GoPro earnings: Analysts are still not expecting a turnaround

Aug 3, 2017

The company is expected to report second-quarter earnings after the market closes Thursday, but analysts are not expecting the company’s line of products to deliver much growth. GoPro has experienced a series of setbacks, including closing its entertainment division, suffering through two botched product launches and layoffs that were meant to cut costs.

Besides the two failed product launches, with a recall of its Karma drone in November and manufacturing issues with the launch of its Hero4 camera, the other measures were meant to mark a turnaround at the company and a new streamlined operation. But analysts do not seem to be buying it.

“We remain unconvinced of the company’s ability to return to sustainable and profitable growth through its current product lineup,” wrote Tavis McCourt, an analyst at Raymond James.

The Karma drone did eventually return to the GoPro lineup, but McCourt said the number and quality of reviews related to the product suggest it has not been selling well. The company also has three Hero cameras, and while those appear to be dominating the category, the overall category is on the decline, he wrote.

Even last quarter, when GoPro beat earnings and sales expectations, shares plummeted the next day, as analysts remained concerned about the company’s fundamentals.

Here’s what to look for:

Earnings: Analysts surveyed by FactSet expect GoPro to report a loss per share of 25 cents, compared with a loss per share of 52 cents in the year-earlier period. The Estimize consensus, made up of estimates crowdsourced from analysts, academics and others, is also for a loss per share of 25 cents.

GoPro has beaten earnings expectations in five out of the past eight quarters.

Revenue: Analysts surveyed by FactSet expect revenue of $269 million, above the $220.8 million reported in the year-earlier period. The Estimize consensus is for revenue of $270.9 million.

GoPro surpassed sales expectations in four of the past eight quarters.


What to look for: The good news is that Raymond James analysts have not seen big discounting on products and do not believe GoPro will change its full-year guidance. They are expecting the company to report year-over-year growth in revenues.

J.P. Morgan analysts also expect “solid” results for the company, largely because of an easy year-over-year comparison, but also thanks to a full-quarter contribution from the company’s push of the Karma drone.

Others are largely ignoring the company’s products, with Yuuji Anderson, an analyst at Morgan Stanley, upgrading the stock to equal weight from underweight on Monday based on improved software. He pointed to the company’s upgrade of QuikStories, which allows GoPro Hero 5 cameras to automatically send edited footage to a user’s phone.

The bad news is that analysts believe the company won't see any acceleration of its business unless it has successful launches of new products. That means analysts will be keeping a keen eye on forward guidance.

GoPro shares jump 11% after results top expectations

GoPro reported quarterly results and revenue that beat analysts' expectations on Thursday.

Here's how the company did compared to what Wall Street expected:

Loss per share: 9 cents vs. 25 cents expected, according to Thomson Reuters
Revenue: $296.5 million vs. $269.6 million expected, according to Thomson Reuters

In the year ago quarter, GoPro reported adjusted earnings of 52 cents on revenue of $220.8 million. Their revenue is up 34 percent year-over-year.

The stock initially soared to 17 percent after the report was released, and is now still up 11 percent.

CEO Nicholas Woodman said GoPro's strong results were driven by a combination of strong demand and cost saving measures.

Woodman also said the company is on track to return to profitability by the end of 2017. GoPro's new products are on track to launch later this year, the CEO said.

In July, GoPro began shipping units of its Fusion camera to professional production teams as part of a pilot program. The company said the product allows users to capture "fully immersive virtual reality content."

Last week, the company launched Quikstories, an editing app that lets GoPro users create shareable videos.

Last quarter, shipments missed expectations, partially due to some failed product launches.

GoPro has also instigated company-wide restructuring efforts over the past year, including hundreds of job cuts and a shutdown of the entertainment division.

two lenses to shoot up to 5.2K video at 30 frames per second, can take 18-megapixel spherical photos, and capture 360-degree sound. It’s waterproof up to 16 feet out of the box, and is compatible with “most” GoPro mounts

GoPro stock dips on reveal of new Google camera

• On Wednesday, GoPro stock dipped 5 percent as Google revealed Google Clips, its new, clip-on cameras.

Oct. 4, 2017

On Wednesday GoPro stock dipped in midday trading after Google revealed a new clip-on camera, Google Clips, and improved cameras in its forthcoming Pixel 2 and Pixel 2XL smartphones.

Clips is a new concept for a camera: It automatically takes photos as you go throughout your day. An artificial intelligence engine inside looks for smiles, people you care about, dogs chasing their tails, and automatically captures the moment. Google says it will get smarter over time.

Specifically, GoPro stock fell by about 5 percent in midday trading. The stock opened at $11.06 ahead of the Google hardware event.

Just a week ago GoPro announced its new Hero 6 and Fusion cameras.

SAN MATEO, Calif., Nov. 1, 2017 /PRNewswire/ -- GoPro, Inc. (GPRO) announced financial results for its third quarter ended September 30, 2017.

