating expenses to be approximately $250 million slightly down year over year.
Operator, we're now ready to take questions.
Nicholas Woodman: We recently launched an innovative and expansive new line of 16 360-centric accessories and mounts that expand MAX 2's creative potential and versatility. Early customer feedback has been resoundingly positive, with many praising MAX 2's superior image quality, ease of use, and durability. In September, GoPro won a 2025 Technology and Engineering Emmy Award in recognition of our innovative 360 technology, which is core to our 360 cameras and software. This is GoPro's third Emmy for innovations related to digital imaging and our first in the 360 technology category. We believe MAX 2 will help grow share in the global 360 camera market. MAX 2 is now available online and on shelf at retailers globally. We're also excited about a second new camera we launched in Q3, Lit Hero, an ultra-compact lifestyle camera designed for whatever, whenever capture with its built-in photo and video light.
Thank you of course, if you'd like to ask a question on todays call. Please press star followed by one on the telephone keypads, maybe low to retool. Your question. Please press star followed by two when preparing to ask a question. Please ensure your line is on mute locally as a reminder, that star followed by one.
To continue to offset approximately half of our expected tariff costs of $45 million.
In 2026 with modest price increases and continued supply chain diversification.
Subscription <unk> growth of 5% and to end 2026 up 2% to $2 4 million subscribers.
Our first question comes from Erik Woodring of Morgan Stanley. Your line is open. Please go ahead.
Great. Thank you very much for taking my questions guys.
Our liquidity position.
It would be more than adequate during 2020.
Maybe if I could just start.
Six and we expect to end 2026 with approximately $80 million.
I'm on for Q sell through I think I think you were saying that you expect sell through to be down I think it was 18% year over year.
And cash plus or minus 5 million along with them.
And a $50 million available under our ABL facility.
Can you just talk about.
They are experienced some margin pressure year over year due to.
Kind of the puts and takes there you launched three new cameras. This year versus two last year I think the timing of the launches. This year was a little later than last year.
Tariffs and increase in component prices, which we expect to partially offset with improvements in supply chain.
So just why we're seeing subsequent down as opposed to the opposite because theres no flagship camera just any details you could help us understand there. Please.
Detailed than the management commentary in our filing we have amended our debt agreement due to changes in tariff rates, we expect adjusted EBITDA to be greater than $40 million in 2026 and.
Yeah, you nailed it.
An improvement from losses of $18 million in 2025 and $72 million in 2024.
Yeah.
I have to be a little hesitant.
Nicholas Woodman: Lit Hero opens up creative possibility in any setting, day or night, and delivers a fun, retro-inspired look to the images it captures. The third new hardware product we launched in Q3 is Fluid Pro AI, our advanced multi-camera AI subject tracking gimbal designed for today's multi-camera content creators looking for a high-performance gimbal that meets their multi-camera needs. Fluid Pro AI is compatible with all GoPro cameras, smartphones, and point-and-shoot cameras up to 400g, making it remarkably versatile for capturing smooth, professional-looking content while vlogging, capturing sports, or documenting life's most meaningful moments. Fluid Pro AI represents an exciting opportunity for GoPro to participate in the global gimbal market. As we enter the holiday season, GoPro now offers a diversified line of eight industry-leading camera SKUs that range from an MSRP of $199 to $649.
We it's clear that we didn't launch of new flagship hero camera this year.
In closing we believe our strategy is working we are in the midst of an innovation cycle with the continued launch of new products and services are expected over the next several years.
In Q3 for Q3, Q4 sales and what I can say is that.
That is strategic.
In preparation for 2026 launches.
Combined with the initiatives, we undertook in 2020, Florida reduce operating expenses and improve supply chain. In 2025, we do believe we will restore unit and revenue growth and deliver strong adjusted EBITDA of at least $40 million in 2026.
So a little bit of patients now.
Yields.
We believe.
Significant upside in 2026.
So it's a it's a bit of a.
We've got something special planned.
Operator, we're now ready to take questions.
So we appreciate market patient investor patience, and we think that this decision is going to significantly.
Thank you of course, if you'd like to ask a question on todays call. Please press star followed by one on your telephone keypad.
Help us grow units revenue and profit in first half of 2026.
So to your question. Please press star followed by two when preparing to ask a question. Please ensure your line is on mute locally as a reminder, that star followed by one.
