Shares of the San Francisco-based company, which has also kept a tight leash on operating costs, jumped nearly 10% to US$5.19 (RM21.72) in after-market trading.
Fitbit sold 3.5 million devices in the reported quarter, beating estimates of 3.42 million, according to four analysts polled by FactSet Average selling price increased 3% to US$108 per device.
The company, which is popular for its colourful fitness trackers, is a late entrant to the smartwatch market and has been facing stiff competition from tech players with deeper pockets such as Apple Inc and Samsung Electronics Co Ltd.
Fitbit’s smartwatch Versa retails for about US$200, while the price of the Apple Watch Series 4, which is capable of taking an electrocardiogram, begins at US$399.
“Fourteen months ago, we had zero share in the smartwatch category. And today, we are the number 2 player in the US,” Fitbit CEO James Park told analysts on a conference call.
Fitbit recently made tuck-in acquisitions in the healthcare market as it looks for a more predictable stream of revenue in the backdrop of continued sales declines for its tracker devices.
The company’s healthcare business grew 26%, and accounted for less than 10% of its total revenue.
Fitbit now expects fourth-quarter revenue to be more than US$560 million, compared to average analysts’ estimate of US$569.2 million, according to Refinitiv data.
Operating costs were down 17% to about US$150 million from last year.
The company’s net loss narrowed to US$2.1 million, or 1 cent per share, in the quarter ended Sept 29, from US$113.4 million, or 48 cents per share, a year earlier.
On an adjusted basis, the company earned 4 cents per share. Revenue rose marginally to US$393.6 million from US$392.5 million.
Analysts on average had expected the company to lose 1 cent per share, on revenue of US$381.2 million.