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GOPRO ANNOUNCES SECOND QUARTER 2014 RESULTS

Companies mentioned in this article: GoPro, Inc.

SAN MATEO, Calif., July 31, 2014 /PRNewswire/ -- GoPro, Inc. (NASDAQ: GPRO), maker of one of the world's most versatile cameras and enabler of some of today's most engaging content, today announced financial results for its second quarter ended June 30, 2014.

Revenue in the second quarter of 2014 was $244.6 million, up 38.1% compared to the $177.1 million reported in the second quarter of 2013. Second quarter 2014 revenue increased 3.8% compared to $235.7 million reported in the first quarter of 2014.

"We delivered a strong quarter of operating results driven by increased demand for our Hero 3+ Black Edition and demand for our accessory products," said Nicholas Woodman, CEO of GoPro. "We are seeing a tremendous volume of quality content generated by our users and a 200% year over year increase in video views on YouTube, which is fueling our virtuous cycle whereby viewership of GoPro content drives sales. Our second quarter performance demonstrates our users' continued passion for GoPro's products, content and brand."

GoPro reports gross profit, operating expenses, operating income (loss), net income (loss) and diluted net income (loss) per share in accordance with GAAP and additionally on a non-GAAP basis. Non-GAAP net income excludes, where applicable, the effect of stock-based compensation, amortization of acquired intangible assets and the tax impact of these excluded items. A reconciliation of preliminary GAAP financial measures to non-GAAP financial measures, as well as a description of items excluded in the calculation of non-GAAP financial measures, is presented in the financial statement portion of this release.

Non-GAAP gross margin in the second quarter of 2014 was 42.2%, compared to 32.3% in the second quarter of 2013 and 41.1% in the first quarter of 2014. Non-GAAP operating income in the second quarter of 2014 was $17.8 million, compared to an operating loss of ($3.2) million in the second quarter of 2013 and operating income of $20.9 million in the first quarter of 2014.

Non-GAAP net income in the second quarter of 2014 was $11.8 million or $0.08 per diluted share, compared to a net loss of ($3.2) million or ($0.03) per diluted share in the second quarter of 2013 and net income of $14.3 million or $0.10 per diluted share in the first quarter of 2014.

In accordance with U.S. generally accepted accounting principles (GAAP), GoPro recorded a net loss attributable to common stockholders in the second quarter of 2014 of $(19.8) million or $(0.24) per diluted share. This compares to a GAAP net loss attributable to common stockholders of $(5.1) million or $(0.06) per diluted share in the second quarter of 2013 and GAAP net income attributable to common stockholders in the first quarter of 2014 of $8.5 million or $0.08 per diluted share.

Second quarter GAAP gross margin was 42.1%, compared to gross margin of 32.1% in the second quarter of 2013 and 40.9% in the first quarter of 2014. Second quarter GAAP operating loss was ($16.7) million, compared to an operating loss of ($6.0) million in the second quarter of 2013 and operating income of $16.6 million in the first quarter of 2014.

Cash was $104.9 million at June 30, 2014, up $77.6 million from June 30, 2013 and down $6.3 million from March 31, 2014. Net cash proceeds of $200.8 million from closing of the company's initial public offering were received on July 1, 2014 and are therefore not included in the June 30, 2014 cash balance.

Second Quarter and Recent GoPro Highlights Include:

