GoPro cuts Q4 revenue outlook to $340M from $460M-$480M
GoPro reported preliminary financial results for Q4. The company expects revenue to be approximately $340M for Q4, which includes a negative impact of approximately $80M for price protection on HERO6 Black, HERO5 Black and HERO5 Session cameras, as well as the Karma drone. The consensus revenue estimate is $474.06M. GoPro expects GAAP gross margin for Q4 to be between 24%-26%. Non-GAAP gross margin is expected to be between 25%-27%. GoPro ended Q4 with cash and cash equivalents of $247M, up $50M over Q3. "As we noted in our November earnings call, at the start of the holiday quarter we saw soft demand for our HERO5 Black camera," said GoPro founder and CEO Nicholas Woodman. "Despite significant marketing support, we found consumers were reluctant to purchase HERO5 Black at the same price it launched at one year earlier. Our December 10 holiday price reduction provided a sharp increase in sell-through."Globally, HERO5 Black sell-through more than doubled in the two weeks following the December 10 price reduction, while HERO5 Session sell-through roughly tripled, the company noted. Sales of the newly introduced flagship HERO6 Black camera "performed as expected" during Q4, it added. On January 7, GoPro lowered the price of its premium model, HERO6 Black from $499 to $399 to align with its "good, better, best product strategy." Initial uptake of GoPro's newly launched spherical camera, Fusion, was better than expected during the quarter.