GoPro : Q1 2020 Supplemental Slides

Q1 2020

Preliminary Earnings

Results Summary

May 7, 2020

SAFE HARBOR STATEMENT

This presentation may contain projections or other forward-looking statements within the meaning Section 27A of the Private Securities Litigation Reform Act. Words such as "anticipate," "believe," "estimate," "expect," "intend," "should," "will" and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements in this presentation may include, but are not limited to planned growth and profitability in 2020. These statements involve risks and uncertainties, and actual events or results may differ materially. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are our ability to effectively manage late stage production delays; the risk that our reduction in operating expenses may impact our ability to meet our business objectives and achieve our revenue targets, and may not result in the expected improvement in our profitability; our ability to continue to focus on expense management; the fact that our future growth depends in part on further penetrating our addressable market and growing internationally, and we may not be successful in doing so; the risk that growing our direct-to-consumer business while reducing our reliance on our other sales channels could impact profitability; the impact of the COVID-19 pandemic and its effect on the United States and global economies and our business in particular; any inability to successfully manage frequent product introductions (including roadmap for new hardware, software and subscription products) and transitions, including managing our sales channel and inventory, and accurately forecasting future sales; the fact that a small number of retailers and distributors account for a substantial portion of our revenue and our level of business with them could be significantly reduced due to retail closures related to COVID-19; our reliance on third party suppliers, some of which are sole source suppliers, to provide components for our products and our reliance on third party logistics partners to deliver without interruption; our dependence on sales of our cameras, mounts and accessories, and subscription services for substantially all of our revenue (and the effects of changes in the sales mix or decrease in demand for these products); the fact that an economic downturn or economic uncertainty in our key U.S. and international markets, as well as fluctuations in currency exchange rates, may adversely affect consumer discretionary spending; any changes to trade agreements, trade policies, tariffs, and import/export regulations; the effects of manufacturing U.S.-bound production in Mexico; the effects of the highly competitive market in which we operate, including new market entrants; the fact that we may not be able to achieve revenue growth or profitability in the future; risks related to inventory, purchase commitments and long-lived assets; difficulty in accurately predicting our future customer demand; the importance of maintaining the value and reputation of our brand; the risk that the e-commerce technology systems that give consumers the ability to shop online do not function effectively; the risk that we will encounter problems with our distribution system; the threat of a security breach or other disruption including cyberattacks; the concern that our intellectual property and proprietary rights may not adequately protect our products and services; and other factors detailed in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2019, and as updated in future filings with the Securities and Exchange Commission including the Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, each of which is on file with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof or as of the date otherwise stated herein. GoPro disclaims any obligation to update these forward-looking statements.

2

USE OF NON-GAAP METRICS

We report gross margin, operating expenses, operating income (loss), net income (loss) and diluted net income (loss) per share in accordance with U.S. generally accepted accounting principles (GAAP) and on a non-GAAP basis. Additionally, we report non-GAAP adjusted EBITDA. We believe that non-GAAP information is useful because it can enhance the understanding of our ongoing economic performance. We use non-GAAP reporting internally to evaluate and manage our operations. We have chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how we analyze our own operating results.

A full reconciliation of GAAP to non-GAAP financial data can be found in the appendix to this slide package and in our Q1 2020 earnings press release issued on May 7, 2020, which should be reviewed in conjunction with this presentation.

3

QUARTERLY NON-GAAP INCOME STATEMENT SUMMARY

($ in millions, except per share data)

Revenue

Camera units shipped

(in thousands)

Gross margin*

Operating expenses* Operating income (loss)* Net income (loss)*

Diluted net income (loss) per share*

Adjusted EBITDA*

Headcount

Q1 2020

$ 119.4

341

34.2% $ 87.5 $ (46.7) $ (49.6)

$ (0.34) $ (41.4)

923

Q4 2019

$ 528.3

1,857

38.6% $ 99.1 $ 105.0 $ 102.5

$ 0.70 $ 112.1

926

Q3 2019

$ 131.2

479

23.4% $ 90.3 $ (59.6) $ (61.3)

