Fitbit Inc. (NYSE: FIT), the maker of wearable fitness trackers, is currently experiencing a 13% uptick following their most recent earnings report released May 3rd. Despite an over 50% contraction in U.S. and Asia-Pacific markets, the company still managed to perform better than analysts expected. Total revenue for 1Q reached $299 million, outpacing forecasts of roughly $280 million. The company’s average selling price and gross margin fell 16% YOY and 4% respectively. The company managed to cut operating expenses to $210 million, down 2.5%.
Most of their revenue is left over from the rollout of three new products in FY 2016. The trio of their newer wearables, the Fitbit Charge 2, Fitbit Alta HR, and Fitbit Flex 2, made up 84% of revenue this quarter. These and older devices are, on average, selling for $96.45 each, a drop of 4%.
Regardless of these dramatic contractions, Fitbit sees a slightly brighter future, at least in the short term. 2Q earnings are expected to increase to somewhere between $330 million and $350 million. However, their year-end revenue projections are – as their 1Q earnings are – roughly 50% smaller, shrinking to roughly $1.6 billion from $2.17 billion for fiscal year 2016.