Ladies and gentlemen, please stand by we're about to begin. Good day and welcome to GoPro's Fourth Quarter and Full Year 2017 Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jeff Brown. Please go ahead, sir.

Thanks, operator. Good afternoon, everyone, and welcome to GoPro's fourth quarter/full year 2017 earnings conference call. With me today are GoPro's CEO, Nicholas Woodman; and CFO, Brian McGee. Before we get started, I'd like to remind everyone that our remarks today may include forward-looking statements. These 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 made today are based on assumptions as of today. We do not undertake any obligation to update these 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, 2016, 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. Today, we may discuss gross margin, operating expense, net profit and loss as well as 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 choose to provide this information to enable investors to perform comparisons of operating results in a manner similar to how we analyze our own operating results. A reconciliation of GAAP to non-GAAP operating expenses can be found in the press release that was issued this afternoon. In addition to the earnings press release, we have posted slides containing detailed financial data and metrics for the fourth quarter and full year 2017. These slides and a link to the webcast for today's earnings conference call are posted on the Events & Presentations page of the GoPro's Investor Relations website. Finally, all income statement related numbers that are discussed today during the call, other than revenue, are not GAAP, unless otherwise noted. Now, I'd like to turn the call over to GoPro's Founder and CEO, Nicholas Woodman. Nick?

Good afternoon. Today, Brian and I will take you through GoPro's recent performance, including a sharpened focus on our camera, app and cloud products, while reducing operating costs. I'll offer some early, but positive data on sell through that followed changes in our pricing strategy. And finally, I will share with you GoPro's six priorities for 2018. I'll begin with a summary of GoPro's full year results for 2017. Our fiscal year was marked by three strong quarters of operating efficiency and solid execution by our teams, overshadowed by a miss in the holiday quarter. Full year revenue was $1.18 billion, flat year over year. One highlight is that we increased our net cash position by $50 million sequentially. And excluding our debt offering in April, GoPro's cash balance increased by $81 million since March. Our cash position at the end of 2017 was $247 million. Brian will provide more detail on our quarter and full year performance, but I want to stop here and note three takeaways for investors. First, GoPro's brand is strong and our products are best in class. Second, sell through increased substantially following our price reductions, indicating significant demand for GoPro at the right price. Third, GoPro is operating more efficiently and returning to profitability is a priority. We've improved cost management, delivering OpEx of $476 million in 2017 and setting a 2018 OpEx target of below $400 million. That's a cumulative reduction of more than $300 million from 2016. And we expect to achieve this without sacrificing innovation. To summarize 2017, GoPro made significant progress in turning our business around, reducing expenses while launching category-leading products and growing our brand globally. But clearly, there were challenges. As noted on our last earnings call, early in the fourth quarter we saw solid demand for HERO6…

Thanks, Nick. Let's turn to an overview of our performance for the fourth quarter and full-year 2017, and qualitative guidance for 2018. Revenue for the full year of 2017 was $1.18 billion, which is flat year-over-year. However, revenue outside of the U.S. grew by 4%, largely benefiting from growth in Asia of 27%. We ended the year with cash and marketable securities of $247 million, a sequential increase of over $50 million. Excluding the net proceeds from our convertible debt offering in April, our cash balance increased $81 million since March 31. In the first quarter of 2018, we expected cash refund of approximately $32 million related to the completion of tax audits. As of December 31, 2017, we had the borrowing capacity of up to $112 million under our asset back credit facility. Our focus on cost management yielded a $233 million reduction in our operating costs, taking our full year operating expenses down to $476 million in 2017. Cost reduction remains a top priority and we are targeting 2018 operating expenses below $400 million. Much of the expected reduction in 2018 is attributable to our decision to exit the drone business as well as additional operating efficiencies, which will contribute to reduced headcount from 1,273 at the end of 2017 to a target of less than 1,000 employees in 2018. For the full year adjusted EBITDA improved by $161 million or 84% to a negative $31 million, which is largely due to our aforementioned reduction and expenses. Moving to the fourth quarter, revenue was $335 million, up 2% sequentially and down 38% year-over-year. Gross margin for the quarter was 25%, down from 40% in the third quarter of 2017. The decrease in gross margin was primarily due to retail price reductions on our camera and drone products, our…

Yes, sir. Thank you. [Operator Instructions] We first go to Paul Coster with JP Morgan.

