SAN FRANCISCO--(BUSINESS WIRE)--
Fitbit, Inc. (NYSE:FIT), the leader in the connected health and fitness
market, today reported revenue of $586.5 million, GAAP diluted net
income per share of $0.03, non-GAAP diluted net income per share of
$0.12, GAAP net income of $6.3 million, and adjusted EBITDA of $48.3
million, for its second quarter of 2016.
“Second quarter results reflect accelerated unit and revenue growth in
the U.S. and EMEA, our two largest markets, despite an unusually strong
Q215 with the full availability of Fitbit Charge HR fulfilling built-up
demand in that quarter,” said James Park, Fitbit co-founder and CEO.
“Our strong profitability reflects careful management of operating
expenses, while we continue to invest in future growth. Based on the
progress of our business, against a backdrop of a growing worldwide
opportunity for our products, we remain confident in our guidance for
the year.”
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Second Quarter 2016 Financial Summary
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For the Three Months Ended
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For the Six Months Ended
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In millions, except percentages and per share amounts
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June 30,
2015
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July 2,
2016
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June 30,
2015
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July 2,
2016
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GAAP Results
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Revenue
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$
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400.4
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$
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586.5
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$
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737.2
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$
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1,091.9
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Gross Margin
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46.8
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%
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41.8
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%
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48.4
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%
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43.8
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%
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Net Income
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$
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17.7
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$
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6.3
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$
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65.7
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$
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17.4
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Diluted Net Income Per Share
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$
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0.07
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$
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0.03
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$
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0.29
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$
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0.07
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Non-GAAP Results
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Gross Margin
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47.2
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%
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42.0
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%
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48.4
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%
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44.1
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%
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Net Income
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$
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51.3
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$
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29.5
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$
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107.5
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$
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54.0
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Diluted Net Income Per Share
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$
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0.21
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$
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0.12
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$
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0.47
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$
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0.22
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Adjusted EBITDA
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$
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86.2
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$
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48.3
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$
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179.6
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$
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93.4
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Devices Sold
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4.5
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5.7
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8.3
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10.5
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For additional information regarding the non-GAAP financial measures,
see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to
Non-GAAP Financial Measures” below.
For additional information regarding the change to our quarterly
reporting calendar, see “Change to Quarterly Reporting Calendar” below.
Second Quarter 2016 Financial Highlights
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Sold 5.7 million devices
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Q216 revenue increased 46% year-over-year
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U.S. comprised 76% of Q216 revenue; EMEA 17%, APAC 2%, and Other
Americas 5%
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U.S. revenue grew 42% year-over-year; EMEA 150%, APAC (54)%, and Other
Americas 63%
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APAC was impacted by factors including the progressive shut down of
retailer Dick Smith in Australia and a reduction of channel inventory.
Excluding the Australia impact, APAC revenue increased 98%
year-over-year.
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New products, Fitbit BlazeTM and AltaTM,
including related accessories, comprised 54% of Q216 revenue, compared
to 50% in Q116
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Gross margin was affected by an increase in warranty reserves for
legacy products, with an expectation the additional reserves taken
will adequately cover future warranty liability, allowing a return to
more normalized gross margins beginning in Q316
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The 120% GAAP and 90% non-GAAP year-over-year increase in operating
expense reflects increased investments in R&D and marketing to drive
innovation and growth
Second Quarter 2016 and Recent Fitbit Operational Highlights
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Of all the activations of Alta and Blaze in the second quarter,
approximately two-thirds were by new customers, and the other third
were by people who own, or previously owned, another Fitbit device.