$ (0.42) $ (52.7)

912

Q2 2019

$ 292.4

1,082

35.8% $ 97.3 $ 7.5 $ 4.2

$ 0.03 $ 13.6

900

Q1 2019

$ 242.7

842

34.2% $ 91.1 $ (8.1) $ (10.2)

$ (0.07) $ (1.0)

903

Q4 2018

$ 377.4

1,413

38.4% $ 98.8 $ 46.0 $ 42.4

$ 0.30 $ 58.8

891

Q3 2018

$ 285.9

1,095

33.2% $ 98.7 $ (3.6) $ (6.1)

$ (0.04) $ 6.2

927

Q2 2018

$ 282.7

1,071

30.8% $ 103.9 $ (16.7) $ (20.8)

$ (0.15) $ (8.7)

948

Q1 2018

$ 202.3

758

24.3% $ 93.7 $ (44.5) $ (47.4)

$ (0.34) $ (34.5)

1,020

* Non-GAAP metric. See reconciliations in Appendix.

4

QUARTERLY REVENUE METRICS

($ in millions)			Q1	2020			Q4	2019			Q3	2019			Q2	2019			Q1	2019
Revenue by Channel:			$	% of Rev			$	% of Rev			$	% of Rev			$	% of Rev			$	% of Rev
Direct *		$	64.9	54.3%		$	230.3	43.6%		$	71.7	54.7%		$	135.3	46.3%		$	110.9	45.7%
Distribution			54.5	45.7			298.0	56.4			59.5	45.3			157.1	53.7			131.8	54.3
Total Revenue		$	119.4	100.0%		$	528.3	100.0%		$	131.2	100.0%		$	292.4	100.0%		$	242.7	100.0%
Revenue by Geography:			$	% of Rev			$	% of Rev			$	% of Rev			$	% of Rev			$	% of Rev
Americas		$	57.3	47.9%		$	212.2	40.2%		$	60.4	46.0%		$	142.3	48.7%		$	109.1	45.0%
Europe, Middle East and Africa			29.7	24.9			156.0	29.5			49.4	37.7			82.9	28.3			70.9	29.2
Asia and Pacific			32.4	27.2			160.1	30.3			21.4	16.3			67.2	23.0			62.7	25.8
Total Revenue		$	119.4	100.0%		$	528.3	100.0%		$	131.2	100.0%		$	292.4	100.0%		$	242.7	100.0%

• Revenue from gopro.com is included as a component of our Direct channel and represents $20.2 million, $56.4 million, $19.0 million, $22.8 million and $26.7 million for the quarters ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, respectively.

5

SELECT BALANCE SHEET METRICS

($ in millions)

Cash, cash equivalents and marketable securities

Days sales outstanding

Inventory

Annualized inventory turns

Inventory days

Q1 2020

$ 124.9

38

$ 172.0

2.0x

197

Q4 2019

$ 165.1

34

$ 144.2

6.6x

40

Q3 2019

$ 79.0

49

$ 250.0

2.1x

224

Q2 2019

$ 130.1

45

$ 129.2

6.0x

62

Q1 2019

$ 133.3

44

$ 119.0

5.4x

67

Q4 2018

$ 197.5

31

$ 116.5

7.8x

45

Q3 2018

$ 148.2

47

$ 123.2

7.3x

58

Q2 2018

$ 139.8

37

$ 86.1

7.2x

40

Q1 2018

$ 144.8

36

$ 132.6

4.3x

78

6

APPENDIX

APPENDIX: GAAP TO NON-GAAP RECONCILIATIONS

To supplement our unaudited selected financial data presented on a basis consistent with GAAP, we disclose certain non-GAAP financial measures, including non-GAAP gross margin, operating expenses, operating income (loss), net income (loss), diluted net income (loss) per share and adjusted EBITDA. We use non-GAAP financial measures to help us understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short-term and long-term operational plans. Our management uses, and believes that investors benefit from referring to these non-GAAP financial measures in assessing our operating results. These non-GAAP financial measures should not be considered in isolation from, or as an alternative to, the measures prepared in accordance with GAAP, and are not based on any comprehensive set of accounting rules or principles. We believe that these non-GAAP measures, when read in conjunction with our GAAP financials, provide useful information to investors by facilitating:

• the comparability of ouron-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 withnon-GAAP financial measures.