    --  Launched GoPro App 2.5 for iOS and Android in July, allowing users to
        stream playlists of GoPro content directly to their phones and identify
        favorite videos that will follow them across other platforms such as
        Xbox One and GoPro.com.
    --  According to June NPD data, GoPro products represented the top three
        camera/camcorder units and six of the top ten camera accessory units
        sold in the U.S.
    --  Launched in new vertical markets with the Sportsman Mount for hunting
        and fishing and the Music Edition for instruments and microphones.
    --  Released popular accessories including the highly versatile Gooseneck
        and 3-Way mounts.
    --  Shipped more than 10,000 linear feet of new POP displays to retail
        outlets around the world.
    --  Number of GoPro videos published on YouTube up over 160% Y/Y; views on
        YouTube up 200% Y/Y; video minutes watched on YouTube up over 270% vs.
        Q2 2013.
    --  Launched the GoPro Channel on Pinterest, a social network with more than
        60 million users.
    --  Launched the GoPro Channel on Xbox 360 with Microsoft, generating more
        than a half million downloads and average engagement time in the U.S. of
        just under 30 minutes. In July, launched GoPro Channel on Xbox One with
        exclusive videos.
    --  Hosted events at South by Southwest, the X Games, and the GoPro Mountain
        Games.
    --  The GoPro Athlete Summit attracted 90 athletes and generated more than
        two million likes on Facebook.
    --  Won four Webby Awards including Best Photography and Graphics, Best Use
        of Video, and Best Overall Social Presence.
    --  GoPro CineForm Codec was standardized by the Society of Motion Picture
        and Television Engineers(®) (SMPTE(®)) as the SMPTE ST 2073 VC-5 video
        compression standard.

Conference Call
GoPro management will host a conference call and live webcast for analysts and investors today at 2 p.m. Pacific Time (5 p.m. Eastern Time) to discuss the Company's financial results.

To listen to the live conference call, please dial (913) 312-1469 or toll free (888) 609-5673, access code 5713125, approximately 15 minutes prior to the start of the call. A live webcast of the conference call will be accessible on the "Events & Presentations" section of the Company's website at http://investor.gopro.com. To access the live webcast, please log in 15 minutes prior to the start of the call to download and install any necessary audio software. The webcast will be recorded and the recording will be available on GoPro's website, http://investor.gopro.com, approximately two hours after the call and for six months thereafter.

About GoPro, Inc. (NASDAQ: GPRO):
GoPro, Inc. is transforming the way consumers capture, manage, share and enjoy meaningful life experiences. We do this by enabling people to capture compelling, immersive photo and video content of themselves participating in their favorite activities. Our customers include some of the world's most active and passionate people. The volume and quality of their shared GoPro content, coupled with their enthusiasm for our brand, are virally driving awareness and demand for our products. To date, we have generated substantially all of our revenue from the sale of our cameras and accessories and we believe that the growing adoption of our capture devices and the engaging content they enable, position GoPro to become an exciting new media company.

For more information, visit www.gopro.com or connect with GoPro on YouTube, Twitter, Facebook, or LinkedIn. GOPRO(®) and HERO(®) are trademarks or registered trademarks of GoPro Inc. in the United States and other countries.

Note on Forward-looking Statements
This press release may contain projections or other forward-looking statements regarding future events. These statements involve risks and uncertainties, and actual events or results may differ materially. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are the effects of the highly competitive market in which we operate; our dependence on sales of our capture devices for substantially all of our revenue; our reliance on third-party suppliers, some of which are sole-source suppliers, to provide components for our products; the fact that we do not expect to continue to grow in the future at the same rate as we have in the past, and profitability in recent periods might not be indicative of future performance; difficulty in accurately predicting our future customer demand; the importance of maintaining the value and reputation of our brand; any inability to successfully manage frequent product introductions and transitions; the effects of international business uncertainties; our reliance on our Chief Executive Officer; and other factors detailed in the Risk Factors section of the final prospectus that we filed with the Securities and Exchange Commission in connection with our initial public offering. These forward-looking statements speak only as of the date hereof or as of the date otherwise stated herein. GoPro disclaims any obligation to update these forward-looking statements.




                                                                                                                      GoPro, Inc.

