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Fitbit (FIT) Q3 Loss Narrower Than Estimated, Revenues Beat
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Fitbit, Inc. reported third-quarter 2020 adjusted loss of 3 cents per share, narrower than the Zacks Consensus Estimate of a loss of 11 cents.
The company’s total revenues came in at $363.9 million, up 5% year over year. Also, the figure surpassed the Zacks Consensus Estimate by 21.7%.
Let’s check out the numbers in detail.
Top-Line Details
During the third quarter, Fitbit sold 3.3 million wearable devices, down 5.7% year over year.
The average selling price increased 8% from the prior-year level to $104 per device for the third quarter. This increase was primarily driven by the introduction of higher priced smartwatches.
Geographically, revenues from the United States — which accounted for 54% of third-quarter revenues — decreased 6% year over year.
International revenues accounted for 46% of the revenues and grew 20% from the prior-year quarter to $169 million. Revenues from Americas — excluding the United States — improved 55% to $26 million and that of EMEA was up 23% year over year to $102 million.
However, revenues from APAC declined 1% from the year-ago quarter to $41 million.
For the quarter, smartwatches represented 60%, trackers accounted for 36% and non-device software offerings comprised 4% of revenues. Smartwatch sales benefited from the introduction of two new smartwatches, Sense and Versa 3.
Non-GAAP gross margin was 38.1%, up 610 basis points year over year. Gross margins were driven by lower promotions, reduced warranty expense and growth of Premium revenues, among others.
Non-GAAP operating expenses were 152 million, up 6% from the year-ago quarter. The increase was driven by higher employee costs, partially offset by lower marketing costs and customer service expenses.
Non-GAAP operating loss was $51.2 million compared with a loss of $52.1 million in the year-ago quarter.
Balance Sheet and Cash Flow
Cash and cash equivalents & marketable securities were $416.4 million compared with $448.2 million in the second quarter.
Accounts receivables were $358.5 million compared with $215.4 million in second-quarter 2020.
Cash flow from operations was ($13) million and free cash flow totaled ($27) million for the third quarter of 2020.
Long-term earnings growth for Alibaba Group, Overstock.com, and Revolve Group is currently projected at 19.8%, 20% and 17.3%, respectively.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Fitbit (FIT) Q3 Loss Narrower Than Estimated, Revenues Beat
Fitbit, Inc. reported third-quarter 2020 adjusted loss of 3 cents per share, narrower than the Zacks Consensus Estimate of a loss of 11 cents.
The company’s total revenues came in at $363.9 million, up 5% year over year. Also, the figure surpassed the Zacks Consensus Estimate by 21.7%.
Let’s check out the numbers in detail.
Top-Line Details
During the third quarter, Fitbit sold 3.3 million wearable devices, down 5.7% year over year.
The average selling price increased 8% from the prior-year level to $104 per device for the third quarter. This increase was primarily driven by the introduction of higher priced smartwatches.
Geographically, revenues from the United States — which accounted for 54% of third-quarter revenues — decreased 6% year over year.
International revenues accounted for 46% of the revenues and grew 20% from the prior-year quarter to $169 million. Revenues from Americas — excluding the United States — improved 55% to $26 million and that of EMEA was up 23% year over year to $102 million.
However, revenues from APAC declined 1% from the year-ago quarter to $41 million.
For the quarter, smartwatches represented 60%, trackers accounted for 36% and non-device software offerings comprised 4% of revenues. Smartwatch sales benefited from the introduction of two new smartwatches, Sense and Versa 3.
Fitbit, Inc. Price, Consensus and EPS Surprise
Fitbit, Inc. price-consensus-eps-surprise-chart | Fitbit, Inc. Quote
Operating Results
Non-GAAP gross margin was 38.1%, up 610 basis points year over year. Gross margins were driven by lower promotions, reduced warranty expense and growth of Premium revenues, among others.
Non-GAAP operating expenses were 152 million, up 6% from the year-ago quarter. The increase was driven by higher employee costs, partially offset by lower marketing costs and customer service expenses.
Non-GAAP operating loss was $51.2 million compared with a loss of $52.1 million in the year-ago quarter.
Balance Sheet and Cash Flow
Cash and cash equivalents & marketable securities were $416.4 million compared with $448.2 million in the second quarter.
Accounts receivables were $358.5 million compared with $215.4 million in second-quarter 2020.
Cash flow from operations was ($13) million and free cash flow totaled ($27) million for the third quarter of 2020.
Zacks Rank and Stocks to Consider
Currently, Fitbit has a Zacks Rank #4 (Sell). Some better-ranked stocks in the broader technology sector include Alibaba Group Holding Limited (BABA - Free Report) , Overstock.com, Inc. and Revolve Group, Inc. (RVLV - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Alibaba Group, Overstock.com, and Revolve Group is currently projected at 19.8%, 20% and 17.3%, respectively.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>