Good day, ladies and gentlemen, and welcome to GoPro's Fourth Quarter 2016 Earnings Call. Today's call is being recorded. At this time, I'd like to turn the conference over to Mr. Peter Salkowski, Head of Investor Relations. Please go ahead, sir.

Thank you. Good afternoon, everyone, and welcome to GoPro's fourth quarter and full year 2016 earnings conference call. With me today are Nicholas Woodman, GoPro's CEO; CJ Prober, our Chief Operating Officer; and Brian McGee, our Chief Financial Officer. Before we get started, I would like to remind everyone that our remarks today may include forward-looking statements. These forward-looking statements and all other statements that are not historical facts are not guarantees of future performance and are subject to a number of risks and uncertainties, which may cause actual results to differ materially. Additionally, any forward-looking statements are based on assumptions as of today, and we do not undertake any obligation to update any of these forward-looking statements as a result of new information or future events. Information concerning our risk factors is available in our most recent Annual Report on Form 10-K for the year ended December 31, 2015, which is on file with the Securities and Exchange Commission, and in other reports that we may file from time to time with the SEC. We report gross margin, operating expenses, net profit and loss and basic and diluted net profit and loss per share in accordance with GAAP and additionally on a non-GAAP basis. We believe that non-GAAP information is useful because it can enhance the understanding of our ongoing economic performance. We use non-GAAP reporting internally to evaluate and manage our operations. We have chosen to provide this information to enable investors to perform comparisons of operating results in a manner similar to how we analyze our operating results. A reconciliation of GAAP to non-GAAP financial data can be found in the earnings press release we issued today. In addition to the earnings press release, we have posted slides containing detailed financial information and metrics for the fourth quarter and full year of 2016. These slides and a link to the webcast for today's earnings conference call are posted on the "Events & Presentations" page of the GoPro Investor Relations website for your reference. All income statement related numbers that are discussed during today's conference call other than revenue are non-GAAP, unless otherwise noted. Now, I'll turn the call over to GoPro's CEO, Nicholas Woodman. Nick?

Good afternoon and thanks for joining us. Today we are going to review GoPro's progress in the fourth quarter of 2016 and outline steps we are taking to narrow our focus, reduce cost and position GoPro on a path to profitability in 2017. To start, I'll offer some perspective about where we are today. We entered 2017 with the most advanced yet simplest to use products and services in GoPro's history and created an experience that delivers the best storytelling solution for the GoPro community. Big investments in hardware, cloud and mobile have yielded a solid foundational experience for our customers. One, we will continue to build upon in 2017. In a moment, I'm going to offer a summary of our Q4 performance that acknowledges missteps that resulted in a shortfall to our revenue guidance. However, when these results are viewed in the larger context of how we've improved our customer experience, 2016 was a successful year for GoPro. In the fourth quarter, we rolled out GoPro's strongest ever lineup of new products. The HERO5 line of cameras, the Karma Grip stabilizer, Quik mobile and desktop applications and our Plus cloud service, all of which advance GoPro as a powerful and convenient end-to-end storytelling solution. Thanks to these new products, we achieved our second highest quarterly revenue in GoPro's 14-year history. Our newly launched HERO5 Black camera was the best-selling digital imaging device in both the U.S. and Europe. Another standout was Karma Grip, a handheld and mountable stabilization solution that we launched in December. However, early production issues compromised launch volumes, which impacted revenue. Fourth quarter revenue was $540.6 million, up 24% year-over-year generating diluted earnings per share of $0.29. In our November call, we detailed how our teams overcame initial HERO5 Black manufacturing issues and quickly ramped production.…

