Action camera company GoPro (NASDAQ: GPRO) posted $152.6 million of revenue in Q2 CY2025, down 18% year on year. Its non-GAAP loss of $0.08 per share was 33.3% below analysts’ consensus estimates.

Is now the time to buy GPRO? Find out in our full research report (it’s free).

StockStory’s Take

GoPro’s second quarter saw continued revenue contraction and a wider-than-expected adjusted loss, with management citing headwinds from higher tariffs, increased competition, and cautious consumer spending on discretionary electronics. CEO Nicholas Woodman noted that efficiency efforts, including a 32% reduction in operating expenses, helped deliver the company’s highest gross margin since 2022 despite these challenges. The quarter also featured new hardware and software launches, and a focus on cost control to stabilize profitability.

Looking ahead, GoPro’s strategy centers on expanding into new product segments, including the launch of the Max 2 360 camera and potential entry into the low-light action camera category. Management is optimistic that these efforts, combined with continued cost reductions and supply chain diversification, will restore top-line growth and profitability by the end of the year. Woodman emphasized, “We believe our upcoming launches position us to hit the mark with both casual and premium consumers.”

Key Insights from Management’s Remarks

GoPro’s management pointed to aggressive cost reductions, product refreshes, and supply chain adjustments as central to navigating the quarter’s challenges and laying groundwork for a return to growth.

• Operating expense controls: The company achieved a 32% year-over-year reduction in operating expenses through lower advertising, headcount cuts, and completion of major engineering projects, which helped cushion the impact of falling revenue.
• Tariff impacts and mitigation: Higher tariffs on imports from China significantly pressured gross margins, but GoPro offset roughly half of the added cost via modest global price increases and initial steps to diversify its supply chain outside China.
• Subscription attach and retention: The attach rate for GoPro’s subscription service rose to 56%, up from 45% a year ago, reflecting improved bundling with hardware and continued software ecosystem enhancements. Retention rates have remained above 67% for seven consecutive quarters, underpinning recurring revenue stability.
• New revenue model with AI data licensing: GoPro introduced a program enabling U.S. subscribers to license their cloud-based video content for AI model training, opening a potential new revenue stream for both GoPro and users.
• Board refresh and capital raise: The addition of three seasoned executives to the Board and a $50 million debt financing round have bolstered governance and provided liquidity ahead of a major debt repayment in November.

Drivers of Future Performance

GoPro’s outlook is underpinned by new product rollouts, ongoing cost discipline, and efforts to offset tariff headwinds, with management targeting improved profitability and renewed growth.

• Upcoming product launches: The release of the Max 2 360 camera and entry into the low-light segment are expected to expand GoPro’s addressable market and restore unit and revenue growth, particularly among premium and professional users.
• Supply chain and tariff strategy: Management aims to further diversify manufacturing locations and implement modest price adjustments globally to counteract increased tariffs, while exploring U.S. production for select products. The effectiveness of these actions will influence gross margin and cash flow.
• AI-driven monetization initiatives: The new AI data licensing program could create a differentiated revenue stream by leveraging GoPro’s vast video content library, but its contribution will depend on adoption rates and demand from technology partners.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will focus on (1) the launch and market reception of the Max 2 360 camera and other new hardware, (2) execution on supply chain diversification and the associated impact on margins and inventory, and (3) initial traction for the AI data licensing initiative as a test of GoPro’s ability to diversify its revenue base. Progress on debt repayment and operational discipline will also be important to watch.

GoPro currently trades at $1.29, in line with $1.29 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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