                                                                                              Preliminary Condensed Consolidated Statements of Operations

                                                                                                  (in thousands, except per share amounts, unaudited)



                                                                                                                                                             Three months ended
                                                                                                                                                             ------------------

                                                                                                                                                          June 30, 2014              March 31, 2014          June 30, 2013
                                                                                                                                                          -------------              --------------          -------------


    Revenue                                                                                                                                                                 $244,605                $235,716                $177,082

    Cost of revenue                                                                                                                                                          141,736                 139,202                 120,242
                                                                                                                                                                             -------                 -------                 -------

    Gross profit                                                                                                                                                             102,869                  96,514                  56,840

    Operating expenses:

       Research and development                                                                                                                                               34,663                  28,739                  16,687

       Sales and marketing                                                                                                                                                    43,701                  41,341                  39,065

       General and administrative                                                                                                                                             41,171                   9,878                   7,044

    Total operating expenses                                                                                                                                                 119,535                  79,958                  62,796
                                                                                                                                                                             -------                  ------                  ------

    Operating income (loss)                                                                                                                                                 (16,666)                 16,556                 (5,956)

    Other income (expense), net                                                                                                                                              (1,536)                (1,625)                (1,697)
                                                                                                                                                                              ------                  ------                  ------

    Income (loss) before income taxes                                                                                                                                       (18,202)                 14,931                 (7,653)

    Income tax (benefit) expense                                                                                                                                               1,639                   3,882                 (2,568)

    Net income (loss)                                                                                                                                                      $(19,841)                $11,049                $(5,085)
                                                                                                                                                                            ========                 =======                 =======


    Net income (loss) attributable to common stockholders- basic                                                                                                           $(19,841)                 $8,009                $(5,085)
                                                                                                                                                                            ========                  ======                 =======

    Net income (loss) attributable to common stockholders- diluted                                                                                                         $(19,841)                 $8,452                $(5,085)
                                                                                                                                                                            ========                  ======                 =======


    Net income (loss) per share attributable to common stockholders:

       Basic                                                                                                                                                                 $(0.24)                  $0.10                 $(0.06)

       Diluted                                                                                                                                                               $(0.24)                  $0.08                 $(0.06)


    Shares used in computing net income (loss) per share attributable to common stockholders:

       Basic                                                                                                                                                                  82,936                  81,582                  80,902

       Diluted                                                                                                                                                                82,936                 100,783                  80,902


                                                                                                                      GoPro, Inc.

                                                                                              Preliminary Condensed Consolidated Statements of Operations

                                                                                                  (in thousands, except per share amounts, unaudited)




                                                                                                                                                          Six months ended
                                                                                                                                                          ----------------

                                                                                                                                                            June 30, 2014           June 30, 2013
                                                                                                                                                            -------------           -------------


    Revenue                                                                                                                                                                $480,321               $432,139

    Cost of revenue                                                                                                                                                         280,938                285,870
                                                                                                                                                                            -------                -------

    Gross profit                                                                                                                                                            199,383                146,269

    Operating expenses:

       Research and development                                                                                                                                              63,402                 28,699

       Sales and marketing                                                                                                                                                   85,042                 74,738

       General and administrative                                                                                                                                            51,049                 14,032

    Total operating expenses                                                                                                                                                199,493                117,469
                                                                                                                                                                            -------                -------

    Operating income (loss)                                                                                                                                                   (110)                28,800

    Other income (expense), net                                                                                                                                             (3,161)               (3,391)
                                                                                                                                                                             ------                 ------

    Income (loss) before income taxes                                                                                                                                       (3,271)                25,409

    Income tax expense                                                                                                                                                        5,521                  7,459

    Net income (loss)                                                                                                                                                      $(8,792)               $17,950
                                                                                                                                                                            =======                =======


    Net income (loss) attributable to common stockholders- basic                                                                                                           $(8,792)               $12,986
                                                                                                                                                                            =======                =======

    Net income (loss) attributable to common stockholders- diluted                                                                                                         $(8,792)               $13,666
                                                                                                                                                                            =======                =======


    Net income (loss) per share attributable to common stockholders:

       Basic                                                                                                                                                                $(0.11)                 $0.16

       Diluted                                                                                                                                                              $(0.11)                 $0.14


    Shares used in computing net income (loss) per share attributable to common stockholders:

       Basic                                                                                                                                                                 82,263                 80,836

       Diluted                                                                                                                                                               82,263                 98,577



                                                                                                                         GoPro, Inc.

