05/06/2020

Fitbit Reports First Quarter Results for the Three Months Ended April 4, 2020

  • Revenue of $188 million, GAAP Net Income Per Share of $0.07, Non-GAAP Net Loss Per Share of $(0.24)

SAN FRANCISCO--(BUSINESS WIRE)-- Fitbit, Inc. (NYSE:FIT) today reported revenue of $188 million, GAAP net income per share of $0.07, non-GAAP net loss per share of $(0.24), GAAP net income of $20 million, non-GAAP net loss of $(65) million, cash flow from operations of $(82) million, and non-GAAP free cash flow of $(86) million for its first quarter of 2020.

“Our mission to help people around the world get healthier has never been more important. The emergence of COVID-19 has underscored the critical role that Fitbit, as a trusted brand, can play in providing people with much-needed support throughout the COVID-19 crisis and beyond,” said James Park, co-founder and CEO. “While COVID-19 has impacted our business, and there continues to be uncertainty around consumer demand and the economy, we are moving quickly to develop innovative products and services that can help people during this time. We launched our most innovative tracker, Fitbit Charge 4, and with consumers looking for more support and guidance at home during this time, we provided a free 90-day trial and access to Premium content, resulting in a substantial increase in Premium subscribers.”

First Quarter 2020 Financial Summary

 

 

For the Three Months Ended

In millions, except percentages and per share amounts

 

April 4, 2020

 

March 30, 2019

GAAP Results

 

 

 

 

Revenue

 

$

188.2

 

 

 

$

271.9

 

 

Gross Margin

 

29.2

 

%

 

32.9

 

%

Net Income (Loss)

 

$

20.3

 

 

 

$

(79.5

)

 

Net Income (Loss) Per Share

 

$

0.07

 

 

 

$

(0.31

)

 

Non-GAAP Results

 

 

 

 

Gross Margin

 

32.0

 

%

 

34.2

 

%

Net Loss

 

$

(64.6

)

 

 

$

(38.1

)

 

Net Loss Per Share

 

$

(0.24

)

 

 

$

(0.15

)

 

Adjusted EBITDA

 

$

(75.6

)

 

 

$

(43.2

)

 

Devices Sold

 

2.2

 

 

 

2.9

 

 

For additional information regarding the non-GAAP financial measures, see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below.

First Quarter 2020 Financial Highlights

  • Sold 2.2 million devices, down 26% year-over-year, driven by the introduction of one new product in the first quarter of 2020 versus three new products in the first quarter of 2019. Average selling price decreased 11% year-over-year to $81 per device. Approximately 76% of the year-over-year decline in price was due to an increase in reserves for product returns, rebates and promotions, and price protection in connection with the impact of COVID-19.
  • U.S. revenue represented 54% of total revenue or $102 million, down 24% year-over-year.
  • International revenue represented 46% of total revenue and declined 37% to $86 million: Americas excluding U.S. revenue declined 30% to $11 million, EMEA revenue declined 35% to $57 million, and APAC revenue declined 47% to $18 million (all on a year-over-year basis).
  • New devices introduced in the past 12 months, Fitbit Charge 4™, Fitbit Ace 2™, Fitbit Versa 2™, and Fitbit Aria Air™, represented 60% of revenue.
  • GAAP gross margin was 29.2% and non-GAAP gross margin was 32.0%. Both GAAP and non-GAAP gross margin were negatively impacted by higher reserves associated with COVID-19 and higher ending and obsolescence costs, partially offset by a non-recurring tariff exclusion benefit.
  • GAAP operating expenses represented 96% of revenue, increasing 5% year-over-year to $181 million driven by costs related to the pending acquisition by Google LLC; non-GAAP operating expenses represented 78% of revenue, declining 3% year-over-year to $146 million driven by lower media spend and lower employee costs.
  • A non-routine GAAP tax benefit of $145 million from net operating loss carrybacks due to changes in the tax law as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

First Quarter 2020 Operational Highlights

  • Smartwatch devices sold grew to 54% of revenue, up from 42% in the first quarter of 2019. Trackers devices sold declined to 42% of revenue, down from 57% in the first quarter of 2019.
  • We introduced Charge 4, our most advanced health and fitness tracker to date with Active Zone Minutes, Sleep tools, Fitbit Pay, and built-in GPS.
  • Our Fitbit Health Solutions business was 14% of revenue, or $27 million.
  • Inventory in the channel was flat year-over-year, but with the expected reduction in demand, weeks of supply increased sharply year-over-year.
  • We provided a 90-day free trial to Fitbit Premium to give users more tools to stay healthy while sheltering in place and saw a significant increase in the number of free Fitbit Premium trials. We have also seen a significant increase in paid Fitbit Premium subscribers in the quarter, helping drive Fitbit Premium revenue up 195% year-over-year, but still representing an immaterial amount of our total revenue.
  • We introduced a COVID-19 resource tab in our free app that provides access to helpful information, tools and resources, such as connecting with a doctor virtually.
  • We announced a broader research effort in coordination with health industry leaders like Stanford Medicine and The Scripps Research Institute, to study how data from wearables can detect, track, and contain infectious diseases like COVID-19.

