GoPro announced its first profitable quarter of the past in two years. After a series of commercial failures and employee layoffs, the action camera manufacturer might be on the path to recovery thanks to the newly launched HERO6. "GoPro has turned a corner, restoring growth and profitability to our business," said CEO Nicholas Woodman. In a call to investors, he also revealed that his company will launch a new camera next year.
No More GoPro Session?
“Demand for GoPro’s entry level Session was much higher than anticipated (this year), and will result in a sooner than expected end of life for this product,” Woodman said, “but (this) identifies a significant opportunity for us to expand our market with a new entry level product slated for 2018.”
GoPro’s Chief Operating Officer CJ Prober added that “in 2018 we’ve got a new product to address that entry level which we’re even more excited about than Session, because it’s an even better form factor for that price point.”
According to the third quarter financial statement:
- In the third quarter, GoPro profit was $14 million out of $330 million revenue. The EBITDA was $36 million.
- Average sales price (ASP) increased by 22 percent year-over-year and 3 percent sequentially. Increased ASP was a primary contributor to stronger margins in the quarter and driven by the strong performance of the premium-priced HERO6.
- The Fusion 360-degree camera will begin shipping in November.
- The Asian-Pacific market was up 153 percent year-over-year.
- More than 50 percent of GoPro's revenue was generated in markets outside of the U.S. in the third quarter.
- GoPro's drone, Karma, was the number 2 selling drone in the U.S. priced $1,000 and above during the 6 months ending September 2017, according to the NPD Group's Retail Tracking Service.
Is GoPro Out of Trouble?
Despite the financial relief, the Californian company still faces many challenges ahead. The competitive pressure from cheap Chinese manufacturers remains and the Karma drone has been a technical and commercial failure. Indeed, the market didn’t react positively to the financial announcement and the stock price dropped by 10 percent, hovering around $9. The revenue projection for the fourth quarter does not look good. At $470 million, it would be GoPro’s worst financial quarter for the holiday season over the past two years when usually Thanksgiving and Christmas strongly impact the sales. Hopefully, the new product release in 2018 will help to keep GoPro on the right track.
[via The Verge]