These non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Some of these limitations are:

• adjusted EBITDA does not reflect tax payments that reduce cash available to us;
• adjusted EBITDA excludes depreciation and amortization and, although these arenon-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;

8

APPENDIX: GAAP TO NON-GAAP RECONCILIATIONS

• adjusted EBITDA excludes the amortization of point of purchase (POP) display assets because it is anon-cash charge, and is treated similarly to depreciation of property and equipment and amortization of acquired intangible assets;
• adjusted EBITDA andnon-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 andnon-GAAP net income (loss) exclude restructuring and other related costs which primarily include severance-related costs, stock-based compensation expenses and 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 Accounting Standards Codification 842, Leases. These expenses were tied to unique circumstances related to organizational restructuring, 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 andnon-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-GAAPnet 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. Although we exclude the amortization of acquired intangible assets from our non-GAAP net income (loss), management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation;

9

APPENDIX: GAAP TO NON-GAAP RECONCILIATIONS

• non-GAAPnet 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-GAAPnet 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-GAAPnet income (loss) includes income tax adjustments. For all periods presented, we utilize a cash-basednon-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-GAAPpre-tax income on a quarterly basis, which considered the income tax effects of the adjustments above; and
• other companies may calculate thesenon-GAAP financial measures differently than we do, limiting their usefulness as comparative measures.

10

APPENDIX: GAAP TO NON-GAAP RECONCILIATIONS

($ in thousands, except per share data)		Q1 2020		Q4 2019		Q3 2019		Q2 2019		Q1 2019		Q4 2018		Q3 2018		Q2 2018		Q1 2018
GAAP net income (loss)	$	(63,528)	$	95,820	$	(74,810)	$	(11,287)	$	(24,365)	$	31,671	$	(27,089)	$	(37,269)	$	(76,347)
Stock-based compensation:
Cost of revenue		503		419		448		522		513		548		534		490		382
Operating expenses		7,134		6,609		9,321		10,084		9,272		9,168		9,803		9,521		10,441
Total stock-based compensation		7,637		7,028		9,769		10,606		9,785		9,716		10,337		10,011		10,823
Acquisition-related costs:
Cost of revenue		1,887		1,864		1,863		2,009		2,082		2,082		3,363		3,334		2,655
Operating expenses		-		-		-		-		-		19		-		-		3
Total acquisition-related costs		1,887		1,864		1,863		2,009		2,082		2,101		3,363		3,334		2,658
Restructuring and other costs:
Cost of revenue		(4)		-		-		71		16		22		115		3		1,239
Operating expenses		(60)		29		-		1,793		287		1,195		3,901		769		15,499
Total restructuring and other costs		(64)		29		-		1,864		303		1,217		4,016		772		16,738
Non-cash interest expense		2,373		2,354		2,255		2,236		2,142		2,124		2,036		2,018		1,934
Gain on sale and license of intellectual property		-		-		-		-		-		(5,000)		-		-		-
Income tax adjustments		2,082		(4,597)		(342)		(1,235)		(118)		527		1,279		291		(3,170)
Non-GAAP net income (loss)	$	(49,613)	$	102,498	$	(61,265)	$	4,193	$	(10,171)	$	42,356	$	(6,058)	$	(20,843)	$	(47,364)
GAAP shares for diluted net income (loss) per		147,560		147,052		145,617		144,668		142,601		143,401		140,072		139,166		137,857
share
Add: dilutive shares		-		-		-		1,622		-		-		-		-		-
Non-GAAP shares for diluted net income
(loss) per share		147,560		147,052		145,617		146,290		142,601		143,401		140,072		139,166		137,857
GAAP diluted net income (loss) per share	$	(0.43)	$	0.65	$	(0.51)	$	(0.08)	$	(0.17)	$	0.22	$	(0.19)	$	(0.27)	$	(0.55)
Non-GAAP diluted net income (loss) per share	$	(0.34)	$	0.70	$	(0.42)	$	0.03	$	(0.07)	$	0.30	$	(0.04)	$	(0.15)	$	(0.34)

