Fitbit Inc. (NYSE: FIT) reported second-quarter financial results after the markets closed on Tuesday. The company said that it had $0.12 in earnings per share (EPS) on $587 million in revenue. There were consensus estimates from Thomson Reuters that called for $0.11 in EPS on $578.48 million in revenue. The same period from last year had $0.21 in EPS on $400.41 million in revenue.
During the second quarter, the company sold 5.7 million devices (the best quarter to date yet), while total devices sold to date is 48.7 million. New products, such as the Fitbit Blaze and Alta, including related accessories, comprised 54% of second quarter revenue, versus 50% in the first quarter.
The total revenue breakdown was 76% from the United States; 17% from EMEA; 2% from APAC; and 5% from other Americas. Revenues grew by 42% in the United States; 150% in EMEA; and 63% in other Americas, but revenues fell in APAC by 54%.
Gross margin was affected by an increase in warranty reserves for legacy products, with an expectation that the additional reserves taken will adequately cover future warranty liability, allowing a return to more normalized gross margins beginning in the third quarter.
In terms of outlook for the third quarter, the company expects to have EPS in the range of $0.17 to $0.19 and revenues in the range of $490 million to $510 million. There are consensus estimates that are calling for $0.17 in EPS on $498.53 million in revenue for the fourth quarter.
James Park, co-founder and CEO of Fitbit, commented on earnings:
Second quarter results reflect accelerated unit and revenue growth in the U.S. and EMEA, our two largest markets, despite an unusually strong Q215 with the full availability of Fitbit Charge HR fulfilling built-up demand in that quarter. Our strong profitability reflects careful management of operating expenses, while we continue to invest in future growth. Based on the progress of our business, against a backdrop of a growing worldwide opportunity for our products, we remain confident in our guidance for the year.
On the books, cash, cash equivalents, and marketable securities totaled $759.7 million at the end of the quarter, versus $664.5 million in the same period from last year.
Shares of Fitbit closed Tuesday down nearly 4% at $13.16, with a consensus analyst price target of $21.63 and a 52-week trading range of $11.65 to $51.90. Following the release of the earnings report, the stock was up 6% at $13.95 in the after-hours trading session.