Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2020 |
Dec. 31, 2019 |
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Preferred Stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized (shares) | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued (shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Treasury Stock, Shares (shares) | 10,710,000 | 10,710,000 |
Common Class A [Member] | ||
Common Stock, Shares Authorized (shares) | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 119,472,000 | 117,922,000 |
Common stock outstanding (shares) | 119,472,000 | 117,922,000 |
Common Class B [Member] | ||
Common Stock, Shares Authorized (shares) | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 28,888,000 | 28,897,000 |
Common stock outstanding (shares) | 28,888,000 | 28,897,000 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
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Mar. 31, 2020 |
Mar. 31, 2019 |
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Income Statement [Abstract] | ||
Revenue | $ 119,400 | $ 242,708 |
Cost of revenue | 80,973 | 162,361 |
Gross profit | 38,427 | 80,347 |
Operating expenses: | ||
Research and development | 32,281 | 37,464 |
Sales and marketing | 43,502 | 47,290 |
General and administrative | 18,758 | 15,881 |
Total operating expenses | 94,541 | 100,635 |
Operating loss | (56,114) | (20,288) |
Interest expense | (4,843) | (4,527) |
Other Nonoperating Expense | (172) | |
Other income (expense), net | 828 | |
Total other expense, net | (5,015) | (3,699) |
Loss before income taxes | (61,129) | (23,987) |
Income tax expense | (2,399) | (378) |
Net loss | $ (63,528) | $ (24,365) |
Earnings Per Share, Basic and Diluted | $ (0.43) | $ (0.17) |
Weighted Average Number of Shares Outstanding, Basic and Diluted | 147,560 | 142,601 |
Summary of business and significant accounting policies |
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Summary of significant accounting policies | Summary of business and significant accounting policies GoPro, Inc. and its subsidiaries (GoPro or the Company) helps its consumers celebrate and share their experiences in immersive and exciting ways. The Company is committed to developing solutions that create an easy, seamless experience for consumers to capture, create and share engaging personal content. To date, the Company’s cameras, mountable and wearable accessories, and subscription services have generated substantially all of its revenue. The Company sells its products globally on its website, and through retailers and wholesale distributors. The Company’s global corporate headquarters are located in San Mateo, California. Basis of presentation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (GAAP). The Company’s fiscal year ends on December 31, and its fiscal quarters end on March 31, June 30 and September 30. The Company’s operating results, financial position and cash flows were negatively impacted by the COVID-19 pandemic and as a result, the Company accelerated a shift in its sales channel strategy to focus more on direct-to-consumer sales through gopro.com, and implemented a restructuring plan in April 2020 which primarily impacted the Company’s global workforce, sales and marketing expenses, and leased facilities. The Company expects these actions to impact its financial results starting in the second quarter of 2020 and expects these actions will reduce operating expenses and accelerate its ability to achieve profitability, thus providing sufficient resources to continue as a going concern for at least one year from the date of issuance of the condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q. The condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, that management believes are necessary for the fair statement of the Company's financial statements, but are not necessarily indicative of the results expected for the full fiscal year or any other future period. The condensed consolidated balance sheet at December 31, 2019 has been derived from the audited financial statements at that date, but does not include all the disclosures required by GAAP. This Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K (Annual Report) for the year ended December 31, 2019. There have been no material changes in the Company’s critical accounting policies and estimates from those disclosed in its Annual Report. Principles of consolidation. These condensed consolidated financial statements include all the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates. The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the Company’s condensed consolidated financial statements and accompanying notes. Significant estimates and assumptions made by management include those related to revenue recognition (including sales incentives, sales returns and implied post contract support), stock-based compensation, inventory valuation, product warranty liabilities, the valuation, impairment and useful lives of long-lived assets (property and equipment, operating leases, intangible assets and goodwill), income taxes and going concern. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, including but not limited to the potential impacts arising from the COVID-19 pandemic, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The extent and continued impact of COVID-19 has been taken into account in making the significant assumptions and estimates related to the above, however if the duration and spread of the outbreak, the impact on our customers, and the effect on our contract manufacturers, vendors and supply chains is different from the Company’s estimates and assumptions, then actual results could differ materially. Given the uncertainty with respect to COVID-19, the Company’s estimates and assumptions may evolve as conditions change. To the extent there are material differences between the estimates and the actual results, future results of operations could be affected. Comprehensive income (loss). For all periods presented, comprehensive income (loss) approximated net income (loss). Therefore, the condensed consolidated statements of comprehensive income (loss) have been omitted. Leases. The Company leases its office space and facilities under cancelable and non-cancelable operating leases. Operating leases are presented as operating lease right-of-use (ROU) assets, short-term operating lease liabilities and long-term operating lease liabilities on the Company’s condensed consolidated balance sheets. ROU assets represent the Company’s right to control the use of an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of future lease payments. The Company determines its incremental borrowing rate based on the approximate rate at which the Company would borrow, on a secured basis, to calculate the present value of future lease payments. Lease expenses are recognized on a straight-line basis over the lease term. Certain leases include an option to renew with terms that can extend the lease term from one to five years. The exercise of a lease renewal option is at the Company’s sole discretion and is included in the lease term when the Company is reasonably certain it will exercise the option. Revenue recognition. The Company derives substantially all of its revenue from the sale of cameras, mounts and accessories, the related implied post contract support to customers, and subscription services. The Company recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The transaction price the Company expects to be entitled to is primarily comprised of product revenue, net of returns and variable consideration, including sales incentives provided to customers. For most of the Company’s revenue, revenue is recognized at the time products are delivered and when collection is considered probable. For the Company’s subscription services, revenue is recognized on a ratable basis over the subscription term, with payments received in advance of services being rendered recorded in deferred revenue. For customers who purchase products directly from gopro.com, the Company retains a portion of the risk of loss on these sales during transit, which are accounted for as fulfillment costs. The Company provides sales commissions to internal and external sales representatives which are earned in the period in which revenue is recognized. As a result, the Company expenses such costs as incurred. The Company's standard terms and conditions of sale for non-web-based sales do not allow for product returns other than under warranty. However, the Company grants limited rights of return, primarily to certain large retailers. The Company reduces revenue and cost of sales for the estimated returns based on analyses of historical return trends by customer class and other factors. An estimated return liability along with a right to recover assets are recorded for future product returns. Return trends are influenced by product life cycles, new product introductions, market acceptance of products, product sell-through, the type of customer, seasonality and other factors. Return rates may fluctuate over time but are sufficiently predictable to allow the Company to estimate expected future product returns. The Company’s camera sales contain multiple performance obligations that generally include the following three separate obligations: a) a hardware component (camera) and the embedded firmware essential to the functionality of the hardware component delivered at the time of sale, b) the implicit right to the Company's downloadable free apps and software solutions, and c) the implied right for the customer to receive support after the initial sale (post contract support or PCS). The Company’s PCS includes the right to receive on a when and if available basis, future unspecified firmware upgrades and features as well as bug fixes, and email and telephone support. The Company allocates a portion of the transaction price to the PCS performance obligation based on a cost-plus methodology. The transaction price is allocated to the remaining performance obligations on a residual value methodology. The Company’s process to allocate the transaction price considers multiple factors that may vary over time depending upon the unique facts and circumstances related to each deliverable, including: the level of support provided to customers, estimated costs to provide the Company’s support, the amount of time and cost that is allocated to the Company’s efforts to develop the undelivered elements and market trends in the pricing for similar offerings. The transaction prices allocated to the delivered hardware, related embedded firmware and free software solutions are recognized as revenue at the time of sale, provided the conditions for recognition of revenue have been met. The transaction price allocated to PCS is deferred and recognized as revenue on a straight-line basis over the estimated term of the support period, which is estimated to be 15 months based on historical experience. Deferred revenue as of March 31, 2020 and 2019 also included immaterial amounts related to the Company’s GoPro Care and GoPro Plus fee-based service offerings. The Company’s short-term and long-term deferred revenue balances totaled $14.8 million and $16.6 million as of March 31, 2020 and December 31, 2019, respectively, and the Company recognized $5.8 million and $5.7 million of related revenue during the quarter ended March 31, 2020 and 2019, respectively. Sales incentives. The Company offers sales incentives through various programs, including cooperative advertising, price protection, marketing development funds and other incentives. Sales incentives are considered to be variable consideration, which the Company estimates and records as a reduction to revenue at the date of sale. The Company estimates sales incentives based on historical experience, product sell-through and other factors. Segment information. The Company operates as one operating segment as it only reports financial information on an aggregate and consolidated basis to its Chief Executive Officer, who is the Company’s chief operating decision maker. Recent accounting standards
Although there are several other new accounting standards issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its condensed consolidated financial statements.
