I will now hand the conference over to Robin Stoecker, Director of Corporate Communications. Please go ahead.
Thank you, Rebecca. Good afternoon, and welcome to GoPro's first quarter 2026 earnings conference call. With me today are GoPro's CEO, Nicholas Woodman, CFO, Brian Tratt, and President and COO, Brian McGee. Today's agenda will include brief commentary from Nick and Brian, followed by Q&A. For detailed information about our first quarter performance, please read our Q1 2026 earnings press release and management commentary we posted to the investor relations section of GoPro's website. Before I pass the call to Nick, 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.
This means that results could change at any time, and we do not undertake any obligation to update these statements as a result of new information or future events. To better understand the risks and uncertainties that could cause actual results to differ from our commentary, we refer you to our most recent annual report on Form 10-K for the year ended December 31st, 2025, which is on file with the Securities and Exchange Commission and other reports that we may file from time to time with the SEC. Today, we may discuss growth margins, operating expense, net profit and loss, adjusted EBITDA, as well as basic and diluted net profit and loss per share in accordance with GAAP and on a non-GAAP basis.
A reconciliation of GAAP to non-GAAP operating expenses can be found in the press release that was issued this afternoon, which is posted on the investor relations section of our website. Unless otherwise noted, all income statement-related numbers that are disclosed in the management commentary, other than revenue, are non-GAAP. Now I'll turn the call over to GoPro Founder and CEO, Nicholas Woodman.
Thanks, Robin, and thanks everybody for joining us today. As Robin mentioned, Brian and I will share brief remarks before going into Q&A, and I want to encourage all on the call to read the detailed management commentary we posted on our investor relations website. In April, we announced that GoPro is formally exploring opportunities in the defense and aerospace sector, having engaged Oliver Wyman, a global leader in defense sector consulting, to assess addressable market segments, product synergies, and go-to-market strategies. GoPro cameras have long been used in demanding defense, government, and aerospace applications where versatility, durability, industry-leading video stabilization, and image quality are mission-critical, and we believe there is a meaningful, scalable opportunity to formalize and grow our presence in these sectors. Following the April announcement of our work with Oliver Wyman, we received several inbound inquiries related to M&A.
To capitalize on this interest, GoPro's board of directors has authorized the company to engage in a strategic process and to engage a financial advisor to assist with that process and evaluate strategic alternatives in order to maximize shareholder value. We believe there is unrealized value in GoPro's technology, IP, brand, product development, and scaled manufacturing capabilities, and we look forward to exploring how M&A could unlock that value to the benefit of our shareholders. Testament to GoPro's credibility as a mission-proven tool for defense and aerospace application is NASA's use of GoPro cameras on the Artemis II mission. On April 1st, the Orion spacecraft launched with modified GoPro cameras mounted externally on its solar array wings, and off-the-shelf GoPro cameras were used inside the ship to capture content for a National Geographic documentary about the mission.
Everyone at GoPro is deeply honored that our cameras played even a small role in the historic Artemis II mission. It's incredibly meaningful to all of us. Turning to Q1, we advanced several partnership initiatives designed to broaden GoPro's reach and appeal. In January, we announced an exciting partnership with ASUS, a leading Taiwanese multinational technology company, and launched a co-branded ASUS ProArt GoPro Edition laptop. The laptop was purpose-built by ASUS to support GoPro content creator workflows. ASUS has shared that early traction has far exceeded their expectations for the ProArt line, reinforcing the strength of GoPro's brand in technology collaborations. In March, we announced our partnership with Dick's Sporting Goods and integration with their GameChanger app, the number one-rated youth sports app for scorekeeping and live streaming, which has more than 9 million active users.
This partnership combines GoPro's industry-leading video quality with GameChanger's live streaming service, making it easy for families to capture and share game day live. The GameChanger GoPro product bundle, available online at Dick's Sporting Goods, brings together everything families need for seamless, high-quality live streaming of the game. Millions of existing GoPro HERO13 Black through HERO7 Black and MAX owners can now pair the GoPro they already own with the GameChanger app to start streaming live sporting events. Just last month, we debuted our new MISSION 1 series of professional 8K and 4K open-gate compact cinema cameras at the National Association of Broadcasters trade show, the largest television industry trade show in the U.S. The launch of the MISSION 1 series marks GoPro's most significant push into the professional and prosumer creator markets.
