Fitbit revealed a number of key metrics ahead of a planned initial public offering, which indicated that the company is seeing good momentum in the burgeoning wearables market.
The company is apparently looking to raise at least $100 million.
A filing made with the US Securities and Exchange Commission showed that the company had sold a total of 20.8 million devices from its launch in 2007 to 31 March 2015. Showing its growing momentum (alongside growth of the fitness tracker market as a whole), 10.9 million devices were sold in 2014.
At the end of March 2015, Fitbit had 9.52 million “paid active users”.
The documents also revealed that the company is already seeing a healthy profit. For the quarter to 31 March, it saw a profit of $48 million, up from $8.9 million in the prior-year period, on revenue of $336.75 million, up from $108.82 million.
For the year to 31 December, it reported a profit of $131.78 million, compared with a prior-year loss of $51.62 million, on revenue of $745.43 million, up from $271.09 million.
With its key numbers heading in the right direction, it seems to be a sensible time for Fitbit to make its listing. But (as is normal for an IPO document) the company detailed a number of factors which could impact its business going forward.
It noted that it expects competition to intensify “as new and existing competitors introduce new or enhanced products and services that are potentially more competitive than our products and services”.
This competition includes “specialised consumer electronics companies, such as Garmin, Jawbone and Misfit”, and traditional health and fitness players such as Adidas and Under Armour. In addition, “many large, broad-based consumer electronics companies either compete in or adjacent markets or have announced plans to do so”, including Apple, Google, LG, Microsoft and Samsung.
Also noted was the March 2014 recall of Fitbit Force, after some users experienced an allergic reaction to adhesives in the wristband. This issue “required significant management attention and disrupted our business operations, and adversely affected our financial condition, operating results and our brand”.
It also noted a recently reported issue concerning its newer products, which “could harm sales of our products and also adversely affect our relationships with retailers that sell our products”.
In order to keep its numbers heading in the right direction, the company said that it intends to build its position by continuing to make “significant” investments in R&D to strengthen its connected health platform, and by introducing new services, citing its March 2015 acquisition of FitStar to add “interactive video-based exercise experiences on mobile devices and computers”.
Also on the agenda are efforts to build brand awareness; to increase global distribution through “select new channels”, and to drive growth in the corporate wellness market.