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Fair value measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value measurements | Fair value measurements The Company’s assets that are measured at fair value on a recurring basis within the fair value hierarchy are summarized as follows:
Cash equivalents and marketable securities are classified as Level 1 or Level 2 because the Company uses quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. The contractual maturities of available-for-sale marketable securities as of March 31, 2020 and December 31, 2019 were all less than one year in duration. At March 31, 2020 and December 31, 2019, the Company had no financial assets or liabilities that were classified as Level 3, which are valued based on inputs supported by little or no market activity. At March 31, 2020 and December 31, 2019, the amortized cost of the Company’s cash equivalents and marketable securities approximated their fair value and there were no material realized or unrealized gains or losses, either individually or in the aggregate. In April 2017, the Company issued $175.0 million principal amount of Convertible Senior Notes due 2022 (Notes) (see Note 4 Financing Arrangements). The estimated fair value of the Notes is based on quoted market prices of the Company’s instruments in markets that are not active and are classified as Level 2 within the fair value hierarchy. The Company estimated the fair value of the Notes by evaluating quoted market prices and calculating the upfront cash payment a market participant would require to assume these obligations. The calculated fair value of the Notes of $154.0 million, is highly correlated to the Company’s stock price and as a result, significant changes to the Company’s stock price will have a significant impact on the calculated fair value of the Notes. For certain other financial assets and liabilities, including accounts receivable, accounts payable and other current assets and liabilities, the carrying amounts approximate their fair value primarily due to the relatively short maturity of these balances.
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Condensed consolidated financial statement details Condensed consolidated financial statement details |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated financial statement details | Condensed consolidated financial statement details The following sections and tables provide details of selected balance sheet items. Inventory
Property and equipment, net
Intangible assets
Amortization expense was $1.9 million and $2.1 million for the three months ended March 31, 2020 and 2019, respectively. At March 31, 2020, expected amortization expense of intangible assets with definite lives for future periods was as follows:
Other long-term assets
Accrued expenses and other current liabilities
Product warranty
At March 31, 2020 and December 31, 2019, $7.4 million and $9.9 million, respectively, of the warranty liability was recorded as a component of accrued expenses and other current liabilities, and $1.6 million and $1.5 million, respectively, was recorded as a component of other long-term liabilities.
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Financing Arrangements |
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Line of Credit Facility [Line Items] | |||||||||||||
Financing Arrangements | Financing Arrangements For a discussion around the Company’s liquidity requirements for at least one year from the issuance of these financial statements, see Note 1 Summary of business and significant accounting policies, to the Notes to Condensed Consolidated Financial Statements. Credit Facility In March 2016, the Company entered into a Credit Agreement (Credit Agreement) with certain banks which provides for a secured revolving credit facility (Credit Facility) under which the Company may borrow up to an aggregate amount of $250.0 million. The Company and its lenders may increase the total commitments under the Credit Facility to up to an aggregate amount of $300.0 million, subject to certain conditions. The Credit Facility will terminate and any outstanding borrowings become due and payable in March 2021. The amount that may be borrowed under the Credit Facility is determined at periodic intervals and is based upon the Company’s inventory and accounts receivable balances. Borrowed funds accrue interest based on an annual rate of (a) London Interbank Offered Rate (LIBOR) or (b) the administrative agent’s base rate, plus an applicable margin of between 1.50% and 2.00% for LIBOR rate loans, and between 0.50% and 1.00% for base rate loans. The Company is required to pay a commitment fee on the unused portion of the Credit Facility of 0.25% or 0.375% per annum, based on the level of utilization of the Credit Facility. Amounts owed under the Credit Agreement and related credit documents are guaranteed by GoPro, Inc. and its material subsidiaries. GoPro, Inc. has also granted security interests in substantially all of its assets to collateralize this obligation. The Credit Agreement contains customary covenants, such as financial statement reporting requirements and limiting the ability of the Company and its subsidiaries to pay dividends or incur debt, create liens and encumbrances, make investments, and redeem or repurchase stock. The Company is required to maintain a minimum fixed charge coverage ratio if and when the unborrowed availability under the Credit Facility is less than the greater of $25.0 million or 10.0% of the borrowing base at such time. The Credit Agreement also contains customary events of default, such as the failure to pay obligations when due, initiation of bankruptcy or insolvency proceedings, or defaults on certain other indebtedness. Upon an event of default, the lenders may, subject to customary cure rights, require the immediate payment of all amounts outstanding and foreclose on collateral. At March 31, 2020 and December 31, 2019, the Company was in compliance with all financial covenants contained in the Credit Agreement. As of March 31, 2020, the Company could borrow up to $70.2 million and had $30.0 million borrowings outstanding on the Credit Facility. As of December 31, 2019, the Company had zero borrowings outstanding on the Credit Facility. Convertible Notes In April 2017, the Company issued $175.0 million aggregate principal amount of 3.50% Convertible Senior Notes due 2022 (Notes). The Notes are senior, unsecured obligations of GoPro and mature on April 15, 2022 (Maturity Date), unless earlier repurchased or converted into shares of Class A common stock under certain circumstances. The Notes are convertible into cash, shares of the Company’s Class A common stock, or a combination thereof, at the Company’s election, at an initial conversion rate of 94.0071 shares of Class A common stock per $1,000 principal amount of the Notes, which is equivalent to an initial conversion price of approximately $10.64 per share of common stock, subject to adjustment. Based on current and projected liquidity, the Company has the intent and ability to deliver cash up to the principal amount of the Notes then outstanding upon conversion. The Company pays interest on the Notes semi-annually in arrears on April 15 and October 15 of each year. The $175.0 million of proceeds received from the issuance of the Notes were allocated between long-term debt (liability component) of $128.3 million and additional paid-in-capital (equity component) of $46.7 million on the condensed consolidated balance sheet. The fair value of the liability component was measured using rates determined for similar debt instruments without a conversion feature. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the aggregate face value of the Notes. The liability component will be accreted up to the face value of the Notes of $175.0 million, which will result in additional non-cash interest expense being recognized in the condensed consolidated statements of operations through the Notes’ Maturity Date. The accretion of the Notes to par and debt issuance cost recorded to long-term debt is amortized into interest expense over the term of the Note using an effective interest rate of approximately 10.5%. The equity component will not be remeasured as long as it continues to meet the conditions for equity classification. The Company incurred approximately $5.7 million of issuance costs related to the issuance of the Notes, of which $4.2 million and $1.5 million were recorded to long-term debt and additional paid-in capital, respectively. The $4.2 million of issuance costs recorded as long-term debt on the condensed consolidated balance sheet are being amortized over the five-year contractual term of the Notes using the effective interest method. The Company may not redeem the Notes prior to the Maturity Date and no sinking fund is provided for the Notes. The indenture includes customary terms and covenants, including certain events of default after which the Notes may be due and payable immediately. Holders have the option to convert the Notes in multiples of $1,000 principal amount at any time prior to January 15, 2022, but only in the following circumstances:
At any time on or after January 15, 2022 until the second scheduled trading day immediately preceding the Maturity Date of the Notes on April 15, 2022, a holder may convert its Notes, in multiples of $1,000 principal amount. Holders of the Notes who convert their Notes in connection with a make-whole fundamental change (as defined in the indenture) are, under certain circumstances, entitled to an increase in the conversion rate. In addition, in the event of a fundamental change prior to the Maturity Date, holders will, subject to certain conditions, have the right, at their option, to require the Company to repurchase for cash all or part of the Notes at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, the repurchase date. As of March 31, 2020 and December 31, 2019, the outstanding principal on the Notes was $175.0 million, the unamortized debt discount was $21.9 million and $24.3 million, respectively, the unamortized debt issuance cost was $1.7 million and $1.9 million, respectively, and the net carrying amount of the liability component was $151.4 million and $148.8 million, respectively, which was recorded as long-term debt within the condensed consolidated balance sheets. For the three months ended March 31, 2020 and 2019, the Company recorded interest expense of $1.5 million for contractual coupon interest, $0.2 million for amortization of debt issuance costs, and $2.4 million and $2.1 million, respectively, for amortization of the debt discount. In connection with the offering, the Company entered into a prepaid forward stock repurchase transaction (Prepaid Forward) with a financial institution (Forward Counterparty). Pursuant to the Prepaid Forward, the Company used approximately $78.0 million of the net proceeds from the offering of the Notes to fund the Prepaid Forward. The aggregate number of shares of the Company’s Class A common stock underlying the Prepaid Forward was approximately 9.2 million. The expiration date for the Prepaid Forward is April 15, 2022, although it may be settled earlier in whole or in part. Upon settlement of the Prepaid Forward, at expiration or upon any early settlement, the Forward Counterparty will deliver to the Company the number of shares of Class A common stock underlying the Prepaid Forward or the portion thereof being settled early. The shares purchased under the Prepaid Forward are treated as treasury stock on the condensed consolidated balance sheet (and not outstanding for purposes of the calculation of basic and diluted income (loss) per share), but will remain outstanding for corporate law purposes, including for purposes of any future stockholders’ votes, until the Forward Counterparty delivers the shares underlying the Prepaid Forward to the Company. The Company’s Prepaid Forward hedge transaction exposes the Company to credit risk to the extent that its counterparty may be unable to meet the terms of the transaction. The Company mitigates this risk by limiting its counterparty to a major financial institution.
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Employee benefit plans |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee benefit plans | Employee benefit plans Equity incentive plans. The Company has outstanding equity grants from its three stock-based employee compensation plans: the 2014 Equity Incentive Plan (2014 Plan), the 2010 Equity Incentive Plan (2010 Plan) and the 2014 Employee Stock Purchase Plan (ESPP). No new options or awards have been granted under the 2010 Plan since June 2014. Outstanding options and awards under the 2010 Plan continue to be subject to the terms and conditions of the 2010 Plan. Options granted under the 2014 Plan generally expire within ten years from the date of grant and generally vest over one to four years. Restricted stock units (RSUs) granted under the 2014 Plan generally vest over two to four years based upon continued service and are settled at vesting in shares of the Company’s Class A common stock. Performance stock units (PSUs) granted under the 2014 Plan generally vest over three years based upon continued service and the Company achieving certain revenue targets, and are settled at vesting in shares of the Company’s Class A common stock. The Company accounts for forfeitures of stock-based payment awards in the period they occur. The ESPP allows eligible employees to purchase shares of the Company’s Class A common stock through payroll deductions at a price equal to 85% of the lesser of the fair market value of the stock as of the first date or the ending date of each six-month offering period. For additional information regarding the Company’s equity incentive plans, refer to the 2019 Annual Report. Stock options A summary of the Company’s stock option activity for the three months ended March 31, 2020 is as follows:
The aggregate intrinsic value of the stock options outstanding as of March 31, 2020 represents the value of the Company’s closing stock price on March 31, 2020 in excess of the exercise price multiplied by the number of options outstanding. Restricted stock units A summary of the Company’s RSU activity for the three months ended March 31, 2020 is as follows:
Performance stock units A summary of the Company’s PSU activity for the three months ended March 31, 2020 is as follows:
Employee stock purchase plan. For the three months ended March 31, 2020 and 2019, the Company issued 556,000 and 458,000 shares under its ESPP, respectively, at weighted-average prices of $3.38 and $4.96, respectively. Stock-based compensation expense. The Company measures compensation expense for all stock-based payment awards based on the estimated fair values on the date of the grant. The fair value of stock options granted and ESPP issuance is estimated using the Black-Scholes option pricing model. The fair value of RSUs and PSUs are determined using the Company’s closing stock price on the date of grant. There have been no significant changes in the Company’s valuation assumptions from those disclosed in its 2019 Annual Report. The following table summarizes stock-based compensation expense included in the condensed consolidated statements of operations:
The income tax benefit related to stock-based compensation expense was zero for the three months ended March 31, 2020 and 2019 due to a full valuation allowance on the Company’s United States net deferred tax assets (see Note 7 Income taxes). At March 31, 2020, total unearned stock-based compensation of $53.2 million related to stock options, RSUs, PSUs and ESPP shares is expected to be recognized over a weighted-average period of 2.5 years.
