Fitbit saw its revenue beat expectations and more than triple to $400m (£256m) in the second quarter of the year. Margins fell, however, due to higher spending on new products.
Net income rose to $17.7m in the quarter from $14.8m in the same period the previous year.
“Our second quarter results included our highest quarterly revenue in the eight-year history of Fitbit,†said James Park, Fitbit co-founder and CEO.
“In the quarter, we introduced new features and services, expanded brand awareness, increased global distribution and further penetrated the corporate wellness market. We remain focused on continuing to deliver innovative products and services that empower people around the world to reach their health and fitness goals.â€Â
Second Quarter 2015 Financial Summary
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| Three Months EndedJune 30, | Six Months EndedJune 30, | |||||||||||||||
| In thousands, except percentages and per share amounts | 2014 | 2015 | 2014 | 2015 | ||||||||||||
| Revenue | $ | 113,572 | $ | 400,412 | $ | 222,387 | $ | 737,166 | ||||||||
| Gross margin | ||||||||||||||||
| GAAP | 51 | % | 47 | % | 46 | % | 48 | % | ||||||||
| Non-GAAP* | 52 | % | 47 | % | 56 | % | 48 | % | ||||||||
| Net income | ||||||||||||||||
| GAAP | $ | 14,753 | $ | 17,681 | $ | 23,625 | $ | 65,678 | ||||||||
| Non-GAAP* | $ | 18,345 | $ | 51,313 | $ | 43,240 | $ | 107,487 | ||||||||
| Diluted net income per share | ||||||||||||||||
| GAAP | $ | 0.07 | $ | 0.07 | $ | 0.11 | $ | 0.29 | ||||||||
| Non-GAAP* | $ | 0.09 | $ | 0.21 | $ | 0.21 | $ | 0.47 | ||||||||
| Adjusted EBITDA* | $ | 29,088 | $ | 86,245 | $ | 71,116 | $ | 179,628 | ||||||||
| Devices sold | 1,720 | 4,458 | 3,295 | 8,324 | ||||||||||||
| * For information regarding the non-GAAP financial measures, see “Non-GAAP Financial Measures†and “Reconciliation of GAAP to Non-GAAP Financial Measures†below. | ||||||||||||||||
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Second Quarter 2015 and Recent Fitbit Highlights
- Sold 4.5 million connected health and fitness devices in the second quarter of 2015
- International revenue increased 250% year-over-year for the second quarter of 2015, driven by EMEA and APAC year-over-year revenue growth of 301% and 292%, respectively, for the second quarter of 2015
- Released an update to the Fitbit Surge, enabling GPS bike tracking
- Redesigned Fitbit mobile experience, including the visual redesign of the daily activity graphs for iPhone, Android and Windows Phones
- Expanded partnership with Tory Burch
- Teamed up with Kellogg’s, showcasing Fitbit Flex on 20 million packages nationwide
- Entered into Corporate Wellness agreements with Geico, Sutter Health, Transunion, Quicken Loans, and several financial institutions. To date, we have signed over 50 of the Fortune 500 companies to our Corporate Wellness offerings
Outlook
Fitbit’s outlook for the third quarter of 2015 is as follows:
- Revenue in the range of $335 million to $365 million
- Non-GAAP gross margin in the range of 47% to 48%
- Non-GAAP tax rate of approximately 37%
- Stock-based compensation expense in the range of $15 million to $17 million
- Non-GAAP diluted net income per share in the range of $0.07 to $0.10
- Adjusted EBITDA in the range of $35 million to $45 million
- Non-GAAP diluted share count between 247 million and 249 million
Fitbit’s outlook for the full year of 2015 is as follows:
- Revenue in the range of $1.6 billion to $1.7 billion
- Non-GAAP gross margin in the range of 47% to 48%
- Non-GAAP tax rate of approximately 37%
- Stock-based compensation expense in the range of $50 million to $54 million
- Non-GAAP diluted net income per share in the range of $0.69 to $0.77
- Adjusted EBITDA in the range of $275 million to $310 million
- Non-GAAP diluted share count between 235 million and 240 million
