Fitbit published its consolidated financial report for the fourth quarter of 2017 earlier this week, revealing that it managed to cut its losses by over $100 million year-on-year, having ended the three-month period $45.5 million in the red. The firm’s revenue remained largely flat, amounting to $570.8 million as opposed to $573.8 million posted in Q4 2016. Its gross margin improved by 43.6-percent over the last three months of 2017, suggesting that while its sales have been declining, Fitbit is now becoming better at making money from the devices that it does sell. During the entire 2017, the San Francisco, California-based firm recorded 15.3 million sales, a substantial decline compared to the 22.3 million products it managed to offload a year ago. Its active users still grew to 25.4 million in 2017, partially due to the fact that some of its previous customers decided to return to the brand. The company had 23.2 million active users over 2016 but didn’t disclose its quarterly sales and usage statistics.
Going forward, Fitbit is planning to release a series of new smartwatches as it believes consumers are now gravitating toward such solutions and are moving away from more basic fitness trackers. The company didn’t specify how many new models it’s preparing for 2018 but strongly suggested it will be launching more than one smartwatch this year. It’s presently unclear whether Fitbit considers redesigned versions of its products to be entirely new entries, with one such device being announced earlier today in the form of the Adidas Edition Ionic. Besides smartwatches, Fitbit will also be focusing on its Health Solutions division moving forward as it expects to grow the number of its premium subscribers in 2018 but not by a significant margin. While no specific numbers have been provided, the firm expects the growth of its Health Solutions subscribers to be “immaterial” to the total revenue generated by its wearable business over the course of this year.
Until Fitbit is able to conduct a more large-scale shift to smartwatches and as the market continues to move away from fitness trackers to more full-featured devices, the company is expecting its annual revenue to continue declining. Whereas it had a turnover of $2.17 billion in 2016 and posted $1.61 billion in revenue this year, Fitbit is now expecting to generate approximately $1.5 billion in sales over the course of 2018, having arrived at that figure after extrapolating unspecified demand trend data for the first quarter of the current year.