GoPro, Inc. (GPRO) is a company known for its rugged and versatile action cameras, but it also has a growing subscription service. Understanding how they make money and what financial numbers truly matter can help everyday investors get a clearer picture of the company's health.

The Business Model (How They Make Money)

GoPro's core business revolves around selling its action cameras and the accessories that go with them. Think of their HERO series cameras, which are popular with adventurers and content creators for capturing high-quality video in challenging environments. They also offer the MAX, a camera that records 360-degree footage. These cameras and their various mounts, cases, and batteries make up the vast majority of their sales.

Beyond the hardware, GoPro also generates revenue from its subscription service, known as GoPro Plus. This service offers benefits like cloud storage for videos, camera replacement options, and discounts on accessories. While the cameras are the main draw, the subscription service provides a recurring revenue stream.

In the second quarter of 2026, GoPro reported total revenue of $104.9 million. Of this, their subscription and services revenue accounted for $29.0 million, representing 28% of their total revenue for that quarter. This is an increase from Q2 2025, when subscription and service revenue made up 17% of total revenue. For the full year 2025, GoPro's total revenue was $652 million, with $106 million coming from subscription and service revenue.

The Metrics That Matter Most

For GoPro, given its mix of hardware sales and subscription services, here are the most important numbers to watch:

1. Revenue: This is the total amount of money GoPro brings in from selling its cameras, accessories, and subscriptions. It's the most basic measure of a company's size and how much business it's doing. For GoPro, watching revenue helps us understand if more people are buying their products and signing up for their services. In 2025, GoPro's revenue was $652 million. However, in Q2 2026, revenue was $104.9 million, which was down 31% compared to the same period in the previous year. This shows a significant decline in their overall sales.
2. Gross Margin: This metric tells us how much profit GoPro makes from selling its products and services before accounting for operating expenses like marketing or administrative costs. For a company that sells physical products like cameras, a healthy gross margin is crucial because it shows how efficiently they are manufacturing and pricing their goods. GoPro's GAAP gross margin was 33.6% in 2025. In Q2 2026, it was 30.2%. A lower gross margin can indicate pricing pressures or higher production costs, which can squeeze overall profitability.
3. Operating Cash Flow: This number shows how much cash a company generates from its regular business operations, like selling cameras and collecting subscription fees, after paying for things like raw materials and employee salaries. It's a good indicator of a company's ability to fund itself without needing to borrow money or sell new stock. For the six months ending June 30, 2026, GoPro had an operating cash outflow of $47.4 million, meaning they spent more cash on operations than they generated. This is a critical metric to watch as consistent negative operating cash flow can signal financial difficulties.
4. Net Income (or Net Loss): This is the "bottom line" – the total profit or loss a company makes after all expenses, including taxes, have been subtracted from revenue. It's the ultimate measure of a company's profitability. In 2025, GoPro reported a GAAP net loss of $93 million. For Q2 2026, their GAAP net loss was $51.0 million. Consistent net losses indicate that the company is spending more than it earns, which is not sustainable in the long run.

How to Value This Company

For GoPro, the most relevant valuation metric to consider is the P/Sales (Price-to-Sales) ratio.

The P/Sales ratio compares a company's stock price to its total revenue. You calculate it by taking the company's total market value (stock price multiplied by the number of shares outstanding) and dividing it by its total revenue over the last year.

We use P/Sales for GoPro because the company has been reporting net losses. When a company isn't making a profit, traditional valuation metrics like the P/E (Price-to-Earnings) ratio, which relies on positive earnings, aren't useful. P/Sales allows investors to see how much they are paying for each dollar of the company's sales, regardless of whether those sales are currently turning into a profit. It helps you understand if the market is valuing the company's revenue stream as cheap or expensive, even if the company isn't profitable right now.