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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2016
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OR
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ________________ to ________________
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Delaware
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77-0629474
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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3000 Clearview Way
San Mateo, California |
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94402
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(Address of principal executive offices)
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(Zip Code)
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Class A Common Stock, par value $0.0001
(Title of each class)
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The NASDAQ Stock Market LLC
(Name of each exchange on which registered)
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Large accelerated filer
þ
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Accelerated filer
☐
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Non accelerated filer
☐
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Smaller reporting company
☐
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(Do not check if a smaller reporting company)
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Page
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PART I
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||
Item 1.
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||
Item 1A.
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||
Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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||
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•
|
HERO5
is our all-new line of cloud-connected cameras launched in Fall 2016 featuring image stabilization, telemetry, cloud connectivity and voice control.
|
•
|
GoPro Plus
is a new cloud-based storage solution that enables subscribers to easily access, edit and share content. HERO5 cameras can automatically upload new photos and videos to a subscriber's GoPro cloud account.
|
•
|
Quik
is our primary mobile editing app
that makes it simple to create stunning edits on a smartphone. Our Quik desktop app provides expanded editing options for power users.
|
•
|
Capture
is a mobile app that allows users to preview and play back shots, control their GoPro cameras and share content on the fly using their smartphones.
|
•
|
Karma
is our compact and foldable drone and versatile stabilization solution that includes the Karma controller, and camera stabilizer, and it all fits in a custom backpack.
|
•
|
Karma Grip
is a handheld, body-mountable camera stabilizer that makes it easy to capture zero-shake, smooth video.
|
•
|
We also offer a full ecosystem of mountable, wearable and voice activated accessories. See "Products" below for additional information.
|
•
|
difficulties in staffing and managing foreign operations;
|
•
|
burdens of complying with a wide variety of laws and regulations, including environmental, packaging and labeling, and drone regulations;
|
•
|
adverse tax effects and foreign exchange controls making it difficult to repatriate earnings and cash;
|
•
|
the impact of foreign currency exchange rates and interest rates;
|
•
|
political and economic instability;
|
•
|
terrorist activities and natural disasters;
|
•
|
trade restrictions;
|
•
|
differing employment practices and laws and labor disruptions;
|
•
|
the imposition of government controls;
|
•
|
lesser degrees of intellectual property protection;
|
•
|
tariffs and customs duties and the classifications of our goods by applicable governmental bodies;
|
•
|
a legal system subject to undue influence or corruption; and
|
•
|
a business culture in which illegal sales practices may be prevalent.
|
•
|
our board of directors is not currently classified, but at such time as all shares of our Class B common stock have been converted into shares of our Class A common stock, our board of directors will be classified into three classes of directors with staggered three-year terms;
|
•
|
so long as any shares of our Class B common stock are outstanding, special meetings of our stockholders may be called by the holders of 10% of the outstanding voting power of all then outstanding shares of stock, a majority of our board of directors, the chairman of our board of directors, our chief executive officer or our president,
|
•
|
when no shares of our Class B common stock are outstanding, only the chairman of our board of directors, our chief executive officer, our president or a majority of our board of directors will be authorized to call a special meeting of stockholders;
|
•
|
our stockholders may only take action at a meeting of stockholders and not by written consent;
|
•
|
vacancies on our board of directors may be filled only by our board of directors and not by stockholders;
|
•
|
directors may be removed from office with or without cause so long as our board of directors is not classified, and thereafter directors may be removed from office only for cause;
|
•
|
our restated certificate of incorporation provides for a dual class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets;
|
•
|
our restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established, and shares of which may be issued, by our board of directors without stockholder approval and which may contain voting, liquidation, dividend and other rights superior to those of our Class A and Class B common stock; and
|
•
|
advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders.
|
|
2016
|
|
2015
|
||||
|
High
|
|
Low
|
|
High
|
|
Low
|
First Quarter
|
$18.69
|
|
$9.78
|
|
$66.87
|
|
$37.95
|
Second Quarter
|
$13.98
|
|
$8.80
|
|
$59.41
|
|
$40.89
|
Third Quarter
|
$17.15
|
|
$10.59
|
|
$64.74
|
|
$29.67
|
Fourth Quarter
|
$17.13
|
|
$8.69
|
|
$30.65
|
|
$16.89
|
(in thousands, except per share amounts)
|
Year ended December 31,
|
||||||||||||||||||
Consolidated statements of operations data:
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Revenue
|
$
|
1,185,481
|
|
|
$
|
1,619,971
|
|
|
$
|
1,394,205
|
|
|
$
|
985,737
|
|
|
$
|
526,016
|
|
Gross profit
|
$
|
461,920
|
|
|
$
|
673,214
|
|
|
$
|
627,235
|
|
|
$
|
361,784
|
|
|
$
|
227,486
|
|
Gross margin
|
39.0
|
%
|
|
41.6
|
%
|
|
45.0
|
%
|
|
36.7
|
%
|
|
43.2
|
%
|
|||||
Operating income (loss)
|
$
|
(372,969
|
)
|
|
$
|
54,748
|
|
|
$
|
187,035
|
|
|
$
|
98,703
|
|
|
$
|
53,617
|
|
Net income (loss)
|
$
|
(419,003
|
)
|
|
$
|
36,131
|
|
|
$
|
128,088
|
|
|
$
|
60,578
|
|
|
$
|
32,262
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(3.01
|
)
|
|
$
|
0.27
|
|
|
$
|
1.07
|
|
|
$
|
0.54
|
|
|
$
|
0.07
|
|
Diluted
|
$
|
(3.01
|
)
|
|
$
|
0.25
|
|
|
$
|
0.92
|
|
|
$
|
0.47
|
|
|
$
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other financial information:
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA
(1)
|
$
|
(192,807
|
)
|
|
$
|
179,309
|
|
|
$
|
293,380
|
|
|
$
|
133,726
|
|
|
$
|
75,288
|
|
Non-GAAP net income (loss)
(2)
|
$
|
(201,247
|
)
|
|
$
|
111,564
|
|
|
$
|
188,913
|
|
|
$
|
68,826
|
|
|
-
|
|
|
Non-GAAP diluted earnings (loss) per share
(2)
|
$
|
(1.44
|
)
|
|
$
|
0.76
|
|
|
$
|
1.32
|
|
|
$
|
0.50
|
|
|
-
|
|
(1)
|
We define adjusted EBITDA as net income (loss) adjusted to exclude the impact of: provision for income taxes, interest income, interest expense, depreciation and amortization, POP display amortization, stock-based compensation, impairment charges and restructuring costs.
|
(2)
|
We define non-GAAP net income as net income (loss) adjusted to exclude stock-based compensation, acquisition-related costs, restructuring costs and taxes related to the tax effect of these adjustments. Acquisition-related costs include the amortization of acquired intangible assets and impairment write-downs (if applicable), as well as third-party transaction costs for legal and other professional services. Non-GAAP earnings per share considers the conversion of the redeemable convertible preferred stock into shares of common stock as though the conversion had occurred at the beginning of the period and the initial public offering shares issued July 2014 as if they had been outstanding since the beginning of the period.
|
|
As of December 31,
|
||||||||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Consolidated balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and marketable securities
|
$
|
217,953
|
|
|
$
|
474,058
|
|
|
$
|
422,256
|
|
|
$
|
101,410
|
|
|
$
|
36,485
|
|
Inventory
|
167,192
|
|
|
188,232
|
|
|
153,026
|
|
|
111,994
|
|
|
60,412
|
|
|||||
Working capital
|
157,074
|
|
|
538,066
|
|
|
564,274
|
|
|
57,446
|
|
|
69,618
|
|
|||||
Total assets
|
922,640
|
|
|
1,102,976
|
|
|
917,691
|
|
|
439,671
|
|
|
246,665
|
|
|||||
Total indebtedness
|
—
|
|
|
—
|
|
|
—
|
|
|
113,612
|
|
|
129,395
|
|
|||||
Redeemable convertible preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
77,198
|
|
|
77,138
|
|
|||||
Total stockholders’ equity (deficit)
|
446,945
|
|
|
772,033
|
|
|
641,204
|
|
|
(5,366
|
)
|
|
(79,741
|
)
|
•
|
Overview.
Discussion of our business and overall analysis of financial and other highlights affecting the Company in order to provide context for the remainder of MD&A.
|
•
|
Components of Our Results of Operations.
Description of the items contained in each operating revenue and expense caption in the consolidated statements of operations.
|
•
|
Results of Operations.
Analysis of our financial results comparing 2016 to 2015 and 2015 to 2014.
|
•
|
Liquidity and Capital Resources.
Analysis of changes in our balance sheets and cash flows, and discussion of our financial condition and potential sources of liquidity.
|
•
|
Contractual Commitments.
Overview of contractual obligations, including expected payment schedule, off-balance sheet arrangements and indemnifications as of December 31, 2016.
|
•
|
Critical Accounting Policies and Estimates.
Accounting estimates that we believe are most important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.
|
•
|
Non-GAAP Financial Measures.
A presentation of results reconciling GAAP to non-GAAP adjusted measures.
