After layoffs, GoPro’s business appears to be back on track
GoPro announced its second quarter earnings this week, and while it’s still losing money, things are finally trending in a slightly better direction for the camera company. GoPro brought in $297 million in revenue this past quarter, a 34 percent increase over the second quarter of 2016 - which was one of the company’s worst ever. It’s still not back to the highs it reached in 2014 and early 2015, but GoPro trimmed its losses to about $30 million, a third of what the company lost in this same quarter last year.
How is GoPro turning things around? There are two likely reasons. One is that the company cleaved a significant amount of its workforce over the last year and a half, with the most recent round of layoffs happening in March of this year. GoPro cut almost 300 jobs, but more importantly the company decided to completely axe its entertainment division. Shifting the overall focus of the company back to products has helped trim some of the fat and rein in expenses by about $70 million compared to Q2 of 2016.
That brings us to the second reason, the products themselves - specifically the Hero 5 Black. After getting off to a slow start in the fall of 2016 because of production issues, the Hero 5 Black has been selling really well for GoPro. Citing data from NPD, GoPro says the Hero 5 Black was the best-selling digital camera in the US for three straight quarters now, and the Hero 5 Session has been basically right behind it.
Meanwhile GoPro’s other big product, the Karma drone, has rebounded from its rocky start - which featured an almost immediate recall - to become the number two best-selling drone in the US last quarter. GoPro’s decision to kill off a significant chunk of its camera lineup last year also seems to have helped turn things around.
With the Hero 6 slated for release later this fall, new Karma drones in the works, and the company’s pro camera solutions humming along, GoPro might just be able to make it back to profitability by the end of this year. Considering it lost almost $400 million in 2016, that’s not a bad place to be.