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Net loss per share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss per share | Net loss per share The following table presents the calculations of basic and diluted net loss per share:
The following potentially dilutive shares were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive:
The Company has the intent and ability to deliver cash up to the principal amount of the Notes subject to conversion, based on the Company’s current and projected liquidity. As such, no shares associated with the Note conversion were included in the Company’s weighted-average number of common shares outstanding for any periods presented. The Company’s Notes mature on April 15, 2022, unless earlier repurchased or converted into shares of Class A common stock under certain circumstances as described further in Note 4 Financing Arrangements. The Notes are convertible into cash, shares of the Company’s Class A common stock, or a combination thereof, at the Company’s election. While the Company has the intent and ability to deliver cash up to the principal amount, the maximum number of shares issuable upon conversion of the Notes is 20.6 million shares of Class A common stock. Additionally, the calculation of weighted-average shares outstanding for the three months ended March 31, 2020 and 2019 excludes approximately 9.2 million shares, effectively repurchased and held in treasury stock on the condensed consolidated balance sheets as a result of the Prepaid Forward transaction entered into in connection with the Note offering. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock and has no expiration date. Each share of Class B common stock will convert automatically into one share of Class A common stock upon the date when the outstanding shares of Class B common stock represent less than 10% of the aggregate number of shares of common stock then outstanding. Class A common stock is not convertible into Class B common stock. The computation of the diluted net loss per share of Class A common stock assumes the conversion of Class B common stock.
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Income taxes |
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] | Income taxes The Company’s income tax expense and the resulting effective tax rate are based upon the estimated annual effective tax rates applicable for the respective period, including losses generated in countries where the Company is projecting annual losses for which deferred tax assets are not anticipated to be recognized. The Company’s tax provision and the resulting effective tax rate for interim periods is determined based upon its estimated annual effective tax rate, adjusted for the effect of discrete items arising in that quarter. The Company also excludes jurisdictions with a projected loss for the year (or year-to-date loss) where the Company cannot or does not expect to recognize a tax benefit from its estimated annual effective tax rate. The impact of such inclusions could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings or losses versus annual projections. In each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual tax rate changes, a cumulative adjustment is made in that quarter.
The Company recorded an income tax expense of $2.4 million for the three months ended March 31, 2020, on a pre-tax net loss of $61.1 million, which resulted in a negative effective tax rate of 3.9%. The Company’s income tax expense for the three months ended March 31, 2020, was primarily composed of $2.3 million of tax expense incurred on pre-tax income, and discrete items that included a $1.1 million of net non-deductible equity tax expense for employee stock-based compensation and $0.1 million of tax expense relating to the foreign provision to income tax returns adjustments, partially offset by a net decrease in the valuation allowance of $1.1 million. For the three months ended March 31, 2019, the Company recorded an income tax expense of $0.4 million on a pre-tax net loss of $24.0 million, which resulted in a negative effective tax rate of 1.6%. The Company’s income tax expense for the three months ended March 31, 2019, was primarily composed of $0.5 million of tax expense incurred on pre-tax income, and one-time items that included $1.3 million of net excess tax benefits for employee stock-based compensation and $0.3 million tax benefit for release of long-term tax payable attributable to the tax statute of limitations, partially offset by a $1.4 million net increase in the valuation allowance and $0.1 million tax expense relating to other items. Further, for both the three months ended March 31, 2020, and 2019, while the Company incurred pre-tax losses in the United States, the Company does not expect to recognize any tax benefits on pretax losses in the United States due to a full valuation allowance recorded against its United States deferred tax assets. At March 31, 2020 and December 31, 2019, the Company’s gross unrecognized tax benefits were $27.5 million and $27.2 million, respectively. If recognized, $13.1 million of these unrecognized tax benefits (net of United States federal benefit) at March 31, 2020 would reduce income tax expense after considering the impact of the change in the valuation allowance in the United States. A material portion of the Company’s gross unrecognized tax benefits, if recognized, would increase the Company’s net operating loss carryforward, which would be offset by a full valuation allowance based on present circumstances. These unrecognized tax benefits relate primarily to unresolved matters with taxing authorities regarding the Company’s transfer pricing positions and tax positions based on the Company’s interpretation of certain United States trial and appellate court decisions, which remain subject to appeal and therefore could be overturned in future periods. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, the Company believes that its reserves reflect the more likely outcome. The Company believes, due to statute of limitations expiration, that within the next 12 months, it is possible that up to $13.0 million of uncertain tax position could be released. It is also reasonably possible that additional uncertain tax positions will be added. It is not reasonably possible at this time to quantify the net effect. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted into law on March 27, 2020, to respond to the economic challenges due to COVID-19. The Company reviewed the tax impact of the CARES Act and determined that the annual effective tax rate is not materially impacted.
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Commitments, contingencies and guarantees |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments, contingencies and guarantees | Commitments, contingencies and guarantees Facility Leases. The Company leases its facilities under long-term operating leases, which expire at various dates through 2027. The components of net lease cost, which were recorded in operating expenses, were as follows:
Supplemental cash flow information related to leases was as follows:
Supplemental balance sheet information related to leases was as follows:
As of March 31, 2020, maturities of operating lease liabilities were as follows:
Other Commitments. In the ordinary course of business, the Company enters into multi-year agreements to purchase sponsorships with event organizers, resorts and athletes as part of its marketing efforts; software licenses related to its financial and IT systems; debt agreements; and various other contractual commitments. As of March 31, 2020, the Company’s total undiscounted future expected obligations under multi-year agreements described above with terms longer than one year was $212.1 million. Legal proceedings and investigations. On February 13, 2018 and February 27, 2018, two purported shareholder derivative lawsuits (the Consolidated Federal Derivative Actions) were filed in the United States District Court for the Northern District of California against certain of GoPro’s current and former directors and executive officers and naming the Company as a nominal defendant. The Consolidated Federal Derivative Actions are based on allegations similar to those in two now-resolved shareholder class actions - one filed in 2016 which was settled and received final approval of the Court on September 20, 2019, and the other filed in 2018 which had final judgment entered in favor of defendants on June 24, 2019, following the Court’s granting of defendants’ motion to dismiss. The Consolidated Federal Derivative Actions assert causes of action against the individual defendants for breach of fiduciary duty, and for making false and misleading statements about the Company’s business, operations and prospects in violation of Sections 10(b) and 14(a) of the Securities Exchange Act of 1934. The plaintiffs seek corporate reforms, disgorgement of profits from stock sales, and fees and costs. The Consolidated Federal Derivative Actions are currently stayed. Different shareholders filed two similar purported shareholder derivative actions on October 30, 2018 and November 7, 2018 in the Delaware Court of Chancery (the Consolidated Delaware Derivative Actions). On April 28, 2020, the Court granted defendants’ motion to dismiss the Consolidated Delaware Derivative Actions with prejudice. Other shareholders filed similar purported shareholder derivative actions on December 26, 2018, February 15, 2019, and January 27, 2020 in the Delaware Court of Chancery. Those actions are either stayed or defendants’ time to respond to the complaint has not yet passed. On January 5, 2015, Contour LLC filed a complaint against the Company in federal court in Utah alleging, among other things, patent infringement in relation to certain GoPro cameras. On November 30, 2015, Contour dismissed the Utah action. On November 30, 2015, Contour IP Holdings LLC (“CIPH”), a non-practicing entity re-filed a similar complaint in Delaware seeking unspecified damages. GoPro filed an inter partes review (IPR) at the US Patent and Trademark Office. The case was transferred to the Northern District of California in July 2017 and was stayed in favor of the IPR proceedings, most recently on December 12, 2018. Upon conclusion of the IPRs, the District Court lifted the stay on October 1, 2019. On October 8, 2019, the court entered a schedule for the remainder of the case, with trial currently scheduled to begin on August 31, 2020. Due to COVID-19 delays, all major deadlines in the case, including trial, have been extended. Trial is now scheduled to commence on December 14, 2020. We believe that this matter lacks merit and we intend to vigorously defend against CIPH. We regularly evaluate the associated developments of the legal proceedings described above, as well as other legal proceedings that arise in the ordinary course of business. While litigation is inherently uncertain, based on the currently available information, we are unable to determine a range of loss, and do not believe the ultimate cost to resolve these matters will have a material adverse effect on our business, financial condition, cash flows or results of operations. Indemnifications. In the normal course of business, the Company enters into agreements that contain a variety of representations and warranties, and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. It is not possible to determine the maximum potential amount under these indemnification agreements due to the Company’s limited history with indemnification claims and the unique facts and circumstances involved in each particular agreement. As of March 31, 2020, the Company has not paid any claims nor has it been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.
