Fitbit Reports Third Straight Year of Revenue Decline, Despite Growing User Base

Fitbit, San Francisco, reported fourth quarter 2018 revenue of $571.2 million and year-end revenue of $1.51 billion, representing an increase of less than 1 percent and a decrease of 6.7 percent, respectively, according to a Feb. 27 financial report. This marks Fitbit's third consecutive year of revenue decline.

Fitbit sold 13.9 million devices in 2018, a decrease of 1.4 million devices sales year-to-year. Device sales during the fourth quarter increased year-over-year by 200,000, with 5.6 million total sales. New devices including the Fitbit Versa, Fitbit Ace and Fitbit Charge 3 represented 79 percent of the fourth quarter's revenue and 57 percent of the full year's revenue.

Company CEO James Park said he was proud of Fitbit's overall 2018 performance and specifically lauded the 9 percent increase in its active user base (totaling 27.6 million users as of Dec. 31, 2018).

"[O]ur results demonstrate that our strategy is the right one, placing us on a path back to growth and profitability," Park said in the report. "We grew our active users 9 percent to 27.6 million, became the No. 2 player in the smartwatch category in the U.S., and grew the number of devices sold in the fourth quarter. In 2019 we’re committed to offering more affordable devices with engaging health and fitness features, making the health benefits of being on Fitbit even more accessible. As a result, we are forecasting active users, devices sold and revenue to grow in 2019. We expect our Fitbit Health Solutions revenue growth to accelerate to approximately $100 million and to grow non-device consumer revenue.”

For the fourth quarter, Fitbit reported a net income of $15.4 million, versus a loss of $45.5 million year-over-year. For the full year, the company reported a net loss of $185.8 million, as compared to a 2017 loss of $277.2 million.

On the heels of its financial report, Fitbit also announced four new products: Fitbit Versa Lite Edition, Fitbit Inspire HR, Fitbit Inspire and Fitbit Ace 2. Park said the Fitbit app will soon be unveiling a major redesign as well.

“With our newest products, we’re delivering high-quality, easy-to-use wearables that are more affordable, so getting healthy can be accessible to people of all ages and activity levels–even those who have never tried a wearable,” Park said in a media release. “Bringing more users to the wearables category and growing our community of active users is a critical part of our strategy. We will continue to build on the Fitbit platform to provide a more personalized and valuable experience for our users through a paid premium service expected to launch later this year.”