GoPro Inc (GPRO) Q4 2020 Earnings Call Transcript

GoPro Inc (NASDAQ: GPRO) Q4 2020 earnings call dated Feb. 04, 2021.

Corporate Participants:

Christopher Clark — Vice President, Corporate Communications

Nicholas Woodman — Chief Executive Officer and Chairman

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Analysts:

Paul Chung — JP Morgan — Analyst

Andrew Uerkwitz — Oppenheimer & Company — Analyst

Jim Suva — Citigroup — Analyst

Nik Todorov — Longbow Research — Analyst

Erik Woodring — Morgan Stanley — Analyst

Presentation:

Operator

Good day and welcome to the GoPro’s Q4 2020 Earnings Conference Call. Today’s conference is being recorded.

At this time, I would like to turn the conference over to Christopher Clark. Please go ahead, sir.

Christopher Clark — Vice President, Corporate Communications

Thank you operator. Good afternoon everyone and welcome to GoPro’s fourth quarter and full year earnings conference call. With me today are GoPro’s CEO, Nicholas Woodman; and CFO and COO Brian McGee.

Before we get started, I’d like to remind everyone that our remarks today may include forward-looking statements. 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 made today are based on assumptions as of today, including but not limited to uncertainty related to the duration and impact of the COVID-19 pandemic. This means that results could change at any time and our commentary about business results and outlook is based on the information available as of today’s date. 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, 2019 and quarterly report on Form 10-Q for the quarter ended September 30, 2020, each of which is on file with the Securities and Exchange Commission. And as updated in future filings with the SEC, including the annual report on Form 10-K for the year ended December 31, 2020.

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 and which is posted on our website.

In addition to the earnings press release, we have posted management commentary and slides containing detailed financial data and metrics for the fourth quarter and full year 2020. The management commentary and slides as well as the link to today’s live webcast and the replay of this conference call are posted on the GoPro Investor Relations website for your reference. Our income statement related numbers that are discussed today during the call, other than revenue are non-GAAP, unless otherwise noted.

Now I’ll turn the call over to GoPro’s Founder and CEO, Nicholas Woodman.

Nicholas Woodman — Chief Executive Officer and Chairman

Thank you Chris and good afternoon, everyone. Before we get started, I’d like to encourage everybody to read the commentary we posted earlier today to the GoPro Investor Relations page on our website. In addition to providing an overview of our quarterly and annual results plus forward-looking guidance, the commentary provides our thoughts on our business going forward.

I will now share some brief remarks and then we’ll go directly into Q&A. In 2020, we evolved GoPro into a more efficient subscription oriented direct to consumer business. We grew our GoPro subscriber base by 145% year-over-year to 601,000 subscribers and generated more than $200 million in cash flow from operations in the second half of the year. This represented 33% of our second-half revenue and contributed to a year-end cash balance of $328 million. Strong Q4 performance resulted in $0.39 of non-GAAP EPS for the quarter and $0.08 of non-GAAP EPS for the year. We achieved this with disciplined expense management, an approach we are committed to maintaining.

Our 2020 performance amidst the pandemic demonstrates GoPro’s enduring relevance as a personal experience sharing solution for consumers and powerful creative tool for professionals. Looking ahead, our plan is to continue super serving our core customers with outsized GoPro subscriber benefits, while expanding our relevance to users of other cameras and smartphones through software subscription offerings. We believe we can maintain our rapid pace of innovation, launching exciting new hardware and software products backed by significant world-class marketing, all within reasonable spend levels that are directionally in line with 2020.

We are excited about 2021, even amidst the pandemic. We’ve proven time and again that GoPro can thrive during challenging times. We believe the steps we’re taking to strengthen our business today will benefit us in spades when the world eventually rebounce from the pandemic in earnest, but fortunately as a business, we do not have to wait for that to happen. I want to thank our employees around the world for their resilience and adaptability throughout 2020. Your dedication and world-class execution is why we are well positioned for the future.

And now, operator, we’re ready to take questions.

Questions and Answers:

Operator

[Operator Instructions] All right. We’ll take the first question from Paul Chung with JP Morgan.

Paul Chung — JP Morgan — Analyst

Hi. Thanks for taking my question. So just on your full-year ’21 guidance, given the large kind of seasonal mix in second half. What kind of gives you the confidence in providing some visibility there and what kind of large factors can sway this higher, maybe possibly rebound to that 4 million kind of units selling for the year than in the past. And then I have follow-up?