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Concentrations of risk and geographic information |
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Risks and Uncertainties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentrations of risk and segment information | Concentrations of risk and geographic information Customer concentration. Financial instruments which potentially subject the Company to concentrations of credit risk, consist principally of trade receivables. The Company believes that credit risk for accounts receivable is mitigated by the Company’s credit evaluation process, relatively short collection terms and dispersion of its customer base. The Company generally does not require collateral and losses on trade receivables have historically been within management’s expectations. Customers who represented 10% or more of the Company’s net accounts receivable balance were as follows:
* Less than 10% of net accounts receivable for the period indicated. The following table summarizes the Company’s accounts receivables sold, without recourse, and factoring fees paid:
Customers who represented 10% or more of the Company’s total revenue were as follows:
* Less than 10% of total revenue for the period indicated. Supplier concentration. The Company relies on third parties for the supply and manufacture of its products, some of which are sole-source suppliers. The Company believes that outsourcing manufacturing enables greater scale and flexibility. As demand and product lines change, the Company periodically evaluates the need and advisability of adding manufacturers to support its operations. In instances where a supply and manufacture agreement does not exist or suppliers fail to perform their obligations, the Company may be unable to find alternative suppliers or satisfactorily deliver its products to its customers on time, if at all. The Company also relies on third parties with whom it outsources supply chain activities related to inventory warehousing, order fulfillment, distribution and other direct sales logistics. In instances where an outsourcing agreement does not exist or these third parties fail to perform their obligations, the Company may be unable to find alternative partners or satisfactorily deliver its products to its customers on time. Geographic information Revenue by geographic region was as follows:
For the three months ended March 31, 2020, revenue from the United States and Japan represented more than 10% of total revenue, while for the same period in 2019, only revenue from the United States exceeded 10% of total revenue. Revenue from the United States, which is included in the Americas geographic region, was $45.7 million and $83.0 million for the three months ended March 31, 2020 and 2019, respectively. Revenue from Japan, which is included in the Asia and Pacific geographic region, was $14.3 million for the three months ended March 31, 2020. The Company does not disclose revenue by product category as it does not track sales incentives and other revenue adjustments by product category to report such data. As of March 31, 2020 and December 31, 2019, long-lived assets, which represent net property and equipment, located outside the United States, primarily in Hong Kong and Mainland China, were $9.0 million and $11.0 million, respectively.
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Restructuring charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges | Restructuring charges Restructuring charges for each period were as follows:
First quarter 2017 restructuring plan On March 15, 2017, the Company approved a restructuring plan to reduce future operating expenses and further align resources around its long-term business strategy. The restructuring provided for a reduction of the Company’s global workforce by approximately 17% and the consolidation of certain leased office facilities. Under the first quarter 2017 restructuring plan, the Company recorded restructuring charges of $23.1 million, including $10.3 million related to severance, and $12.8 million related to accelerated depreciation and other charges. The actions associated with the first quarter 2017 restructuring plan were substantially completed by the fourth quarter of 2017. The following table provides a summary of the Company’s restructuring activities and the movement in the related liabilities recorded in accrued expenses and other current liabilities, and other long-term liabilities on the condensed consolidated balance sheet under the first quarter 2017 restructuring plan.
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Subsequent Events (Notes) |
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Mar. 31, 2020 | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | Subsequent events On April 14, 2020, the Board of Directors approved the Company’s restructuring plan to reduce operating costs, optimize its business model and address the impact of the COVID-19 pandemic. The restructuring provided for a reduction in force of the Company’s global workforce of approximately 20% and is expected to be substantially completed by the end of the second quarter of 2020. The restructuring plan will result in an estimated aggregate charge of $31 million to $49 million. Cash expenditures will be approximately $5 million of the estimated aggregate charges in the second quarter of 2020 as a result of a reduction in force. The remaining expenditures are approximately $26 million to $44 million primarily pertaining to planned reductions of office space (including $4 million of non-cash charges) and approximately $5 million for other non-cash charges. The Company anticipates the majority of the office space charges will result in future cash expenditures through 2027. The Company anticipates that a substantial portion of these restructuring charges will be reflected in its second quarter results.
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Summary of business and significant accounting policies (Policies) |
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Basis of presentation | Basis of presentation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (GAAP). The Company’s fiscal year ends on December 31, and its fiscal quarters end on March 31, June 30 and September 30. The Company’s operating results, financial position and cash flows were negatively impacted by the COVID-19 pandemic and as a result, the Company accelerated a shift in its sales channel strategy to focus more on direct-to-consumer sales through gopro.com, and implemented a restructuring plan in April 2020 which primarily impacted the Company’s global workforce, sales and marketing expenses, and leased facilities. The Company expects these actions to impact its financial results starting in the second quarter of 2020 and expects these actions will reduce operating expenses and accelerate its ability to achieve profitability, thus providing sufficient resources to continue as a going concern for at least one year from the date of issuance of the condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q. The condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, that management believes are necessary for the fair statement of the Company's financial statements, but are not necessarily indicative of the results expected for the full fiscal year or any other future period. The condensed consolidated balance sheet at December 31, 2019 has been derived from the audited financial statements at that date, but does not include all the disclosures required by GAAP. This Quarterly Report on Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K (Annual Report) for the year ended December 31, 2019. There have been no material changes in the Company’s critical accounting policies and estimates from those disclosed in its Annual Report.
