Fitbit, maker of wearable fitness devices, saw its shares plunge 20.8% after reporting fourth-quarter earnings. Shares fell $3.44 on Tuesday to close at $13.08 per share near an all-time low.
The company reported fourth quarter revenues of $711.6 million and $1.85 billion for all of 2015. Net income for the quarter was $39.2 million and $254.1 million for all of 2015.
Fitbit sold 8.2 million connected health and fitness devices in the fourth quarter which includes the holiday season. U.S. revenue in the quarter grew 100% from the previous year and made up 75% of fourth quarter revenue. The company sold a total of 21.4 million devices for all of 2015.
“We believe we are beginning 2016 with strong customer engagement and retention, an accelerating pace of innovation and competitive differentiation, and a foundation of significant revenue growth and profitability in 2015,” said James Park, Fitbit co-founder and CEO. “I am very optimistic about our growth opportunities and long-term vision as a broader digital health company.”
The company also reported:
- Active users grew 152% to 16.9 million at year-end 2015 from 6.7 million at year-end 2014
- Added 18.0 million new registered device users in 2015, of which 13.0 million, 72%, were active users at year-end; Total year-end 2015 registered device users was 29.0 million
- Research and development headcount grew to 624 at year-end 2015, comprising 57% of the company’s employees
For the first quarter of 2016, Fitbit estimates revenue in the range of $420 million to $440 million. The company projects 2016 revenue of $2.4 to $2.5 billion.
Investors weren’t happy with the projections and shares tumbled Tuesday and five different research firms downgraded the stock according to Yahoo Finance.