GoPro, Inc, (NASDAQ: GPRO) stock rallied over 15.4% on September 7th, 2017 (As of 11:37AM EDT; Source: Google finance) post the group’s update of achieving the high end of their revenue and gross margin forecasts for the third quarter of 2017. The group’s revenue and gross margin would be in the high end of their forecasted range of $290-$310 million and 36-38 percent respectively.
Management’s comment of solid Consumer demand for GoPro products, boosted the stock sentiment. The group continues to control their channel inventories and launching HERO6 and 5.2K spherical camera.
GoPro also delivered a decent second quarter of 2017 performance, with revenue rising 34% yoy to $297 million. They also controlled their Inventory by 39% during the second quarter, positioning them well for their upcoming product releases HERO5 Black, and GoPro’s drone, Karma, continued to perform well during the quarter. GoPro’s gross margin reached 36%, driven by better margins from their HERO5 Black and HERO5 products and expects the same throughout 2017.
The group launched QuikStories, a new GoPro App feature which automatically copies footage from the consumer’s GoPro to their phone, and the GoPro App then creates a ready-to-share video. The group is see a major opportunity to serve as an untethered lens for the smartphone, enabling users capture more immersive and engaging stories.
Sharing from the group’s GoPro App enhanced 30% on a yoy basis while Quick installs and monthly active users surged 84% and 112% on a year-over-year. The group’s marketing efforts started paying off, who witnessed over 13% yoy sell-through growth in the $300-and-above price point. Their two-week promotion on HERO5 Black in June led to a 66% rise in average weekly unit sales.
The group’s market in China is fastest growing and as per GfK, GoPro witnessed a rise of unit sell-through by 57%. Their second largest user base for the Quik App is in China, which is a trend that shows strong consumer engagement in the major China market. Europe’s revenue surged 32% on a yoy basis during the second quarter and rose 18% on a quarter-over-quarter basis.