GoPro, Inc. Just Captured Another Stellar Quarter

By Markets Fool.com

Trailing only last quarter's impressive holiday period, GoPro just captured its second-highest revenue quarter in company history. And the market understandably couldn't be happier.

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After climbing 4% in Tuesday's regular session, GoPro stock jumped another 10% in Tuesday's after-hours trading after the camera maker said quarterly sales rose 54% year over year, to $363.1 million. Adjusted gross margin also climbed to 45.2%, up from 41.1% in the same year-ago period, while adjusted earnings before interest, taxes, depreciation and amortization rose 97.4%, to $56.5 million. That translated to 149.4% growth in net income, to $35.6 million, or $0.24 per diluted share.

Analysts, on average, were only expecting earnings of $0.18 per share on sales of roughly $341 million.

The highlight reel
International sales led the way this time, accounting for more than half of GoPro's total first-quarter revenue. Within that, GoPro's EMEA and APAC regions collectively rose an impressive 66% year over year, or only a slight deceleration from their 70% combined growth last quarter.

GoPro shipped 1.3 million capture devices in the first quarter, good for a 58% year-over-year increase, and its third-consecutive quarter of achieving at least 1 million unit shipments. Within that, GoPro saw strongconsumer demand for its higher-priced HERO4 Black and Silver products, which were its two best sellers on both a revenue and unit basis, and made up more than 50% of GoPro's Q1 total for both metrics.

What's more, NPD data indicates GoPro's five capture-device models accounted for each of the quarter's top-five products in the combined U.S. digital camera and camcorder category on a unit basis. GoPro also accounted for three of the top-five products on a dollar-share basis, including the No. 1 spot, and was the leader in accessory unit sales, with seven of the top 10 selling accessories.

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On the software front -- and keeping in mind GoPro is working hard to define itself as a "media" company over the longer term -- GoPro's mobile app was downloaded another 2.6 million times in Q1, bringing its cumulative total to nearly 16 million downloads. Installations of GoPro Studio also surpassed 1.7 million during the quarter, with average daily exports growing 68% year over year, to almost 40,000. In addition, videos published to the GoPro Channel on YouTube were up 93% year over year, while overall views increased 46%. Finally, content submissions to GoPro's Photo and Video of the Day program increased 50% sequentially from last quarter.

This content not only provides GoPro a solid base to monetize under its Media segment, but also affords the company more difficult-to-measure brand exposure on a global scale. Incidentally, Gopro recently commissioned market research firm IPSOS to perform one such study, which showed a 70% year-over-year increase in aided awareness of the GoPro brand among consumers in nine countries across five continents.

On acquisitions, looking forward
GoPro also announced it has agreed to acquire Kolor, a virtual reality and "spherical media solutions" specialist based in France. Spherical media allows for more immersive viewing and, to borrow GoPro's words, "is an essential building block of virtual reality."

Kolor's platform, for its part, allows users to combine multiple photographs or videos to produce high-res panoramic or spherical content to be enjoyed via mobile, web, or virtual-reality interfaces. Financial terms for the deal weren't disclosed, but GoPro CEO Nick Woodman made clear his company's intent by stating, "We see an incredible opportunity for GoPro to be at the forefront of the virtual reality movement."

Finally, GoPro offered guidance during its subsequent conference call. For the current quarter, GoPro expects revenue between $380 million and $400 million, the midpoint of which represents accelerated growth of 59% year over year.

Better yet, product and channel mix should remain favorable with the HERO4 Black and Silver still comprising more than 50% of revenue, so gross margin should remain at roughly 45%, plus or minus 50 basis points. As a result, GoPro expects second-quarter earnings per share in the range of $0.24 to $0.26. Analysts were only modeling second-quarter earnings of $0.16 per share on revenue of $333.7 million.

In the end, given GoPro's substantial Q1 beat, strong Q2 guidance, and a promising acquisition to further its media ambitions, I can't find anything to dislike about this solid performance. Judging by the stock's current after-hours pop, it appears I'm not the only one impressed.

The article GoPro, Inc. Just Captured Another Stellar Quarter originally appeared on Fool.com.

Steve Symington has no position in any stocks mentioned. The Motley Fool recommends GoPro. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.