The American wearables manufacturer has struggled to turn a profit year on year but managed to do so this quarter fuelled by strong smartwatch sales, with smartwatches now accounting for around half of total revenue. Net losses decreased significantly to $2.1 million from $113.4 million this time last year, a difference of $111.3 million.
This paints a rosy picture for Fitbit, who released the Fitbit Versa, Fitbit Charge 3, Fitbit Ace and Fitbit Aria 2 this year. These four devices accounted for 62% of revenue, which just goes to show how well their smartwatches are selling.
Due to this positive performance, Fitbit is predicting a strong fourth quarter. They expect revenue to be greater than $560 million in the fourth quarter, with fitness tracker sales down but evened out by a higher average selling price of their smartwatches.
Full year revenue has been guided at $1.5 billion. Fitbit say they’re on track to deliver that, but a strong fourth quarter will be needed to see it through. To turn a profit, they’ll also need to meet their full year operating expense target of $740 million.
Fitbit continues to invest heavily in R&D, they’re currently within a transitional period, from fitness trackers only to smartwatches too, and are looking to provide subscription based services to advance health data as smartwatches become more sophisticated.
Fitbit’s resurgence from poor wearables sales has been fuelled by the launch of the Fitbit Versa, a smartwatch that’s as good as anything else out there. It addressed the issues that plagued the Ionic and is Fitbit’s best-selling smartwatch to date. Fitbit was keen to point out the Versa’s success in their earnings call, pointing out the Versa outsold Garmin, Samsung, Fossil and other brands in the US.
Fitbit is so popular that in the US they’re behind only Apple as the best-selling smartwatch maker. However, they do have the Versa, Charge 3, Ace and Aria 2, four wearable devices to Apple’s one. Maybe that’s a bigger compliment to Apple than Fitbit?
You can check out the full Fitbit earnings call here.