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It’s official: San Francisco-based fitness wearable manufacturer Fitbit is preparing to go public.

The documents, issued on May 7, reveal a company which is, on the surface, in good health; quarterly revenue tripling year over year, from $108.8m in Q114 to $336.8m in Q115. The number of paid users has also rocketed comparatively; from 2.6m at the end of 2013, to 6.7m the same time the year after, and 9.5m by the end of Q115, while device numbers have grown from 4.5m to 10.9m in 2014.

The figures certainly suggest a company which continues to fight off its competition as the fitness wearable market becomes ever more competitive. It’s also the case that employers, as well as consumers, are getting on board. Enterprise mobility management provider Good Technology has had a Fitbit program in place since 2014, with CEO Christy Wyatt saying the move was “more philosophical than strategic.”

Yet there’s a caveat.

Jan Dawson, founder of Jackdaw Research, had a dig through the figures, and found a couple of interesting discrepancies. In terms of paid active users (PAUs), users either need to have ‘an active Fitbit Premium or FitStar subscription’, have ‘paired a health and fitness tracker or Aria scale with his or her Fitbit account’, and have ‘logged at least 100 steps with a health and fitness tracker or a weight measurement using an Aria scale.’

It’s clearly a broad spectrum of users Fitbit classifies, but the real gem here is how these users fluctuate over time, particularly in regard to how many devices the average Fitbit user buys, as well as how many abandoned users the company has. The answer to the first question is, as a rule, one; according to Dawson only 10% of the total number of devices are sold to people who already have one. Whether that is for people who legitimately want two devices or are buying as a present, for example, is unclear.

However, the answer to the second question is more positive. The number of paid active users as a percentage of registered users continues to hover at around the 50% mark, which Dawson described as ‘surprising’, given cumulative numbers from abandoned users should theoretically drag that number down over time. Yet half of Fitbit users still abandon their product.

Dawson argues Fitbit is going public at the right time for them. The launch of the Apple Watch creates a trigger for the event; it ramps up the awareness of wearable tech, while at the same time threatening the concept of the dedicated fitness tracker. Similarly, He notes in: “Fitbit is IPOing at the best possible time from the perspective of its existing owners and investors, but that its future looks much less rosy than its past.”

You can take a look at Fitbit’s S-1 filing here.

 

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