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(Mark one)
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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ________________ to ________________
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Delaware
(State or other jurisdiction of
incorporation or organization)
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20-8920744
(I.R.S. Employer Identification No.)
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405 Howard Street
San Francisco, California 94105
(Address of principal executive offices) (Zip Code)
(415) 513-1000
(Registrant’s telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
Class A Common Stock, par value $0.0001
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Name of each exchange on which registered
New York Stock Exchange LLC
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Securities registered pursuant to Section 12(g) of the Act:
None
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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Page
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competitors and competition in our markets;
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our expectation to derive the substantial majority of our revenue from sales of devices;
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releasing and shipping new products and services, and the timing thereof;
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trends in revenue, costs of revenue and gross margin;
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trends in our operating expenses, including personnel costs, research and development expense, sales and marketing expense and general and administrative expense;
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trends in our quarterly operating results and other operating metrics;
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the effect of seasonality on our results of operations;
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the sufficiency of our existing cash and cash equivalent balances and cash flow from operations to meet our working capital and capital expenditure needs for at least the next 12 months;
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the impact of foreign currency exchange rates;
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legal proceedings and the impact of such proceedings;
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continued investments in research and development, sales and marketing and international expansion and the impact of those investments;
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expansion of our distribution channels; our reliance on third-party suppliers, contract manufacturers (particularly Flextronics) and logistics providers and our limited control over such parties;
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our ability to successfully build relationships with employers and wellness providers, enhance our corporate wellness offerings and our expectations around the growth of the corporate wellness market;
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our ability to expand our brand awareness;
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our ability to develop new products and services or improve our existing products and services;
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our business strategy to make investments in other companies, products and technologies;
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our belief that the active user and registered device user metrics are indicators of the potential size of our community;
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our ability to attract and retain users and increase the level of engagement of our users;
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growing our sales of subscription-based services
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our ability to attract and retain highly skilled employees; and
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general market, political, economic and business conditions
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Tracking activities through our connected health and fitness devices.
We empower users to live healthier, more active lifestyles by both tracking the information that matters most to them and providing them with real-time feedback. Our connected health and fitness devices span multiple styles, form factors, and price points, addressing the needs of everyone—from people simply looking to get fit by increasing their activity levels to endurance athletes seeking to maximize their performance. Our devices, which include wrist-based and clippable fitness trackers and our Wi-Fi connected scale, feature proprietary and advanced sensor technologies and algorithms, high accuracy of measures, and long battery lives. In addition, the ease of use and small, lightweight, and durable designs of our devices help them fit effortlessly into our users’ lifestyles.
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Learning through our online dashboard and mobile apps.
We offer our users a personalized online dashboard and mobile apps that sync automatically with, and display data from, our connected health and fitness devices. We provide our users with a wide range of information and analytics, such as charts and graphs of their progress and the ability to log caloric intake. Both our online dashboard and mobile apps are free and work with all of our connected health and fitness devices. Our internally-developed software is regularly updated and enhanced, increasing the utility of our health and fitness platform.
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Staying motivated through social features, notifications, challenges, and virtual badges.
Our products help millions of users achieve their goals both individually and within the community that they choose. On an individual level, we motivate users by delivering real-time feedback, including notifications, leaderboard and challenge updates, and virtual badges. Our platform also offers users social features that allow them to receive and provide support and engage in friendly competition. Users can securely share some or all of their health and fitness information on an opt-in basis with friends, family, and other parties and compete against each other on key statistics through leaderboards and daily or multi-day fitness challenges. In addition, users can choose to share their data with thousands of third-party apps and through social networks on an opt-in basis. As users create more connections on our network, they often benefit from higher levels of fitness activity and overall value from our platform.
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Improving health and fitness through goal-setting, personalized insights, premium services, and virtual coaching.
Our primary goal is to help our users improve their health and fitness. We believe our platform assists users in changing their
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Leading market position and global brand.
Our singular focus on building a connected health and fitness platform, coupled with our leading market share, has led to our brand becoming synonymous with the connected health and fitness category.
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Broad range of connected health and fitness devices.
We believe everyone’s approach to fitness is different, so we offer our users a range of connected health and fitness devices spanning multiple styles, form factors, and price points to allow people to find the devices that fit their lifestyles and goals. In addition to our wrist-based and clippable wearable health and fitness devices, we also offer a Wi-Fi connected scale that tracks weight, body fat, and BMI. We believe the breadth of our connected health and fitness devices provides us with a competitive advantage over our competitors, which often have a more limited line of products.
