Fitbit Reports Final Q4 2016 Earnings (Feb 22, 2017)

I covered Fitbit’s preliminary earnings release a little while back, and we already knew these results weren’t going to be pretty. This was the first quarter of year on year declines, and also featured the company’s first meaningful losses since 2013, when it recalled its Force device. Its costs, especially its sales and marketing costs, rose considerably as a percentage of revenue, and its cost of revenue in particular was well up on last year’s despite the much lower revenue. As I said a few weeks ago, though Fitbit is downplaying these results as a temporary setback and promising a recovery, I see little evidence to support that assertion. Interestingly, some of the metrics Fitbit only provides once a year around user numbers suggest that it’s sold relatively few second devices to the same users – its registered user number is over 80% of its total number of cumulative devices sold, suggesting under 20% were sold as second devices to the same users; in addition, its active user number is now under half its total registered user number, suggesting an over 50% abandonment rate. Those two combined, together with the relatively small addressable market for dedicated fitness devices, are why Fitbit is having such trouble.

via Fitbit (PDF)

The company, topic, and narrative tags below will take you to other posts with the same tags. The narrative link(s) will also take you to the narrative essay which provides additional context behind the post.

• Fitbit

• Earnings
• Hardware
• Q4 2016
• Wearables

• Hardware is Hard
• Wearables are Struggling

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