Fitbit shrank its quarterly loss, with chief James Park stating the company had been extremely focused on delivering on a transition plan in Q3.

“We succeeded in growing our healthcare business by 26 per cent and diversifying our revenue to compete in the changing wearables category and saw sequential growth in both tracker and smartwatch devices,” he said.

“We are now the number two player in the smartwatch space in the US, a category we just entered with zero share only 14 months ago. We also launched our most advanced tracker yet, Fitbit Charge 3, which is blurring the lines between trackers and smartwatches and is already one of the top selling devices in the US.”

The company reported a loss of $2.1 million for the quarter, down from $113.4 million in Q3 2017. Revenue of $393.6 million was up slightly from $392.5 million. The company noted a $6 million write-down of a minority equity investment.

It sold 3.5 million wearable devices, compared with 3.6 million in Q3 2017, with ASPs increasing 3 per cent to $108 driven by a growing mix of more costly smartwatches, which accounted for 49 per cent of revenue in the recent quarter, from less than 10 per cent.

Park said the recent launch of Charge 3 “proves there’s still room to innovate” in the basic wearables category.

Loyalty
The company’s US revenue slid, with APAC essentially flat and European sales improved. Products introduced within the last year – Versa, Charge 3, Ace and Aria 2 – generated 62 per cent of sales.

Fitbit said 58 per cent of activations came from new users and 42 per cent repeat buyers: of the latter, almost half had been inactive for 90 days or more. This, the CEO said “speaks to our ability to build a loyal long term customer base” while also attracting new users.

“This gives us confidence in a lessening decline and further stabilisation of the tracker category and our ability to grow device sales, as we move into the final quarter of the year and begin to focus on 2019,” he continued.

For Q4, the company expects revenue of more than $560 million, with device sales down but higher ASPs.