Earnings call transcript: GoPro Q2 2025 sees revenue growth amid cost cuts

GoPro reported its Q2 2025 earnings, showing a revenue of $153 million, which surpassed its guidance midpoint by 6%. The company achieved a gross margin of 36%, up from 30.7% in the same quarter last year. Despite an adjusted EBITDA of negative $6 million, the company improved significantly from the previous year’s negative $33 million. With a market capitalization of $205.6 million, GoPro’s stock currently trades at $1.29, showing significant potential according to InvestingPro’s Fair Value analysis.

Key Takeaways

• GoPro’s revenue exceeded the midpoint of its guidance by 6%.
• Gross margin improved to 36% from 30.7% year-over-year.
• Operating expenses were reduced by 32% compared to the previous year.
• The company plans to launch new products, including a tech-enabled motorcycle helmet.

Company Performance

GoPro demonstrated a strong performance in Q2 2025, with revenue reaching $153 million, marking a notable improvement over its guidance expectations. The company has been focusing on reducing costs, which is reflected in the 32% reduction in non-GAAP operating expenses. This, along with an improved gross margin, highlights GoPro’s strategic efforts to enhance profitability.

Financial Highlights

• Revenue: $153 million, up 6% from the guidance midpoint
• Gross Margin: 36%, compared to 30.7% in Q2 2024
• Non-GAAP Operating Expenses: $63 million, a 32% reduction year-over-year
• Adjusted EBITDA: -$6 million, improved from -$33 million in the previous year
• Average Selling Price (ASP): $374, a 16% year-over-year increase

Outlook & Guidance

GoPro expects to achieve an adjusted EBITDA of $20 million in the second half of 2025. The company anticipates resuming revenue growth in Q4 2025, with a full-year revenue projection of $160 million, plus or minus $10 million. By the end of 2025, GoPro aims to have 2.4 million subscribers and a cash position of $80 million. According to InvestingPro’s comprehensive analysis, the company currently maintains a WEAK Financial Health Score of 1.42, with its next earnings report scheduled for August 11, 2025.

Executive Commentary

CEO Nicholas Woodman emphasized GoPro’s potential to return to revenue growth, stating, "We believe GoPro is poised to return to revenue growth and deliver meaningful adjusted EBITDA in 2025 and into 2026." CFO/COO Brian McGee added, "We expect to resume revenue growth in the fourth quarter."

Risks and Challenges

• Market Saturation: The action camera market is competitive, with limited room for growth.
• Supply Chain Issues: Disruptions could affect product availability and costs.
• Macro-economic Pressures: Consumer spending trends may impact sales.
• Patent Litigation: Ongoing legal issues with Insta360 may pose financial risks.
• Technological Advancements: Rapid changes in technology require continuous innovation.

Q&A

During the earnings call, analysts inquired about consumer spending trends and the market opportunity for 360 cameras. GoPro highlighted its previous leadership in the 360 camera segment and discussed potential growth in the low-light camera market.

Full transcript - GoPro (GPRO) Q2 2025:

Cameron, Moderator: Good afternoon. Thank you for attending the GoPro Second Quarter twenty twenty five Earnings Call. My name is Cameron, and I’ll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. And I would now like to pass the conference over to your host, Robin Stecker, Director of Corporate Communications.

You may proceed.

Robin Stecker, Director of Corporate Communications, GoPro: Thank you, Cameron. Good afternoon, and welcome to GoPro’s second quarter twenty twenty five earnings conference call. With me today are GoPro’s CEO, Nicholas Woodman and CFO and COO, Brian McGee. Today’s agenda will include brief commentary from Nick and Brian followed by Q and A. For detailed information about our second quarter as well as outlook, please read our Q2 earnings press release and management commentary we posted to the Investor Relations section of GoPro’s website.

Before I pass the call to Nick, I’d like to remind everybody that our remarks today may include forward looking statements. Forward looking statements and all other statements that are not historical facts are not guarantees of future performance and are subject to a number of risks and uncertainties, which may cause actual results to differ materially. Additionally, any forward looking statements made today are based on assumptions as of today. This means that results could change at any time, and we do not undertake any obligation to update these statements as a result of new information or future events. To better understand the risks and uncertainties that could cause actual results to differ from our commentary, we refer you to our most recent annual report on Form 10 ks for the year ended 12/31/2024, which is on file with the Securities and Exchange Commission and other reports that we may file from time to time with the SEC.

