GoPro Sees Revenue at $96 Million as Loan Risks Threaten Merger Completion
Key Facts
GoPro disclosed preliminary third-quarter revenue estimates of about $96 million, down from $163 million in the same period of 2025, and said that failure to comply with certain loan covenants could threaten completion of its proposed merger with Starman. In a filing with the U.S. Securities and Exchange Commission, the company said it is seeking waivers from lenders related to those covenants. If it does not obtain them, a default could allow lenders to accelerate the maturity of the debt. The company said any acceleration of repayment could result in failure to satisfy a condition to closing the transaction, allowing the acquirer to terminate the agreement. These risks left the deal’s status tied to the company’s handling of its financing obligations.
GoPro forecast gross margin of about 12.7% for the quarter ended September 30, 2026, compared with 35.1% in the year-earlier quarter. It also estimated operating expenses at about $60 million, down from $73 million a year earlier. The company said the figures are preliminary and remain under review. In the same context, it said its financial statements will continue to include substantial doubt about its ability to continue as a going concern over the next twelve months. The estimates place falling revenue and margins alongside the financing risks facing the company.
GoPro said its delay in filing its third-quarter report stems from the need to complete financial close procedures and accounting and valuation documentation for certain financing arrangements entered into during the third quarter of 2026. It expects to file the quarterly report and disclose results as soon as possible after completing those procedures. The results disclosure was delayed as the company sought to address financing issues related to lender covenants. The company had previously said it was not in compliance with certain covenants under its 2025 credit agreement before obtaining a waiver and amendment on July 9, 2026. That date provides background to its current efforts to obtain lender concessions.
The current pressures reflect a financial position GoPro disclosed in its previous report: it recorded $47.4 million in operating cash outflows during the first half of 2026. Cash and cash equivalents totaled $27.3 million on June 30, compared with total outstanding principal debt of $87.2 million on the same date. Those figures coincided with the warning about doubt over the company’s ability to continue as a going concern and its efforts to address covenant noncompliance. They show the scale of the obligations surrounding its financing efforts, while accelerated debt maturity remains a possibility contingent on the company failing to obtain the required concessions. GoPro directly linked that possibility to a condition for completing the merger.
GoPro announced in September that the proposed deal would give its shareholders $285 million in cash, or $1.14 per share, while they would retain about 10% of the combined company’s shares, with the cash consideration subject to a potential adjustment based on working capital. The company presented the deal as a refinancing and repositioning that would add an optical transceiver business and target the AI data center, government, defense and space markets. Chief Executive Nicholas Woodman said the merger would allow the company to grow in consumer, commerce and defense markets and expand its role in imaging, optics and AI infrastructure solutions. However, completion remains subject to the deal’s conditions, including addressing the loan risks disclosed by the company. The cash consideration and shareholders’ retained stake provide context for a transaction whose closing condition may now be at risk.
The parties changed the outside date for completing the merger from December 31, 2026, to March 31, 2027, giving them additional time to complete the deal. The original agreement set December 31, 2026, as the deadline, with the possibility of an extension by written agreement of both parties. GoPro said completion depends, among other factors, on shareholder approval and the acquiring party securing the necessary financing and extending the expiration date of its financing commitment. In parallel, the company said it would file its third-quarter report and disclose results as soon as possible after completing financial close, accounting and valuation procedures. The next steps combine completion of financial disclosures, resolution of the covenants and satisfaction of the deal conditions by the revised deadline.