|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
OR
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|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from ________________ to ________________
|
Delaware
|
|
77-0629474
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
3000 Clearview Way
San Mateo, California |
|
94402
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Class A common stock
|
GPRO
|
NASDAQ Global Select Market
|
Large accelerated filer þ
|
Accelerated filer ☐
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Non-accelerated filer ☐
|
|
|
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
|
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Page
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PART I. FINANCIAL INFORMATION
|
||
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
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PART II. OTHER INFORMATION
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
(in thousands, except par values)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
86,941
|
|
|
$
|
152,095
|
|
Marketable securities
|
46,319
|
|
|
45,417
|
|
||
Accounts receivable, net
|
117,822
|
|
|
129,216
|
|
||
Inventory
|
118,970
|
|
|
116,458
|
|
||
Prepaid expenses and other current assets
|
26,402
|
|
|
30,887
|
|
||
Total current assets
|
396,454
|
|
|
474,073
|
|
||
Property and equipment, net
|
42,680
|
|
|
46,567
|
|
||
Operating lease right-of-use assets
|
57,469
|
|
|
—
|
|
||
Intangible assets, net
|
10,983
|
|
|
13,065
|
|
||
Goodwill
|
146,459
|
|
|
146,459
|
|
||
Other long-term assets
|
16,793
|
|
|
18,195
|
|
||
Total assets
|
$
|
670,838
|
|
|
$
|
698,359
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
91,757
|
|
|
$
|
148,478
|
|
Accrued expenses and other current liabilities
|
117,290
|
|
|
135,892
|
|
||
Short-term operating lease liabilities
|
10,862
|
|
|
—
|
|
||
Deferred revenue
|
14,065
|
|
|
15,129
|
|
||
Total current liabilities
|
233,974
|
|
|
299,499
|
|
||
Long-term taxes payable
|
19,081
|
|
|
19,553
|
|
||
Long-term debt
|
141,342
|
|
|
138,992
|
|
||
Long-term operating lease liabilities
|
73,887
|
|
|
—
|
|
||
Other long-term liabilities
|
3,998
|
|
|
28,203
|
|
||
Total liabilities
|
472,282
|
|
|
486,247
|
|
||
|
|
|
|
||||
Commitments, contingencies and guarantees (Note 8)
|
|
|
|
|
|||
|
|
|
|
||||
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, 111,263 and 105,170 shares issued and outstanding, respectively; 150,000 Class B shares authorized, 33,097 and 35,897 shares issued and outstanding, respectively
|
905,625
|
|
|
894,755
|
|
||
Treasury stock, at cost, 10,710 and 10,710 shares, respectively
|
(113,613
|
)
|
|
(113,613
|
)
|
||
Accumulated deficit
|
(593,456
|
)
|
|
(569,030
|
)
|
||
Total stockholders’ equity
|
198,556
|
|
|
212,112
|
|
||
Total liabilities and stockholders’ equity
|
$
|
670,838
|
|
|
$
|
698,359
|
|
|
Three months ended March 31,
|
||||||
(in thousands, except per share data)
|
2019
|
|
2018
|
||||
Revenue
|
$
|
242,708
|
|
|
$
|
202,346
|
|
Cost of revenue
|
162,361
|
|
|
157,430
|
|
||
Gross profit
|
80,347
|
|
|
44,916
|
|
||
Operating expenses:
|
|
|
|
||||
Research and development
|
37,464
|
|
|
50,979
|
|
||
Sales and marketing
|
47,290
|
|
|
49,170
|
|
||
General and administrative
|
15,881
|
|
|
19,506
|
|
||
Total operating expenses
|
100,635
|
|
|
119,655
|
|
||
Operating loss
|
(20,288
|
)
|
|
(74,739
|
)
|
||
Other income (expense):
|
|
|
|
||||
Interest expense
|
(4,527
|
)
|
|
(4,567
|
)
|
||
Other income, net
|
828
|
|
|
177
|
|
||
Total other expense, net
|
(3,699
|
)
|
|
(4,390
|
)
|
||
Loss before income taxes
|
(23,987
|
)
|
|
(79,129
|
)
|
||
Income tax (benefit) expense
|
378
|
|
|
(2,782
|
)
|
||
Net loss
|
$
|
(24,365
|
)
|
|
$
|
(76,347
|
)
|
|
|
|
|
||||
Basic and diluted net loss per share
|
$
|
(0.17
|
)
|
|
$
|
(0.55
|
)
|
|
|
|
|
||||
Weighted-average number of shares outstanding, basic and diluted
|
142,601
|
|
|
137,857
|
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(24,365
|
)
|
|
$
|
(76,347
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
6,850
|
|
|
8,907
|
|
||
Amortization of leased assets
|
2,626
|
|
|
—
|
|
||
Stock-based compensation
|
9,785
|
|
|
10,823
|
|
||
Deferred income taxes
|
(38
|
)
|
|
(593
|
)
|
||
Non-cash restructuring charges
|
(201
|
)
|
|
2,933
|
|
||
Non-cash interest expense
|
2,142
|
|
|
1,934
|
|
||
Other
|
(329
|
)
|
|
272
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
11,260
|
|
|
31,277
|
|
||
Inventory
|
(2,512
|
)
|
|
17,932
|
|
||
Prepaid expenses and other assets
|
5,761
|
|
|
26,138
|
|
||
Accounts payable and other liabilities
|
(74,640
|
)
|
|
(117,879
|
)
|
||
Deferred revenue
|
(1,323
|
)
|
|
(2,509
|
)
|
||
Net cash used in operating activities
|
(64,984
|
)
|
|
(97,112
|
)
|
||
|
|
|
|
||||
Investing activities:
|
|
|
|
||||
Purchases of property and equipment, net
|
(724
|
)
|
|
(6,782
|
)
|
||
Purchases of marketable securities
|
(6,948
|
)
|
|
(14,896
|
)
|
||
Maturities of marketable securities
|
4,400
|
|
|
20,000
|
|
||
Sale of marketable securities
|
1,889
|
|
|
—
|
|
||
Net cash used in investing activities
|
(1,383
|
)
|
|
(1,678
|
)
|
||
|
|
|
|
||||
Financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock
|
3,812
|
|
|
3,210
|
|
||
Taxes paid related to net share settlement of equity awards
|
(2,673
|
)
|
|
(2,402
|
)
|
||
Net cash provided by financing activities
|
1,139
|
|
|
808
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
74
|
|
|
465
|
|
||
Net change in cash and cash equivalents
|
(65,154
|
)
|
|
(97,517
|
)
|
||
Cash and cash equivalents at beginning of period
|
152,095
|