Similar to last quarter, approximately a fifth of those repeat
purchasers were reactivations, having been inactive for 90 days or more
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Together, Blaze and Alta accessories grew 40% sequentially from Q116,
and all accessories together grew 21% sequentially
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Completed the installation of new, larger display materials in many
Fitbit retail locations
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Launched Chinese, Japanese and Korean language versions of products
into their respective markets, and launched a relationship with
Alibaba’s TMall platform, generating 100 million consumer impressions
and approximately 1.3 million unique visitors to TMall
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R&D headcount grew to 863 in Q216, comprising 59% of the company’s
headcount
Outlook and Guidance
Fitbit’s outlook for the third quarter of 2016 is as follows:
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Revenue in the range of $490 to $510 million
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Non-GAAP gross margin of approximately 48% to 49%
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Adjusted EBITDA in the range of $70 to $80 million
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Non-GAAP diluted net income per share in the range of $0.17 to $0.19
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Non-GAAP diluted share count between 244 and 247 million
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Stock-based compensation expense in the range of $26 to $28 million
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Non-GAAP tax rate of approximately 30%
Fitbit’s outlook for the full year of 2016 is as follows:
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Revenue in the range of $2.5 to $2.6 billion
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Non-GAAP gross margin of approximately 47%
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Adjusted EBITDA in the range of $430 to $490 million
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Non-GAAP diluted net income per share in the range of $1.12 to $1.24
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Non-GAAP diluted share count between 244 and 250 million
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Stock-based compensation expense in the range of $92 to $97 million
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Non-GAAP tax rate of approximately 30%
Webcast and Conference Call Information
Fitbit will host a conference call today at 5:00 p.m. Eastern Time, 2:00
p.m. Pacific Time, to discuss its results. Investors may access a free,
live webcast of the call through the Investor section of Fitbit’s
website at investor.fitbit.com. The call can also be accessed by dialing
(719) 325-2146, access code 8214317. A replay of the call will be
archived on Fitbit’s website for the following six months.
Forward Looking Statements
This press release contains forward-looking statements that involve
risks and uncertainties, including statements regarding our financial
outlook for the third quarter 2016 and the full year of 2016, our
investments in research and development, sales and marketing, and
consumer engagement features and the impact of those investments, our
management of warranty reserves, our anticipated return to normal gross
margin expected in the third quarter of 2016, and the potential for
growth of our user community through network effects. These
forward-looking statements are only predictions and may differ
materially from actual results due to a variety of factors including:
the effects of the highly competitive market in which we operate,
including competition from much larger technology companies; our ability
to anticipate and satisfy consumer preferences in a timely manner, our
ability to successfully develop and timely introduce new products and
services or enhance existing products and services; any inability to
accurately forecast consumer demand and adequately manage our inventory;
our ability to ship products on the timelines we anticipate and
unexpected delays; quarterly and seasonal fluctuations; our reliance on
third-party suppliers, contract manufacturers, and logistics providers,
and our limited control over such parties; product liability issues,
security breaches or other defects, which may adversely affect product
performance, our reputation and brand awareness and overall market
acceptance of our products and services; the fact that the market for
connected health and fitness devices is relatively new and unproven; the
ability of our channel partners to sell our products; litigation and
related costs; privacy; other general market, political, economic and
business conditions.
Additional risks and uncertainties that could affect our financial
results are included under the caption “Risk Factors” in our Annual
Report on Form 10-K for the full year ended December 31, 2015 and our
most recently filed Quarterly Report on Form 10-Q, which are available
on our Investor Relations website at investor.fitbit.com and on the SEC
website at www.sec.gov.
Additional information will also be set forth in our Quarterly Report on
Form 10-Q for the quarter ended July 2, 2016. All forward-looking
statements contained herein are based on information available to us as
of the date hereof and we do not assume any obligation to update these
statements as a result of new information or future events.
Change to Quarterly Reporting Calendar
Our fiscal year ends on December 31 of each year. In the first quarter
of 2016, we adopted a 4-4-5 week quarterly calendar, which, for the 2016
fiscal year, is comprised of four fiscal quarters ending on April 2,
2016, July 2, 2016, October 1, 2016, and December 31, 2016. We did not
adjust operating results for quarters prior to 2016. There were 91 days
in both the three months ended July 2, 2016 and June 30, 2015, and 184
and 181 days in the six months ended July 2, 2016 and June 30, 2015,
respectively.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared
and presented in accordance with GAAP, we use the following non-GAAP
financial measures: non-GAAP gross margin; non-GAAP operating expenses;
non-GAAP operating income; non-GAAP net income; non-GAAP diluted shares;
non-GAAP diluted net income per share; and adjusted EBITDA. The
presentation of these financial measures is not intended to be
considered in isolation or as a substitute for, or superior to,
financial information prepared and presented in accordance with GAAP.
We use non-GAAP measures to internally evaluate and analyze financial
results. We believe these non-GAAP financial measures provide investors
with useful supplemental information about the financial performance of
our business, enable comparison of financial results between periods
where certain items may vary independent of business performance, and
enable comparison of our financial results with other public companies,
many of which present similar non-GAAP financial measures.