|
(units and dollars in thousands, except per share amounts)
|
|
Q4 2016
|
|
Q4 2015
|
|
FY 2016
|
|
FY 2015
|
||||||||
Revenue
|
|
$
|
540,621
|
|
|
$
|
436,603
|
|
|
$
|
1,185,481
|
|
|
$
|
1,619,971
|
|
Units shipped
(1)
|
|
2,284
|
|
|
2,002
|
|
|
4,762
|
|
|
6,584
|
|
||||
Gross margin
(2)
|
|
39.2
|
%
|
|
29.4
|
%
|
|
39.0
|
%
|
|
41.6
|
%
|
||||
Operating expenses
|
|
$
|
238,703
|
|
|
$
|
169,805
|
|
|
$
|
834,889
|
|
|
$
|
618,466
|
|
Operating income (loss)
|
|
$
|
(26,568
|
)
|
|
$
|
(41,294
|
)
|
|
$
|
(372,969
|
)
|
|
$
|
54,748
|
|
Net income (loss)
|
|
$
|
(115,709
|
)
|
|
$
|
(34,451
|
)
|
|
$
|
(419,003
|
)
|
|
$
|
36,131
|
|
Diluted net income (loss) per share
|
|
$
|
(0.82
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(3.01
|
)
|
|
$
|
0.25
|
|
Cash provided by (used in) operations
|
|
$
|
12,696
|
|
|
$
|
20,848
|
|
|
$
|
(107,753
|
)
|
|
$
|
157,611
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other financial information:
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA
(3)
|
|
$
|
44,343
|
|
|
$
|
(9,268
|
)
|
|
$
|
(192,807
|
)
|
|
$
|
179,309
|
|
Non-GAAP net income (loss)
(4)
|
|
$
|
42,367
|
|
|
$
|
(11,396
|
)
|
|
$
|
(201,247
|
)
|
|
$
|
111,564
|
|
Non-GAAP earnings (loss) per share
|
|
$
|
0.29
|
|
|
$
|
(0.08
|
)
|
|
$
|
(1.44
|
)
|
|
$
|
0.76
|
|
|
Year ended December 31,
|
|||||||||||||||||||
(dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Revenue
|
$
|
1,185,481
|
|
|
100
|
%
|
|
$
|
1,619,971
|
|
|
100
|
%
|
|
$
|
1,394,205
|
|
|
100
|
%
|
Cost of revenue
|
723,561
|
|
|
61
|
|
|
946,757
|
|
|
58
|
|
|
766,970
|
|
|
55
|
|
|||
Gross profit
|
461,920
|
|
|
39
|
|
|
673,214
|
|
|
42
|
|
|
627,235
|
|
|
45
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
358,902
|
|
|
30
|
|
|
241,694
|
|
|
15
|
|
|
151,852
|
|
|
11
|
|
|||
Sales and marketing
|
368,620
|
|
|
31
|
|
|
268,939
|
|
|
17
|
|
|
194,377
|
|
|
14
|
|
|||
General and administrative
|
107,367
|
|
|
9
|
|
|
107,833
|
|
|
7
|
|
|
93,971
|
|
|
7
|
|
|||
Total operating expenses
|
834,889
|
|
|
70
|
|
|
618,466
|
|
|
38
|
|
|
440,200
|
|
|
32
|
|
|||
Operating income (loss)
|
(372,969
|
)
|
|
(31
|
)
|
|
54,748
|
|
|
3
|
|
|
187,035
|
|
|
13
|
|
|||
Other expense, net
|
(2,205
|
)
|
|
—
|
|
|
(2,163
|
)
|
|
—
|
|
|
(6,060
|
)
|
|
—
|
|
|||
Income (loss) before income taxes
|
(375,174
|
)
|
|
(31
|
)
|
|
52,585
|
|
|
3
|
|
|
180,975
|
|
|
13
|
|
|||
Income tax expense
|
43,829
|
|
|
4
|
|
|
16,454
|
|
|
1
|
|
|
52,887
|
|
|
4
|
|
|||
Net income (loss)
|
$
|
(419,003
|
)
|
|
(35
|
)%
|
|
$
|
36,131
|
|
|
2
|
%
|
|
$
|
128,088
|
|
|
9
|
%
|
|
Year ended December 31,
|
|
2016 vs 2015
|
|
2015 vs 2014
|
||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
|
% Change
|
|
% Change
|
||||||||
Units shipped
|
4,762
|
|
|
6,584
|
|
|
5,180
|
|
|
(28
|
)%
|
|
27
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
||||||||
Direct channel
|
$
|
650,111
|
|
|
$
|
841,882
|
|
|
$
|
818,381
|
|
|
(23
|
)%
|
|
3
|
%
|
Percentage of revenue
|
54.8
|
%
|
|
52.0
|
%
|
|
58.7
|
%
|
|
|
|
|
|||||
Distribution channel
|
$
|
535,370
|
|
|
$
|
778,089
|
|
|
$
|
575,824
|
|
|
(31
|
)%
|
|
35
|
%
|
Percentage of revenue
|
45.2
|
%
|
|
48.0
|
%
|
|
41.3
|
%
|
|
|
|
|
|||||
Total revenue
|
$
|
1,185,481
|
|
|
$
|
1,619,971
|
|
|
$
|
1,394,205
|
|
|
(27
|
)%
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
619,784
|
|
|
$
|
868,772
|
|
|
$
|
890,352
|
|
|
(29
|
)%
|
|
(2
|
)%
|
Percentage of revenue
|
52.3
|
%
|
|
53.6
|
%
|
|
63.9
|
%
|
|
|
|
|
|||||
Europe, Middle East and Africa ("EMEA")
|
$
|
366,352
|
|
|
$
|
535,260
|
|
|
$
|
371,197
|
|
|
(32
|
)%
|
|
44
|
%
|
Percentage of revenue
|
30.9
|
%
|
|
33.0
|
%
|
|
26.6
|
%
|
|
|
|
|
|||||
Asia and Pacific ("APAC")
|
$
|
199,345
|
|
|
$
|
215,939
|
|
|
$
|
132,656
|
|
|
(8
|
)%
|
|
63
|
%
|
Percentage of revenue
|
16.8
|
%
|
|
13.4
|
%
|
|
9.5
|
%
|
|
|
|
|
|||||
Total revenue
|
$
|
1,185,481
|
|
|
$
|
1,619,971
|
|
|
$
|
1,394,205
|
|
|
(27
|
)%
|
|
16
|
%
|
|
Year ended December 31,
|
|
2016 vs 2015
|
|
2015 vs 2014
|
||||||||||||
(dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
|
% Change
|
|
% Change
|
||||||||
Cost of revenue
|
$
|
719,689
|
|
|
$
|
944,304
|
|
|
$
|
765,247
|
|
|
(24
|
)%
|
|
23
|
%
|
Stock-based compensation
|
1,616
|
|
|
1,492
|
|
|
835
|
|
|
8
|
%
|
|
79
|
%
|
|||
Acquisition-related costs
|
1,759
|
|
|
961
|
|
|
888
|
|
|
83
|
%
|
|
8
|
%
|
|||
Restructuring costs
|
497
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|
N/A
|
|
|||
Total cost of revenue
|
$
|
723,561
|
|
|
$
|
946,757
|
|
|
766,970
|
|
|
(24
|
)%
|
|
23
|
%
|
|
Gross margin
|
39.0
|
%
|
|
41.6
|
%
|
|
45.0
|
%
|
|
(260) bps
|
|
|
(340) bps
|
|
|
Year ended December 31,
|
|
2016 vs 2015
|
|
2015 vs 2014
|
||||||||||||
(dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
|
% Change
|
|
% Change
|
||||||||
Research and development
|
$
|
295,901
|
|
|
$
|
220,516
|
|
|
$
|
140,109
|
|
|
34
|
%
|
|
57
|
%
|
Stock-based compensation
|
31,365
|
|
|
18,024
|
|
|
11,640
|
|
|
74
|
%
|
|
55
|
%
|
|||
Acquisition-related costs
|
14,439
|
|
|
3,154
|
|
|
103
|
|
|
358
|
%
|
|
2,962
|
%
|
|||
Restructuring costs
|
17,197
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|
N/A
|
|
|||
Total research and development expenses
|
$
|
358,902
|
|
|
$
|
241,694
|
|
|
$
|
151,852
|
|
|
48
|
%
|
|
59
|
%
|
Percentage of revenue
|
30.3
|
%
|
|
14.9
|
%
|
|
10.9
|
%
|
|
|
|
|
|
Year ended December 31,
|
|
2016 vs 2015
|
|
2015 vs 2014
|
||||||||||||
(dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
|
% Change
|
|
% Change
|
||||||||
Sales and marketing
|
$
|
342,651
|
|
|
$
|
255,045
|
|
|
$
|
183,807
|
|
|
34
|
%
|
|
39
|
%
|
Stock-based compensation
|
13,883
|
|
|
13,762
|
|
|
10,428
|
|
|
1
|
%
|
|
32
|
%
|
|||
Acquisition-related costs
|
22
|
|
|
132
|
|
|
142
|
|
|
(83
|
)%
|
|
(7
|
)%
|
|||
Restructuring costs
|
12,064
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|
N/A
|
|
|||
Total sales and marketing expenses
|
$
|
368,620
|
|
|
$
|
268,939
|
|
|
$
|
194,377
|
|
|
37
|
%
|
|
38
|
%
|
Percentage of revenue
|
31.1
|
%
|
|
16.6
|
%
|
|
13.9
|
%
|
|
|
|
|
|
Year ended December 31,
|
|
2016 vs 2015
|
|
2015 vs 2014
|
||||||||||||
(dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
|
% Change
|
|
% Change
|
||||||||
General and administrative
|
$
|
70,247
|
|
|
$
|
59,308
|
|
|
$
|
45,475
|
|
|
18
|
%
|
|
30
|
%
|
Stock-based compensation
|
22,663
|
|
|
47,402
|
|
|
48,496
|
|
|
(52
|
)%
|
|
(2
|
)%
|
|||
Acquisition-related costs
|
1,126
|
|
|
1,123
|
|
|
—
|
|
|
—
|
%
|
|
N/A
|
|
|||
Restructuring costs
|
13,331
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|
N/A
|
|
|||
Total general and administrative expenses
|
$
|
107,367
|
|
|
$
|
107,833
|
|
|
$
|
93,971
|
|
|
—
|
%
|
|
15
|
%
|
Percentage of revenue
|
9.1
|
%
|
|
6.7
|
%
|
|
6.7
|
%
|
|
|
|
|
|
Year ended December 31,
|
|
2016 vs 2015
|
|
2015 vs 2014
|
||||||||||||
(dollars in thousands)
|
2016
|
|
2015
|
|
2014
|
|
% Change
|
|
% Change
|
||||||||
Income tax expense
|
$
|
43,829
|
|
|
$
|
16,454
|
|
|
$
|
52,887
|
|
|
166
|
%
|
|
(69
|
)%
|
Effective tax rate
|
11.7
|
%
|
|
31.3
|
%
|
|
29.2
|
%
|
|
|
|
|
|
Three months ended
|
||||||||||||||||||||||||||||||
(in thousands, except per share amounts)
|
Dec. 31,
2016
|
|
Sept. 30,
2016 |
|
June 30,
2016
|
|
March 31,
2016 |
|
Dec. 31,
2015
|
|
Sept. 30,
2015 |
|
June 30,
2015
|
|
March 31,
2015 |
||||||||||||||||
Revenue
(1)
|
$
|
540,621
|
|
|
$
|
240,569
|
|
|
$
|
220,755
|
|
|
$
|
183,536
|
|
|
$
|
436,603
|
|
|
$
|
400,340
|
|
|
$
|
419,919
|
|
|
$
|
363,109
|
|
Gross profit
(2)
|
212,135
|
|
|
97,069
|
|
|
93,002
|
|
|
59,714
|
|
|
128,511
|
|
|
186,630
|
|
|
194,340
|
|
|
163,733
|
|
||||||||
Operating expenses
(3)
|
238,703
|
|
|
212,658
|
|
|
202,379
|
|
|
181,149
|
|
|
169,805
|
|
|
158,994
|
|
|
148,202
|
|
|
141,465
|
|
||||||||
Net income (loss)
|
$
|
(115,709
|
)
|
|
$
|
(104,068
|
)
|
|
$
|
(91,767
|
)
|
|
$
|
(107,459
|
)
|
|
$
|
(34,451
|
)
|
|
$
|
18,799
|
|
|
$
|
35,031
|
|
|
$
|
16,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
(0.82
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
0.14
|
|
|
$
|
0.26
|
|
|
$
|
0.13
|
|
Diluted
|
$
|
(0.82
|
)
|
|
$
|
(0.74
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
0.13
|
|
|
$
|
0.24
|
|
|
$
|
0.11
|
|
(1)
|
Included in revenue for the quarters ended September 30, 2015 and December 31, 2015 was a reduction of approximately $19 million and $21 million, respectively, for price protection and marketing development funds incurred in connection with the reduction of the HERO4 Session selling price.
|
(2)
|
Included in cost of revenue for the quarters ended December 31, 2015 and March 31, 2016 were charges of $57 million and $8 million, respectively, for excess purchase order commitments, excess inventory and obsolete tooling, relating to the end-of-life of our entry-level HERO products.
|
(3)
|
Included in operating expenses for the quarter ended March 31, 2016 and December 31, 2016 were restructuring charges of approximately $6.2 million and $36.4 million, respectively.
|
(dollars in thousands)
|
December 31,
2016 |
|
December 31,
2015 |
||||
Cash and cash equivalents
|
$
|
192,114
|
|
|
$
|
279,672
|
|
Marketable securities
|
25,839
|
|
|
194,386
|
|
||
Total cash and investments
|
$
|
217,953
|
|
|
$
|
474,058
|
|
Percentage of total assets
|
24
|
%
|
|
43
|
%
|
•
|
We forecast that revenue will increase in 2017 as compared to 2016, which we anticipate will have favorable impacts on our cash receipts and working capital.
|
•
|
We believe the restructuring actions and other cost saving initiatives we have taken will enable us to reduce our operating expenses by more than $100 million in 2017 compared to 2016, on both a GAAP and non-GAAP basis, primarily reflecting lower cash-based personnel-related expenses.
|
•
|
We expect to spend significantly less on capital expenditures in 2017 than in 2016 and prior years. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of spending on research and development efforts and other business initiatives, the timing of new product introductions, market acceptance of our products, and overall economic conditions.
|
•
|
In March 2016, we entered into a credit agreement with a syndicate of banks that provides for a secured revolving credit facility under which we may borrow up to an aggregate of
$250 million
. As of December 31, 2016, we may borrow up to approximately $150 million under the credit facility, based upon a borrowing base formula with respect to our inventory and accounts receivable balances. (See Note 5 to the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K for additional information.)
|
•
|
We have completed acquisitions in the past and we expect to evaluate additional possible acquisitions of, or strategic investments in, businesses, products and technologies that are complementary to our business, which may require the use of cash.
|
|
Year ended December 31,
|
|
2016 vs 2015
|
|
2015 vs 2014
|
||||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
|
% Change
|
|
% Change
|
||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||
Operating activities
|
$
|
(107,753
|
)
|
|
$
|
157,611
|
|
|
$
|
96,922
|
|
|
(168
|
)%
|
|
63
|
%
|
Investing activities
|
$
|
19,286
|
|
|
$
|
(211,977
|
)
|
|
$
|
(133,904
|
)
|
|
(109
|
)%
|
|
58
|
%
|
Financing activities
|
$
|
1,955
|
|
|
$
|
15,665
|
|
|
$
|
255,501
|
|
|
(88
|
)%
|
|
(94
|
)%
|
•
|
Persuasive evidence of an arrangement exists
. Contracts or sales orders from our distributors, resellers or online customers are generally used to determine the existence of an arrangement.
|
•
|
Delivery has occurred
. We consider delivery to have occurred once title and risk of loss has been transferred. Shipping documents and customer acceptance, when applicable, are used to verify delivery.
|
•
|
The sales price is fixed or determinable
. We assess whether the sales price is fixed or determinable based on the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment.
|
•
|
Collectability is reasonably assured
. We assess collectability based primarily on the creditworthiness of the customer as determined by credit analysis, the customer’s payment history, and other relevant factors.
|
•
|
Expected Term.