"GoPro has turned a corner, restoring growth and profitability to our business," said founder and CEO Nicholas Woodman. "We are dedicated to growing as an innovative company, while being a vigilant steward of shareholder capital."

"During the quarter we generated $47 million in cash and gross margins were 40 percent. Year-over-year, we grew revenue by 37 percent and dramatically reduced operating costs without impacting our product roadmap. We launched our premium-priced HERO6 Black with global on-shelf availability and strong critical acclaim. We are now focused on driving consumer demand to reach our goal of full-year double-digit revenue growth and non-GAAP profitability."

Recent GoPro Highlights:

• In the third quarter, GoPro achieved strong revenue growth, gross margins and adjusted EBITDA. Revenue was $330 million, up 37% year-over-year, gross margins were approximately 40%, and adjusted EBITDA was $36 million, up $109 million year-over-year.
• GoPro strengthened its balance sheet, generating $47 million in cash, ending the third quarter with a cash balance of $197 million.
• GAAP net income for the third quarter was approximately $15 million, or $0.10 per share -- a sharp improvement over a GAAP net loss of $104 million in the third quarter of 2016. Non-GAAP net income for the third quarter was $21 million, or $0.15 per share.
• Average sales price (ASP) increased by 22% year-over-year and 3% sequentially. Increased ASP was a primary contributor to stronger margins in the quarter and driven by the strong performance of the premium-priced HERO6.
• Quarterly operating expenses reached a 3-year low. GAAP operating expenses were down 6% sequentially and down 7% on a non-GAAP basis. GoPro is tracking toward a non-GAAP operating expense goal of less than $490 million in 2017 (or approximately $570 million of GAAP operating expenses), down over 30% year-over-year.
• GoPro achieved strong revenue growth across all key regions. Growth in the Americas was up 20% year-over-year. EMEA was up 26% year-over-year. APAC was up 153% year-over-year. More than 50% of GoPro's revenue was generated in markets outside of the U.S. in the third quarter.
• Strong momentum continues in key Asian markets. GoPro is seeing strong and sustained results in Asia. Sell-thru year-over-year unit growth in Japan was up over 99% and China was up 25%, according to GfK.
• GoPro's drone, Karma, was the #2 selling drone in the U.S. priced $1,000 and above during the six months ending September 2017, according to the NPD Group's Retail Tracking Service.

GoPro to Cut 20% of Workforce, Exit Drone Market

The action-camera company also warned its quarterly revenue would be substantially lower than expected

Updated Jan. 8, 2018 2:54 p.m. ET

GoPro Inc. is cutting more than one-fifth of its workforce and exiting the drone market as part of the action-camera company’s latest attempt to turn itself around.

Shares in GoPro tumbled as much as 28% during Monday trading after the company announced restructuring plans and warned that its quarterly revenue would be substantially lower than expected.

The stock regained some ground after Chief Executive Nicholas Woodman told CNBC GoPro would entertain a sale to a larger company. In recent trading, shares were down 14% at $6.47.

GoPro has been struggling to differentiate its wearable cameras as smartphone makers launch phones with increasingly advanced lenses. The company in December cut the price for its Hero 5 Black camera, and this week reduced the price of its newer Hero 6 model to $399 from $499.

For the final quarter of the year, which includes the critical holiday shopping period, GoPro said it expects to report revenue of $340 million, compared with the $472.1 million forecast by analysts.

GoPro also said Monday it will stop selling drones after clearing its existing inventory because of regulatory uncertainty.

“A hostile regulatory environment in Europe and the United States will likely reduce the total addressable market in the years ahead,” the company said.

The company said it would reduce its workforce to under 1,000 employees from 1,254 and take restructuring charges of as much as $33 million, mostly because of severance costs. GoPro also said it would slash Mr. Woodman’s cash-based compensation to $1 from an annual base salary of $800,000.

It has been a bumpy ride for GoPro shares since its 2014 IPO, where the company raised $490 million while billing itself as “one of the most exciting and aspirational companies of our time.”

GoPro built a loyal following among sports enthusiasts for its durable cameras, which can be attached to motorbike handles, surfboards, ski helmets and more. In the months following its debut, shares traded more than three times above its IPO price of $24.

Amid the run-up in the shares, some investors and analysts argued that GoPro wasn’t just a camera company. They justified its soaring price and valuation by saying it was a lifestyle brand, or even a social-media company akin to Facebook and Twitter, since users frequently share their videos on such platforms.

But even back then, skeptics abounded. GoPro became a popular target for short sellers. Ultimately, the big gains proved short-lived as the company has faced a string of weaker-than-expected earnings and mounting competition from smartphones. Its Karma drone, released in 2016 as part of its plan to diversify beyond action cameras, was also beset by a recall, regulatory pressures and “an extremely competitive aerial market,” the company said Monday.

The company cut 15% of its workforce at the end of 2016 after attempts to branch out beyond its core business of action cameras failed to gain traction.