                                                                                                      Preliminary Condensed Consolidated Balance Sheets

                                                                                                                        (in thousands)



                                                                                                                                                                    June 30,          December 31,

                                                                                                 2014                                                                            2013
                                                                                                 ----                                                                            ----

    ASSETS                                                                                                                                              (unaudited)

    Current assets:

    Cash                                                                                                                                                                     $104,879              $101,410

    Accounts receivable, net                                                                                                                                                   49,230               122,669

    Inventory                                                                                                                                                                  80,376               111,994

    Prepaid expenses and other current assets                                                                                                                                  65,409                21,967
                                                                                                                                                                               ------                ------

    Total current assets                                                                                                                                                      299,894               358,040

    Property and equipment, net                                                                                                                                                38,939                32,111

    Intangible assets and goodwill                                                                                                                                             16,805                17,365

    Other long-term assets                                                                                                                                                     36,562                32,155
                                                                                                                                                                               ------                ------

    Total assets                                                                                                                                                             $392,200              $439,671
                                                                                                                                                                             ========              ========


    LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

    Current liabilities:

    Accounts payable                                                                                                                                                          $54,925              $126,423

    Accrued liabilities                                                                                                                                                        78,819                86,391

    Other current liabilities                                                                                                                                                  12,524                27,483

    Current portion of long-term debt                                                                                                                                          66,306                60,297
                                                                                                                                                                               ------                ------

    Total current liabilities                                                                                                                                                 212,574               300,594

    Long-term debt, less current portion                                                                                                                                       41,433                53,315

    Other long-term liabilities                                                                                                                                                13,719                13,930
                                                                                                                                                                               ------                ------

    Total liabilities                                                                                                                                                         267,726               367,839


    Redeemable convertible preferred stock                                                                                                                                     77,227                77,198

    Total stockholders' equity (deficit)                                                                                                                                       47,247               (5,366)
                                                                                                                                                                               ------                ------

    Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit)                                                                             $392,200              $439,671
                                                                                                                                                                             ========              ========



                                                                                   GoPro, Inc.

                                                                Reconciliation of Preliminary Non-GAAP Adjustments

                                                                 (in thousands, except per share data, unaudited)



                                                                                                    Three months ended
                                                                                                    ------------------

                                                                                                June 30, 2014                 March 31, 2014          June 30, 2013
                                                                                                -------------                 --------------          -------------


    GAAP NET INCOME (LOSS)                                                                                          $(19,841)                $11,049                $(5,085)

    Stock-based compensation

    Cost of revenue                                                                                                       154                     168                     157

    Research and development                                                                                            1,657                   1,401                     556

    Sales and marketing                                                                                                 1,654                   1,414                   1,454

    General and administrative                                                                                         30,728                   1,054                     365
                                                                                                                       ------                   -----                     ---

    Total stock-based compensation                                                                                     34,193                   4,037                   2,532


    Amortization of acquisition-related intangible assets

    Cost of revenue                                                                                                       222                     222                     222

    Research and development                                                                                               20                      20                       -

    Sales and marketing                                                                                                    34                      42                      47
                                                                                                                          ---                     ---                     ---

    Total amortization of acquisition-related intangible assets                                                           276                     284                     269


    Tax related items

    Income tax adjustments                                                                                            (2,854)                (1,088)                  (875)
                                                                                                                       ------                  ------                    ----

    Non-GAAP NET INCOME (LOSS)                                                                                        $11,774                 $14,282                $(3,159)
                                                                                                                      =======                 =======                 =======



    GAAP SHARES FOR DILUTED NET INCOME (LOSS) PER SHARE                                                                82,936                 100,783                  80,902