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Advanced, purpose-built hardware and software technologies.
Our connected health and fitness devices leverage industry-standard technologies, such as Bluetooth low energy, as well as proprietary technologies, such as our PurePulse continuous heart rate tracking, and our algorithms that more accurately measure and analyze user health and fitness metrics. We devote significant resources to ensure that our devices effortlessly fit into our users’ lifestyles. For example, we design our small, lightweight, durable, and fashionable products to be optimized for power efficiency, which enables automatic wireless data syncing without compromising battery life. We place a similarly strong emphasis on our online dashboard and mobile apps to provide users with visualization of their progress and personalized guidance. Our highly-scalable cloud infrastructure enables millions of users around the world to engage with our platform in real-time.
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Broad mobile compatibility and open API.
Our broad mobile compatibility and open API enable a large and growing health and fitness ecosystem that provides additional value to our existing users and extends our reach to potential new users. Our users can sync their Fitbit devices with, and view their online dashboard on, their computers and over 200 mobile devices, including iOS, Android, and Windows Phone products. This broad compatibility, combined with our market-leading position, has enabled us to build what we believe is the largest community of connected health and fitness device users. Additionally, we enable seamless integration with thousands of apps across iOS, Android, and Windows Phone through our open API, which allows our users to share data with third-party apps on an opt-in basis.
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Broad and differentiated go-to-market strategy.
We have developed a broad go-to-market strategy that reaches individuals regardless of where they shop. We sell our products in over 50,000 retail stores and in 63 countries, through our retailers’ websites, through our online store at Fitbit.com, and as part of our corporate wellness offering. We believe the breadth and depth of our established selling channels and prominent presence in retail stores are unmatched in the connected health and fitness category and would be difficult for a competitor to replicate.
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Large and growing community and powerful network effects.
We believe the size of our community of users makes it more likely that users can connect with friends and family and attracts many new users to our platform. Each of our users add value to our platform by making progress towards their goals and syncing their data with our platform, which we leverage to provide better insights for our users. As our community of users continues to grow, we will develop a deeper understanding of our users and expect to deliver additional value to them through more detailed insights and analysis. We believe the growth and scale of our user community allows users to become not only more engaged with personalized and relevant content, but also less likely to leave a community in which many of their friends and family are active members.
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Direct relationship and continuous communication with our users.
The connectivity of our devices allows us to better understand our users’ health and fitness goals. This connectivity also allows us to communicate the most relevant analysis, features, advice, and content to our users throughout the day with our online dashboard, mobile apps, emails, and notifications. We also utilize these communication channels to help our users become aware of our new products and services.
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Steps.
The cornerstone of our initial product offering, our trackers use accelerometers and proprietary algorithms that count the number of steps taken throughout their day.
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Calories burned.
Our users can estimate the amount of calories burned throughout the day based on several methods depending on the tracker. We believe our more advanced devices that use our PurePulse heart rate tracking technology provide a more accurate estimate of calorie burn than non-PurePulse based products.
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Distance traveled.
Our users can track the distance they have traveled throughout the day as a function of the number of steps they have taken throughout the day or through built-in GPS, depending upon the tracker.
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Heart rate.
On trackers that are outfitted with our proprietary PurePulse technology, our users are able to automatically and continuously track their heart rate during everyday activity and exercise. Our PurePulse technology uses wrist-based optical LEDs, which measures heart rate using light reflection. We believe our PurePulse technology makes heart rate relevant as a means to more accurately measure calorie burn, maintain intensity during exercise, and train more effectively by using heart rate zones. Additionally, our heart rate tracking technology can conveniently provide our users with their resting heart rate, which is a widely used indicator of cardiovascular fitness and conditioning.
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Floors climbed.
Using a built-in altimeter sensor, our users are able to track flights of stairs climbed, which encourages users to take the stairs instead of using an escalator or elevator. Floors climbed are tracked by all trackers except Fitbit Zip and Fitbit Alta.
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Sleep duration and quality.
Users can track their sleep duration and quality on all trackers, except Fitbit Zip, including restless and awake episodes throughout the night. Most trackers allow users to track this data automatically.
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Active minutes.
Our trackers detect the number of minutes our users are more active.
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GPS-based tracking.
