GoPro to restate 2025 and 2026 results over debt accounting errors

What happened

GoPro said on Friday 16 October that its financial statements for 2025 and the first half of 2026 should no longer be relied on, because it accounted for some of its borrowing wrongly. ^[1]

Its audit committee reached that conclusion with management on Friday 9 October. GoPro plans amended reports for 2025 and for the quarters to 31 March and 30 June 2026, to be filed 'as soon as reasonably practicable', the company wrote. ^[1]

The errors surfaced while GoPro prepared the proxy statement for its planned merger with Starman Optical and closed its books for the quarter to 30 September. Management and the audit committee found them unintentional and not the result of fraud. ^[1]

Why it matters

The corrections are non-cash and leave revenue, operating loss and cash untouched, the filing says. Net loss for 2025 is restated to $92.6 million, from $93.5 million, and for the first half of 2026 to $127.5 million, from $131.8 million. The errors also count as a default under each of GoPro's debts. ^[1]

The lenders

The company said it requested and obtained waivers of those defaults from its lenders, the debenture holder and its senior secured noteholders. In the same item it wrote that it cannot assure it will obtain 'the remaining waivers on acceptable terms or at all', without naming which remain. ^[1]

The company was already strained. Its report for the quarter to 30 June recorded substantial doubt about its ability to keep operating for a year, with $27.3 million in cash against $87.2 million of debt principal. ^[2]

How the errors arose

A warrant is a right to buy shares later at a set price. GoPro gave warrants to Mateo Financing, the lender on its 2025 term loan, on 4 August 2025, and valued them with too short a life and a discount that did not belong. The filing says that left the warrant liability $8.1 million too low at the start. ^{[1, 2]}

When the warrants' exercise price was lowered on 5 November 2025, the $1.0 million of value passed to the lender was booked as other income or expense, the filing says. It should have been a cost of the loan, spread over time as interest. ^[1]

A derivative is a contract whose value follows something else, here the right to turn the 2026 debentures sold to YA II PN into shares. GoPro valued that right at the whole debenture's worth, $30.9 million, and booked a $7.1 million loss, the filing says. The correct method books the debt and the right together as $23.8 million of short-term debt. ^[1]

GoPro reported a material weakness, a gap in its controls, over how it values features built into its financing. It discussed the matter with PricewaterhouseCoopers, its auditor. It filed under the item for a conclusion the board or its committee reaches itself, which the SEC's form keeps apart from a warning sent by the auditor. ^{[1, 3]}

What settles it next

The amended annual report will restate 2025 and the quarter to 30 September 2025 and carry a new report on internal controls, the company said. GoPro and Starman said on Tuesday 1 September they expect the merger to close by the end of 2026, subject to a vote of GoPro's stockholders. ^{[1, 4]}

Who it reaches

GoPro (GPRO) is direct: it filed the warning and will restate its own reports. No recognized press report on the filing could be found by Sunday 18 October, so this piece rests on the company's filings. ^[1]