Okay pleasure delay.
Yes.
[laughter].
Our first question comes from Erik Woodring of Morgan Stanley. Your line is open. Please go ahead.
Just give us a little more context I have to be a little bit careful as it relates to competition, obviously, but we believe that.
Yeah.
Great. Thank you very much.
Bye.
Taking my questions guys.
Nicholas Woodman: More than 70 versatility-expanding camera mounts and accessories, and an industry-leading mobile app and subscription experience that adds enormous convenience and value to GoPro subscribers. We're just getting started. We believe our current offerings serve as an incredible foundation to build on with the planned launch of several exciting new products in 2026 that we believe will result in revenue, profit, and market share growth across our business. Turning to software, in Q3, we launched several new 360-related editing tools that make immersive 360 content creation easy for everyone. We updated our Quik mobile app with several new 360 editing features, including AI-powered subject tracking, convenient POV and selfie modes, and cloud-based 360 editing. These powerful new features significantly enhance the convenience and creative experience for MAX and MAX 2 owners and GoPro subscribers.
Focusing on a bigger upgrade we can have a more significant outcome than if we were to have launched.
Mick maybe if I could just start.
On for Q.
Product.
Sell through I feel I think you were saying that you expect sell through to be down I think it was 18% year over year can you just talk about.
In the third quarter of this year.
Okay, Alright, Super looking forward to that.
I was going to ask you a.
Kind of the puts and takes there you launched three new cameras. This year versus two last year I think the timing of the launches. This year was a little later than last year.
Question on innovation and so realizing you just made.
That comment, but I'd love if you could just talk where do you think kind of the camera innovation.
So just why we're seeing so I'll sit down as opposed to the opposite because there was no flagship camera just any detail you could help us understand there. Please.
Can meet needs or should go from here, obviously, you got 360 into the market. That's great you've launched a lifestyle camera you have the gimbal system.
Yeah, you nailed it.
Okay.
I have to be a little hesitant.
<unk> talked about the motorcycle helmets.
Again without disclosing things that obviously for competitive reasons.
It's clear that we didn't launch of new flagship hero camera this year.
Where do you think there are differentiated end markets or use cases.
In Q3 for Q3, Q4 sales and what I can say is.
That are compelling from here whatever you can share would be super helpful.
That is strategic.
Preparation for 2026 launches.
It's clear that.
So a little bit of patients now.
The opportunity for growth and diversification.
Nicholas Woodman: Our subscription model continues to exceed our expectations, contributing enormous value to both subscribers and our bottom line. We anticipate renewed subscriber and associated revenue growth in 2026, fueled by camera unit growth and the launch of new editing and content management features that we expect to significantly enhance convenience, capability, and value. We continue to see strong engagement from subscribers opting into our AI training program, which will earn them 50% of the third-party licensing revenue we expect to generate on their behalf. GoPro subscribers have contributed more than 270,000 hours of video content during the AI training program's invitation-only outreach period, which began in July 2025. We are in discussion with several AI data licensees to address their demand for authentic real-world video content for AI model training.
Yields.
And.
Meeting more of the specific needs.
We believe <unk>.
Significant upside in 2026.
Of the market not through one SKU traditionally the hero camera of the product that Gopro was built on.
So it's a it's a bit of.
We've got something special planned yes.
So we appreciate market patient investor patience, and we think that this decision is going to significantly help.
It's a bit of a Swiss army knife.
That did it all for everybody and that was terrific for a time, but as <unk>.
Consumer and professional demands have grown and become more specialized and we.
Us grow.
Units revenue and profit in first half of 2026.
Okay pleasure delay I should thank you.
We've seen.
The end customer.
Yes.
[laughter].
Want to not have a.
And again I was kind of a.
A little more context, I have to be a little bit careful as it relates to competition, obviously, but we believe that.
Do it all Swiss army knife as much as they want additional tools multiple tools multiple cameras that help them achieve more specifically.
Bye.
Focusing on a bigger upgrade.
The solution for whatever capture scenario, they're they're they're solving for so that's terrific for us because that can expand the Tam help us relate gopro to more end users and not burden any one product.
We can have a more significant outcome than if we were to have launched.
Our product and.
In the third quarter of this year.
Okay, Alright, Super looking forward to that.
