Action camera maker GoPro swung to a surprise first-quarter profit, boosted by strong revenues from its DTC channel, subscription services and increased prices. Total revenue was up 6 percent to $217 million, with DTC contributing $89 million, a rise of 8 percent for the channel. Subscribers grew 85 percent to 1.74 million, while subscription and service revenue grew 73 percent to $19 million. Net income came in at $5.7 million from a loss of $10 million a year ago. Adjusted Ebitda doubled to $20.6 million year-on-year. The gross margin was 42 percent from 39.2 percent in 2021.
Average selling prices increased 13 percent to $414 (€393), driven by growth in subscription revenue and a continued shift in demand for higher-end cameras. This offset a fall in units sold to 523,000 compared with 556,000 a year earlier.
On a geographical basis, first-quarter sales in Europe and Asia Pacific grew 24 percent and 11 percent, respectively, while the Americas declined 4 percent.
Looking ahead to the second quarter, GoPro said it expected greater revenue growth in the second half due to the timing of product launches and guided for sales of around $235 million to $245 million. It also expects a 16 percent fall in unit sales, which will be largely offset by an average 14 percent increase in average prices to around $400 as the company continues to shift camera mix to the high-end and grow subscription revenue.
GoPro is focusing on a strategy of “derivative” cameras and in March launched the Hero10 Black Bones – a first-person-view “stripped-down, lightweight variant of Hero10 Black that is designed specifically for mounting on small, agile drones.” “Expect to see more from our derivative and diversification strategy in both hardware and software later this year and expanding further in 2023,” said chief executive Nick Woodman. “We’re confident we can grow our total addressable market by serving differentiated, often very specific needs of our consumer and professional customers.”
Second-quarter gross margin is forecast to be between 40-41 percent, lower than the previous three months due to a strengthening U.S. dollar along with component price increases. “We continue to effectively manage the supply chain, with second-quarter inventory secured and the second half of the 2022 pipeline well-developed,” the company said. “We are seeing positive impacts from our recent product launches on customer engagement as well as our subscription, and believe we remain on track to achieve annual growth of GoPro subscribers of 40 percent, to 2.2 million, which translates into more than $80 million in subscription and service revenue in 2022.”