COVID-19-Related Impact to Financials

  • Our business during the first quarter of 2020 was negatively impacted by the outbreak of COVID-19, which caused disruptions in the development, manufacture, shipment, and sales of our products.
  • We increased reserves for product returns, rebates and promotions to retailers and distributors, and price protection by approximately $16 million.
  • We increased credit loss allowances by $6 million.
  • The current circumstances are dynamic and unprecedented, and the impacts of COVID-19 on our business operations, including the duration and severity of the effect on overall consumer demand, cannot be predicted. However, we expect COVID-19 and associated mitigation efforts to continue to have a significant negative impact on our results in 2020, including our liquidity, although the nature and extent will depend on future developments that are evolving and highly uncertain.

Additional Highlights and Information

  • Fitbit announced its entry into a Merger Agreement with Google on November 1, 2019. Upon close of the all-cash transaction, which is subject to customary closing conditions, Fitbit stockholders will receive $7.35 per share in cash, valuing the company at a fully diluted equity value of approximately $2.1 billion.
  • Fitbit stockholders approved the transaction on January 3, 2020.
  • Regulatory review of the transaction is ongoing. We expect Fitbit and Google to secure the necessary regulatory approvals and to close the transaction in 2020, however the extent to which COVID-19 may impact the timing of receipt of these approvals is uncertain and cannot be predicted. Prior to closing, we do not expect to provide additional updates on the regulatory process other than during the release of future earnings reports.
  • Due to the pending acquisition by Google, Fitbit does not plan to host an earnings conference call nor provide next-quarter or full-year guidance.

Forward Looking Statements

This press release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risks and uncertainties. In some cases, you can identify these forward-looking statements by the use of terms such as “expect,” “will,” “continue,” or similar expressions, and variations or negatives of these words, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements of historical fact could be deemed forward-looking statements, including, but not limited to: our ability to develop innovative products and services that can help people during the COVID-19 crisis; any statements regarding the anticipated impact of COVID-19 on our business, including the effect of provisions under the CARES Act; the expected timing of the completion of the transaction with Google; the ability of Google and us to complete the proposed transaction considering the various conditions to the transaction, some of which are outside the parties’ control, including those conditions related to regulatory approvals; any statements concerning the expected development or competitive performance relating to Fitbit’s products and services; and any statements of assumptions underlying any of the foregoing. A number of important factors and uncertainties could cause actual results or events to differ materially from those described in these forward-looking statements, including without limitation: the impact of COVID-19 on our business, results of operations, or financial condition, including the development, manufacturing, and shipment of our products; general public health, market, political, economic and business conditions, including the impact of COVID-19 on global economic conditions and consumer confidence and spending; 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 and cost-effective manner; our ability to successfully develop, timely introduce, and achieve retail and customer acceptance of new products and services, or enhance existing products and services, including software and subscription services; our ability to accurately forecast consumer demand and adequately manage our inventory; our ability to ship products on the timelines we anticipate and avoid unexpected delays; our ability to detect, prevent or fix quality issues in our products and services; our ability to attract and retain employees; our reliance on third-party suppliers, contract manufacturers, and logistics providers and our limited control over such parties; delays in procuring components and products from third parties or their suppliers; the ability of third parties to manufacture and ship quality products in a timely manner; seasonality of demand; the concentrated nature of our retailer and distributor base; product liability issues, security breaches, or other factors that may adversely affect product performance and overall market acceptance of our products and services; our ability to integrate acquired technologies and employees of acquired businesses into our operations, particularly in new geographies; warranty claims; the relatively new and unproven market for trackers and wearable devices; the ability of our channel partners to sell our products; litigation and related costs; the impact of privacy and data security laws; changes in tax laws; the impact of tariffs; the failure to satisfy any of the conditions to the consummation of the proposed transaction with Google, including the receipt of certain governmental and regulatory approvals; the occurrence of any event, change, or other circumstance that could give rise to the termination of the Merger Agreement; the outcome of any legal proceedings that may be instituted against us related to the Merger Agreement or the proposed transaction; unexpected costs, charges or expenses resulting from the proposed transaction; the occurrence of a Company Material Adverse Effect (as defined in the Merger Agreement).