|
|
202,504
|
|
||
Cash and cash equivalents at end of period
|
$
|
86,941
|
|
|
$
|
104,987
|
|
|
Common stock and additional paid-in capital
|
|
Treasury stock
|
|
Retained earnings (accumulated
deficit)
|
|
Stockholders’ equity
|
||||||||||
(in thousands)
|
Shares
|
Amount
|
|
Amount
|
|
|
|||||||||||
Balances at December 31, 2017
|
137,000
|
|
$
|
854,452
|
|
|
$
|
(113,613
|
)
|
|
$
|
(442,134
|
)
|
|
$
|
298,705
|
|
Common stock issued under employee benefit plans, net of shares withheld for tax
|
1,673
|
|
3,186
|
|
|
—
|
|
|
—
|
|
|
3,186
|
|
||||
Taxes paid related to net share settlements
|
—
|
|
(2,402
|
)
|
|
—
|
|
|
—
|
|
|
(2,402
|
)
|
||||
Stock-based compensation expense
|
—
|
|
10,797
|
|
|
—
|
|
|
—
|
|
|
10,797
|
|
||||
Cumulative effect of adoption of new accounting standards
|
—
|
|
—
|
|
|
—
|
|
|
(17,862
|
)
|
|
(17,862
|
)
|
||||
Net loss
|
—
|
|
—
|
|
|
—
|
|
|
(76,347
|
)
|
|
(76,347
|
)
|
||||
Balances at March 31, 2018
|
138,673
|
|
$
|
866,033
|
|
|
$
|
(113,613
|
)
|
|
$
|
(536,343
|
)
|
|
$
|
216,077
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Balances at December 31, 2018
|
141,067
|
|
$
|
894,755
|
|
|
$
|
(113,613
|
)
|
|
$
|
(569,030
|
)
|
|
$
|
212,112
|
|
Common stock issued under employee benefit plans, net of shares withheld for tax
|
3,293
|
|
3,761
|
|
|
—
|
|
|
—
|
|
|
3,761
|
|
||||
Taxes paid related to net share settlements
|
—
|
|
(2,673
|
)
|
|
—
|
|
|
—
|
|
|
(2,673
|
)
|
||||
Stock-based compensation expense (Note 5)
|
—
|
|
9,782
|
|
|
—
|
|
|
—
|
|
|
9,782
|
|
||||
Cumulative effect of adoption of new accounting standard (Note 1)
|
—
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
|
(61
|
)
|
||||
Net loss
|
—
|
|
—
|
|
|
—
|
|
|
(24,365
|
)
|
|
(24,365
|
)
|
||||
Balances at March 31, 2019
|
144,360
|
|
$
|
905,625
|
|
|
$
|
(113,613
|
)
|
|
$
|
(593,456
|
)
|
|
$
|
198,556
|
|
•
|
Operating leases were previously not recorded on the Company’s condensed consolidated balance sheets.
|
•
|
The Company did not assume renewals in its determination of the lease term unless the renewals were deemed to be reasonably assured at lease inception.
|
•
|
The Company calculated a liability for future costs to be incurred under a lease for its remaining term without economic benefit to the Company upon determination of a cease-use date. The fair value of the liability was determined based on remaining lease payments, estimated sublease income and the effects of any prepaid or deferred items recognized under the lease.
|
Standard
|
|
Description
|
|
Company’s date of adoption
|
|
Effect on the condensed consolidated financial statements or other significant matters
|
Standards that were adopted
|
|
|
|
|
||
Leases
ASU No.
2016-02,
2018-10,
2018-11, 2019-01, (ASC 842)
|
|
This standard replaces existing lease guidance for lessees and requires operating leases to be recognized on the balance sheet. Under the new standard, lessees recognize a lease liability for the present value of future lease payments and a corresponding right-to-use asset. The new standard should be applied on a modified retrospective basis or using the cumulative effect transition method.
|
|
January 1, 2019
|
|
The new standard was applied using the cumulative effect transition method.
The Company completed its analysis of the impact of the standard by reviewing its lease agreements to identify changes resulting from applying the requirements of the new standard. The Company elected to utilize a package of practical expedients, which among other things, allowed the Company to maintain its existing classification of its current leases. The Company also elected the hindsight practical expedient to determine the reasonably certain lease term for existing leases. Additionally, the Company made a policy election to maintain its previous lease accounting for leases with an initial term of 12 months or less. Furthermore, the Company made the policy election to not separate nonlease components from lease components. The Company’s analysis of its lease agreements under the new standard resulted in the recognition of lease liabilities of $88.3M and lease assets of $60.1M on its condensed consolidated balance sheet as of January 1, 2019. The new standard did not have a material impact on the Company’s condensed consolidated income statement and condensed consolidated statement of cash flows.
|
(in thousands)
|
Balance at December 31, 2018
|
|
Adjustment due to ASC 842
|
|
Balance at January 1, 2019
|
||||||
Operating lease right-of-use assets
|
$
|
—
|
|
|
$
|
60,095
|
|
|
$
|
60,095
|
|
Property and equipment, net (1)
|
46,567
|
|
|
(57
|
)
|
|
46,510
|
|
|||
Accrued expenses and other current liabilities (2)
|
135,892
|
|
|
(4,315
|
)
|
|
131,577
|
|
|||
Short-term operating lease liabilities
|
—
|
|
|
10,812
|
|
|
10,812
|
|
|||
Long-term operating lease liabilities
|
—
|
|
|
77,478
|
|
|
77,478
|
|
|||
Other long-term liabilities (2)
|
28,203
|
|
|
(23,878
|
)
|
|
4,325
|
|
|||
Accumulated deficit
|
(569,030
|
)
|
|
(61
|
)
|
|
(569,091
|
)
|
(1)
|
Represents reclassification of leasehold acquisition costs to operating lease right-of-use assets.
|
(2)
|
Represents reclassification of deferred rent, tenant incentives and cease-use charges to operating lease right-of-use assets.
|
Standard
|
|
Description
|
|
Expected date of adoption
|
|
Effect on the condensed consolidated financial statements or other significant matters
|
Standards not yet adopted
|
|
|
|
|
||
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 is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017, and requires use of a prospective transition method.
