Garmin had a pretty solid 2016, finishing off the fourth quarter with a 10 percent year over year increase in revenue and a total of $861 million. For all of 2016, revenue was up 7 percent from the prior year, with each of the company’s categories – fitness, marine, outdoor and aviation – collectively growing over 20 percent. Fitness wearables grew 20 percent in the quarter driven by devices with the Elevate wrist heart rate technology, and the company expects that category to be the largest revenue contributor in 2017, owing to the new fenix 5 series as well as added features to their existing devices.
“Much has been said recently about the momentum change in certain wearable categories, specifically basic activity trackers. However, demand for products with more advanced features, particularly those with GPS capability, was very strong in the holiday quarter. One possible explanation is that customers want more than just a basic activity tracker,” Garmin CEO Cliff Pemble said on a call to investors. “We believe we are well positioned to capitalize on this trend with the broadest portfolio of activity trackers, many of which include GPS capability. In 2017, we are targeting revenue growth of approximately 5 percent in the fitness segment with strength in cycling and advanced wearables offsetting anticipated softness in basic activity trackers.”
Pemble also said the ConnectIQ application platform has become “an important differentiator for our smart wearables” that features over 2,500 apps, widgets and watch faces and has generated more than 24 million downloads since it was launched. To capitalize on that momentum, Pemble said the company will host their first ever developer conference in mid-April, where they will offer workshops and tools that developers can use to “leverage the Garmin wearable ecosystem.”
WebMD posted an 8 percent increase in revenue for the fourth quarter, as well as improved bio-pharma advertising, and a bump in their health and information services. Medscape continues to be the company’s powerhouse, with 60 percent of the advertising revenue and 8.3 million physician sessions per month. The number of consumer visitors to the WebMD health network was also up on both desktop and mobile, with 64 million users during the fourth quarter.
“Our research shows that nearly 75 percent of our visitors say they learned something new from the information we provided and are more confident as to what to do for the next step in addressing their healthcare concerns,” WebMD CEO Steve Zatz said on a call to investors. “Building on these considerable strengths, we believe that WebMD can become the place consumers turn to first take healthcare actions, whether it be self-care, purchase of an OTC product, attend a house visit or scheduling an appointment with the physicians. And we are investing accordingly.”
Zatz went on to describe such investments as the company’s cold and flu map alert and the soon-to-be-launched offering with Walgreens, as well as their forthcoming efforts to make WebMD available via new interfaces like Google home devices and Amazon Alexa.
In spite of the strong physician and consumer engagement, WebMD forecast a decline in 2017 for pharma advertising, although they expect it to pick back up under a possible uptick in drugs and devices coming down the pipeline should the new administration deliver on their expressed intent to reduce regulations and streamline the FDA process. But current decline has WebMD thinking of alternative opportunities for revenue, which they announced their board of directors is now doing in earnest. No timelines or decisions have been made, by Zatz said possible alternatives could include, “the sale of part or all of the company, a merger with another party or other strategic transaction or continuing to execute on WebMD’s business plan.” This isn't the first time WebMD has floated that idea: they were rumored to be seeking a buyer in January 2016, but those rumors came to nothing.
On Under Armour's Q4 earnings call, held at the end of January, CEO Kevin Plank sought to explain lower-than-expected earnings and talked about the company's intention to tighten its belt. Will that affect investment in the company's Connected Fitness segment, formed from the acquisition a few years ago of MyFitnessPal, MapMyFitness, and Endomondo? An investor asked specifically whether the company would be halting investment in Connected Fitness, and Plank assured him they would not be.
"We know what we do for our livelihoods, and frankly the reason that we got into Connected Fitness to begin with, with an investment like that, was to help us sell more shirts and shoes. And so we still believe in that vision. We still continue to see it coming through. We have a major go-live this year with SAP, with our version of single view of the consumer. And we think that the amount of data that the 200 million users we have, telling us how much they exercise, what they ate and giving us data that will help us learn more about them to ultimately help us sell more shirts and shoes is something important," Plank said. "At the same time, it doesn't mean that we're not going to be prudent across the organization. We'll make sure that ... we're tightening the belt. But at this time, I think we feel really good about the leadership we have with Connected Fitness. We'll continue to, of course, forge on and build something bigger and better there."
Under Armour also got a less-than-flattering mention on MindBody's earnings call, with CEO Richard Stollmeyer expressing disappointment about the results of the two companies' recent partnership.
"With respect to the Under Armour partnership, to be really candid, we're disappointed that Under Armour, MyFitnessPal hasn’t done more to promote activity on the MyFitnessPal app," he said during the Q&A last week. "I think they did a beautiful job of the integration, but as of yet we haven't seen them driving a lot of traffic."