FitBit Inc. (NYSE: FIT) released its second quarter earnings reports on Wednesday after closing, topping analysts estimates.
Although the company did not achieve it had hoped for, FitBit is currently up over 14 percent at open on Thursday.
The company blames competition, like Apple, who attract more consumers with a more high-tech device than the ones FitBit produces.
FitBit is on track currently to reduce operating costs to turnaround the business and has called 2017 a “transitional year”, said Chief Executive James Park.
The fitness wearable brand’s revenue fell over 40 percent to $353.3 million in the second quarter compared to last year’s second quarter, but came in above analysts' estimate of $341.6 million, according to Thomson Reuters.
Three products that were released in the past year, Fitbit Charge 2™, Fitbit Alta HR™, and Fitbit Flex 2™, account for 81% of revenue. The company had sold 3.4 million devices, up 14% sequentially from the first quarter of 2017, down 40% year-over-year from the second quarter of 2016.
The Fitbit app was the #1 downloaded health and fitness application, based on U.S. downloads, on both the iOS and Android platforms.
“Consumer demand in the second quarter was better than anticipated, enabling Fitbit to reduce channel inventory and generate better sales. We are executing according to our transition plan and have increased confidence in achieving our full year results," said co-founder and CEO James Park. “Our smartwatch, which we believe will deliver the best health and fitness experience in the category, is on track for delivery ahead of the holiday season and will drive a strong second half of the year. In the long term, we are confident in our vision for the future and are uniquely positioned to succeed by leveraging our brand, community, and data to drive positive health outcomes.”
Although the company had done better than expected, Fitbit reported a loss of $58.2 million, or 25 cents per share, compared with a profit of $6.3 million, or 3 cents per share, a year earlier.
With the results of the second quarter, the company believes it’ll be on track to achieve its full year estimates.
Here’s what to expect for the full year guidance:
- Revenue in the range of $1.55 billion to $1.7 billion.
- Non-GAAP gross margin of 42.5% to 44%.
- Non-GAAP net loss per share in the range of ($0.40) to ($0.22).
- Non-GAAP free cash flow loss in the range of ($80) million to ($50) million.
- Effective non-GAAP tax rate of approximately 46%.
- Stock-based compensation expense in the range of $90 million to $100 million and share count of approximately 230 million.