Our Fitbit Surge allows our users to track their speed, distance, and exercise routes using the GPS capability integrated into the device during activities such as running, cycling, hiking, and walking. For those without Fitbit Surge, our mobile apps provide GPS tracking using the phone’s GPS capability. Fitbit Blaze allows users to connect to their smartphones’ GPS capabilities.
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SmartTrack.
SmartTrack automatically recognizes continuous movement when users wear Fitbit Alta, Fitbit Charge HR, Fitbit Blaze, or Fitbit Surge. It identifies the type of activity and records it in the Fitbit app along with an exercise summary,
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Weight, body fat, and BMI.
Our Aria Wi-Fi connected scale allows users to track weight, BMI, lean mass, and body fat percentage separately and privately for up to eight users, helping individuals to track progress towards and achieve their body composition goals.
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Caloric intake.
Through our mobile apps, we provide a database with more than 300,000 specific food items that can be searched and tracked. Users can log food consumption and set calorie budgets based on their caloric intake and daily activity to achieve a desired weight goal.
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Limited Collection.
We only collect data that is useful to improving our products, services, and user experience.
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Transparent and Easy to Understand Policies.
We are transparent about our data practices and explain them in clear language.
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No Unexpected Uses.
We never sell user data or use it other than as described in our privacy policy.
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Clear Notice and Consent.
We only share personally identifiable data with third parties, including employers, when our users consent to the sharing and under the limited circumstances outlined in our privacy policy where users’ personally identifiable data can be shared without specific consent, such as our receipt of search warrants or subpoenas from law enforcement agencies or in response to a validly issued legal process in a civil litigation matter. We do not currently share information such as heart rate data or geolocation data with employers under our corporate wellness offerings and do not intend to share such data in the future without specific user consent.
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Prioritize Security.
We take the security of our users’ data seriously. We use a combination of technical and administrative security controls to maintain the security of user data.
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Consumer electronics and specialty retailers.
Our products are sold by retailers with a large domestic and international presence such as Best Buy.
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e-Commerce retailers.
Our products are sold on Amazon.com, in addition to e-Commerce sites of our retailers.
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Mass merchant
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department store, and club retailers.
Our products are sold by large retailers, including Costco, Macy’s, and Walmart.
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Sporting goods and outdoors retailers.
Our products are sold by sporting goods and outdoors retailers, including Dick’s Sporting Goods, REI, and The Sports Authority.
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Wireless carriers.
Our products are sold by wireless carriers, including AT&T, Sprint, and Verizon.
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brand awareness and focus;
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breadth of product offerings;
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battery life, sensor technology, and tracking features;
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online and mobile app experience;
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strength of sales and marketing efforts; and
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distribution strategy.
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the level of demand for our connected health and fitness devices and our ability to maintain or increase the size and engagement of our community of users;
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the timing and success of new product and service introductions by us or our competitors or any other change in the competitive landscape of our market;
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the mix of products sold in a quarter;
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the continued market acceptance of, and the growth of the market for, connected health and fitness devices;
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pricing pressure as a result of competition or otherwise;
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delays or disruptions in our supply, manufacturing, or distribution chain;
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errors in our forecasting of the demand for our products, which could lead to lower revenue or increased costs, or both;
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seasonal buying patterns of consumers;
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increases in and timing of sales and marketing and other operating expenses that we may incur to grow and expand our operations and to remain competitive;
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insolvency, credit, or other difficulties faced by our distributors and retailers, affecting their ability to purchase or pay for our products;
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insolvency, credit, or other difficulties confronting our suppliers, contract manufacturers, or logistics providers leading to disruptions in our supply or distribution chain;
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levels of product returns, stock rotation, and price protection rights;
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adverse litigation judgments, settlements, or other litigation-related costs;
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changes in the legislative or regulatory environment, such as with respect to privacy, information security, health and wellness devices, consumer product safety, and advertising;
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product recalls, regulatory proceedings, or other adverse publicity about our products;
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fluctuations in foreign exchange rates;
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costs related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs; and
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general economic conditions in either domestic or international markets.
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inability to satisfy demand for our products;
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reduced control over delivery timing and product reliability;
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reduced ability to oversee the manufacturing process and components used in our products;
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reduced ability to monitor compliance with our product manufacturing specifications;
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reduced ability to develop comprehensive manufacturing specifications that take into account materials shortages, materials substitutions, and variance in the manufacturing capabilities of our third-party contract manufacturers;
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price increases;
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the failure of a key supplier, contract manufacturer, or logistics provider to perform its obligations to us for technical, market, or other reasons;
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difficulties in establishing additional contract manufacturing relationships if we experience difficulties with our existing contract manufacturers;
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shortages of materials or components;
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misappropriation of our intellectual property;
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exposure to natural catastrophes, political unrest, terrorism, labor disputes, and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured;
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changes in local economic conditions in countries where our suppliers, contract manufacturers, or logistics providers are located;
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the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds; and
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insufficient warranties and indemnities on components supplied to our contract manufacturers.
