GoPro (GPRO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $259 million, exceeding guidance midpoint but down 12% year-over-year, with subscription and service revenue up 11% to $27.5 million and subscribers up 2% to 2.56 million, driven by ARPU growth and new product launches.

• Non-GAAP net loss narrowed to $0.5 million (breakeven per share), while GAAP net loss was $8 million; adjusted EBITDA was $5.4 million, a significant sequential improvement but down year-over-year.

• Gross margin improved to 35.5%-35.6%, up from 32.0%-32.2% last year, driven by lower operational costs and higher subscription revenue mix.

• The company faces ongoing macroeconomic headwinds, delayed product launches, increased competition, and has implemented aggressive cost reductions, including a 26% workforce reduction.

• Two new products, HERO13 Black and a redesigned entry-level HERO camera, launched in September 2024, expanding the product lineup and global retail presence.

Financial highlights

• Q3 2024 revenue was $258.9-$259 million, down 12% year-over-year; subscription and service revenue grew 10.6%-11% to $27.5 million, with a 45% attach rate and 67% annual subscriber retention.

• Adjusted EBITDA was $5-$5.4 million, a $39 million sequential improvement.

• Gross margin for Q3 2024 was 35.5%-35.6%, a 250-350 basis point year-over-year improvement.

• Cash and equivalents ended Q3 at $130-$130.2 million, down from $222.7 million at year-end 2023.

• Inventory increased to $155.3 million, up from $97.3 million in Q2 2024 and $106.3 million year-over-year.

Outlook and guidance

• 2025 units and revenue are expected to be lower than 2024 due to macroeconomic headwinds, competition, and delayed product launches, but gross margin is projected to improve to 35%-36% from 34% in 2024.

• Operating expenses are targeted at $245-$255 million in 2025, reflecting a 26% reduction in headcount and other costs, with Q1 2025 operating expenses expected at $60 million.

• Profitability is targeted for 2025, with new product launches and cash preservation to repay debt.

• The company anticipates sufficient liquidity for at least 12 months, with $44.8 million available under its credit facility.

• Street ASP projected at $335-$345 in 2025, a 5% increase over 2024.