Hi. Thanks. This is Paul Chung on for Coster. Thanks for taking my questions. So, first up, can you give us a sense for potential opportunities in your distribution channel or where you can expand? And then, on a global basis, looks like China and Japan are doing quite well. Are you reallocating resources there to drive - ride that momentum? And how would you describe the competitive landscape there in those markets and potential?

Hi. Thanks for your question. International remains one of our priorities. And as we're expanding our marketing budget for 2018, in addition to targeting entry-level customers and growing our base of future upgraders, we're also going to be focusing our increased marketing budget on continuing to grow our international markets. We still have a lot of room to grow in terms of awareness, driving for GoPro in markets like Japan and in China. And as you noted, in 2017, we saw the impact that we can make on sales in those regions when we do apply more marketing spend and as well when - as we continue to improve our localization of our brand and products and in-store merchandising in those regions.

Paul, I'd also add and I mentioned this in our prepared remarks. If you look at the data out of GfK, on the unit basis we have 44% share in EMEA or in the European market. And we have opportunities to use an entry-level price point product to take some of that share back. So I think that's also an important market.

Got you. And then, next question is on the Plus monthly service. So on the 130,000 subs, can you give us a sense for how those subs have been growing every quarter since launching. And what you think the potential TAM is for subs from your existing consumer base. And how should we think about the margin profile for that service over time? Thank you.

We're very happy with how the original launch of Plus went. It was a on the - the launch is on a the quiet side. We didn't do a ton to aggressively promote it, because we're in a learning mode for the Plus subscription. And what we found was that we had a very high free trial to paid subscriber conversion rate, which was great. And then we also had a very low churn rate, which was also really encouraging. And frankly, the pickup rate and the churn rate exceeded our expectations in terms of positive performance, because the original version of Plus didn't have as robust a feature set and benefit to the user. And so, we were happily surprised to see how engaged our customers were with plus. And it grew to this 130,000 subscriber-level that we have today. We're pretty excited about the prospects for the new and improved Plus, because we've significantly improved the value proposition, essentially rolling all that was Care into - all that was GoPro Care into the new Plus, and we kept the price the same. And the metrics that we see for GoPro Care uptake of our customers has been very strong. So net-net, we feel like Plus is in a really good position to appeal to consumers. And it's going to play a more important part in our business moving forward as well as other subscription initiatives that we're working on. Our goals are that, eventually, the value that we continue to build into Plus will ultimately make it so appealing that it would be essentially awkward for one of our customers to not subscribe to the program, so subscription is going to be central to our business moving forward.

Yeah, and, Paul, you asked the question about the margins on it. The margin is very profitable today. The margins are very high, because it's our channel. So we're looking forward to this product and continue to grow it, will definitely add to corporate margins over time.

Thank you very much.

Next question comes from Joe Wittine with Longbow Research.

Hey, thanks for taking the questions. A question on the entry level, which I think you said is still slated for the first half. It sounds like you're targeting expanding the ten [ph] to a new customer type. So could you provide any more detail on that, on exactly what demographic you're targeting. And with that, maybe you could provide some thoughts on how you're managing the balance of drawing in that new customer, the new entry-level customer, while maintaining your core customer at the price points you're accustomed to.

When we say that we are going to be expanding our marketing, to take better advantage of the terrific products we have at the really appealing prices, and that were going to be targeting our entry-level customer opportunity more than we have before. I think it's important to note that we're going to be - it's incremental marketing budget that we're adding. And we are going to be maintaining our existing efforts to market our premium products. So we won't be risking the sell-through and demand generation that we've enjoyed at the high-end of our product line. We are going to allocate incremental spend to create a now second marketing funnel to attract new entry-level customers and to promote the benefits of this new products. Now, as it relates to the first half of the year, release of our new entry-level product, what I can share about that product is that it's going to incorporate features that have proven to be very appealing with consumers. And significantly move the needle on sell through. For the last couple of years, our entry-level product has been Session form-factor camera that has not been as widely appealing as we had hoped it would be. And in certain markets internationally, it hasn't resonated at all. And so we see a pretty significant opportunity to update our entry level form factor and go with product features that have proven to be very successful with consumers, so we're excited about that. And that's something that we're going to build into our full product line, and we'll - we believe, we'll really benefit from in the second half of 2018, when we introduce new products with higher margins that we believe can get us back to a profitable pace, when we combine those higher margin products with the sell-through that we're now seeing in our business.

And Joe, this is Brian, I'll also add that the step-up in the marketing ad spend is significant year-over-year, but it's also contemplated in the sub-$400 million OpEx for 2018.

Okay. Got it. And then, maybe just my follow-up, Brian, a clarification on the guidance, where you seem to be drawing a line on the sand between the first half and the second half. Can you just clarify whether you expect that return to both sales growth and non-GAAP profits to be merely in the second half in aggregator, or are you referring to both the third and fourth quarter individually as well? I know, you are not probably thrilled to guide the September quarter at this point, but you clarify this as much as you're willing to.

Yeah, I think, I'm going to stick to first half and second half at this point, although, I will say that we do expect the loss to narrow quite a bit in 2018 from 2017. And quite frankly, if the marketing uptake is solid with - and resonates with consumers as well as the new products, we think we're coming out with, that we're not too far from being profitable for the year, so it's close.

Got it. Thanks, guys.

I'd also like to add just one thing, which is it's - I think it's really important not to confuse the lack of profitability or revenue in the first half of the year with a lack of demand. We are seeing significant demand for GoPro at our new prices that are appropriately aligned with market demand. Sell-through is good. And it's just that we have quite a bit of channel in the inventory in the channel that we need to sell-through. But sell-through is good, which means demand is good for GoPro, when our products are priced appropriately.

We'll go and take our next question comes from Doug Clark with Goldman Sachs.

Hi, thanks for taking my question. My first one is on the comments on repeat customers being kind of a larger percentage than you expected. Can you give more details on that as now that do you have some data on it, how large is the repeat customer base on the unit basis or anything there?

Yes. Analytics is incredibly important to us - has been important to us even. And we recognize that we need to make even more investment there to better understand our market, our customer pricing dynamics, so that we can more predictably plan and operate our business. We do understand that we have a larger than previously understood community of a very loyal repeat customers. And they need to see one of two things from us to be motivated to purchase a GoPro, and that is either a significant new model upgrade or they need to see a discount on the previous year's model. And that was really at the heart of the problem for HERO5 Black is that many of our customers - well, the problem is that that product was in the market for second year at the same price that it was introduced at the year prior. And a number of our customers either already own the product or we're waiting to upgrade to it, but weren't happy to do so when it was still of its original price. And that explains the significant uptick in sell-through we saw, when we lowered the price by $100, it was more than a two time sales uplift for HERO5 Black, and approximately a three time sales uplift for HERO5 Session, when we lowered both of those products by $100, which again signifies their significant demand for GoPro at the right price. In terms of the specifics around the percentage of our customer base being a repeat customer that's not something we're sharing at this time, and frankly we need to sharpen our understanding of our customer. We have a lot more data now than we used to. We - before HERO5, well, actually since the launch of HERO5, we have…

Okay. Thanks for the detail. My other question is, and you've mentioned a few times kind of the increase sell-through post the price cuts in the month of December. Can you talk about, how sell-through has been in the month of December now the entire portfolio has had that? And then, secondarily, if you can give any more granular detail on first quarter expectations in terms of revenue?

Sure. I think, you meant how sell-through is maybe going in January?

Yes, yes. right.

Right. As I mentioned we saw approximately a two times uplift for HERO5 Black, a three times uplift for HERO5 Session, and even larger uplift for HERO6 Black, when we lowered the pricing of that product by $100 on January 7. Even after the traditional leveling out of the sales lifts, they're still at a rate that indicates their strong demand for GoPro with these new prices. And there - those prices have now been in the market long enough that we see them at hearing to historically proven decay rates that are enabling us to forecast how the rest of the year is looking, and we're happy with the sell-through that we have and we think that it puts us in a really good position to marry that demand with our higher margin products in the second half of the year to put GoPro back on a profitable pace.

And Doug, this is Brian. I'd also point out in the guidance for channel inventory, our expectation based on the current sell-through rates, is that will reduce 25% to 30% in the first quarter. We should see further reduction actually in the second quarter.

Got it. And then, any comments specifically on first quarter revenue guidance.

No. We're going to keep that at first half. And part of that is quite frankly due to the fact that with the channel inventory, we also have to sell-through Karma, there's some kind of moving parts there that kind of go possibly between quarters. So I think we're better off on a half view.

I think, one - and one more really important point as it relates to our sell-through rates, some information we can give you that provides sort of a directional guide to what sell-through is, is that with the current sell-through rates we're seeing. We are forecasting sell-through growth in 2018 over 2017. So we believe, we are going to sell through more units in 2018 and we did in 2017, which indicates growing demand which is what we all want to hear.

Great. Thanks a lot.

Next question comes from Stanley Kovler with Citi.

Hey, guys, this is [Josh Kehoe] [ph] on for Stan. I guess, going back to those comments. What are your expectations for camera unit growth in 2018, and would you consider us sort of a long-term stable run rate? And I guess, how did that related to the overall camera market? Thanks.

I think, you're asking about channel inventory? So we expect channel inventory, actually, to decline in the first and second quarter, so in the first half, which we kind of talked about. We expect sell-through to be more balanced with selling and I think in the second half as we introduced some new products. So even in 2017, in total, selling of sell-through were actually balanced and that was true for the fourth quarter, we will sell-through more in Q1 and Q2, it would be more balanced with overall sell-through growth in 2018 over 2017.

I think that's the key point there, is that I can just to reiterate. We expected to increase sell-through for the year indicating a growth in demand for GoPro, and that's based on a - the sell-through trends we're seeing today following historically proven trends.

And the follow-up, do you think $400 million a year approximately for OpEx is an appropriate run rate in 2019 and beyond? Or does it possibly fall further maybe closer 2014 levels?

Well, at the moment, we're continuing to - if you step back, I mean, 2016 we spend $709 million. So we have taken OpEx down by close to 50% over two year period of time, that's pretty big. We'll continue to find operating efficiencies, as we run the business. And that's the way we're just going to keep operating.

Okay. Thanks.

Next question comes from Andrew Uerkwitz with Oppenheimer & Co.

Hey, thanks, gentlemen. Nick, if you can just comment when you look out beyond 2018 and into the future. Could you comment on how you think the camera industry could evolve over time, and then, what role the Fusion camera could play in that?

Sure. I and the rest of it's a GoPro believe that the camera is going to continue to play a supporting role to the phone. The phone is the computer that we all have in our pocket, it's how we communicate, it's how we socialize, it's how we express ourselves, but it has its limitations. And really GoPro's opportunity is to pick up where the phone leaves off in terms of serving as extremely convenient capable durable tool for self-capturing life experiences that just simply would be difficult to capture without a GoPro. And as we've made significant improvements to how seamlessly a GoPro works with a phone, last year with the launch of HERO6 and the GoPro App, improving transfer speeds more than 3x, and the GoPro Apps ability to auto-edit video for you. And now we're expanding it even further with the convenience further with the launch of - the updated launch of GoPro Plus, which is now at the end of February going to be able to have the GoPro App upload any GoPro photos and videos you capture directly to your cloud account. So you really never need to touch a computer again, if you're a GoPro Plus subscriber, and you own a HERO5 or HERO6. We see that trend continuing, we see people - the human behavior to continue to share, express itself more and GoPro's position, we believe brilliantly to serve as a really useful tool to hundreds of millions, if not billions of consumers who are sharing themselves more and more today, where Fusion plays into that. Fusion today is an incredibly versatile tool for our more tip of the spear prosumer and professional customers. Fusion is selling very well. It proves that GoPro can sell products at higher price points provided the value is really there, which it is with Fusion. And in terms of this long term place in GoPro's line up and as it relates to expanded business opportunities. Fusion will get easier to use over time, and will become more consumer and mainstream ready. And we're learning how to do that now with its more pro version. We're very excited about Fusion's place in GoPros, in our consumers' future, and we're continuing to make the appropriate investments to make that future happen.

And then just a follow-up, I appreciate the color. Where are you spending the bulk of your R&D dollars, at this point? And do you feel the need to do major hardware upgrades every single year?

Well, as we shared earlier on the call, we have a very loyal and passionate customer base, that is looking for new things from us each year. And in simplest terms, they need to see either exciting new models from us or discounts on older products to be compelled to buy. And it's our job to provide them with both of those whenever we can. And we also recognize there is a significant opportunity to improve the appeal of our entry level products so that we - and tailor marketing to entry-level customers so that we can significantly grow the percentage of new customers we get every year, because the data shows that many of those customers grow into repeat customers over time. So we have to do a better job of not only being appealing to and marketing to the high end of our market, but we also have to address the entry level and in many markets, we see significant opportunities to do that. Other areas that we're investing significantly is in our software. Our customers tell us that your cameras are easy enough to use. It's really the convenience of offloading my footage to the phone and the ease of using the app to get to that shareable piece of content. That's where our customers really want to see us make continued improvements. So we're investing accordingly all the way up to the cloud experience with updates to Plus like we just launched and we're not done yet. We have several more subscription initiatives that we have planned for the year that we believe are going to do an even better job of solving our customer's challenges from start to finish when they use a GoPro. So we're investing across the board.

Great. I appreciate that color. Thanks, guys.

Thank you.

Next question comes from Yuuji Anderson with Morgan Stanley.

Great. Thanks, all. Thanks so much for taking my question. On the new SKU launch in the first half how should we think about that ramp versus the channel inventory drawdown that you're expecting in Q1, and I presume Q2? Is that kind of part of that or is it entirely - is that shelf space just entirely different from the 16-weeks that we're seeing right now?

This is Brian. Hey, Yuuji, you should - the entry-level product was the Session and then the HERO5 Session, which will be mostly. The session is mostly out of the channel. So this is new. We still expect the channel inventory overall to decline, even with - in the first quarter. And we're pretty excited about the product. We think there is a bigger value proposition for the consumer at this entry-level price point in the first half. So - and that's we're carrying on through the year with new products.

Okay. Got it, definitely makes sense. And then on your comment on sell-through expectations for the full year, should we think about it as returning to growth with the additional SKU launches in the second half or are you expecting something sooner with the new entry launch.

The first half and second half revenue we talked about was incorporated. The entry level product in the first half as well as the new products in the second half.

Okay. That's…

And I needed to make the point, we expect sell-through to be much higher in the first half. And it'd be more balanced in the second half, but overall for the year, I'd be higher - 2018 sell through higher than 2017.

Next question comes from James Medvedeff with Cowen.

Hi, good evening, guys. How are you?

Great. Thank you.

So I have a couple of questions about expenses. As the sales and marketing took a nice increase here in the fourth quarter as it does every fourth quarter, and the run rate for non-GAAP was $120 million, so how should we think about getting that down to $100 million or less per quarter and what is the cadence of that through 2018?

Yeah, so for below $400 million for the year, some of those quarters have to be less than a $100 million, right, by definition. And so, and you're right, we had more advertising spend in the fourth quarter as we discussed on the last conference call. And we will definitely step up marketing throughout 2018. I think that's a key component to the overall strategy, build innovative products and then market them, and then, go and leverage the rest of SG&A to drive OpEx down.

Okay. So you're committed to continuing to spend R&D at relatively the same rate?

No, obviously, we'll have to pull - R&D will come down by definition of exiting the Karma business and the drone business. So, obviously, that will come down, but we'll also pull down SG&A. So we think we'll have enough investment in R&D to drive innovation we need on our product roadmap for our customers. And then, we'll leverage SG&A and drive more marketing spend to drive product demand.

Yeah, I just want to second on what Brian said that nobody should confuse our reduced OpEx with us being unable to continue innovating or drive a really exciting roadmap. Innovation is at the core of this company's culture. It's a big part of how we attract and retain employees. And frankly, it's the only way that you can continue to invent an exciting future for our customers in the form of a great roadmap is through innovation. So that is something that we are keenly committed to and our R&D budget for 2018 not only secures our roadmap for 2018, but it's also laying the groundwork for an exciting 2019 as well. So I just want to make that abundantly clear.

Yeah, of course, so my second question is on gross margin potential. It's becoming apparent that new products are coming out. And as you said in your prepared remarks, the loyal and passionate user base is going to need a price reduction to - in other words, bring out a model price and it's only good at that price for a year, right, because then you replace it with another high-end model. And the question is are you able to improve the cost structure of making those products at the same rate as you have to reduce the price?