We do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time stock-based awards have been exercisable since the completion of our IPO in July 2014. As a result, we used the simplified method to calculate the expected term estimate based on the vesting and contractual terms of the option. Under the simplified method, the expected term is equal to the average of the stock-based award’s weighted average vesting period and its contractual term.
|
•
|
Volatility.
As we do not have a significant trading history for our common stock, the expected stock price volatility for our common stock was estimated by taking the average historic volatility of the common stock of a group of comparable publicly traded companies over a period equivalent to the expected term.
|
|
Three months ended
|
||||||
(in thousands)
|
December 31, 2016
|
|
December 31, 2015
|
||||
Net loss
|
$
|
(115,709
|
)
|
|
$
|
(34,451
|
)
|
Income tax expense (benefit)
|
87,391
|
|
|
(6,521
|
)
|
||
Interest (income) expense, net
|
1,022
|
|
|
(126
|
)
|
||
Depreciation and amortization
|
11,100
|
|
|
9,596
|
|
||
POP display amortization
|
4,944
|
|
|
4,114
|
|
||
Stock-based compensation
|
17,926
|
|
|
18,120
|
|
||
Impairment of intangible assets
|
1,088
|
|
|
—
|
|
||
Restructuring costs
|
36,581
|
|
|
—
|
|
||
Adjusted EBITDA
|
$
|
44,343
|
|
|
$
|
(9,268
|
)
|
|
|
Year ended December 31,
|
||||||||||||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Net income (loss)
|
|
$
|
(419,003
|
)
|
|
$
|
36,131
|
|
|
$
|
128,088
|
|
|
$
|
60,578
|
|
|
$
|
32,262
|
|
Income tax expense
|
|
43,829
|
|
|
16,454
|
|
|
52,887
|
|
|
30,751
|
|
|
20,948
|
|
|||||
Interest expense
|
|
1,401
|
|
|
234
|
|
|
5,038
|
|
|
6,018
|
|
|
346
|
|
|||||
Depreciation and amortization
|
|
41,639
|
|
|
28,981
|
|
|
17,945
|
|
|
12,034
|
|
|
3,975
|
|
|||||
POP display amortization
|
|
19,623
|
|
|
16,829
|
|
|
18,023
|
|
|
13,458
|
|
|
8,601
|
|
|||||
Stock-based compensation
|
|
69,527
|
|
|
80,680
|
|
|
71,399
|
|
|
10,887
|
|
|
9,156
|
|
|||||
Impairment of intangible assets
|
|
7,088
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring costs
|
|
43,089
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Adjusted EBITDA
|
|
$
|
(192,807
|
)
|
|
$
|
179,309
|
|
|
$
|
293,380
|
|
|
$
|
133,726
|
|
|
$
|
75,288
|
|
|
Three months ended
|
||||||
(in thousands)
|
December 31, 2016
|
|
December 31, 2015
|
||||
Net loss
|
$
|
(115,709
|
)
|
|
$
|
(34,451
|
)
|
Stock-based compensation
|
17,926
|
|
|
18,120
|
|
||
Acquisition-related costs
|
3,700
|
|
|
1,545
|
|
||
Restructuring costs
|
36,581
|
|
|
—
|
|
||
Income tax adjustments
|
99,869
|
|
|
3,390
|
|
||
Non-GAAP net income (loss)
|
$
|
42,367
|
|
|
$
|
(11,396
|
)
|
Non-GAAP diluted earnings (loss) per share
|
$
|
0.29
|
|
|
$
|
(0.08
|
)
|
|
|
|
|
||||
GAAP shares for diluted net income (loss) per share
|
141,063
|
|
|
137,086
|
|
||
Add: effect of potentially dilutive shares
|
5,198
|
|
|
—
|
|
||
Non-GAAP shares for diluted net income per share
|
146,261
|
|
|
137,086
|
|
|
|
Year ended December 31,
|
||||||||||||||
(in thousands)
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||
Net income (loss)
|
|
$
|
(419,003
|
)
|
|
$
|
36,131
|
|
|
$
|
128,088
|
|
|
$
|
60,578
|
|
Stock-based compensation
|
|
69,527
|
|
|
80,680
|
|
|
71,399
|
|
|
10,887
|
|
||||
Acquisition-related costs
|
|
17,346
|
|
|
5,370
|
|
|
1,133
|
|
|
1,106
|
|
||||
Restructuring costs
|
|
43,089
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income tax adjustments
|
|
87,794
|
|
|
(10,617
|
)
|
|
(11,707
|
)
|
|
(3,745
|
)
|
||||
Non-GAAP net income (loss)
|
|
$
|
(201,247
|
)
|
|
$
|
111,564
|
|
|
$
|
188,913
|
|
|
$
|
68,826
|
|
Non-GAAP diluted earnings (loss) per share
|
|
$
|
(1.44
|
)
|
|
$
|
0.76
|
|
|
$
|
1.32
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP shares for diluted net income (loss) per share
|
|
139,425
|
|
|
146,486
|
|
|
123,630
|
|
|
98,941
|
|
||||
Add: preferred shares conversion
|
|
—
|
|
|
—
|
|
|
15,136
|
|
|
30,523
|
|
||||
Add: initial public offering shares
|
|
—
|
|
|
—
|
|
|
4,414
|
|
|
8,900
|
|
||||
Non-GAAP shares for diluted net income (loss) per share
|
|
139,425
|
|
|
146,486
|
|
|
143,180
|
|
|
138,364
|
|
•
|
These non-GAAP financial measures may exclude certain recurring, non-cash charges such as stock-based compensation and amortization of acquired intangible assets;
|
•
|
adjusted EBITDA does not reflect tax payments that reduce cash available to us
;
|
•
|
adjusted EBITDA excludes depreciation and amortization and, although these are non-cash charges, the property and equipment being depreciated and amortized often will have to be replaced in the future, and adjusted EBITDA does not reflect any cash capital expenditure requirements for such replacements;
|
•
|
adjusted EBITDA excludes the amortization of POP display assets because it is a non-cash charge, and similar to depreciation of property and equipment and amortization of acquired intangible assets;
|
•
|
adjusted EBITDA and non-GAAP net income (loss) excludes the impairment of intangible assets because it is a non-cash charge that is inconsistent in amount and frequency, and similar to amortization of acquired intangible assets;
|
•
|
adjusted EBITDA and non-GAAP net income (loss) also excludes restructuring costs because these expenses do not reflect expected future operating expenses and do not contribute to a meaningful evaluation of current operating performance or comparisons to the operating performance in other periods; and
|
•
|
other companies may calculate these non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.
|
|
Page(s)
|
(in thousands, except par values)
|
December 31,
2016 |
|
December 31,
2015 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
192,114
|
|
|
$
|
279,672
|
|
Marketable securities
|
25,839
|
|
|
194,386
|
|
||
Accounts receivable, net
|
164,553
|
|
|
145,692
|
|
||
Inventory
|
167,192
|
|
|
188,232
|
|
||
Prepaid expenses and other current assets
|
38,115
|
|
|
25,261
|
|
||
Total current assets
|
587,813
|
|
|
833,243
|
|
||
Property and equipment, net
|
76,509
|
|
|
70,050
|
|
||
Intangible assets, net
|
33,530
|
|
|
31,027
|
|
||
Goodwill
|
146,459
|
|
|
57,095
|
|
||
Other long-term assets
|
78,329
|
|
|
111,561
|
|
||
Total assets
|
$
|
922,640
|
|
|
$
|
1,102,976
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
205,028
|
|
|
$
|
89,989
|
|
Accrued liabilities
|
211,323
|
|
|
192,446
|
|
||
Deferred revenue
|
14,388
|
|
|
12,742
|
|
||
Total current liabilities
|
430,739
|
|
|
295,177
|
|
||
Long-term taxes payable
|
26,386
|
|
|
21,770
|
|
||
Other long-term liabilities
|
18,570
|
|
|
13,996
|
|
||
Total liabilities
|
475,695
|
|
|
330,943
|
|
||
|
|
|
|
||||
Commitments, contingencies and guarantees (Note 11)
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.0001 par value, 5,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Common stock and additional paid-in capital, $0.0001 par value, 500,000 Class A shares authorized,104,647 and 100,596 shares issued and outstanding, respectively; 150,000 Class B shares authorized, 36,712 and 36,005 shares issued and outstanding, respectively
|
757,226
|
|
|
663,311
|
|
||
Treasury stock, at cost, 1,545 and 1,545 shares, respectively
|
(35,613
|
)
|
|
(35,613
|
)
|
||
Retained earnings (accumulated deficit)
|
(274,668
|
)
|
|
144,335
|
|
||
Total stockholders’ equity
|
446,945
|
|
|
772,033
|
|
||
Total liabilities and stockholders’ equity
|
$
|
922,640
|
|
|
$
|
1,102,976
|
|
|
Year ended December 31,
|
||||||||||
(in thousands, except per share data)
|
2016
|
|
2015
|
|
2014
|
||||||
Revenue
|
$
|
1,185,481
|
|
|
$
|
1,619,971
|
|
|
$
|
1,394,205
|
|
Cost of revenue
|
723,561
|
|
|
946,757
|
|
|
766,970
|
|
|||
Gross profit
|
461,920
|
|
|
673,214
|
|
|
627,235
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
358,902
|
|
|
241,694
|
|
|
151,852
|
|
|||
Sales and marketing
|
368,620
|
|
|
268,939
|
|
|
194,377
|
|
|||
General and administrative
|
107,367
|
|
|
107,833
|
|
|
93,971
|
|
|||
Total operating expenses
|
834,889
|
|
|
618,466
|
|
|
440,200
|
|
|||
Operating income (loss)
|
(372,969
|
)
|
|
54,748
|
|
|
187,035
|
|
|||
Other expense, net
|
(2,205
|
)
|
|
(2,163
|
)
|
|
(6,060
|
)
|
|||
Income (loss) before income taxes
|
(375,174
|
)
|
|
52,585
|
|
|
180,975
|
|
|||
Income tax expense
|
43,829
|
|
|
16,454
|
|
|
52,887
|
|
|||
Net income (loss)
|
$
|
(419,003
|
)
|
|
$
|
36,131
|
|
|
$
|
128,088
|
|
|
|
|
|
|
|
||||||
Less: net income allocable to participating securities
|
—
|
|
|
—
|
|
|
(16,512
|
)
|
|||
Net income (loss) attributable to common stockholders—basic
|
$
|
(419,003
|
)
|
|
$
|
36,131
|
|
|
$
|
111,576
|
|
Add: net income allocable to dilutive participating securities
|
—
|
|
|
—
|
|
|
2,277
|
|
|||
Net income (loss) attributable to common stockholders—diluted
|
$
|
(419,003
|
)
|
|
$
|
36,131
|
|
|
$
|
113,853
|
|
|
|
|
|
|
|
||||||
Net income (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
(3.01
|
)
|
|
$
|
0.27
|
|
|
$
|
1.07
|
|
Diluted
|
$
|
(3.01
|
)
|
|
$
|
0.25
|
|
|
$
|
0.92
|
|
|
|
|
|
|
|
||||||
Shares used to compute net income (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
139,425
|
|
|
134,595
|
|
|
104,453
|
|
|||
Diluted
|
139,425
|
|
|
146,486
|
|
|
123,630
|
|
|
Redeemable
convertible preferred stock |
Common stock and additional paid-in capital
|
|
Treasury stock
|
|
Retained
earnings (accumulated
deficit)
|
|
Stockholders’
equity
(deficit) |
||||||||||||||
(in thousands)
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
Amount
|
|
|
||||||||||
Balances at December 31, 2013
|
30,523
|
|
$
|
77,198
|
|
81,420
|
|
$
|
14,518
|
|
|
$
|
—
|
|
|
$
|
(19,884
|
)
|
|
$
|
(5,366
|
)
|
Issuance of common stock upon public offerings, net of offering costs
|
—
|
|
—
|
|
10,188
|
|
286,247
|
|
|
—
|
|
|
—
|
|
|
286,247
|
|
|||||
Conversion of preferred stock to common stock upon initial public offering, net of issuance cost accretion
|
(30,523)
|
|
(77,198)
|
|
30,523
|
|
77,198
|
|
|
—
