Fitbit lowers guidance after Versa Lite disappoints – TechCrunch
July 31, 2019
Fitbit continued solid device growth for Q2, up 31%, year over year, representing a 5% bump in revenue. From that angle, the company’s long-term turnaround appears to be on track — but things weren’t all cheery this time out. Notably, the company’s stock is down in after-hours trading after it lowered guidance for annual revenue.
The company laid much of the blame at the feet of the Versa Lite. Announced in March, the $160 device is a stripped-down version of the Versa, the smartwatch that helped kickstart Fitbit’s most recent act.
“While we are disappointed to lower guidance for the year, we remain confident in our long-term transformation strategy and have demonstrated good results across key areas of the business,” CEO James Park said in a release tied to the earnings. We saw growth in devices sold, increased active users and continued growth in our Fitbit Health Solutions channel, up 42% in the first half of 2019.”
All told, smartwatch revenue dropped 27% year over year, with the Lite making up a lower than expected 38% of that number. Ultimately the company’s recently consolidated tracker offers were there to pick up some of the slack, with a 51% year over year increase.
The stumbles come in contrast to this week’s Apple earnings, which found wearables on the upswing as iPhone sales continued to sputter. In addition to a newfound focus on smartwatches, Fitbit’s recent shift also includes a healthcare offering. Fitbit Health Solutions is up 42% for the year, with international growth playing a key role.