Fitbit is growing but not at the pace they're wanting, according to the latest financial results released by the fitness tracker giant.
The company reported third quarter revenue of $503.8 million, but have lowered its guidance for the fourth quarter, expecting revenue between $725 million and $750 million, representing growth of just 2-5%.
The reduced guidance for the crucial holiday period saw Fitbit shares tumble by 31%.
“We continue to grow and are profitable, however not at the pace previously expected,” James Park, Fitbit co-founder and CEO, says.
“We are focused on improving the utility of our products and integrating more deeply into the healthcare ecosystem and believe we can leverage our brand and community to unlock new avenues and adjacencies of growth.
The company this year released a range of new products, including the Fitbit Blaze, Alta, Fitbit Charge 2 and the Fitbit Flex 2 . The new products and related accessories comprised 79% of Q316 revenue, compared to 54% in Q216.
“I am pleased to see positive reception for our new products launched in the third quarter. We are attracting new customers while our existing ones are upgrading their devices, underscoring the strength of the Fitbit brand and growing relevancy of wearables as part of consumers' everyday lives,” Park says.
According to reports, Fitbit's struggle in the Asia Pacific regions has contributed to the not-so-rosy outlook, with Park quoted as saying growth is not where they'd like it to be.
“We have a lot of work to do to unlock that region. Every player in the category has to do that,” he told the Financial Times.
Despite the outlook, revenue increased 23% year-over-year in the third quarter to $503.8 million. The company expects revenue between $2.320 billion and $2.345 billion for the full year year 2016, representing growth of 25%-26%