GoPro (NASDAQ:GPRO) released second-quarter 2019 results on Thursday after the markets closed, delivering a slightly smaller adjusted profit on lower revenue than most analysts were expecting. 

But with the help of impending product launches and the accelerated growth from its recently improved Plus subscription service, the action camera specialist also followed by raising its full-year revenue and earnings guidance.

With shares up around 5% in after-hours trading as of this writing -- albeit after a similar decline in today's session ahead of the report -- let's pan in for a clearer view of how GoPro ended the first half, as well as what investors should be watching for the rest of 2019.

GoPro HERO 7 Black camera falling into dark gray water.

IMAGE SOURCE: GOPRO

GoPro's results: The raw numbers

Metric

Q2 2019

Q2 2018

Growth (YOY)

Revenue

$292.4 million

$282.7 million

3.4%

GAAP net income (loss)

($11.3 million)

($37.3 million)

N/A

GAAP earnings (loss) per share

($0.08)

($0.27)

N/A

Data source: GoPro. YOY = year over year. 

What happened with GoPro this quarter?

  • Excluduing GoPro's aerial (drone) business, which it exited last year, revenue would have increased 9%.
  • On an adjusted (non-GAAP) basis, which excludes items like stock-based compensation and restructuring expenses, GoPro generated net income of $4 million, or $0.03 per share, swinging from a net loss of $20.8 million, or $0.15 per share in the same year-ago period.
  • For perspective, most analysts were modeling slightly higher adjusted net income of $0.04 per share on revenue closer to $302 million.
  • Adjusted gross margin expanded five percentage points year over year to 36%.
  • Adjusted EBITDA was $13.6 million, swinging from an adjusted EBITDA loss of $8.7 million this time last year.
  • GoPro reduced its adjusted operating expenses by 6%, or $7 million from last year's second quarter. GAAP operating expenses declined by $5 million, or 4% year over year.
  • In an effort to avoid tariffs on products made in and imported from China, starting in June GoPro began manufacturing its U.S.-bound cameras in Guadalajara, Mexico.
  • Camera units shipped increased 1% year over year to 1.082 billion.
  • GoPro.com saw record second-quarter traffic, climbing 22% year over year, and total e-commerce sales grew 55%.
  • Active paying GoPro Plus subscribers exceeded 252,000 this quarter, up 50% year over year and up 15% sequentially from 220,000 last quarter.

What management had to say, looking forward

"In the second quarter, we grew revenue and achieved profitability on a non-GAAP basis," stated GoPro's founder and CEO, Nick Woodman. "Given our continued sell-through momentum, channel inventory levels and the strength of new products slated for later this year, we are raising our outlook for the second half of 2019."

More specifically, during the subsequent conference call GoPro told investors it now expects 2019 revenue to increase 9% to 12% (up from between 7% and 10% previously), which should translate to adjusted earnings of roughly $0.40 per share (up a nickel per share from the midpoint of its previous target range).

In the end, GoPro's top-line growth and narrow bottom-line profits might not seem exciting at first glance. But if it can achieve a stronger second half as promised, that progress will appear much more pronounced, helping the stock resume its upward trajectory.