GoPro Expects Quarterly Revenue of $96 Million, Delays Filing Amid Credit Risks
Key Facts
GoPro notified the U.S. Securities and Exchange Commission on November 10 that it would be unable to file its quarterly report for the quarter ended September 30 by the deadline. The company estimated preliminary net revenue of about $96 million, compared with $163 million in the same quarter a year earlier. It also forecast a gross margin of 12.7%, versus 35.1% a year earlier. It said it needs additional time to close its books and document its assessment of financing arrangements entered into during the third quarter. The figures are preliminary and subject to review and may change, while the company said it would file the report and earnings disclosure as soon as practicable.
The preliminary estimates reflect a decline in revenue and a narrower gross margin compared with the year-earlier period, while estimated operating expenses fell to about $60 million from $73 million in the third quarter of last year. The company did not provide a specific date for publishing final results in the notice. It said third-quarter results would reflect significant changes compared with the corresponding quarter a year earlier. The filing delay means investors are waiting for the accounting close to be completed before they learn the final figures. The company also linked the need for additional time to its assessment of financing arrangements entered into during the quarter.
GoPro disclosed an unremediated material weakness in its financial reporting controls, saying it stemmed from a failure to design and maintain effective controls for assessing the accounting treatment of embedded features in financing arrangements. The weakness was disclosed in the delay notice as the company works to document those arrangements and close the quarter's books. It said its third-quarter report would continue to indicate substantial doubt about its ability to continue as a going concern over the next twelve months. That places the reporting delay in the context of accounting-close and financial-control challenges, alongside continuing going-concern concerns. The company did not specify a final date for filing the report.
The company said it is actively seeking waivers from lenders for noncompliance with certain covenants. It warned that failure to obtain the waivers could result in a covenant breach constituting an event of default, with potential consequences for other debt agreements under cross-default provisions. Those provisions could allow lenders to accelerate repayment of the debt. GoPro said any acceleration could lead to a failure to satisfy a condition for completing the pending merger and could also allow the buyer to terminate the merger agreement. The path to resolving the credit covenants is therefore directly linked to the possibility of completing the deal.
Company data as of June 30, 2026, showed cash and cash equivalents of $27.3 million, compared with $49.7 million on December 31, 2025, while outstanding principal rose to $87.2 million from $69.3 million. GoPro recorded operating losses of $96.2 million and operating cash outflows of $47.4 million in the six months ended June. These figures cover the first half of the year and provide financial context for the financing risks addressed in the November notice. In its third-quarter disclosure, the company confirmed that assessing the financing arrangements remains part of the work required before completing the report. The going-concern assessment over the next twelve months remains in focus in the awaited quarterly report.
The merger agreement allows the deal to be terminated if it is not completed by December 31, 2026, except by the party whose breach caused the failure to close by that date. Under the announced terms, each eligible share will receive $1.14 in cash and 0.1 Class A share in the surviving company, with the cash consideration potentially reduced if net working capital falls below the threshold specified in the agreement. The buyer is expected to own about 90% of the surviving company, while current GoPro shareholders would own about 10%. The notice does not guarantee completion of the deal, as satisfying the closing condition and obtaining shareholder approval remain requirements. The company said it would file its third-quarter report and earnings disclosure as soon as practicable.