|
|
|
—
|
|
|
77,198
|
|
|||||
Common stock issued under employee benefit plans, net of shares withheld for tax
|
—
|
|
—
|
|
8,414
|
|
7,681
|
|
|
—
|
|
|
—
|
|
|
7,681
|
|
|||||
Retirement of common stock
|
—
|
|
—
|
|
(1,430)
|
|
(1,177
|
)
|
|
—
|
|
|
—
|
|
|
(1,177)
|
|
|||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
71,399
|
|
|
—
|
|
|
—
|
|
|
71,399
|
|
|||||
Excess tax benefit from stock-based compensation
|
—
|
|
—
|
|
—
|
|
77,134
|
|
|
—
|
|
|
—
|
|
|
77,134
|
|
|||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
128,088
|
|
|
128,088
|
|
|||||
Balances at December 31, 2014
|
—
|
|
—
|
|
129,115
|
|
533,000
|
|
|
—
|
|
|
108,204
|
|
|
641,204
|
|
|||||
Common stock issued under employee benefit plans, net of shares withheld for tax
|
—
|
|
—
|
|
14,249
|
|
36,413
|
|
|
—
|
|
|
—
|
|
|
36,413
|
|
|||||
Taxes paid related to net share settlements
|
—
|
|
—
|
|
—
|
|
(13,943
|
)
|
|
—
|
|
|
—
|
|
|
(13,943
|
)
|
|||||
Retirement of common stock
|
—
|
|
—
|
|
(5,218
|
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase of outstanding common stock
|
—
|
|
—
|
|
(1,545
|
)
|
—
|
|
|
(35,613
|
)
|
|
—
|
|
|
(35,613
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
80,583
|
|
|
—
|
|
|
—
|
|
|
80,583
|
|
|||||
Excess tax benefit from stock-based compensation
|
—
|
|
—
|
|
—
|
|
27,258
|
|
|
—
|
|
|
—
|
|
|
27,258
|
|
|||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
36,131
|
|
|
36,131
|
|
|||||
Balances at December 31, 2015
|
—
|
|
—
|
|
136,601
|
|
663,311
|
|
|
(35,613
|
)
|
|
144,335
|
|
|
772,033
|
|
|||||
Common stock issued under employee benefit plans, net of shares withheld for tax
|
—
|
|
—
|
|
3,936
|
|
10,103
|
|
|
—
|
|
|
—
|
|
|
10,103
|
|
|||||
Taxes paid related to net share settlements
|
—
|
|
—
|
|
—
|
|
(6,889
|
)
|
|
—
|
|
|
—
|
|
|
(6,889
|
)
|
|||||
Shares issued to third-party vendor for services (Note 11)
|
—
|
|
—
|
|
822
|
|
7,297
|
|
|
—
|
|
|
—
|
|
|
7,297
|
|
|||||
Stock-based compensation expense (Note 7)
|
—
|
|
—
|
|
—
|
|
69,499
|
|
|
—
|
|
|
—
|
|
|
69,499
|
|
|||||
Stock-based compensation expense related to restructuring (Note 13)
|
—
|
|
—
|
|
—
|
|
15,566
|
|
|
—
|
|
|
—
|
|
|
15,566
|
|
|||||
Excess tax benefit from stock-based compensation
|
—
|
|
—
|
|
—
|
|
(1,661
|
)
|
|
—
|
|
|
—
|
|
|
(1,661
|
)
|
|||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
(419,003
|
)
|
|
(419,003
|
)
|
|||||
Balances at December 31, 2016
|
—
|
|
$
|
—
|
|
141,359
|
|
$
|
757,226
|
|
|
$
|
(35,613
|
)
|
|
$
|
(274,668
|
)
|
|
$
|
446,945
|
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(419,003
|
)
|
|
$
|
36,131
|
|
|
$
|
128,088
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
41,640
|
|
|
28,981
|
|
|
17,945
|
|
|||
Stock-based compensation
|
69,527
|
|
|
80,680
|
|
|
71,399
|
|
|||
Excess tax benefit from stock-based compensation
|
(3,463
|
)
|
|
(29,348
|
)
|
|
(77,134
|
)
|
|||
Deferred income taxes
|
38,568
|
|
|
(11,468
|
)
|
|
(16,920
|
)
|
|||
Non-cash restructuring charges
|
17,601
|
|
|
—
|
|
|
—
|
|
|||
Impairment of intangible assets
|
7,088
|
|
|
—
|
|
|
—
|
|
|||
Other
|
7,574
|
|
|
5,427
|
|
|
1,865
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
(18,816
|
)
|
|
38,313
|
|
|
(61,323
|
)
|
|||
Inventory
|
21,040
|
|
|
(35,005
|
)
|
|
(41,033
|
)
|
|||
Prepaid expenses and other assets
|
(14,618
|
)
|
|
(23,281
|
)
|
|
(30,317
|
)
|
|||
Accounts payable and other liabilities
|
142,941
|
|
|
68,461
|
|
|
98,354
|
|
|||
Deferred revenue
|
2,168
|
|
|
(1,280
|
)
|
|
5,998
|
|
|||
Net cash provided by (used in) operating activities
|
(107,753
|
)
|
|
157,611
|
|
|
96,922
|
|
|||
|
|
|
|
|
|
||||||
Investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment, net
|
(43,627
|
)
|
|
(51,245
|
)
|
|
(27,210
|
)
|
|||
Purchases of marketable securities
|
—
|
|
|
(220,055
|
)
|
|
(103,827
|
)
|
|||
Maturities of marketable securities
|
119,918
|
|
|
94,680
|
|
|
1,083
|
|
|||
Sale of marketable securities
|
47,348
|
|
|
30,048
|
|
|
—
|
|
|||
Acquisitions, net of cash acquired
|
(104,353
|
)
|
|
(65,405
|
)
|
|
(3,950
|
)
|
|||
Net cash provided by (used in) investing activities
|
19,286
|
|
|
(211,977
|
)
|
|
(133,904
|
)
|
|||
|
|
|
|
|
|
||||||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock, net
|
2,775
|
|
|
22,833
|
|
|
300,097
|
|
|||
Excess tax benefit from stock-based compensation
|
3,463
|
|
|
29,348
|
|
|
77,134
|
|
|||
Payment of deferred acquisition-related consideration
|
(950
|
)
|
|
—
|
|
|
(2,000
|
)
|
|||
Payment of credit facility issuance costs
|
(3,333
|
)
|
|
—
|
|
|
—
|
|
|||
Payment of deferred public offering costs
|
—
|
|
|
(903
|
)
|
|
(5,730
|
)
|
|||
Repurchases of outstanding common stock
|
—
|
|
|
(35,613
|
)
|
|
—
|
|
|||
Repayment of debt
|
—
|
|
|
—
|
|
|
(114,000
|
)
|
|||
Net cash provided by financing activities
|
1,955
|
|
|
15,665
|
|
|
255,501
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(1,046
|
)
|
|
(1,556
|
)
|
|
—
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(87,558
|
)
|
|
(40,257
|
)
|
|
218,519
|
|
|||
Cash and cash equivalents at beginning of period
|
279,672
|
|
|
319,929
|
|
|
101,410
|
|
|||
Cash and cash equivalents at end of period
|
$
|
192,114
|
|
|
$
|
279,672
|
|
|
$
|
319,929
|
|
|
|
|
|
|
|
Level 1
|
Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to directly access.
|
Level 2
|
Valuations based on quoted prices for similar assets or liabilities; valuations for interest-bearing securities based on non-daily quoted prices in active markets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
|
Level 3
|
Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
Standard
|
|
Description
|
|
Expected date of adoption
|
|
Effect on the financial statements or other significant matters
|
Standards that are not yet adopted
|
|
|
|
|
||
Revenue from Contracts with Customers
Accounting Standards Update (ASU) No. 2014-09, 2016-08, 2016-10 and 2016-12 (Topic 606)
|
|
The updated revenue standard establishes principles for recognizing revenue and develops a common revenue standard for all industries. Under the new model, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard requires that entities disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Early adoption is permitted, but not earlier than the first quarter of 2017. The retrospective or cumulative effect transition method is permitted.
|
|
January 1, 2018
|
|
The Company completed an initial analysis of the impact of the standard on its sales contract portfolio by reviewing its current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to its sales contracts. The Company does not anticipate a material impact on its consolidated financial statements because the analysis of its contracts under the new standard supports the recognition of most of its revenue at the time product is shipped, consistent with its current revenue policy. Although the Company is continuing to review certain aspects of its policies and practices, it expects that, as a result of the adoption of the new guidance, the timing of recognizing certain sales incentives as a reduction of revenue will generally be earlier than under the existing guidance. The Company expects to utilize the modified retrospective transition method.
|
Leases
ASU No. 2016-02(Topic 842)
|
|
This standard requires lessees to put most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. Lessees would recognize a right-to-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The new standard should be applied on a modified retrospective basis.
|
|
January 1, 2019
|
|
Although the Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures, the Company currently expects that most of its operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption.
|
Stock Compensation
ASU No. 2016-09 (Topic 718)
|
|
This standard simplifies certain aspects of the accounting for share-based payment transactions, including income taxes, classification of awards and classification on the statement of cash flows. The new guidance also allows an entity to make a policy election to account for forfeitures as they occur. Early adoption is permitted for an entity in any interim or annual period.
|
|
January 1, 2017
|
|
The adoption of the standard resulted in a net cumulative-effect adjustment of $16.2 million to decrease accumulated deficit as of January 1, 2017, mostly related to the recognition of previously unrecognized excess tax benefits using the modified retrospective method. The previously unrecognized excess tax effects were recorded as a reduction to tax liabilities or an increase to deferred tax assets, which was fully offset by a valuation allowance. Without the valuation allowance, the Company’s deferred tax assets would have increased by $162.8 million. The Company elected to apply the change in presentation to the statements of cash flows prospectively and elected to account for forfeitures as they occur.
|
Income Taxes
ASU No. 2016-16 (Topic 740)
|
|
This standard requires entities to recognize at the transaction date the income tax consequences of intra-entity asset transfers. Previous guidance requires the tax effects from intra-entity asset transfers to be deferred until that asset is sold to a third party or recovered through use. The updated standard is effective in annual and interim periods in fiscal years beginning after December 15, 2017, with early adoption permitted during the first interim period of a fiscal year, and requires a modified retrospective transition method.
|
|
January 1, 2018
|
|
The Company is evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.
|
Intangible - Goodwill and Other
ASU No. 2017-04 (Topic 350)
|
|
This standard simplifies the accounting for goodwill and removes Step 2 of the annual goodwill impairment test. Upon adoption, goodwill impairment will be determined based on the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. Early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017, and requires a prospective transition method.
