GoPro Q3 2024 Earnings: Mixed Results Amid Competition

GoPro's third quarter 2024 report reveals mixed financial results, navigating through challenging macroeconomic conditions and increased competition. Key metrics indicate a modest revenue growth, yet the company faces hurdles with product launches and market performance.

Date: 08-11-2024

AI Rating: 6

The report provides a comprehensive overview of GoPro's third quarter 2024 performance. Here are some key points that could influence stock prices:

Revenue Growth: GoPro reported revenue of $259 million, which exceeded guidance. Additionally, subscription and service revenue experienced an 11% growth year-over-year, indicating a positive trend in revenue drivers.
Earnings Per Share (EPS): EPS was reported as breakeven on a non-GAAP basis, suggesting that while the company is not currently profitable, it is not in a deficit either. This may provide a cautious optimism for investors.
Profit Margins: GoPro expects gross margins to improve from 34% to a range of 35% to 36% in 2025, which could indicate stronger profitability moving forward. The company also noted that the new HERO camera has been designed to yield a better profit margin compared to previous entry-level models.
Free Cash Flow (FCF): The report mentions expected cash of approximately $125 million at year-end, reflecting a healthy liquidity position that may reassure investors about the company's ability to navigate through challenges.
Market Context: The ongoing macroeconomic challenges, delay of new product launches, and competitive pressures may dampen investor sentiment. The anticipated lower units and revenue for 2025, as mentioned in the report, are notable red flags.

Given these developments, the mixed results have implications for GoPro's stock performance. The slight uptick in revenue and adjustments to operating expenses could lend positive momentum. However, the delays in product launches and rising competition remain significant concerns that investors will need to monitor closely.

Stocks: GPRO