GoPro’s 2019 has been great for the company. Its first-quarter revenue is up compared to last year and that jump is because GoPro left the drone market.
So far in 2019, GoPro has generated $243 million in revenue. That is a 20 percent increase over its first quarter compared to last year. There’s no way to sugarcoat it though, GoPro is still losing a profit. GoPro reported it lost $24 million. However, that may be something to celebrate. This time last year, GoPro reported a loss of $76 million. The company has cut its losses by more than half.
GoPro has been holding its head up more these days and feeling confident. It felt so confident that it posted the results above this Thursday for its guidance to investors and said it will turn its first annual profit since 2015.
Why is GoPro seeing a boom in business?
We can attribute much of GoPro’s success to the HERO7 Black. The camera brought the company its best start ever for one of its cameras. However, the HERO7 isn’t the sole reason for GoPro’s comeback. It also seems that GoPro has finally recovered from leaving the drone business.
In January 2018, GoPro announced it was leaving the drone market completely. While there were sure many upset GoPro drone users, it seems that it was at least a smart financial move for the company. Plus, there are reports and rumors DJI is moving into the action camera market. GoPro is going to need to focus on its core product if it wants to be competitive with DJI.
GoPro did say in a letter to their shareholders: “excluding our aerial business, [quarterly] revenue would have increased 27% year-over-year.” The Karma did make GoPro some money, but the company probably felt it wasn’t worth the cost of production. In fact, the Karma was one of the major reasons GoPro has such a big loss at the start of 2018.
The company also saw a boost in its gross margin for this quarter — which is up to 33 percent from 22 percent. That can probably also be attributed to GoPro stopping sales of the Karma.
GoPro has finally recovered from leaving the drone market
This is great timing for GoPro. While it’s possible the company could once again be in direct competition with DJI on the action camera front, GoPro has also been moving into different categories of cameras. It seems, at least financially, it was good for GoPro to leave the drone market when they did.