Fitbit’s revenue has tripled since last year because of soaring sales of the device, the company said in its first set of results since it went public in June.
Fitbit sold 4.5 million devices in the second quarter of the year and by some estimates owns almost 70 per cent of the US market for fitness trackers.
Revenue in the three months to June was $400 million, up from $114 million in the same three months last year.
The news didn’t stop shares in the company tumbling 13 per cent from a record high of $51.9 during regular hours, to $44.9 after hours.
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Investors are thought to have focused on narrowing profit margins, down to 47 percent from 52 per cent the previous year. This was partly due to spiralling profit margins of $107.1 million. Marketing costs accounted for half of the figure. Fitbit said operating costs were likely to remain high as it invested in marketing to expand the brand outside the US.
Investors sink Fitbit stock 12% after earnings http://t.co/yXssFpzDLA $FIT pic.twitter.com/jLbOZnIZdF
— Harrison Weber (@HarrisonWeber) August 5, 2015
Fitbit’s very high market share of around 70 per cent in the US could also suffer from competition as other brands seek to cash in on the trend for fitness trackers and personal health.
