Industry Overview - The Zacks Audio Video Production industry includes manufacturers of televisions, speakers, video players, camcorders, gaming consoles, drones, and high-end cameras, providing advanced audio, imaging, and voice technologies for entertainment and communication [3] - The industry is currently facing macroeconomic headwinds, including trade tensions, tariffs, and inflationary pressures, which are likely to suppress consumer spending [4][8] Market Trends - Macroeconomic uncertainty is expected to negatively impact consumer demand, particularly for discretionary purchases, while supply chain disruptions and commodity price fluctuations pose additional challenges [4][5] - Intense competition from low-priced imports, especially from China, Vietnam, and Mexico, is leading to price wars and margin contraction for U.S.-based manufacturers [5] - Technological advancements, such as the shift to digital technology and wireless transmission, are enhancing productivity and catering to the demand for high-resolution video [6] - The demand for premium entertainment is increasing, driven by record labels, TV producers, and advertisers, which is likely to support profitable growth in the industry [7] Industry Performance - The Zacks Audio Video Production industry has outperformed the broader Zacks Consumer Discretionary sector and the S&P 500 over the past year, with a growth of 37.2% compared to the S&P 500's 12.3% [12] - The industry's current Zacks Industry Rank is 201, placing it in the bottom 18% of over 246 Zacks industries, indicating bleak near-term prospects [8][9] Company Highlights - **Sonos, Inc. (SONO)**: The company is experiencing growth from robust home theater sales and has proactively reduced its exposure to China by moving production to Malaysia and Vietnam. Sonos expects revenues of $310-$340 million for the fiscal third quarter, reflecting a sequential increase but a year-over-year decline [19][20][21] - **GoPro, Inc. (GPRO)**: GoPro is focusing on expanding subscription revenues and product innovation, including the launch of new camera models. However, it anticipates lower unit sales and revenue growth in 2025 due to macroeconomic challenges [23][25][27] - **LiveOne, Inc. (LVO)**: LiveOne is expanding its B2B partnerships and has secured significant agreements, including a partnership with Amazon valued at over $16.5 million. The company is preparing for a major collaboration expected to significantly increase its subscriber base [30][31]

Core Insights - GoPro has launched a new special edition of its HERO13 Black camera, the HERO13 Black Ultra Wide Edition, aimed at enhancing first-person video capture with a significantly expanded field of view [1] Product Features - The HERO13 Black Ultra Wide Edition is priced at $479.99 and features an Ultra Wide Lens Mod that provides a 177-degree field of view, expanding width by 36% and height by 48% compared to the standard lens [2] - The Ultra Wide Lens Mod offers features such as unbreakable HyperSmooth stabilization for video modes up to 4K60, Horizon Lock for 360-degree rotation stability, and a scratch-resistant, hydrophobic lens coating [3] - The Ultra Wide Lens Mod is part of GoPro's HB-Series Lens lineup, which includes other specialty lenses like the Anamorphic Lens Mod, Macro Lens Mod, and a 4-pack ND Filter Set [4] Financial Performance - In the first quarter of 2025, GoPro reported a non-GAAP loss per share of 12 cents, which is an improvement from a loss of $2.11 per share in the same quarter last year, and better than the Zacks Consensus Estimate of a loss of 13 cents [6] - The company generated revenues of $134.3 million, a decrease of 13.6% year over year, attributed to lower accessory sales and increased price promotions, although this was partially offset by growth in subscription and service revenues [6][7] Strategic Focus - GoPro's first-quarter results indicate a strategic focus on operational efficiency and long-term growth, with a reduction in operating expenses year over year and an increase in subscription ARPU, reflecting improved revenue quality [7] - The company is diversifying its supply chain to better adapt to changing market conditions [7] Market Position - GoPro currently holds a Zacks Rank 2 (Buy), but its shares have declined by 49.2% over the past six months, contrasting with a 31.9% growth in the Audio Video Production industry [8]

Financial Data and Key Metrics Changes - First quarter revenue was $134 million, at the high end of guidance of $125 million, driven by stronger sell-through [13] - Non-GAAP operating expenses decreased by 26% year over year to $62 million from $83 million [14][18] - GAAP and non-GAAP loss per share were $0.30 and $0.12 respectively, with adjusted EBITDA loss reduced by nearly 50% year over year to negative $16 million [16][19] - Inventory at the end of the quarter was $96 million, a 27% decrease year over year [16] Business Line Data and Key Metrics Changes - Revenue from the retail channel was $94 million, accounting for 70% of Q1 2025 revenue, up from 68% in Q1 2024 [14] - Revenue from the GoPro.com channel, including subscription and service revenue, was $40 million, representing 30% of Q1 2025 revenue, down from 32% in Q1 2024 [14] - Subscription and service revenue grew 4% year over year to $27 million, primarily due to a 5% increase in ARPU [15] Market Data and Key Metrics Changes - Sell-through was approximately 440,000 units, down from 530,000 units in the prior year period, primarily due to decreases in Asia Pacific driven by macroeconomic issues and competition [17] - In the United States, sell-through was down 10% year over year, while sell-in was up 7% year over year [28] Company Strategy and Development Direction - The company plans to continue making strategic investments in product innovation to return to growth and diversify its supply chain, including exploring domestic production [6][10] - GoPro is focused on launching new products while preserving cash to repay debt and drive growth in 2025 and 2026 [24][23] - The company aims to introduce the Max 2 360 camera in 2025 and expects to end 2025 with 2.4 million subscribers [22][23] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating model is becoming leaner and more efficient, positively impacting financial results [11] - The company expects revenue for Q2 2025 to be $145 million, down 22% year over year, with unit sell-through expected to decrease by 20% [21] - Management highlighted that the macro environment, competition, and delays in new product launches are expected to impact units and revenue in 2025 [22] Other Important Information - The company reported a strong aggregate retention rate for subscriptions at 70%, up from 69% both sequentially and year over year [8] - GoPro is actively managing its balance sheet and expects to reduce inventory sequentially by $20 million [20] Q&A Session Summary Question: Can you help us understand the sources of stronger sell-through in the quarter? - Management indicated that there was no pull-forward demand; sales were linear throughout the quarter [27] Question: What happened with the sell-through in the U.S. and Asia? - Management noted that Asia was down 54% due to macroeconomic issues and competition, particularly in China, Japan, and South Korea [30] Question: Can you elaborate on the tariff situation? - Management confirmed that the tariff impact on cameras entering the U.S. is zero due to diversified production outside of China [35] Question: What are the dynamics in Asia currently? - Management highlighted that competition and macroeconomic issues are affecting sales in Asia, with a nationalistic trend to buy local impacting performance [39]

Financial Data and Key Metrics Changes - First quarter revenue was $134 million, at the high end of guidance of $125 million, driven by stronger sell-through [12] - Non-GAAP operating expenses decreased by 26% year over year to $62 million from $83 million [13][16] - Reported gross margin was 32.3%, with an adjusted gross margin of 35.5% excluding a one-time sale [15][16] - Non-GAAP loss per share was $0.12, while GAAP loss per share was $0.30 [14] - Adjusted EBITDA loss was reduced by nearly 50% year over year to negative $16 million [14] Business Line Data and Key Metrics Changes - Revenue from the retail channel was $94 million, accounting for 70% of Q1 2025 revenue, up from 68% in Q1 2024 [13] - Revenue from GoPro's website, including subscription and service revenue, was $40 million, representing 30% of Q1 2025 revenue, down from 32% in Q1 2024 [13] - Subscription and service revenue grew 4% year over year to $27 million, with an average revenue per user (ARPU) growth of 5% [14] Market Data and Key Metrics Changes - Sell-through was approximately 440,000 units, down from 530,000 units in the prior year period, primarily due to macroeconomic issues and competition in Asia Pacific [15] - In Asia, revenue was down 54%, significantly impacted by competition and macroeconomic factors in China, Japan, and South Korea [29][38] - The U.S. sell-through was down 10% year over year, while sell-in was up 7% year over year [27] Company Strategy and Development Direction - The company aims to continue strategic investments in product innovation to return to growth and diversify its supply chain, including exploring domestic production [6][8] - GoPro plans to launch tech-enabled motorcycle helmets in partnership with AGV, targeting a significant market opportunity [10] - The company is focused on launching new products while preserving cash to repay debt and drive growth and profitability [23] Management's Comments on Operating Environment and Future Outlook - Management expects revenue and unit sales in 2025 to be lower than in 2024 due to an uncertain macro environment and competition [20] - The company anticipates a return to camera unit growth in 2026, alongside subscriber and revenue growth [8] - Management highlighted the importance of protecting intellectual property and is prepared to litigate if necessary [8] Other Important Information - The company ended Q1 2025 with $70 million in cash and marketable securities, including a $25 million draw on its asset-based loan [16] - Inventory decreased by 27% year over year to $96 million, marking the first sequential decline in inventory since 2018 [14] Q&A Session Summary Question: Sources of stronger sell-through in the quarter - Management indicated that there was no pull-forward demand; sales were linear throughout the quarter [26] Question: Sell-through dynamics in the U.S. and Asia - Management noted that Asia's decline was primarily due to macroeconomic issues and competition, particularly in China, Japan, and South Korea [29][38] Question: Tariff situation and inventory sourcing - Management confirmed that the tariff impact on cameras entering the U.S. is zero due to diversified production outside of China [34] Question: Dynamics in Asia and competition - Management highlighted that nationalistic trends and increased competition in China have impacted sales, while the U.S. market showed improvement [38] Question: Plans for stock price changes - Management expressed confidence that continued performance improvements would positively impact stock price without the need for a reverse stock split [41]

Revenue of $134 million, at High-end of GuidanceSubscription and Service Revenue Up 4% Year-over-Year to $27 million SAN MATEO, Calif., May 12, 2025 /PRNewswire/ -- GoPro, Inc. (NASDAQ: GPRO) announced financial results for its first quarter ended March 31, 2025, and posted management commentary, including forward-looking guidance, in the investor relations section of its website at https://investor.gopro.com."Our Q1 results reflect our commitment to reducing operating expenses, down 26% year-over-year, imp ...