GoPro Turning to Smartphone App, DTC Business to Pump Up 2021 Sales

GoPro is looking to subscriptions from an upcoming app revamp and direct-to-consumer sales to pump up revenue battered in 2020 by COVID-19 as consumers channeled discretionary income into home-based activities. Q4 revenue plunged 32% year on year to $358 million; annual revenue dropped 25% to $892 million, said the company Thursday. It doubled its business on GoPro.com, said CEO Nicholas Woodman. GoPro.com brought in $116 million in the quarter, 33% of revenue, while retail was 67% of sales at $241 million. The company is getting “solid traction” in its e-commerce business in Q1 that’s helping to drive up average selling prices, said Chief Financial Officer Brian McGee. It hopes to expand its subscription base through an app for smartphone users to help them get the most out of their photos and videos, said Woodman. The company will add editing tools “at a steady clip” along with content management features, he said. Subscriptions grew 52% sequentially and 145% year on year. The company is “well-positioned” for a bounce-back post-COVID-19, when “somebody finally goes outside and travels more and is more active,” said Woodman. GoPro found “early success after recently shifting its business model toward a direct-to-consumer strategy,” Wedbush analyst Michael Pachter wrote investors Friday. The direct-to-consumer and subscription strategies give the company a “significantly lower barrier to profitability,” he said: “GoPro is expanding its core user base even as the pandemic has kept many of its traditional core users indoors.” The stock fell 19.1% Friday, closing at $8.38.