GoPro (GPRO -11.03%) stock is sinking in Thursday’s trading. The company’s share price was down 11% as of 1:15 p.m. ET, according to data from S&P Global Market Intelligence.
GoPro published fourth-quarter results after the market closed yesterday, reporting disappointing sales and earnings performance. The action camera specialist posted non-GAAP (adjusted) earnings per share of $0.02 on sales of $295.42 million. Meanwhile, the average analyst estimate had called for the business to post earnings of $0.03 per share on revenue of $326.13 million.
GoPro’s revenue continues to slide
GoPro’s subscription and service segment revenue grew 13% year over year to reach approximately $25 million in Q4. On the other hand, overall sales were down 8% compared to the prior-year period.
GoPro sold roughly 3 million cameras last year — up approximately 6% annually. The company also increased its number of subscription customers 12% to reach 2.5 million, and revenue from its subscription and service segment rose 18% year over year to $97 million. The segment accounted for nearly 10% of the company’s $1 billion in 2023.
GoPro has managed to build its subscription and services segment into a meaningful business pillar, but price cuts and bundling for its core camera and accessories business have meant that overall revenue has continued to decline. In Q4, the company’s average street selling price for its cameras was $330 — down 13% year over year.
What comes next for GoPro?
GoPro expects to post an adjusted loss of $0.25 per share on sales of $145 million in this year’s first quarter. Meanwhile, the average analyst estimate had expected the business to post an adjusted loss of $0.15 per share on $193.9 million in sales.
At this stage, it’s not clear whether GoPro has a path to reenergizing growth over the long term. With camera prices being pushed down, the company looks to lean more on its subscription service offerings.
If the business can make substantial progress with its turnaround strategies, the beaten-down stock could soar above current levels. But thus far, growth for the subscription business hasn’t been powering sufficient margin improvements — and sales appear to be stuck in reverse.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
