Fitbit, the wearables brand that Google plans to buy, posted an 11 percent revenue drop on Wednesday (Nov. 6) for the third quarter of 2019, with revenue hitting $347.2 million. Still, the Q3 revenue beat analyst expectations by some $1.94 million.
The company’s net loss deepened to $51.9 million, which compares to 2.1 million for the same period last year. During the third quarter of 2019, Fitbit said it sold some 3.5 million devices. It blamed its Q3 revenue decline on a “12 percent decline in pricing and flat year-over-year growth in devices sold. Average selling price per device sold was $96.”
Fitbit also said that revenue from its sales of smartwatches represented 58 percent of the company’s total revenue. “With no new trackers launched in the third quarter and facing a difficult comparison from the launch of Charge 3 last year, tracker revenue declined and represented 39 percent of total revenue,” the company said in its earnings release. “Accessory and non-device revenue represented 3 percent of revenue.” As well, the company said, “Fitbit Health Solutions revenue grew 10 percent in the quarter, producing $73 million in revenue for the year-to-date period, up 31 percent year-over-year.”
“In Q3 we continued to make good progress shifting our business towards the faster growing smartwatch category with the introduction of Versa 2, expanding Fitbit Health Solutions, and deepening our relationship with consumers with the launch of Premium,” said James Park, Fitbit co-founder and CEO.
Last week, Google reached a definitive agreement to acquire Fitbit. “Over the years, Google has made progress with partners in this space with Wear OS and Google Fit, but we see an opportunity to invest even more in Wear OS as well as introduce Made by Google wearable devices into the market,” Google’s senior vice president of devices and services Rick Osterloh said in the post.
The company said it will work with Fitbit’s experts to develop top artificial intelligence (AI), software and hardware to help stimulate advancement in wearables that could benefit people worldwide.
“Google aspires to create tools that help people enhance their knowledge, success, health and happiness. This goal is closely aligned with Fitbit’s long-time focus on wellness and helping people live healthier, more active lives. But to get this right, privacy and security are paramount,” Osterloh said. “When you use our products, you’re trusting Google with your information. We understand this is a big responsibility, and we work hard to protect your information, put you in control and give you transparency about your data.”