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Yes. Hi Paul, this is Brian. Well let’s talk about 2020 we sold through 3.6 million units and we shipped in about 2.8 million units and that delta is because we took channel inventory down about 800,000 units and ended the year at about 650,000 units in that channel. So that’s an important distinction to make. And we think we’ve got the right channel inventory in place. As we look to ’21, we expect to continue on the D2C transition and shift our revenue up from the 32% that we had in 2020 to 38% to 42% in 2021 that’s why we have very good visibility into the first quarter and our trends on the sell-through and selling perspective are hitting the mark related to our guide of $185 million in Q1.

And so, we think on a range that sell-through is going to gain 2.4 million units to 2.6 million units right now and settling in kind of 3.2 million units to 3.4 million units. So we may see about 100,000 units or so reduction in the channel even in ’21 and that’s really due to the fact that we’re growing — our expectation is to grow more in D2C and so we would continue to trim retail inventories a bit and keep them at healthy levels going into the end of ’21 and into 2022.

Paul Chung — JP Morgan — Analyst

Got you. Thanks for that. And then your unit sell-through was off by maybe around 100,000 relative to guidance, kind of what drove the difference there, I noticed regionally EMEA and Asia were a bit softer and you mentioned the pandemic, is there kind of more preference for North American consumers to kind of go to the website and what’s been the split overseas for GoPro.com sales and how are you driving more traffic there? Any comments you can make. Thanks.

Nicholas Woodman — Chief Executive Officer and Chairman

Yes, GoPro.com did great, record quarter. We doubled the business year-over-year basis in that 92% sequentially, so terrific performance on GoPro.com. Our revenue came in within our guidance. Within the split between retail and consumer, we were within like 5% of our revenue was kind of split between a little bit more heavy to retail than D2C. We definitely saw some slowness in EMEA and APAC channels, largely related to COVID and North America did do well and better than what we expected and made up for some of that in Europe and in Asia. We’ve also taken that into account as we look at our forecast for Q1 and trending on sell-through, we think is trending right into the 700,000 units that I provided on the commentary.

Paul Chung — JP Morgan — Analyst

Okay, great. And then…

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Paul just to add one more bit of color, specifically to your — there seems to be a preference with consumers for shopping offline versus online in certain regions like EMEA or Asia and the answer to that is no. We definitely saw strong.com performance and then some softness as COVID lockdowns ramped up and consumer online shopping did take a hit as a part of that. So we could map the softness to COVID lockdowns intensifying certain regions. That’s a way to say that does not seem to be a headwind for us as it relates to growing our business internationally. The headwind is specifically the pandemic.

Paul Chung — JP Morgan — Analyst

And then my last question is on the GoPro subs did very good progress there. What kind of features are users engaging with the [Indecipherable] and then next year when we kind of lap that large cohort of subs from your nine sales, what kind of gives you the confidence in low churn rates and retention and are there any kind of cumbersome of high switching costs for consumer, maybe related to stores that would kind of detour them from moving off GoPro since [Indecipherable] started? Thanks.

Nicholas Woodman — Chief Executive Officer and Chairman

Well, the consumer behavior and they’re taking advantage of the various GoPro subscription benefit is napping to the consumer insights research that we did and that we do on going to understand what are the biggest drivers for people signing up as a subscriber. And I’m happy to say that they are taking advantage of the key benefits, and that gives us a good feeling as it relates to subscribers getting value out of the subscription. They’re making use of the subscription benefits ongoing and that just points to an aged customer that we believe we’re going to be able to do a good job of retaining. We have — as we’ve shared very impressive retention and low churn rates, we’re really happy with those. We continue to drive those down as we continue to improve both the marketing of the subscription, driving awareness of the benefits, so that consumers can take advantage of them than they are happier customers and we a better retention. And that’s all moving in the right direction. So we feel really good about that and that’s just where we are today in February. So we’ve got a lot on cap for the rest of the year to further improve retention and keep churn well.

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

And Paul the thing I guess I would add on top of it is we have that visibility we are seeing solid traction even in Q1 on GoPro.com. And that’s also what’s helping to drive up our ASPs, we’re seeing margin improvement, you saw in Q4, we’ve given a little bit of a extended margins in our guide for ’21 of 38% to 39% and the implied guidance or with in management commentary would point to a very profitable GoPro in 2021 with solid — again solid cash generation in the $150 million or so range. So we’re very happy with how the results went in Q4 and to look ahead in ’21.

Paul Chung — JP Morgan — Analyst

Great, thank you.

Operator

[Operator Instructions] Our next question is from Andrew Uerkwitz with Oppenheimer & Company.

Andrew Uerkwitz — Oppenheimer & Company — Analyst

Hey, gentlemen. Thanks. I am going to ask a couple of questions. The first one, I guess is probably for Nick. With the new, I guess the new subscript — the 999 subscription, presumably, this is trying to capture the MAUs that are using the GoPro app that don’t have cameras. So what’s the — how should we think about that number as it fits into your subscription number for the year? And if you could shed any light on how you can hopefully convert those folks to traditional GoPro users?

Nicholas Woodman — Chief Executive Officer and Chairman

Sure. Thank you, Andrew. Yes, we’re really excited about the upcoming revamp and subscription-based offering at the GoPro app. You’re spot on. It’s a way for us to serve as a personal content solution helping users of any camera including smartphones get the most out of their personal photos and videos. We all suffer from the bottom most click, that is our camera roll. You know the feeling when you get a great — capture a great photo or video or have one sent to you and you say that’s your camera roll. And you have that moment where you best probably look at it and you acknowledge there’s a good chance you never going to see that again. And that’s a very widespread problem shared by everybody that uses a phone and with the phone they are lucky, because they actually know what their photos and videos are. And so with the — the upcoming GoPro app revamp with the near-the-wall feature, it makes it really easy for you as a user to send that photo or video that you know the moment you see it, that that’s something that you’re going to want to keep track of and revisit later. And you send it to the app, you don’t even have to open the app to have it go there. You can send it straight from your camera roll and it will be presented to you on your [Indecipherable] which serves as a chronological feed of your personal favorite moments and then combined with that are all of our top-tier powerful editing tools auto video generation capabilities and ultimately the GoPro app is going to scale over time as the most enabling yet simple app to help you get the most out of your personal content.

And we think that this is a significant size market globally. We think our brand is really well positioned to solve this problem for people and importantly, we have the brand to drive awareness to grow usage of this app, what we believe will be impressive scale. It’s directly in our wheelhouse. Where you don’t have to take on very much additional opex to go and make this possible for people that don’t own on a GoPro, because we’re already building this solution for GoPro users, but by making it subscription-based, we can extend access to anybody who owns smartphone or another camera. And over time we think that this is going to become a really meaningful solution for people that is going to punch way above its weight class in terms of its value proposition to what that user will pay to use it on an annual basis. So we’re pretty excited about it.

Andrew Uerkwitz — Oppenheimer & Company — Analyst

Got it. I appreciate the additional color. I guess the next question…

Nicholas Woodman — Chief Executive Officer and Chairman

Sorry to answer. There was one part of your question and the answer is, the quick app which we sun setted a 1.5 year ago has roughly 8.6 million monthly app users. That’s a free app. It’s very updated relative to the new GoPro app experience and it’s a pretty siginificant opportunity for us to market the new GoPro app exprerience to these quick users and migrate them over time to the GoPro app. And then of course we have the roughly 5 million monthly active users at the GoPro app itself, that assuming they are not already GoPro subscribers for 49 and 99 a year. That’s also an opportunity for us to up-sell them to the $10 year functionality that includes the [Indecipherable] experience as well as a slew of premium added tools that we’re going to roll out over time. So those are just two of many growth initiatives that we’ve got for this new subscription service.

Andrew Uerkwitz — Oppenheimer & Company — Analyst

Got it. That’s helpful. And I guess when I think about, your unit guidance for 2021, it looks like it’s coming in a little bit down year-over-year, is that on a sell-through basis. Is that mostly just caution around COVID? Or is there something more to it related to just fewer stores and a further decline in retail. Any color there would be helpful.

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Yeah, hi Andrew, it’s Brian. It relates to none but COVID as one and being cautious I think is, as the world opens up there is opportunity to expand that as you recall, last year, early on in 2020, we were at about 2.2 million units to 2.4 million units, we raised that to 2.6 million units, assume was sell-through. So we have the ability to step to that and that would increased profitability so that we get a lot of synergy levels from that. And so — and I think that’s saw an upside. We will also see more movement to the high end of $300 and more price point and less on the lower end as well. So that’s helping to drive ASPs that’s going to be supporting GoPro.com, that’s helping with margins and profitability. So we think it’s on balance, we would see visibility we have today and I think there is hopefully upside as the world comes back.

Andrew Uerkwitz — Oppenheimer & Company — Analyst

Got it. And then just last question, it looks like based on your guidance, your cash balance by the end of the year is going to be a healthy amount one we haven’t seen in a while. How is that affecting your view on potential investment opportunities, whether it’s M&A or internal? How are you thinking about that use of cash going forward?

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Yes, well there are few uses of cash in ’22 we’ll pay back $125 million of debt on the convert and there is more in 2025. We split that out and actually paid them off early in Q4, which is good. And I think from an opex perspective, we said we will continue to be hawkish. We will continue to invest in innovation and technology and improving the website experience for GoPro.com. So those are key initiatives for the company to take investment and there is other areas that we’ll be able to be more prudent and cut back. So we want to stay in $305 million to $350 million range for opex in 2021 and its upside because, our revenues are up too. So that’s also contributing to go up, but we’re definitely going to make those investments and be prudent about our cash balances and actually to your point, we were at $328 million ending the year of 2020. We haven’t had a $300 million number in cash for a number of the years. So the cash generation in the second half is well above $200 million, which is — those are record for the company. Two quarters in a row where we have $100 million in operating cash flow.

Andrew Uerkwitz — Oppenheimer & Company — Analyst

Got it. Thank you. Thank you so much guys. Great quarter.

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Thank you.

Operator

All right. We’ll take the next question from Jim Suva with Citigroup Investment Research.

Jim Suva — Citigroup — Analyst

Thank you, Nick and Brian and I sincerely want to say congratulations on managing through a very, very, very challenging year of 2020, quite remarkable results. I have one question for Brian and one for Nick. Brian you being CFO, normally we talk to you about seasonality quarter-to-quarter and I realized 2020 was very difficult and you gave in your commentary some very good 2021 outlooks. For revenues and EPS, is seasonality kind of still in place largely or with COVID lapping us and I think about vaccines being prevalent more as we increase to the year and maybe people go on vacations and travel and do more extreme stuff later on the year. Is there a chance that second half could be even seasonally stronger, stronger, stronger than expected or I was kind of wonder about what you built into your guidance?

And then for Nick, as CEO, your move to subscription model has been fantastic. Are there a couple of apps or interface items or variables, whether it be video editing or the upload function that really surpassed your expectations. It seems to really draw the subscriber base even more. I just kind of wondering because I know that you have a lot of enhancements, which one, two or three really are bringing in so much. Thank you.

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Yes, hi, Jim. Thank you. Let me start. We expect on a year-over-year basis to grow in every quarter in ’21 over 2020. The biggest growth of course will be in quarter one and quarter two and — because we will be — our guidance implied 55% growth in Q1 ’21 over Q1 ’20. Obviously in the first half is when the pandemic hit us at ’20. So there will be some seasonality. Q2 and Q4 tend to be seasonally stronger for the company. And so you should expect that kind of in the modeling.

Jim Suva — Citigroup — Analyst

Great. Thanks, Brian. And Nick, anything on the apps, really is bringing the set [Phonetic] so much.

Nicholas Woodman — Chief Executive Officer and Chairman

Yes, it’s a good question. Well, as I shared before, we’re happy to see that both our research and the reality of how consumers are taking advantage of subscription benefits are aligning. Of course the savings at GoPro.com are important, and we’re seeing the lion’s share of lifestyle goods and accessory sales going to subscribers. We’re taking advantage of the 30% to 50% savings, that they get at GoPro.com on non-camera items. That’s really good to see because that shows, one, that there is a comprehension of those savings and two, we’re seeing subscribers pay for their $49, $99 annual subscriptions very quickly with the savings that they’re getting through their backpacks or their mount accessories for their cameras. They have ensured buying, there is real value there and it had to act quickly to the $49, $99 annual GoPro subscription. So that’s a really positive sign.