Additional risks and uncertainties are included under the caption “Risk Factors” in our Annual Report on Form 10-K for the full year ended December 31, 2019, which is available on our Investor Relations website at investor.fitbit.com and on the SEC website at www.sec.gov. Once filed with the SEC, additional information will be set forth in our Quarterly Report on Form 10-Q for the three months ended April 4, 2020. 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. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on such statements.

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 in this press release: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP operating loss before income taxes, non-GAAP net income (loss), non-GAAP basic/diluted net income (loss) per share, free cash flow, non-GAAP research and development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, 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 certain items, specifically stock-based compensation expense, depreciation, amortization of intangible assets, interest income, net, acquisition-related costs, 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.

The following are explanations of the adjustments that are reflected in one or more of our non-GAAP financial measures:

  • 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.
  • Acquisition-related costs relates to acquisition retention bonuses, integration costs, advisory and consulting, legal, accounting, tax, other professional service fees, and SEC filing fees to the extent associated with the pending Merger or our acquisition of other companies.
  • Restructuring costs primarily included severance-related costs. We believe that excluding this expense provides greater visibility to the underlying performance of our business operations, facilitates comparison of our results with other periods, and may also facilitate comparison with the results of other companies in our industry.
  • Amortization of intangible assets relates to our acquisitions of FitStar, Pebble, Vector and Twine Health. We exclude these amortization expenses because we do not believe they have a direct correlation to the operation of our business.
  • Income tax effect of non-GAAP adjustments relates to the tax effect of the adjustments that we incorporate into non-GAAP financial measures such as stock-based compensation, amortization of intangibles, restructuring and valuation allowance in order to provide a more meaningful measure of non-GAAP net loss.
  • We define free cash flow as net cash used in operating activities less purchase of property and equipment. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in our business and strengthening the balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. Free cash flow is not prepared in accordance with U.S. GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with U.S. GAAP.

About Fitbit, Inc. (NYSE: FIT)

Fitbit helps people lead healthier, more active lives by empowering them with data, inspiration and guidance to reach their goals. Fitbit designs products and experiences that track and provide motivation for everyday health and fitness. Fitbit’s diverse line of innovative and popular products include Fitbit Charge 4™, Fitbit Charge 3™, Fitbit Inspire HR™, Fitbit Inspire™, and Fitbit Ace 2™ activity trackers, as well as the Fitbit Ionic™ and Fitbit Versa™ family of smartwatches, Fitbit Flyer™ wireless headphones, and Fitbit Aria™ family of connected scales. Fitbit products are carried in over 39,000 retail stores and in over 100 countries around the globe. Powered by one of the world’s largest health and fitness social networks and databases of health and fitness data, the Fitbit platform delivers personalized experiences, insights and guidance through leading software and interactive tools, including the Fitbit and Fitbit Coach apps, and Fitbit OS for smartwatches. Fitbit Health Solutions develops health and wellness solutions designed to help increase engagement, improve health outcomes, and drive a positive return for employers, health plans and health systems.

Fitbit and the Fitbit logo are trademarks or registered trademarks of Fitbit, Inc. in the United States and other countries. Additional Fitbit trademarks can be found at www.fitbit.com/legal/trademark-list. Third-party trademarks are the property of their respective owners.

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FITBIT, INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

 

 

Three Months Ended

 

 

April 4, 2020

 

March 30, 2019

 

 

 

 

 

Revenue

 

$

188,158

 

 

 

$

271,890

 

 

Cost of revenue

 

133,236

 

 

 

182,437

 

 

Gross profit

 

54,922

 

 

 

89,453

 

 

Operating expenses:

 

 

 

 

Research and development

 

81,589

 

 

 

77,039

 

 

Sales and marketing

 

56,961

 

 

 

68,616

 

 

General and administrative

 

42,041

 

 

 

26,692

 

 

Total operating expenses

 

180,591

 

 

 

172,347

 

 

Operating loss

 

(125,669

)

 

 

(82,894

)

 

Interest income, net

 

1,293

 

 

 

3,466

 

 

Other income (expense), net

 

(4

)

 

 

1,273

 

 

Loss before income taxes

 

(124,380

)

 