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establishing and maintaining effective controls at foreign locations and the associated increased costs;
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adapting our technologies, products, and services to non-U.S. consumers’ preferences and customs;
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variations in margins by geography;
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increased competition from local providers of similar products;
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longer sales or collection cycles in some countries;
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compliance with foreign laws and regulations;
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compliance with the laws of numerous taxing jurisdictions where we conduct business, potential double taxation of our international earnings, and potentially adverse tax consequences due to U.S. and foreign tax laws as they relate to our international operations;
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compliance with anti-bribery laws, such as the FCPA and the U.K. Bribery Act, by us, our employees, and our business partners;
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complexity and other risks associated with current and future foreign legal requirements, including legal requirements related to consumer protection, consumer product safety, and data privacy frameworks, such as the E.U. Data Protection Directive, the proposed E.U. Data Protection Regulation, and applicable privacy and data protection laws in foreign jurisdictions where we currently conduct business or intend to conduct business in the future;
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currency exchange rate fluctuations and related effects on our operating results;
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economic and political instability in some countries, particularly those in China where we have recently expanded;
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the uncertainty of protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad; and
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other costs of doing business internationally.
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use our accounts receivable, inventory, trademarks, and most of our other assets as security in other borrowings or transactions;
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incur additional indebtedness;
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sell certain assets;
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guarantee certain obligations of third parties;
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declare dividends or make certain distributions; and
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undergo a merger or consolidation or other transactions.
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overall performance of the equity markets;
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actual or anticipated fluctuations in our revenue and other operating results;
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changes in the financial projections we may provide to the public or our failure to meet these projections;
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failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
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recruitment or departure of key personnel;
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the economy as a whole and market conditions in our industry;
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negative publicity related to problems in our manufacturing or the real or perceived quality of our products, as well as the failure to timely launch new products that gain market acceptance;
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rumors and market speculation involving us or other companies in our industry;
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announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;
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new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
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lawsuits threatened or filed against us;
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other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and
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sales of shares of our Class A common stock by us or our stockholders.
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provide that our board of directors will be classified into three classes of directors with staggered three-year terms at such time as the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock;
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permit the board of directors to establish the number of directors and fill any vacancies and newly-created directorships;
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require super-majority voting to amend some provisions in our restated certificate of incorporation and restated bylaws;
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authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;
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provide that only the chairman of our board of directors, our chief executive officer, or a majority of our board of directors will be authorized to call a special meeting of stockholders;
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provide for a dual class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets;
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prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
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provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws; and
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establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
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High
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Low
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Fiscal Year 2015
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Second Quarter (from June 18, 2015)
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$
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40.45
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$
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29.50
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Third Quarter
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$
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51.90
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$
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30.51
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Fourth Quarter
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$
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41.97
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$
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26.46
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As of or For the Year Ended December 31,
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2015
(1)
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2014
(1)
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2013
(1)
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2012
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2011
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(in thousands, except per share data)
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Consolidated Statements of Operations Data
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Revenue
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$
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1,857,998
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$
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745,433
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$
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271,087
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$
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76,373
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$
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14,454
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Cost of revenue
(2)
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956,935