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Principles of consolidation | Principles of consolidation. These condensed consolidated financial statements include all the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
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Use of estimates | Use of estimates. The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the Company’s condensed consolidated financial statements and accompanying notes. Significant estimates and assumptions made by management include those related to revenue recognition (including sales incentives, sales returns and implied post contract support), stock-based compensation, inventory valuation, product warranty liabilities, the valuation, impairment and useful lives of long-lived assets (property and equipment, operating leases, intangible assets and goodwill), income taxes and going concern. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances, including but not limited to the potential impacts arising from the COVID-19 pandemic, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The extent and continued impact of COVID-19 has been taken into account in making the significant assumptions and estimates related to the above, however if the duration and spread of the outbreak, the impact on our customers, and the effect on our contract manufacturers, vendors and supply chains is different from the Company’s estimates and assumptions, then actual results could differ materially. Given the uncertainty with respect to COVID-19, the Company’s estimates and assumptions may evolve as conditions change. To the extent there are material differences between the estimates and the actual results, future results of operations could be affected.
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Comprehensive income (loss) | Comprehensive income (loss). For all periods presented, comprehensive income (loss) approximated net income (loss). Therefore, the condensed consolidated statements of comprehensive income (loss) have been omitted | ||||||||||||||||||||||||||||||||||||||||||
Lessee, Operating Leases [Text Block] | Leases. The Company leases its office space and facilities under cancelable and non-cancelable operating leases. Operating leases are presented as operating lease right-of-use (ROU) assets, short-term operating lease liabilities and long-term operating lease liabilities on the Company’s condensed consolidated balance sheets. ROU assets represent the Company’s right to control the use of an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of future lease payments. The Company determines its incremental borrowing rate based on the approximate rate at which the Company would borrow, on a secured basis, to calculate the present value of future lease payments. Lease expenses are recognized on a straight-line basis over the lease term. Certain leases include an option to renew with terms that can extend the lease term from one to five years. The exercise of a lease renewal option is at the Company’s sole discretion and is included in the lease term when the Company is reasonably certain it will exercise the option.
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Revenue Recognition, Policy [Policy Text Block] | Revenue recognition. The Company derives substantially all of its revenue from the sale of cameras, mounts and accessories, the related implied post contract support to customers, and subscription services. The Company recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The transaction price the Company expects to be entitled to is primarily comprised of product revenue, net of returns and variable consideration, including sales incentives provided to customers. For most of the Company’s revenue, revenue is recognized at the time products are delivered and when collection is considered probable. For the Company’s subscription services, revenue is recognized on a ratable basis over the subscription term, with payments received in advance of services being rendered recorded in deferred revenue. For customers who purchase products directly from gopro.com, the Company retains a portion of the risk of loss on these sales during transit, which are accounted for as fulfillment costs. The Company provides sales commissions to internal and external sales representatives which are earned in the period in which revenue is recognized. As a result, the Company expenses such costs as incurred. The Company's standard terms and conditions of sale for non-web-based sales do not allow for product returns other than under warranty. However, the Company grants limited rights of return, primarily to certain large retailers. The Company reduces revenue and cost of sales for the estimated returns based on analyses of historical return trends by customer class and other factors. An estimated return liability along with a right to recover assets are recorded for future product returns. Return trends are influenced by product life cycles, new product introductions, market acceptance of products, product sell-through, the type of customer, seasonality and other factors. Return rates may fluctuate over time but are sufficiently predictable to allow the Company to estimate expected future product returns. The Company’s camera sales contain multiple performance obligations that generally include the following three separate obligations: a) a hardware component (camera) and the embedded firmware essential to the functionality of the hardware component delivered at the time of sale, b) the implicit right to the Company's downloadable free apps and software solutions, and c) the implied right for the customer to receive support after the initial sale (post contract support or PCS). The Company’s PCS includes the right to receive on a when and if available basis, future unspecified firmware upgrades and features as well as bug fixes, and email and telephone support. The Company allocates a portion of the transaction price to the PCS performance obligation based on a cost-plus methodology. The transaction price is allocated to the remaining performance obligations on a residual value methodology. The Company’s process to allocate the transaction price considers multiple factors that may vary over time depending upon the unique facts and circumstances related to each deliverable, including: the level of support provided to customers, estimated costs to provide the Company’s support, the amount of time and cost that is allocated to the Company’s efforts to develop the undelivered elements and market trends in the pricing for similar offerings. The transaction prices allocated to the delivered hardware, related embedded firmware and free software solutions are recognized as revenue at the time of sale, provided the conditions for recognition of revenue have been met. The transaction price allocated to PCS is deferred and recognized as revenue on a straight-line basis over the estimated term of the support period, which is estimated to be 15 months based on historical experience. Deferred revenue as of March 31, 2020 and 2019 also included immaterial amounts related to the Company’s GoPro Care and GoPro Plus fee-based service offerings. The Company’s short-term and long-term deferred revenue balances totaled $14.8 million and $16.6 million as of March 31, 2020 and December 31, 2019, respectively, and the Company recognized $5.8 million and $5.7 million of related revenue during the quarter ended March 31, 2020 and 2019, respectively.
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Sales Incentives [Policy Text Block] | Sales incentives. The Company offers sales incentives through various programs, including cooperative advertising, price protection, marketing development funds and other incentives. Sales incentives are considered to be variable consideration, which the Company estimates and records as a reduction to revenue at the date of sale. The Company estimates sales incentives based on historical experience, product sell-through and other factors.
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Segment Reporting, Policy [Policy Text Block] | Segment information. The Company operates as one operating segment as it only reports financial information on an aggregate and consolidated basis to its Chief Executive Officer, who is the Company’s chief operating decision maker.
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Schedule of recent accounting pronouncements | Recent accounting standards
Although there are several other new accounting standards issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its condensed consolidated financial statements.
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Recent accounting pronouncements |
Although there are several other new accounting standards issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its condensed consolidated financial statements.
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Summary of business and significant accounting policies (Tables) |
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Schedule of recent accounting pronouncements | Recent accounting standards
Although there are several other new accounting standards issued or proposed by the FASB, which the Company has adopted or will adopt, as applicable, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its condensed consolidated financial statements.
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Fair value measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets measured at fair value on recurring basis | The Company’s assets that are measured at fair value on a recurring basis within the fair value hierarchy are summarized as follows:
(1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets. Cash balances were $105.6 million and $145.9 million as of March 31, 2020 and December 31, 2019, respectively.
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Condensed consolidated financial statement details (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | Inventory
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Property, Plant and Equipment | Property and equipment, net
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Schedule of Finite-Lived Intangible Assets | Intangible assets
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Schedule of Future Amortization | At March 31, 2020, expected amortization expense of intangible assets with definite lives for future periods was as follows:
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Schedule of Other Assets | Other long-term assets
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Schedule of Accrued Liabilities | Accrued expenses and other current liabilities
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Schedule of Product Warranty Liability | Product warranty
At March 31, 2020 and December 31, 2019, $7.4 million and $9.9 million, respectively, of the warranty liability was recorded as a component of accrued expenses and other current liabilities, and $1.6 million and $1.5 million, respectively, was recorded as a component of other long-term liabilities.
