GoPro's aggressive cost cutting efforts, disciplined expense and inventory management are starting to bear fruits. While the gross margin expanded by 5.5 percentage points to 34.9 percent, the American brand of action cameras managed to narrow its net loss in the second quarter to $11.3 million, down from $37.3 million for the same quarter of 2018.
Revenues increased by 3 percent to $292.5 million. Excluding the discontinued drone business, which GoPro exited in 2018, sales were up by 9 percent. The number of units shipped rose by 1 percent to 1.1 million.
The company raised its full-year guidance for the second time this year, projecting revenue growth of 9 to 12 percent, up from its prior guidance of 7 to 10 percent growth. Earnings for the year are expected to be around breakeven.
The company said it significantly raised its awareness online and across social media during the latest quarter. Visits to the Gopro.com website grew by 22 percent, while the brand registered a record 115 million organic views on the YouTube channel.
As compared to the year-ago quarter, the number of active paying subscribers was up by 50 percent to 252,000 and the number of social media followers was around one million higher with a total of around 41 million people, watching the contents mostly on YouTube and Instagram.
In Europe, GoPro held 83 and 82 percent market share in units and dollars, respectively. Demand for cameras at price points of $300 and above increased more than 90 percent year-over-year, demonstrating customers' preferences for higher-performance products on the continent, which the management believes can help the company expand margins over time.
In the Asia-Pacific region, the sell-through of GoPro cameras grew in aggregate by 11 percent on a dollar basis, also according to GfK.
In the U.S., GoPro captured a share of 94 percent of the action camera category in dollars. The Hero7 Black was the top-selling camera with digital imaging by unit volume, according to the NPD Group.
Moving forward, GoPro said it is ramping up production of cameras for the U.S. market in Guadalajara, Mexico to avoid the effect of new tariffs on imports from China. Moving into the supply chain in the third quarter, the Mexican-made cameras will account for most of U.S. bound cameras in the second half of the year.