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387,776
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210,836
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49,733
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9,222
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Gross profit
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901,063
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357,657
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60,251
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26,640
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5,232
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|||||
Operating expenses:
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||||||||||
Research and development
(2)
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150,035
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54,167
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27,873
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16,210
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|
6,133
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|||||
Sales and marketing
(2)
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332,741
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112,005
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26,847
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10,237
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|
|
1,868
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|||||
General and administrative
(2)
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77,793
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33,556
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14,485
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|
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3,968
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|
|
1,544
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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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—
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|
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—
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|
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—
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|||||
Total operating expenses
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552,865
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199,728
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69,205
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30,415
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|
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9,545
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|||||
Operating income (loss)
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348,198
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|
157,929
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(8,954
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)
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|
(3,775
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)
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|
(4,313
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)
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|||||
Interest expense, net
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(1,019
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)
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(2,222
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)
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(1,082
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)
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(176
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)
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|
(15
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)
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|||||
Other income (expense), net
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(59,230
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)
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(15,934
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)
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(3,649
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)
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|
26
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|
|
15
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|
|||||
Income (loss) before income taxes
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287,949
|
|
|
139,773
|
|
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(13,685
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)
|
|
(3,925
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)
|
|
(4,313
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)
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|||||
Income tax expense
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112,272
|
|
|
7,996
|
|
|
37,937
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|
|
291
|
|
|
4
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|
|||||
Net income (loss)
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$
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175,677
|
|
|
$
|
131,777
|
|
|
$
|
(51,622
|
)
|
|
$
|
(4,216
|
)
|
|
$
|
(4,317
|
)
|
Net income (loss) per share attributable to common stockholders
(3)
:
|
|
|
|
|
|
|
|
|
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||||||||||
Basic
|
$
|
0.88
|
|
|
$
|
0.70
|
|
|
$
|
(1.32
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.12
|
)
|
Diluted
|
$
|
0.75
|
|
|
$
|
0.63
|
|
|
$
|
(1.32
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.12
|
)
|
Other Data
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Devices sold
(4)
|
21,355
|
|
|
10,904
|
|
|
4,476
|
|
|
1,279
|
|
|
208
|
|
|||||
Active users
(5)
|
16,903
|
|
|
6,700
|
|
|
2,570
|
|
|
558
|
|
|
|
||||||
Registered device users
(5)
|
29,033
|
|
|
11,068
|
|
|
3,534
|
|
|
|
|
|
|||||||
Adjusted EBITDA
(6)
|
$
|
389,879
|
|
|
$
|
191,042
|
|
|
$
|
79,049
|
|
|
$
|
(2,401
|
)
|
|
$
|
(4,023
|
)
|
(1)
|
In March 2014, we recalled the Fitbit Force. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Fitbit Force Product Recall” for additional information. The recall, which primarily affected our results for the fourth quarter of 2013, the first quarter of 2014, and the fourth quarter of 2015 and had the following effect on our income (loss) before income taxes:
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Reduction of revenue
|
$
|
—
|
|
|
$
|
(8,112
|
)
|
|
$
|
(30,607
|
)
|
Incremental (benefit to) cost of revenue
|
(5,755
|
)
|
|
11,339
|
|
|
51,205
|
|
|||
Impact on gross profit
|
(5,755
|
)
|
|
(19,451
|
)
|
|
(81,812
|
)
|
|||
Incremental general and administrative expenses (benefit)
|
(4,416
|
)
|
|
3,389
|
|
|
2,838
|
|
|||
Impact on income (loss) before income taxes
|
$
|
10,171
|
|
|
$
|
(22,840
|
)
|
|
$
|
(84,650
|
)
|
(2)
|
Includes stock-based compensation expense as follows:
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Cost of revenue
|
$
|
4,739
|
|
|
$
|
890
|
|
|
$
|
37
|
|
|
$
|
15
|
|
|
$
|
8
|
|
Research and development
|
18,251
|
|
|
2,350
|
|
|
288
|
|
|
62
|
|
|
27
|
|
|||||
Sales and marketing
|
7,419
|
|
|
1,295
|
|
|
204
|
|
|
29
|
|
|
—
|
|
|||||
General and administrative
|
10,615
|
|
|
2,269
|
|
|
91
|
|
|
26
|
|
|
25
|
|
|||||
Total
|
$
|
41,024
|
|
|
$
|
6,804
|
|
|
$
|
620
|
|
|
$
|
132
|
|
|
$
|
60
|
|
(3)
|
See notes 3 and 13 of the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for an explanation of the calculations of our net income (loss) per share attributable to common stockholders, basic and diluted.
|
(4)
|
See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metrics—Devices Sold” for more information.
|
(5)
|
We believe that the active user and registered device user metrics are indicators of the potential size of our community, but currently we do not believe that these have a direct effect on our revenue and operating results. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metrics” for more information.
|
(6)
|
Adjusted EBITDA is a financial measure that is not calculated in accordance with U.S. GAAP. See the section titled “—Adjusted EBITDA” for information regarding our use of adjusted EBITDA and a reconciliation of adjusted EBITDA to net income (loss).
