GoPro Ace news business fiscal ces 2017
GoPro Inc. CES 2017

Thinking of buying a GoPro camera? HERO5 Black was the best-selling digital image camera on a unit basis in the U.S. and currently holding the top 2 spots in the digicam category.  

TRENDING ON ACE

On February 2, 2017 GoPro Inc. held a conference announcing the 2016 fiscal results.  The biggest take away from the event is the 2017 road map coming from Nick Woodman, CEO and Founder of GoPro.  While he strayed from guidance questions, he told Ace+ Media that GoPro is committed to drive innovation, improve experience for customers, and more importantly position the smartphone to be more central to the GoPro platform.

GoPro was profitable in fourth quarter of 2016 with income of $42 million, or $0.29 per diluted share.  The company also hit their second highest revenue quarter in company history.  Nick goes on to say that China remains a top-ten country for GoPro with fourth quarter and 2016 sell-through up 61% and 90%, respectively, year-over-year.

How is the company doing?

Despite a loss of $116 million in the fourth quarter of 2016,  the business sustained a 33% gross margin in the fourth quarter.  The losses were mainly from the full valuation allowance on U.S. deferred tax assets and nearly $37 million for restructuring costs.  GoPro is expecting to return to 40% gross margin +/- one basis point in the first quarter of 2017.

The company experienced a lose of marketing with top retailers around the world, premium placement, print, and digital as a consequence to their supply problem.  While retailers were inclined to remove GoPro from their promotions because they could not get enough inventory to warrant the spending on the HERO5 Black.  According to CJ Prober, GoPro Inc. COO, the major retail partners are happy with the sell-through rate.  Woodman added that the issue is more on timing than a demand issue.

GoPro Ace news business fiscal ces 2017
GoPro Inc.
GPRO Stock

Shares slid 10% to $9.90 in after-hours trading on February 2, 2017. In the previous fiscal year revenue rose 24% to $436.6 million, but was well below analyst estimates of $574.5 million. There was a bit of good news as adjusted earnings per share came in at $0.29, well ahead of the anticipated $0.22.  GoPro claimed that 65% of its revenue is made within the U.S.

According to Woodman, the company is becoming more focus in margin and revenue rather than volume of sales.  Sales are expected to increase due to consumers benefiting from the QUIK and Splice apps.  GoPro is focused on attracting smartphone users who are not yet owners of GoPro cameras but use their apps. Moving forward, GoPro intends to convert these users by way of a revenue generating relationship.

CJ Prober as COO

GoPro’s Board of Directors appointed CJ Prober to serve as the Chief Operating Officer.  Prober once served as the Senior Vice President of Software and Services at Electronic Arts.  Prober worked alongside Andrew Wilson, CEO of EA, taking on the leadership of Origin products, and the team to create more value and an enhanced entertainment experiences.

Already, Prober announced the opening of an office in Bucharest, Romania to better adhere to the low operating cost model.  The company is in the position to make better operating expense reductions, and the development team in Bucharest is yet another way to exercise a multi-tier management model utilizing countries as growth opportunity within a region.  Prober will specifically look at market share, growth markets vs mature markets
and mason ops as he mentioned markets like India that have yet to be explored.

This year we will resource appropriately. Be thoughtful in gauging the life-cycle of selling, and driving the biggest growth in the right places.  Ensuring that the dollars are spent against the right opportunities – CJ Prober, CoO of GoPro

Solving the KARMA drone issue

The KARMA recall period has ended as of the first week of February 2017.  Sales of the drone product has begun and consumers can now purchase the KARMA on GoPro’s site. GoPro hired an outside team of UAV experts to diagnose the problem. Composed of at least three former 3D Robotics engineers, the team, whose motivation was to prevent DJI from extending its stranglehold on the market, traveled to San Mateo in December and stayed for a few weeks to root out the problem. Eventually it was determined that a physical design flaw in the drone’s battery port prevented the battery from locking into place, causing a decoupling of the power supply sometimes during flight.

GoPro Ace news business fiscal ces 2017
GoPro Inc.
Ambassadors of GoPro

In 2017, GoPro is poised to provide a strong value proposition for consumers and ambassadors of the brand.  Growth is expected in Europe and Asia while there is still alot of success in the U.S. GoPro laid the ground work in 2016 with tie-ins to the smartphone centric/GoPro user experience intended to boost excitement in the GoPro community.  The company intends to reach out to its social networks to focus and target the core consumers who eventually want to become ambassadors of the brand.

Making some big changes

GoPro has not announced anymore operation expense reductions in 2017 – so no foreseeable layoffs.  The biggest news yet is the announcement of the HERO6.  We should expect more details within the year.   In the fourth quarter of 2016, GoPro released several accessories including Karma Grip, a handheld and wearable stabilization accessory, Remo, a voice-activated waterproof remote for HERO5 cameras, and Quik Key, a mobile microSD card reader that enables fast editing and sharing from a smartphone.

What’s New for 2017

  • Expect to hear about the HERO6 camera line this year
  • Additional accessories for the HERO5 Black, HERO5 Session, and KARMA
  • Ramping up of the GoPro PLUS subscription cloud service
  • GoPro PLUS to debut in International markets in the coming months

 

GoPro Ace news business fiscal ces 2017
GoPro Inc.