|
|
January 1, 2020
|
|
The Company is evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
(in thousands)
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
Cash equivalents
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
18,024
|
|
|
$
|
—
|
|
|
$
|
18,024
|
|
|
$
|
51,059
|
|
|
$
|
—
|
|
|
$
|
51,059
|
|
Total cash equivalents
|
$
|
18,024
|
|
|
$
|
—
|
|
|
$
|
18,024
|
|
|
$
|
51,059
|
|
|
$
|
—
|
|
|
$
|
51,059
|
|
Marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. agency securities
|
$
|
—
|
|
|
$
|
8,283
|
|
|
$
|
8,283
|
|
|
$
|
—
|
|
|
$
|
14,451
|
|
|
$
|
14,451
|
|
Commercial paper
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,197
|
|
|
2,197
|
|
||||||
Corporate debt securities
|
—
|
|
|
15,226
|
|
|
15,226
|
|
|
—
|
|
|
165,825
|
|
|
165,825
|
|
||||||
Municipal securities
|
—
|
|
|
2,330
|
|
|
2,330
|
|
|
—
|
|
|
11,913
|
|
|
11,913
|
|
||||||
Total marketable securities
|
$
|
—
|
|
|
$
|
25,839
|
|
|
$
|
25,839
|
|
|
$
|
—
|
|
|
$
|
194,386
|
|
|
$
|
194,386
|
|
|
December 31,
|
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Less than one year
|
$
|
25,839
|
|
|
$
|
122,199
|
|
Greater than one year but less than two years
|
—
|
|
|
72,187
|
|
||
Total
|
$
|
25,839
|
|
|
$
|
194,386
|
|
|
|
|
December 31,
|
||||||
(in thousands)
|
Useful life
(in years)
|
|
2016
|
|
2015
|
||||
Leasehold improvements
|
3–12
|
|
$
|
48,103
|
|
|
$
|
40,841
|
|
Production, engineering and other equipment
|
4
|
|
46,328
|
|
|
25,174
|
|
||
Tooling
|
1–2
|
|
23,742
|
|
|
19,537
|
|
||
Computers and software
|
2
|
|
18,750
|
|
|
14,581
|
|
||
Furniture and office equipment
|
3
|
|
12,530
|
|
|
11,389
|
|
||
Tradeshow equipment and other
|
2-5
|
|
7,578
|
|
|
4,136
|
|
||
Construction in progress
|
|
|
1,870
|
|
|
4,632
|
|
||
Gross property and equipment
|
|
|
158,901
|
|
|
120,290
|
|
||
Less: Accumulated depreciation and amortization
|
|
|
(82,392
|
)
|
|
(50,240
|
)
|
||
Property and equipment, net
|
|
|
$
|
76,509
|
|
|
$
|
70,050
|
|
|
December 31, 2016
|
||||||||||
(in thousands)
|
Gross carrying value
|
|
Accumulated
amortization
|
|
Net carrying value
|
||||||
Purchased technology
|
$
|
47,001
|
|
|
$
|
(17,086
|
)
|
|
$
|
29,915
|
|
In-process research and development (IPR&D)
|
3,615
|
|
|
—
|
|
|
3,615
|
|
|||
Total intangible assets
|
$
|
50,616
|
|
|
$
|
(17,086
|
)
|
|
$
|
33,530
|
|
|
December 31, 2015
|
||||||||||
(in thousands)
|
Gross carrying value
|
|
Accumulated
amortization |
|
Net carrying value
|
||||||
Purchased technology
|
$
|
32,952
|
|
|
$
|
(8,540
|
)
|
|
$
|
24,412
|
|
IPR&D
|
6,615
|
|
|
—
|
|
|
6,615
|
|
|||
Total intangible assets
|
$
|
39,567
|
|
|
$
|
(8,540
|
)
|
|
$
|
31,027
|
|
(in thousands)
|
Total
|
||
Balance at December 31, 2015
|
$
|
6,615
|
|
IPR&D assets acquired
|
4,460
|
|
|
Technological feasibility achieved
|
(1,150
|
)
|
|
Asset impairment
|
(6,310
|
)
|
|
Balance at December 31, 2016
|
$
|
3,615
|
|
(in thousands)
|
Total
|
||
Year ending December 31,
|
|
||
2017
|
$
|
8,689
|
|
2018
|
8,297
|
|
|
2019
|
7,786
|
|
|
2020
|
4,273
|
|
|
2021
|
870
|
|
|
|
$
|
29,915
|
|
|
December 31,
|
||||||
(in thousands)
|
2016
|
|
2015
|
||||
POP displays
|
$
|
27,592
|
|
|
$
|
27,989
|
|
Long-term deferred tax assets
|
106
|
|
|
41,936
|
|
||
Income tax receivable
|
33,425
|
|
|
33,206
|
|
||
Deposits and other
|
17,206
|
|
|
8,430
|
|
||
Other long-term assets
|
$
|
78,329
|
|
|
$
|
111,561
|
|
|
December 31,
|
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Accrued payables
|
$
|
91,655
|
|
|
$
|
60,738
|
|
Employee related liabilities
(1)
|
42,577
|
|
|
27,535
|
|
||
Accrued sales incentives
|
40,070
|
|
|
29,298
|
|
||
Warranty liability
|
11,456
|
|
|
10,400
|
|
||
Customer deposits
|
4,381
|
|
|
8,877
|
|
||
Income taxes payable
|
2,756
|
|
|
7,536
|
|
||
Purchase order commitments
|
4,730
|
|
|
38,477
|
|
||
Other
|
13,698
|
|
|
9,585
|
|
||
Accrued liabilities
|
$
|
211,323
|
|
|
$
|
192,446
|
|
(1)
|
See Note 13 for amounts associated with restructuring liabilities.
|
(in thousands)
|
December 31, 2016
|
|
Stock options outstanding
|
12,379
|
|
Restricted stock units outstanding
|
7,970
|
|
Common stock available for future grants
|
20,685
|
|
Total common stock shares reserved for issuance
|
41,034
|
|
|
Options outstanding
|
|||||||||||
|
Shares (in thousands)
|
|
Weighted- average
exercise price |
|
Weighted-
average remaining contractual term (in years) |
|
Aggregate
intrinsic value (in thousands) |
|||||
Outstanding at December 31, 2015:
|
13,081
|
|
|
$
|
11.82
|
|
|
6.70
|
|
$
|
108,846
|
|
Granted
|
2,573
|
|
|
11.27
|
|
|
|
|
|
|||
Exercised
|
(1,733
|
)
|
|
2.05
|
|
|
|
|
|
|||
Forfeited/Cancelled
|
(1,542
|
)
|
|
19.07
|
|
|
|
|
|
|||
Outstanding at December 31, 2016:
|
12,379
|
|
|
$
|
12.17
|
|
|
5.97
|
|
$
|
32,772
|
|
|
|
|
|
|
|
|
|
|||||
Vested and expected to vest at December 31, 2016
|
12,245
|
|
|
$
|
12.12
|
|
|
5.95
|
|
$
|
32,772
|
|
Exercisable at December 31, 2016
|
8,952
|
|
|
$
|
10.37
|
|
|
5.36
|
|
$
|
32,771
|
|
|
Shares (in thousands)
|
|
Weighted- average grant date fair value
|
|||
Non-vested shares at December 31, 2014
|
4,307
|
|
|
$
|
21.98
|
|
Granted
|
2,170
|
|
|
44.00
|
|
|
Vested
|
(1,735
|
)
|
|
19.84
|
|
|
Forfeited
|
(104
|
)
|
|
63.47
|
|
|
Non-vested shares at December 31, 2015
|
4,638
|
|
|
32.15
|
|
|
Granted
|
7,354
|
|
|
12.10
|
|
|
Vested
|
(2,075
|
)
|
|
23.87
|
|
|
Forfeited
|
(1,947
|
)
|
|
22.85
|
|
|
Non-vested shares at December 31, 2016
|
7,970
|
|
|
$
|
18.08
|
|
|
Year ended December 31,
|
||||
|
2016
|
|
2015
|
|
2014
|
Volatility
|
43%–54%
|
|
39%–45%
|
|
45.5%
|
Expected term (years)
|
0.5
|
|
0.5
|
|
0.6
|
Risk-free interest rate
|
0.4%–0.5%
|
|
0.1%–0.2%
|
|
0.1%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of revenue
|
$
|
1,616
|
|
|
$
|
1,492
|
|
|
$
|
835
|
|
Research and development
|
31,365
|
|
|
18,024
|
|
|
11,640
|
|
|||
Sales and marketing
|
13,883
|
|
|
13,762
|
|
|
10,428
|
|
|||
General and administrative
|
22,663
|
|
|
47,402
|
|
|
48,496
|
|
|||
Total stock-based compensation expense
|
$
|
69,527
|
|
|
$
|
80,680
|
|
|
$
|
71,399
|
|
|
Year ended December 31,
|
||||||||||
(in thousands, except per share data)
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Allocation of net income (loss)
|
$
|
(419,003
|
)
|
|
$
|
36,131
|
|
|
$
|
128,088
|
|
Less: net income allocable to participating securities
|
—
|
|
|
—
|
|
|
16,512
|
|
|||
Net income (loss) attributable to common stockholders—basic
|
(419,003
|
)
|
|
36,131
|
|
|
111,576
|
|
|||
Add: net income allocable to dilutive participating securities
|
—
|
|
|
—
|
|
|
2,277
|
|
|||
Net income (loss) attributable to common stockholders—diluted
|
$
|
(419,003
|
)
|
|
$
|
36,131
|
|
|
$
|
113,853
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted-average common shares—basic for Class A and Class B common stock
|
139,425
|
|
|
134,595
|
|
|
104,453
|
|
|||
Stock options, RSU's and ESPP shares
|
—
|
|
|
11,891
|
|
|
19,177
|
|
|||
Weighted-average common shares—diluted for Class A and Class B common stock
|
139,425
|
|
|
146,486
|
|
|
123,630
|
|
|||
|
|
|
|
|
|
||||||
Net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
(3.01
|
)
|
|
$
|
0.27
|
|
|
$
|
1.07
|
|
Diluted
|
$
|
(3.01
|
)
|
|
$
|
0.25
|
|
|
$
|
0.92
|
|
|
Year ended December 31,
|
|||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
|||
Stock options, RSUs and ESPP shares
|
21,000
|
|
|
2,681
|
|
|
15,921
|
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(2,925
|
)
|
|
$
|
18,548
|
|
|
$
|
55,846
|
|
State
|
(356
|
)
|
|
3,007
|
|
|
6,075
|
|
|||
Foreign
|
8,542
|
|
|
6,539
|
|
|
8,219
|
|
|||
Total current
|
5,261
|
|
|
28,094
|
|
|
70,140
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
37,573
|
|
|
(11,211
|
)
|
|
(13,551
|
)
|
|||
State
|
4,436
|
|
|
(204
|
)
|
|
(3,369
|
)
|
|||
Foreign
|
(3,441
|
)
|
|
(225
|
)
|
|
(333
|
)
|
|||
Total deferred
|
38,568
|
|
|
(11,640
|
)
|
|
(17,253
|
)
|
|||
Income tax expense
|
$
|
43,829
|
|
|
$
|
16,454
|
|
|
$
|
52,887
|
|
|
Year ended December 31,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
(in thousands, except percentage)
|
$
|
|
%
|
|
$
|
|
%
|
|
$
|
|
%
|
|||||||||
Reconciliation to statutory rate:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Tax at federal statutory rate
|
$
|
(131,311
|
)
|
|
(35.0
|
)%
|
|
$
|
18,405
|
|
|
35.0
|
%
|
|
$
|
63,341
|
|
|
35.0
|
%
|
Change in valuation allowance
|
101,878
|
|
|
27.2
|
|
|
8,555
|
|
|
16.3
|
|
|
—
|
|
|
—
|
|
|||
Impact of foreign operations
|
84,491
|
|
|
22.5
|
|
|
6,434
|
|
|
12.2
|
|
|
(13,305
|
)
|
|
(7.4
|
)
|
|||
Stock-based compensation
|
15,718
|
|
|
4.2
|
|
|
2,390
|
|
|
4.5
|
|
|
8,050
|
|
|
4.4
|
|
|||
State taxes, net of federal benefit
|
(14,195
|
)
|
|
(3.8
|
)
|
|
1,454
|
|
|
2.8
|
|
|
4,911
|
|
|
2.7
|
|
|||
Tax credits
|
(12,992
|
)
|
|
(3.5
|
)
|
|
(21,891
|
)
|
|
(41.6
|
)
|
|
(10,616
|
)
|
|
(5.9
|
)
|
|||
Other
|
240
|
|
|
0.1
|
|
|
1,107
|
|
|
2.1
|
|
|
506
|
|
|
0.4
|
|
|||
Income tax provision at effective tax rate
|
$
|
43,829
|
|
|
11.7
|
%
|
|
$
|
16,454
|
|
|
31.3
|
%
|
|
$
|
52,887
|
|
|
29.2
|
%
|
|
December 31,
|
||||||
(in thousands)
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
30,193
|
|
|
$
|
339
|
|
Tax credit carryforwards
|
22,341
|
|
|
9,372
|
|
||
Stock-based compensation
|
26,656
|
|
|
19,096
|
|
||
Allowance for returns
|
6,336
|
|
|
8,812
|
|
||
Accruals and reserves
|
26,587
|
|
|
20,398
|
|
||
Total deferred tax assets
|
112,113
|
|
|
58,017
|
|
||
Valuation allowance
|
(110,433
|
)
|
|
(8,555
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
1,680
|
|
|
49,462
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation and amortization
|
(1,714
|
)
|
|
(6,937
|
)
|
||
Intangible assets
|
(2,540
|
)
|
|
(2,904
|
)
|
||
Total deferred tax liabilities
|
(4,254
|
)
|
|
(9,841
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
(2,574
|
)
|
|
$
|
39,621
|
|
|
December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Gross balance at January 1
|
$
|
36,273
|
|
|
$
|
16,558
|
|
|
$
|
9,898
|
|
Gross increase related to current year tax positions
|
20,594
|
|
|
19,948
|
|
|
6,401
|
|
|||
Gross increase related to prior year tax positions
|
130
|
|
|
108
|
|
|
259
|
|
|||
Gross decrease related to prior year tax positions
|
(88
|
)
|
|
(341
|
)
|
|
—
|
|
|||
|
$
|
56,909
|
|
|
$
|
36,273
|
|
|
$
|
16,558
|
|
(in thousands)
|
Total
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
||||||||||||||
Operating leases
(1)
|
$
|
139,511
|
|
|
$
|
16,972
|
|
|
$
|
20,345
|
|
|
$
|
13,896
|
|
|
$
|
17,157
|
|
|
$
|
16,770
|
|
|
$
|
54,371
|
|
Sponsorship commitments
(2)
|
14,500
|
|
|
7,449
|
|
|
4,134
|
|
|
2,917
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other contractual commitments
(3)
|
39,189
|
|
|
11,744
|
|
|
14,723
|
|
|
12,722
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total contractual cash obligations
|
$
|
193,200
|
|
|
$
|
36,165
|
|
|
$
|
39,202
|
|
|
$
|
29,535
|
|
|
$
|
17,157
|
|
|
$
|
16,770
|
|
|
$
|
54,371
|
|
(1)
|
The Company leases its facilities under long-term operating leases, which expire at various dates through 2027.
