GoPro turns its first profit since 2017, thanks to the Hero 7

A very strong holiday season for GoPro’s newest Hero 7 lineup of cameras has helped the camera maker turn its first quarterly profit since the third quarter of 2017, the company announced on Wednesday. GoPro pulled in $377 million in revenue in the fourth quarter of last year, and it walked away with a $32 million profit.

This marks the second time GoPro has turned a profit since the third quarter of 2015, back before the company’s ill-fated attempt at entering the drone market.

The company also announced that it will move its US-bound camera production from China to Guadalajara, Mexico, in the second quarter of this year. The company announced in December that it was moving some production due to the ongoing trade war with China.

“We’re encouraged by the momentum,” GoPro CEO Nick Woodman said on a call with investors. “GoPro’s brand has never been stronger, our product never better, and we’re fired up for the year ahead.”

The Hero 7 Black was announced in September of last year. While it hews closely to the design of its two predecessors, the Hero 5 and Hero 6 Black, the company’s newest flagship offered a number of internal improvements and new features.

GoPro had previously said that the Hero 7 Black was the company’s fastest-selling camera ever, and that momentum carried through the 2018 holiday season. Overall camera sales were up 20 percent in the fourth quarter of 2018 compared to the year prior. For the whole year, GoPro’s camera sales were up 9 percent compared to 2017, and total revenue was $1.15 billion. GoPro posted a $94 million loss for the year, which is nearly half the $163 million loss the company suffered in 2017.

The camera company also continued to increase the number of customers for its $5-per-month cloud storage subscription service called GoPro Plus. As of today, there are now 199,000 paid Plus subscribers, according to GoPro, which is up from 185,000 at the end of the third quarter of last year. GoPro recently announced that it removed all storage caps for Plus in a bid to increase that subscription count.

GoPro started 2018 in a rough spot. The company had come off a 2017 holiday season that was worse than it predicted. Then GoPro turned right around and canceled its Karma drone, which resulted in layoffs of a few hundred people. At CES 2018, Woodman was even talking about exploring a sale of the company.

But the company’s course corrections seem to have worked. GoPro trimmed its operating expenses to just under $400 million for the year, and is now heading into a new year with a more trim headcount of 891 employees (the company had nearly 1,300 employees in 2017 even after previous rounds of layoffs).

“It feels terrific to be now into 2019 with momentum and stable footing,” Woodman said on the investor call Wednesday. This “gives us the ability to constructively build on the momentum that we’ve got in the business, and to look for ways to grow our business, and frankly spend our time and energy on that, as opposed to firefighting, as we’ve had to do in years past.”