 

(78,155

)

 

Income tax expense (benefit)

 

(144,674

)

 

 

1,310

 

 

Net income (loss)

 

$

20,294

 

 

 

$

(79,465

)

 

Net income (loss) per share:

 

 

 

 

Basic

 

$

0.08

 

 

 

$

(0.31

)

 

Diluted

 

$

0.07

 

 

 

$

(0.31

)

 

Shares used to compute net income (loss) per share:

 

 

 

 

Basic

 

265,661

 

 

 

253,124

 

 

Diluted

 

276,946

 

 

 

253,124

 

 

FITBIT, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

April 4, 2020

 

December 31, 2019

 

 

 

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

251,997

 

 

 

$

334,479

 

 

Marketable securities

 

175,699

 

 

 

184,023

 

 

Accounts receivable, net

 

182,284

 

 

 

435,269

 

 

Inventories

 

105,745

 

 

 

136,752

 

 

Income tax receivable

 

139,827

 

 

 

573

 

 

Prepaid expenses and other current assets

 

56,694

 

 

 

28,656

 

 

Total current assets

 

912,246

 

 

 

1,119,752

 

 

Property and equipment, net

 

76,218

 

 

 

82,756

 

 

Operating lease right-of use-assets

 

70,137

 

 

 

70,225

 

 

Goodwill

 

64,812

 

 

 

64,812

 

 

Intangible assets, net

 

12,717

 

 

 

16,746

 

 

Deferred tax assets

 

4,066

 

 

 

4,111

 

 

Other assets

 

9,458

 

 

 

9,684

 

 

Total assets

 

$

1,149,654

 

 

 

$

1,368,086

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

90,801

 

 

 

$

194,626

 

 

Accrued liabilities

 

376,530

 

 

 

513,530

 

 

Operating lease liabilities

 

21,832

 

 

 

23,511

 

 

Deferred revenue

 

32,466

 

 

 

32,307

 

 

Income taxes payable

 

1,700

 

 

 

636

 

 

Total current liabilities

 

523,329

 

 

 

764,610

 

 

Long-term deferred revenue

 

6,176

 

 

 

8,535

 

 

Long-term operating lease liabilities

 

66,234

 

 

 

67,902

 

 

Other liabilities

 

32,860

 

 

 

39,776

 

 

Total liabilities

 

628,599

 

 

 

880,823

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

Class A and Class B common stock

 

26

 

 

 

26

 

 

Additional paid-in capital

 

1,140,280

 

 

 

1,126,827

 

 

Accumulated other comprehensive income

 

233

 

 

 

188

 

 

Accumulated deficit

 

(619,484

)

 

 

(639,778

)

 

Total stockholders’ equity

 

521,055

 

 

 

487,263

 

 

Total liabilities and stockholders’ equity

 

$

1,149,654

 

 

 

$

1,368,086

 

 

FITBIT, INC.

Condensed Consolidated Statements of Cash Flow

(in thousands)

(unaudited)

 

 

Three Months Ended

 

 

April 4, 2020

 

March 30, 2019

Cash Flows from Operating Activities

 

 

 

 

Net income (loss)

 

$

20,294

 

 

 

$

(79,465

)

 

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

Provision for doubtful accounts

 

6,486

 

 

 

32

 

 

Provision for excess and obsolete inventory

 

9,845

 

 

 

1,478

 

 

Depreciation

 

10,589

 

 

 

13,373

 

 

Non-cash lease expense

 

1,524

 

 

 

7,713

 

 

Accelerated depreciation of property and equipment

 

13

 

 

 

 

 

Amortization of intangible assets

 

4,029

 

 

 

2,060

 

 

Stock-based compensation

 

19,727

 

 

 

20,544

 

 

Deferred income taxes

 

46

 

 

 

(20

)

 

Other

 

5

 

 

 

(50

)

 

Changes in operating assets and liabilities, net of acquisition:

 

 

 

 

Accounts receivable

 

246,499

 

 

 

163,592

 

 

Inventories

 

20,301

 

 

 

(50,958

)

 

Prepaid expenses and other assets

 

(28,073

)

 

 

12,554

 

 

Income taxes receivable

 

(139,254

)

 

 

40

 

 

Fitbit force recall reserve

 

(41

)

 

 

46

 

 

Accounts payable

 

(104,378

)

 

 

(81,656

)

 

Accrued liabilities and other liabilities

 

(143,692

)

 

 

(69,962

)

 

Lease liabilities

 

(4,756

)

 

 

(4,972

)

