Fitbit, the renowned wearable device manufacturer, pleasantly surprised investors and analysts alike with their recent third-quarter earnings report. The company, based in San Francisco, revealed that a significant portion of their adjusted profit came from the booming sales of their smartwatches, which contributed nearly half of their total revenue. This news caused Fitbit’s stock to surge by almost 9% to $5.15 in after-hours trading, indicating a strong vote of confidence from the market.
During the third quarter, Fitbit managed to sell an impressive 3.5 million devices, beating expectations and underscoring the ongoing demand for their products. Additionally, the average selling price of their devices rose by 3% to $108 per unit, showcasing an increase in consumer willingness to invest in their products.
Despite facing fierce competition in the smartwatch sector from tech giants such as Apple Inc and Samsung Electronics Co Ltd, Fitbit has managed to carve out a significant market share with its eye-catching fitness trackers. Looking forward to the fourth quarter, Fitbit is optimistic about surpassing $560 million in revenue, slightly below analysts’ average prediction of $569.2 million.
In the recent quarter, Fitbit was able to reduce its net loss to $2.1 million, or 1 cent per share, compared to a loss of $113.4 million, or 48 cents per share, in the same period last year. Adjusted for certain factors, Fitbit’s earnings actually amounted to 4 cents per share. Revenue also experienced a modest uptick, climbing to $393.6 million from $392.5 million.
In the face of projections suggesting a loss of 1 cent per share on revenue of $381.2 million, Fitbit’s unexpected profitability in the third quarter is truly noteworthy. This success underscores the potential for growth in the wearable technology market and demonstrates Fitbit’s capacity to compete effectively with larger tech firms in the sector.
Useful links: Official Fitbit Website, Forbes Article on Wearable Technology in Healthcare