Thanks, Nick. It's an honor to have this opportunity and to represent such a talented and motivated group of people. Today I want to offer some color and context on our efficiency initiatives as well as the market and competitive landscape for our products. I'll start with our plans to strengthen execution and manage costs. This is our number one priority for 2017. We've already made major inroads in our organizational model reducing handoffs and layers of bureaucracy. Since November, we've eliminated one-third of the VP and above roles at GoPro. We have also moved away from a complex business unit structure to a functionally driven product development organization. In addition to having a positive impact on spending these changes allow us to improve communication across the teams and will enable faster more reliable execution. Another important initiative is continuing our efforts to shift resources to lower cost locations. This month we've opened an office in Bucharest Romania in order to replace expensive external software and IT contractors with lower-cost teams. We're also growing other lower-cost locations in China and the Philippines. In the last few months, we've also closed several facilities including offices in San Francisco, San Mateo and Los Angeles. These are just three examples of a much longer list of initiatives focused on reducing expenses. Next I'll provide some data on the camera category in the U.S. and international markets. While the digital imaging category has its challenges, our consumers differentiated use of the GoPro, our hardware and software ecosystem, and our powerful brand helps insulate us from many of the negative trends facing this category. GoPro's strengths set a high standard for competitors entering this business. According to the NPD Group in the fourth quarter, GoPro accounted for three of the top five digital imaging products…

Thanks CJ. Today I will focus on a financial overview of the fourth quarter and then provide guidance for the first quarter of 2017. In the fourth quarter, we launched the most advanced connected and user-friendly cameras in the company's history resulting in our second highest revenue quarter and a return to non-GAAP profitability for the first time since the third quarter of 2015. Despite several distractions during the quarter we were able to grow fourth quarter revenue 24% year-over-year to $540.6 million. We generated diluted earnings per share of $0.29 which compares to a loss per share in the fourth quarter of 2015 of $0.08. We shipped approximately 2.3 million cameras in the fourth quarter, a year-over-year increase of 14%. Shipments in the quarter included approximately 200,000 units of previously discontinued cameras. Our $399 and above cameras accounted for more than 50% of the units shipped and revenue in the fourth quarter with consumers having a strong preference for our flagship HERO5 Black camera. Comparing launch periods unit shipped of HERO5 cameras in the fourth quarter of 2016 were approximately 10% higher than units shipped of HERO4 cameras in the fourth quarter of 2014. At the end of 2016 channel inventory was down over 15% when compared to the end of 2015. The vast majority of the inventory in the channel at the end of 2016 were our newer products. Discontinued cameras accounted for less than 5% of global year end channel inventory. Fourth quarter sell-in was higher than sell-through resulting in a full-year sell-through exceeding sell-in by over 10%. In 2016, we estimate that camera unit sell-through was approximately 5.3 million units as compared to approximately 6 million units in 2015, or down 12% year-over-year. Street ASP defined as total reported revenue divided by camera units shipped was…

Thank you. We'll go to Paul Coster with JPMorgan.

Yeah. Hi. I guess I'm a little perplexed by the weakness in the revenue outlook for the first quarter. In the context of it being a long time now since you had a HERO5 refresh, and you are right in the middle of a new one after what's nearly a two-year hiatus and you are selling into a much larger global channel. So perhaps you can just talk us through why maybe versus two years ago this doesn't look so strong, it doesn't even look very strong against the weak year ago comps? And then I will have quick follow-up.

Hi, Paul. This is Brian. Couple of things on this, one is seasonality is always weaker. Two is as we ended the quarter for the fourth quarter, the Session inventory was a little bit higher than we would have liked. The market moved up a little bit to the HERO5 as you saw in ASPs and we shipped in HERO5 Blacks later in the quarter as we had talked about on the last conference call. So, both of those are overhanging a bit in the quarter and then Karma we're going to launch that which actually we had sales yesterday, but that's mid-to-late in the quarter as well. So that's driving the numbers in the quarter.

All right. And the follow-up is, can you just talk to us a little bit about the product cadence moving forward. I think in the prepared remarks it sounded like this year you will have several new products coming to market. Can you confirm that and we're not going to be on a two-year kind of timeline now between HEROs. Thank you.

Thanks, Paul, Nick here. Yes, we can confirm there will be new cameras and other accessories released during the year and new camera namely being HERO6. But we're not going to share any information as to the timing or any other details around the release of those new products as you can imagine.

Our next question will come from Simona Jankowski with Goldman Sachs. Simona K. Jankowski - Goldman Sachs & Co.: Hi. Thank you. Brian I was hoping you can provide a little more color on the weakness in your gross margin guidance for the first quarter. I did hear your comment about the fixed cost absorption over a smaller base, but even so, your revenues are expected to be up on a year-over-year basis, but you're expecting gross margins to be down by about 10 points. So I'd love a little bit more color on that.