That's our job too. And also, the way that we introduce new products and how we move other products through our lineup is also an opportunity for us to get more leverage out of a product that we've made in the year prior. But you've nailed it. We both need to reduce the cost of manufacturing our products. That's both through - starts with the definition of the product itself and then it in involves the designing of that products for low-cost manufacture. And then it's working with our suppliers to do the best job we collectively can to hit the price targets that we need to in order to generate necessary margin. So that is one of the priorities of the company. And then, also how we manage the lifecycle of those products also we take into account to build a roadmap that can serve our customers accordingly. So you're right on all fronts.

Okay. Final one if I can squeeze one more in is on ASP. How should we think about - with all the changing channels sell-through and entry-level products coming in, Karma going out, higher-end product coming in the second half? How should we think about ASP in H1 and H2, how are you willing to characterize it?

Yeah, let's start off for the year. So for the year, 2017 obviously had the price protection in it, so that pulled the average suite ASP down about $274. For the whole of 2018, I'd expect it to be kind of around that, that neighborhood. We'll have still some Karma to sell. We'll have Fusion, which is higher price point. We'll have the new products at new price points. And so, that's going to kind of balance it out. In Q1, quite frankly, it could be slightly higher, given we'll sell of the Karma, but you got to think about it more for the overall year. And so, at the end of the day we think we've got the right value proposition that consumers will pay for, because we've got the products priced right at the right price.

Okay. Thanks.

And our final question comes from Charlie Anderson with Dougherty & Company.

Yeah. Thanks for taking my questions. Just a couple of housekeeping. Number one, Brian, you mentioned you'd use cash first half, generate cash second half. I wonder if you could define that to any beyond that in terms of whether it'd be a range or anything. And then, also on the subscribers, I think you guys said 130,000. Are they all through their free trial period? And then as we think about the potential there, do you guys have a sense of how many cameras are active out there today? Thanks.

On the subscribers, the majority - obviously, some of them are still in their free trial period. The majority of them are through that free trial period. As I mentioned, the conversion from free trial to paid subscriber was very high. And the rate of churn, the rate at which subscribers would drop out after a period of paying was very low. And that was with the original Plus subscription offering, which had significantly less value than the new one. And as well I want to remind listeners that we did very little to promote Plus, the original Plus, because we were in a learning phase. And now with the re-launch of Plus, we're much more aggressively marketing it through our app and other CRM tools to really engage and excite our customer base. So we're pretty excited about what we think we're going to be able to achieve with Plus.

Yeah, Charlie, and on cash, we're not going to give any specific numbers. We'll use some cash in the first half. But it will look like quantitatively or qualitatively I should say, like kind of last year used a little bit. But then, we end up driving lot of free cash flow in second half. We've done a pretty good job. You look at our inventory, it's the lowest it's been in four years, exiting 2017. Our AP is down pretty substantially from where we ended last year. Cash is up to $247 million. We'll get $32 million in. We had $112 million borrowing capacity, that's $400 million of cash flow available for the company, so we're in pretty good shape from a balance sheet perspective.

Great. Thanks so much.

Thank you.

That does conclude our question-and-answer session. I'd like to turn the conference back over to Nicholas Woodman for closing remarks.

Thanks very much. Well, in closing, I'd like to summarize with a few key points. First, I want to stress that we have a plan to reduce our operating costs to below $400 million. And we have the capital to run our business and continue to innovate and produce an exciting roadmap. This is very important. Second, our growing social following affirms that GoPro is one of the world's most recognized and inspiring brands. We grew our social following by approximately 16% last year across all platforms. And on Instagram alone, we grew by 3 million followers to a total of 15 million followers on just that platform. So GoPro is very relevant and our customers and audience are very engaged. Third, our products continue to lead the industry. And sell through is solid now that we've aligned our pricing with market demand. It's quite clear that there is significant demand for GoPro at the right price. Fourth, we're excited about our 2018 roadmap, which includes new cameras designed to attract new users and existing consumers. And starting in the second half of the year, we believe these higher margin products will combine with our sell-through to return GoPro to a profitable pace. Finally, we want you to watch out for new subscription offerings, as this becomes an increasingly important part of our business going forward. So thank you very much for listening. And with that, this is team GoPro signing off.

And thank you, ladies and gentlemen. That does conclude today's conference. We thank you for your participation. You may now disconnect.