Nicholas Woodman: We believe this program represents a meaningful opportunity over time for both our subscribers and GoPro, and we look forward to sharing progress as the program continues to evolve. As Brian will detail, we've amended our second lien credit agreement to address volatility in tariff rates. Given our commitment and expectation to achieve the minimum $40 million in trailing 12-month adjusted EBITDA by year-end 2026, I'm personally backing our commitment with a $2 million equity infusion into the company. In summary, we're executing against our strategy, and we're seeing the results: improved product diversification via the launch of industry-leading hardware, software products, and an expected return to unit revenue and profitability growth in Q4 2025.
I was going to ask you a.
<unk>.
Question on innovation and so realizing you just made.
With the burden of doing everything for everyone.
That comment, but I'd love if you could just talk where do you think kind of the camera innovation.
So what I would say is diversification diversification diversification.
Seeing that already in our product line and Youll see that scale in 2026, and we believe that will result in Tam expansion unit growth subscriber growth and sustained profitability growth.
Can need needs or should go from here, obviously, you got 360 into the market. That's great you've launched a lifestyle camera you have the gimbal system.
Talked about the motorcycle helmets.
Yes, I think on top of it.
You know.
Again without disclosing things that obviously for competitive reasons.
Hi.
G. III processor is also market leading in its capability and what we're able to do with that from an imaging and an innovation perspective. So.
Where do you think there are differentiated end markets or use cases.
That are compelling from here whatever you can share would be super helpful.
That's another area, where we're leading with the product.
It's clear that.
It will come out.
The opportunity for growth and diversification.
That will come out with next year using that process.
And <unk>.
Meeting more of the specific needs of.
Yeah, what Brian just alluded to is 2026 will be the year of GBP three our current cameras are based on a GPU processor.
Nicholas Woodman: We expect to build on this momentum in 2026 with the launch of several new, innovative, and differentiated products and services that we believe will lead to consistent quarterly camera unit and revenue growth on a year-over-year basis and a swing from losses in recent years to solid adjusted EBITDA profitability in 2026. Many thanks to all of GoPro's incredibly talented, passionate, and committed employees. Your execution is enabling us to realize our vision to the benefit of our customers and investors alike. Now, I'll turn the call over to Brian to share some details on our financials and outlook.
The market not through one SKU traditionally the hero camera product that Gopro was built on.
And two.
2026 is the debut of our line of.
A bit of a Swiss army knife.
That did it all for everybody and that was terrific for a time, but as <unk>.
G P. Three based processors that'll take gopro in the industry to the next level of performance.
Consumer and professional demands have grown and become more specialized and we've seen.
Yeah.
Okay Super and then maybe last one for me quickly is just I.
I appreciate all the color on 2026.
The end customer.
Want to not have a.
Yes at a high level.
Do it all Swiss army knife as much as they want additional tools multiple tools multiple cameras that help them achieve more specifically.
Are you or what are you assuming the world looks like in 2026, obviously theres a lot of uncertainty as it just relates to the holiday period coming up. So like gives you the degree of confidence to kind of guide the way that you did and how are you kind of embedding the world view in 2026 underlying that guidance.
The solution for whatever capture scenario, they're they're they're solving for so that's terrific for us because that can expand the Tam help us relate gopro to more end users and not burden any one product.
Brian McGee: Thanks, Nick. For the third quarter of 2025, revenue was $163 million, and gross profit was 35.2%, in line with guidance. We achieved a second consecutive quarter of positive cash flow from operations of $12 million, a $14 million improvement year-over-year. Demand for our cameras as measured via sell-through was 5% better than we predicted. Channel inventory declined 30% from the prior year quarter and has reduced for four consecutive quarters as we prepare for the upcoming holiday quarter. As we look to the fourth quarter, our outlook is prefaced by highlighting heightened uncertainty that exists due to volatility in tariff rates, consumer confidence, competition, component supply chain, and global economic uncertainty. For the fourth quarter, we expect revenue growth at the midpoint of guidance of 10% to $220 million.
For me thank you.
Yeah, I'll start and then.
Oh go ahead.
Go ahead, I was just going to say.
<unk>.
With the burden of doing everything for everyone.
To add to what I said about the market demand for diversification.
So what I would say its diversification diversification diversification.
That's how we see consumers behaving.
Being that already in our product line and Youll see that scale in 2026, and we believe that will result in Tam expansion unit growth subscriber growth and sustained profitability growth.