Today, we may discuss gross margin, operating expense, net profit and loss, adjusted EBITDA, as well as basic and diluted net profit and loss per share in accordance with GAAP and on a non GAAP basis. A reconciliation of GAAP to non GAAP operating expenses can be found in the press release that was issued this afternoon, which is posted on the Investor Relations section of our website. Unless otherwise noted, all income statement related numbers that are discussed in the management commentary and remarks made today other than revenue are non GAAP. Now I will turn the call over to GoPro’s Founder and CEO, Nicholas Woodman.

Nicholas Woodman, Founder and CEO, GoPro: Thanks, Robin, and thanks, everybody, for joining us today. As Robin mentioned, Brian and I will share brief remarks before going into Q and A. And I want to encourage all on the call to read the detailed management commentary we posted on our Investor Relations website. In Q2, we reached the high end of our revenue guidance, delivered compelling new hardware and software products and are on track to launch exciting new products in the second half of the year. Our ongoing focus on efficiency drove operating expenses down 32% year over year, achieving our highest gross margin since Q3 twenty twenty two.

In addition, we refreshed our Board of Directors and executed a capital raise. GoPro continues to hit its marks. Last week, we announced that GoPro raised $50,000,000 in debt financing to bolster our balance sheet as we prepare to repay approximately $94,000,000 in convertible debt due this November. Our priorities for the balance of 2025 and into 2026 continue to be managing operating expenses, protecting our IP and launching new products, which we believe will return GoPro to both unit and revenue growth and improved profitability starting in the fourth quarter of this year. Turning to product highlights.

During the second quarter, we launched HERO 13 Black Ultra Wide Edition, a special edition of our flagship HERO 13 Black camera bundled in box with our ultra wide lens mod preinstalled on the camera, making it simple to capture low distortion, incredibly wide angle 177 degree perspectives that make you feel like you’re fully immersed in the moment. We also introduced a limited edition forest green colorway of hero 13 black, offering a bold nature inspired aesthetic designed to appeal to outdoor enthusiasts. On the software front, we added new, easy, and powerful 360 degree editing tools to the GoPro app, including motion frame and POV. Motion frame makes it simple to reframe your three sixty content into easy to share clips by using your phone to look around and reframe what part of your three sixty video or photo you want to share. And POV is a fast and simple way to create immersive see what I saw POV videos from your three sixty content.

These new tools add to the growing three sixty editing experience in the GoPro app and lay the groundwork for the upcoming launch of our Max two three sixty camera. Our software ecosystem continues to create value for our users, particularly for our subscribers. Our subscription attach rate from cameras sold across all channels was 56% compared to 45% in Q2 twenty twenty four, a 24% improvement. Aggregate retention has been above 67% for the past seven quarters. We believe ongoing software enhancements, coupled with increased camera sales from the launch of new products later this year and in 2026, will resume subscriber growth in 2026.

And on 07/30/2025, we announced a new opt in program that enables U. S. Subscribers to monetize their GoPro cloud based video content by making it available to help train AI models. GoPro subscribers can opt in to make their user generated content available for GoPro to license to leading technology companies seeking diverse real world footage to enhance the performance and accuracy of their AI models. GoPro subscribers will earn 50% of the license revenue that GoPro expects to generate on their behalf.

The GoPro subscriber community’s vast data lake contains more than four fifty petabytes of cloud based high quality video content, which translates into more than thirteen million hours of video. This vast trove of video content represents a valuable opportunity for AI developers to train their models with a rich and varied dataset across a wide range of experiences and environments. We are excited to participate in the demand for authentic real world video to train AI models while growing a new diversified revenue stream for GoPro. Industry analysts expect the AI data licensing market for photo and video content to reach $1,300,000,000 in 2025 with a projected 20% CAGR. And now an update on our IP projection efforts.

On 07/10/2025, The United States Administrative Law Judge, ALJ, with the International Trade Commission or ITC issued an initial determination that one of our China based competitors, Insta360, violated federal law by importing and selling products that infringe a patent covering GoPro’s iconic hero camera design in The United States. We are pleased with the ALJ’s recommendation that the commission issue both a cease and desist order against further infringing acts and an inclusion order barring further importation of Insta360’s infringing products. We are also pleased with the initial determinations validation of multiple patent claims covering GoPro’s industry leading hyper smooth video stabilization. The case is ongoing. And the next phase is a review by the commission where we believe we have the opportunity to gain further rulings in GoPro’s favor.

