GoPro, Inc. Q4 FY2024 earnings call

• US tariff announcements on inbound goods not expected to materially impact US consumer pricing or gross margin due to proactive supply chain management.
• Q4 results landed largely in line or slightly better than guidance; action taken to right-size operating expenses.
• Subscription is the most profitable product; ARPU improved 8% y/y, Q4 aggregate retention 69%, annual retention rates strong (e.g., nearly 90% for fourth-year renewals).
• Introduced entry-level HERO camera, refreshed Max 360 camera, and made progress on Max 2 360 camera; completed validation of next-generation SOC GP3.
• Plan to reduce operating expenses nearly 30% from 2024, hone roadmap for faster time to market and efficiency, and expand supply chain outside China to improve gross margin.

In the fourth quarter of 2024, subscription and service revenue grew 9% year over year, with ARPU improving 8% year over year. Aggregate subscription retention in Q4 was 69%. Retail revenue was 75% of total revenue at $601 million, down 15% year over year. GoPro product revenue was 12% of total revenue at $94 million, down 54% year over year. For the full year 2024, subscription and service revenue grew 10% year over year to $107 million, retail revenue was $601 million (75% of total), and GoPro product revenue was $94 million (12% of total).

• 2025: Unit and revenue expected to be lower than 2024 due to macroeconomic headwinds, competition, and delay of Max 2 360 camera. Q1 2025 revenue expected at $125 million ±$10M, down 20% y/y; ASP ~$365, unit sales ~430k; OpEx ~$63M ±$2M; gross margin 35% midpoint. Full year 2025: OpEx range $250M-$260M (down ~30% y/y), subscription revenue ~$105M, cash ~$50M at year end.
• Focus on reducing inventory below $100M, managing balance sheet to preserve cash and operate efficiently.

• Macro economic headwinds.
• Competition.
• Strong US dollar impacting FX.
• Delay of Max 2 360 camera.

Q: Erik Woodring asked about subscriber declines in 2025 despite bullish renewal rates.

A: Brian McGee explained that units will be down, attach rate is ~42% (expected 38%-40%), aggregate retention improvement boosts ARPU, leading to ~$105M revenue and 2.4 million subscribers (down ~120k).

Q: Martin Yang asked about Max reintroduction, GP3, and subscription trends.

A: Nicholas Woodman said Max 2 reintroduction is margin accretive; on GP3, roadmap is opaque due to competition; Brian McGee noted subscription is tied to hardware but new software experiences are being developed to boost engagement and conversion rates, with focus on expanding functionality via software to drive subscription growth.