|
|
January 1, 2020
|
|
The Company does not expect that the adoption of this standard will have a material impact on its condensed consolidated financial statements and related disclosures.
|
Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments
ASU No. 2016-13
(Topic 326)
|
|
The standard changes the impairment model for most financial assets and replaces the existing incurred loss model with a current expected credit loss (CECL) model. The standard should be applied on a modified retrospective approach.
|
|
January 1, 2020
|
|
The Company is currently evaluating the impact of adopting this standard on its condensed consolidated financial statements and related disclosures.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
(in thousands)
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||||||||
Cash equivalents (1):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds
|
$
|
6,114
|
|
|
$
|
—
|
|
|
$
|
6,114
|
|
|
$
|
10,901
|
|
|
$
|
—
|
|
|
$
|
10,901
|
|
Commercial paper
|
—
|
|
|
1,899
|
|
|
1,899
|
|
|
7,577
|
|
|
—
|
|
|
7,577
|
|
||||||
Total cash equivalents
|
$
|
6,114
|
|
|
$
|
1,899
|
|
|
$
|
8,013
|
|
|
$
|
18,478
|
|
|
$
|
—
|
|
|
$
|
18,478
|
|
Marketable securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. treasury securities
|
$
|
—
|
|
|
$
|
9,565
|
|
|
$
|
9,565
|
|
|
$
|
—
|
|
|
$
|
6,336
|
|
|
$
|
6,336
|
|
Commercial paper
|
—
|
|
|
22,687
|
|
|
22,687
|
|
|
20,657
|
|
|
—
|
|
|
20,657
|
|
||||||
Corporate debt securities
|
—
|
|
|
14,067
|
|
|
14,067
|
|
|
—
|
|
|
18,424
|
|
|
18,424
|
|
||||||
Total marketable securities
|
$
|
—
|
|
|
$
|
46,319
|
|
|
$
|
46,319
|
|
|
$
|
20,657
|
|
|
$
|
24,760
|
|
|
$
|
45,417
|
|
(1)
|
Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. Cash balances were $78.9 million and $133.6 million as of March 31, 2019 and December 31, 2018, respectively.
|
(in thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Components
|
$
|
21,212
|
|
|
$
|
19,205
|
|
Finished goods
|
97,758
|
|
|
97,253
|
|
||
Total inventory
|
$
|
118,970
|
|
|
$
|
116,458
|
|
(in thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Leasehold improvements
|
$
|
66,222
|
|
|
$
|
66,198
|
|
Production, engineering and other equipment
|
43,298
|
|
|
43,019
|
|
||
Tooling
|
17,947
|
|
|
17,808
|
|
||
Computers and software
|
20,562
|
|
|
20,865
|
|
||
Furniture and office equipment
|
14,984
|
|
|
14,969
|
|
||
Tradeshow equipment and other
|
7,016
|
|
|
7,009
|
|
||
Construction in progress
|
44
|
|
|
80
|
|
||
Gross property and equipment
|
170,073
|
|
|
169,948
|
|
||
Less: Accumulated depreciation and amortization
|
(127,393
|
)
|
|
(123,381
|
)
|
||
Property and equipment, net
|
$
|
42,680
|
|
|
$
|
46,567
|
|
|
March 31, 2019
|
||||||||||
(in thousands)
|
Gross carrying value
|
|
Accumulated amortization
|
|
Net carrying value
|
||||||
Purchased technology
|
$
|
50,501
|
|
|
$
|
(39,533
|
)
|
|
$
|
10,968
|
|
Domain name
|
15
|
|
|
—
|
|
|
15
|
|
|||
Total intangible assets
|
$
|
50,516
|
|
|
$
|
(39,533
|
)
|
|
$
|
10,983
|
|
|
December 31, 2018
|
||||||||||
(in thousands)
|
Gross carrying value
|
|
Accumulated amortization
|
|
Net carrying value
|
||||||
Purchased technology
|
$
|
50,501
|
|
|
$
|
(37,451
|
)
|
|
$
|
13,050
|
|
Domain name
|
15
|
|
|
—
|
|
|
15
|
|
|||
Total intangible assets
|
$
|
50,516
|
|
|
$
|
(37,451
|
)
|
|
$
|
13,065
|
|
(in thousands)
|
Total
|
||
Year ending December 31,
|
|
||
2019 (remaining 9 months)
|
$
|
5,736
|
|
2020
|
4,363
|
|
|
2021
|
869
|
|
|
2022
|
—
|
|
|
2023
|
—
|
|
|
|
$
|
10,968
|
|
(in thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Point of purchase (POP) displays
|
$
|
7,385
|
|
|
$
|
9,130
|
|
Long-term deferred tax assets
|
915
|
|
|
945
|
|
||
Deposits and other
|
8,493
|
|
|
8,120
|
|
||
Other long-term assets
|
$
|
16,793
|
|
|
$
|
18,195
|
|
(in thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Accrued sales incentives
|
$
|
46,983
|
|
|
$
|
40,918
|
|
Accrued payables (1)
|
27,308
|
|
|
34,696
|
|
||
Employee related liabilities (1)
|
10,538
|
|
|
19,775
|
|
||
Refund liability
|
8,995
|
|
|
13,100
|
|
||
Warranty liability
|
10,187
|
|
|
9,604
|
|
||
Inventory received
|
4,166
|
|
|
5,061
|
|
||
Customer deposits
|
2,181
|
|
|
3,105
|
|
||
Purchase order commitments
|
1,770
|
|
|
2,015
|
|
||
Income taxes payable
|
1,580
|
|
|
1,948
|
|
||
Other
|
3,582
|
|
|
5,670
|
|
||
Accrued expenses and other current liabilities
|
$
|
117,290
|
|
|
$
|
135,892
|
|
(1)
|
See Note 10 Restructuring charges, for amounts associated with restructuring liabilities.
