GoPro (NASDAQ:GPRO) has released their 3rd quarter earnings report on Wednesday after market, missing their own guidance given previously. Shares of the company crashed about 16%, reaching a new all-time low price per share of $24.95.
The report showed that GoPro has generated revenue of $400 million, which is an impressive 43% growth year-over-year. Despite the strong growth in revenue since last year, it is the first time since the company’s IPO the results delivered on an earnings report were below GoPro’s own expectations and guidance.
GoPro tried to explain the disappointing results. First, the sales of the HERO4 session camera were much weaker than anticipated. The company claims their pricing strategy might have hurt the sales this product, as $399 might have been too high a price. Especially when one of the company’s best products HERO4 Silver also price $399. The situation, it seems, is that the HERO4 session could not compete against the HERO4 Silver. The company has price adjusted the session camera to $299 in September.
Another reason for the lower than expected sales, was GoPro’s decision to cut marketing funding during the second and third quarters of this year, which could have impacted demand. The company has announced that more aggressive marketing and advertising campaigns will be initiated in the fourth quarter, which will include a return to television, after a year hiatus.
GoPro CEO, Nicholas Woodman, remain optimistic, “we made some mistakes and we've taken corrective action. While the effect of these actions will take some time to be fully realized, we believe we're approaching the holidays with a strong product line up, priced appropriately and backed by a world-class global marketing campaign.”