GoPro’s Q3 earning report was filed yesterday and shows that the company has underperformed even it’s most pessimistic predictions. With massive losses hitting the company and an uncertain holiday season approaching, GoPro is yet again looking shaky.
The bad news was signaled in advance as GoPro halted trading of its stocks right before they released their results. That precautionary measure was understandable as the company’s revenue for the quarter was US$240. 56 million, about US$75 million (or 23%) lower than had been expected.
The report attempted to put a brave face on things, listing a score of achievements and new releases. An accompanying statement from founder and CEO Nick Woodman said “These are the best products we've ever made and consumer demand is strong. GoPro is now a seamless storytelling experience and we're very happy with customer reception so far,"
Investors weren’t comforted by morale boosting messages though and with shares dropping by a staggering 22%, GoPro’s value as a company decreased by around US$250 million in the wake of the report. The fall took the company’s worth all the way down to US$972 million from a starting position that trading day of US$1. 23 billion. Overall, that’s an abysmal loss of US$0. 60 per share.
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If Woodman is fearful for the future of his company, he isn’t showing it. He has set out a US$625 million game plan for the fourth quarter that aims to bring the company’s total revenue for 2016 to somewhere around $1. 3 billion. He states in the report, "Looking forward to 2017, we expect to return to profitability, driven by the strength of our new products, double digit revenue growth and annual operating expenses of approximately US$650 million. "
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There is some room for optimism. Q3 ended in September and therefore the figures won’t include sales of their new product range. As we’ve mentioned before, for the first half of 2016 GoPro’s stock price was trending downward. That was until the official announcement of the long-awaited Karma drone. The reveal of the upcoming modular UAV was cited as a revelation, with many tech/photography sites (including ours) lauding praise upon the house that Woodman built. Coupled with the release of the new Hero5 action camera, there seemed to be a resurrection of GoPro in sight.
These high sailing hopes were sadly dashed on the rocks within days as DJI unveiled its own offering. The extremely compact Mavic stole all of GoPro’s thunder, with an evenly-priced product that quickly quashed Karma’s claim as the most portable drone on the market.
Since then, head to head reviews of the two drones haven’t been kind to GoPro. Though many praise Karma’s removable gimbal for providing versatility, its size in comparison to the Mavic has been hurting its appeal. What’s more, the overall quality of Karma has been disputed by mixed reviews. While an article from Wired gave it a glowing recommendation against DJI’s drone, other incredibly negative opinions, (such as a heavily publicised critique by YouTuber iPhonedo) have damaged Karma’s reputation as a serious contender.
The seriousness of this harm is clearly visible with a quick Google trends analysis. Comparing Karma to DJI’s current releases, one can see the steep drop-off in public interest in the GoPro drone. At the moment it only matches up in search levels with DJI’s flagship Phantom 4, a drone that has been available for the better part of the year, while interest in the Mavic is clearly still dominating the public consciousness.
/Google Trends
The real moment of destiny will arrive in January when we discover how those all-important holiday sales panned out, and if there’s a chance for GoPro to return to profitability. As it stands right now, the odds don’t look good.
. digitalrev.com2016-11-5 03:00