Investor Presentation – Aug. 2016
Safe Harbor Statement These slides may contain projections or other forward-looking statements regarding future events, including but not limited to, those regarding our business outlook for the full year of 2016. These statements involve risks and uncertainties, and actual events or results may differ materially. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are our dependence on sales of our capture devices for substantially all of our revenue and the effect of a fall in sales during the holiday season; the fact that we do not expect to continue to grow in the future at the same rate as we have in the past, that we may fail to manage our growth, and profitability in recent periods might not be indicative of future performance; any inability to successfully manage frequent product introductions and transitions or to anticipate consumer preferences and successfully develop desirable products; the risks associated with our expected entrance into the consumer drone market; the effects of the highly competitive market in which we operate; the risks related to inventory, purchase commitments and long-lived assets; difficulty in accurately predicting our future customer demand; the importance of maintaining the value and reputation of our brand; and other factors detailed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2015, which is on file with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof or as of the date otherwise stated herein. GoPro disclaims any obligation to update these forward-looking statements. We report gross margin, operating expenses, operating income (loss), net income (loss) and diluted net income (loss) per share in accordance with U.S. generally accepted accounting principles (GAAP) and additionally on a non-GAAP basis. Non-GAAP items exclude, where applicable, the effects of stock-based compensation, acquisition-related costs, restructuring costs and the tax impact of these items. Additionally, we report non-GAAP adjusted EBITDA. We believe that non-GAAP information is useful because it can enhance the understanding of our ongoing economic performance. We use non-GAAP reporting internally to evaluate and manage our operations. We have chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how we analyze our own operating results. A full reconciliation of GAAP to non-GAAP financial data can be found in the appendix to this slide package and in our Q2 2016 earnings press release issued on July 27, 2016, which should be reviewed in conjunction with this presentation. Certain data in this presentation was obtained from various external sources, and neither the Company nor its affiliates, advisers or representatives has verified such data with independent sources. Accordingly, neither the Company nor any of its affiliates, advisers or representatives makes any representations as to the accuracy or completeness of that data or to update such data after the date of this presentation. Such data involves risks and uncertainties and is subject to change based on various factors. The trademarks included herein are the property of the owners thereof and are used for reference purposes only. Such use should not be construed as an endorsement of the products or services of the Company or this proposed offering. 2
GOPRO BY THE NUMBERS ESTABLISHED HQ IN IPO IN 1621 IN 2004 SAN MATEO JUNE 2014 EMPLOYEES • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • •• • • • • • • • • • • • • • • • • • • • • • • • • 2Q16 unit sell-thru was up approximately 10% Q/Q and down less than 10% Y/Y • 2Q16 sell-thru exceeded sell-in by over 50%, reducing channel and GoPro inventory sequentially by ~35% and ~36%, respectively • GoPro’s $399 and above cameras accounted for 50%+ of units shipped • ~22 million cumulative cameras shipped thru 2Q16, including 759K cameras shipped in 2Q16 • Quik & Splice mobile editing apps have been downloaded a combined 37 million times. The GoPro App has ~29 million cumulative downloads and installs of GoPro Studio have reached 17.7 million 3 Sources: NPD, GfK, & GoPro as of 6/30/2016