The commission is expected to issue its final determination on all of GoPro’s infringement claims on or before 11/10/2025, and any resulting exclusion orders would go into effect in January 2026, subject to presidential review. And in Q2, we refreshed our Board of Directors with the addition of three seasoned executives. Mick Lopez brings decades of strategic and financial governance expertise from leadership roles at Vista Outdoors, L3Harris, IBM and Cisco Systems. Emily Culp is the Chief Brand and Strategy Officer of BodyHealth and adds value expertise in omnichannel marketing and consumer brand strategy and Mike Dennison is CEO of Fox Factory Holding Corp. And brings a deep understanding of global manufacturing and product innovation to GoPro’s board.

We believe their diverse industry experience and insights will be instrumental to GoPro’s efforts to grow our TAM, revenue and profitability going forward. We believe GoPro is poised to return to revenue growth and deliver meaningful adjusted EBITDA in the 2025 and into 2026, while expanding our TAM by participating in key growth categories. GoPro remains The U. S. Market leader in the estimated global 3,000,000 unit action camera category.

New growth areas include the three sixty camera segment, which we estimate to be nearly 2,000,000 units annually. We’re excited to regain share in this three sixty market with the launch of our Max2 three sixty camera later this year. Additionally, the low light capable camera segment estimated at 2,000,000 to 2,500,000 units annually represents a significant opportunity for GoPro as we do not currently participate in that market. And GoPro’s tech enabled motorcycle helmet development in partnership with AGV remains on track. We expect to bring meaningful innovation, improved safety and performance to the world of motorcycling, which we believe represents a meaningful business opportunity for GoPro with a SAM of approximately $3,000,000,000 To summarize, we’re excited to launch an expanded diversified suite of hardware and software products in the 2025 and throughout 2026, which we believe will enable GoPro to grow into markets that we’re not participating in today.

We expect to resume revenue growth in the fourth quarter and expect second half adjusted EBITDA to be approximately $20,000,000 compared to a prior year period loss of $9,000,000 a nearly $30,000,000 improvement. GoPro’s teams are focused and highly motivated to realize the exciting opportunities that lie ahead. Now I’ll turn the call over to Brian McGee.

Brian McGee, CFO and COO, GoPro: Thanks, Amit. In the second quarter, revenue was $153,000,000 or 6% higher than the midpoint of our guidance of $145,000,000 Gross margin improved to 36% compared to 30.7% in Q2 twenty twenty four. Non GAAP operating expenses were $63,000,000 a 32% reduction year over year. Adjusted EBITDA improved 83% or $28,000,000 year over year to negative $6,000,000 in q two twenty twenty five, and non GAAP EPS net loss per share improved from negative $0.24 in Q2 twenty twenty four to negative $08 in Q2 twenty twenty five. We continue to have a strong focus on operating expense controls while retaining investments in our product roadmap.

Notable second quarter performance highlights. Revenue from our retail channel was $111,000,000 or 73% of Q2 twenty twenty five revenue compared to 74% in the 2024. Revenue from our gopro.com channel, which includes subscription and service revenue, was 41,000,000 or 27% of q two twenty twenty five revenue compared to 26% of the 2024. Subscription and service revenue was flat year over year at 26,000,000. Subscription attach rate from cameras sold across all channels was 56% compared to 45% in q two twenty twenty four, a 24% improvement.

Q two twenty twenty five ASP was $374, a 16% improvement year over year. Gross margin was 36% compared to 30.7 in the prior year quarter. The margin improvement of over 500 basis points was primarily due to less price discounting activity and an increase in subscription and service revenue as a percentage of total revenue partially offset by tariff costs. Non GAAP operating expenses were $63,000,000 compared to $93,000,000 in the prior year period, a 32% decrease year over year. The year over decrease was primarily driven by a decrease in advertising and marketing related activities, restructuring actions resulting in reduced employee related costs and the completion of our newest system on tip TP3.

GAAP and non GAAP loss per share was $0.10 and $08 respectively. Adjusted EBITDA was negative $6,000,000 compared to a negative $33,000,000 in the prior year period. Cash flow from operations was $9,000,000 an improvement of $8,000,000 year over year compared to cash provided by operations of $1,000,000 in the 2024. We ended the quarter with inventory of 84,000,000 a 12% decrease sequentially, and a 30% decrease since q four twenty twenty four. Sell through was approximately 500,000 units compared to 600,000 units in the prior year period.

