GoPro Inc ((GPRO)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for GoPro Inc. painted a picture of cautious optimism. While the company has made significant strides in revenue growth, gross margin improvements, and operating expense reductions, it faces ongoing challenges such as debt repayment, increased tariffs, and heightened market competition. The sentiment during the call was generally positive, with a focus on strategic initiatives and new product launches that indicate forward momentum.
Revenue and Gross Margin Improvement
GoPro reported a notable increase in revenue for Q2 2025, reaching $153 million, which exceeded the midpoint of their guidance by 6%. This growth was accompanied by an improvement in gross margin, which rose to 36% from 30.7% in the same quarter of the previous year. These results highlight the company’s ability to enhance profitability despite challenging market conditions.
Operating Expense Reduction
The company successfully reduced its operating expenses by 32% year-over-year, bringing them down from $93 million to $63 million. This reduction was primarily achieved through cuts in advertising, marketing, and employee-related costs, demonstrating GoPro’s commitment to maintaining financial discipline.
Subscription Growth
GoPro’s subscription attach rate saw a significant improvement, increasing by 24% to reach 56% compared to 45% in Q2 2024. The company also reported a strong aggregate retention rate of over 67% for the past seven quarters, underscoring the growing importance of its subscription model.
New Product Launches
In a bid to capture more market share, GoPro launched the HERO13 Black Ultra Wide Edition and introduced new 360 editing tools in the GoPro App. These innovations are part of the company’s strategy to stay competitive and meet evolving consumer demands.
AI Data Licensing Initiative
GoPro announced an innovative AI data licensing program that allows subscribers to monetize their video content by licensing it for AI model training. Subscribers can earn 50% of the revenue generated, providing a new revenue stream for both the company and its users.
Strategic Board Refresh
The company strengthened its leadership by appointing three new executives to the Board. These individuals bring expertise in strategic and financial governance, omnichannel marketing, and global manufacturing, which are crucial for GoPro’s future growth.
Convertible Debt and Tariff Challenges
GoPro raised $50 million in debt financing to address the repayment of $94 million in convertible debt due in November. Additionally, increased tariff costs have impacted the company’s gross margin, posing a challenge that management is actively working to mitigate.
Decline in Sell-Through Units
The company experienced a decline in sell-through units, with approximately 500,000 units sold compared to 600,000 units in the prior year period. However, channel inventory decreased by 60,000 units, indicating efforts to manage supply chain efficiency.
Market Competition
GoPro’s market share in the 360 camera segment has been eroded over time due to delayed product refreshes and increased competition. This highlights the need for the company to innovate and refresh its product line to maintain its competitive edge.
Forward-Looking Guidance
Looking ahead, GoPro anticipates revenue of approximately $390 million for the second half of 2025, with an adjusted EBITDA of $20 million, marking a significant improvement from the previous year’s loss. The company remains focused on launching new products, reducing operating expenses, and diversifying its supply chain to drive growth and profitability into 2026.
In conclusion, GoPro’s earnings call conveyed a generally positive outlook, with substantial improvements in key financial metrics and strategic initiatives aimed at sustaining growth. However, challenges such as debt repayment, tariffs, and competition remain hurdles that the company must navigate carefully. Investors will be keenly watching how these factors play out in the coming quarters.