Action camera company GoPro (NASDAQ: GPRO) reported Q1 CY2025 results topping the market’s revenue expectations, but sales fell by 13.6% year on year to $134.3 million. Its non-GAAP loss of $0.12 per share was in line with analysts’ consensus estimates.
Is now the time to buy GoPro? Find out by accessing our full research report, it’s free.
GoPro (GPRO) Q1 CY2025 Highlights:
- Revenue: $134.3 million vs analyst estimates of $125.2 million (13.6% year-on-year decline, 7.3% beat)
- Adjusted EPS: -$0.12 vs analyst estimates of -$0.12 (in line)
- Adjusted EBITDA: -$15.71 million vs analyst estimates of -$16.17 million (-11.7% margin, 2.9% beat)
- Operating Margin: -33.7%, down from -26.6% in the same quarter last year
- Free Cash Flow was -$58.49 million compared to -$99.37 million in the same quarter last year
- Market Capitalization: $96.92 million
Company Overview
Known for sponsoring extreme athletes, GoPro (NASDAQ: GPRO) is a camera company known for its POV videos and editing software.
Sales Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, GoPro’s demand was weak and its revenue declined by 6.1% per year. This was below our standards and is a sign of poor business quality.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. GoPro’s recent performance shows its demand remained suppressed as its revenue has declined by 13.9% annually over the last two years. 
This quarter, GoPro’s revenue fell by 13.6% year on year to $134.3 million but beat Wall Street’s estimates by 7.3%.
Looking ahead, sell-side analysts expect revenue to decline by 7.4% over the next 12 months. While this projection is better than its two-year trend, it's tough to feel optimistic about a company facing demand difficulties.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
Operating Margin
GoPro’s operating margin has shrunk over the last 12 months and averaged negative 12.2% over the last two years. Unprofitable consumer discretionary companies with falling margins deserve extra scrutiny because they’re spending loads of money to stay relevant, an unsustainable practice.
In Q1, GoPro generated a negative 33.7% operating margin. The company's consistent lack of profits raise a flag.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
GoPro’s earnings losses deepened over the last five years as its EPS dropped 70.7% annually. We tend to steer our readers away from companies with falling EPS, where diminishing earnings could imply changing secular trends and preferences. Consumer Discretionary companies are particularly exposed to this, and if the tide turns unexpectedly, GoPro’s low margin of safety could leave its stock price susceptible to large downswings.
In Q1, GoPro reported EPS at negative $0.12, up from negative $2.11 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast GoPro’s full-year EPS of negative $0.45 will reach break even.
Key Takeaways from GoPro’s Q1 Results
We enjoyed seeing GoPro beat analysts’ revenue and EBITDA expectations this quarter. Overall, we think this was a decent quarter with some key metrics above expectations. The market seemed to be hoping for more, and the stock traded down 4.4% to $0.58 immediately following the results.
Is GoPro an attractive investment opportunity at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