Channel inventory decreased sequentially by approximately 60,000 units, in line with guidance. Our outlook is prefaced by highlighting uncertainty that exists due to volatility and tariff rates, consumer confidence, competition and global economic uncertainty. For the second half, we expect revenue of approximately $390,000,000 plus or minus 20,000,000 non GAAP net income per share of $04 positive plus or minus $04 and adjusted EBITDA positive $20,000,000 compared to a prior year loss of $9,000,000 a nearly $30,000,000 improvement. We anticipate adjusted EBITDA in Q3 to be breakeven. In addition, we expect to resume revenue growth in the 2025.

All of these expected improvements are due to the actions we took in 2024 to launch new products in the ’25, reduce operating expenses, diversify our supply chain, and drive product cost reductions, which are partially offset by higher tariffs. Additionally, we are focused on further operational efficiencies to drive down costs and expand our supply chain outside of China. We expect the impact on tariffs on our cameras and accessories in 2025 to be approximately $18,000,000 up from $8,000,000 in tariff rates due to the increase from 10% to 20%. We expect to offset approximately 50% of the full tariff impact by modest product price moves we have already made of less than 5% globally. We continue to actively manage the balance sheet and expect to further reduce inventory sequentially in Q3 twenty twenty five by $10,000,000 to approximately $75,000,000 For the 2025, we expect to deliver revenue of $160,000,000 plus or minus $10,000,000 down 38% year over year.

We estimate Street ASP in the third quarter to be approximately $370 up nearly 26% year over year. We expect unit sell through to be down 25% year over year to approximately 500,000 units and channel inventory to be flat sequentially. We expect gross margin in the third quarter to be 35.5% at the midpoint of guidance, flat versus the prior year quarter. We expect third quarter twenty twenty five operating expenses to be $60,000,000 plus or minus $1,000,000 a 34% reduction from the prior year quarter due to lower spending on wages from lower headcount, reduced marketing and lower nonrecurring engineering expenses related to the completion of GP3. Non GAAP tax expense by quarter in 2025 is expected to be $1,500,000 in the third quarter and a credit of $1,200,000 in the fourth quarter.

Non GAAP tax expense is expected to be $2,900,000 for 2025. Cash tax is expected to be between $05,000,000 and $1,000,000 in 2025. We expect non GAAP loss per share for the third quarter of $04 at the midpoint of guidance and expect shares outstanding to be approximately $159,000,000 in Q3 and $171,000,000 in Q4. To provide additional color on our expectations for the priorities of the balance of 2025, we expect to introduce two new cameras, including our Max two three sixty camera. We expect full year 2025 operating expenses to remain in the range of $240,000,000 to $250,000,000 down more than $100,000,000 from or 30% year over year.

We expect to offset approximately half of our expected tariff costs with modest price increases and continued supply chain diversification outside of China while also exploring the production of certain products in The United States. We’ve set expect subscription ARPU and subscription cost improvements in the end of the year with end the year with 2,400,000 subscribers. We expect our liquidity position to be more than adequate going into 2026 as we expect to end 2025 with approximately $80,000,000 in cash along with an additional $50,000,000 available under our ABL facility. Our liquidity position ending 2025 reflects the repayment of approximately 94,000,000 in convertible debt that will be fully paid off in November 25 from our escrow account. The initiatives we took undertook in 2024 to reduce operating expenses and improve gross margins are bearing fruit.

We are focused on launching new products in 2025 and 2026 to restore growth and profitability for our business beginning in q four twenty twenty five and into 2026. With that, operator, we are now ready to take questions.

Cameron, Moderator: Perfect. We will now begin the question and answer session. If would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, And the first question is from the line of Eric Woodring with Morgan Stanley. You may proceed.

Eric Woodring, Analyst, Morgan Stanley: Great. Thank you guys for taking my questions. I have two, if I may. Maybe just first one to start, Nick. I’d love if we could maybe just take a step back and kind of help us better understand between all the kind of headwinds that you discussed amongst tariffs and uncertainty and competition and whatnot, Can you just maybe help us understand where you believe kind of consumer spending intentions, especially on more discretionary products, is kind of tracking?

Is it improving? Is it worsening? Is it kind of running in place? And how does that differ by region? What I’m really just trying to get an understanding of is kind of the backdrop that you guys are currently selling into realizing that there are other challenges like not having a three sixty camera on market today, but just isolating the market.

And then I have a follow-up, please. Thank you.