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
10,971
|
|
|
$
|
10,373
|
|
Charged to cost of revenue
|
6,149
|
|
|
6,000
|
|
||
Settlement of warranty claims
|
(5,527
|
)
|
|
(6,966
|
)
|
||
Warranty liability
|
$
|
11,593
|
|
|
$
|
9,407
|
|
•
|
during any calendar quarter beginning after the calendar quarter ending on September 30, 2017, if the last reported sale price of Class A common stock for at least 20 trading days (whether or not consecutive) during the last 30 consecutive trading days of the immediately preceding fiscal quarter is greater than or equal to 130% of the conversion price of the Notes on each applicable trading day;
|
•
|
during the five-business day period following any five consecutive trading day period in which the trading price for the Notes is less than 98% of the product of the last reported sale price of Class A common stock and the conversion rate for the Notes on each such trading day; or
|
•
|
upon the occurrence of specified corporate events.
|
|
Shares
(in thousands)
|
|
Weighted-average
exercise price |
|
Weighted-average remaining contractual term (in years)
|
|
Aggregate intrinsic value
(in thousands) |
|||||
Outstanding at December 31, 2018
|
5,993
|
|
|
$
|
7.28
|
|
|
5.44
|
|
$
|
7,897
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(2,055
|
)
|
|
0.75
|
|
|
|
|
|
|||
Forfeited/Cancelled
|
(149
|
)
|
|
15.91
|
|
|
|
|
|
|||
Outstanding at March 31, 2019
|
3,789
|
|
|
$
|
10.49
|
|
|
7.02
|
|
$
|
2,149
|
|
|
|
|
|
|
|
|
|
|||||
Vested and expected to vest at March 31, 2019
|
3,789
|
|
|
$
|
10.49
|
|
|
7.02
|
|
$
|
2,149
|
|
Exercisable at March 31, 2019
|
2,561
|
|
|
$
|
12.25
|
|
|
6.14
|
|
$
|
1,411
|
|
|
Shares
(in thousands)
|
|
Weighted-average grant date fair value
|
|||
Non-vested shares at December 31, 2018
|
7,217
|
|
|
$
|
8.15
|
|
Granted
|
2,857
|
|
|
5.99
|
|
|
Vested
|
(1,227
|
)
|
|
8.53
|
|
|
Forfeited
|
(179
|
)
|
|
8.54
|
|
|
Non-vested shares at March 31, 2019
|
8,668
|
|
|
$
|
7.38
|
|
|
Shares
(in thousands)
|
|
Weighted-average grant date fair value
|
|||
Non-vested shares at December 31, 2018
|
300
|
|
|
$
|
5.76
|
|
Granted
|
—
|
|
|
—
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(300
|
)
|
|
5.76
|
|
|
Non-vested shares at March 31, 2019
|
—
|
|
|
$
|
—
|
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Cost of revenue
|
$
|
513
|
|
|
$
|
382
|
|
Research and development
|
4,677
|
|
|
5,005
|
|
||
Sales and marketing
|
2,213
|
|
|
2,747
|
|
||
General and administrative
|
2,382
|
|
|
2,689
|
|
||
Total stock-based compensation expense
|
$
|
9,785
|
|
|
$
|
10,823
|
|
|
Three months ended March 31,
|
||||||
(in thousands, except per share data)
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
||||
Net loss
|
$
|
(24,365
|
)
|
|
$
|
(76,347
|
)
|
|
|
|
|
||||
Denominator:
|
|
|
|
||||
Weighted-average common shares—basic and diluted for Class A and Class B common stock
|
142,601
|
|
|
137,857
|
|
||
|
|
|
|
||||
Basic and diluted net loss per share
|
$
|
(0.17
|
)
|
|
$
|
(0.55
|
)
|
|
Three months ended March 31,
|
||||
(in thousands)
|
2019
|
|
2018
|
||
Anti-dilutive stock-based awards
|
12,962
|
|
|
17,593
|
|
|
Three months ended March 31,
|
||||||
(dollars in thousands)
|
2019
|
|
2018
|
||||
Income tax (benefit) expense
|
$
|
378
|
|
|
$
|
(2,782
|
)
|
Effective tax rate
|
(1.6
|
)%
|
|
3.5
|
%
|
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
|
2019 (2)
|
|
2018 (1)
|
||||
Operating lease cost
|
|
$
|
5,105
|
|
|
$
|
3,409
|
|
Sublease income
|
|
(231
|
)
|
|
(189
|
)
|
||
Net lease cost
|
|
$
|
4,874
|
|
|
$
|
3,220
|
|
(1)
|
Represents rent expense and sublease income under ASC 840, Leases.
|
(2)
|
Operating lease cost includes variable lease costs, which are immaterial.
|
(in thousands)
|
|
Three months ended March 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
4,736
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
|
1,018
|
|
|
|
March 31, 2019
|
Weighted-average remaining lease term (in years) - operating leases
|
|
5.94
|
Weighted-average discount rate - operating leases
|
|
6.3%
|
(in thousands)
|
|
March 31, 2019
|
||
2019 (remaining 9 months)
|
|
$
|
11,058
|
|
2020
|
|
18,245
|
|
|
2021
|
|
17,716
|
|
|
2022
|
|
17,430
|
|
|
2023
|
|
16,861
|
|
|
Thereafter
|
|
21,676
|
|
|
Total lease payments
|
|
102,986
|
|
|
Less: Imputed interest
|
|
(18,237
|
)
|
|
Present value of lease liabilities
|
|
$
|
84,749
|
|
(in thousands)
|
|
December 31, 2018
|
||
2019
|
|
$
|
14,845
|
|
2020
|
|
17,654
|
|
|
2021
|
|
17,763
|
|
|
2022
|
|
17,552
|
|
|
2023
|
|
17,052
|
|
|
Thereafter
|
|
22,951
|
|
|
Total lease payments
|
|
$
|
107,817
|
|
|
March 31, 2019
|
|
December 31, 2018
|
Customer A
|
*
|
|
12%
|
Customer B
|
12%
|
|
11%
|
Customer C
|
17%
|