|
|
As of December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents, and marketable securities
|
$
|
664,478
|
|
|
$
|
195,626
|
|
|
$
|
81,728
|
|
|
$
|
13,148
|
|
|
$
|
14,788
|
|
Working capital
(1)
|
847,157
|
|
|
101,860
|
|
|
14,457
|
|
|
17,477
|
|
|
15,073
|
|
|||||
Total assets
|
1,519,066
|
|
|
633,051
|
|
|
230,774
|
|
|
51,699
|
|
|
22,139
|
|
|||||
Total long-term debt
|
—
|
|
|
132,589
|
|
|
10,710
|
|
|
8,439
|
|
|
739
|
|
|||||
Retained earnings (accumulated deficit)
|
242,919
|
|
|
67,242
|
|
|
(64,535
|
)
|
|
(12,913
|
)
|
|
(8,697
|
)
|
|||||
Total stockholders’ equity (deficit)
|
981,451
|
|
|
75,262
|
|
|
(63,466
|
)
|
|
(12,707
|
)
|
|
(8,627
|
)
|
(1)
|
In November 2015, the FASB issued ASU 2015-17,
Balance Sheet Classification of Deferred Taxes
. This ASU requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. We early adopted this accounting standard retrospectively in the fourth quarter of 2015 and reclassified all our current deferred tax assets to noncurrent deferred tax assets on our consolidated balance sheets for all periods presented.
|
•
|
adjusted EBITDA excludes the Fitbit Force recall, which primarily impacted our results for the fourth quarter of 2013, the first quarter of 2014, and the fourth quarter of 2015;
|
•
|
adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy;
|
•
|
adjusted EBITDA excludes the revaluation of our redeemable convertible preferred stock warrant liability, which was a historically recurring non-cash charge prior to our initial public offering, but will not recur in the periods following the completion of our initial public offering;
|
•
|
adjusted EBITDA excludes depreciation and intangible assets amortization expense and, although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;
|
•
|
adjusted EBITDA excludes change in contingent consideration, a non-recurring benefit received for the reversal of a contingent liability incurred in connection with the acquisition of FitStar;
|
•
|
adjusted EBITDA does not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us;
|
•
|
adjusted EBITDA does not reflect income tax payments that reduce cash available to us; and
|
•
|
the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA when they report their operating results.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Net income (loss)
|
$
|
175,677
|
|
|
$
|
131,777
|
|
|
$
|
(51,622
|
)
|
|
$
|
(4,216
|
)
|
|
$
|
(4,317
|
)
|
Impact of Fitbit Force recall
|
(10,171
|
)
|
|
22,840
|
|
|
84,650
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation expense
|
41,024
|
|
|
6,804
|
|
|
620
|
|
|
132
|
|
|
60
|
|
|||||
Revaluation of redeemable convertible preferred stock warrant liability
|
56,655
|
|
|
13,272
|
|
|
3,370
|
|
|
37
|
|
|
13
|
|
|||||
Depreciation and amortization
|
21,107
|
|
|
6,131
|
|
|
3,012
|
|
|
1,179
|
|
|
202
|
|
|||||
Change in contingent consideration
|
(7,704
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense, net
|
1,019
|
|
|
2,222
|
|
|
1,082
|
|
|
176
|
|
|
15
|
|
|||||
Income tax expense
|
112,272
|
|
|
7,996
|
|
|
37,937
|
|
|
291
|
|
|
4
|
|
|||||
Adjusted EBITDA
|
$
|
389,879
|
|
|
$
|
191,042
|
|
|
$
|
79,049
|
|
|
$
|
(2,401
|
)
|
|
$
|
(4,023
|
)
|
|
For the Year Ended
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Revenue
|
$
|
1,857,998
|
|
|
$
|
745,433
|
|
|
$
|
271,087
|
|
Net income (loss)
|
$
|
175,677
|
|
|
$
|
131,777
|
|
|
$
|
(51,622
|
)
|
Adjusted EBITDA
|
$
|
389,879
|
|
|
$
|
191,042
|
|
|
$
|
79,049
|
|
Devices sold
|
21,355
|
|
|
10,904
|
|
|
4,476
|
|
|
As of or For the Year Ended
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Devices sold
|
21,355
|
|
|
10,904