 

Deferred revenue

 

(2,200

)

 

 

(2,259

)

 

Income taxes payable

 

1,064

 

 

 

257

 

 

Net cash used in operating activities

 

(81,972

)

 

 

(67,653

)

 

Cash Flows from Investing Activities

 

 

 

 

Purchase of property and equipment

 

(3,556

)

 

 

(6,096

)

 

Purchases of marketable securities

 

(59,735

)

 

 

(111,615

)

 

Maturities of marketable securities

 

68,191

 

 

 

128,309

 

 

Net cash provided by investing activities

 

4,900

 

 

 

10,598

 

 

Cash Flows from Financing Activities

 

 

 

 

Payment of financing lease liability

 

 

 

(597

)

 

Proceeds from issuance of common stock

 

458

 

 

 

931

 

 

Taxes paid related to net share settlement of restricted stock units

 

(5,868

)

 

 

(6,422

)

 

Net cash used in financing activities

 

(5,410

)

 

 

(6,088

)

 

Net decrease in cash and cash equivalents

 

(82,482

)

 

 

(63,143

)

 

Cash and cash equivalents at beginning of period

 

334,479

 

 

 

473,956

 

 

Cash and cash equivalents at end of period

 

$

251,997

 

 

 

$

410,813

 

 

FITBIT, INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except percentages and per share amounts)

(unaudited)

 

 

Three Months Ended

 

 

April 4, 2020

 

March 30, 2019

Non-GAAP gross profit:

 

 

 

 

GAAP gross profit

 

$

54,922

 

 

 

$

89,453

 

 

Stock-based compensation expense

 

2,179

 

 

 

1,430

 

 

Impact of restructuring

 

 

 

190

 

 

Acquisition-related costs

 

765

 

 

 

 

 

Intangible assets amortization

 

2,392

 

 

 

1,854

 

 

Non-GAAP gross profit

 

$

60,258

 

 

 

$

92,927

 

 

 

 

 

 

 

Non-GAAP gross margin (as a percentage of revenue):

 

 

 

 

GAAP gross margin

 

29.2

 

%

 

32.9

 

%

Stock-based compensation expense

 

1.2

 

 

 

0.5

 

 

Impact of restructuring

 

 

 

 

0.1

 

 

Acquisition-related costs

 

0.4

 

 

 

 

 

Intangible assets amortization

 

1.2

 

 

 

0.7

 

 

Non-GAAP gross margin

 

32.0

 

%

 

34.2

 

%

 

 

 

 

 

Non-GAAP research and development:

 

 

 

 

GAAP research and development

 

$

81,589

 

 

 

$

77,039

 

 

Stock-based compensation expense

 

(11,119

)

 

 

(11,988

)

 

Impact of restructuring

 

 

 

 

(1,550

)

 

Acquisition-related costs

 

(5,711

)

 

 

 

 

Non-GAAP research and development

 

$

64,759

 

 

 

$

63,501

 

 

 

 

 

 

 

Non-GAAP sales and marketing expense:

 

 

 

 

GAAP sales and marketing

 

$

56,961

 

 

 

$

68,616

 

 

Stock-based compensation expense

 

(2,775

)

 

 

(3,138

)

 

Impact of restructuring

 

 

 

 

(589

)

 

Acquisition-related costs

 

(2,404

)

 

 

 

 

Intangible assets amortization

 

(1,444

)

 

 

(135

)

 

Non-GAAP sales and marketing

 

$

50,338

 

 

 

$

64,754

 

 

 

 

 

 

 

Non-GAAP general and administrative expense:

 

 

 

 

GAAP general and administrative

 

$

42,041

 

 

 

$

26,692

 

 

Stock-based compensation expense

 

(3,654

)

 

 

(3,988

)

 

Impact of restructuring

 

 

 

 

(129

)

 

Acquisition-related costs

 

(6,892

)

 

 

 

 

Intangible assets amortization

 

(194

)

 

 

(71

)

 

Non-GAAP general and administrative

 

$

31,301

 

 

 

$

22,504

 

 

FITBIT, INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except percentages and per share amounts)

(unaudited)

 

 

Three Months Ended

 

 

April 4, 2020

 

March 30, 2019

Non-GAAP operating expenses:

 

 

 

 

GAAP operating expenses

 

$

180,591

 

 

 

$

172,347

 

 

Stock-based compensation expense

 

(17,548

)

 

 

(19,114

)

 

Impact of restructuring

 

 

 

(2,268

)

 

Acquisition-related costs

 