        Add: dilutive shares                                                                                           17,345                       -                      -

        Add: preferred shares conversion                                                                               30,523                  30,523                  30,523

        Add: initial public offering shares                                                                             8,900                   8,900                   8,900

    Non-GAAP SHARES FOR DILUTED NET INCOME (LOSS) PER SHARE                                                           139,704                 140,206                 120,325
                                                                                                                      =======                 =======                 =======


    Non-GAAP diluted net income (loss) per share                                                                        $0.08                   $0.10                 $(0.03)


                                                                                    GoPro, Inc.

                                                                Reconciliation of Preliminary Non-GAAP Adjustments

                                                                 (in thousands, except per share data, unaudited)



                                                                                                                   Six months ended
                                                                                                                   ----------------

                                                                                                                     June 30, 2014           June 30, 2013
                                                                                                                     -------------           -------------


    GAAP NET INCOME (LOSS)                                                                                                          $(8,792)               $17,950

    Stock-based compensation

    Cost of revenue                                                                                                                      322                    377

    Research and development                                                                                                           3,058                    997

    Sales and marketing                                                                                                                3,068                  2,658

    General and administrative                                                                                                        31,782                    595
                                                                                                                                      ------                    ---

    Total stock-based compensation                                                                                                    38,230                  4,627


    Amortization of acquisition-related intangible assets

    Cost of revenue                                                                                                                      444                    444

    Research and development                                                                                                              40                     13

    Sales and marketing                                                                                                                   76                     94
                                                                                                                                         ---                    ---

    Total amortization of acquisition-related intangible assets                                                                          560                    551


    Tax related items

    Income tax adjustments                                                                                                           (3,942)               (1,617)

    Non-GAAP NET INCOME                                                                                                              $26,056                $21,511
                                                                                                                                     =======                =======


    GAAP SHARES FOR DILUTED NET INCOME PER SHARE                                                                                      82,263                 98,577

        Add: dilutive shares                                                                                                          18,273                      -

        Add: preferred shares conversion                                                                                              30,523                 30,523

        Add: initial public offering shares                                                                                            8,900                  8,900

    Non-GAAP SHARES FOR DILUTED NET INCOME PER SHARE                                                                                 139,959                138,000
                                                                                                                                     -------                -------


    Non-GAAP diluted net income per share                                                                                              $0.19                  $0.16

GoPro, Inc.
Reconciliation of Preliminary GAAP to Non-GAAP Financial Measures

To supplement our unaudited selected financial data presented on a basis consistent with Generally Accepted Accounting Principles, or GAAP, we disclose certain non-GAAP financial measures, including non-GAAP gross profit, operating expenses, operating profit (loss), net income (loss), earnings (loss) per share and adjusted EBITDA. These non-GAAP measures are not in accordance with, nor serve as an alternative for GAAP. We believe that these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our GAAP results of operations. These non-GAAP measures should only be viewed in conjunction with corresponding GAAP measures.

In calculating non-GAAP financial measures, we exclude certain items to facilitate a review of the comparability of our core operating performance on a period-to-period basis. The excluded items represent stock-based compensation and charges that are primarily driven by discrete events that we do not consider to be directly related to core operating performance. We use non-GAAP measures to evaluate the core operating performance of our business, for comparison with forecasts and strategic plans and for calculating return on investment. In addition, management's incentive compensation is determined using non-GAAP measures. Since we find these measures to be useful, we believe that investors benefit from seeing results reviewed by management in addition to seeing GAAP results. We believe that these non-GAAP measures, when read in conjunction with our GAAP financials, provide useful information to investors by facilitating:

    --  the comparability of our on-going operating results over the periods
        presented;
    --  the ability to identify trends in our underlying business; and
    --  the comparison of our operating results against analyst financial models
        and operating results of other public companies that supplement their
        GAAP results with non-GAAP financial measures.