Yeah. Hi, Simona, this is Brian. If you actually go back a year, our first quarter revenue was pretty low, and we had 33% margin in the quarter, largely driven by the same factors. In addition, we have Karma in the quarter, which is below average margin. I think we've talked about that before. So both are kind of impacting kind of where we are with the quarter. I'll also remind folks that as we looked at kind of last year first quarter we did 33% and became between 39% and 40% for the year, which quite frankly is our goal. We've set our goal for operating margin target 40% plus or minus 1% for the year. And that's where we're sticking to. And we just about got there in all of (29:36) 2016. Simona K. Jankowski - Goldman Sachs & Co.: And then just as the follow-up since you're exiting with a little higher inventory levels than you had expected both in the channel and on your balance sheet, are you expecting to have to take any more aggressive pricing actions this quarter?

We've not put any aggressive pricing actions into – no – the answer is no. Simona K. Jankowski - Goldman Sachs & Co.: Thank you.

And we'll now go to Will Power with Baird. Will V. Power - Robert W. Baird & Co., Inc.: Great. Thanks. Yeah, I wondered if you could give us any more color for modeling purposes, how to think about revenue trends in Q2, Q3, I mean, I guess, I'm assuming and you're not going to walk through the product cadence, but I think, probably assuming rightly or wrongly that's more second half loaded. But you have Karma ramping, will that be enough to offset any further decline in Q2, maybe just some color how to think about that at least directionally and really the same question in terms of gross margins is this lower 30 level, is those kind of a good level given the revenue run-rate until we get to the back half of the year?

Yeah. We're not going to guide for the rest of the year. Clearly, we expect uptick obviously from Q1 on both top-line and margin. And so, our goal as I had just said is getting the year at 40% plus or minus a point, which arguably we were there in 2015 as well. Will V. Power - Robert W. Baird & Co., Inc.: Okay.

I would add in terms of Karma, we did just launch it. We do believe that we have a very strong value proposition for the GoPro community, helping our customers get their GoPros into the air, but also importantly providing them phenomenal solution for handheld and wearable stabilization and so that – nothing has changed about our optimism for how Karma can perform with the existing GoPro community. But given that we've only just launched – relaunched the product yesterday, we're not going to be giving any information as to how much it's going to contribute over the quarter or next. Will V. Power - Robert W. Baird & Co., Inc.: Okay. And then maybe just a follow-up, just thinking about the geographic dispersion it was nice to see the good growth in Asia Pac and EMEA. If I look at the Americas region, I guess, weaker relative to those two. How do you think about the Americas, given you had a new product launch, you didn't get the year-over-year growth, I mean, is this still a growth market? What helps the Americas grow, I guess, again from here?

Hey. It's CJ speaking, a few thoughts on that. One is, as you heard Nick describe our broad key priorities for the year. One of those is to make the GoPro experience or the smartphone more central to the GoPro experience. And we believe that we've taken – we know we've taken massive steps forward. We built a great foundation that we're going to build upon this year, built the foundation in 2016. And our ability to make that experience between the smartphone and your GoPro more seamless from capturing to sharing, will allow us to access, we believe, a broader market in the U.S. We still have work to do in terms of evolving that experience, but we feel good about where we are today in the path forward there. The other thing I would say is, from a marketing perspective, we're going to be investing significantly in targeting our extended community. So, folks that have historically been GoPro purchasers, who have put up their hand and said, I want to part of the GoPro community. They're on our social networks or sign up for email, and then through our – in the U.S. and particularly through our analytics, we're able to target look-alike communities. So in the past where we've been a little broader on our marketing and this year we're going to be much more focused and targeted, and we expect those core consumers to really be the ambassadors for us going forward.

Yeah. And. well, let me add one more point. So, the comp is pretty tough against the fourth quarter of 2015 where 65% of our revenue was in the U.S. So that was a record and exceptionally high. So that's also driving it. Will V. Power - Robert W. Baird & Co., Inc.: Okay. Thank you.