Today, that's all of our research shows that there is clearly an opportunity to diversify our product lineup to better meet their diversified needs of the of the market. That's what the roadmap delivers in 2026 and when you combine that diversification with the next generation GPS III.
Yes, I think on top of it.
Great.
<unk>.
GPS III processor is also market leading in its capability and what we're able to do with that from an imaging and an innovation perspective. So.
Processor from Gopro that is going to.
We believe.
Make gopro a market leader.
And all of the important categories that we're participating in.
That's another area, where we're leading with the product.
So the demand that we see for our products today, we see increasing as we enter this new era of performance and capability at Gopro next year.
We'll come out.
That will come out with next year using that process.
Brian McGee: Non-GAAP net income per share of $0.03 ± $0.02, and adjusted EBITDA of positive $12 million compared to a prior year adjusted EBITDA loss of $14 million, a $26 million improvement. All of these expected improvements are due to the actions we took in 2024 to launch new products in the second half of 2025, reduce operating expenses, diversify our supply chain, and drive product cost reductions, which are partially offset by higher tariffs. We estimate street ASP in the fourth quarter to be approximately $350, up slightly year-over-year. We expect unit sell-through to be down 18% year-over-year at the midpoint of guidance to 625,000 units, and channel inventory to be nominally up sequentially. We continue to actively manage the balance sheet and expect to further reduce inventory sequentially in the fourth quarter.
Yes, what Brian just alluded to is 2026 will be the year of GBP three our current cameras are based on a GPU processor.
And Brian you can add to that.
Yes.
Even in the fourth quarter of this year, which arguably is challenging with consumer and everything else that's going on where remain on track for our sell through and so on targets for the fourth quarter. So.
And two.
2026 is the debut of our line of.
G P. Three based processors that'll take gopro in the industry to the next level of performance.
Yeah.
And now we have newer products.
Okay Super and then maybe last one for me quickly.
26 that are going to add to that so that's pretty exciting as we look ahead actually in behalf both of you.
I appreciate all the color on 2026.
I guess at a high level kind of how how are you or what are you assuming the world looks like in 2026, obviously theres a lot of uncertainty as it just relates to the holiday period coming up so like.
Unit growth and revenue growth.
Finally, now in the fourth quarter, because we have two new products three new products.
And now the share and more coming next year.
Yes, and just to be clear the cadence of a.
Gives you the degree of confidence to kind of guide the way that you did and how are you kind of embedding the world view in 2026 underlying that guidance and that's it for me. Thank you.
Launching new products next year will.
<unk> steadily throughout the year. So that's also something to look forward to as opposed to.
Yeah, I'll start and then.
Brian McGee: In addition, we expect to end the year with cash and cash equivalents in the range of $60 million to $65 million, along with an additional $50 million available under our ABL facility. We expect gross margin in the fourth quarter to be 32% at midpoint of guidance, down compared to the prior year quarter of 35%, primarily due to tariffs. Excluding tariffs, gross margin in the fourth quarter 2025 would be approximately 37%. We expect fourth quarter 2025 operating expenses to be $63 million at the midpoint of our guidance range, a more than 25% reduction from the prior year quarter due to lower spending on wages from lower headcount, reduced marketing, and lower engineering expenses. We expect shares outstanding to be approximately 177 million in the fourth quarter. As we look ahead to 2026, we expect the following.
Oh go ahead.
Being so back end loaded.
Go ahead, I was just going to say.
To add to what I said about the market demand for diversification.
Alright Super guys. Thanks, so much.
Thank you.
That's how we see consumers behaving.
Thanks, Eric.
Thank you we have no further questions registered on today's call. So I'll hand back over to the management team for any further or final remarks.
That's all of our research shows that there is clearly an opportunity to diversify our product lineup to better meet their diversified needs of the of the market. That's what the roadmap delivers in 2026 and when you combine that diversification with the next generation GPS III.
Thank you operator, and thank you everyone for joining today's call to summarize we are executing well against our strategy to launch industry, leading hardware and software products with improved product diversification expected to restore unit revenue and profitability growth this fourth quarter and throughout 2026.
<unk> are from Gopro that is going to be.
We believe.
Make gopro a market leader.
<unk>.
And all of the important categories that we're participating in.
Thank you everyone. This is team gopro signing off.
