GoPro's (GPRO) Q3 Earnings & Revenues Surpass Estimates
GoPro, Inc GPRO reported third-quarter 2023 non-GAAP earnings of 4 cents per share, which outshined the Zacks Consensus Estimate by 100%. The company reported earnings of 19 cents in the year-ago quarter.
GoPro generated revenues of $294.3 million, down 4% from the year-ago levels. However, the top line beat the consensus mark by 4.7%.
GPRO now expects 2023 revenues and unit sales to be ahead of its earlier guidance, which was provided during the second quarter of 2023 earnings call. Revenues are anticipated to be $1.04 billion (+/-$5 million) compared with the prior projection of $1.03 billion (+/-$30 million).
Shares were up 4.1% in the after-market trading on Nov 7. In the past year, shares of GPRO have lost 48% of their value against the sub-industry’s growth of 14%.
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Quarter in Details
GoPro shipped 923 million camera units during the reported quarter, up 16% year over year.
It recorded 2.5 million subscribers, marking 20% year-over-year growth at the end of the quarter under discussion. Management envisions subscribers at 2023 end to be between 2.5 and 2.6 million, with additional subscriber growth in 2024.
Region-wise, revenues from the Americas totaled $131.6 million (44.7% of total revenues), down 6% from the prior-year levels. Revenues from Europe, the Middle East and Africa were $83.5 million (28.4%), declining 2% year over year. The Asia Pacific generated revenues of $79.2 million (26.9%), down 2% on a year-over-year basis.
GoPro, Inc. Price, Consensus and EPS Surprise
GoPro, Inc. price-consensus-eps-surprise-chart | GoPro, Inc. Quote
Based on channels, revenues from GoPro.com of $63.3 million (21.5% of total revenues) plunged 36% year over year. Our estimate was pegged at $67.7 million.
In this channel, hardware revenues totaled $38.5 million compared with $77.2 million in the previous-year quarter. Subscription revenues amounted to $24.8 million, climbing 15.9% year over year.
Retail channel registered revenues of $231 million (78.5%), which improved 12% from the year-ago levels. The uptick was driven by strategic pricing action, increasing retail doors and retail efforts including merchandising. We suggested the metric to be $213.1 million.
Management added that it was ahead of its target of opening 2,000 new retail doors globally, with 2,500 already opened. By 2024, it is aiming to open more than 3,000 new retail doors worldwide. This will bring the total count to approximately 25,000, representing an increase of more than 30% from the initiation of growth strategy in May 2023.
The company had $154.9 million in inventory compared with $153.4 million in the year-earlier quarter.
Other Details
Gross profit of $94.2 million decreased 18.8% year over year. Total operating expenses of $98 million rose 7% year over year. Operating loss totaled $3.7 million against operating income of $24.4 million in the prior-year quarter.
Non-GAAP gross margin came in at 32.2% compared with 38.2% in the year-ago quarter mainly due to higher demand for current lower-margin entry-level cameras. Entry-level products accounted for 19% of camera revenues in the third quarter.
Adjusted EBITDA was $7.2 million compared with $35.2 million a year ago.
Cameras with suggested retail prices at or above $400 contributed 75% to revenues in the reported quarter compared with 87% in the prior-year quarter.
Cash Flow & Liquidity
In the quarter under review, GoPro used $1.6 million of net cash from operating activities against $40.7 million of cash generated from operations in the year-ago period.
As of Sep 30, the company had $220.9 million of cash and cash equivalents with $141.7 million of long-term debt.
GPRO repurchased 2.6 million shares worth $10 million.
Guidance
For the fourth quarter of 2023, revenues are estimated to be $325 million (+/- $5 million). Non-GAAP adjusted earnings are forecast to be 2 cents per share (+/- 1 cent).
Gross margin is anticipated to be 33% (+/- 50 basis points). Street ASP is projected to be nearly $335.
GoPro currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Asure Software ASUR, Synopsys SNPS and Cadence Design Systems (CDNS). While Asure Software flaunts a Zacks Rank #1 (Strong Buy), Synopsys and Cadence carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 676.4%. Shares of ASUR have climbed 28.4% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has remained flat in the past 60 days at $11.09. SNPS’ long-term earnings growth rate is 16.7%. Shares of SNPS have surged 72% in the past year.
The Zacks Consensus Estimate for Cadence 2023 EPS has improved 1 cent in the past 60 days to $5.10.
Cadence’s earnings outpaced the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 4.1%. Shares of CDNS have jumped 71.7% in the past year.
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