|
|
|
4,476
|
|
|||
Active users
|
16,903
|
|
|
6,700
|
|
|
2,570
|
|
|||
Registered device users
|
29,033
|
|
|
11,068
|
|
|
3,534
|
|
|||
Adjusted EBITDA
|
$
|
389,879
|
|
|
$
|
191,042
|
|
|
$
|
79,049
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Reduction of revenue
|
$
|
—
|
|
|
$
|
(8,112
|
)
|
|
$
|
(30,607
|
)
|
Incremental (benefit to) cost of revenue
|
(5,755
|
)
|
|
11,339
|
|
|
51,205
|
|
|||
Impact on gross profit
|
(5,755
|
)
|
|
(19,451
|
)
|
|
(81,812
|
)
|
|||
Incremental general and administrative expenses (benefit)
|
(4,416
|
)
|
|
3,389
|
|
|
2,838
|
|
|||
Impact on income (loss) before income taxes
|
$
|
10,171
|
|
|
$
|
(22,840
|
)
|
|
$
|
(84,650
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2015
(1)
|
|
2014
(1)
|
|
2013
(1)
|
||||||
|
(in thousands)
|
||||||||||
Consolidated Statements of Operations Data
:
|
|
|
|
|
|
||||||
Revenue
|
$
|
1,857,998
|
|
|
$
|
745,433
|
|
|
$
|
271,087
|
|
Cost of revenue
(2)
|
956,935
|
|
|
387,776
|
|
|
210,836
|
|
|||
Gross profit
|
901,063
|
|
|
357,657
|
|
|
60,251
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
(2)
|
150,035
|
|
|
54,167
|
|
|
27,873
|
|
|||
Sales and marketing
(2)
|
332,741
|
|
|
112,005
|
|
|
26,847
|
|
|||
General and administrative
(2)
|
77,793
|
|
|
33,556
|
|
|
14,485
|
|
|||
Change in contingent consideration
|
(7,704
|
)
|
|
—
|
|
|
—
|
|
|||
Total operating expenses
|
552,865
|
|
|
199,728
|
|
|
69,205
|
|
|||
Operating income (loss)
|
348,198
|
|
|
157,929
|
|
|
(8,954
|
)
|
|||
Interest expense, net
|
(1,019
|
)
|
|
(2,222
|
)
|
|
(1,082
|
)
|
|||
Other income expense, net
|
(59,230
|
)
|
|
(15,934
|
)
|
|
(3,649
|
)
|
|||
Income (loss) before income taxes
|
287,949
|
|
|
139,773
|
|
|
(13,685
|
)
|
|||
Income tax expense
|
112,272
|
|
|
7,996
|
|
|
37,937
|
|
|||
Net income (loss)
|
$
|
175,677
|
|
|
$
|
131,777
|
|
|
$
|
(51,622
|
)
|
(1)
|
In March 2014, we recalled the Fitbit Force. See the section titled “—Fitbit Force Product Recall” for additional information. The recall, which primarily affected our results for the fourth quarter of 2013, the first quarter of 2014, and the fourth quarter of 2015 and had the following effect on our income (loss) before income taxes:
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Reduction of revenue
|
$
|
—
|
|
|
$
|
(8,112
|
)
|
|
$
|
(30,607
|
)
|
Incremental (benefit to) cost of revenue
|
(5,755
|
)
|
|
11,339
|
|
|
51,205
|
|
|||
Impact on gross profit
|
(5,755
|
)
|
|
(19,451
|
)
|
|
(81,812
|
)
|
|||
Incremental general and administrative expenses (benefit)
|
(4,416
|
)
|
|
3,389
|
|
|
2,838
|
|
|||
Impact on income (loss) before income taxes
|
$
|
10,171
|
|
|
$
|
(22,840
|
)
|
|
$
|
(84,650
|
)
|
(2)
|
Includes stock-based compensation expense as follows:
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Cost of revenue
|
$
|
4,739
|
|
|
$
|
890
|
|
|
$
|
37
|
|
Research and development
|
18,251
|
|
|
2,350
|
|
|
288
|
|
|||
Sales and marketing
|
7,419
|
|
|
1,295
|
|
|
204
|
|
|||
General and administrative
|
10,615
|
|
|
2,269
|
|
|
91
|
|
|||
Total
|
$
|
41,024
|
|
|
$
|
6,804
|
|
|
$
|
620
|
|
|
Year Ended December 31,
|
|||||||
|
2015
(1)
|
|
2014
(1)
|
|
2013
(1)
|
|||
|
(as a percentage of revenue)
|
|||||||
Consolidated Statements of Operations Data
:
|
|
|
|
|
|
|||
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
52
|
|
|
52
|
|
|
78
|
|
Gross profit
|
48
|
|
|
48
|
|
|
22
|
|
Operating expenses:
|
|
|
|
|
|
|||
Research and development
|
8
|
|
|
7
|
|
|
10
|
|
Sales and marketing
|
18
|
|
|
15
|
|
|
10
|
|
General and administrative
|
4
|
|
|
5
|
|
|
5
|
|
Change in contingent consideration
|
—
|
|
|
—
|
|
|
—
|
|
