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01/11 07:35
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals several negative factors: a significant revenue guidance decline (22% YoY), ongoing competitive pressures, and macroeconomic challenges in Asia. Despite some positive aspects, like reduced operating expenses and increased gross margins, these are overshadowed by the EPS miss, legal issues, and lack of a share repurchase program. The Q&A section highlights management's vague responses and challenges in Asia. These factors, combined with the absence of a market cap for precise impact assessment, suggest a negative sentiment, predicting a stock price decline between -2% to -8%.
Revenue $134 million, up from $125 million, due to stronger sell-through in the quarter.
Subscription and Service Revenue $27 million, up 4% year-over-year, primarily from 5% ARPU growth and improved aggregate retention rates, which reached a record 70%.
Operating Expenses $62 million, down 26% year-over-year from $83 million, due to restructuring actions, reduced employee-related costs, and lower marketing expenses.
GAAP Loss per Share $0.30, compared to $0.40 in Q1 2024.
Non-GAAP Loss per Share $0.12, compared to $0.20 in Q1 2024.
Adjusted EBITDA Loss Negative $16 million, reduced by nearly 50% year-over-year.
Inventory $96 million, a 27% decrease year-over-year, reflecting the first Q1 sequential decline in inventory since 2018.
Sell-through Units Approximately 440,000 units, down from 530,000 units in the prior-year period, due to macroeconomic issues and competition in Asia-Pacific.
Gross Margin 32.3%, impacted by a $5 million one-time sale; excluding this, gross margin would have been 35.5%, above Q1 2024's 34.4%.
Cash and Cash Equivalents $70 million, including a $25 million draw on ABL; cash usage was primarily due to adjusted EBITDA loss and working capital changes.
Headcount 659 full-time employees, down 30% from 937 in the prior year.
New Hardware and Software Products: Launched several new hardware and software products, including an updated 360-degree camera app experience, a refreshed MAX camera, and the Anamorphic Lens Mod for HERO13 Black.
Upcoming Product Launches: On track to launch MAX2 later this year.
Tech-Enabled Motorcycle Helmets: Initiated a joint development partnership with AGV to launch tech-enabled motorcycle helmets, targeting a market with a SAM of approximately $3 billion.
Subscription Growth: GoPro subscription retention reached a record 70%, with ARPU improving 5% year-over-year.
Retail Channel Revenue: Revenue from retail channel was $94 million, accounting for 70% of Q1 2025 revenue.
Operating Expenses: Operating expenses decreased 26% year-over-year to $62 million.
Inventory Management: Ended Q1 with inventory of $96 million, a 27% decrease year-over-year.
Supply Chain Diversification: Continuing to diversify supply chain to mitigate tariff impacts and exploring domestic production.
IP Protection: Engaged in litigation to protect IP related to cameras and digital imaging technology.
Competitive Pressures: Sell-through decreased in Asia-Pacific due to consumer-related macroeconomic issues and competition, particularly in China, Japan, and South Korea.
Regulatory Issues: GoPro is involved in a legal case with the U.S. International Trade Commission regarding patent infringement, which could impact its competitive position.
Supply Chain Challenges: GoPro is diversifying its supply chain to mitigate the impact of tariffs and is exploring domestic production to offset costs.
Economic Factors: An uncertain macro environment is expected to drive lower units and revenue in 2025 compared to 2024.
Tariff Impact: Expected tariff impact for 2025 is approximately $8 million on cameras, which is anticipated to be offset by modest price increases.
Product Innovation: GoPro is making strategic investments in product innovation to return to growth, including the launch of new hardware and software products.
Supply Chain Diversification: GoPro is diversifying its supply chain and exploring domestic production to mitigate tariff impacts.
Tech-Enabled Motorcycle Helmets: GoPro is launching tech-enabled motorcycle helmets in partnership with AGV, targeting a market with a SAM of approximately $3 billion.
Patent Protection: GoPro is committed to protecting its intellectual property and is involved in litigation to enforce its patents.
Q2 2025 Revenue Guidance: Expected revenue for Q2 2025 is $145 million, down 22% year-over-year.
Q2 2025 Non-GAAP Loss Per Share: Expected non-GAAP loss per share for Q2 2025 is $0.07.
2025 Operating Expenses: Full-year 2025 operating expenses are expected to be between $240 million and $250 million, down more than $100 million or 30% year-over-year.
2025 Cash Position: Expected to end 2025 with $75 million in cash, with no debt.
Subscriber Growth: Expected to end 2025 with 2.4 million subscribers.
Gross Margin Guidance: Expected gross margin for Q2 2025 is 35.5%, up nearly 500 basis points year-over-year.
Share Repurchase Program: None
The earnings call presents mixed signals. While there are positives like revenue growth, reduced operating expenses, and an optimistic 2026 outlook, there are concerns about tariff impacts, declining gross margins, and sell-through challenges. The Q&A reveals strategic decisions for future growth but lacks specific data, causing uncertainty. The absence of a new flagship product in Q4 2025 and competitive pressures add to the neutral sentiment. Overall, the near-term outlook is stable, but uncertainties prevent a strong positive or negative stance.
Despite some positive financial metrics, such as improved gross margins and reduced operating expenses, GoPro faces significant challenges. The expected revenue decline, increased tariff costs, and competition from China-based rivals present substantial risks. The Q&A reveals vague responses on consumer demand and competition, indicating uncertainties. The guidance for Q2 2025 shows a revenue decline and a net loss, which are likely to negatively impact the stock price. Given these factors, the sentiment is negative, with a potential stock price decrease between -2% to -8%.
The earnings call reveals several negative factors: a significant revenue guidance decline (22% YoY), ongoing competitive pressures, and macroeconomic challenges in Asia. Despite some positive aspects, like reduced operating expenses and increased gross margins, these are overshadowed by the EPS miss, legal issues, and lack of a share repurchase program. The Q&A section highlights management's vague responses and challenges in Asia. These factors, combined with the absence of a market cap for precise impact assessment, suggest a negative sentiment, predicting a stock price decline between -2% to -8%.
The earnings call presents a mixed outlook. While there are positives like proactive supply chain management and a share repurchase program, the EPS miss and vague guidance for 2025 introduce uncertainty. The Q&A further highlights concerns about declining subscribers and competition, with management avoiding precise revenue guidance. These factors balance each other out, leading to a neutral sentiment.
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