MARKET SHARE • Market Share • GoPro accounted for 6 of the top 10 products on a unit basis, including the top 3 spots, for 2Q16 in the combined digital camera/camcorder category in the U.S.* • HERO4 Silver remains the best-selling digital image camera on a unit and dollar basis for the seventh consecutive quarter.* • By our estimate, HERO Session was the #2 best-selling camera on a unit basis for the second consecutive quarter in the U.S. • 2Q16 digital camera/camcorder leading unit share in the U.S. increased 110 basis points YoY to 21.3%.* • 2Q16 digital imaging unit share in Europe increased 110 basis points YoY to 9.4%.** • GoPro accounted for 4 of the top 5 camcorders in Europe on a unit basis.** 4 Sources: *NPD, **GfK, GoPro as of 6/30/2016
RECENT ANNOUNCEMENTS • Recent Announcements • Announced an exclusive partnership with Reliance Digital, India's largest Consumer Electronics retailer, that will put GoPro's cameras, mounts and accessories, on the shelves of up to 1,800 Reliance Digital across India. • Lauren Zalaznick was appointed to GoPro's Board of Directors. A 12-year executive at NBCUniversal, Ms. Zalaznick has devoted her career to transforming the cultural landscape in media, and has been named one of Time's 100 Most Influential People and Fortune's 50 Most Powerful Women. • Signed content partnerships to create episodic content with some of the world's most recognized brands including Ford, Wimbledon, and Real Madrid. The first series, produced with Ford Motor Company titled "Unstoppable Life," profiles GoPro athletes who demonstrate the perseverance and determination on their respective life journeys. • Launched GoPro Care to U.S. consumers, a fee-based service offering a range of support options, including extended warranty and accidental damage coverage. • Entered into a multi-year, global agreement with Red Bull that included content production, distribution, and cross-promotion through which GoPro will become Red Bull's exclusive provider of point-of-view imaging technology. Content to be distributed across both Red Bull and GoPro's digital distribution networks, including The GoPro Channel, Red Bull TV, RedBull.com and in the Red Bull Content Pool, Red Bull's media service platform. 5
ABOUT US what we make what we do World’s Most Versatile Enable Engaging Capture Devices Content 6
Why GoPro Matters People are spending more time online GoPro enables the world to capture and sharing personal experiences through share its passion in the form of immersive photos and video and engaging content 7
GOPRO MODEL: A VIRTUOUS CYCLE VIRALLY SCALES CAPTURE, ACCESS, & SHARE AWARENESS + ENTHUSIASM ENGAGING CONTENT 8
MARKET LEADING PRODUCT LINE & FEATURES Software features Hilight Tagging Trim n Share GoPro App for the Apple Watch Periscope – Live Streaming from a GoPro HERO4 Black MSRP’s or Silver $199.99 $399.99 $499.99 9
ATTRACTIVE MARKET OPPORTUNITY ANNUAL UNIT MARKET OPPORTUNITY CONTENT DRIVEN MODEL CREATES ORGANIC MEDIA OPPORTUNITIES User-Generated- Content Software Advertising Virtual Reality NEW MEDIA Services Linear programming CAPTURE OPPORTUNITIES Licensing OTT DIGITAL CAMERAS & CAMCORDERS Drone 50mm+ MATURE CE PRODUCTS Social 30mm+ 5.1mm units (TTM) 10 Note: Portable navigation device market representative of mature CE products. Source: IDC 2014, Technavio.
OUR MISSION: ELIMINATE THE PAIN POINTS OF CAPTURING, ACCESSING AND SHARING ENGAGING CONTENT PHASE II PHASE I MAXIMIZE SHARING & CAPTURE ACCESS ENJOYMENT LEADING CAPTURE Cross Platform Content BRAND Management & Editing Solutions + LEADING ACCESSORY BRAND GoPro Desktop App w/ GoPro Studio, Quik & Splice 11
GOPRO PLATFORM – INCREASINGLY MOBILE 29 million cumulative downloads GoPro Studio 37 million cumulative downloads 43,500 average exports per day during 2Q16, up 15% Y/Y 12
PARTICIPATING IN TODAY’S MEGA -TRENDS • Drones • Karma, GoPro’s drone, to be released in the second half of 2016 • User Generated Content • Consumers watch more UGC today than ever before • Odyssey Social Media GoPro VR App • Global audience for shared GoPro content • Stokes the virtuous cycle • Virtual Reality – Omni & Odyssey Omni • GoPro broadly used for VR capture today • Partnerships with Google, Facebook and others • GoPro VR mobile app for 360-degree & VR reality content 13
STRATEGIC MARKETING AND BRANDING TOP TIER EVENTS TV 160+ GOPRO ATHLETES SOCIAL Kelly Slater Shaun White MARKETING Missy Franklin CONSUMER LIFESTYLE MARKETING MARKETING OUT-OF-HOME ADVERTISING PRINT ADS RESORTS / CAMPS GLOBAL TRADESHOWS 14 CHANNEL MARKETING
DISTRIBUTION – POINT OF PURCHASE Custom video-enabled point-of-purchase displays distributed in over 45,000 retail locations, globally Available in 2ft, 3ft and 4ft and 12ft footprints 2 ft POP display 4 ft POP display 12 ft POP display 15
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