Fitbit, the San Francisco-based wearable fitness device maker, increased its revenue by 23 percent in third quarter 2016 but saw its net income decrease by 40 percent as its stock dropped 30 percent in after-hours trading Wednesday.
Fitbit’s stock, which closed at $12.81 on Wednesday on the New York Stock Exchange, plummeted to $8.91 in after-hours trading shortly after the release of the company’s third quarter 2016 financials. Fitbit co-founder and CEO James Park said the company continues to grow but not at the pace the company had expected.
“We are focused on improving the utility of our products and integrating more deeply into the health care ecosystem and believe we can leverage our brand and community to unlock new avenues and adjacencies of growth,” Park said in a statement ahead of an earnings call with analysts.
Fitbit generated $503.8 million in third quarter 2016 revenue compared to $409.3 million in third quarter 2015. For the first nine months of 2016, Fitbit generated $1.6 billion in revenue compared to $1.1 billion in the first nine months of 2015.
The company’s net income in third quarter 2016, according to generally accepted accounting principles (GAAP), was $26.1 million compared to $45.8 million in the same period a year ago. For the first nine months of 2016, Fitbit’s GAAP net income was $43.5 million compared to $111.5 million in the first nine months of 2015.
Fitbit sold 5.3 million devices in third quarter 2016 compared to 4.8 million devices in the same period last year. The company had an 11 percent growth in unit sales in third quarter 2016 along with an 11 percent rise in the average selling price of its products.
New products and related accessories comprised 79 percent of third quarter 2016 revenue compared to 54 percent in second quarter 2016. For the first nine months of 2016, Fitbit sold 15.8 million devices compared to 13.1 million devices in the first nine months of 2015.