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Employee benefit plans (Tables) |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
schedule of share-based compensation, Performance Stock Units Award Activity [Table Text Block] | A summary of the Company’s PSU activity for the three months ended March 31, 2020 is as follows:
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Schedule of Share-based Compensation, Stock Options, Activity | A summary of the Company’s stock option activity for the three months ended March 31, 2020 is as follows:
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Schedule of Share-based Compensation, Restricted Stock Units Award Activity | A summary of the Company’s RSU activity for the three months ended March 31, 2020 is as follows:
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Allocation of Stock-based Compensation Expense | The following table summarizes stock-based compensation expense included in the condensed consolidated statements of operations:
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Net loss per share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Income per Share, Basic and Diluted | The following table presents the calculations of basic and diluted net loss per share:
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Schedule of Antidilutive Securities Excluded from Computation of Net Income per Share | The following potentially dilutive shares were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive:
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Income taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] |
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Commitments, contingencies and guarantees (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense [Text Block] | The components of net lease cost, which were recorded in operating expenses, were as follows:
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Schedule of Supplemental Cash Flow Information Related To Leases [Text Block] | Supplemental cash flow information related to leases was as follows:
Supplemental balance sheet information related to leases was as follows:
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Schedule of Maturities of Lease Liabilities [Text Block] | As of March 31, 2020, maturities of operating lease liabilities were as follows:
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Concentrations of risk and geographic information (Tables) |
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Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | The following table summarizes the Company’s accounts receivables sold, without recourse, and factoring fees paid:
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Schedule of Revenue by Geographic Region | Revenue by geographic region was as follows:
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Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of Customer Concentration by Risk Factor | Customers who represented 10% or more of the Company’s net accounts receivable balance were as follows:
* Less than 10% of net accounts receivable for the period indicated.
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Concentration Risk [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of Customer Concentration by Risk Factor | Customers who represented 10% or more of the Company’s total revenue were as follows:
* Less than 10% of total revenue for the period indicated.
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Restructuring charges (Tables) |
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Restructuring Cost and Reserve [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | Restructuring charges for each period were as follows:
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Schedule of Restructuring Reserve by Type of Cost | The following table provides a summary of the Company’s restructuring activities and the movement in the related liabilities recorded in accrued expenses and other current liabilities, and other long-term liabilities on the condensed consolidated balance sheet under the first quarter 2017 restructuring plan.
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Summary of business and significant accounting policies (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
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Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
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Property, Plant and Equipment [Line Items] | |||
Document Period End Date | Mar. 31, 2020 | ||
Accumulated deficit | $ (647,261) | $ (583,733) | |
Deferred Revenue | 14,800 | 16,600 | |
Deferred Revenue, Revenue Recognized | 5,800 | $ 5,700 | |
Accrued expenses and other current liabilities | $ 97,543 | $ 141,790 |
Condensed consolidated financial statement details - Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
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Cash and Cash Equivalents [Line Items] | ||||
Marketable securities | $ 7,495 | $ 14,847 | ||
Cash | 105,600 | 145,900 | ||
Cash and cash equivalents | 117,435 | 150,301 | $ 86,941 | $ 152,095 |
Fair Value, Recurring [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Marketable securities | $ 7,495 | $ 14,847 |
Condensed consolidated financial statement details - Inventory (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Components | $ 24,413 | $ 20,370 |
Finished goods | 147,609 | 123,866 |
Total inventory | $ 172,022 | $ 144,236 |
Condensed consolidated financial statement details - Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
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Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
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Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross carrying value | $ 51,066 | $ 50,501 | |
Accumulated amortization | (47,156) | (45,269) | |
Net carrying value | 3,910 | 5,232 | |
Intangible Assets, Gross (Excluding Goodwill) | 51,081 | 50,516 | |
Intangible assets, net | 3,925 | 5,247 | |
Indefinite-lived Intangible Assets [Roll Forward] | |||
Amortization of intangible assets | 1,900 | $ 2,100 | |
Goodwill | 146,459 | 146,459 | |
Indefinite-Lived Trademarks | $ 15 | $ 15 |
Condensed consolidated financial statement details - Future Amortization (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
2020 | $ 2,711 | |
2021 | 1,152 | |
Net carrying value | 3,910 | $ 5,232 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | $ 47 |
Condensed consolidated financial statement details - Goodwill (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
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Business Combination, Goodwill [Abstract] | ||
Goodwill | $ 146,459 | $ 146,459 |
Condensed consolidated financial statement details - Other Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
POP Displays | $ 7,450 | $ 7,595 |
Deferred Tax Assets, Net | 858 | 864 |
Deposits and other | 6,705 | 7,002 |
Other long-term assets | $ 15,013 | $ 15,461 |
Condensed consolidated financial statement details - Accrued Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2020 |
Dec. 31, 2019 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Employee related liabilities | $ 6,943 | $ 20,494 |
Accrued sales incentives | 22,798 | 39,120 |
Other Accounts Payable and Accrued Liabilities | 32,225 | 42,153 |
Customer Refund Liability, Current | 10,663 | 14,854 |
Warranty liability | 7,350 | 9,899 |
Customer deposits | 3,474 | 2,063 |
Income taxes payable | 977 | 1,166 |
Purchase Commitment, Remaining Minimum Amount Committed | 2,077 | 1,710 |
Inventory received | 7,936 | 5,737 |
Other | 3,100 | 4,594 |
Accrued expenses and other current liabilities | $ 97,543 | $ 141,790 |
Condensed consolidated financial statement details - Product Warranty (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
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Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Beginning balances | $ 11,398 | $ 10,971 | |
Charged to cost of revenue | 1,717 | 6,149 | |
Settlements of warranty claims | (4,161) | (5,527) | |
Ending balances | 8,954 | $ 11,593 | |
Warranty liability | 7,350 | $ 9,899 | |
Product Warranty Accrual, Noncurrent | $ 1,600 | $ 1,500 |
Employee benefit plans - Restricted Stock Units Activity (Details) - RSUs [Member] shares in Thousands |
3 Months Ended |
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Mar. 31, 2020
$ / shares
shares
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Shares (in thousands) | |
Non-vested shares at beginning of period (shares) | shares | 8,225 |
Granted (shares) | shares | 4,231 |
Vested (shares) | shares | (1,328) |
Forfeited (shares) | shares | (377) |
Non-vested shares at end of period (shares) | shares | 10,751 |
Weighted-average grant date fair value | |
Non-vested shares at beginning of period (in dollars per share) | $ / shares | $ 6.11 |