GoPro will now replace a broken camera if you buy its $4.99 monthly service plan

Published 21 Mins Ago

GoPro just announced that it has a new reason for its customers to sign up for its $4.99 monthly GoPro Plus plan: A free camera replacement.

People who sign up for the service will now get a free new camera if they ever break their current one, "no questions asked."

The service also includes unlimited photo storage and 35 hours of cloud video storage, as well as features like 20 percent off of GoPro accessories, premium support and cloud uploads.

GoPro said cloud backup will be available for iPhone users on February 20 and for Android later this spring.

It might help the company generate additional revenue. The company issued weak guidance and announced plans to eliminate 20 percent of its workforce earlier this month.

GoPro is offering a 30-day free trial of GoPro Plus for new customers and said it plans to roll out the option globally later this year.

GoPro earnings: Many tough questions after a third flubbed holiday quarter

Feb 1, 2018 7:35 a.m. ET



For the third straight year, the company botched its holiday quarter, admitting earlier this year that it was forced to implement “price protection” on its new camera after charging a high price — the same issue that cost the company two years ago — discontinue its drone attempt and lay off workers after a disappointing quarter. While GoPro already announced weak preliminary revenue for the quarter, its Thursday earnings commentary will be worth watching for details on what exactly went wrong and what’s being done in an attempt to right the ship.

Toward the beginning of the holiday season, at least one analyst speculated that the year-old Hero5 camera, priced at $399, was outselling the new Hero6, which was priced at $499.

“GoPro data points are simply not positive on a few fronts,” wrote Raymond James analyst Tavis McCourt back in November, noting weak search trends along with the Hero5/Hero6 demand mismatch over Black Friday weekend.

The company said in its December pre-announcement that even the Hero5 didn’t do well, citing “soft demand.” It appears customers weren’t all that interested in buying a year-old camera for the same price at which it launched. The company said it eventually lowered the price and saw “a sharp increase in sell-through,” though it was not enough to save holiday-quarter revenue from coming in more than $100 million lower than analysts’ consensus expectations.

The Hero6 performed “as expected,” GoPro said, but its decision to lower the camera’s price by $100 in early January suggests that the company has considerable inventory left over. Meanwhile, the disappointing search volume trends that McCourt cited indicate a broader issue of demand that can’t be solved merely by trimming prices. Morgan Stanley analyst Yuuji Kim added that search trends for the Hero6 got better after the price cut was announced, while search volume for the Hero5 remained weak despite its lower price.

Earnings: GoPro gave some information about operating expenses when it pre-announced some of its results, but it didn’t give earnings figures. Of the seven analysts who have updated their estimates since GoPro’s January disclosures, and whose estimates appear publicly on FactSet, the average projection calls for an adjusted loss of 11 cents a share. Analysts were predicting adjusted earnings of between 35 cents and 48 cents previously.

Revenue: All of the analysts who updated their projections following GoPro’s pre-announcement lowered their estimates to $340 million, the approximate figure that the company gave. Analysts had been predicting revenue of $450 million to $490 million before seeing the preliminary figures, according to FactSet. GoPro’s initial forecast for the quarter, issued in November, called for revenue of $460 million to $480 million.

What else to watch for

Chief Executive Nick Woodman will be forced to answer some tough questions, including about GoPro’s decision to exit the drone business, media reports saying that the company is exploring a sale, and the larger issue of how the firm plans to thrive as a stand-alone action-camera maker at a time when specialized hardware companies are struggling.

GoPro cited low margins and steep competition in January when it announced it would be exiting the drone market after it sells off the remainder of its inventory, and the company may provide more information about this move on its earnings call.

Management changes will also be in focus, as the company said in January that both CJ Prober, the firm’s chief operating officer, and Sharon Zezima, its head of corporate business development and general counsel, would be leaving in the first few months of 2018. Prober was relatively new to his position, but the departure of key executives prompts questions about stability that could be addressed on the company’s call. Also important will be commentary on plans to fill these positions.

GoPro may also discuss its intentions to return to profitability during the second half of 2018. “GoPro is committed to turning our business around in 2018,” CEO Woodman said in the pre-announcement release. Management believes GoPro can be profitable again this year due to a combination of new products and a significantly smaller workforce, which should lower expenses.

“The company will cut costs to return to some level of profitability in 2H18, but ultimately it needs to stabilize the revenue stream for the shares to improve from currently distressed levels,” Raymond James’ McCourt wrote in a January note to clients. The company may share some information about the product road map and the ability to sustain interest in its cameras.

GoPro shares fall more than 10 percent after earnings release

Published 40 Mins Ago

GoPro shares plummeted after the company reported quarterly results that missed analysts' expectations on Thursday.

Here's how the company did compared with what Wall Street expected:

Adjusted loss per share: 30 cents vs. 11 cents expected according to Thomson Reuters
Revenue: $334.8 million vs. $340.1 million expected according to Thomson Reuters

That revenue figure came in below the $340 million the company guided in early January.

The stock plunged as much as 11 percent after the report.