For a second consecutive quarter, GoPro’s operating loss and revenues widened. But the action camera company’s senior management continues to see brighter financial days ahead in FY25, largely due to a sharply lower operating expense budget and a projection of 100 to 200 basis points improvement in gross margin to 35 to 36 percent. However, year-over-year units and revenues are forecast to be down in FY25 due to macroeconomic headwinds, competition, and a delayed introduction of its 360-degree camera.
Aiming to position itself better in the expanding consumer digital market, GoPro has taken action for 2025 and beyond. These developments included eliminating $110 million in annual spending, partly through a 26 percent headcount reduction.
The group suffered a 112 percent increase in year-over-year operating loss to $8.0 million versus a loss of $3.8 million in Q3, which ended on Sept. 30. The net loss was $8.2 million against a loss of $3.7 million. Total revenues slipped by 12 percent to $258.9 million from $294.3 million, but gross margin improved by 350 basis points to 35.5 percent from 32.0 percent. Subscription and service revenue grew 11 percent year-over-year to $27.5 million; overall subscriber growth was 2 percent to 2.56 million. Retail sales dipped 10 percent to $208 million.
Third quarter sell-through demand sunk by about 18 percent to 610,000 units, falling by double digits in the EMEA (-16%), Asia-Pacific (-21%) and the Americas (-17%). The company blamed the declines on consumer-related macroeconomic issues and competition. The average selling price (ASP) of products fell to $294 from the guidance of $300, largely due to a 38 percent increase in sales of entry-level cameras and higher promotional activity. The percentage of cameras sold at suggested retail price points of $400+ declined to 74 percent from 75 percent in the year-ago period.
CEO Nicholas Woodman, commenting about the company’s investments in innovation over the past two decades, confirmed that GoPro filed a complaint with the US International Trade Commission earlier this year to enforce certain patents it owns on cameras and digital imaging technology from infringement by one of its competitors.
“We are really looking forward to executing in 2025 as a leaner, meaner organization that’s focused on efficiency and execution in the process of getting out exciting new products that we believe are going to help us grow our business,” Woodman added.
