Fitbit (NYSE: FIT) reported Q4 EPS of ($0.02), $0.02 worse than the analyst estimate of $0.00. Revenue for the quarter came in at $571 million versus the consensus estimate of $588.89 million.

GUIDANCE:

Fitbit sees Q1 2018 EPS of ($0.21)-($0.18), versus the consensus of ($0.09). Fitbit sees Q1 2018 revenue of $240-255 million vs $340.3 million.

Full Year 2018 Guidance

• We expect our device mix to continue to shift towards smartwatches over the course of the year. We expect to grow Fitbit Health Solutions and increase premium subscribers, but this growth will be relatively immaterial to wearable device revenue. We extrapolated the demand trend forecasted in the first quarter 2018 for the full year and expect revenue to be approximately $1.5 billion.
• We expect device mix shift and fixed cost deleveraging to negatively impact gross margins, partially offset by operating efficiencies.
• We expect to drive operating expenses 7% lower, to a target of $740 million.
• Capital expenditures as a percentage of revenue of approximately 3.5%.
• We expect free cash flow to decline less than revenue and expect to breakeven for 2018. Guidance excludes the benefit of an expected $80 million tax refund payment.
• We expect effective non-GAAP tax rate to be volatile driven by geographic mix of revenue, tax credits, and shift to profitability.
• Stock-based compensation expense of approximately $110 million and basic/diluted share count of approximately 248/267 million.

(Street sees FY revenue of $1.74 billion)

For earnings history and earnings-related data on Fitbit (FIT) click here.