It's Thursday August 1st. Welcome to Market Foolery. I'm Chris Hill joining me in studio.

First time in a while. Aaron Bush, good to see you.

It's good to be here. Thanks for having me.

Can you believe it to August?

I hate to sound like an old man, but when I was sort of typing up my notes for today, I was like,

wow, to August already?

Yeah, it is.

That surprised me when I was typing the date on my notes.

I was like, there's an eight 8 what's going on what's happening here

we've got software earnings we've got medical device earnings we've got video

games to talk about we got to start with Fitbit though. Third quarter revenue for

Fitbit was higher than expected. Their loss for the quarter was smaller than expected and nobody

cares because they cut guidance for the full fiscal year and shares of

Fitbit are falling about 20% this morning.

Yeah, so for those of you who have not been following Fitbit closely, they've changed their strategy

a little bit.

What they've done is they've lowered their prices on a ton of their different trackers in order to sell more devices so so they've lowered

prices about 20% the year over year in order to sell 31% more devices and so that

explains most of the 5% revenue growth, but cash flows are still

weak, so still pretty terrible overall. And as a result of this, their margins have been hit.

This was never, because it's hardware. It never was a high

gross margin business, but when you lower your prices 20% that that hurts you

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