We'll now go to Ben Bollin with Cleveland Research.

Good afternoon. Thank you for taking the question. The first item, when we look at your OpEx guidance for the year could you help us understand a little bit, is it straight line through the year, do you expect there to be maybe some additional reductions beyond 1Q into 2Q, 3Q, and then maybe you see some seasonal recovery on the advertising front perhaps later in the year just the right way to think about the OpEx trajectory? Then I have a follow-up.

Sure. This is Brian. We guided $145 million to $155 million in OpEx, which is pretty big reduction from Q4 of $182 million that midpoint puts you at $600 million, so I'd expect OpEx to decrease quarter-by-quarter as we exit 2017.

And then at conferences toward the end of 2016, there had been some discussions about the potential for camera volumes into calendar 2017 and this approximate 6 million figure had been discussed a lot. Do you still view that as kind of the right opportunity and could you help us understand maybe some of the puts and takes about how you do think about the aggregate volumes over the course of the year channel inventory, new product, year-to-year compares, things along those lines? Thank you.

Yeah. We ended, so in 2016 we sold-through, which is the true measure of demand, 5.3 million cameras by our estimate. That was down. I think in my prepared remarks 12%. And so we viewed the business in that kind of $5 million to $6 million range, which I think, we talked about kind of late in 2016.

We'll go on to Rob Stone with Cowen & Co. Robert Stone - Cowen & Co. LLC: Hi. I had a question for Brian on your comments about deferred tax assets, should we on a non-GAAP basis be expecting you to record tax credits in the early quarters of the year?

Yeah, for 2017, we'll approximate on a non-GAAP basis a tax expense to kind of mirror what our taxes table would be on income tax returns. So you should figure somewhere in the $6 million to $8 million range of tax expense for the year. Robert Stone - Cowen & Co. LLC: Okay. You guys have talked a lot about social media activity and uploads and use of the software, et cetera. Can you give us any metric on non-hardware revenue? Can you provide color on that? And how you think about growing that segment of the business? Thanks.

Yeah. Hey, it's CJ. So we don't have any specific guidance on that. I did say in my prepared remarks that we feel really good about our early traction with GoPro Plus. The metrics around conversion from trial to paid and churn are actually exceeding our expectations. I think, it's important to note though with Plus, one of the biggest driver behind that is really to improve the experience for our consumers and to drive more engagement. So, while it's a nice recurring revenue stream, we expect our revenue continue to come from the bulk of our revenue to continue to come from our hardware products going forward. Robert Stone - Cowen & Co. LLC: Right. Thank you.

Thank you. Our next question comes from Brad Erickson with Pacific Crest Securities.

Hi. Thanks for taking my questions. I guess first just directionally I may have missed this in the prepared remarks; but can you remind us what your ASP assumptions are sequentially in Q1 assumes within your guidance?

Yeah, we talked about it more for the year, but they would be directionally up from the average of all of 2016.

Got it. And then just related to I guess sort of the backing away from the double-digit growth outlook, you mentioned on last quarter's conference call is Karma's delay and then just getting it started again here the largely the reason behind that, that you're backing away from that outlook, or is there some other incremental caution in the camera growth outlook in as well build in there? Thank you.

Yeah. I think, it's kind of a guidance question. We don't think we have enough visibility given early January, early February to be guiding for the whole year. And as we get better results, good results from Karma with the reintroduction, we will have more data and we can – improve on that outlook as we work through the year.

Thank you. We'll go to Mike Koban with Raymond James. Mike Koban - Raymond James & Associates, Inc.: Hey, guys. This is Mike Koban on for Tavis McCourt. Thanks for taking my question. Honestly, it seems like a lot of them have been answered. I guess the couple questions I had were – leftover were as far as international expansion goes, you know is there – as you guys grow that base of your revenue more and look to make that a bigger portion, is there a difference any kind of margin effect from selling over there and having to go through different channels. And then the second question would just be what does the – how does the layout of the drone market, what kind of opportunity do you guys see internationally for that versus the way it sets up here in the U.S. And that's it from me.

