The battered American brand of action cameras benefited from production delays in the third quarter, which pushed deliveries of GoPro’s new Hero8 cameras into the fourth quarter, leading the company to record strong results for the three months to Dec. 31.
Revenues soared by 40 percent to $528.3 million during the quarter, while the gross margin improved by 0.5 percentage points to 38.2 percent. Net income tripled to $95.8 million – up from $31.6 million for the same period a year ago – turning this quarter into the company’s second most profitable ever.
The volume of camera units shipped jumped by 31 percent to 1.85 million, led by the company’s highest end products. There were especially strong sell-throughs for the Hero8 Black and Max 360-degree camera during the period from Black Friday to Cyber Monday. The Hero8 Black was the top selling camera in all of digital imaging by unit volume in the U.S. for the quarter. In Europe, GoPro had four of the top five cameras in the action camera category, and it held shares of 83 percent in value and 82 percent in units in the price band over $200, according to GfK.
The GoPro Plus subscription service also helped revenues during the quarter, surpassing 334,000 active paying subscribers as of Jan. 31, up by 69 percent. The management said it is targeting 600,000-700,000 paid subscribers in one year’s time, which it believes will contribute $35 to $40 million in high-margin recurring revenues in 2021.
Looking at the full financial year, revenues were up by 4 percent to $1,195 million. The strong performance from high-end products led to 90 percent of revenues coming from the $300 and above price band in 2019.
GoPro.com represented more than 10 percent of revenues, growing by around 40 percent year-over-year. Organic viewership of GoPro content across all channels achieved an all-time high with 737 million non-paid views, a 29 percent increase over 2018.
The gross margin expanded by 0.2 percentage points to 38.6 percent, while the adjusted Ebitda was $72 million, a 230 percent increase compared with last year.
The management believes it is well positioned this year to expand both margins and earnings per share due to the strength of its product line, along with its high-margin Plus subscription service and its app monetization strategy.