But as it relates to the app, content back up is really important to our customers. We are — as a company that helps people capture some of the most exciting and beautiful moments in their lives may want to safeguard those moments to our cloud backup is how signature can value and we’re seeing good uses there. And then the editing tool that we offer in the GoPro app are really important to our subscribers and that’s one of the reasons we are really excited about. The upcoming GoPro app revamp because we are going to be still introducing new editing tools at a steady clip for our customers ongoing and as well of course the [Indecipherable] content management wall, which is going to do a phenomenal job in helping people keep track of the content that they’re capturing and generating and easily share on their wall and assuming it’s going to be a significant enhancement to the overall experience building on what our customers are already using and capitalizing on the feedback they are giving us and we want to see next.

So kudos to our research — consumer research team and our product teams for both going on and learning what our customers want from us and then going — building it for them is paying off in spades. And I think that’s underlying strength in the business that you see is that this is — GoPro is serving a real purpose in people’s lives and we’re doing a terrific job of it. I think that’s why you’re seeing business perform so well.

Jim Suva — Citigroup — Analyst

Congratulations to you and your team on a great year and looking forward to 2021. Thank you.

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Yeah. Thank you Andrew.

Nicholas Woodman — Chief Executive Officer and Chairman

We are really looking forward to 2021 because if GoPro can perform this way amidst the pandemic, as I mentioned in my prepared remarks, we don’t need the — we all want the pandemic to go away for obvious reasons, but as a business, we’re not sitting around waiting for that to happen. We’re driving a successful and growing business and we’re well poised for when the world begins to snap back.

Operator

All right. We’ll take the next question from Nik Todorov with Longbow Research.

Nik Todorov — Longbow Research — Analyst

Yes, thanks guys. Brian and Nick, when you guys announced your plans to transition to a direct business model in Q2 at the time I think you expected GoPro.com to become majority of your sales in 2021. You guided below 50% for GoPro.com in 2021 and I think in the fourth quarter was the second quarter in a row where GoPro.com sales came a little bit lower than your expectations. I just wonder, has anything changed since the original comment you made, when you announced the plan to go direct and should we think that GoPro.com will go — should we expect GoPro.com to become majority of your sales at some point in time?

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Let me start with that one Nikolay. When we first talked about that back in May, retail was completely shut, quite frankly, and we saw on our website and we — I believe we were over 40% in Q2 of 2020. And it also wasn’t clear how retail is going to come back quite frankly, and when the pandemic was going to end, so we can have visibility on our own business which on our side, we doubled it on a year-over-year basis. And so since then we’ve seen retail come back. It’s an important channel. So we have two strong channels that we get product to consumers, GoPro.com plus the retail channel globally. That’s actually a real advantage I think from a distribution perspective for the company. We have that reach, whether it be GoPro.com or retail. Gopro.com is obviously more profitable for us and we’ll continue to drive that in subscriptions, but we’re very happy with the fact that we were able to — throughout 2020 raise our numbers and part of that was due to retail coming back and a good chunk of it was GoPro.com driving a quite a lot of business.

Nicholas Woodman — Chief Executive Officer and Chairman

I would add to that. You’re never going to hear us complaining about retail coming back better than expected and being a healthy channel for us. I mean thank God for our retailers and many thanks to them for their continued support at GoPro. We’ve got a saying one of our core values at GoPro is strength and numbers, going alone is a lot riskier than when you’ve got a number of strategic partners help you succeed and that’s the case at GoPro. That said, the bounce back of our retail channels performance is actually helpful to GoPro, because it’s — it reduces the risk significantly as we continue to make investments to improve our direct to consumer capabilities, whether it’s being able to do a better job of direct marketing to consumers as more of an individual as opposed to just a mass market blast to everybody and do not even sure who owns a camera or not, those are investments that we’re making that are going to yield significant terms for us this year. And as well, we’re investing significantly in our e-commerce platform to do a much better job of merchandising the cameras, up-selling accessories and again having a better understanding of who the customer is and what they might actually want to buy from us and where they are in their GoPro lifecycle and usually all investments and developments will take time, and it’s fantastic that our teams were able to double our direct to consumer GoPro.com revenues last year. How quickly we have with you back and what improvements we were able to make through our approach from a technical starndpoint. The team got a ton done, but it’s just a fraction of the whole opportunity we have to enhance our capabilities. So while we have a strong retail channel to help us drive our business while we make investments and improve our direct capabilities. I just, I don’t see how that could possibly be seen as a negative.

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

And that’s another way of answering your question Nik. We’ve absolutely have seen significant opportunity to grow our direct business over time. And this is, this is a marathon, not a sprint. And this is a lot of greenfield opportunity to improve our approach.

Nik Todorov — Longbow Research — Analyst

Got it. Then Nick maybe one more question on overall demand trends and sell-through. I mean if I look at the implied full year guidance it sounds like you’re still expecting sell-through to be down in the second half of the calendar year. I think most people operate under the impression that there is going to be some normalization from COVID, but maybe this is your thinking differently and that’s part of the reason for that guidance. I think if you look at the broader consumer electronic space, I think the expectations of that there is — if not growth for 2021 but demand will be at least flat versus very challenging. Very easy compare from 2020, how are you thinking about overall demand environment for GoPro as we go forward?

Nicholas Woodman — Chief Executive Officer and Chairman

I’ll pick that up and then Brian, if you want to add anything. We shared our demand outlook in terms of our guide. I think where we differ from traditional consumer electronics per se, is that, in many ways we’re tied to human activity. And the more active humans are, consumers are, the more they are out in about, the more they’re celebrating life and sharing experiences, the more of a value proposition we represent to those consumers. So if you’re talking about streaming video game sales or video game platforms, consoles or things that remain in the house when somebody finally goes outside and travels more and is more active, we don’t fall into that same stay-at-home consumer electronics category, so that relates to my point that we’re very well positioned for — to succeed during the pandemic, and even better positioned to thrive on another level as the world, even if it take baby steps, bouncing back. You can imagine the outsized positive impact that that can have on our business.

Now we’re not factoring that into our guide. Our outlook is that, the world continues to go along the way that it’s been in certain areas of the world there’ll be a better condition as it relates to the pandemic. In others, it might be hit harder, but net-net, we think that we’re positioned to succeed and make no mistake, the world will bounce back at some point and we’ll be there waiting.

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

And Nikolay, I think the other point to make is, if you look at the distribution by quarter, it’s more evenly distributed, which is actually kind of more normal at least within the content we have Q4 going up for seasonality of course and that enables us to be profitable in quarters, two, three and four and that’s how we guided, so this we breakeven plus or minus I think $0.03 in Q1. So, here we think we can be profitable in Q1 and we haven’t done that in quite a long time. So, and a very profitable GoPro in 2021 and continuing to generate a lot of cash. And if the demand profile comes back stronger as Nick had mentioned, as the world comes back, we have the opportunity to drive more profitability and more revenue growth, but we’re forecasting 20% to 25% up on a year-over-year basis which as proved out good [Indecipherable] units, losses from an ASP as we continue to shift to the high end, a strategy we’ve taken on since basically 2019, that’s worked very well for the company and for the consumers for the product they get.

Nik Todorov — Longbow Research — Analyst

Okay. Thanks Brian. And the last question, Nick, I think last quarter you shared some metrics about conversion rate on the subscription on purchases to GoPro.com. I believe it is not mistaken, that number was 80% to 85% and people who bought Flagship cameras, maybe can you provide us an update on that metric. And how should we think about conversion rates on retail. It seems like you mentioned it’s much lower. I wondered if you can give us some numbers. Thanks.

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Maybe I can start on that one, and then Nick can chime in. Yes on the conference call back in November, we saw the initial uptake for subscription on GoPro.com in the 80% to 85% range. As you had mentioned, through the quarter that continued to climb and I believe to the end of the close to 90% conversion on GoPro.com. So it definitely stepped up, which helped the subscriber growth number and that’s continued quite frankly even into to Q1. So that’s a very nice metric and organic through retail is obviously much lower. And I think those rates are somewhere around 11% to 12% kind of range. So obviously the lion’s share of $6 are coming from GoPro.com.

Nik Todorov — Longbow Research — Analyst

Okay, got it. Thanks guys, good luck.

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Thank you.

Operator

[Operator Instructions] And we’ll take the next question from Erik Woodring with Morgan Stanley. Erik, your line is open if you would like to ask a question.

Erik Woodring — Morgan Stanley — Analyst

Hi. Can you hear me?

Nicholas Woodman — Chief Executive Officer and Chairman

Yes.

Operator

Yes, we can hear you. Go ahead.

Erik Woodring — Morgan Stanley — Analyst

Okay, perfect. Sorry about the guys. So I just wanted to follow up on one of Andrew’s questions earlier, just obviously and significant cash balance, but at the same time your capex has fallen to I think it was $5 million in 2020. So I was just — I’d love to get your outlook on how you think about that growing, if you do think about that growing into the future. Why not at ramp that higher as you’re kind of building the business becoming more profitable generating more cash. And then I have a follow up?