There are limitations associated with the use of non-GAAP financial
measures as an analytical tool. In particular, many of the adjustments
to our GAAP financial measures reflect the exclusion of items,
specifically stock-based compensation expense, amortization of
intangible assets, and the related income tax effects of the
aforementioned exclusions, that are recurring and will be reflected in
our financial results for the foreseeable future. In addition, these
measures may be different from non-GAAP financial measures used by other
companies, limiting their usefulness for comparison purposes. A
reconciliation of our non-GAAP financial measures to their most directly
comparable GAAP measures has been provided in the financial statement
tables included in this press release, and investors are encouraged to
review the reconciliation.
Guidance for non-GAAP financial measures excludes stock-based
compensation, amortization of acquired intangible assets, and tax
effects associated with these items. We have not reconciled guidance for
non-GAAP gross margin, non-GAAP diluted shares, non-GAAP diluted net
income per share, adjusted EBITDA and non-GAAP tax rate to their most
directly comparable GAAP measures because items that impact these
measures are out of our control and/or cannot be reasonably predicted.
Accordingly, a reconciliation of the non-GAAP financial measure guidance
to the corresponding GAAP measures is not available without unreasonable
effort.
The following are explanations of the adjustments that are reflected in
one or more of our non-GAAP financial measures:
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In March 2014, we recalled the Fitbit Force after some of our users
experienced allergic reactions to adhesives in the wristband. This
recall primarily impacted our results for the fourth quarter of 2013,
the first quarter of 2014 and the fourth quarter of 2015.
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Stock-based compensation expense relates to equity awards granted
primarily to our employees. We exclude stock-based compensation
expense because we believe that the non-GAAP financial measures
excluding this item provide meaningful supplemental information
regarding operational performance. In particular, companies calculate
stock-based compensation expense using a variety of valuation
methodologies and subjective assumptions.
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Litigation expense relates to legal costs incurred due to litigation
with Aliphcom, Inc. d/b/a Jawbone. We exclude these expenses because
we do not believe these expenses have a direct correlation to the
operations of our business and because of the singular nature of the
claims underlying the Jawbone litigation matters. We began excluding
Jawbone litigation costs in the second quarter as these costs
significantly increased during the second quarter of 2016, and may
continue to be material for the remainder of 2016. Although not
excluded in reporting for the first quarter of 2016, these litigation
expenses were $9.1 million.
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Revaluation of redeemable convertible preferred stock warrant
liability is a non-cash charge that will not recur in the periods
following our initial public offering.
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Amortization of intangible assets relates to our acquisition of
FitStar. We exclude these amortization expenses because we do not
believe these expenses have a direct correlation to the operation of
our business.
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The change in contingent consideration relates to our acquisition of
FitStar. This is a non-recurring benefit that has no direct
correlation to the operation of our business.
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Income tax effect of non-GAAP adjustments relates to the tax effect of
the adjustments that we incorporate into non-GAAP financial measures
in order to provide a more meaningful measure of non-GAAP net income.
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Adjustment to shares includes the conversion of the redeemable
convertible preferred stock into shares of common stock as though the
conversion had occurred at the beginning of all periods presented, and
the shares issued in our initial public offering in June 2015, as if
they had been outstanding since the beginning of the second quarter of
2015.
For more information on our non-GAAP financial measures and a
reconciliation of such measures to the nearest GAAP measure, please see
the “Reconciliation of GAAP to Non-GAAP Financial Measures” table in
this press release.
About Fitbit, Inc.
Fitbit helps people lead healthier, more active lives by empowering them
with data, inspiration and guidance to reach their goals. As the leader
in the connected health and fitness category, Fitbit designs products
and experiences that track everyday health and fitness. Fitbit’s diverse
line of award-winning products includes Fitbit Surge™, Fitbit Blaze™, Fitbit Charge
HR™, Alta™, Fitbit
Charge™, Fitbit Flex®, Fitbit One® and Fitbit Zip® activity
trackers, as well as the Aria® Wi-Fi
Smart Scale. Fitbit products are carried in 54,000 retail stores, and
are available in 64 countries, around the globe. Fitbit Group
Health uses the power of the Fitbit activity trackers, software, and
services to deliver innovative solutions for corporate wellness, weight
management, insurance and clinical research.