Great. This is Brian. I'll start on the margin impact on international expansion. To the extent we sell to direct retailers on an international basis, it's pretty similar to the margin structure in North America and in many of the larger countries between Europe and actually some in Asia, we are direct on some of those accounts and then others are indirect to the extent that we go through distribution there's obviously some margin impact there but the larger customers tend to be more direct.

And as it relates to your question about our opportunity in the greater global drone market, as we noted Karma was really designed for the GoPro community and helping people get the most out of their GoPro camera. And since we have such a strong global community with over half of our revenue coming from outside of the United States, we do think that Karma does have a strong opportunity internationally. And so we feel good about that. Mike Koban - Raymond James & Associates, Inc.: Great. Thanks.

Thank you. And we'll now hear from Erinn Murphy with Piper Jaffray. Erinn E. Murphy - Piper Jaffray & Co.: Great. Thanks. Good afternoon. Just a couple of questions from me. I guess first I think, if you talked about the first quarter outlook, you said that sell-throughs would be above sell-ins. When do you see that relationship changing as we go throughout the year or should that relationship change this year?

We're actually trying to keep it balanced, and yes, you can't get it right perfectly quarter-to-quarter. But I think as you think about the year, they should be balanced. Erinn E. Murphy - Piper Jaffray & Co.: So, I guess when will sell-ins be positive again, maybe let me ask it that way?

Is should be more positive starting in Q2. Erinn E. Murphy - Piper Jaffray & Co.: Okay. Got it. And then I guess just from a high level, maybe just talk about some of the rationale to continue to really push the pace of growth in APAC you're opening an office in – I think, you said Bucharest, you are kind of evolving this language localization product as well. You're doing a lot of interesting growth opportunities. But at the same time, I mean, it seems to be a little bit at odds with really getting that SG&A back under control. I mean, how do you balance internally what are the areas you still feel confident or you want to be growing with just the overall cost rationalization efforts?

Hey, Erinn, it's a great question. This is CJ. So just to clarify the office in Bucharest is actually to address your exact point. So that's a development office where we're going to eliminate some high-cost software vendors that we use and we're going to move to a much lower cost model for that development. So, it goes to our OpEx reduction efforts. In terms of the way we think about the international opportunities. We are moving to a tiering model where we look at each country as a different opportunity, each region we look at various factors from the market opportunity, how its growing, our market share there and then we categorize those as into mature markets like the U.S. would be, growth markets where we've got a foothold like you would have in China and then nascent opportunities like we would have in India where we just started introducing our product. And then we apply – we're in the process of applying our resources against those appropriately and just our go-to-market model based on where we are in the lifecycle of selling GoPro in those markets, and it's all with the goal of having the biggest impact and driving the biggest growth in the right places. So we're being very thoughtful in the context of keeping costs under control, of putting our dollars against the right opportunities. Erinn E. Murphy - Piper Jaffray & Co.: Okay. Thanks. And if I could just add one follow-up for Brian, how should we be thinking about cash for the end of 2017? Thanks.

Yeah. It's kind of a guidance question. So we're going to kind of stay away from kind of the whole year. Erinn E. Murphy - Piper Jaffray & Co.: Got it. All right. Thank you.

Thank you. And Charlie Anderson with Dougherty & Co. Please go ahead. Charlie Lowell Anderson - Dougherty & Co. LLC: Yeah. Thanks for taking my questions. I had a two-part question on HERO5. I think I heard 10% higher than HERO4. I think that was a sell-in. I wondered if you had any thought on sell-through. And then also I know this is always tough to track, but I wondered if you had any thoughts on the HERO5 buyer versus the HERO4 buyer. If there were any change in the dynamics in terms of was that to a large degree repeat purchasers, were you bringing new people into the fold, and any color on that will be helpful? Thanks.