(15,007

)

 

 

 

 

Intangible assets amortization

 

(1,638

)

 

 

(206

)

 

Non-GAAP operating expenses

 

$

146,398

 

 

 

$

150,759

 

 

 

 

 

 

 

Non-GAAP operating loss and loss before income taxes:

 

 

 

 

GAAP operating loss

 

$

(125,669

)

 

 

$

(82,894

)

 

Stock-based compensation expense

 

19,727

 

 

 

20,544

 

 

Impact of restructuring

 

 

 

 

2,458

 

 

Acquisition-related costs

 

15,772

 

 

 

 

 

Intangible assets amortization

 

4,030

 

 

 

2,060

 

 

Non-GAAP operating loss

 

(86,140

)

 

 

(57,832

)

 

Interest income, net

 

1,293

 

 

 

3,466

 

 

Other income (expense), net

 

(4

)

 

 

1,273

 

 

Non-GAAP loss before income taxes

 

$

(84,851

)

 

 

$

(53,093

)

 

 

 

 

 

 

Non-GAAP net income (loss) and net loss per share:

 

 

 

 

Net income (loss)

 

$

20,294

 

 

 

$

(79,465

)

 

Stock-based compensation expense

 

19,727

 

 

 

20,544

 

 

Impact of restructuring

 

 

 

 

2,458

 

 

Acquisition-related costs

 

15,772

 

 

 

 

 

Intangible assets amortization

 

4,030

 

 

 

2,060

 

 

Income tax effect of non-GAAP adjustments

 

(124,412

)

 

 

16,335

 

 

Non-GAAP net loss

 

$

(64,589

)

 

 

$

(38,068

)

 

 

 

 

 

 

GAAP diluted shares

 

265,661

 

 

 

253,124

 

 

Other dilutive equity awards

 

 

 

 

 

 

Non-GAAP diluted shares

 

265,661

 

 

 

253,124

 

 

Non-GAAP diluted net loss per share

 

$

(0.24

)

 

 

$

(0.15

)

 

FITBIT, INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except percentages and per share amounts)

(unaudited)

 

 

Three Months Ended

 

 

April 4, 2020

 

March 30, 2019

Free cash flow:

 

 

 

 

Net cash used in operating activities

 

$

(81,972

)

 

 

$

(67,653

)

 

Purchases of property and equipment

 

(3,556

)

 

 

(6,096

)

 

Free cash flow

 

$

(85,528

)

 

 

$

(73,749

)

 

Net cash provided by investing activities

 

$

4,900

 

 

 

$

10,598

 

 

Net cash used in financing activities

 

$

(5,410

)

 

 

$

(6,088

)

 

 

 

 

 

 

Adjusted EBITDA:

 

 

 

 

Net income (loss)

 

$

20,294

 

 

 

$

(79,465

)

 

Stock-based compensation expense

 

19,727

 

 

 

20,544

 

 

Impact of restructuring

 

 

 

2,458

 

 

Acquisition-related costs

 

15,772

 

 

 

 

 

Depreciation and intangible assets amortization

 

14,620

 

 

 

15,433

 

 

Interest income, net

 

(1,293

)

 

 

(3,466

)

 

Income tax expense (benefit)

 

(144,674

)

 

 

1,310

 

 

Adjusted EBITDA

 

$

(75,554

)

 

 

$

(43,186

)

 

 

 

 

 

 

Stock-based compensation expense:

 

 

 

 

Cost of revenue

 

$

2,179

 

 

 

$

1,430

 

 

Research and development

 

11,119

 

 

 

11,988

 

 

Sales and marketing

 

2,775

 

 

 

3,138

 

 

General and administrative

 

3,654

 

 

 

3,988

 

 

Total stock-based compensation expense

 

$

19,727

 

 

 

$

20,544

 

 

FITBIT, INC.

Revenue by Geographic Region

(in thousands)

(unaudited)

 

 

Three Months Ended

 

 

April 4, 2020

 

March 30, 2019

United States

 

$

102,039

 

 

$

135,091

 

Americas, excluding United States

 

10,743

 

 

15,327

 

Europe, Middle East, and Africa

 

57,007

 

 

87,098

 

Asia Pacific

 

18,369

 

 

34,374

 

Total

 

$

188,158

 

 

$

271,890

 

 

Investor Contact:
Tom Hudson, (415) 604-4106
investor@fitbit.com

Media Contact:
Jen Ralls, (415) 722-6937
PR@fitbit.com

Source: Fitbit, Inc.