10-Q · October 19, 2026
GoPro’s restated Q1 2026 results show a sharp deterioration in core operating performance: revenue fell 26.2% year over year to $99.1 million, gross margin collapsed to 4.3%, operating loss widened to $57.2 million, and…
Earnings analysis · 10-Q
GPRO earnings analysis
Filed October 19, 2026 · Our reading of the company's report
The latest report
GoPro’s restated Q2 2026 results show a modest sequential recovery but continued severe year-over-year deterioration: revenue fell 31% to $104.9 million, gross margin declined 560 basis points to 30.2%, operating margin…
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GoPro’s restated Q2 2026 results show a modest sequential recovery but continued severe year-over-year deterioration: revenue fell 31% to $104.9 million, gross margin declined 560 basis points to 30.2%, operating margin was negative 37.1%, and diluted EPS was $(0.30). Subscription and direct-channel performance improved, but hardware demand, camera shipments, memory costs and component commitments remain significant headwinds. Liquidity is critical, with $27.3 million of cash, $47.4 million of six-month operating cash burn, current debt classification and management’s conclusion that substantial doubt about going concern has not been alleviated. The restatement, ineffective controls, covenant breaches and expected future non-compliance materially increase financing and execution risk.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.3
What stood out
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Subscription growth partly offsets hardware decline
Q2 revenue was $104.9 million, down 31% year over year but up 6% sequentially from $99.1 million in Q1 2026. Subscription and services revenue increased 10.6% year over year to $29.0 million, partially offsetting the 39.9% decline in hardware revenue to $76.0 million.
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Gross margin recovered sequentially
Gross margin was 30.2%, down 560 basis points from 35.8% in Q2 2025 but sharply above 4.3% in Q1 2026. Management attributed the year-over-year pressure primarily to a $15.2 million component commitment charge, lower volume, higher camera costs and supply-chain costs, partially offset by an $18.9 million tariff refund benefit.
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Operating losses and EPS deteriorated
Operating loss widened to $39.0 million from $14.0 million year over year, producing a negative 37.1% operating margin versus negative 9.2% in Q2 2025. Net loss was $51.2 million, or $(0.30) per diluted share, compared with $16.4 million, or $(0.10) per share, in the prior-year quarter.
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Direct channel and attach rate improved
GoPro.com revenue rose 13% year over year to $46.5 million and represented 44.3% of total revenue versus 27.0% in Q2 2025. The overall subscription attach rate increased to 69% from 54%, although the annual subscriber retention rate declined to 67% from 68%.
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Operating cash burn remained significant
Cash used in operating activities was $47.4 million for the first six months of 2026 versus $48.4 million in the prior-year period. Capital expenditures were $2.1 million, resulting in reported investing cash outflows of $0.9 million after $1.2 million of intellectual-property sale proceeds.
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Tariff refund provided temporary margin relief
The Company recorded an $18.9 million reduction to cost of revenue from approved IEEPA tariff refunds and subsequently received $17.9 million of refunds including interest. However, the proceeds are required to be remitted to the lender under the IEEPA Agreement.
What to watch
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Going-concern and liquidity risk
Substantial doubt about going concern remains: cash was $27.3 million at June 30, 2026 versus $49.7 million at December 31, 2025, while six-month operating cash outflow was $47.4 million. Management does not expect sufficient liquidity to meet its obligations and states it may need to reduce, restructure or cease operations or seek bankruptcy protection if financing or a strategic transaction is not completed.
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Restatement and covenant-default risk
The Q2 restatement caused defaults or events of default under debt agreements, including cross-default provisions; the Company was not compliant with the 1.15x minimum asset coverage ratio or minimum EBITDA covenant under the 2025 Credit Agreement as of June 30, 2026. Although waivers were obtained on October 16, 2026, management continues to expect future covenant non-compliance.
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Material weakness and reporting risk
The material weakness in internal control over financial reporting was not remediated as of June 30, 2026, and disclosure controls were deemed ineffective. The restatement adjusted June 30 short-term debt by $9.0 million and accumulated deficit by $5.2 million; additional errors or litigation related to the restatement could adversely affect financing and investor confidence.
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Memory cost and supply exposure
Memory suppliers communicated planned production reductions, reducing forecasted sales volumes and contributing to a $39.6 million accrued obligation for expected underutilization of non-cancellable, non-refundable materials. Management also cited unexpected memory price increases ranging from 80% to 115% in the last week of March 2026.
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New fulfillment and inventory risk
The Company is assuming commercial fulfillment responsibility for certain purchase orders from a primary manufacturing partner, requiring expanded sourcing, procurement and distribution capabilities. The filing states vendors may refuse purchase orders and that delays could affect product launches; inventory was already $86.7 million, up from $78.4 million at December 31, 2025.
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Nasdaq listing and cross-default risk
The Company received a Nasdaq notice after its Class A stock remained below the $1.00 minimum bid price for 30 consecutive business days. A delisting could constitute an event of default under the 2025 Credit Agreement, Term Loan and Convertible Debentures, although the Company later reported regaining compliance on September 16, 2026.
Management's outlook
No formal numeric revenue or EPS guidance was provided. Management expects continued operating losses and negative operating cash flows, expects future covenant non-compliance, and states that the Merger may not close by December 31, 2026 or at all.
Earlier filings 4
10-K · October 19, 2026
GoPro’s FY2025 results show lower losses and sharply reduced operating expenses, but revenue declined 19% to $651.5 million and the company remains structurally unprofitable, with operating margin of approximately…
10-Q · August 10, 2026
GoPro's Q2 2026 filing shows substantial deterioration: revenue declined approximately 31% year over year to $104.9 million and the operating loss widened to $39.0 million from $14.0 million. Subscriber count fell 11%…
10-Q · May 11, 2026
GoPro reported a significant decline in both revenue and EPS in Q1 2026, with total revenue at $99.1 million, a decrease of 26% year-over-year, and an EPS loss of $0.50 compared to a loss of $0.30 in Q1 2025. Despite…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.