I can take the second part of that. So one of the things that we're seeing – and it's obviously early on the HERO5 – is the connectivity with our software. And as we've discussed, our thesis is that, as consumers are able to get more out of their camera, i.e they are able to capture and share more easily, that will lead to higher engagement rates, which leads to a stronger virtuous cycle, stronger viral growth, and stronger upgrade cycle. And the engagement we're seeing around HERO5 in terms of connectivity with our software is quite strong relative to HERO4, and in addition to that if you take it one step further and you look at users who are subscribing to Plus, their engagement rates are quite a bit higher in terms of the amount of content that they're sharing, and thereby getting more out of their GoPro experience. So having moved for the first time to this connected experience where consumers can auto offload their content and then access that with our software, we're seeing that to start to pay dividends in terms of driving that engagement. There's still a big opportunity because it's a hard experience to discover. We know that a lot of our consumers actually don't know about our software experience. So one of our big marketing goals in changes for this year is we're going to move away from marketing GoPro as a capture device and more marketing it as a storytelling solution, something that we've never done before to drive up that awareness and then drive that conversion and upgrade to HERO5.

And Charlie, this is Brian. I think you asked a question around the HERO5 and HERO4 comparable launches. We were 10% up on a sell-in basis. On sell-through, HERO4 did slightly better and that's because we had inventory in the channel earlier versus the HERO5, which came later in the quarter. Charlie Lowell Anderson - Dougherty & Co. LLC: Great. Thanks so much.

Our next question comes from Joe Wittine with Longbow Research.

Hi, thanks. Appreciate it. The first quarter guide implies another year-over-year sell-through decline it seems compared to the sell-through you inferred one year ago. So the question is, do you have a time period in mind where you expect capture device sell-through to bottom and return to growth on a year-over-year basis or should we expect this current trend to hold up throughout calendar 2017?

Well, the DI market in general has been declining at a much faster rate, and we've actually been bucking the trend and taking market share, which I believe was in CJ's opening comments. I think CJ's comments, again, about talking about changing the marketing to a storytelling solution, helps to change – actually drive more awareness and hopefully starts to change that trend. In addition, I did talk about ASPs going up. That's because I think we were moving to higher price points as well. So that helps on the revenue side and then the margin side.

Okay. And then...

I would say that we are more focused on revenue and margin and less focused on volume on a unit basis.

Helpful. As my follow-up, Brian, you commented in your remarks how discontinued camera models had an impact on fourth quarter ASPs. So the question is, was everything you shipped in the fourth quarter, all those discontinued products, were those all H4 cameras, because you cited the impact on ASP. Did that also include the previously discontinued models, the HERO, the HERO+, the WiFi, because we saw a fair amount of those in retail throughout the fourth quarter and it seems like they just cleared up in the last couple of weeks, which should be a help if that's the case?

Yeah. It was the HERO, HERO+, and HERO+ LCD, the 200,000 units I referred to in my opening comments. And they've largely cleared through. The sell-in almost match perfectly with sell-through in the quarter. There is about 5% overhang, and you're right, the sell-through data we've seen since they are out of the channel.

Got it. Thanks and good luck.

Thank you.

Thank you. We'll go to Jason Mitchell with Bank of America Merrill Lynch.

Hi, thanks for taking my questions. Just a few real quick. I guess, can you talk about your product strategy for 2017? Do you think you'll stick with the good, better, best strategy this year? You mentioned HERO6 and maybe some other projects. And then just, can you give a little bit more detail about the marketing support that you normally would have had for the HERO5 and how big a piece that is to your usual overall marketing plan in Q4?

Sure. As far as a roadmap goes, candidly we can't disclose what our plans are for products or how they lineup with each other. But what we can say is that we are committed to continuing to drive innovation, and continuing to improve the experience for our customers, and importantly, position the smartphones more centrally to the GoPro experience just to make it that much more seamless and convenient for our customers. So, as we drive down OpEx, at no point does this compromise our customers experience in anyway and frankly, we recognize that we serve the customer first and foremost and that the better job we do in exceeding their expectations, that's really where our growth opportunities are going to come from. And in terms of the impact that lost marketing had on our business in Q4, it's significant. I mean we had promotional programs in place with our top retailers around the world in getting premium replacement in their print and digital, and in some cases out of home marketing, and unfortunately, all of those retailers understandably felt inclined to remove GoPro from their promotions, namely remove HERO5 Black from their promotions because we could not get them enough inventory to warrant the spend that they were going to make. And we also to a degree pulled back on some of our own spending and reserved it until later in the quarter in December when we knew we'd have enough product in the channel. And the backend loading of all of that unfortunately compounded to being contributing to our missing our revenue guidance and also contributing to a little bit of the overhang that we're suffering on HERO5 Black inventory in the channel. But that is I just want to make clear that the sell-through rates that we receive, we're happy with. It's more of a timing issue than it is a demand issue in that regard.

