Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GoPro Inc (GPRO, Financial) reported Q4 results that were largely in line or slightly better than guidance.
- The company has successfully diversified its manufacturing and sourcing, mitigating the impact of US tariffs.
- Subscription and service revenue grew 9% year over year, with an 8% increase in ARPU.
- GoPro Inc (GPRO) introduced new products, including the HERO13 Black and a tiny 4K camera, expanding its product portfolio.
- The company is focused on operational efficiencies, expecting to improve gross margin by more than 100 basis points in 2025.
Negative Points
- GoPro Inc (GPRO) expects units and revenue to be lower in 2025 compared to 2024 due to macroeconomic headwinds and competition.
- The company reported a GAAP net loss per share of $0.24 for Q4 2024.
- Retail revenue was down 15% year over year, and GoPro.com product revenue decreased by 54%.
- Operating loss for the year was $80 million, compared to a $34 million loss in 2023.
- The delay of the new MAX 2 360 camera has impacted the company's revenue and unit sales projections.
Q & A Highlights
Q: Can you explain the expected decline in subscribers for 2025 despite strong renewal rates?
A: Brian McGee, CFO and COO, explained that while units are expected to be down, the aggregate retention rate is improving, which results in better ARPU. This helps counterbalance the reduction in units, leading to an expected $105 million in revenue and approximately 2.4 million subscribers, down about 120,000 from the previous year.
Q: Can you provide more concrete guidance on 2025 revenue expectations?
A: Brian McGee stated that they will guide quarter to quarter due to various headwinds like consumer competition and FX impacts. While they expect revenue to be down, they are focusing on maintaining a good margin and cost reductions. They are not providing a precise top-line number for 2025 at this time.
Q: Why reintroduce the MAX 1 camera, and will it be margin accretive?
A: Nicholas Woodman, CEO, explained that the MAX 1 was reintroduced due to a delay in the MAX 2 launch and identified market demand. The refreshed product, along with enhanced software, will serve as an entry-level 360 product. Brian McGee added that it is margin accretive, contributing positively to their financial model.
Q: Will the GP3-enabled camera be released this year?
A: Nicholas Woodman stated that due to competitive reasons, they cannot disclose specific details about upcoming product releases, including the GP3-enabled camera.
Q: What are the long-term growth prospects for GoPro's subscription service?
A: Nicholas Woodman mentioned that while historically tied to hardware, they are exploring new software experiences to boost engagement and conversion rates. Brian McGee added that improving retention rates and ARPU are key drivers, and they expect subscription growth to resume in 2026 with new product launches.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
