The U.S. action camera brand’s sales tumbled by 54.1 percent in the second quarter to $134.2 million, while the gross margin contracted by 4.6 percentage points to 30.3 percent. Adjusted Ebitda was negative $22 million, compared to $14 million in the same period a year ago. The company’s net loss widened from $11.3 million last year to $50.9 million this quarter.
However, GoPro pointed out that revenues this quarter were 12 percent higher than in the first quarter, and attributed this to the company’s strategic shift to a more direct-to-consumer business with lower operating costs. GoPro.com represented a record percentage of revenues in the period at 44 percent, up from slightly below 10 percent of revenues in the second quarter of 2019.
The group said it saw steadily increasing demand and better-than-expected sell-through across all geographic areas. GoPro’s Plus subscription service ended the period with 372,000 paid subscribers, up by 57 percent year-over-year. Cameras with retail prices above $300 represented 95 percent of sales, reflecting consumer preference for the company’s premium products.
Despite lower revenues overall, GoPro said it experienced a faster-than-expected rebound in sell-through at its retail partners. Channel inventories are down by about 25 percent sequentially and by 45 percent from last December. The management pointed to new product launches in the second half that will include new hardware, software, nd subscription offerings. It expects to have between 600,000 and 700,000 subscribers by the end of 2020.