GoPro, Inc. reported sales in the third quarter were down 4 percent but landed in the upper range of guidance. EPS also was slightly ahead of forecasts and double-digit gains were seen in both subscribers and subscription/service revenue.

“GoPro had a strong third quarter, demonstrating the merits of the growth strategy we initiated in May,” said Nicholas Woodman, GoPro’s founder and CEO. “The successful launch of HERO12 Black combined with strong entry-level product sales and our growing retail presence helped us exceed our Q3 revenue and unit sales expectations and finish the quarter with 2.5 million subscribers.”

“We are pleased to see how our TAM expansion strategy contributed to unit and subscriber growth in Q3,” said Brian McGee, GoPro’s CFO and COO. “We’re looking forward to the Q4 holiday season and we believe our growth strategy will be a catalyst for meaningful revenue, subscriber and earnings growth in 2024.”

Q3 2023 Financial Results

  • Revenue was $294 million, 5 percent above the mid-point of guidance and down 4 percent year-over-year. Guidance had called for sales in the range of $270 million to $290 million.
  • GoPro subscriber count ended Q3 at 2.5 million, up 20 percent year-over-year.
  • Revenue from the retail channel was $231 million, or 78 percent of total revenue, and up 12 percent year-over-year. GoPro.com revenue, including subscription and service revenue, was $63 million, or 22 percent of total revenue, and down 36 percent year-over-year.
  • Subscription and service revenue increased 16 percent year-over-year to $25 million.
  • GAAP net loss was $4 million, or negative $0.02 per share, down from net income of $18 million or $0.10 per share in the prior year period. Non-GAAP net income was $6 million, or $0.04 per share, down from non-GAAP net income of $32 million, or $0.19 per share, in the prior year period. Guidance had called for non-GAAP EPS in the range of negative 2 cents to positive 2 cents.
  • GAAP and non-GAAP gross margin was 32.0 percent and 32.2 percent, respectively, which reflects the impact of demand from its lower-margin entry-level cameras. This compares to GAAP and non-GAAP gross margins of 38.0 percent and 38.2 percent, respectively, in the prior year period. Guidance had called for a gross margin of 34.0 percent.
  • Adjusted EBITDA was $7 million; this compares to $35 million in the prior year period.
  • Cameras with MSRPs at or above $400 represented 75 percent of Q3 2023 camera revenue. Entry-level products increased, accounting for 19 percent of camera revenue.
  • Q3 2023 Street ASP was $319, a 17 percent decrease year-over-year. Guidance had called for a Street ASP of $355
  • Cash and marketable securities were $259 million at the end of the third quarter.

Recent Business Highlights

  • In Q3 2023, GoPro bought back $10 million in stock, and we plan to continue executing on its stock repurchase plan in 2023 and 2024.
  • Vince Nakayama joined GoPro as senior vice president of engineering. Nakayama has held product management, hardware and software engineering leadership roles at Microsoft, Flex, Sony, Amazon and Apple.
  • In Q3, GoPro further expanded its core sports partnerships as the official action camera partner of MotoGP, FIA Karting World Championships, Amsoil Championship Off-Road, Pro Motocross Championship, Formula Drift, and Nitrocross, and as the exclusive action camera of Red Bull Rampage.

Outlook
For the year, GoPro raised its revenue estimates slightly to $1.04 billion, down 5% from 2022. Previously, it expected sales of $1.03 billion. The non-GAAP EPS loss is projected to be approximately 20 cents per share at the midpoint for 2023, up from an 18-cent loss expected previously. GoPro expects to be profitable and generate adjusted EBITDA of approximately $13 million in the second half of 2023.

For the fourth quarter, sales are expected to reach approximately $325 million, up 1 percent year-over-year. Non-GAAP EPS is expected to be 2 cents at the midpoint of guidance.

Photo courtesy GoPro