|
(2)
|
The Company enters into multi-year sponsorship agreements with event organizers, resorts and athletes as part of its marketing efforts.
|
(3)
|
The Company enters into other contractual commitments, including the multi-year agreement with Red Bull, as well as software licenses related to the Company's financial and IT systems which require payments over several years.
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Beginning balances
|
$
|
10,856
|
|
|
$
|
6,405
|
|
|
$
|
3,870
|
|
Charged to cost of revenue
|
19,272
|
|
|
25,377
|
|
|
10,268
|
|
|||
Settlements of warranty claims
|
(18,183
|
)
|
|
(20,926
|
)
|
|
(7,733
|
)
|
|||
Ending balances
|
$
|
11,945
|
|
|
$
|
10,856
|
|
|
$
|
6,405
|
|
|
Year ended December 31,
|
||||||||||
(in thousands)
|
2016
|
|
2015
|
|
2014
|
||||||
Accounts receivable sold
|
$
|
167,769
|
|
|
$
|
194,223
|
|
|
$
|
250,437
|
|
Factoring fees
|
1,266
|
|
|
1,566
|
|
|
2,148
|
|
|
|
||
(in thousands)
|
Amount
|
||
Employee severance pay and related costs
(1)
|
$
|
18,893
|
|
Non-cash acceleration of stock-based compensation expense
(1)
|
15,566
|
|
|
Non-cancelable leases, accelerated depreciation and other charges
|
2,122
|
|
|
Total restructuring charges
|
$
|
36,581
|
|
(1)
|
Includes total charges of
$11.4 million
(including
$8.8 million
for accelerated equity awards) associated with the departure of the Company's former President.
|
|
|
|
|
|
|
||||||
(in thousands)
|
Severance
|
|
Other
|
|
Total
|
||||||
Restructuring liability as of October 1, 2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Restructuring charges
|
18,893
|
|
|
879
|
|
|
19,772
|
|
|||
Cash paid
|
(8,440
|
)
|
|
—
|
|
|
(8,440
|
)
|
|||
Non-cash settlements
|
(793
|
)
|
|
—
|
|
|
(793
|
)
|
|||
Restructuring liability as of December 31, 2016
|
$
|
9,660
|
|
|
$
|
879
|
|
|
$
|
10,539
|
|
|
|
||
(in thousands)
|
Amount
|
||
Cost of revenue
|
$
|
497
|
|
Research and development
|
17,197
|
|
|
Sales and marketing
|
12,064
|
|
|
General and administrative
|
13,331
|
|
|
Total restructuring charges
|
$
|
43,089
|
|
(in thousands)
|
Balance at Beginning of Year
|
|
Charges to Revenue
|
|
Charges to Expense
|
|
Deductions/Write-offs
|
|
Balance at End of Year
|
||||||||||
Allowance for doubtful accounts receivable:
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2016
|
$
|
1,400
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
(159
|
)
|
|
$
|
1,281
|
|
Year ended December 31, 2015
|
1,250
|
|
|
—
|
|
|
682
|
|
|
(532
|
)
|
|
1,400
|
|
|||||
Year ended December 31, 2014
|
520
|
|
|
—
|
|
|
970
|
|
|
(240
|
)
|
|
1,250
|
|
|||||
Allowance for sales returns:
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2016
|
$
|
26,280
|
|
|
$
|
35,136
|
|
|
$
|
(41,378
|
)
|
|
$
|
—
|
|
|
$
|
20,038
|
|
Year ended December 31, 2015
|
25,747
|
|
|
48,182
|
|
|
(47,649
|
)
|
|
—
|
|
|
26,280
|
|
|||||
Year ended December 31, 2014
|
14,352
|
|
|
39,011
|
|
|
(27,616
|
)
|
|
—
|
|
|
25,747
|
|
|||||
Valuation allowance for deferred tax assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2016
|
$
|
8,555
|
|
|
$
|
—
|
|
|
$
|
101,878
|
|
|
$
|
—
|
|
|
$
|
110,433
|
|
Year ended December 31, 2015
|
—
|
|
|
—
|
|
|
8,555
|
|
|
—
|
|
|
8,555
|
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedules
|
|
|
GoPro, Inc.
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
Dated:
|
February 16, 2017
|
By: /s/ Nicholas Woodman
|
|
|
Nicholas Woodman
Chief Executive Officer
(Principal Executive Officer)
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
|
By:
|
/s/ Nicholas Woodman
|
|
Chief Executive Officer and Chairman
|
|
February 16, 2017
|
|
Nicholas Woodman
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
By:
|
/s/ Brian McGee
|
|
Chief Financial Officer
|
|
February 16, 2017
|
|
Brian McGee
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
By:
|
/s/ Anthony Bates
|
|
Director
|
|
February 16, 2017
|
|
Anthony Bates
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Michael Marks
|
|
Director
|
|
February 16, 2017
|
|
Michael Marks
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Peter Gotcher
|
|
Director
|
|
February 16, 2017
|
|
Peter Gotcher
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Edward Gilhuly
|
|
Director
|
|
February 16, 2017
|
|
Edward Gilhuly
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Kenneth Goldman
|
|
Director
|
|
February 16, 2017
|
|
Kenneth Goldman
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Alexander Lurie
|
|
Director
|
|
February 16, 2017
|
|
Alexander Lurie
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Lauren Zalaznick
|
|
Director
|
|
February 16, 2017
|
|
Lauren Zalaznick
|
|
|
|
|
Exhibit
|
|
|
Incorporated by Reference
|
Filed
|
|||
Number
|
|
Exhibit Title
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Herewith
|
3.01
|
|
Restated Certificate of Incorporation of the Registrant.
|
S-1
|
333-200038
|
3.01
|
November 10, 2014
|
|
3.02
|
|
Amended and Restated Bylaws of the Registrant.
|
S-1
|
333-200038
|
3.02
|
November 10, 2014
|
|
4.01
|
|
Form of Registrant’s Class A common stock certificate.
|
S-1
|
333-196083
|
4.01
|
May 19, 2014
|
|
4.02
|
|
Investors’ Rights Agreement, dated as of February 26, 2011, by and among the Registrant and certain investors, as amended.
|
S-1
|
333-196083
|
4.02
|
May 19, 2014
|
|
10.01*
|
|
Form of Indemnity Agreement by and between the Registrant and each of its directors and executive officers.
|
S-1
|
333-196083
|
10.01
|
May 19, 2014
|
|
10.02*
|
|
Form of Change in Control Severance Agreement.
|
S-1
|
333-196083
|
10.09
|
May 19, 2014
|
|
10.03*
|
|
2010 Equity Incentive Plan, as amended, and form of stock option agreement and restricted stock unit agreement.
|
S-1
|
333-196083
|
10.02
|
May 19, 2014
|
|
10.04*
|
|
2014 Equity Incentive Plan, as amended, and forms thereunder.
|
10-Q
|
001-36514
|
10.03
|
July 29, 2016
|
|
10.05*
|
|
2014 Employee Stock Purchase Plan and forms thereunder.
|
S-1/A
|
333-196083
|
10.04
|
June 11, 2014
|
|
10.06*
|
|
Employment Letter to Nicholas Woodman from the Registrant, dated June 2, 2014.
|
S-1/A
|
333-196083
|
10.16
|
June 11, 2014
|
|
10.07*
|
|
Offer Letter to Jack Lazar from the Registrant, dated January 17, 2014.
|
S-1
|
333-196083
|
10.07
|
May 19, 2014
|
|
10.08*
|
|
Amended and Restated Change in Control Severance Agreement dated June 8, 2014, by and between Jack Lazar and the Registrant.
|
S-1/A
|
333-196083
|
10.01
|
June 11, 2014
|
|
10.09*
|
|
Offer Letter to Sharon Zezima from the Registrant, dated August 23, 2013.
|
S-1
|
333-196083
|
10.08
|
May 19, 2014
|
|
10.10*
|
|
Amended and Restated Offer Letter to Anthony Bates from the Registrant, effective as of October 23, 2014.
|
S-1
|
333-200038
|
10.16
|
November 10, 2014
|
|
10.11*
|
|
Separation Agreement and Release of Claims dated December 15, 2016 by and between Anthony Bates and the Registrant.
|
8-K
|
001-36514
|
10.01
|
December 20, 2016
|
|
10.12*
|
|
Offer Letter to Brian McGee from the Registrant, dated September 3, 2015.
|
|
|
|
|
X
|
10.13*
|
|
Offer Letter to Charles Prober from Registrant, dated May 28, 2014.
|
|
|
|
|
X
|
10.14
|
|
Office Lease Agreement, dated as of November 1, 2011, by and between Locon San Mateo, LLC and the Registrant, as amended, and other leases for the Registrant’s headquarters.
|
S-1
|
333-196083
|
10.12
|
May 19, 2014
|
|
10.15
|
|
Eighth amendment to Office Lease Agreement, by and between RAR2 - Clearview Business Park Owner QRS, LLC and the Registrant, dated February 24, 2016.
|
|
|
|
|
X
|
10.16
|
|
Ninth amendment to Office Lease Agreement, by and between RAR2 - Clearview Business Park Owner QRS, LLC and the Registrant, dated August 3, 2016.
|
|
|
|
|
X
|
10.17
|
|
Credit Agreement by and among Registrant, the Lenders party thereto and JPMorgan Chase Bank, N.A. dated March 25, 2016.
|
10-Q
|
001-36514
|
10.17
|
May 6, 2016
|
|
21.01
|
|
List of Subsidiaries.
|
|
|
|
|
X
|
23.01
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
|
X
|
24.01
|
|
Power of Attorney (included on the signature page to this Annual Report on Form 10-K).
|
|
|
|
|
X
|
31.01
|
|
Certification of Principal Executive Officer Required Under Rule 13(a)-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
X
|
31.02
|
|
Certification of Principal Financial Officer Required Under Rule 13(a)-14(a) and 15(d)-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
X
|
32.01‡
|
|
Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
|
|
|
|
|
X
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
/s/ Jeff Ryan
|
Jeff Ryan
|
VP, People
|
/s/ Brian McGee
|
Date:
|
9/8/2015
|
Brian McGee
|
|
|
/s/ Nina Richardson
|
Nina Richardson
|
COO
|
/s/ Charles Prober
|
|
May 30, 2014
|
Charles Prober
|
|
Date
|
|
|
|
Start Date: June 2, 2014
|
|
|
A.