Fitbit, the Fitbit logo, Fitbit Surge, Fitbit Blaze, Fitbit Charge
HR, Alta, Fitbit Charge, Fitbit Flex, Fitbit One, Fitbit Zip, Aria,
PurePulse, SmartTrack and FitStar are trademarks, service marks and/or
registered trademarks of Fitbit in the United States and in other
countries. All other trademarks, service marks, and product names used
herein are the property of their respective owners.
Connect with us on Facebook, Instagram or Twitter and
share your Fitbit experience.
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FITBIT, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands, except for per share amounts)
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(unaudited)
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Three Months Ended
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Six Months Ended
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June 30,
2015
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July 2,
2016
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June 30,
2015
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July 2,
2016
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Revenue
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$
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400,412
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$
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586,528
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$
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737,166
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$
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1,091,884
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Cost of revenue
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212,870
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341,559
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380,415
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613,160
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Gross profit
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187,542
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244,969
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356,751
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478,724
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Operating expenses:
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Research and development
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30,492
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79,909
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52,918
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152,157
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Sales and marketing
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69,690
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118,138
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113,557
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225,189
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General and administrative
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14,648
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37,262
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27,629
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72,964
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Change in contingent consideration
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(7,704
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)
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—
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(7,704
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)
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—
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Total operating expenses
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107,126
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235,309
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186,400
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450,310
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Operating income
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80,416
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9,660
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170,351
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28,414
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Interest income (expense), net
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(379
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)
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839
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(846
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)
