Fitbit beats by $0.10, beats on revs; guides Q1 EPS below consensus, revs below consensus; guides FY16 EPS in-line, revs in-line  

FitBit is down after hours after the company's quarterly report. Though their earnings and revenue easily topped Wall Street's forecast the company totally whiffed on forward guidance due to "extra costs" that they will endure in their latest product manufacturing. Below are the highlighted stats from the quarterly report. 

  • Reports Q4 (Dec) earnings of $0.35 per share, $0.10 better than the Capital IQ Consensus of $0.25; revenues rose 92.2% year/year to $711.6 mln vs the $648 mln Capital IQ Consensus.
  • Co sold 8.2 mln connected health and fitness devices.
  • U.S. comprised 75% of Q4 revenue; EMEA 12%, APAC 8%, and Other Americas 5%.
  • Q4 non-GAAP gross margin adjusted for foreign currency exchange rate impact was 50.0%.
  • Active users grew 152% to 16.9 million at year-end 2015 from 6.7 million at year-end 2014
  • Co issues downside guidance for Q1, sees EPS of $0.00-$0.02 vs. $0.23 Capital IQ Consensus Estimate; sees Q1 revs of $420-$440 mln vs. $484.59 mln Capital IQ Consensus Estimate. Co states, "For 1Q16, FIT expects several dynamics to drive results. For the first time in the company's history, FIT will make a global launch of new products, Fitbit Blaze and Alta. Launching media campaigns around the world is expected to drive higher sales and marketing expenses for the quarter. Also, the timing of shipments into sales channels may result in the majority of reorders, especially for Alta, coming in the second quarter of 2016. The company also expects to incur additional manufacturing costs in the first quarter to maximize production of new products to meet expected demand, which is expected to impact gross margins in the quarter."
  • Co issues in-line guidance for FY16, sees EPS of $1.08-$1.20 vs. $1.14 Capital IQ Consensus Estimate; sees FY16 revs of $2.4-$2.5 bln vs. $2.41 bln Capital IQ Consensus Estimate. Co expects gross margin of 48.5-49.0%.

BIAS: This is dog shit. Sell the "F" out of "it."