|
Landlord (as successor in interest to Locon San Mateo, LLC, a Delaware limited liability company) and Tenant (formerly known as Woodman Labs, Inc., a Delaware corporation, successor in interest to Woodman Labs, Inc., a California corporation) are parties to that certain Office Lease Agreement dated November 1, 2011 (the “
Original Lease
”), as amended by that certain First Amendment to Office Lease Agreement fully executed on or about August 29, 2012, that certain Second Amendment to Office Lease Agreement dated as of September 11, 2012, that certain Third Amendment to Office Lease Agreement fully executed on or about September 17, 2012, that certain Fourth Amendment to Office Lease Agreement dated as of March 5, 2013, that certain Fifth Amendment to Office Lease Agreement dated as of August 20, 2013, that certain Sixth Amendment to Lease dated December 19, 2014 (the “
Sixth Amendment
”), and that certain Seventh Amendment to Lease dated as of November 23, 2015 (collectively, the “
Lease
”). Pursuant to the Lease, Landlord has leased to Tenant space totaling
311,194
rentable square feet (the “
Premises
”), containing: (i)
45,435
rentable square feet comprising the entire building located at 3000E Clearview Way, San Mateo, California (“
Building E
”); (ii)
37,222
rentable square feet comprising the entire building located at 3000F Clearview Way, San Mateo, California (“
Building F
”); (iii)
9,666
rentable square feet comprised of (a) 1,728 rentable square feet known as Suite C (formerly known as the marketing suite) on the first floor of the building commonly known as Building A located at 3155 Clearview Way, San Mateo, California (“
Building A
”) and (b) 7,938 rentable square feet known as Suite A (formerly known as the shell space) on the first floor of Building A; (iv)
4,810
rentable square feet known as Suite B located on the first floor of Building A; (v)
1,342
rentable square feet known as Suite D located on the first floor of Building A; (vi)
16,674
rentable square feet known as Suite 200 on the second floor of Building A, (vii)
860
rentable square feet described as the lobby area of Building A; (viii)
17,364
rentable square feet known as Suite 300 in Building A; (ix)
66,945
rentable square feet comprising the entire building located at 3125 Clearview Way, San Mateo, California (“
Building B
”); and (x)
110,876
rentable square feet comprising the entire building to be built by Landlord and which will be commonly known as Building D located at 3025 Clearview Way, San Mateo, California (“
Building D
”) (Building A, Building B, Building D, Building E and Building F are collectively referred to herein as the “
Buildings
”). The Buildings are a part of the property commonly known as Clearview Business Park.
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B.
|
Pursuant to the Sixth Amendment, Landlord granted Tenant an improvement allowance in an amount up to $133,890.00 (the “
Allowance
”) in connection Tenant’s performance of certain improvements to a portion of the Premises, all as further described in the Sixth Amendment. Pursuant to the Sixth Amendment, Tenant must submit a request for payment of the entire Allowance to Landlord by February 29, 2016 (the “
Allowance Expiration Date
”). Tenant has requested and Landlord has agreed to postpone the Allowance Expiration Date to a later date, on and subject to the following terms and conditions of this Amendment.
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1.
|
Amendment.
Notwithstanding anything to the contrary contained in Section 3 of Exhibit “B” to the Sixth Amendment, Tenant must submit a request for payment of the entire Allowance to Landlord in accordance with the provisions contained in Exhibit “B” to the Sixth Amendment by May 31, 2016 (the “
Extended
Allowance Expiration Date
”). If Tenant does not submit a request for payment of the entire Allowance to Landlord by the Extended Allowance Expiration Date, any unused amount of the Allowance shall accrue to the sole benefit of Landlord, it being understood that Tenant shall not be entitled to any credit, abatement or other concession in connection therewith.
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2.
|
Miscellaneous.
|
2.1
|
This Amendment sets forth the entire agreement between the parties with respect to the matters set forth herein. There have been no additional oral or written representations or agreements. Under no circumstances shall Tenant be entitled to any rent abatement, improvement allowance, leasehold improvements, or other work to the Premises, or any similar economic incentives that may have been provided Tenant in connection with entering into the Lease, unless expressly set forth in the Lease or this Amendment.
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2.2
|
Except as herein modified or amended, the provisions, conditions and terms of the Lease shall remain unchanged and in full force and effect. In the case of any inconsistency between the provisions of the Lease and this Amendment, the provisions of this Amendment shall govern and control. The capitalized terms used in this Amendment shall have the same definitions as set forth in the Lease to the extent that such capitalized terms are defined therein and not redefined in this Amendment.
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2.3
|
Submission of this Amendment by Landlord is not an offer to enter into this Amendment but rather is a solicitation for such an offer by Tenant. Landlord shall not be bound by this Amendment until Landlord has executed and delivered the same to Tenant.
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2.4
|
Tenant hereby represents to Landlord that Tenant has dealt with no broker in connection with this Amendment. Tenant agrees to indemnify and hold Landlord and the Landlord Parties
harmless from all claims of any brokers claiming to have represented Tenant in connection with this Amendment.
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2.5
|
Tenant hereby represents and warrants that neither Tenant, nor any persons or entities holding any legal or beneficial interest whatsoever in Tenant, are (i) the target of any sanctions program that is established by Executive Order of the President or published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“
OFAC
”); (ii) designated by the President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App. § 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of the President issued pursuant to such statutes; or (iii) named on the following list that is published by OFAC: “List of Specially Designated Nationals and Blocked Persons.” If the foregoing representation is untrue at any time during the Term, an event of default under the Lease will be deemed to have occurred, without the necessity of notice to Tenant.
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2.6
|
Redress for any claim against Landlord under the Lease and this Amendment shall be limited to and enforceable only against and to the extent of Landlord’s interest in the Buildings. The obligations of Landlord under the Lease are not intended to and shall not be personally binding on, nor shall any resort be had to the private properties of, any of its trustees or board of directors and officers, as the case may be, its investment manager, the general partners thereof, or any beneficiaries, stockholders, employees, or agents of Landlord or the investment manager, and in no case shall Landlord be liable to Tenant hereunder for any lost profits, damage to business, or any form of special, indirect or consequential damage.
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LANDLORD:
|
TENANT:
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||
|
|
|
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RAR2-CLEARVIEW BUSINESS PARK OWNER, LLC,
|
GOPRO, INC.,
|
||
a Delaware limited liability company
|
a Delaware corporation
|
||
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|
|
|
By: RAR2-Clearview Business Park Member
|
By:
|
/s/ Brian McGee
|
|
QRS, LLC, a Delaware limited liability company,
|
Name:
|
Brian McGee
|
|
its Investor Member and Manager
|
Title:
|
VP Finance
|
|
|
|
Dated:
|
Feb 24, 2016
|
By: RREEF America, L.L.C.,
|
|
|
|
a Delaware limited liability company,
|
|
|
|
its Authorized Agent
|
|
|
|
|
|
|
|
By:
|
/s/ Lisa Vogel
|
|
|
Name:
|
Lisa Vogel
|
|
|
Title:
|
Vice President
|
|
|
Dated:
|
3-4 ,2016
|
|
|
A.
|
Landlord (as successor in interest to Locon San Mateo, LLC, a Delaware limited liability company) and Tenant (formerly known as Woodman Labs, Inc., a Delaware corporation, successor in interest to Woodman Labs, Inc., a California corporation) are parties to that certain Office Lease Agreement dated November 1, 2011 (the “
Original Lease
”), as amended by that certain First Amendment to Office Lease Agreement fully executed on or about August 29, 2012, that certain Second Amendment to Office Lease Agreement dated as of September 11, 2012, that certain Third Amendment to Office Lease Agreement fully executed on or about September 17, 2012, that certain Fourth Amendment to Office Lease Agreement dated as of March 5, 2013, that certain Fifth Amendment to Office Lease Agreement dated as of August 20, 2013, that certain Sixth Amendment to Lease dated December 19, 2014 (the “
Sixth Amendment
”), that certain Seventh Amendment to Lease (the “
Seventh Amendment
”) dated as of November 23, 2015 and that certain Eighth Amendment to Lease dated February 24, 2016 (the “
Eighth Amendment
”) (collectively, the “
Lease
”). Pursuant to the Lease, Landlord has leased to Tenant space totaling
311,194
rentable square feet (the “
Premises
”), containing: (i)
45,435
rentable square feet comprising the entire building located at 3000E Clearview Way, San Mateo, California (“
Building E
”); (ii)
37,222
rentable square feet comprising the entire building located at 3000F Clearview Way, San Mateo, California (“
Building F
”); (iii)
9,666
rentable square feet comprised of (a) 1,728 rentable square feet known as Suite C (formerly known as the marketing suite) on the first floor of the building commonly known as Building A located at 3155 Clearview Way, San Mateo, California (“
Building A
”) and (b) 7,938 rentable square feet known as Suite A (formerly known as the shell space) on the first floor of Building A; (iv)
4,810
rentable square feet known as Suite B located on the first floor of Building A; (v)
1,342
rentable square feet known as Suite D located on the first floor of Building A; (vi)
16,674
rentable square feet known as Suite 200 on the second floor of Building A, (vii)
860
rentable square feet described as the lobby area of Building A; (viii)
17,364
rentable square feet known as Suite 300 in Building A; (ix)
66,945
rentable square feet comprising the entire building located at 3125 Clearview Way, San Mateo, California (“
Building B
”); and (x)
110,876
rentable square feet (the “
Building D Premises
”) comprising the entire building to be built by Landlord and which will be commonly known as Building D located at 3025 Clearview Way, San Mateo, California (“
Building D
”) (Building A, Building B, Building D, Building E and Building F are collectively referred to herein as the “
Buildings
”). The Buildings are a part of the property commonly known as Clearview Business Park.
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B.
|
Pursuant to the Seventh Amendment, Landlord shall perform certain improvements to the Building D Premises (the “
Landlord Work
”), as further described in the Seventh Amendment, including but not limited to installation of certain lobby finishes, including floor tile and base in the first floor lobby area and first and second floor elevator lobby areas and wood wall finish in the first floor lobby area (the “
Lobby Finish Work
”), as depicted on sheets A2.1 and A2.2, and with enlarged plans, details and finishes shown on sheets A5.13, A5.14 and A5.15 of those certain construction drawings dated February 10, 2015 (the “
Drawings
”) attached as Exhibit “B-1” to the Seventh Amendment, and installation of three (3) showers, as depicted on sheet A2.1, finish schedule A5.10, and with elevations and enlarged plans shown on details 3, 4 and 5 on sheet A5.11 of the Drawings (the “
Shower Work
”). Pursuant to the Seventh Amendment, Tenant shall perform certain improvements to the Building D Premises (the “
Tenant Work
”), and Landlord granted Tenant an improvement allowance in connection with Tenant’s performance of the Tenant Work, all as further described in the Seventh Amendment. Tenant has requested and Landlord has agreed that the Lobby Finish Work and the Shower Work shall become part of the Tenant Work, and Tenant shall be entitled to an improvement allowance in connection with Tenant’s performance of the Lobby Finish Work and the Shower Work, on and subject to the following terms and conditions of this Amendment.
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C.
|
Pursuant to the Sixth Amendment, Landlord granted Tenant an improvement allowance in an amount up to $133,890.00 (the “
Allowance
”) in connection with Tenant’s performance of certain improvements to a portion of the Premises, and Tenant was required to submit a request for payment of the entire Allowance to Landlord on or before February 29, 2016 (the “
Allowance Expiration Date
”), all as further described in the Sixth Amendment. Pursuant to the Eighth Amendment, the parties agreed to extend the Allowance Expiration Date to May 31, 2016 (the “
Extended Allowance Expiration Date
”). Tenant has requested and Landlord has agreed to once again extend the date by when Tenant is required to submit a request for payment of the entire Allowance from the Extended Allowance Expiration Date to a later date, on and subject to the following terms and conditions of this Amendment.
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1.
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Amendment
.