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1,421
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Other income (expense), net
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(45,308
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)
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(463
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)
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(58,385
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)
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1,105
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Income before income taxes
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34,729
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10,036
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111,120
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30,940
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Income tax expense
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17,048
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3,695
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45,442
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13,564
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Net income
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$
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17,681
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$
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6,341
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|
|
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$
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65,678
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$
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17,376
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Less: noncumulative dividends to preferred stockholders
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|
|
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(1,212
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)
|
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—
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|
|
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|
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(2,526
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)
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—
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Less: undistributed earnings attributable to participating securities
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|
|
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(11,244
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)
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—
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|
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(45,907
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)
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|
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—
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Net income attributable to common stockholders—basic
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|
|
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5,225
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6,341
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|
|
|
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17,245
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|
|
|
|
17,376
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Add: undistributed earnings to dilutive participating securities
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|
|
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1,862
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|
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|
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—
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|
|
|
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|
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7,003
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|
|
—
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Net income attributable to common stockholders—diluted
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|
|
|
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$
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7,087
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|
|
|
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$
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6,341
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|
|
|
|
|
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$
|
24,248
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|
|
|
|
$
|
17,376
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|
|
|
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|
|
|
|
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|
|
|
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|
|
|
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Net income per share attributable to common stockholders:
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Basic
|
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$
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0.09
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$
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0.03
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$
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0.35
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$
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0.08
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Diluted
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$
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0.07
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$
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0.03
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$
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0.29
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$
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0.07
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Weighted average shares used to compute net income per share
attributable to common stockholders:
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Basic
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58,548
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218,850
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49,922
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|
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217,431
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Diluted
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95,190
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|
|
242,328
|
|
|
|
|
|
|
82,841
|
|
|
|
|
242,153
|
|
|
FITBIT, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
December 31,
2015
|
|
|
|
|
|
|
July 2,
2016
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
|
535,846
|
|
|
|
|
|
|
|
$
|
416,142
|
Marketable securities
|
|
|
|
|
|
128,632
|
|
|
|
|
|
|
|
343,534
|
Accounts receivable, net
|
|
|
|
|
|
469,260
|
|
|
|
|
|
|
|
377,545
|
Inventories
|
|
|
|
|
|
178,146
|
|
|
|
|
|
|
|
190,644
|
Prepaid expenses and other current assets
|
|
|
|
|
|
43,530
|
|
|
|
|
|
|
|
59,782
|
Total current assets
|
|
|
|
|
|
1,355,414
|
|
|
|
|
|
|
|
1,387,647
|
Property and equipment, net
|
|
|
|
|
|
44,501
|
|
|
|
|
|
|
|
74,181
|
Goodwill
|
|
|
|
|
|
22,157
|
|
|
|
|
|
|
|
25,217
|
Intangible assets, net
|
|
|
|
|
|
12,216
|
|
|
|
|
|
|
|
15,090
|
Deferred tax assets
|
|
|
|
|
|
83,020
|
|
|
|
|
|
|
|
119,472
|
Other assets
|
|
|
|
|
|
1,758
|
|
|
|
|
|
|
|
1,504
|
Total assets
|
|
|
|
|
|
$
|
1,519,066
|
|
|
|
|
|
|
|
$
|
1,623,111
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
|
$
|
260,842
|
|
|
|
|
|
|
|
$
|
226,418
|
Accrued liabilities
|
|
|
|
|
|
194,977
|
|
|
|
|
|
|
|
231,921
|
Deferred revenue
|
|
|
|
|
|
44,448
|
|
|
|
|
|
|
|
46,420
|
Fitbit Force recall reserve
|
|
|
|
|
|
5,122
|
|
|
|
|
|
|
|
2,148
|
Income taxes payable
|
|
|
|
|
|
2,868
|
|
|
|
|
|
|
|
2,074
|
Total current liabilities
|
|
|
|
|
|
508,257
|
|
|
|
|
|
|
|
508,981
|
Other liabilities
|
|
|
|
|
|
29,358
|
|
|
|
|
|
|
|
47,473
|
Total liabilities
|
|
|
|
|
|
537,615
|
|
|
|
|
|
|
|
556,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock and additional paid-in capital
|
|
|
|
|
|
737,841
|
|
|
|
|
|
|
|
804,678
|
Accumulated other comprehensive income
|
|
|
|
|
|
691
|
|
|
|
|
|
|
|
1,684
|
Retained earnings
|
|
|
|
|
|
242,919
|
|
|
|
|
|
|
|
260,295
|
Total stockholders’ equity
|
|
|
|
|
|
981,451
|
|
|
|
|
|
|
|
1,066,657
|
Total liabilities and stockholders’ equity
|
|
|
|
|
|
$
|
1,519,066
|
|
|
|
|
|
|
|
$
|
1,623,111
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(In thousands, except percentages and per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
2015
|
|
|
|
July 2,
2016
|
|
|
|
|
|
|
June 30,
2015
|
|
|
|
July 2,
2016
|
Non-GAAP gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
|
|
|
|
$
|
187,542
|
|
|
|
|
$
|
244,969
|
|
|
|
|
|
|
|
$
|
356,751
|
|
|
|
|
$
|
478,724
|
|
Stock-based compensation expense
|
|
|
|
|
|
825
|
|
|
|
|
1,084
|
|
|
|
|
|
|
|
1,271
|
|
|
|
|
2,393
|
|
Impact of Fitbit Force recall