Hey great. Thanks guys.

Thank you. Jerry Liu with Morgan Stanley has our next question. Jerry Yuan Liu - Morgan Stanley & Co. LLC: Thank you. Nick, a question for you. You said early one of your 2017 priorities is to make the smartphone more central to the storytelling process, and with CJ who has rebuilt the software team now promoted to COO, it seems like in general there's just more focus on the software. Do you ever see a situation where GoPro would start monetizing apps or other softwares you might launch and even deemphasizing or just not necessarily having to sell hardware to a GoPro user to make money?

Well, we do monetize today software insofar as our customer subscribe to GoPro Plus, our cloud service so that they can enable their GoPro to auto offload to their Plus account while their camera is charging. That's up and running today. And as CJ noted, while it's early, the initial data we're seeing on that is good and exceeding our expectations in terms of converting trial customers into paid customers and also we have very good churn rates on that. So we're happy with that. The bulk of our business, our revenue obviously does come from selling hardware, and so we see that continuing for the foreseeable future. We are benefiting not in a direct revenue perspective, but we are benefiting from the success of our Quik and Splice apps in that they are very successful in attracting smartphone users. And those smartphone users that use Quik and Splice to edit their smartphone footage, they're on a GoPro software platform. And we're building a relationship with them that we hope to be able to convert into a revenue generating relationship when we are able to upsell a percentage of those customers to our hardware products. So that is part of our strategy now and moving forward. Jerry Yuan Liu - Morgan Stanley & Co. LLC: Got it. My other question is around the retailers, understandably data was through some marketing efforts in the December quarter, but when you look at this quarter or just in 2017, going forward, do you see any change to the number of distribution points placement within the store or shelf space for GoPro? Do retailers have any desire to continue to market with GoPro to pull back on marketing at all?

That's a good question. We have very good relationship with our retailers. We're in close contact with all of them and what I can share with you is that coming out of CES, we feel very good, consumer electronics tradeshow that's beginning January where we meet face-to-face with all of our major retailers from around the world. We feel very good about our relationship with them and their continued desire to support GoPro and we're still a very meaningful part of their business. So, we have no concerns about lack of retailer marketing support or a pullback on floor space in 2017.

Yeah. It's worth clarifying too that the pullback on the demand generation opportunities we had in Q4 were just driven by lack of supply. So there is nothing behind that other than the fact that we didn't have product on shelf to promote so it didn't make sense to run those promotions. And just to add to what Nick said, at the conference we meet with all of our major retail partners. I would actually say, I heard an opposite trend where they're looking to give us additional space, especially as we introduce Karma into the market. Jerry Yuan Liu - Morgan Stanley & Co. LLC: Got it. Thank you.

And we have a follow-up from Ben Bollin with Cleveland Research.

Thanks for taking me on the follow-up. When you look at the revenue, what was the revenue and profit contribution of the sale of previously charged-off units, those 200,000. And how many 10% customers in the quarter and what were those percentages? Thank you.

Yeah. The amount was actually pretty small. In terms of the revenue contribution, it is de minimis quite frankly. And the 10% customers, we had two in the quarter, and the percentages, I don't know off the top of my head.

Thank you.

Thank you. And with no additional questions, I'd like to turn the conference back over to Mr. Nick Woodman for any additional or closing remarks.

Thanks for joining us today. To summarize, I'll say again that we consider 2016 to be a strong year for GoPro in terms of what we accomplished on behalf of our customers. Our customers are a big part of why we come to work every day and for them we delivered. Our job in 2017 is to evolve GoPro into a more cost-effective profitable business so that we can also deliver for you, our investors. Thank you very much. This is team GoPro signing-off.

Thank you. Ladies and gentlemen, again that does conclude today's conference. Thank you all again for your participation.