The following are explanations of each type of adjustment that we incorporate into non-GAAP financial measures:

    --  Stock-based compensation expense relates to equity awards granted
        primarily to our workforce. We exclude stock-based compensation expense
        because we believe that the non-GAAP financial measures excluding this
        item provide meaningful supplemental information regarding operational
        performance. In particular, we note that companies calculate stock-based
        compensation expense for the variety of award types that they employ
        using different valuation methodologies and subjective assumptions.
        These non-cash charges are not factored into our internal evaluation of
        net income as we believe their inclusion would hinder our ability to
        assess core operational performance. We believe that excluding this
        expense provides greater visibility to the underlying performance of our
        business operations, facilitates comparison of our results with other
        periods, and may also facilitate comparison with the results of other
        companies in our industry.
    --  Acquisition-related charges include the amortization of acquired
        intangible assets primarily consisting of acquired technology, customer
        relationships, trade names and covenants not to compete related to our
        acquisitions. These charges are not factored into our evaluation of
        potential acquisitions, or of our performance after completion of
        acquisitions, because they are not related to our core operating
        performance, and the frequency and amount of such charges vary
        significantly based on the timing and magnitude of our acquisition
        transactions and the maturities of the businesses being acquired.
    --  Adjustment for taxes relates to the tax effect of the adjustments that
        we incorporate into non-GAAP measures in order to provide a more
        meaningful measure of non-GAAP net income. We believe that these
        adjustments provide us with the ability to more clearly view trends in
        our core operating performance.
    --  Adjustment to shares includes the conversion of the redeemable
        convertible preferred stock into shares of common stock as though the
        conversion had occurred at the beginning of the period, the initial
        public offering shares issued July 2014, as if they had been outstanding
        since the beginning of the period, and the addition of all dilutive
        awards outstanding that were excluded from the GAAP diluted earnings per
        share calculation because they were anti-dilutive as a result of our net
        loss position.


                                                            Reconciliations of non-GAAP financial measures are set forth below ($ in thousands):


                                                                                                         Three months ended
                                                                                                         ------------------

                                                                                                     June 30, 2014                               March 31, 2014          June 30, 2013
                                                                                                     -------------                               --------------          -------------

    GAAP gross profit                                                                                                    $102,869                                $96,514                 $56,840

      Stock-based compensation                                                                                                154                                    168                     157

      Amortization of acquisition-related intangible assets                                                                   222                                    222                     222
                                                                                                                              ---                                    ---                     ---

    Non-GAAP gross profit                                                                                                $103,245                                $96,904                 $57,219
                                                                                                                         ========                                =======                 =======


    GAAP gross profit as a % of revenue                                                                                     42.1%                                 40.9%                  32.1%

      Stock-based compensation                                                                                               0.0%                                  0.1%                   0.1%

      Amortization of acquisition-related intangible assets                                                                  0.1%                                  0.1%                   0.1%
                                                                                                                              ---                                    ---                     ---

    Non-GAAP gross profit as a % of revenue                                                                                 42.2%                                 41.1%                  32.3%
                                                                                                                             ====                                   ====                    ====


    GAAP operating expenses                                                                                              $119,535                                $79,958                 $62,796

      Stock-based compensation                                                                                           (34,039)                               (3,869)                (2,375)

      Amortization of acquisition-related intangible assets                                                                  (54)                                  (62)                   (47)

    Non-GAAP operating expenses                                                                                           $85,442                                $76,027                 $60,374
                                                                                                                          =======                                =======                 =======


    GAAP operating income (loss)                                                                                        $(16,666)                               $16,556                $(5,956)

      Stock-based compensation                                                                                             34,193                                  4,037                   2,532

      Amortization of acquisition-related intangible assets                                                                   276                                    284                     269

    Non-GAAP operating income (loss)                                                                                      $17,803                                $20,877                $(3,155)
                                                                                                                          =======                                =======                 =======


