Fitbit Turns a Corner? Q3.2020 Results

Affiliate Disclosure: All links pay commission

Reading Time: 3 minutes
Image|Fitbit

Fitbit Q3.2020 Results – An Improvement

Some positive-sounding numbers from Fitbit did not seem to impress the markets as much as they cheered me compared to recent quarters. Despite a rising NASDAQ on the same day, Fitbit’s share price fell. Presumably the market expected more, so let’s quickly move on and see why there was, in my eyes, some scope for cheer. Let’s start with the stock price.

 

 

 

Despite the YOY quarterly growth for the entire company, Fitbit sales in the USA declined by 8%. Perhaps Fitbit could have better-phrased that headline by saying that they were, instead, growing in overseas markets! On that point, the growth was good in EMEA but up over 50% elsewhere in the Americas, albeit from a low base. Other interesting growth angles saw Fitbit.com’s direct sales increasing by 54% (to $42m) and Fitbit Health growing 14% to $22m. That said, even bigger percentage growth was to be found elsewhere with a large increase in service revenues. In large part, this probably comes from premium subscribers which hit the half-million mark back in August

“Consumer services revenue grew 607% year-over-year to $15 million and represented 4% of sales. Consumer services revenue includes revenue from our Premium subscription and extended warranty offerings.”

There’s likely to be a good profit in those numbers too!

Looking at the product numbers, Fitbit shared this:

“Smartwatches represented 60% of revenue, trackers represented 36% of revenue and non-device software offerings were 4% of revenue. Smartwatch sales benefited from the introduction of two new smartwatches, Sense and Versa 3.

“New devices introduced in the past 12 months, Fitbit Charge 4™, Fitbit Sense™, Fitbit Versa 3™ and Fitbit Inspire 2™, represented 52% of revenue.”

 

Finally, Fitbit expects the Google deal to close this year. It’s been dragging on for more than a year now but an end seems close. Fitbit says closing the deal might drag on beyond the calendar year-end but that we shouldn’t expect any more published accounts from them. So this is the end of the financials we will ever see from Fitbit (probably).

Take Out

I guess the Fitbit financial story ends on a somewhat rosy note. Subscription sales and new product sales probably highlight what we have seen in previous quarters, namely that the Fitbit consumer is a loyal one who keeps investing into the ecosystem. Things might get even better as the Versa 3 & Sense sales really kick in.

It now seems highly plausible that we will never see another fully-Fitbit product. The next one could be Google-branded. That is a possible scenario but I suspect the future will, in fact, have MANY more Fitbit devices in store for us and I expect Google will keep the well-respected Fitbit brand and it will become their health and fitness brand, just like Nest is becoming their over-arching Home brand.

Source: Fitbit

Reader-Powered Content

Follow the5krunner
This content is not sponsored. It's mostly me behind the labour of love which is this site, meaning it's entirely reader-powered content ❤️ I'd really appreciate it if you'd follow, subscribe or consider getting me an e-Coffee ❤️ Alternatively please buy the reviewed product via the5krunner.com (which costs you no extra) and, for that, I receive a small commission. Thank you!
 
Affiliate Disclosure: All links pay commission
Support this site with purchases at these partners - should click to a local choice in your country
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments