Yahoo Finance GoPro Inc (GPRO) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges and ...
Revenue: $155.5 million in Q1 2024.
Non-GAAP Gross Margin: 34.4% in Q1 2024.
Non-GAAP EPS: Loss of $0.21 in Q1 2024.
Subscribers: Ended Q1 with 2.5 million, a 6% year-over-year increase.
Annual Subscription Retention Rate: Increased to 69% in Q1, up 6% year over year.
New Retail Doors: Added approximately 1,000 in Q1; total of 4,200 added since Q2 2023.
Expected New Doors by End of 2025: 3,000 to 6,000 additional doors.
Premium Plus Subscribers: Added more than 20,000, with nearly 80% upgrading from the $49.99 tier.
Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
GoPro Inc (NASDAQ:GPRO) exceeded Q1 guidance with revenue of $155.5 million and a non-GAAP gross margin of 34.4%.
Subscriber base grew to 2.5 million, marking a 6% year-over-year increase.
Launched the Quick desktop app for macOS and introduced a new Premium Plus subscription tier, enhancing software offerings.
Expanded global retail presence by adding approximately 1,000 new retail doors, improving in-store merchandising and brand exposure.
Strong focus on developing a broader range of products to meet customer needs and targeting new market segments, including the acquisition of Foresight Helmet Systems.
Negative Points
Reported a non-GAAP EPS loss of $0.21 in Q1.
Delays in product launches including the new entry-level camera and the new 360 camera, expected to negatively impact 2024 revenue by $65 million to $85 million.
Facing increased competition in the HERO camera category, particularly through aggressive discounting by competitors.
Macro-economic factors leading to flat or declining retail sales and retailers carrying less inventory, impacting overall sales performance.
Challenges in the Chinese market with local brands gaining preference over GoPro, affecting sales.
Q & A Highlights
Q: Could you please walk us through what's unfolding behind the scene, like what's the main factors causing the delay in windows? A: Nicholas Woodman - GoPro Inc - Chairman of the Board, Chief Executive Officer: The main focus for our 360 product, and with any of our products, is to launch the highest quality experience possible. We're taking more time to ensure that the experience lives up to the brand promise for our customers. Our flagship new HERO camera remains on track, and we're very excited about that. It's going to be a terrific new product that will really impress people with a number of new features and capabilities.
Q: How significant is the delay and what gives you confidence that all of your other product launches remain on track? A: Nicholas Woodman - GoPro Inc - Chairman of the Board, Chief Executive Officer: We're giving ourselves more time to launch these products at a performance and quality level that people have come to expect from GoPro. This approach gives us confidence in the timeline for our various products.
Q: When you said that 80% of the premium plus subscribers have upgraded from the original premium tier. So where did the other 20% come from? A: Brian McGee - GoPro Inc - Chief Financial Officer: The other 20% were people who are new to buy subscription and they backed up Premium Plus subscription at $100.
Q: Could you give us a little more details on the competitive pressure? Is that coming from heavier discounting, feature differentiation? A: Nicholas Woodman - GoPro Inc - Chairman of the Board, Chief Executive Officer: We've seen some increased competition in our core HERO camera category, specifically through discounting. This discounting is questionable whether that's at a sustainable level for our competitors. That's what's been impacting the core Hero camera business specifically is extremely discounted product, which tells you that they were likely having trouble moving that product without discounting.
Q: How much of the below seasonal revenue guidance is macro-driven? A: Brian McGee - GoPro Inc - Chief Financial Officer: We had anticipated that retail would grow this year. However, no retailers are reporting flat to down revenue in their businesses largely due to macroeconomic factors. In addition, we're seeing retailers also carrying less inventory and the economic conditions in the US and China are good examples of that.
Q: What are the bright spots in your strategy despite the competitive pressures? A: Nicholas Woodman - GoPro Inc - Chairman of the Board, Chief Executive Officer: Our upcoming new entry-level camera that we're launching in Q3 has received really positive feedback from retailers and distributors and as well athletes and influencers that we've shared that product with. We're very encouraged by the TAM expanding potential this entry-level product will have. It's a different type of product than we've made before, and it's really in response to consumer research that we've done for what not just entry-level, but what consumers in general want to see from GoPro.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