Featuring a new 50-megapixel 1-inch sensor and GoPro's new ultra-efficient next generation GP3 processor, the MISSION 1 series cameras deliver category-leading resolutions, frame rates, runtimes, and thermal performance for mission-critical reliability in extreme use cases. The new lineup includes three camera models: MISSION 1 PRO, MISSION 1 PRO ILS, and MISSION 1. The response to our MISSION 1 series of products has been overwhelmingly positive. Recent press coverage has consistently highlighted the camera's industry-leading specs, image quality, compact and durable design, plus the outright performance and value the cameras deliver relative to dramatically more expensive cinema cameras. At the NAB Show, our new cameras earned three prestigious awards from leading industry outlets.
One of 6 RedShark Best in Show Awards, one of 10 ProductionHUB Awards of Excellence, and the MISSION 1 PRO ILS was the sole winner of the CineD Best of Show Award in the camera category. These awards go to all of GoPro's employees whose dedication and passion made the MISSION 1 series cameras possible. Thank you, team, and congratulations. We expect the MISSION 1 series products to enable GoPro to gain meaningful share in our core markets, as well as in new professional and prosumer markets. The MISSION 1 series products will be available May 28 at gopro.com and select authorized retail partners globally, including Best Buy and Walmart, and high-end imaging retailers B&H and Adorama.
As we shared, Q1 and the past few weeks marked an exciting array of new partnerships, business opportunity explorations, and product launches that we believe can help diversify and grow our business. We've just entered a new era of professional performance capability with the launch of our new MISSION 1 series of cameras, and we're excited for the impact they can have on our business. Now, I'll turn the call over to Brian Tratt to walk you through details of our Q1 financial results.
Thanks, Nick. Turning to our financial results, revenue in Q1 2026 was $99 million, within our guidance range and compared to $134 million in the prior year period. Macro challenges in the consumer electronics sector, including rising memory costs, supply chain constraints, and fluctuating tariffs, prompted us to take some discrete actions in the quarter that impacted gross margins and earnings per share. Despite these pressures, some of which materialized in the last week of the quarter, we made meaningful progress on the metrics within our control. Cash used in operations improved $21 million year-over-year to $37 million. Operating expenses declined year-over-year, and we continued to reduce both owned and channel inventory sequentially and year-over-year.
Additional first quarter performance highlights include revenue from our retail channel was $61 million or 61% of revenue, compared to 70% of Q1 2025 revenue. Revenue from our gopro.com channel, which includes subscription and service revenue, was $38 million or 39% of revenue, compared to 30% of Q1 2025 revenue. Subscription and services revenue was flat year over year at $27 million or 27% of revenue. Subscription attach rate from cameras sold across all channels was 51%, compared to 49% in Q1 2025. Street ASP was $371, a 6% improvement year over year. Operating expenses were $59 million compared to $62 million in the prior year period, a 6% decrease year over year. The following results reflect the discrete actions mentioned previously.
Gross margin was 4.5% compared to 32.3% in Q1 2025. Excluding the discrete actions, gross margin would have been approximately 31%. Net loss was $58 million compared to prior year net loss of $19 million. GAAP and non-GAAP loss per share were $0.50 and $0.35, respectively, compared to a prior year loss per share of $0.30 and $0.12, respectively. Excluding the discrete actions, non-GAAP loss per share would have been $0.20. Adjusted EBITDA was negative $50 million, compared to negative $16 million in the prior year period. Excluding the discrete actions, adjusted EBITDA would have been negative $25 million. We ended the quarter with inventory of $72 million, a 25% decrease year-over-year, and an 8% decrease from Q4 2025.
Channel inventory declined 20% from the prior year quarter and 6% sequentially. Given the macro challenges in the consumer electronic sector and the strategic process we've initiated to evaluate opportunities for the sale of the company, we will no longer be providing forward-looking guidance and are withdrawing our full-year guidance at this time. In summary, we're encouraged by the early positive response to our MISSION 1 line of cameras. As Nick mentioned, we're excited about the strategic momentum building around our defense and aerospace exploration with Oliver Wyman and the plan to engage a strategic advisor to evaluate strategic alternatives, both of which we believe can unlock unrealized value in GoPro's technology, IP, and brand. Operator, we're now ready to take questions
We will now begin the question and answer session. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Erik Woodring with Morgan Stanley. Please go ahead.