So the demand that we see for our products today, we see increasing as we enter this new era of performance and capability at Gopro next year.
Ladies and gentlemen, this concludes today's call. Thank you for joining you may now disconnect.
Brian you can add to that.
Yeah, I think on top of that at all and even in the fourth quarter of this year.
Brian McGee: To grow units and revenue in 2026 based on both our existing lineup of products, as well as new products and services expected to be introduced next year, our expectation is to grow units and revenue each quarter in 2026 on a year-over-year basis. For year 2026, operating expenses to be approximately $250 million, slightly down year-over-year. To continue to offset approximately half of our expected tariff cost of $45 million in 2026 with modest price increases and continued supply chain diversification. Subscription ARPU growth of 5% end-to-end 2026, up 2% to 2.4 million subscribers. Our liquidity position to be more than adequate during 2026, and we expect to end 2026 with approximately $80 million in cash, ±$5 million, along with an additional $50 million available under our ABL facility. To experience some margin pressure year-over-year due to.
Arguably is challenging with consumer and everything else, that's going on where remain on track for our sell through and so on targets for the fourth quarter. So.
And now we have newer products.
In 2026 that are going to add to that so that's pretty exciting as we look ahead actually in behalf both unit growth and revenue growth.
Finally, now in the fourth quarter as we have.
As to new products or three new products.
And now the share and more coming next year.
Yes, and just to be clear the cadence of.
Launching new products next year will.
<unk> steadily throughout the year. So that's also something to look forward to as opposed to.
Being so back end loaded.
Alright Super guys. Thanks, so much.
Thank you.
Thanks, Eric.
Thank you we have no further questions registered on today's call. So I'll hand back over to the management team for any further or final remarks.
Brian McGee: Tariffs and increasing component prices, which we expect to partially offset with improvements in supply chain. As detailed in the management commentary in our filing, we have amended our debt agreement due to changes in tariff rates. We expect adjusted EBITDA to be greater than $40 million in 2026, an improvement from losses of $18 million in 2025 and $72 million in 2024. In closing, we believe our strategy is working. We are in the midst of an innovation cycle with the continued launch of new products and services expected over the next several years, combined with the initiatives we undertook in 2024 to reduce operating expenses and improve supply chain in 2025. We believe we will restore unit and revenue growth and deliver strong adjusted EBITDA of at least $40 million in 2026. Operator, we are now ready to take questions.
Thank you operator, and thank you everyone for joining today's call to summarize we are executing well against our strategy to launch industry, leading hardware and software products with improved product diversification expected to restore unit revenue and profitability growth this fourth quarter and throughout 2026.
<unk>.
Thank you everyone. This is team gopro signing off.
Ladies and gentlemen, this concludes today's call. Thank you for joining you may now disconnect.
[music].
Operator: Thank you. Of course, if you'd like to ask a question on today's call, please press Star followed by 1 on your telephone keypads. If you'd like to withdraw your question, please press Star followed by 2. When preparing to ask your question, please ensure your line is unmuted locally. As a reminder, that's Star followed by 1. Our first question comes from Eric Woodring of Morgan Stanley. Eric, your line is open. Please go ahead.
Erik Woodring: Great. Thank you very much for taking my questions, guys. Nick, maybe if I just start on Q4 sell-through. I think it was saying that you expect sell-through to be down, I think it was 18% year-over-year. Can you just talk about kind of the puts and takes there? You launched three new cameras this year versus two last year. I think the timing of the launches this year was a little later than last year. Just why we're seeing sell-through down as opposed to up, is it because there's no flagship camera? Just any detail you could help us understand there, please.
Nicholas Woodman: Yeah, you nailed it. I had to be a little hesitant. It's clear that we didn't launch a new flagship HERO camera this year in Q3 for Q4 sales. What I can say is that is strategic, in preparation for 2026 launches. A little bit of patience now yields, we believe, a significant upside in 2026. It's a bit of we've got something special planned. We appreciate market patience, investor patience, and we think that this decision is going to significantly help us grow units, revenue, and profits in the first half of 2026.
Erik Woodring: Okay.
Nicholas Woodman: Pleasure to lay.
Erik Woodring: I appreciate that.
Nicholas Woodman: If you will.
Erik Woodring: So.