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(2,040
|
)
|
|
|
|
—
|
|
Intangible assets amortization
|
|
|
|
|
|
467
|
|
|
|
|
451
|
|
|
|
|
|
|
|
467
|
|
|
|
|
903
|
|
Non-GAAP gross profit
|
|
|
|
|
|
$
|
188,834
|
|
|
|
|
$
|
246,504
|
|
|
|
|
|
|
|
$
|
356,449
|
|
|
|
|
$
|
482,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross profit as a percentage of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit as a percentage of revenue
|
|
|
|
|
|
46.8%
|
|
|
|
41.8%
|
|
|
|
|
|
|
48.4
|
%
|
|
|
|
43.8%
|
Stock-based compensation expense
|
|
|
|
|
|
0.3
|
|
|
|
|
0.2
|
|
|
|
|
|
|
|
0.2
|
|
|
|
|
0.2
|
|
Impact of Fitbit Force recall
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
|
—
|
|
Intangible assets amortization
|
|
|
|
|
|
0.1
|
|
|
|
|
—
|
|
|
|
|
|
|
|
0.1
|
|
|
|
|
0.1
|
|
Non-GAAP gross profit as a percentage of revenue
|
|
|
|
|
|
47.2
|
%
|
|
|
|
42.0
|
%
|
|
|
|
|
|
|
48.4
|
%
|
|
|
|
44.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP research and development:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development
|
|
|
|
|
|
$
|
30,492
|
|
|
|
|
$
|
79,909
|
|
|
|
|
|
|
|
$
|
52,918
|
|
|
|
|
$
|
152,157
|
|
Stock-based compensation expense
|
|
|
|
|
|
(3,138
|
)
|
|
|
|
(11,725
|
)
|
|
|
|
|
|
|
(5,017
|
)
|
|
|
|
(22,118
|
)
|
Non-GAAP research and development
|
|
|
|
|
|
$
|
27,354
|
|
|
|
|
$
|
68,184
|
|
|
|
|
|
|
|
$
|
47,901
|
|
|
|
|
$
|
130,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP sales and marketing:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing
|
|
|
|
|
|
$
|
69,690
|
|
|
|
|
$
|
118,138
|
|
|
|
|
|
|
|
$
|
113,557
|
|
|
|
|
$
|
225,189
|
|
Stock-based compensation expense
|
|
|
|
|
|
(1,322
|
)
|
|
|
|
(2,927
|
)
|
|
|
|
|
|
|
(2,629
|
)
|
|
|
|
(5,462
|
)
|
Non-GAAP sales and marketing
|
|
|
|
|
|
$
|
68,368
|
|
|
|
|
$
|
115,211
|
|
|
|
|
|
|
|
$
|
110,928
|
|
|
|
|
$
|
219,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP general and administrative:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and administrative
|
|
|
|
|
|
$
|
14,648
|
|
|
|
|
$
|
37,262
|
|
|
|
|
|
|
|
$
|
27,629
|
|
|
|
|
$
|
72,964
|
|
Stock-based compensation expense
|
|
|
|
|
|
(2,462
|
)
|
|
|
|
(4,664
|
)
|
|
|
|
|
|
|
(3,733
|
)
|
|
|
|
(8,197
|
)
|
Litigation expense
|
|
|
|
|
|
—
|
|
|
|
|
(11,558
|
)
|
|
|
|
|
|
|
—
|
|
|
|
|
(11,558
|
)
|
Impact of Fitbit Force recall
|
|
|
|
|
|
(69
|
)
|
|
|
|
11
|
|
|
|
|
|
|
|
73
|
|
|
|
|
—
|
|
Intangible assets amortization
|
|
|
|
|
|
(82
|
)
|
|
|
|
(82
|
)
|
|
|
|
|
|
|
(82
|
)
|
|
|
|
(163
|
)
|
Non-GAAP general and administrative
|
|
|
|
|
|
$
|
12,035
|
|
|
|
|
$
|
20,969
|
|
|
|
|
|
|
|
$
|
23,887
|
|
|
|
|
$
|
53,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses
|
|
|
|
|
|
$
|
107,126
|
|
|
|
|
$
|
235,309
|
|
|
|
|
|
|
|
$
|
186,400
|
|
|
|
|
$
|
450,310
|
|
Stock-based compensation expense
|
|
|
|
|
|
(6,922
|
)
|
|
|
|
(19,316
|
)
|
|
|
|
|
|
|
(11,379
|
)
|
|
|
|
(35,777
|
)
|
Litigation expense
|
|
|
|
|
|
—
|
|
|
|
|
(11,558
|
)
|
|
|
|
|
|
|
—
|
|
|
|
|
(11,558
|
)
|
Impact of Fitbit Force recall
|
|
|
|
|
|
(69
|
)
|
|
|
|
11
|
|
|
|
|
|
|
|
73
|
|
|
|
|
—
|
|
Intangible assets amortization
|
|
|
|
|
|
(82
|
)
|
|
|
|
(82
|
)
|
|
|
|
|
|
|
(82
|
)
|
|
|
|
(163
|
)
|
Change in contingent consideration
|
|
|
|
|
|
7,704
|
|
|
|
|
—
|
|
|
|
|
|
|
|
7,704
|
|
|
|
|
—
|
|
Non-GAAP operating expenses
|
|
|
|
|
|
$
|
107,757
|
|
|
|
|
$
|
204,364
|
|
|
|
|
|
|
|
$
|
182,716
|
|
|
|
|
$
|
402,812
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(In thousands, except percentages and per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
June 30,
2015
|
|
|
|
July 2,
2016
|
|
|
|
|
|
|
June 30,
2015
|
|
|
|
July 2,
2016
|
Non-GAAP operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income
|
|
|
|
|
|
|
$
|
80,416
|
|
|
|
|
$
|
9,660
|
|
|
|
|
|
|
|
$
|
170,351
|
|
|
|
|
$
|
28,414
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
7,747
|
|
|
|
|
20,400
|
|
|
|
|
|
|
|
12,650
|
|
|
|
|
38,170
|
|
Litigation expense
|
|
|
|
|
|
|
—
|
|
|
|
|
11,558
|
|
|
|
|
|
|
|
—
|
|
|
|
|
11,558
|
|
Impact of Fitbit Force recall
|
|
|
|
|
|
|
69
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
(2,113
|
)
|
|
|
|
—
|
|
Intangible assets amortization
|
|
|
|
|
|
|
549
|
|
|
|
|
533
|
|
|
|
|
|
|
|
549
|
|
|
|
|
1,066
|
|
Change in contingent consideration
|
|
|
|
|
|
|
(7,704
|
)
|
|
|
|
—
|
|
|
|
|
|
|
|
(7,704
|
)
|
|
|
|
—
|
|
Non-GAAP operating income
|
|
|
|
|
|
|
$
|
81,077
|
|
|
|
|
$
|
42,140
|
|
|
|
|
|
|
|
$
|
173,733
|
|
|
|
|
$
|
79,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income and net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
$
|
17,681
|
|
|
|
|
$
|
