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Fitbit’s revenues climbed by 46%

Fitbit (NYSE:FIT) topped earnings per share and revenue expectations for the current quarter.

Revenues climbed some 46% from the same quarter in the prior year, but gross margin slipped 500 basis points to 41.8%. According to the press release, gross margins were impacted by an increase in “warranty reserves for legacy products.” The company expects gross margins to return to a more normalized level next quarter.

Management expects revenues of $490 million to $510 million for next quarter and $2.5 billion to $2.6 billion for the full year.

When Fitbit came to market, it toted remarkable, triple-digit revenue growth and showed its profitability potential. That and the booming smartwatch/devices market enticed a lot of investors.

However, the story hasn’t quite panned out as many had hoped.