GoPro Announces Revenue Growth, More Losses, Slight Dip in Costs (Apr 27, 2017)
GoPro beat its revenue guidance for Q1 and grew year on year for the second straight quarter, though it’s still a shadow of its former self, with revenues less than two thirds of what they were two years ago in the quarter, and even less than the equivalent quarter three years ago. Meanwhile, it still hasn’t reduced costs nearly enough to get back to profitability, as its cost of sales was nearly 70% of revenue and its operating expenses accounted for about the same amount, leaving it with a -40% operating margin. That’s actually a slight improvement on a couple of quarters last year, but was much worse than Q4, The fundamental challenge facing GoPro is still that it’s essentially a one-trick pony in a market that has a fairly low ceiling at a time when smartphones and other product categories are beginning to be more meaningful competitors. It’s expanded into drones, but that’s an even more niche category than action cameras, and all its efforts at diversifying into content have failed. It may be able to bring costs down enough over the course of the year to get back to profitability but a return to sustained high growth still seems like a distant prospect.
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