GoPro Inc (GPRO) Q2 2024 Earnings Call Highlights: Navigating Challenges with Strategic Innovations

GuruFocus News
4 min read

In This Article:

  • Revenue: $186 million, 9% above the midpoint of guidance.

  • Gross Margin: 30.7%, compared to 31.6% in Q2 2023.

  • Non-GAAP EPS Loss: $0.24.

  • Subscription and Service Revenue: $26 million, 8% growth year over year.

  • Subscribers: 2.53 million, 4% growth year over year.

  • Retail Revenue: $137 million, 74% of total revenue, down 17% year over year.

  • GoPro.com Product Revenue: $23 million, 12% of total revenue.

  • GAAP Loss Per Share: $0.31.

  • Sell-Through: Slightly above 600,000 units, down 9% year over year.

  • Channel Inventory: Decreased sequentially to approximately 700,000 units.

  • Annual Subscription Retention: 68%, a 7% improvement year over year.

  • Subscription Attach Rate: 45%, in line with prior year.

  • Expected 2024 Revenue: $850 to $870 million, down 13% from the prior year.

  • Expected 2024 Unit Sales: 2.6 million to 2.7 million, down 15% from the prior year.

  • 2025 Operating Expenses Target: $320 million, plus or minus $5 million, a reduction of nearly $50 million from 2024 levels.

Release Date: August 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • GoPro Inc (NASDAQ:GPRO) achieved its sell-through goal of over 600,000 units and slightly reduced channel inventory in Q2 2024.

  • Subscription and service revenue grew 8% year over year to $26 million, driven by a 4% increase in subscribers to 2.53 million.

  • GoPro Inc (NASDAQ:GPRO) expanded its global retail presence by adding approximately 800 new retail doors, with significant growth in EMEA and Latin America.

  • The company announced a partnership with SoftBank Group's SB C&S Corporation to expand distribution in Japan, enhancing brand exposure.

  • GoPro Inc (NASDAQ:GPRO) plans to launch new products, including the HERO13 Black and a redesigned entry-level HERO camera, which are expected to improve gross margins in 2025.

Negative Points

  • GoPro Inc (NASDAQ:GPRO) reported a non-GAAP EPS loss of $0.24 and a GAAP loss per share of $0.31 for Q2 2024.

  • Retail revenue decreased by 17% year over year, contributing to a decline in total revenue.

  • The company faced challenges with delayed product launches, impacting sales by approximately $100 million in 2024.

  • Increased competition and lower consumer confidence have led to reduced unit revenue and profitability expectations for the year.

  • GoPro Inc (NASDAQ:GPRO) is experiencing foreign exchange rate fluctuations, particularly in China and Japan, affecting financial performance.

Q & A Highlights

Q: What was driving the delays in product launches, and how confident are you that these issues will be resolved by next year? A: Nicholas Woodman, CEO, explained that the delays were due to pushing innovation and ensuring high-quality product experiences. The company is confident that the upcoming launches, including the HERO13 Black and a new entry-level camera, will excite consumers. The 360-degree camera, MAX 2, is also on track for 2025, with full confidence in its launch.

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