|
*
|
Customer D
|
11%
|
|
*
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Accounts receivable sold
|
$
|
16,423
|
|
|
$
|
18,596
|
|
Factoring fees
|
220
|
|
|
221
|
|
|
Three months ended March 31,
|
||
|
2019
|
|
2018
|
Customer A
|
13%
|
|
14%
|
Customer B
|
*
|
|
14%
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Americas
|
$
|
111,547
|
|
|
$
|
90,472
|
|
Europe, Middle East and Africa (EMEA)
|
69,869
|
|
|
62,310
|
|
||
Asia and Pacific (APAC)
|
61,292
|
|
|
49,564
|
|
||
Total revenue
|
$
|
242,708
|
|
|
$
|
202,346
|
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Cost of revenue
|
$
|
(9
|
)
|
|
$
|
1,239
|
|
Research and development
|
(147
|
)
|
|
9,599
|
|
||
Sales and marketing
|
(35
|
)
|
|
3,618
|
|
||
General and administrative
|
(62
|
)
|
|
2,282
|
|
||
Total restructuring charges
|
$
|
(253
|
)
|
|
$
|
16,738
|
|
(in thousands)
|
Severance
|
|
Other
|
|
Total
|
||||||
Restructuring liability as of December 31, 2018
|
$
|
1,119
|
|
|
$
|
399
|
|
|
$
|
1,518
|
|
Restructuring charges
|
—
|
|
|
15
|
|
|
15
|
|
|||
Cash paid
|
(1,095
|
)
|
|
(11
|
)
|
|
(1,106
|
)
|
|||
Non-cash reductions
|
(24
|
)
|
|
—
|
|
|
(24
|
)
|
|||
Restructuring liability as of March 31, 2019
|
$
|
—
|
|
|
$
|
403
|
|
|
$
|
403
|
|
(in thousands)
|
Severance
|
|
Other
|
|
Total
|
||||||
Restructuring liability as of December 31, 2018
|
$
|
—
|
|
|
$
|
5,667
|
|
|
$
|
5,667
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash paid
|
—
|
|
|
(267
|
)
|
|
(267
|
)
|
|||
Non-cash reductions
|
—
|
|
|
(1,311
|
)
|
|
(1,311
|
)
|
|||
Restructuring liability as of March 31, 2019
|
$
|
—
|
|
|
$
|
4,089
|
|
|
$
|
4,089
|
|
(in thousands)
|
Severance
|
|
Other
|
|
Total
|
||||||
Restructuring liability as of December 31, 2018
|
$
|
299
|
|
|
$
|
50
|
|
|
$
|
349
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash paid
|
—
|
|
|
—
|
|
|
—
|
|
|||
Non-cash reductions
|
(43
|
)
|
|
(50
|
)
|
|
(93
|
)
|
|||
Restructuring liability as of March 31, 2019
|
$
|
256
|
|
|
$
|
—
|
|
|
$
|
256
|
|
•
|
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.
|
•
|
Results of Operations. Analysis of our financial results comparing the first quarter of 2019 to 2018.
|
•
|
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 our contractual obligations, including expected payment schedule and indemnifications as of March 31, 2019.
|
•
|
Critical Accounting Policies and Estimates. Accounting estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.
|
•
|
Non-GAAP Financial Measures. A reconciliation and discussion of our GAAP to non-GAAP financial measures.
|
|
|
|
|
|
|
|
% Change
|
||||||||||
(units and dollars in thousands, except per share amounts)
|
Q1 2019
|
|
Q4 2018
|
|
Q1 2018
|
|
Q1 2019 vs. Q4 2018
|
|
Q1 2019 vs. Q1 2018
|
||||||||
Revenue
|
$
|
242,708
|
|
|
$
|
377,378
|
|
|
$
|
202,346
|
|
|
(36
|
)%
|
|
20
|
%
|
Camera units shipped (1)
|
842
|
|
|
1,413
|
|
|
758
|
|
|
(40
|
)%
|
|
11
|
%
|
|||
Gross margin (2)
|
33.1
|
%
|
|
37.7
|
%
|
|
22.2
|
%
|
|
(460) bps
|
|
|
1,090 bps
|
|
|||
Operating expenses
|
$
|
100,635
|
|
|
$
|
109,150
|
|
|
$
|
119,655
|
|
|
(8
|
)%
|
|
(16
|
)%
|
Net income (loss)
|
$
|
(24,365
|
)
|
|
$
|
31,671
|
|
|
$
|
(76,347
|
)
|
|
(177
|
)%
|
|
(68
|
)%
|
Diluted net income (loss) per share
|
$
|
(0.17
|
)
|
|
$
|
0.22
|
|
|
$
|
(0.55
|
)
|
|
(177
|
)%
|
|
(69
|
)%
|
Cash provided by (used) in operations
|
$
|
(64,984
|
)
|
|
$
|
48,413
|
|
|
$
|
(97,112
|
)
|
|
(234
|
)%
|
|
(33
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other financial information:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted EBITDA (3)
|
$
|
(1,035
|
)
|
|
$
|
58,807
|
|
|
$
|
(34,537
|
)
|
|
(102
|
)%
|
|
(97
|
)%
|
Non-GAAP net income (loss) (4)
|
$
|
(10,171
|
)
|
|
$
|
42,356
|
|
|
$
|
(47,364
|
)
|
|
(124
|
)%
|
|
(79
|
)%
|
Non-GAAP income (loss) per share
|
$
|
(0.07
|
)
|
|
$
|
0.30
|
|
|
$
|
(0.34
|
)
|
|
(124
|
)%
|
|
(79
|
)%
|
(1)
|
Represents the number of camera units that are shipped during a reporting period, including camera units that are shipped with drones, net of any returns. Camera units shipped does not include drones sold without a camera, mounts or accessories.
|
(2)
|
One basis point (bps) is equal to 1/100th of 1%.
|
(3)
|
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, point of purchase (POP) display amortization, stock-based compensation, impairment charges, and restructuring and other costs.
|
(4)
|
We define non-GAAP net income (loss) as net income (loss) adjusted to exclude stock-based compensation, acquisition-related costs, restructuring and other costs, non-cash interest expense, gain on sale and license of intellectual property and income tax 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.