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1.1
|
Notwithstanding anything to the contrary contained in the Seventh Amendment, the Lobby Finish Work and the Shower Work shall be excluded from the Landlord Work and Landlord shall have no further obligation for the performance thereof. Tenant shall perform the Lobby Finish Work and the Shower Work as part the Tenant Work in accordance with Exhibit “C” to the Seventh Amendment. Notwithstanding anything to the contrary contained in the Lease, the flush flow rates for the showers and adjacent fixtures shall be performed in compliance with the LEED requirements set forth on
Exhibit A
, attached hereto. Tenant shall cause to be prepared the final design and space plans and specifications (called “
Plans
”) necessary to construct the Lobby Finish Work and the Shower Work, which Plans shall be approved by Landlord. Tenant shall be responsible for all elements of the design of the Plans (including, without limitation, functionality of design, the configuration of the Premises and the placement of Tenant’s furniture, appliances and equipment). Tenant shall furnish to Landlord complete Plans on or before January 1, 2017 (the “
Plans Due Date
”). If Tenant fails to furnish to Landlord complete Plans by the Plans Due Date, then Landlord shall provide Tenant with a written notice (a “
Plan Notice
”) that contains substantially the following statement in bold and capital letters: “
THIS IS A REMINDER THAT TENANT WAS REQUIRED TO SUBMIT PLANS BY JANUARY 1, 2017 PURSUANT TO THE PROVISIONS OF SECTION 1.1 OF THE NINTH AMENDMENT TO LEASE. IF TENANT FAILS TO RESPOND WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF THIS NOTICE, THEN LANDLORD SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO COMPLETE THE LOBBY FINISH WORK AND THE SHOWER WORK IN ACCORDANCE WITH THE DRAWINGS
.” If Tenant fails to respond to such Plan Notice within five (5) business days after receipt by Tenant, then Landlord shall have the right, but not the obligation, to complete the Lobby Finish Work and the Shower Work in accordance with the Drawings. Any sums reasonably expended by Landlord in connection therewith, to the extent it exceeds the Additional Allowance (as defined below), shall be payable by Tenant within thirty (30) days of written demand as Additional Rent, or at Landlord’s election deducted from the Building D Allowance (as defined in Exhibit “C” to the Seventh Amendment) to the extent that such Building D Allowance is not yet disbursed and is still available to apply. Tenant shall obtain all necessary permits and commence performance of the Lobby Finish Work and the Shower Work by not later than March 1, 2017. If Tenant fails to obtain all necessary permits and commence performance of the Lobby Finish Work and the Shower Work by March 1, 2017, then Landlord shall provide Tenant with a written notice (a “
Permit Notice
”) that contains substantially the following statement in bold and capital letters: “
THIS IS A REMINDER THAT TENANT WAS REQUIRED TO OBTAIN ALL NECESSARY PERMITS AND COMMENCE PERFORMANCE OF THE LOBBY FINISH WORK AND THE SHOWER WORK BY MARCH 1, 2017 PURSUANT TO THE PROVISIONS OF SECTION 1.1 OF THE NINTH AMENDMENT TO LEASE. IF TENANT FAILS TO RESPOND WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF THIS NOTICE, THEN LANDLORD SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO COMPLETE THE LOBBY FINISH WORK AND THE SHOWER WORK
.” If Tenant fails to respond to such Permit Notice within five (5) business days after receipt by Tenant, then Landlord shall have the right, but not the obligation, to complete the Lobby Finish Work and the Shower Work. Any sums reasonably expended by Landlord in connection therewith, to the extent it exceeds the Additional Allowance (as defined below), shall be payable by Tenant within thirty (30) days of written demand as Additional Rent, or at Landlord’s election deducted from the Building D Allowance (as defined in Exhibit “C” to the Seventh Amendment) to the extent that such Building D Allowance is not yet disbursed and is still available to apply. If Tenant fails to timely perform any of its obligations under this Section 1.1, such failure shall be a Tenant Delay (as defined in the Seventh Amendment); provided, however, that the number of days of delay caused by Landlord’s failure to timely review plans or any other documents in accordance with the terms and conditions of this Amendment in connection with the Lobby Work and the Shower Work shall be deducted from the total number of any days of Tenant Delay.
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1.2
|
Provided Tenant is not in default beyond applicable notice and cure periods, Landlord agrees to contribute the following: (i) the sum of up to $141,164.00 (the “
Lobby Work Allowance
”) toward the cost of performing the Lobby Finish Work, and (ii) the sum of up to $65,186.00 (the “
Shower Work Allowance
”) toward the cost of performing the Shower Work (the Lobby Work Allowance and the Shower Work Allowance are collectively referred to herein as the “
Additional Allowance
”). The Additional Allowance may only be used for the hard costs in connection with the Lobby Finish Work and the Shower Work, as may be the case. The Additional Allowance shall be paid to Tenant or, at Landlord’s option, to the order of the general contractor that performed the Lobby Finish Work or the Shower Work, as may be the case, within thirty (30) days following receipt by Landlord of (a) receipted bills covering all labor and materials expended and used in the Lobby Finish Work or the Shower Work, as may be the case; (b) a sworn contractor’s affidavit from the general contractor and a request to disburse from Tenant containing an approval by Tenant of the work done; (c) full and final waivers of lien; (d) as-built plans of the Lobby Finish Work or the Shower Work, as applicable; and (e) the certification of Tenant and its architect that the Lobby Finish Work and the Shower Work, as may be the case, have been installed in a good and workmanlike manner in accordance with the approved plans, and in accordance with applicable laws, codes and ordinances. The Additional Allowance shall be disbursed in the amount reflected on the receipted bills meeting the requirements above. Notwithstanding anything herein to the contrary, Landlord shall not be obligated to disburse any portion of the Additional Allowance during the continuance of an uncured default under the Lease, and Landlord’s obligation to disburse shall only resume when and if such default is cured. If Tenant does not submit a request for payment of the entire Additional Allowance to Landlord in accordance with the provisions contained in this Section 1.2 on or before the expiration of twelve (12) months from the Building D Expansion Effective Date (as defined in the Seventh Amendment) any unused amount shall accrue to the sole benefit of Landlord, it being understood that Tenant shall not be entitled to any credit, abatement or other concession in connection therewith. Tenant shall be responsible for all applicable state sales or use taxes, if any, payable in connection with the Lobby Finish Work, the Shower Work and/or the Additional Allowance.
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1.3
|
Notwithstanding anything to the contrary contained in Section 3 of Exhibit “B” to the Sixth Amendment, as amended by the Eighth Amendment, Tenant must submit a request for payment of the entire Allowance to Landlord in accordance with the provisions contained in Exhibit “B” to the Sixth Amendment by August 31, 2016 (the “
Second
Extended
Allowance Expiration Date
”). If Tenant does not submit a request for payment of the entire Allowance to Landlord by the Second Extended Allowance Expiration Date, any unused amount of the Allowance shall accrue to the sole benefit of Landlord, it being understood that Tenant shall not be entitled to any credit, abatement or other concession in connection therewith.
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2.
|
Miscellaneous
.
|
2.1
|
This Amendment, including
Exhibit A
(LEED Requirements)
attached hereto, sets forth the entire agreement between the parties with respect to the matters set forth herein. There have been no additional oral or written representations or agreements. Under no circumstances shall Tenant be entitled to any rent abatement, improvement allowance, leasehold improvements, or other work to the Premises, or any similar economic incentives that may have been provided Tenant in connection with entering into the Lease, unless specifically set forth in this Amendment.
|
2.2
|
Except as herein modified or amended, the provisions, conditions and terms of the Lease shall remain unchanged and in full force and effect. In the case of any inconsistency between the provisions of the Lease and this Amendment, the provisions of this Amendment shall govern and control. The capitalized terms used in this Amendment shall have the same definitions as set forth in the Lease to the extent that such capitalized terms are defined therein and not redefined in this Amendment.
|
2.3
|
Submission of this Amendment by Landlord is not an offer to enter into this Amendment but rather is a solicitation for such an offer by Tenant. Landlord shall not be bound by this Amendment until Landlord has executed and delivered the same to Tenant.
|
2.4
|
Tenant hereby represents to Landlord that Tenant has dealt with no broker in connection with this Amendment. Tenant agrees to indemnify and hold Landlord and the Landlord Parties harmless from all claims of any brokers claiming to have represented Tenant in connection with this Amendment.
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2.5
|
Each of the parties hereto represents that the person signing this Amendment has the authority to execute and deliver the same on behalf of the party hereto for which such signatory is acting. Tenant hereby represents and warrants that neither Tenant, nor any persons or entities holding any legal or beneficial interest whatsoever in Tenant (excluding any owners of publicly traded shares in Tenant to the extent Tenant is publicly traded on an “over-the-counter” market or any recognized national or international market), are (i) the target of any sanctions program that is established by Executive Order of the President or published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“
OFAC
”); (ii) designated by the President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App. § 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of the President issued pursuant to such statutes; or (iii) named on the following list that is published by OFAC: “List of Specially Designated Nationals and Blocked Persons.” If the foregoing representation is untrue at any time during the Term, an event of default under the Lease will be deemed to have occurred, without the necessity of notice to Tenant.
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2.6
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Pursuant to California Civil Code Section 1938, Landlord hereby notifies Tenant that as of the date of this Amendment, the Premises have not undergone inspection by a “Certified Access Specialist” to determine whether the Premises meet all applicable construction-related accessibility standards under California Civil Code Section 55.53.
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2.7
|
Redress for any claim against Landlord under the Lease and this Amendment shall be limited to and enforceable only against and to the extent of Landlord’s interest in the Buildings. The obligations of Landlord under the Lease are not intended to and shall not be personally binding on, nor shall any resort be had to the private properties of, any of its trustees or board of directors and officers, as the case may be, its investment manager, the general partners thereof, or any beneficiaries, stockholders, employees, or agents of Landlord or the investment manager, and in no case shall Landlord be liable to Tenant hereunder for any lost profits, damage to business, or any form of special, indirect or consequential damage.
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LANDLORD:
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TENANT:
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|||
|
|
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|
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RAR2-CLEARVIEW BUSINESS PARK OWNER, LLC,
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GOPRO, INC.,
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|||
a Delaware limited liability company
|
a Delaware corporation
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|||
|
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By: RAR2-Clearview Business Park Member
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By:
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/s/ Brian McGee
|
||
QRS, LLC, a Delaware limited liability company,
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Name:
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Brian McGee
|
||
its Investor Member and Manager
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Title:
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CFO
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Dated:
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, 2016
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By:
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RREEF America, L.L.C.,
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|
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a Delaware limited liability company,
|
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its Authorized Agent
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By:
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/s/ Stephen J. George
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Name:
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Stephen J. George
|
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Title:
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Vice President
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Dated:
|
8/3/2016
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Fixture Type
|
Baseline
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Installed
|
Water Closets
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1.6 gpf
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1.28 gpf
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Urinals
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1 gpf
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0.125 gpf
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Public Lavatory Faucets (Metered)
|
0.25 gpc
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0.108 gpc
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Showers
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2.5gpm
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1.5gpm
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/s/ SG
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/s/ BM
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Initials
|
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Exhibit 21.1
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List of Subsidiaries
|
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Name
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Jurisdiction of Incorporation
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GoPro Australia Pty Ltd
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Australia
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GoPro do Brasil Participações Ltda.
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Brazil
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GoPro Philippines Ltd.
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Cayman Islands
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Woodman Labs Cayman, Inc.
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Cayman Islands
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GoPro Technology (Shenzhen) Limited
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China
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GoPro Trading (Shanghai) Limited
|
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China
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GoPro France SAS
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France
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GoPro Technology France SAS
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France
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Kolor SAS
|
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France
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Stupeflix SAS
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France
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GoPro GmbH
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Germany
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GoPro Hong Kong Limited
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Hong Kong
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GoPro GK
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Japan
|
GoPro Coöperatief U.A.
|
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The Netherlands
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GoPro International B.V.
|
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The Netherlands
|
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GoPro Switzerland AG
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Switzerland
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GoPro Media (UK) Ltd.
|
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United Kingdom
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GoPro Care, Inc.
|
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United States
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GoPro Care Services, Inc.
|
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United States
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GoPro Mobility (U.S.), LLC
|
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United States
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SpliceApp LLC
|
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United States
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Stupeflix Inc.
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United States
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Vemory, Inc.
|
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United States
|
Date:
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February 16, 2017
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/s/ Nicholas Woodman
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Nicholas Woodman
Chief Executive Officer
(Principal Executive Officer)
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Date:
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February 16, 2017
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/s/ Brian McGee
|
|
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Brian McGee
Chief Financial Officer
(Principal Financial Officer)
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By: /s/ Nicholas Woodman
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Nicholas Woodman
Chief Executive Officer
(Principal Executive Officer)
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February 16, 2017
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By: /s/ Brian McGee
|
Brian McGee
Chief Financial Officer
(Principal Financial Officer)
|
February 16, 2017
|