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Action camera company GoPro (NASDAQ:GPRO) reported Q1 CY2025 results topping the market’s revenue expectations , but sales fell by 13.6% year on year to $134.3 million. Its non-GAAP loss of $0.12 per share was in line with analysts’ consensus estimates.
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GoPro (GPRO) Q1 CY2025 Highlights:
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Revenue: $134.3 million vs analyst estimates of $125.2 million (13.6% year-on-year decline, 7.3% beat)
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Adjusted EPS: -$0.12 vs analyst estimates of -$0.12 (in line)
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Adjusted EBITDA: -$15.71 million vs analyst estimates of -$16.17 million (-11.7% margin, 2.9% beat)
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Operating Margin: -33.7%, down from -26.6% in the same quarter last year
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Free Cash Flow was -$58.49 million compared to -$99.37 million in the same quarter last year
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Market Capitalization: $96.92 million
Company Overview
Known for sponsoring extreme athletes, GoPro (NASDAQ:GPRO) is a camera company known for its POV videos and editing software.
Sales Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, GoPro’s demand was weak and its revenue declined by 6.1% per year. This was below our standards and is a sign of poor business quality.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. GoPro’s recent performance shows its demand remained suppressed as its revenue has declined by 13.9% annually over the last two years.
This quarter, GoPro’s revenue fell by 13.6% year on year to $134.3 million but beat Wall Street’s estimates by 7.3%.
Looking ahead, sell-side analysts expect revenue to decline by 7.4% over the next 12 months. While this projection is better than its two-year trend, it's tough to feel optimistic about a company facing demand difficulties.
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Operating Margin
GoPro’s operating margin has shrunk over the last 12 months and averaged negative 12.2% over the last two years. Unprofitable consumer discretionary companies with falling margins deserve extra scrutiny because they’re spending loads of money to stay relevant, an unsustainable practice.