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 (GPRO, Financial) 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 (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 (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 (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 (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.
Q: Were there any issues with parts and manufacturing affecting the delays?
A: Brian McGee, CFO, confirmed that supply chain issues were not a factor in the delays. The focus was on driving innovation, not on procuring components.
Q: Can you elaborate on the sources of cost savings expected in 2025?
A: Brian McGee stated that operating expenses are expected to be reduced by $50 million from 2024 levels, with $20 million from nonrecurring engineering development expenses. Additional savings will come from reductions in marketing, salary expenses, and other operating costs.
Q: How do you perceive the competitive landscape in the 360-degree camera market, and are there concerns about losing market share?
A: Nicholas Woodman acknowledged the missed opportunity due to delayed product launches but expressed confidence in regaining market share with the new 360-degree camera in 2025. GoPro aims to restore its leadership position in the category, leveraging its strong brand recognition.
Q: What are the underlying drivers for GoPro's commitment to profitability in 2025?
A: Nicholas Woodman emphasized that new product launches, including re-entering the 360-degree market and introducing a new entry-level camera with better margins, will drive top-line and margin growth. The company is also focused on significantly reducing operating expenses to ensure profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
