Here are the key takeaways from the GoPro Q2 earnings conference call.
Raising Fiscal Revenue Outlook
GoPro raised its full-year revenue outlook to $1.25-1.28 billion, translating to 9-12% growth range compared to prior guidance range of 7-10%. Non-GAAP earnings is projected to come in at 35-45 cents per share.
The raise in outlook is primarily attributed to increased sales of higher-end cameras and new product launches planned during the holiday season. For the full-year period, analysts are anticipating sales of $1.26 billion and adjusted earnings of 38 cents per share.
Looking Beyond Hardware
The company is taking concerted steps to offer subscription-based services to its users which it believes would yield high margins. The $5/month Plus subscription service saw 15% jump in paid subscribers. GoPro has extended the subscription service now to 30 countries.
On the software front, the merger of Quik and GoPro app would bring both users on one platform improving the user experience for the app users. Since most of the users of the app are non-GoPro users, the company plans to improve engagement with these users which would result in improved monetization from this cohort who would buy its products/services.
Moving Production to Mexico
In order to protect itself from the vagaries of the ongoing trade war between the US and China, GoPro is moving camera products production to Guadalajara, Mexico. The Mexican facility is going to produce most of the cameras for the US market for the latter half of 2019. This shift is expected to bring in cost savings and improvement in supply chain.