|
|
Three months ended March 31,
|
||||||||||||
(dollars in thousands)
|
2019
|
|
2018
|
||||||||||
Revenue
|
$
|
242,708
|
|
|
100
|
%
|
|
$
|
202,346
|
|
|
100
|
%
|
Cost of revenue
|
162,361
|
|
|
67
|
|
|
157,430
|
|
|
78
|
|
||
Gross profit
|
80,347
|
|
|
33
|
|
|
44,916
|
|
|
22
|
|
||
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Research and development
|
37,464
|
|
|
15
|
|
|
50,979
|
|
|
25
|
|
||
Sales and marketing
|
47,290
|
|
|
19
|
|
|
49,170
|
|
|
24
|
|
||
General and administrative
|
15,881
|
|
|
7
|
|
|
19,506
|
|
|
10
|
|
||
Total operating expenses
|
100,635
|
|
|
41
|
|
|
119,655
|
|
|
59
|
|
||
Operating loss
|
(20,288
|
)
|
|
(8
|
)
|
|
(74,739
|
)
|
|
(37
|
)
|
||
Other income (expense):
|
|
|
|
|
|
|
|
||||||
Interest expense
|
(4,527
|
)
|
|
(2
|
)
|
|
(4,567
|
)
|
|
(2
|
)
|
||
Other income, net
|
828
|
|
|
—
|
|
|
177
|
|
|
—
|
|
||
Total other expense, net
|
(3,699
|
)
|
|
(2
|
)
|
|
(4,390
|
)
|
|
(2
|
)
|
||
Loss before income taxes
|
(23,987
|
)
|
|
(10
|
)
|
|
(79,129
|
)
|
|
(39
|
)
|
||
Income tax (benefit) expense
|
378
|
|
|
—
|
|
|
(2,782
|
)
|
|
(1
|
)
|
||
Net loss
|
$
|
(24,365
|
)
|
|
(10
|
)%
|
|
$
|
(76,347
|
)
|
|
(38
|
)%
|
|
Three months ended March 31,
|
|||||||||
(camera units and dollars in thousands)
|
2019
|
|
2018
|
|
% Change
|
|||||
Camera units shipped
|
842
|
|
|
758
|
|
|
11
|
%
|
||
|
|
|
|
|
|
|||||
Direct channel
|
$
|
110,928
|
|
|
$
|
99,703
|
|
|
11
|
|
Percentage of revenue
|
46
|
%
|
|
49
|
%
|
|
|
|||
Distribution channel
|
$
|
131,780
|
|
|
$
|
102,643
|
|
|
28
|
|
Percentage of revenue
|
54
|
%
|
|
51
|
%
|
|
|
|||
Total revenue
|
$
|
242,708
|
|
|
$
|
202,346
|
|
|
20
|
%
|
|
|
|
|
|
|
|||||
Americas
|
$
|
111,547
|
|
|
$
|
90,472
|
|
|
23
|
%
|
Percentage of revenue
|
46
|
%
|
|
45
|
%
|
|
|
|||
Europe, Middle East and Africa (EMEA)
|
$
|
69,869
|
|
|
$
|
62,310
|
|
|
12
|
|
Percentage of revenue
|
29
|
%
|
|
31
|
%
|
|
|
|||
Asia and Pacific (APAC)
|
$
|
61,292
|
|
|
$
|
49,564
|
|
|
24
|
|
Percentage of revenue
|
25
|
%
|
|
24
|
%
|
|
|
|||
Total revenue
|
$
|
242,708
|
|
|
$
|
202,346
|
|
|
20
|
%
|
|
Three months ended March 31,
|
|||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
% Change
|
|||||
Cost of revenue
|
$
|
159,775
|
|
|
$
|
153,154
|
|
|
4
|
%
|
Stock-based compensation
|
513
|
|
|
382
|
|
|
34
|
|
||
Acquisition-related costs
|
2,082
|
|
|
2,655
|
|
|
(22
|
)
|
||
Restructuring costs
|
(9
|
)
|
|
1,239
|
|
|
(101
|
)
|
||
Total cost of revenue
|
$
|
162,361
|
|
|
$
|
157,430
|
|
|
3
|
%
|
Gross margin
|
33.1
|
%
|
|
22.2
|
%
|
|
|
|
Three months ended March 31,
|
|||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
% Change
|
|||||
Research and development
|
$
|
32,934
|
|
|
$
|
36,375
|
|
|
(9
|
)%
|
Stock-based compensation
|
4,677
|
|
|
5,005
|
|
|
(7
|
)
|
||
Restructuring costs
|
(147
|
)
|
|
9,599
|
|
|
(102
|
)
|
||
Total research and development
|
$
|
37,464
|
|
|
$
|
50,979
|
|
|
(27
|
)%
|
Percentage of revenue
|
15.4
|
%
|
|
25.2
|
%
|
|
|
|
Three months ended March 31,
|
|||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
% Change
|
|||||
Sales and marketing
|
$
|
45,112
|
|
|
$
|
42,805
|
|
|
5
|
%
|
Stock-based compensation
|
2,213
|
|
|
2,747
|
|
|
(19
|
)
|
||
Restructuring costs
|
(35
|
)
|
|
3,618
|
|
|
(101
|
)
|
||
Total sales and marketing
|
$
|
47,290
|
|
|
$
|
49,170
|
|
|
(4
|
)%
|
Percentage of revenue
|
19.5
|
%
|
|
24.3
|
%
|
|
|
|
Three months ended March 31,
|
|||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
% Change
|
|||||
General and administrative
|
$
|
13,561
|
|
|
$
|
14,532
|
|
|
(7
|
)%
|
Stock-based compensation
|
2,382
|
|
|
2,689
|
|
|
(11
|
)
|
||
Acquisition-related costs
|
—
|
|
|
3
|
|
|
(100
|
)
|
||
Restructuring costs
|
(62
|
)
|
|
2,282
|
|
|
(103
|
)
|
||
Total general and administrative
|
$
|
15,881
|
|
|
$
|
19,506
|
|
|
(19
|
)%
|
Percentage of revenue
|
6.5
|
%
|
|
9.6
|
%
|
|
|
|
Three months ended March 31,
|
|||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
% Change
|
|||||
Interest expense
|
$
|
(4,527
|
)
|
|
$
|
(4,567
|
)
|
|
(1
|
)%
|
Other income, net
|
828
|
|
|
177
|
|
|
368
|
|
||
Total other expense, net
|
$
|
(3,699
|
)
|
|
$
|
(4,390
|
)
|
|
(16
|
)%
|
|
Three months ended March 31,
|
|||||||||
(dollars in thousands)
|
2019
|
|
2018
|
|
% Change
|
|||||
Income tax (benefit) expense
|
$
|
378
|
|
|
$
|
(2,782
|
)
|
|
(114
|
)%
|
Effective tax rate
|
(1.6
|
)%
|
|
3.5
|
%
|
|
|
(dollars in thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Cash and cash equivalents
|
$
|
86,941
|
|
|
$
|
152,095
|
|
Marketable securities
|
46,319
|
|
|
45,417
|
|
||
Total cash, cash equivalents and marketable securities
|
$
|
133,260
|
|
|
$
|
197,512
|
|
Percentage of total assets
|
20
|
%
|
|
28
|
%
|
•
|
We expect that operating expenses and inventory purchases will constitute a material use of our cash balances. We intend to continue to manage our operating activities in line with our existing cash and available financial resources.
