Shortcuts to profitability: Fire people. GoPro seems to have taken this philosophy to heart and is now embarking upon its third round of layoffs in less than a year and a half. The company is planning to hand pink slips to 270 of its staff in what would be one of its largest rounds of layoffs. The company announced the same in a release that also contained guidance of its first quarter results.
In its release, GoPro said that the job-cuts were part of broader cost-cutting measures being undertaken by the company. Only five months earlier, GoPro had fired almost 15 percent of its staff, letting go off 200 people. Rewind the clock 5 months further still and GoPro had let 7 percent of its staff go.
The company expects to have to spend almost $10 million to conclude this round of restructuring. A lion’s share of the monies will go to the employees in form of their severance packages. However, the company expects to achieve full year non-GAAP profitability in 2017. Needless to say, employee morale isn’t likely to be very high with all these pink slips floating in the air.
And profitability would be good. In the fourth quarter of last year GoPro reported almost $540 million in revenue, which marked an impressive 23.8 percent annual increase. However, the company still shoed up with a $115.7 million GAAP net loss and a $42.3 million non-GAAP net income.
The term GAAP stands for Generally Accepted Accounting Principals whereas Non-GAAP stands for — you guessed it. GAAP revenues and other stats are preferred and more commonly accepted because they offer us a standard, comparable picture of what it happening. Indeed, many financial pundits have been speaking out against Non-GAAP, claiming that it allowed companies to twist the data to make it look good.
But we are deviating from the point here. GoPro was still running in considerable loss at the end of 4th quarter last year. Meanwhile, the company expects that its first quarter revenue will be “in the upper end of its previously announced $190 million to $210 million range.” It also expects to be EBITDA positive for full-year 2017 without having to draw on its credit facility.