6,341
|
|
|
|
|
|
|
|
$
|
65,678
|
|
|
|
|
$
|
17,376
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
7,747
|
|
|
|
|
20,400
|
|
|
|
|
|
|
|
12,650
|
|
|
|
|
38,170
|
|
Litigation expense
|
|
|
|
|
|
|
—
|
|
|
|
|
11,558
|
|
|
|
|
|
|
|
—
|
|
|
|
|
11,558
|
|
Impact of Fitbit Force recall
|
|
|
|
|
|
|
69
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
(2,113
|
)
|
|
|
|
—
|
|
Revaluation of redeemable convertible preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock warrant liability
|
|
|
|
|
|
|
46,320
|
|
|
|
|
—
|
|
|
|
|
|
|
|
56,655
|
|
|
|
|
—
|
|
Intangible assets amortization
|
|
|
|
|
|
|
549
|
|
|
|
|
533
|
|
|
|
|
|
|
|
549
|
|
|
|
|
1,066
|
|
Change in contingent consideration
|
|
|
|
|
|
|
(7,704
|
)
|
|
|
|
—
|
|
|
|
|
|
|
|
(7,704
|
)
|
|
|
|
—
|
|
Income tax effect of non-GAAP adjustments
|
|
|
|
|
|
|
(13,349
|
)
|
|
|
|
(9,297
|
)
|
|
|
|
|
|
|
(18,228
|
)
|
|
|
|
(14,126
|
)
|
Non-GAAP net income
|
|
|
|
|
|
|
$
|
51,313
|
|
|
|
|
$
|
29,524
|
|
|
|
|
|
|
|
$
|
107,487
|
|
|
|
|
$
|
54,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted shares
|
|
|
|
|
|
|
95,190
|
|
|
|
|
242,328
|
|
|
|
|
|
|
|
82,841
|
|
|
|
|
242,153
|
|
Diluted effect of redeemable convertible preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock conversion
|
|
|
|
|
|
|
126,020
|
|
|
|
|
—
|
|
|
|
|
|
|
|
132,898
|
|
|
|
|
—
|
|
Initial public offering shares
|
|
|
|
|
|
|
20,173
|
|
|
|
|
—
|
|
|
|
|
|
|
|
10,081
|
|
|
|
|
—
|
|
Other dilutive equity awards
|
|
|
|
|
|
|
1,766
|
|
|
|
|
—
|
|
|
|
|
|
|
|
1,801
|
|
|
|
|
—
|
|
Non-GAAP diluted shares
|
|
|
|
|
|
|
243,149
|
|
|
|
|
242,328
|
|
|
|
|
|
|
|
227,621
|
|
|
|
|
242,153
|
|
Non-GAAP diluted net income per share
|
|
|
|
|
|
|
$
|
0.21
|
|
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
$
|
0.47
|
|
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
|
$
|
17,681
|
|
|
|
|
$
|
6,341
|
|
|
|
|
|
|
|
$
|
65,678
|
|
|
|
|
$
|
17,376
|
|
Impact of Fitbit Force recall
|
|
|
|
|
|
|
69
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
(2,113
|
)
|
|
|
|
—
|
|
Stock-based compensation expense
|
|
|
|
|
|
|
7,747
|
|
|
|
|
20,400
|
|
|
|
|
|
|
|
12,650
|
|
|
|
|
38,170
|
|
Litigation expense
|
|
|
|
|
|
|
—
|
|
|
|
|
11,558
|
|
|
|
|
|
|
|
—
|
|
|
|
|
11,558
|
|
Revaluation of redeemable convertible preferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock warrant liability
|
|
|
|
|
|
|
46,320
|
|
|
|
|
—
|
|
|
|
|
|
|
|
56,655
|
|
|
|
|
—
|
|
Depreciation and intangible assets amortization
|
|
|
|
|
|
|
4,705
|
|
|
|
|
7,178
|
|
|
|
|
|
|
|
8,174
|
|
|
|
|
14,186
|
|
Change in contingent consideration
|
|
|
|
|
|
|
(7,704
|
)
|
|
|
|
—
|
|
|
|
|
|
|
|
(7,704
|
)
|
|
|
|
—
|
|
Interest (income) expense, net
|
|
|
|
|
|
|
379
|
|
|
|
|
(839
|
)
|
|
|
|
|
|
|
846
|
|
|
|
|
(1,421
|
)
|
Income tax expense
|
|
|
|
|
|
|
17,048
|
|
|
|
|
3,695
|
|
|
|
|
|
|
|
45,442
|
|
|
|
|
13,564
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
$
|
86,245
|
|
|
|
|
$
|
48,322
|
|
|
|
|
|
|
|
$
|
179,628
|
|
|
|
|
$
|
93,433
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(In thousands, except percentages and per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
2015
|
|
|
|
July 2,
2016
|
|
|
|
|
|
June 30,
2015
|
|
|
|
July 2,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
|
|
$
|
825
|
|
|
|
|
$
|
1,084
|
|
|
|
|
|
|
$
|
1,271
|
|
|
|
|
$
|
2,393
|
Research and development
|
|
|
|
|
|
3,138
|
|
|
|
|
11,725
|
|
|
|
|
|
|
5,017
|
|
|
|
|
22,118
|
Sales and marketing
|
|
|
|
|
|
1,322
|
|
|
|
|
2,927
|
|
|
|
|
|
|
2,629
|
|
|
|
|
5,462
|
General and administrative
|
|
|
|
|
|
2,462
|
|
|
|
|
4,664
|
|
|
|
|
|
|
3,733
|
|
|
|
|
8,197
|
Total stock-based compensation expense
|
|
|
|
|
|
$
|
7,747
|
|
|
|
|
$
|
20,400
|
|
|
|
|
|
|
$
|
12,650
|
|
|
|
|
$
|
38,170
|
|
|
FITBIT, INC.
|
Revenue by Geographical Region
|
(In thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
|
June 30,
2015
|
|
|
|
July 2,
2016
|
|
|
|
|
|
June 30,
2015
|
|
|
|
July 2,
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
|
|
|
$
|
312,666
|
|
|
|
|
$
|
445,192
|
|
|
|
|
|
|
$
|
577,975
|
|
|
|
|
$
|
796,877
|
Americas excluding United States
|
|
|
|
|
|
|
16,799
|
|
|
|
|
27,375
|
|
|
|
|
|
|
30,228
|
|
|
|
|
50,769
|
Europe, Middle East, and Africa
|
|
|
|
|
|
|
39,712
|
|
|
|
|
99,471
|
|
|
|
|
|
|
74,768
|
|
|
|
|
174,195
|
APAC
|
|
|
|
|
|
|
31,235
|
|
|
|
|
14,490
|
|
|
|
|
|
|
54,195
|
|
|
|
|
70,043
|
Total
|
|
|
|
|
|
|
$
|
400,412
|
|
|
|
|
$
|
586,528
|
|
|
|
|
|
|
$
|
737,166
|
|
|
|
|
$
|
1,091,884
|

View source version on businesswire.com: http://www.businesswire.com/news/home/20160802006731/en/
Source: Fitbit, Inc.