Earnings

Fitbit Sells 6M Wearable Devices In Q4 Amid Pending Google Acquisition

Fitbit Google, acquisition

As it sold more wearable devices and average selling price fell, which was driven by more affordable devices as well as higher promotions, Fitbit reported a non-GAAP net loss of $31 million for the fourth quarter. The firm said in an announcement that it did not plan to host an earnings call or offer forward-looking guidance “due to the pending acquisition by Google.”

Co-founder and CEO James Park said in the announcement, “In 2019, we continued to advance our mission of making health accessible to more people around the world by delivering devices, software and services at affordable prices that help improve peoples’ health.”

Park continued, “As a result, we sold 16 million devices and our smartwatch business grew 45 percent at retail, due to strong demand for Versa 2. Our community of active users increased to nearly 30 million, and Fitbit Health Solutions grew 17 percent, underscoring the strength of the Fitbit brand.” Park also said the company rolled out its new premium membership, which is he called the “most personalized experience yet” of Fitbit.

In the fourth quarter, the wellness technology company sold 6 million wearable devices and had an average selling price that dropped 19 percent year-over-year to $81 per device. International revenue fell 7 percent year-over-year to arrive at $226 million. U.S. revenue dropped 16 percent to $276 million.

Fitbit had revenue of $502 million and non-GAAP net losses of $31 million in the fourth quarter with non-GAAP net loss per share of 12 cents, which came out below analysts’ forecasts of $523.21 million for revenue and earnings of 3 cents per share.

Earlier this month, reports surfaced that Google‘s plan to buy Fitbit wasn’t proceeding as well as it had hoped. The search engine firm has been encountering a wall of regulatory red tape, as competition officials in multiple continents worry that the mass control of data by tech companies could have negative impacts. The acquisition, which is worth $2.1 billion on the part of Google, would provide the tech firm with control over Fitbit’s bevy of fitness trackers, smartwatches, and other such wearable devices.

Fitbit said it “announced its entry into a Merger Agreement with Google LLC on Nov. 1, 2019. Stockholders of Fitbit approved the transaction on Jan. 3, 2020.

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