Fitbit is coming out of its third quarter beating its expected revenue by $64.9 million. This comes ahead of its much-anticipated merger with Google. Fitbit did not hold an earnings call due to the pending merger but did release figures on the quarter.
In the release, Fitbit CEO James Park attributed some of the success to the release of the Fitbit Sense, the company’s first smartwatch to include an ECG app and stress indicator. In fact, according to the latest report, smartwatches now represent 60% of Fitbit's revenue.
The company did report that COVID-19 negatively impacted the business due to disruptions in the manufacturing of components and sales of its products.
TOP LINE DATA
The San Francisco-based company announced $364 million in revenue last quarter, which represents a 5% year-over-year increase. The GAAP net loss per share was $0.20 per share and non-GAAP net loss per share was $0.03.
Fitbit reported a GAAP net loss of $54 million and a non-GAAO free loss of $8 million.
The average price of its devices rose to $104, which represents an 8% YoY growth. The company also reported growth in the EMEA market, with a revenue increase of 23%, and in the Americas (excluding the U.S.) by 55% YoY.
It's been a rocky road for Fitbit the last few years. Last quarter, the company reported a drop in Q2 YoY revenue from $313.6 million to $261.3 million. Last quarter, it also reported a 30% decline in YoY device sales. In 2019, Fitbit’s earnings were also disappointing.
Roughly a year ago, Google announced its plans to acquire Fitbit for approximately $2.1 billion. In the release, Fitbit noted that regulatory review of the acquisition is still ongoing, specifying that the European Commission had initiated Phase Two of the review of the transaction; however, how long that process will take is still unknown.
Fitbit said it expects the acquisition to go through by the end of the year but also recognizes that, due to the regulatory process, it may be extended.
ON THE RECORD
“Fitbit continued to play an important role for our community during this uncertain COVID-19 environment by supporting the mental health and overall wellness of our users with innovative products, features and services. We introduced Fitbit Sense, our most advanced health smartwatch that helps users understand and manage their stress and is also our first device with an ECG app. Fitbit is committed to making health data more accessible and actionable with the new Health Metrics Dashboard, which tracks metrics like breathing rate, heart rate variability and SpO2 – all important metrics when it comes to illness detection,” Park said. “The response to our new offerings has been strong across both devices and software. We achieved a key financial milestone this quarter with an annual run-rate for consumer services revenue of more than $100 million, highlighting the continued opportunity we have to deepen our relationship with our users.”