GoPro Inc (NASDAQ:GPRO) recently announced its 4Q2020 and full year 2020 financials and one of the main highlights of the earnings call was the company’s roadmap to more profitability moving forward.
The action camera manufacturer’s subscription-based consumer-direct business plan is shifting to a subscriber-focused model to achieve sustainable growth. The company reported that its subscriber base grew by 52% sequentially in the fourth quarter. The subscriber growth was encouraging and it validated the company’s decision to change up its strategy.
"GoPro's shift to a more subscription-centric consumer-direct model is resulting in a simpler, more profitable business with materially better cash generation," stated GoPro CEO, Nicholas Woodman.
GoPro continues to encourage an active and adventure-seeking lifestyle for its customers and subscribers through its camera offerings. The company recently announced the launch of some fresh features designed to provide a better GoPro camera experience, while providing an edge against cameras from rival companies.
GoPro’s earnings forecasts
GoPro’s subscriber base grew to 761,000 subscribers in 2020, representing a 145% YOY growth. Its 4Q2020 revenue was $358 million while full year revenue amounted to $892 million which was lower than the 2019 full year revenue figure of $1.19 billion. This decline is not surprising considering the unfavorable business environment in 2020 courtesy of the global pandemic.
The company’s analysts expects its 2021 revenue to reach $1.09 billion. If that were to happen, it would represent a 22% growth in sales. The previous revenue forecast for the company in 2021 was $1.08 billion but that was before the company released its latest earnings report. Analysts also expect the company to deliver a $0.44 earnings per share in 2021 which would be an improvement from the non-GAAP EPS of $0.08 that the company reported for the full year 2020.
GoPro hopes to achieve the forecasted figures through a heavy focus on the subscribe-based business model. It also plans to back the forecast through continued robust offerings as far as its product lineup is concerned.