Nicholas Woodman: To give us a little more context, I have to be a little bit careful as it relates to competition, obviously, but we believe that by focusing on a bigger upgrade, we can have a more significant outcome than if we were to have launched a product in the third quarter of this year.
Erik Woodring: Okay. All right. Super. Looking forward to that. I was going to ask you a question on innovation, realizing you just made that comment, but I'd love if you could just talk where you think kind of the camera innovation can need or should go from here. Obviously, you got 360 into the market, that's great. You've launched a lifestyle camera, you have the gimbal system, you've talked about the motorcycle helmets. Again, without disclosing things that are obviously for competitive reasons, where do you think there are differentiated end markets or use cases that are compelling from here? Whatever you can share would be super helpful.
Nicholas Woodman: It's clear that the opportunity for growth is in diversification and meeting more of the specific needs of the market, not through one SKU. Traditionally, the HERO camera, the product that GoPro was built on, was a bit of a Swiss army knife that did it all for everybody. That was terrific for a time, but as consumer and professional demands have grown and become more specialized, we've seen the end customer want to not have a do-it-all Swiss army knife as much as they want additional tools, multiple tools, multiple cameras that help them achieve more specifically the solution for whatever capture scenario they're solving for. That's terrific for us because that can expand the TAM, help us relate GoPro to more end users, and not burden any one product with the burden of doing everything for everyone.
Nicholas Woodman: What I would say is diversification, diversification, diversification. You're seeing that already in our product line, and you'll see that scale in 2026. We believe that'll result in TAM expansion, unit growth, subscriber growth, and sustained profitability growth.
Brian McGee: Yeah, Nick, I think on top of that.
Erik Woodring: Okay. Super.
Brian McGee: Our GP3 processor is also market-leading in its capability and what we're able to do with that from an imaging and innovation perspective. That's another area where we're leading with the product that will come out, products that will come out next year using that processor.
Nicholas Woodman: Yeah. What Brian just alluded to is 2026 will be the year of GP3. Our current cameras are based on a GP2 processor. 2026 is the debut of our line of GP3-based processors that'll take GoPro and the industry to the next level of performance.
Erik Woodring: Okay. Super. Maybe last one for me quickly is just I appreciate all the color on 2026. I guess at a high level, kind of how are you or what are you assuming the world looks like in 2026? Obviously, there's a lot of uncertainty, even as it just relates to the holiday period coming up. Gives you the degree of confidence to kind of guide the way that you did? How are you kind of embedding the worldview in 2026 underlying that guidance? That's it for me. Thank you.
Nicholas Woodman: Yeah. I'll start and then let Brian.
Brian McGee: Oh, go ahead. Go ahead.
Nicholas Woodman: Well, I was just going to say, to add to what I said about market demand for diversification, that's how we see consumers behaving today. All of our research shows that there's clearly an opportunity to diversify our product lineup to better meet the diversified needs of the market. That's what the roadmap delivers in 2026. When you combine that diversification with the next generation GP3 processor from GoPro, that is going to, we believe, make GoPro a market leader in all of the important categories that we're participating in. The demand that we see for our products today, we see increasing as we enter this new era of performance and capability at GoPro next year. Brian, you can add to that.
Brian McGee: Yeah. I think on top of that, I'll add even in the fourth quarter of this year, which arguably is challenging with consumer and everything else that's going on, we remain on track for our sell-through and sell-in targets for the fourth quarter. Now we have newer products. In 2026 that are going to add to that. That's pretty exciting as we look ahead, actually, to have both unit growth and revenue growth finally now in the fourth quarter as we have two new products or three new products. Now this year and more coming next year.
Nicholas Woodman: Yeah, just to be clear, the cadence of launching new products next year will be steadily throughout the year. That's also something to look forward to as opposed to being so back-end loaded.
Erik Woodring: All right. Super, guys. Thanks so much.
Nicholas Woodman: Thank you.
Brian McGee: Thanks, Eric.
Operator: Thank you. We have no further questions registered on today's call, so I'll hand back over to the management team for any further or final remarks.
Nicholas Woodman: Thank you, Operator. Thank you, everyone, for joining today's call. To summarize, we're executing well against our strategy to launch industry-leading hardware and software products, with improved product diversification expected to restore unit revenue and profitability growth this fourth quarter and throughout 2026. Thank you, everyone. This is Team GoPro signing off.
Operator: Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect.