GoPro, Inc
GPRO
reported healthy fourth-quarter 2021 results, with the bottom and the top line surpassing their respective Zacks Consensus Estimate.
Quarterly non-GAAP earnings came in at 41 cents per share compared with 39 cents per share reported in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 17.1%.
GoPro generated revenues of $391 million, up 9% from $358 million in the year-ago quarter. The surge in revenues was mainly driven by robust sales of premium products along with an accretive subscriber base. The top line surpassed the consensus estimate by 2.1%.
Strong retail partnerships and expanding direct-to-consumer business acted as tailwinds. Also, effective supply chain and channel inventory management as well as successful new product launches acted as major tailwinds.
GoPro, Inc. Price, Consensus and EPS Surprise
GoPro, Inc. price-consensus-eps-surprise-chart
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GoPro, Inc. Quote
Quarter in details
GoPro shipped 1.033 million camera units during the reported quarter, down 6.8% year over year, witnessing a sell-through of 1 million units. Its channel inventory increased slightly in the fourth quarter, exiting the year with 600,000 camera units in the channel. Driven by higher subscription revenues, GoPro recorded 1.6 million subscribers, marking 107% year-over-year growth, at the close of the reported quarter.
The company’s Quik App tapped 221,000 subscribers, up 32% quarter over quarter.
Region-wise, revenues from the Americas came in at $193.4 million (49.5% of total revenues), up 4% from the year-ago quarter’s levels. Revenues from Europe, the Middle East and Africa were $108.9 million (27.8%), up 22% year over year. The Asia Pacific generated revenues of $88.8 million (22.7%), up 8% year over year.
On the basis of channels, revenues from GoPro.com were $127.8 million (32.7% of total revenues), up 9.8% year over year. The uptick was driven by higher direct-to-consumer and subscription revenues via GoPro.com. In the GoPro.com channel, hardware revenues totaled $110.7 million compared with $108.3 million in the prior year. Subscription revenues came in at $17.1 million compared with $8.1 million in the year-ago quarter.
Encouraged by a healthy momentum, the company aims to bolster margins with continued investments to enhance shopper experience on the back of robust website engagement and conversion.
Revenues from the Retail channel came in at $263.3 million (67.3%), up 9.1% from the year-ago quarter’s levels. With a majority of the stores opening post the lockdown, driven by higher vaccination rates, people are inclined to shop more physically. This drove the retail channel’s performance in the fourth quarter.
The company had $86.4 million in inventory compared with $97.9 million in the year-ago quarter. The inventory reductions were mainly driven by an upward sell-through trend across all regions.
Other Details
Gross profit was $161.1 million, up 18.4% year over year. Total operating expenses were $102.5 million, up 26.9%, due to higher research and development, general and administrative and sales and marketing expenses. Operating income came in at $58.6 million compared with $55.4 million in the prior-year quarter.
Non-GAAP gross margin expanded 300 basis points to 41.3%, while adjusted EBITDA was $72 million up 5.6% from the year-ago period.
Cameras with suggested retail prices at $300 and above contributed 100% to revenues in the reported quarter, up from 91% in fourth-quarter 2020. The upside reflects the growing demand for GoPro’s premium products.
Cash Flow & Liquidity
For 2021, GoPro generated $229.2 million of net cash from operating activities against $93.8 million reported in the year-ago period. As of Dec 31, 2021, the company had $401.1 million in cash and cash equivalents with $111.3 million of long-term debt.
Q1 Guidance
GoPro provided guidance for first-quarter 2022. For the first quarter, revenues are estimated to be $215 million +/- $5 million. Gross margins are expected to be 41.5% +/- 50 basis points.
Zacks Rank & Other Stocks to Consider
GoPro currently has a Zacks Rank #2 (Buy).
Other stocks worth consideration from the broader technology sector include
Broadcom
AVGO
,
Apple
AAPL
and
Cadence Design Systems
CDNS
. While Apple sports a Zacks Rank #1 (Strong Buy), Broadcom and Cadence carry a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $33.03 per share. The long-term earnings growth rate of the company is pegged at 14.5%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 1.41%. Shares of Broadcom have increased 28.3% in the past year.
The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings is pegged at $6.15 per share. The long-term earnings growth rate of the company is pegged at 12.5%.
Apple’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 20.3%. Shares of AAPL have rallied 27% in the past year.
The Zacks Consensus Estimate for Cadence 2021 earnings is pegged at $3.25 per share. The long-term earnings growth rate of the company is pegged at 18.2%.
Cadence’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11%. Shares of CDNS have returned 7.8% in the past year.
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