|
•
|
In March 2016, we entered into a credit agreement with a syndicate of banks that provided for a secured revolving credit facility under which we could borrow up to an aggregate of $250.0 million. Our credit facility terminates in March 2021. No borrowings have been made from the credit facility to date. (See Note 4 Financing Arrangements, in the Notes to Condensed Consolidated Financial Statements for additional information.)
|
•
|
We have completed acquisitions in the past and we may 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.
|
|
Three months ended March 31,
|
|||||||||
(in thousands)
|
2019
|
|
2018
|
|
% Change
|
|||||
Net cash provided by (used in):
|
|
|
|
|
|
|||||
Operating activities
|
$
|
(64,984
|
)
|
|
$
|
(97,112
|
)
|
|
(33
|
)%
|
Investing activities
|
$
|
(1,383
|
)
|
|
$
|
(1,678
|
)
|
|
(18
|
)%
|
Financing activities
|
$
|
1,139
|
|
|
$
|
808
|
|
|
41
|
%
|
•
|
the comparability of our on-going operating results over the periods presented;
|
•
|
the ability to identify trends in our underlying business; and
|
•
|
the comparison of our operating results against analyst financial models and operating results of other public companies that supplement their GAAP results with non-GAAP financial measures.
|
•
|
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 is treated similarly to depreciation of property and equipment and amortization of acquired intangible assets;
|
•
|
adjusted EBITDA and non-GAAP net income (loss) exclude the impairment of intangible assets because it is a non-cash charge that is inconsistent in amount and frequency;
|
•
|
adjusted EBITDA and non-GAAP net income (loss) exclude restructuring and other related costs which primarily include severance-related costs, stock-based compensation expenses, facilities consolidation charges recorded in connection with restructuring actions announced in the fourth quarter of 2016, first quarter of 2017 and first quarter of 2018, and the related ongoing operating lease cost of those facilities recorded under ASC 842. 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;
|
•
|
adjusted EBITDA and non-GAAP net income (loss) exclude stock-based compensation expense related to equity awards granted primarily to our workforce. We exclude stock-based compensation expense because we believe that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance. In particular, we note that companies calculate stock-based compensation expense for the variety of award types that they employ using different valuation methodologies and subjective assumptions. These non-cash charges are not factored into our internal evaluation of net income (loss) as we believe their inclusion would hinder our ability to assess core operational performance;
|
•
|
non-GAAP net income (loss) excludes acquisition-related costs including the amortization of acquired intangible assets (primarily consisting of acquired technology), the impairment of acquired intangible assets (if applicable), as well as third-party transaction costs incurred for legal and other professional services. These costs are not factored into our evaluation of potential acquisitions, or of our performance after completion of the acquisitions, because these costs are not related to our core operating performance or reflective of ongoing operating results in the period, and the frequency and amount of such costs are inconsistent and vary significantly based on the timing and magnitude of our acquisition transactions and the maturities of the businesses being acquired;
|
•
|
non-GAAP net income (loss) excludes non-cash interest expense. In connection with the issuance of the Convertible Senior Notes in April 2017, we are required to recognize non-cash interest expense in accordance with the authoritative accounting guidance for convertible debt that may be settled in cash;
|
•
|
non-GAAP net income (loss) excludes a gain on the sale and license of intellectual property. This gain is not related to our core operating performance or reflective of ongoing operating results in the period, and the frequency and amount of such gains are inconsistent;
|
•
|
non-GAAP net income (loss) includes income tax adjustments. Beginning in the first quarter of 2017, we implemented a cash-based non-GAAP tax expense approach (based upon expected annual cash payments for income taxes) for evaluating operating performance as well as for planning and forecasting purposes. This non-GAAP tax approach eliminates the effects of period specific items, which can vary in size and frequency and does not necessarily reflect our long-term operations. Historically, we computed a non-GAAP tax rate based on non-GAAP pre-tax income on a quarterly basis, which considered the income tax effects of the adjustments above; and
|
•
|
other companies may calculate these non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.
|
|
Three months ended March 31,
|
||||||
(in thousands)
|
2019
|
|
2018
|
||||
Net loss
|
$
|
(24,365
|
)
|
|
$
|
(76,347
|
)
|
Income tax (benefit) expense
|
378
|
|
|
(2,782
|
)
|
||
Interest expense, net
|
4,083
|
|
|
4,212
|
|
||
Depreciation and amortization
|
6,850
|
|
|
8,907
|
|
||
POP display amortization
|
1,931
|
|
|
3,912
|
|
||
Stock-based compensation
|
9,785
|
|
|
10,823
|
|
||
Restructuring and other costs
|
303
|
|
|
16,738
|
|
||
Adjusted EBITDA
|
$
|
(1,035
|
)
|
|
$
|
(34,537
|
)
|
|
Three months ended March 31,
|
||||||
(in thousands, except per share data)
|
2019
|
|
2018
|
||||
Net loss
|
$
|
(24,365
|
)
|
|
$
|
(76,347
|
)
|
Stock-based compensation
|
9,785
|
|
|
10,823
|
|
||
Acquisition-related costs
|
2,082
|
|
|
2,658
|
|
||
Restructuring and other costs
|
303
|
|
|
16,738
|
|
||
Non-cash interest expense
|
2,142
|
|
|
1,934
|
|
||
Income tax adjustments
|
(118
|
)
|
|
(3,170
|
)
|
||
Non-GAAP net loss
|
$
|
(10,171
|
)
|
|
$
|
(47,364
|
)
|
Non-GAAP loss per share
|
$
|
(0.07
|
)
|
|
$
|
(0.34
|
)
|
|
|
|
|
||||
GAAP shares for diluted net loss per share
|
142,601
|
|
|
137,857
|
|
||
Add: effect of potentially dilutive shares
|
—
|
|
|
—
|
|
||
Non-GAAP shares for diluted net loss per share
|
142,601
|
|
|
137,857
|
|
•
|
difficulties in staffing and managing foreign operations;
|
•
|
burdens of complying with a wide variety of laws and regulations, including environmental, packaging and labeling;
|
•
|
adverse tax effects and foreign exchange controls making it difficult to repatriate earnings and cash;
|
•
|
changes to the taxation of undistributed foreign earnings;
|
•
|
the effect 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 or our chief executive officer;
|
•
|
when no shares of our Class B common stock are outstanding, only the chairman of our board of directors, our chief executive officer 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.