    GAAP operating income (loss) as a % of revenue                                                                         (6.8%)                                  7.0%                 (3.4%)

      Stock-based compensation                                                                                              14.0%                                  1.7%                   1.4%

      Amortization of acquisition-related intangible assets                                                                  0.1%                                  0.2%                   0.2%
                                                                                                                              ---                                    ---                     ---

    Non-GAAP operating income (loss) as a % of revenue                                                                       7.3%                                  8.9%                 (1.8%)
                                                                                                                              ===                                    ===                   =====


                                                            Reconciliations of non-GAAP financial measures are set forth below ($ in thousands):


                                                                                                                      Six months ended
                                                                                                                      ----------------

                                                                                                                       June 30, 2014                      June 30, 2013
                                                                                                                       -------------                      -------------

    GAAP gross profit                                                                                                                            $199,383               $146,269

      Stock-based compensation                                                                                                                        322                    377

      Amortization of acquisition-related intangible assets                                                                                           444                    444

    Non-GAAP gross profit                                                                                                                        $200,149               $147,090
                                                                                                                                                 ========               ========


    GAAP gross profit as a % of revenue                                                                                                             41.5%                 33.8%

      Stock-based compensation                                                                                                                       0.1%                  0.1%

      Amortization of acquisition-related intangible assets                                                                                          0.1%                  0.1%

    Non-GAAP gross profit as a % of revenue                                                                                                         41.7%                 34.0%
                                                                                                                                                     ====                   ====


    GAAP operating expenses                                                                                                                      $199,493               $117,469

      Stock-based compensation                                                                                                                   (37,908)               (4,250)

      Amortization of acquisition-related intangible assets                                                                                         (116)                 (107)

    Non-GAAP operating expenses                                                                                                                  $161,469               $113,112
                                                                                                                                                 ========               ========


    GAAP operating income (loss)                                                                                                                   $(110)               $28,800

      Stock-based compensation                                                                                                                     38,230                  4,627

      Amortization of acquisition-related intangible assets                                                                                           560                    551

    Non-GAAP operating income                                                                                                                     $38,680                $33,978
                                                                                                                                                  =======                =======


    GAAP operating income (loss) as a % of revenue                                                                                                   0.0%                  6.7%

      Stock-based compensation                                                                                                                       8.0%                  1.1%

      Amortization of acquisition-related intangible assets                                                                                          0.1%                  0.1%

    Non-GAAP operating income as a % of revenue                                                                                                      8.1%                  7.9%
                                                                                                                                                      ===                    ===


                                   Reconciliations of non-GAAP financial measures are set forth below ($ in thousands):


                                                                   Three months ended
                                                                   ------------------

                                                                June 30, 2014                                    March 31, 2014          June 30, 2013
                                                                -------------                                    --------------          -------------

     GAAP net income (loss)                                                   $(19,841)                                         $11,049                $(5,085)

     Income tax (benefit) expense                                                 1,639                                            3,882                 (2,568)

     Interest income and expense                                                  1,390                                            1,335                   1,369

     Depreciation and amortization                                                4,177                                            3,811                   3,207

     POP display amortization                                                     4,166                                            4,513                   2,886

     Stock-based compensation                                                    34,193                                            4,037                   2,532

     Adjusted EBITDA                                                            $25,724                                          $28,627                  $2,341
                                                                                =======                                          =======                  ======


                                   Six months ended
                                   ----------------

                                     June 30, 2014           June 30, 2013
                                     -------------           -------------

     GAAP net income (loss)                         $(8,792)               $17,950

     Income tax expense                                5,521                  7,459

     Interest income and expense                       2,725                  2,701

     Depreciation and amortization                     7,988                  5,416

     POP display amortization                          8,679                  5,111

     Stock-based compensation                         38,230                  4,627

     Adjusted EBITDA                                 $54,351                $43,264
                                                     =======                =======

SOURCE GoPro, Inc.