For GoPro, this New Year is not a good thing.
Recently, the sports camera brand GoPro released its fourth quarter and full year financial report for the fiscal year 2016. The data showed that GoPro's fourth-quarter revenue was $540.6 million, up 23.8% year-on-year; the net loss was $115.7 million, compared to $34.45 million in the same period last year, which means Compared to the same period last year, GoPro's losses increased by 236%.
For the full year, GoPro's revenue for fiscal year 2016 was $1,185 million, a 26.8% decline from revenue of $1,620 million in fiscal 2015; the company's net loss reached $419 million. And in 2015, they were able to record a net profit of $36.1 million for the full year.
No matter how you look at it, GoPro seems to have fallen into a trough in 2016. In the third quarter of 2016, GoPro had recorded a net loss of $84.28 million, plus the fourth quarter, which was the fifth quarter of GoPro's consecutive losses.
In June 2014, GoPro was officially listed on the NASDAQ and closed at $31.34 on the same day, up 30.58% from the issue price. After that, GoPro's share price continued to rise, reaching 98 in October 2014. A high of $47. However, since 2015, its share price has experienced a cliff-like decline, even reaching a low of $8.62 in May 2016, falling below 50% of the issue price, or even less than 10% of the highest point. At present, GoPro's share price has not recovered, and it is still hovering around $10.
The overall shrinkage of the wearable device market is an important reason for GoPro's decline. Although the sports camera itself is a distinctive product, with the mass adoption of smartphones, for most consumers, the functions of these devices can be completely done by smartphones. Therefore, sports cameras, like other wearable devices, are inevitably ruined.
In this case, GoPro also lacks a strong response. They have been slow to introduce new products that can differentiate, but to fine-tune existing products. The overly single product line has made GoPro fall into a worries in the second half of 2015. At the beginning of 2016, they announced the news of 7% layoffs.
In 2016, GoPro's new footsteps were late. In September, they launched Hero5 Black, Hero5 Session and three new products of the Karma drone that were originally planned to enter the market in the first half of 2016. This also made the outside world see the hope of GoPro turning over.
Among them, the Karma drone launched by GoPro is considered by the industry to be the secret weapon to compete with Dajiang for the market share of aerial drones. The market research firm Radiant Insights reports that the market for consumer drones will reach $4.9 billion in 2025, and GoPro really doesn't want to let go of this big market.
However, the good times did not last long. Just two months later, GoPro announced the recall of 2,500 Karma drones sold. The reason given by the company is that "a few users feedback that the drone will have a power failure stall during the flight." This is another big blow for GoPro, which is designed to restore vitality. Until recently, GoPro re-launched the Karma drone, but it has missed the Christmas and New Year sales season.
In this incident, GoPro lost $116 million, and in December 2016 it announced that it would cut about 200 full-time positions, and company president Tony Bates will also leave at the end of the year. GoPro hopes to take advantage of this as soon as possible.
But even after so many troubles, GoPro CEO Nicholas Woodman still has confidence in the company's prospects. His reason is that in the fourth quarter of 2016, the company's revenue of $540.6 million was established. The second-highest, if not calculated in accordance with US GAAP, then GoPro could still record a net profit of $42.4 million in the fourth quarter.
On the conference call, Woodman said: "We laid the foundation for hardware, cloud and mobile in 2016; in 2017, we will provide better services to our customers and improve our operations. Efficiency and reduced expenses to achieve profitability."
In addition to his financial situation, Woodman also mentioned GoPro's new product plan at the earnings conference. He said that in late 2017, GoPro will launch the new flagship sports camera product Hero6 series, and will also introduce new drone products, but he did not disclose more product details.
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