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IPO Report: GoPro (GPRO)

GoPro ($GPRO) was founded in 2004 to address the limitations of traditional cameras. It is headquartered in in San Mateo, CA,. Fourteen other companies are scheduled for the week of June 23,

GoPro ($GPRO) was founded in 2004 to address the limitations of traditional cameras. It is headquartered in in San Mateo, CA,.

Fourteen other companies are scheduled for the week of June 23, 2014. The complete IPO calendar is available at IPOpremium.

The manager and joint managers are J.P. Morgan, Citigroup, and Barclays. The co-managers are Allen & Company, Stifel, Baird, MCS Capital Markets, Piper Jaffray, and Raymond James

GPRO scheduled a $400 million IPO with a market capitalization of $2.8 billion at a price range midpoint of $22.50 for Thursday, June 26, 2014 on the Nasdaq. SEC filings

GoPro IPO Report


GPRO was founded in 2004 to address the limitations of traditional cameras.

GPRO does this by enabling people to capture compelling, immersive photo and video content of themselves participating in their favorite activities.

Q1 '14 results down vs Q1 '13 results

Q1 '14 was down vs Q1 '13 because revenue and units shipped for the three months ended March 31, 2013 were impacted by production delays of the HERO3 Black edition capture device in the fourth quarter of 2012.

These production delays correspondingly delayed shipments until the first quarter of 2013, which resulted in revenues in the first quarter of 2013 that did not reflect the traditional seasonality in the  business.

Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

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Price /TanBV

% offered in IPO

annualizing Q1 '14


GoPro (GPRO)







P/E based on 2013













The rating on GPRO is positive.

GPRO is fast growing with an established wearable HD camera brand, protected by a number of patents.

The P/E based on 2013 results is 46. Q1 '14 was down vs Q1 '13 and is explained below.

GPRO does not expect to sustain or increase its revenue growth rates.


GPRO was founded in 2004 to address the limitations of traditional cameras.

GPRO is transforming the way consumers capture, manage, share and enjoy meaningful life experiences.

GPRO does this by enabling people to capture compelling and immersive photo and video content of themselves participating in their favorite activities.


In 2004, GPRO shipped its first product, a wrist-mounted, waterproof, film-based capture device, and in 2006 GPRO shipped its first digital capture device, the Digital HERO. GPRO introduced its first HD capture device in 2009, the HD HERO, and GPRO introduced its current HERO3+ family of capture devices in late 2013. GPRO also sells mountable and wearable accessories that enable professional quality capture at affordable prices.

GPRO has continued to enhance its product offering by providing software solutions that address the pain points of managing, editing and sharing content.

GPRO’s Studio enables its customers to easily edit and share simple or complex videos. The GPRO’s App enables customers to easily and wirelessly manage and share content from its HERO capture devices.

HD camera

Since GPRO launched its first HD camera in 2009, it has experienced rapid growth.


Historically, GPRO experienced the highest levels of revenue in the fourth quarter of the year, coinciding with the holiday shopping season in the United States and Europe.

Accordingly, GPRO historically introduced the newest generation of product offerings just prior to this peak season.

Given the significant seasonality of sales, timely and effective product introductions and forecasting for this season are critical to operations

Income statement summary

In 2011, 2012, 2013, and the three months ended March 31, 2014, GPRO generated revenue of $234.2 million, $526.0 million, $985.7 million, and $235.7 million and reported net income of $24.6 million, $32.3 million, $60.6 million, and $11.0 million, respectively.

Substantially all of its revenue has been generated from the sale of cameras and accessories.

GPRO’s sales strategy initially targeted independent specialty retailers focused on action sports markets, which GPRO believes helped to establish the authenticity of its brand. GPRO now sells its products both directly and through distribution.

Direct channel

GPRO’s direct channel includes big box, mid-market and independent specialty retailers, as well as its website.

GPRO uses its distribution channel to sell internationally and into certain specialty markets.

As of March 31, 2014, GPRO’s products were sold to customers in more than 100 countries and through more than 25,000 retail outlets.

Sales outside of the United States represented 35%, 47%, 49% and 53% of GRPO’s revenue for 2011, 2012, 2013 and the three months ended March 31, 2014, respectively.

Dividend Policy

No dividends are planned.

Intellectual Property

GPRO’s trademarks, including “GoPro” and “Be a Hero,” are a critical component of the value of its business.

In addition, GPRO holds many issued and pending utility and design patents for various aspects of its capture devices and the software that helps its customers manage, share and enjoy their content. GPRO’s patents cover areas that include physical structures, image processing, operational firmware and software, post-processing software, distribution software, mount and accessory structures, as well as the ornamental aspects of its capture devices.

GPRO had 42 issued patents and 72 patent applications pending in the United States, and 15 corresponding issued patents and 12 patent applications pending in foreign countries.

GPRO cannot be certain that its patent applications will be issued or that any issued patents will provide it with any competitive advantage or will not be challenged by third parties.

GPRO’s issued U.S. patents will expire between 2024 and 2032 and its issued foreign patents will expire between 2022 and 2038. GPRO continually review its developments efforts to assess the existence and patentability of new intellectual property.


GPRO competes against established, well-known camera manufacturers such as Canon (CAJ) , Nikon (NINOY) , Olympus (OCPNY) , Polaroid, and Vivitar; and large, diversified electronics companies such as JVC Kenwood (JVCZF) , Panasonic (PCRFY) , Samsung (SSNLF) , Sony (SNE) , and Toshiba (TOSBF) , and specialty companies such as Garmin (GRMN) .

Many of these companies have substantial market share, diversified product lines, well-established supply and distribution systems, strong worldwide brand recognition and significant financial, marketing, research and development and other resources.

5% stockholders

Nicholas Woodman and Jill R. Woodman, as Co-Trustees of The Woodman Family Trust under Trust Agreement dated March 11, 2011  49.21%          

RW Camera Holdings LLC    15.96%

Foxteq Holdings Inc.     10.18%  

Dean Woodman            6.31%

Sageview Capital Master, L.P. 6.03% 

Neil Dana          5.41%    

Use of proceeds

GPRO expects to net $183 million from its IPO. Proceeds are allocated as follows:

to repay its term loan under its credit facility, for general corporate purposes including working capital, to create a public market for its Class A common stock and to facilitate its future access to the public equity markets.

At March 31, 2014, the outstanding balance of the term loan was $111 million and bore interest at the rate of 2.75% per annum. The term loan has scheduled quarterly principal repayments with the remaining balance due on December 21, 2015.

GPRO may also use a portion of the net proceeds to acquire or invest in complementary businesses, technologies or assets. However, GPRO has no present commitments or agreements to enter into any acquisitions or make any investments.

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