Action camera maker GoPro is approaching two million subscribers after the total grew 65 percent (or 754,000 subs year-over-year) in Q2 to reach 1.91 million. The company’s subscription and service segment revenues rose 70 percent to $20.1 million for the period ended June 30, while hardware sales declined 1.1 percent to $75.2 million. Total Q2 revenues were essentially flat at $250.7 million versus $249.6 million as GoPro.com sales rose 8.5 percent to $95.3 million and retail sales declined 4.0 percent to $155.4 million. Total revenues of $250.7 million, although flat year-over-year, and non-GAAP EPS of $0.08 a share exceeded company expectations.
Bolstered by more travel, EMEA sales jumped by 17.2 percent to $71.7 million from $61.2 million in the period. Asia-Pacific, described as beginning to open, reported a 25.8 percent increase in year-over-year sales to $52.6 million. Americas’ revenues were down by 13.8 percent to $126.4 million from $146.6 million, with senior executives expressing some concern that big box retailers could reduce their weeks of inventory in H2, which would impact sell-in to the channel.
Net income declined 36 percent in Q2 to $12.8 million from 19.9 million. Operating income was off 27.5 percent at $15.0 million against 20.7 million. Gross margin came in at 38.5 percent versus 40.1 percent as GoPro shipped 640,000 camera units, or 11.6 percent fewer than the 724,000 shipped in the year-ago period.
The company currently forecasts annual cam unit sales at 2.9 to 3.1 million units, down from prior guidance of 3.2 million. FY average selling prices are projected to rise 8 percent year-over-year, with the annual gross margin forecast now at the low-end of a 40 to 43 percent target range due to some higher freight and component price increases and the stronger U.S. dollar. Meanwhile, annual operating costs have been reduced more than 4 percent to a range of $325 to $330 million, down from a prior estimate of $340 to 345 million. GoPro, prioritizing hiring in certain areas and slowing it elsewhere, is promising further investments in product innovation and hardware, software, the client experience, and targeted marketing.