Weighted average price of shares granted (usd per share) | $ / shares | 4.08 |
Weighted average price of shares vested (usd per share) | $ / shares | 6.63 |
Weighted average price of shares forfeited (usd per share) | $ / shares | 6.32 |
Non-vested shares at end of period (in dollars per share) | $ / shares | $ 5.24 |
Employee benefit plans - Allocation of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 7,637 | $ 9,785 |
Share-based Payment Arrangement, Expense, Tax Benefit | 0 | 0 |
Cost of Revenue [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 503 | 513 |
Research and Development [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 3,022 | 4,677 |
Selling and Marketing Expense [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 1,717 | 2,213 |
General and Administrative [Member] | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 2,395 | $ 2,382 |
Employee benefit plans Performance Stock Units activity (Details) - Performance Shares [Member] - $ / shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units outstanding (shares) | 1,316 | 788 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 4.81 | $ 7.51 |
Granted (shares) | 1,035 | |
Weighted average price of shares granted (usd per share) | $ 4.08 | |
Vested (shares) | (144) | |
Weighted average price of shares vested (usd per share) | $ 7.51 | |
Forfeited (shares) | (363) | |
Weighted average price of shares forfeited (usd per share) | $ 7.51 |
Net loss per share Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Apr. 12, 2017 |
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Document Period End Date | Mar. 31, 2020 | ||
Treasury Shares Acquired, Estimated, Prepaid Forward | 9,200,000 | 9,200,000 | 9,200,000 |
Common Class A [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common Stock, Voting Rights, Number | 1 | ||
Conversion of Stock, Shares Issued | 1 | ||
Common Class B [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common Stock, Voting Rights, Number | 10 | ||
Convertible Debt [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Debt Instrument | $ 175.0 | ||
Interest rate | 3.50% | ||
Maximum number of shares issuable upon conversion of the notes | 20,600,000 |
Net loss per share - Basic and Diluted Net Income per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Apr. 12, 2017 |
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Earnings Per Share [Abstract] | |||
Treasury Shares Acquired, Estimated, Prepaid Forward | 9,200 | 9,200 | 9,200 |
Numerator: | |||
Net loss | $ (63,528) | $ (24,365) | |
Denominator: | |||
Weighted-average common shares—basic for Class A and Class B common stock (shares) | 147,560 | 142,601 | |
Earnings Per Share, Basic and Diluted | $ (0.43) | $ (0.17) |
Net loss per share - Antidilutive Securities Excluded from Computation of Net Income per Share (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share (shares) | 14,000 | 12,945 |
Income taxes Income Taxes (Details) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Loss before income taxes | $ (61,129) | $ (23,987) |
Income tax (benefit) expense | $ (2,399) | $ (378) |
Effective Income Tax Rate Reconciliation, Percent | (3.90%) | (1.60%) |
Income taxes - Income Tax Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Income Tax Disclosure [Abstract] | ||
Income tax (benefit) expense | $ 2,399 | $ 378 |
Effective Income Tax Rate Reconciliation, Percent | (3.90%) | (1.60%) |
Current Foreign Tax Expense (Benefit) | $ 2,300 | $ 500 |
Income taxes - Unrecognized Income Tax Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2019 |
Mar. 31, 2020 |
|
Income Tax Disclosure [Abstract] | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 13.1 | |
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions | $ 0.3 |
Income taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||
Increase in Unrecognized Tax Benefits is Reasonably Possible | $ 13,000 | ||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 1,100 | $ 1,400 | |
Income Tax Effects Allocated Directly to Equity, Other | 1,100 | 1,300 | |
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions | 300 | ||
Tax Adjustments, Settlements, and Unusual Provisions | 100 | ||
Other Tax Expense (Benefit) | $ 100 | ||
Unrecognized Tax Benefits | $ 27,500 | $ 27,200 |
Concentrations of risk and geographic information - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2019 |
|
Revenue, Major Customer [Line Items] | |||
Revenue | $ 119,400 | $ 242,708 | |
Document Period End Date | Mar. 31, 2020 | ||
United States [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenue | $ 45,700 | $ 83,000 | |
JAPAN | |||
Revenue, Major Customer [Line Items] | |||
Revenue | 14,300 | ||
Outside the United States [Member] | |||
Revenue, Major Customer [Line Items] | |||
Long-lived assets | $ 9,000 | $ 11,000 |
Concentrations of risk and geographic information - Schedule of Revenue by Geographic Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Segment Reporting Information [Line Items] | ||
Revenue | $ 119,400 | $ 242,708 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 45,700 | 83,000 |
Americas [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 57,247 | 109,074 |
Europe, Middle East and Africa [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | 29,719 | 70,866 |
Asia and Pacific Area Countries [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenue | $ 32,434 | $ 62,768 |
Restructuring charges - Restructuring Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2017 |
|
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ (64) | $ (253) | |
Cost of Revenue [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | (4) | (9) | |
Research and Development [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | (24) | (147) | |
Selling and Marketing Expense [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | (19) | (35) | |
General and Administrative [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | (17) | $ (62) | |
First quarter 2017 restructuring [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 23,100 | ||
Restructuring charges | $ (73) | ||
First quarter 2017 restructuring [Member] | Non-cancelable Leases, Accelerated Depreciation and Other Charges [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 12,800 |
Restructuring charges (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 15, 2017 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2017 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ (64) | $ (253) | ||
First quarter 2017 restructuring [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Expected percent of positions eliminated | 17.00% | |||
Restructuring charges | $ 23,100 | |||
Other Restructuring Costs | (73) | |||
First quarter 2017 restructuring [Member] | Non-cancelable Leases, Accelerated Depreciation and Other Charges [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 12,800 | |||
First quarter 2017 restructuring [Member] | Employee Severance and Pay Related Costs [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance Costs | $ 0 | $ 10,300 |
Restructuring charges - Restructuring Liability (Details) - First quarter 2017 restructuring [Member] - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2017 |
|
Restructuring Cost and Reserve [Line Items] | ||
Other Restructuring Costs | $ (73) | |
Restructuring Reserve [Roll Forward] | ||
Restructuring liability as of October 1, 2016 | 4,470 | |
Restructuring charges | (73) | |
Cash paid | (830) | |
Restructuring liability as of December 31, 2017 | 3,567 | |
Employee Severance [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance Costs | 0 | $ 10,300 |
Restructuring Reserve [Roll Forward] | ||
Restructuring liability as of October 1, 2016 | 0 | |
Cash paid | 0 | |
Restructuring liability as of December 31, 2017 | 0 | |
Other Restructuring [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring liability as of October 1, 2016 | 4,470 | |
Cash paid | (830) | |
Restructuring liability as of December 31, 2017 | $ 3,567 |
Subsequent Events (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Subsequent Event [Line Items] | |||
Restructuring charges | $ (64) | $ (253) | |
Subsequent Event [Member] | Minimum [Member] | |||
Subsequent Event [Line Items] | |||
Restructuring charges | $ 31,000 | ||
Restructuring Costs and Asset Impairment Charges | 26,000 | ||
Subsequent Event [Member] | Maximum [Member] | |||
Subsequent Event [Line Items] | |||
Restructuring charges | 49,000 | ||
Restructuring Costs and Asset Impairment Charges | 44,000 | ||
Subsequent Event [Member] | Employee Severance [Member] | |||
Subsequent Event [Line Items] | |||
Severance Costs | 5,000 | ||
Subsequent Event [Member] | Leasehold Improvements [Member] | |||
Subsequent Event [Line Items] | |||
Restructuring charges | 4,000 | ||
Subsequent Event [Member] | point of purchase (POP) Displays [Domain] | |||
Subsequent Event [Line Items] | |||
Restructuring charges | $ 5,000 |