GoPro, Inc. (NASDAQ: GPRO) reported fourth-quarter revenue of $201 million, marking a 32% decline year-over-year, as the action camera maker continues to navigate challenging market conditions while implementing strategic initiatives aimed at future growth and profitability.

The San Mateo-based company posted a GAAP net loss of $37 million, or $(0.24) per share, compared to a net loss of $2 million, or $(0.02) per share, in the same period last year. For the full year 2024, revenue reached $801 million, down 20% from 2023, while subscription and service revenue grew 10% to $107 million.

Camera sell-through declined 16% year-over-year to approximately 775,000 units in Q4, though the company maintained strong positioning in the premium segment with 84% of camera revenue coming from models priced at or above $400. The average selling price increased 5% year-over-year to $346.

“In 2024 we undertook several initiatives to put us back on a path to return to growth and profitability in 2026,” said Nicholas Woodman, GoPro’s founder and CEO. “This includes our plan to reduce operating expenses for 2025 by nearly 30% and refining our roadmap to pursue improved product diversification and how efficiently we design our products.”

The company’s subscription business continued to show strength, with subscriber count reaching 2.52 million at quarter’s end, up 1% year-over-year. Subscription and service revenue grew 9% to $27 million in Q4, driven by 8% ARPU growth from improving retention rates.

GoPro’s retail channel generated revenue of $150 million, representing 74% of total revenue but showing a 34% decline from the previous year. GoPro.com revenue, including subscription and service revenue, was $51 million, or 26% of total revenue, down 24% year-over-year.

The company’s gross margin showed slight improvement, with GAAP gross margin reaching 34.7% compared to 34.2% in the prior year period. However, gross margin was impacted by 80 basis points due to a stronger US dollar during the quarter.

Brian McGee, GoPro’s CFO and COO, highlighted operational improvements, stating, “Our continued focus to streamline our business has yielded reduced product costs and improved operational efficiencies as well as continued diversification of our supply chain outside of China, all of which has contributed to improving gross margin.”

The company ended the quarter with $103 million in cash and marketable securities.

Opinion

GoPro’s Q4 results reveal both concerning trends and potential opportunities. The substantial revenue decline across both retail and direct-to-consumer channels signals significant challenges in the core camera business, though the company’s ability to maintain premium pricing power and grow subscription revenue provides some encouragement.

The planned 30% reduction in operating expenses for 2025 represents a decisive but potentially risky move. While necessary for achieving profitability, such significant cost-cutting could impact product development and market competitiveness at a time when product diversification is crucial for growth.

The growth in subscription services, while modest, demonstrates the potential of GoPro’s recurring revenue strategy. However, the single-digit subscriber growth rate suggests this segment may need additional innovation to accelerate expansion.

The company’s supply chain diversification efforts and improved operational efficiencies are promising developments, though these gains are currently being overshadowed by broader market challenges. The path to profitability by 2026 appears ambitious given current trends, and much will depend on the success of the company’s product diversification initiatives and their ability to execute significant cost reductions while maintaining innovation capabilities.

Source: (https://www.nasdaq.com/press-release/gopro-announces-fourth-quarter-and-2024-results-2025-02-06) GoPro Q4 2024 Earnings Release

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