Nicholas Woodman, Founder and CEO, GoPro: Yeah. Consumers are definitely becoming choosier about where they’re spending their money. And, fortunately, that aligns with, our our product ethos, which is, build solutions, not things. And so for a lot of our customer base, a GoPro is a important tool, whether they’re a professional or aspiring content creator or they’re an adventurer or an athlete who uses a GoPro, for training or, you know, more towards the the lighter duty use side of things, on the family front, GoPro’s importance as a life capture and sharing solution. So we’re seeing pretty stable demand, which is good.

Tariffs are definitely taking a bite out of gross margin. But as Brian noted, we’re managing that pretty well with just modest price increases. And we feel pretty good about maintaining demand going forward. But it certainly is an area of uncertainty. And then as it relates to upcoming product launches, we are optimistic about where our products are going to land competitively and the unit growth and profitability that they’ll drive and even more so as we go into 2026 and we continue to build on that product launch momentum, we’re feeling really good about the products that we’ve got slated for the rest of not only 2025, but 2026 as well, where we think we’re going to be really hitting the mark with what consumers are looking for.

From the casual consumer, who may be more pinched economically speaking, but definitely landing a bull’s eye, we think, with the more premium and pro minded consumer that’s going to be very excited, we believe, about the products that we have on tap for them. So it’s a mixed bag, Eric. But overall, we’re feeling pretty good about how GoPro’s positioned going forward.

Brian McGee, CFO and COO, GoPro: Eric, I’d add on that that our sell through for the quarter is actually trending, to, you know, what our projections are. So, Nick might have alluded to that, but, the demand side of of the business is is tracking for the quarter.

Eric Woodring, Analyst, Morgan Stanley: Okay. That’s super helpful, guys. And then my follow-up, I wanted to ask you about the MAX camera market, the three sixty market. The last MAX camera you guys launched was 2019. I realize, obviously, you really find one today because you’re coming out with a Max two.

If we look back over, whatever, call it, the last five years, what was GoPro’s share in that three sixty market? And how has this market changed in the last few years, whether that’s technology or price points or more competition or less competition? I’d just love to know each of those. Thanks so much, guys.

Brian McGee, CFO and COO, GoPro: Oh, Nick, you want the Right. You want us to do that? Ticket. Yeah. Eric, when when we launched when we launched Max of, you know, back ’20, I think, nineteen ish, Obviously, we have the bulk of the share, and the bulk meaning 90% arguably of that market.

And, you know, we didn’t refresh it. We’re late in refreshing. And in that time period, we’ve had competition, actually come into that market. And, Max eroded, you know, over over time. We’ve as you know, we launched it a little bit.

I think we even took 10% share back in the North American market by relaunching it. So it’s good. But the the max two refresh is is an important milestone, you know, for the company to get us back into the market. And we’ve seen that market grow, from, you know, a few 100,000 units a year to, you know, a million and a half, 2,000,000 units now estimated. So there’s definitely a a large opportunity for the company to participate in a a very fast growing market, with with the refresh of the product.

Eric Woodring, Analyst, Morgan Stanley: Yes. I would also add Eric,

Nicholas Woodman, Founder and CEO, GoPro: I would just add to recount what we mentioned in our prepared remarks is that there are other growth areas as well that we’re going to be targeting that we’re very excited about, markets we don’t participate in today. One of them is the more premium low light camera category, which is estimated now to be more than 2,000,000 units. And GoPro’s brand and technology is primed for us to participate in that market in a meaningful way, that’s another very exciting growth opportunity that we’re looking forward to in the nearer term.

Eric Woodring, Analyst, Morgan Stanley: Awesome. Thank you guys for all that color. Good luck.

Nicholas Woodman, Founder and CEO, GoPro: Thank you. Thanks very much.

Cameron, Moderator: That was our last question. I would now like to pass the conference back over to management for any closing remarks.

Nicholas Woodman, Founder and CEO, GoPro: Thank you, operator, and thank you, everyone, for joining today’s call. To summarize, we’re excited for the 2025 and into 2026 as we intend to bolster our position in existing markets and enter new markets with the launch of new products, which we believe will combine to enable GoPro to resume revenue and profit growth beginning in 2025. We look forward to addressing investors during our fireside chat at the Oppenheimer Investor Conference tomorrow at 02:05 p. M. Eastern Time, which will be webcast and available on our Investor Relations website.

Thank you very much, everyone. This is Team GoPro signing off.

Cameron, Moderator: That concludes today’s call. Thank you for your participation, and enjoy the rest of your day.

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