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GoPro, Inc. Crushes Expectations, Confirms New Products on the Way

GoPro (NASDAQ: GPRO) announced second-quarter 2017 results on Thursday after the market closed, and investors couldn't be more pleased with the continued progress of its turnaround. GoPro also confirmed its new Fusion and Hero 6 cameras are on track to launch later this year.

With shares of the action camera and drone specialist up more than 21% Friday as of this writing, let's zoom in for a closer look at how GoPro finished the first half.

Image source: GoPro.

GoPro's results: The raw numbers

Metric

Q2 2017

Q2 2016

Year-Over-Year Growth

Revenue

$296.5 million

$220.8 million

34.3%

GAAP net income

($30.5 million)

($91.8 million)

N/A

GAAP earnings per share

($0.22)

($0.66)

N/A

Data source: GoPro. 

What happened with GoPro this quarter?

  • Revenue was well above GoPro's guidance provided last quarter for a range of $260 million to $280 million.
  • On an adjusted (non-GAAP) basis -- which excludes items like stock-based compensation, acquisition expenses, and restructuring costs -- GoPro's net loss was $12.9 million, or $0.09 per share, narrowed from an adjusted net loss of $72.6 million, or $0.52 per share in last year's second quarter.
  • Adjusted gross margin was 36.2%, also above guidance for a range of 32.5% to 34.5%.
  • Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $5.1 million, swinging from an adjusted EBITDA loss of $76.8 million in last year's second quarter.
  • International markets represented more than half of GoPro's total revenue.
  • The company shipped approximately 1.061 million camera units, up from 759,000 units in last year's second quarter.
  • Global sell-through of cameras increased 18% sequentially, including a 13% increase in camera sell-through.
  • According to NPD data, the Hero 5 Black was the best-selling camera in the U.S. during the quarter, while the Karma drone was the No. 2-selling drone brand in the country.

What management had to say

GoPro founder and CEO Nick Woodman stated:

GoPro is building momentum. Strong demand combined with our cost management and margin initiatives contributed to GoPro's EBITDA positive performance in the second quarter. HERO6 and Fusion, our 5.2K spherical camera, are on course to launch later this year and we continue to track toward our goal of full-year, non-GAAP profitability in 2017.

Looking forward

For the third quarter, GoPro expects revenue of $290 million to $310 million, gross margin of 36% to 38%, a GAAP loss per share in the range of $0.29 to $0.19, and an adjusted loss per share in the range of $0.11 to $0.01. In comparison, consensus estimates predicted GoPro would incur a wider third-quarter adjusted net loss of $0.35 per share on revenue of just $278.5 million.

For the full year, GoPro now expects GAAP operating expenses to be below $570 million (compared to $580 million previously), and reiterated its goal for adjusted operating expenses to be under $495 million.

There was little not to like from this report. GoPro's current products are selling well, its next-generation offerings are on the way, and its cost-management initiatives are yielding fruit. As a result, the company is approaching its goal of recapturing sustained profitability faster than investors had hoped.

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Steve Symington has no position in any stocks mentioned. The Motley Fool owns shares of and recommends GoPro. The Motley Fool has the following options: short January 2019 $12 calls on GoPro and long January 2019 $12 puts on GoPro. The Motley Fool has a disclosure policy.