Wearable device maker Fitbit Inc. is taking bigger steps to provide digital healthcare and data collection services to corporate America.

In January, Fitbit CEO James Park announced plans to transform Fitbit from simply making and selling fitness wearables to a digital and mobile healthcare data company that links together disparate segments in the U.S. healthcare system by supplying them with consumer wellness and fitness data.

Now the company has formalized its strategy with a rollout of Fitbit Group Health, a new business unit that will oversee all of Fitbits offerings under one product and services umbrella and target large and small employers that want to launch or expand a corporate wellness program. Our data indicates that many C-level executives could be strong proponents of wearable technology investments as part of employee benefits and wellness, Park told analysts on a recent earnings call. In a recent survey we conducted with 200 CEOs of companies with 1,000 to 10,000 employees, we found that 95% of the CEOs were interested in providing additional incentives to employees who use a fitness tracker.

Fitbit Group Health will consist of four services: corporate wellness, weight management, insurance and health research. The corporate wellness unit can equip company employees with a Fitness wearable device and track results, while the weight loss service helps employers set up plans for collecting and measuring activity and weight data online as part of personal weight loss plans. The insurance service offers similar plans through partnerships with health insurance companies and the health research branch develops custom health research studies with various organizations such as the Mayo Clinic.

The launch of Fitbit Group Health is a natural evolution for us because it positions the company to integrate more deeply into the population health space, says Fitbit chief business officer Woody Scal. With corporate wellness, weve already shown that our connected platform can drive higher engagement and better health behaviors in companies and communities. With that experience under our belts, weve already begun expanding the reach of our technology through other channels, such as health plans.

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Fitbit says it has fitness device and information management deals in place with more than 1,000 companies and in 2015 added new employers such as fast food restaurant Wendys. The Fitbit wellness platform provides a means for companies to be successful with their programs by driving more engagement participation, Park told analysts.

The company lists such corporate and institutional clients as Barclays, Boston College, Emory University and Emory Healthcare, Godaddy.com, Houston Methodist and Target. Our platform consisting of devices, apps, social motivational features, advice and personalized coaching is aimed at helping people make key behavioral changes to be more active, exercise more, eat smarter, eat better and manage their weight, Park said. Fitbit trackers are distributed as the device of choice in several disease management programs for two of the largest U.S. health insurers and one program is focused on diabetes management and has been offering Fitbit trackers to its members as a component of the overall program since 2013.

To diversify its product mix, Fitbit will continue to invest heavily in research and development, the company says. In 2015 total spending by Fitbit.com on research and development increased 177% to $150.0 million from $54.1 million, while the number of employees engaged in research and development grew 176% to 624 from 226. It’s still early in Fitbit’s integration into the larger healthcare world but we believe the connected health and fitness market has great potential to help people to take ownership of their health, and deliver better health outcome, Park told analysts. We believe we have an important role to play that will allow us to become a broader digital health company.

In the first quarter ended April 2 Fitbit:

  • Grew revenue 50% to $505.4 million from $336.8 million in Q1 2015.
  • Recorded net income of $48 million compared with $11.0 million in the prior year.
  • Increased spending on research and development 223% to $72.2 million from $22.4 million in Q1 2015.

Fitbit didnt break out revenue for its corporate wellness business. The company has yet to schedule a release of financial data for the second quarter.

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