Wearable device maker Fitbit reported better-than expected first-quarter results and reaffirmed its full-year revenue forecast on Wednesday, as it sells more smartwatches and wearable devices that track health at affordable prices.
Shares of the company rose 1.5 percent to $5.45 (roughly Rs. 380) in late trade.
Fitbit, which helped pioneer the wearable devices craze, posted year-over-year trackers growth for the first time in three years, getting a boost from its new Inspire line. Smartwatch sales also more than doubled in the quarter.
The San Francisco-based company said new devices launched in the past 12 months, including the Inspire brand, made up 67 percent of revenue in the quarter.
Fitbit said it sold 2.9 million devices in the quarter, 36 percent higher than a year-ago. Average selling prices fell 19 percent to $91 per device as it focused on cheaper devices to compete with tech-heavyweights Apple and Samsung.
Analysts expected the company to sell 2 million devices at an average selling price of $109.33, according to data from FactSet.
To keep pace with rivals, Fitbit has focused on value prices – selling Inspire at $69.95 and the HR version, capable of heart rate monitoring, at $99.95. Apple’s smartwatches start at $279 and Samsung’s watches and trackers lead in at $200.
Fitbit’s Health Solutions business grew 70 percent in the quarter and posted revenue of $30.5 million. The unit is focused on subscription-based fitness coaching services that connect users with doctors, hospitals and lifestyle coaches.
“We think Fitbit is on the right track pushing to get its trackers and smartwatches on as many wrists as possible, and then ultimately leveraging the user-base and technology for its healthcare initiatives,” said Alicia Reese, senior associate, equity research, Wedbush Securities Inc.
The company’s net loss narrowed to $79.5 million, or 31 cents per share, in the first quarter ended March 30 from $80.9 million, or 34 cents per share, a year earlier.
Excluding items, Fitbit reported a loss of 15 cents per share, beating analysts’ average estimate of a loss of 22 cents, according to IBES data from Refinitiv.
Revenue rose to $271.9 million from $247.9 million, above Wall Street expectations of $259.7 million.
Fitbit reaffirmed its full-year revenue forecast of $1.52 billion to $1.58 billion, expecting to sell more devices at cheaper prices.
For the second quarter, Fitbit forecast revenue between $305 million and $320 million, the midpoint of which is slightly below the average analysts’ estimate of $312.8 million.
The company forecast an adjusted loss for the second quarter between 17 cents to 20 cents per share. Analysts’ estimate a loss of 16 cents