Nicholas Woodman — Chief Executive Officer and Chairman

A lot of the capex, quite frankly is related to two things. Point of purchase displays in retail, I would say because of the lion’s share of it and then tooling and such from an engineering perspective. We can able to really do a good job managing much more tightly and engineering capex spend so on the engineering team for being much more prudent and efficient and how we go about doing that. So that’s important to note and then PLP because we’re reducing retail footprint, we don’t need to spend as much money on PLP and that’s another reason why going more direct is actually a more efficient and effective method for us to go to market, and better from a profitability perspective.

Erik Woodring — Morgan Stanley — Analyst

Okay, that’s helpful. The second question would just be, I love that you’re trying to solve this problem of having all these pictures and videos lost in your camera or like can obviously, it’s something I suffer from as well. But I consider myself someone that’s aware of the brand. How are you guys going to get that brand awareness out to those consumers that perhaps aren’t GoPro users and that are only smartphone users and perhaps don’t know the GoPro brand as well. Is that — just curious how you guys think about going about doing that? Thanks.

Nicholas Woodman — Chief Executive Officer and Chairman

Well there are a number of ways to drive awareness for apps that will be employing but we haven’t really had to do before for the GoPro app because, we really only target the GoPro app at hardware, built for hardware owners. That’s true. But it’s not rocket science. We’ve had a lot of success with the quick app, which I mentioned. We sunset that almost two years ago and it’s still has 8.6 million monthly active users. It’s quite a incredibly well regarded and consumer reviews very highly ranked in the app stores, and so we’ll be employing the same tactics that we used to grow the popularity of the quick app to scale the GoPro apps awareness of the GoPro app and its popularity outside of the GoPro community. But make no mistake, I think the GoPro fan base and it’s in the neighborhood of 45 million, 46 million social followers, direct followers and then of course you we have the extended follower base of all the influencers, athletes and celebrities that we work with, it’s a very large brand network that we’ve got, that we’re going to be leveraging to drive awareness of this new product that we’ve got.

So on the marketing front and on the branding front, we’re feeling very good because we’re pretty well regarded for being a strong marketing organization. And then it’s all about value and really solving problems for people. And as you know, when you have a great product and you make your customers successful, they also do a wonderful job of driving awareness for you through their advocacy. And because the GoPro app is centered around helping you get the most out of your photos and videos when you’re doing that and sharing them more often from the GoPro app, that is also going to virally drive awareness for the app. So, the list goes on in terms of the number of ways that we have to drive awareness and ultimately scale the GoPro app subscription into something meaningful over time.

Erik Woodring — Morgan Stanley — Analyst

That’s very helpful, thank you for that color Nick. I guess last question for Brian. Just curious, you guys obviously gave guidance for opex in 2021, but we’re just curious how you’re thinking about that from a sales and marketing relative to R&D relative to G&A perspective if you’re going all of those line items as you’re pulling back and then growing some of them? Thanks.

Brian McGee — Executive Vice President, Chief Financial Officer, Chief Operating Officer

Yes, I think we’ll see some growth in R&D. There’ll be a little bit of growth in sales and marketing, but some things we’re able to spend less on are basically being offset by investment and we’ll see reductions in G&A.

Erik Woodring — Morgan Stanley — Analyst

Okay, that’s awesome. Thank you, guys.

Nicholas Woodman — Chief Executive Officer and Chairman

Thank you.

Operator

All right. It appears there are no further questions at this time. Mr. Woodman, I’d like to turn the conference back to you for any additional or closing remarks.

Nicholas Woodman — Chief Executive Officer and Chairman

Thank you, operator. Thank you, everyone. I would like to reiterate our excitement for GoPro’s future and for 2021 while we plan to super serve our customers through high value subscription offerings and in parallel scale GoPro’s margin profitability and importantly predictability. We believe we can continue to succeed during this pandemic, which puts us in a strong position for when the world begins to recover in earnest. Thank you again to all of GoPro’s employees and partners who are making this possible. We’re grateful for this group win. And thank you to everyone for joining today’s call. We genuinely appreciate your time and support. This is team GoPro signing off.

Operator

[Operator Closing Remarks]