16-106 Gopro

To Our Shareholders, 2015 was filled with challenges, lessons and valuable opportunities that will contribute to our business in the years ahead. 2016 is a building year which we began with a strategic focus on the needs of consumers and a dedication to improving the simplicity of our products and services. In 2016, we are focused on three major strategic initiatives which we believe will beneficially impact our business later this year. Listen Carefully to The Consumer—GoPro was built on a simple ‘good-better-best’ strategy that ensured the right product at the right price for each level of consumer – introductory, aspiring intermediate and advanced. In 2015, we learned that too many products at varying prices is distracting and confusing to the consumer. We learned that we need to focus our development on the products and solutions that consumers really need …and nothing more. We exited 2015 committed to making this happen. Accelerate Making it ‘Easier and Faster’ to GoPro—Our introduction of HERO4 Silver and Session made it dramatically easier to use a GoPro. So much so that my one-year old son, Bodhi, could pick up a Session, press the shutter button and the GoPro would turn on and begin recording. On the software front, we recognized a need to accelerate the ease of offloading, accessing and editing for our users. GoPro has a vision for creating a simple, seamless user experience that spans capturing, creating, and enjoying engaging content. We exited 2015 committed to making this happen. Think Bigger and Broader—2015 also inspired us to think bigger about GoPro and its potential as a ‘content enabling platform.’ As we looked forward to the software experience we are building for our customers, and for ourselves, it became clear to us that by limiting the experience to only content captured with a GoPro we were limiting the reach and relevance of ‘GoPro as a platform.’ We began to think of ways to open GoPro up to include anyone with a smartphone, DSLR or any camera for that matter. In doing so, we can provide GoPro’s content management and editing benefits to many -- dramatically scaling the reach and relevance of our platform to a much, much broader global audience. We exited 2015 committed to making this happen. 2016 is the year we expect the vision to come together. These lessons and perspectives combine with our refined product roadmap to position 2016 as a critical building year. This is the year for realizing our vision for a unified consumer experience: a simplified, seamless experience for capturing, creating and enjoying engaging personal content. • Every GoPro will be easy enough for a child to use. • There will be GoPros that connect to the cloud and synchronize content automatically. • GoPro’s mobile app will make it easy to access content on-the-go and also provide a high-quality yet simple editing experience for delivering engaging videos in less than a minute. This, combined with this year’s introduction of industry-forging new products like our 16-camera surround rig, Odyssey, and our 6-camera spherical rig, Omni, illustrates that GoPro is delivering the type of system and software innovation and invention that made it a leader in traditional digital imaging. And our soon-to-be-released drone, Karma, enables a robotic GoPro experience that will leave little doubt that our passion for ‘what’s next’ is alive and well and that robotics will continue to expand the potential of our business for years to come. We exited 2015 committed to making all of this happen. And we expect to exit 2016 looking very much like that company we envisioned during our IPO: a powerful and globally recognized brand, led by an inspired team which is focused on enabling a new era of personal content creation for connected consumers – be they GoPro customers, smartphone users or users of other devices. In this way, we believe GoPro can realize our vision at the largest scale. Personally – and as a major shareholder in this company – I have never been more excited or confident in GoPro’s future. Thank you for your support and your belief in our future. Nicholas Woodman Founder, Chairman and Chief Executive Officer Selected Financial Data ($ in millions) 2011 2012 2013 2014 2015 Revenue $ 234 $ 526 $ 986 $ 1,394 $ 1,620 Gross Profit 123 227 362 627 673 Gross Margin % 52.3 43.2 36.7 45.0 41.6 Net Income 25 32 61 128 36 Adjusted EBITDA 53 75 134 293 179 Cash and Investments 29 36 101 422 474 Total Assets 104 247 440 918 1,103 Working Capital $ 44 $ 70 $ 57 $ 564 $ 538 ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• Revenue Net Income (in millions) (in millions) $1,620 $128 $1,394 $986 $61 $526 $36 $32 $25 $234 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Capture Devices Shipped Headcount R&D Headcount (in millions) 6.6 1,539 5.2 3.8 970 2.3 646 676 1.1 347 415 147 250 36 123 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2015 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number: 001-36514 GOPRO, INC. (Exact name of registrant as specified in its charter) Delaware 77-0629474 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 3000 Clearview Way San Mateo, California 94402 (Address of principal executive offices) (Zip Code) (650) 332-7600 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Class A Common Stock, par value $0.0001 The NASDAQ Stock Market LLC (Title of each class) (Name of each exchange on which registered) Securities registered pursuant to section 12(g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of Act. Yes No Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non accelerated filer Smaller reporting company (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2015, the last business day of the registrant's most recently completed second fiscal quarter, was approximately $5,005,600,000 based upon the closing price reported for such date on the NASDAQ Global Select Market. On January 31, 2016, the registrant had 100,761,057 shares of Class A common stock and 36,104,708 shares of Class B common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement for its 2016 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days of the registrant’s fiscal year ended December 31, 2015, are incorporated by reference in Part II and Part III of this Annual Report on Form 10-K. Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, the Proxy Statement is not deemed to be filed as part of this Annual Report on Form 10-K. GoPro, Inc. Index Page PART I Item 1. Business 1 Item 1A. Risk Factors 8 Item 1B. Unresolved Staff Comments 27 Item 2. Properties 27 Item 3. Legal Proceedings 27 Item 4. Mine Safety Disclosures 27 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer 28 Purchases of Equity Securities Item 6. Selected Consolidated Financial Data 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of 31 Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk 47 Item 8. Financial Statements and Supplementary Data 48 Item 9.

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