11

APPENDIX: GAAP TO NON-GAAP RECONCILIATIONS

($ in thousands)	Q1 2020	Q4 2019	Q3 2019	Q2 2019	Q1 2019	Q4 2018	Q3 2018	Q2 2018	Q1 2018
GAAP gross margin	32.2%	38.2%	21.7%	34.9%	33.1%	37.7%	31.8%	29.5%	22.2%
Stock-based compensation	0.4	0.1	0.3	0.2	0.2	0.1	0.2	0.2	0.2
Acquisition-related costs	1.6	0.3	1.4	0.7	0.9	0.6	1.2	1.1	1.3

Restructuring and other costs		-			-			-			-			-			-			-			-			0.6
Non-GAAP gross margin		34.2%			38.6%			23.4%			35.8%			34.2%			38.4%			33.2%			30.8%			24.3%
GAAP operating expenses	$	94,541	$	105,725	$	99,630	$	109,132	$	100,635	$	109,150	$	112,386	$	114,205	$	119,655
Stock-based compensation		(7,134)			(6,609)			(9,321)			(10,084)			(9,272)			(9,168)			(9,803)			(9,521)			(10,441)
Acquisition-related costs		-			-			-			-			-			(19)			-			-			(3)
Restructuring and other costs		60			(29)			-			(1,793)			(287)			(1,195)			(3,901)			(769)			(15,499)
Non-GAAP operating expenses	$	87,467		$	99,087		$	90,309		$	97,255		$	91,076		$	98,768		$	98,682		$	103,915		$	93,712
GAAP operating income (loss)	$	(56,114)	$	96,100	$	(71,198)	$	(6,947)	$	(20,288)	$	32,967	$	(21,354)	$	(30,836)	$	(74,739)
Stock-based compensation		7,637			7,028			9,769			10,606			9,785			9,716			10,337			10,011			10,823
Acquisition-related costs		1,887			1,864			1,863			2,009			2,082			2,101			3,363			3,334			2,658
Restructuring and other costs		(64)			29			-			1,864			303			1,217			4,016			772			16,738
Non-GAAP operating income (loss)	$	(46,654)		$	105,021		$	(59,566)		$	7,532		$	(8,118)		$	46,001		$	(3,638)		$	(16,719)		$	(44,520)

12

APPENDIX: GAAP TO NON-GAAP RECONCILIATIONS

($ in thousands)			Q1 2020			Q4 2019			Q3 2019			Q2 2019			Q1 2019			Q4 2018			Q3 2018			Q2 2018			Q1 2018
GAAP net income (loss)		$	(63,528)		$	95,820		$	(74,810)		$	(11,287)		$	(24,365)		$	31,671		$	(27,089)		$	(37,269)		$	(76,347)
Income tax expense (benefit)			2,399			(3,928)			(273)			(605)			378			1,655			1,780			706			(2,782)
Interest expense, net			4,681			5,032			4,278			4,479			4,083			4,470			4,297			4,299			4,212
Depreciation and amortization			5,982			6,445			6,421			6,552			6,850			7,290			9,693			9,173			8,907
POP display amortization			1,537			1,666			1,900			2,007			1,931			2,788			3,171			3,611			3,912
Stock-based compensation			7,637			7,028			9,769			10,606			9,785			9,716			10,337			10,011			10,823
Restructuring and other costs			(64)			29			-			1,864			303			1,217			4,016			772			16,738
Adjusted EBITDA		$	(41,356)		$	112,092		$	(52,715)		$	13,616		$	(1,035)		$	58,807		$	6,205		$	(8,697)		$	(34,537)

13