GoPro Inc. reported its sales rose 43.0 percent to $400.3 million in the third quarter ended Sept. 30, or about 8 percent shy of analysts’ consensus estimates. Adjusted earnings per share of 25 cents also came in 4 cent shy of analysts’ expectations for the quarter.

The results appeared to justify recent downgrades of the company’s stock amid reports that sales of its Hero4 Session camera were below expectations. GoPro launched the cube shaped, waterproof model in July at a suggested retail price of $399.99, but it struggled to gain traction alongside GoPro’s best-selling Hero4 Black and Silver cameras. GoPro has since re-launched the camera at a price point between Hero4 Silver and Hero+ and says it is now well positioned for the holidays.

GoPro’s stock price closed around $30 Wednesday, up from its 52 week low Oct. 8 but 53 percent below its Aug. 10  peak.

In a press release Wednesday, GoPro Founder and CEO, Nicholas Woodman conceded “business in the third quarter was clearly more difficult than anticipated.”

Still, the maker of wearable video cameras reported gross margin, operating income, net income and diluted net income per share increased 230 basis points, 105.4, 28.6 and 30.0 percent respectively compared with the year earlier quarter.  The quarter’s highlights included:

Other highlight from the third quarter Include:

  • GoPro accounted for 5 of the top 10 products on a unit basis in the combined digital camera and camcorder category, in the U.S. for Q3, according to NPD. In the same category, on a dollar basis, GoPro capture devices accounted for 4 of the top 10 products. GoPro was also the leader in accessory unit sales with 7 of the top 10 selling accessories.
  • International sales totaled more than 50 percent of Q3 revenue; combined EMEA and APAC revenue was up over 175 percent year-over-year.
  • Based on the first nine months of revenue, China is the fastest growing market in GoPro's history.
  • Released key firmware updates for Hero4 Session which include the ability to change settings directly on the camera without connecting to a smartphone or remote.
  • Launched Hero+ which features Wi-Fi/Bluetooth integration and is capable of capturing stunning 1080p60 and 720p60 video and 8MP single, Time Lapse and Burst photos, rounding out an exciting 2015 GoPro lineup.
  • Launched Odyssey, a new 16-camera rig designed for Google's 3D, 360-degree virtual reality platform (Jump).
  • Released Trim-and-Share, a feature that allows users to select video clips directly on the camera or mobile device for effortless sharing.
  • The GoPro Mobile App was downloaded 2.7 million times in Q3, totaling over 21 million cumulative downloads; Q3 installs of GoPro Studio totaled nearly 2 million, up over 75 percent year-over-year, with average daily video exports of over 50,000.
  • Launched the GoPro App on Apple Watch, enabling users to control their GoPros from their wrists.
  • Brought immersive, spherical (VR) content to Facebook News Feed.
  • Launched the GoPro Channel on Watchable, Comcast's new cross-platform video service, marking GoPro's first multichannel video distribution agreement.
  • Launched GoPro for a Cause, a program in which GoPro will dedicate financing, equipment and production expertise to social causes that align with GoPro's brand.
  • Announced partnership with USC School of Cinematic Arts to attract content and invest in the next generation of filmmakers.
  • In October, the GoPro Channel on YouTube surpassed one billion views. GoPro is one of only four brands to reach this milestone.

GoPro, Inc.

Preliminary Condensed Consolidated Statement of Operations

(unaudited)


Three months ended

Nine months ended

(in thousands, except per share data)

September 30, 2015

September 30, 2014

September 30, 2015

September 30, 2014








Revenue

$

400,340

$

279,971

$

1,183,368

$

760,292

Cost of revenue

213,710

155,932

638,665

436,870

Gross profit

186,630

124,039

544,703

323,422








Operating expenses:






Research and development

67,372

42,376

175,262

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