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Fitbit’s Q1.2019 results are in and things seem to be trending like the previous quarter.
The numbers, linked further below, show that the loss is about the same but on a higher turnover. the words are a bit more interesting than the numbers this time and here are the ones that are the most interesting with special bits bolded by me:
First Quarter 2019 Financial Highlights
- Devices sold increased 36% year-over-year to 2.9 million. Average selling price decreased 19% year-over-year to $91 per device due to the introduction of more affordable devices, lowering the barriers to joining our community of active users.
- U.S. revenue represented 50% of total revenue or $135 million, down 3% year-over-year.
- International revenue represented 50% of total revenue and grew 26% to $137 million: EMEA revenue grew 35% to $87 million; APAC revenue grew 24% to $34 million and Americas excluding U.S. revenue declined 5% to $15 million (all on a year-over-year basis).
First Quarter 2019 Operational Highlights
- Smartwatch devices sold increased 117% year-over-year and represented 42% of revenue. Trackers sold increased 17% year-over-year, reversing a multi-year decline, and represented 58% of revenue.
- Strategy to increase affordability of our devices and grow our community of active users is working with growth in active users in the first quarter of 2019 on a year-over-year basis.
- 39% of activations came from repeat users; of the repeat users, 53% came from users who were inactive for 90 days or more.
Full Year 2019 Guidance
- We expect devices sold to increase in 2019, but average selling price to decline, each year-over-year driven by our intention to increase accessibility to our platform and grow our community of active users. We expect revenue to grow 1% to 4% year-over-year and to be in the range of $1.52 billion to $1.58 billion.
- We expect non-GAAP gross margin to be approximately 41% in the second half of the year and decline modestly to approximately 40% for the full year. Second half gross margin will benefit from operating leverage with higher revenue and improving yields. This will be partially offset by lower warranty benefit in 2019 compared to 2018 and device mix shift towards smartwatches. As the size of our Fitbit Health Solutions and software services business increases, we expect them to be gross margin accretive to overall company gross margin.
And here is what the market thought of it all
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