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Fitbit revenue surges 46pc in Q2 but profits down

Paul Withers
August 4, 2016

Revenue up 46 per cent on sales of 5.7 million devices, but net income slumps by more than half

Fitbit saw revenues and device sales surge in Q2 but saw a decline in quarterly profit.

Reporting its financial results for the three month period, the connected health and fitness manufacturer posted revenue of $586.5 million – up 46 per cent from last year.

More than three quarters (76 per cent) of its revenue came from its home market of the US, 17 per cent from EMEA, two per cent from Asia Pacific and five per cent from ‘Other Americas’.

Fitbit said US revenue grew 42 per cent year-over-year; EMEA 150 per cent, Asia Pacific 54 per cent and Other Americas 63 per cent, although it did not reveal a detailed breakdown of figures.

It sold 5.7 million devices compared to 4.5 million from the same year-ago period. New products, including Fitbit Blaze and Alta comprised 54 per cent of overall revenue compared to 50 per cent in the previous quarter.

Of all the activations of the Alta and Blaze in Q2, around two-thirds were by new customers, while the other third were by those who own, or previously owned, another Fitbit device.

However, profits in the quarter were down by more than half to $6.3 million from $17.7 million 12 months ago, while gross margin fell from 46.8 per cent to 41.8 per cent.

Posting guidance for Q3, Fitbit expects revenue of $490-510 million and gross margin of 48-49 per cent. For the full year, it is forecasting revenue of $2.5-$2.6 billion and gross margin of 47 per cent.

Fitbit co-founder and CEO James Park said: “Second quarter results reflect accelerated unit and revenue growth in the U.S. and EMEA, our two largest markets, despite an unusually strong Q215 with the full availability of Fitbit Charge HR fulfilling built-up demand in that quarter.

“Our strong profitability reflects careful management of operating expenses, while we continue to invest in future growth. Based on the progress of our business, against a backdrop of a growing worldwide opportunity for our products, we remain confident in our guidance for the year.”

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