|
•
|
heighten our vulnerability to adverse general economic conditions and heightened competitive pressures;
|
•
|
require us to dedicate a larger portion of our cash flow from operations to interest payments, limiting the availability of cash for other purposes;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and industry; and
|
•
|
impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate purposes or other purposes.
|
Exhibit
|
|
|
Incorporated by Reference
|
Filed
|
|||
Number
|
|
Exhibit Title
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
Herewith
|
|
Tenth amendment to Office Lease Agreement, by and between HG Clearview Owner LLC and the Registrant, dated April 30, 2019.
|
|
|
|
|
X
|
|
|
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
|
|
|
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
|
|
|
Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.
|
|
|
|
|
X
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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
|
|
|
|
|
|
|
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GoPro, Inc.
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(Registrant)
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Dated:
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May 9, 2019
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By: /s/ Nicholas Woodman
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Nicholas Woodman
Chief Executive Officer
(Principal Executive Officer)
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Dated:
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May 9, 2019
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By: /s/ Brian McGee
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Brian McGee
Chief Financial Officer (Principal Financial Officer) |
795203.05/WLA
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1
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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2.
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Premises and Building.
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2.2
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Give-Back Space.
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795203.05/WLA
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2
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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795203.05/WLA
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3
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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795203.05/WLA
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4
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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3.
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Lease Term.
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795203.05/WLA
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5
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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5.
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Rent.
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7.
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Parking and Bike Lockers.
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795203.05/WLA
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6
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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795203.05/WLA
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7
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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9.
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Signage.
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795203.05/WLA
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8
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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795203.05/WLA
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9
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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795203.05/WLA
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10
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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"LANDLORD":
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HG CLEARVIEW OWNER LLC,
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a Delaware limited liability company
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By:
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HG Clearview LLC,
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a Delaware limited liability company,
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its sole member
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By:
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Hines Clearview MM LLC,
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a Delaware limited liability company
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its managing member
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By:
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Hines Clearview Associates LP,
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a Texas limited partnership,
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its sole member
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By:
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Hines Investment Management Holdings Limited Partnership,
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a Texas limited partnership
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its general partner
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By:
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HIHM GP LLC,
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a Delaware limited liability company,
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its general partner
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By:
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Hines Real Estate Holdings Limited Partnership,
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a Texas limited partnership,
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its sole member
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By:
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JCH Investments, Inc.,
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a Texas corporation
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its general partner
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By:
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/s/ Cameron Falconer
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Name:
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Cameron Falconer
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Title:
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Senior Managing Director
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795203.05/WLA
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11
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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"TENANT":
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GOPRO, INC.,
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A Delaware corporation
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By:
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/s/ Brian McGee
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Name:
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Brian McGee
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Title:
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EVP & CFO
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By:
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Brian McGee
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Name:
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Title:
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795203.05/WLA
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12
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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GoPro, Inc.
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EXHIBIT A-1
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OUTLINE OF EDITING BAY GIVE-BACK SPACE
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795203.05/WLA
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EXHIBIT A-1
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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-1-
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GoPro, Inc.
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EXHIBIT A-2
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CORRIDOR WORK
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795203.05/WLA
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Exhibit A-2
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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-1-
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GoPro, Inc.
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EXHIBIT B
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LOCATION OF TENANT'S PARKING
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795203.05/WLA
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Exhibit B
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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-1-
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GoPro, Inc.
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EXHIBIT C
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TERMINATION FEE DETAILS
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1.
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Total Termination Fee: $11,289,048.35, before applying any credit for the New Tenant Credit or the Editing Bay Credit.
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2.
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Portion of Termination Fee attributable to Tenant's Share of Expenses and Taxes: $3,122,792.54, which amount is subject to reconciliation as set forth in Section 2.2.4 of this Tenth Amendment.
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3.
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Monthly Payment of Termination Fee for Building A:
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•
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$54,973.00 per month for the period from 5/1/19 - 7/31/19 (i.e., 3 equal payments), of which $54,973.00 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$141,353.80 for the month of August 2019 (i.e., 1 payment), of which $54,973.00 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$222,609.38 per month for the period from 9/1/19 through 1/31/20. (i.e., 5 payments), of which $55,246.58 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$226,326.94 for the month of February 2020 (i.e., 1 payment), of which $56,340.90 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$228,902.87 per month for the period from 3/1/20 through 1/31/21. (i.e., 11 payments), of which $56,468.47 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$232,714.41 per month for the month of February 2021 (i.e., 1 payment), of which $57,744.21 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$235,250.21 per month for the period from 3/1/21 through 4/30/21. (i.e., 2 payments), of which $57,744.21 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$72,487.00 per month for the period from 5/1/19 - 7/31/19 (i.e., 3 equal payments), of which $72,487.00 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$186,509.45 for the month of August 2019 (i.e., 1 payment), of which $72,487.00 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$293,766.16 per month for the period from 9/1/19 - 1/31/20 (i.e., 5 equal payments), of which $72,847.66 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$298,671.48 for the month of February 2020 (i.e., 1 payment), of which $74,290.31 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$302,071.49 per month for the period from 3/1/20 through 1/31/21 (i.e., 11 equal payments), of
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795203.05/WLA
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Exhibit C
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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-1-
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GoPro, Inc.
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•
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$307,100.54 for the month of February 2021 (i.e., 1 payment), of which $76,140.29 per month is attributable to Tenant's Share of Expenses and Taxes
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•
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$310,447.79 per month for the period from 3/1/21 through 4/30/21 (i.e., 2 equal payments), of which $76,140.29 per month is attributable to Tenant's Share of Expenses and Taxes
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795203.05/WLA
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Exhibit C
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CLEARVIEW BUSINESS PARK
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377397-00003/4-3-19/mjh/ejw
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-2-
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GoPro, Inc.
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Date:
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May 9, 2019
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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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May 9, 2019
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/s/ Brian McGee
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|
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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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May 9, 2019
|
By: /s/ Brian McGee
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Brian McGee
Chief Financial Officer
(Principal Financial Officer)
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May 9, 2019
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