Hey, everyone. It's Dylan Lu on for Erik, and thanks for taking my questions. I have a couple if I may. Today you just announced a strategic alternative process, which includes the sale of the company or merger to maximize the value for shareholders. Nick, I think your Class B shares give you about like 63% of the outstanding voting power of GoPro, meaning any sale or merger ultimately requires your personal approval. Can you clarify whether you are personally supportive of a full sale of the company? If so, what price or strategic outcome would you need to see to vote in favor of such a transaction?
Thanks for the question. Yeah, I am fully supportive of evaluating strategic opportunities for the company to unlock value for shareholders. This effort has my full and complete support.
Got it. In the press release, you mentioned the strategic review was triggered by, you know, several unsolicited inbound strategic inquiries received after the, you know, defense and aerospace announcement in early, or, you know, mid-April. Can you describe the nature of these inquiries? Are they primarily from defense/, you know, aerospace acquirers interested in GoPro's technology or from, you know, financial or strategic buyers in your core consumer imaging market? Does the board or you have a preference for one type of buyer over the other, another?
Well, without sharing too much detail, I can share that there's been interest from various sectors, various types of interested parties. It's not just, you know, defense or not just financial. The range of interest led us to make the decision that we should run a process to evaluate what kind of value we could unlock on behalf of shareholders.
Got it. That's clear to me. Thank you. Just one follow-up, if I may. GoPro, you just announced the MISSION 1 series, and this is a brand-new product line. Would you mind giving us the sense of the sell-in potential of this product? I think you sized that low-light capable camera segment as a TAM. It's about like 2 million-2.5 million units annually. Can you describe the specific customer segments that you're targeting with MISSION 1 series? Who are the major competitors that we're taking shares of? How should we think about the pricing, the $600-$700 selling price relative incumbent solutions?
Sure. The MISSION 1 line is very interesting because it plays in several different categories. First and foremost, we're marketing it and to its strength as the world's most compact cinema camera line, whether it's the entry-level MISSION 1 camera for $599 or the MISSION 1 PRO for $699 or the PRO ILS with an interchangeable lens system also for $699. The resolutions, the frame rates, the image quality is all at the professional level. They truly are compact cinema cameras that we think are gonna unlock exciting new perspectives for professional filmmakers, television series producers, commercial producers, as well as, you know, influencers and tip-of-spear professional-level content creators.
At the same time, the price points, the convenience, the versatility, the durability make them ideal as very high-end alternatives for people that are currently using action cameras for creating whatever content they're creating, but want to do so at a much higher end with a much more professional output. For aspiring consumers that want the most capable action cameras in the world, the MISSION Series line definitely can be used for that purpose. A portion of that market we think will gravitate up towards the MISSION Series because of how well they work just as an everyday camera. The cameras are definitely targeting a higher end professional user.
We think that the price points relative to cameras that are far more expensive but don't match the resolution and frame rates of the MISSION 1 line, we think the cameras are a relative bargain. Especially when you look at the capabilities of the ILS model, which enables people to use a vast array of commercially available Micro Four Thirds lenses or lenses that they might already own, and truly get just an incredible range of, you know, different looks that you can create, whether it's macro to telephoto to full cinema lenses. I think we're gonna see a lot of staggeringly impressive content being created with the new MISSION 1 series line. It's a step up for us across the board in performance and pricing.
Yet at the same time, it's not a complete departure from our existing markets because at the end of the day, they're very relatable as GoPros to the average consumer.
Got it. Thank you. That's it from me.
Thank you very much.
We have reached the end of the Q&A session. I will now turn the call back to management for closing remarks.
Thank you, operator, and thank you everyone for joining today's call. To close, Q1 and the last few weeks have been a period of meaningful momentum, marked by new partnerships, expanding business opportunities, and significant product launches that we believe can both diversify and grow our business. Importantly, we believe there's unrealized value in GoPro's technology, IP, brand, product development, and scaled manufacturing capabilities, and we look forward to exploring how a potential sale of the company could unlock that value to the benefit of our shareholders. Thank you, everyone. This is Team GoPro signing off.
This concludes today's call. Thank you for attending. You may now disconnect.