Fitbit Inc (NYSE:FIT)’s Corporate Wellness Business Could Drive Growth In Future


Wearable device maker Fitbit Inc (NYSE:FIT) recently went public and so far, things have been working out well. However, there is still room for growth, especially in the software and services businesses.

So far the company has revealed its financial summary for the second quarter of 2015 and things are looking up for Fitbit. The positive performance can be attributed to the strategic marketing strategies. Fitbit was, therefore, able to accumulate an impressive revenue portfolio within a short period. However, the software and services departments exhibited great potential for growth, despite them not earning enough revenue currently.

Regardless of the underperformance, Fitbit can make rapid improvements in the future as it gathers momentum. One of the reasons why the corporate wellness business stands to take major steps forward is the huge offerings from the technology and device world as digitization takes root. In the second quarter alone, the company managed to sell 4.5 million connected devices.

The firm projects that the upward revenue trend will continue in the third quarter, and that’s why it has raised its expectations. Fitbit recently signed 50 Fortune 500 companies aboard its corporate wellness plans. This is where the software and services aspect comes in. Analysts expect healthcare costs to be on the rise and employers are willing to do what they can to maintain proper health for their employees. The point being prevention is better than cure, and in this case, maintaining health is cheaper than medical costs.

Fitbit will, therefore, bring the necessary services to the companies through its software and data analysis. This means the firm will have to redefine its software to ensure optimal service to its clients. Fitness has proven to be a rapidly growing industry, especially among the modern generation that coincidentally has a high affinity for technology. This pretty much locks everything into place.

According to Fitbit CEO James Park, software and services units represent a very small proportion of the business. If steered in the right direction, the two departments will end up being some of the biggest revenue drivers for the company.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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