GoPro sees Q4 EPS 1c-3c, consensus 5c

Sees Q4 revenue $320M-$330M, consensus $338.8M. The company states: “For the fourth quarter of 2023, we expect to deliver revenue of approximately $325 million, up 1% year-over-year. We estimate Street ASP in the fourth quarter to be approximately $335, down 11%, year-over-year, and up 5% sequentially. Our expectation, as a result of our pricing, retail expansion and increasing marketing, CRM, product bundles and tactics to improve conversion, is for unit sell-through to increase more than 10% year-over-year to approximately one million units. That said, there may still be macroeconomic pressures that impact consumer confidence and spending in the fourth quarter. Our guidance assumes channel inventory will reduce during the quarter. We expect gross margin in the fourth quarter to be 33% at the midpoint of guidance, down from 35% in the prior year quarter, but up from 32.2% in the third quarter of 2023. The year-over-year decline in gross margin percentage is primarily related to reduced camera pricing and higher camera demand at our entry level price point. It’s worth pointing out that we are seeing GoPro subscriber attach rates amongst these entry level camera buyers of nearly 30%, which is helping to drive subscription revenue growth and offset near term margin impact. We expect subscribers to grow to between 2.5 and 2.6 million by the end of the fourth quarter, or more than 10% growth, year-over-year. Our year end subscriber estimate assumes consistent renewal rates. Due to historic seasonality and gift giving trends, we modeled the fourth quarter subscription attach to last year’s fourth quarter retail attach rate of nearly 30%. As a reminder, our first quarter has the highest subscription attach in the year. We expect non-GAAP net income per share for the fourth quarter of $0.02 at the midpoint of guidance. We expect shares outstanding to be approximately 166 million shares in the fourth quarter based on our current stock price and anticipated share repurchases in the quarter. We expect our GAAP effective tax rate in 2023 to be in a range of between 20% to 25%.”