For the first time in two years, GoPro is making a profit. In the third quarter financial results released on Wednesday, November 1, the company posted a $15 million net income, up from a loss of $104 million the same time last year, while also bringing operating costs to the lowest level in three years.
GoPro announced a restructuring plan nearly a year ago after struggling with falling sales, but the latest financial results offer a bright spot for fans of the action camera giant as well as for investors. Analysts suggested at the time that GoPro’s niche market was too narrow for the changing camera industry, but the company has since stepped up its game. The firm is now on an annual update schedule for its action cameras, helping GoPro maintain an edge by integrating some of the latest features. The Hero6, for example, records 60 fps 4K with electronic image stabilization and voice controls.
The company is also expanding beyond action cameras — according to those financial results, the GoPro Karma was the second best-selling consumer drone in the U.S. after a rocky start with a battery-related recall. Fusion, the company’s first dedicated 360 camera, is expected to start shipping later this month. Quik, the company’s app that automatically picks the best moments and creates a highlight video of the footage, has now been downloaded 18 million times.
“GoPro has turned a corner, restoring growth and profitability to our business,” said founder and CEO Nicholas Woodman. “We are dedicated to growing as an innovative company, while being a vigilant steward of shareholder capital. During the quarter we generated $47 million in cash and gross margins were 40 percent. Year-over-year, we grew revenue by 37 percent and dramatically reduced operating costs without impacting our product roadmap. We launched our premium-priced Hero6 Black with global on-shelf availability and strong critical acclaim. We are now focused on driving consumer demand to reach our goal of full-year double-digit revenue growth and non-GAAP profitability.”
The company also increased the average sale price by 22 percent, thanks in part to a high-end price that matches the premium features of the Hero6. Before that launch, the Hero5 Black was the top-selling digital camera in the U.S. for four quarters in a row. The company also says that global sales are increasing, with more than half of the revenue from this quarter coming from outside the U.S., including key growth in the Asia-Pacific region.
While increased sales boosted the company’s profits, the restructuring plan also lowered expenses, which are down six percent from the previous quarter and 30 percent from before the restructure.
While the third quarter numbers are higher than first estimated, the company is also estimating a fourth-quarter earnings slightly lower than what Wall Street predicted, which caused stock prices to drop by seven percent. The prediction also means GoPro may or may not post a profit for the full year.
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