The Fitbit Versa smartwatch Photo courtesy Fitbit.
Fitbit is forecasting a 3 percent decrease in third quarter revenue and a 7 percent decrease in full-year revenue for 2018.

Fitbit Reports 15 Percent Drop in 2018 Q2 Revenue Despite Strong Smartwatch Sales

Fitbit's smartwatch segment sales grew 30 percent year over year, with the Fitbit Versa outselling Samsung, Garmin and Fossil smartwatches combined in North America, Fitbit CEO James Park said in an earnings release.

Fitbit Inc., San Francisco, reported $299.3 million in 2018 second quarter revenue and 2.7 million device sold, year-over-year decreases of 15 percent and 20 percent, respectively, according to financials released by the company on Aug. 1.

“Our performance in Q2 represents the sixth consecutive quarter that we have delivered on our financial commitments, made important progress in transforming our business, and continued to adapt to the changing wearables market," CEO James Park said in the report. "Demand for Versa, our first ‘mass-appeal’ smartwatch, is very strong. Within the second quarter, Versa outsold Samsung, Garmin and Fossil smartwatches combined in North America, improving our position with retailers, solidifying shelf space for the Fitbit brand and providing a halo effect to our other product offerings."

For the quarter, the company reported a net loss of $118.3 million versus a net loss of $58.2 million during the same period last year. Adjusted EBITDA was a loss of $55.8 million compared to a loss of $28.2 million year over year. 

Fitbit's smartwatch segment comprised 55 percent of the company's quarterly revenue, an increase of 30 percent year over year.

The company's U.S. revenue represented 61 percent of the quarter's total revenue, a decrease of 8 percent year over year. International sales represented 39 percent of total revenue, a 24 percent drop from 2017.

Park is forecasting third quarter revenue in the range of $370 million to $390 million, representing a decrease of approximately 3 percent year over year.

For the full year, he said the company stands by its target of $1.5 billion, which represents a 7 percent decrease from 2017's year-end revenue—Fitbit's lowest sales year since 2014.

In April, Fitbit announced a partnership with Google to "innovate and transform the future of digital health and wearables, leading to positive health outcomes for people around the world." This follows through on a strategy Park announced in 2017 that Fitbit would refocus its efforts on smartwatches and the healthcare sector.

 

 

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