Total operating expenses
|
30
|
|
|
27
|
|
|
25
|
|
Operating income (loss)
|
18
|
|
|
21
|
|
|
(3
|
)
|
Interest expense, net
|
—
|
|
|
—
|
|
|
—
|
|
Other expense, net
|
(3
|
)
|
|
(2
|
)
|
|
(2
|
)
|
Income (loss) before income taxes
|
15
|
|
|
19
|
|
|
(5
|
)
|
Income tax expense
|
6
|
|
|
1
|
|
|
14
|
|
Net income (loss)
|
9
|
%
|
|
18
|
%
|
|
(19
|
)%
|
(1)
|
In March 2014, we recalled the Fitbit Force. See the section titled “—Fitbit Force Product Recall” for additional information. The recall, which primarily affected our results for the fourth quarter of 2013, the first quarter of 2014, and the fourth quarter of 2015 and had the following effect on our income (loss) before income taxes:
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
(1)
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Revenue
|
$
|
1,857,998
|
|
|
$
|
745,433
|
|
|
$
|
1,112,565
|
|
|
149
|
%
|
(1)
|
The Fitbit Force recall resulted in a decrease to revenue of $8.1 million for 2014. See the section titled “—Fitbit Force Product Recall” for additional information.
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2015
(1)
|
|
2014
(1)
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Cost of revenue
|
$
|
956,935
|
|
|
$
|
387,776
|
|
|
$
|
569,159
|
|
|
147
|
%
|
Gross profit
|
901,063
|
|
|
357,657
|
|
|
543,406
|
|
|
152
|
%
|
|||
Gross margin
|
48
|
%
|
|
48
|
%
|
|
|
|
|
(1)
|
The Fitbit Force recall resulted in a benefit to cost of revenue of $5.8 million and an increase to cost of revenue of $11.3 million for 2015 and 2014, respectively, an increase in gross profit of $5.8 million and a decrease in gross profit of $19.5 million for 2015 and 2014, respectively, and a negligible increase in gross margin and a decrease in gross margin of 3 percentage points for 2015 and 2014, respectively. See the section titled “—Fitbit Force Product Recall” for additional information.
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Research and development
|
$
|
150,035
|
|
|
$
|
54,167
|
|
|
$
|
95,868
|
|
|
177
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Sales and marketing
|
$
|
332,741
|
|
|
$
|
112,005
|
|
|
$
|
220,736
|
|
|
197
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
(1)
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
General and administrative
|
$
|
77,793
|
|
|
$
|
33,556
|
|
|
$
|
44,237
|
|
|
132
|
%
|
(1)
|
The Fitbit Force recall resulted in a benefit to general and administrative expenses of $4.4 million and an increase to general and administrative expenses of $3.4 million for 2015 and 2014, respectively. See the section titled “—Fitbit Force Product Recall” for additional information.
|
|
Year Ended December 31,
|
|
Change
|
||||||||
|
2015
|
|
2014
|
|
$
|
||||||
|
(in thousands)
|
||||||||||
Change in contingent consideration
|
$
|
(7,704
|
)
|
|
$
|
—
|
|
|
$
|
(7,704
|
)
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Interest expense, net
|
$
|
(1,019
|
)
|
|
$
|
(2,222
|
)
|
|
$
|
1,203
|
|
|
(54
|
)%
|
Other expense, net
|
(59,230
|
)
|
|
(15,934
|
)
|
|
(43,296
|
)
|
|
272
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Income tax expense
|
$
|
112,272
|
|
|
$
|
7,996
|
|
|
$
|
104,276
|
|
|
1,304
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2014
(1)
|
|
2013
(1)
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Revenue
|
$
|
745,433
|
|
|
$
|
271,087
|
|
|
$
|
474,346
|
|
|
175
|
%
|
(1)
|
The Fitbit Force recall resulted in a decrease to revenue of $30.6 million and $8.1 million in 2013 and 2014, respectively. See the section titled “—Fitbit Force Product Recall” for additional information.
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2014
(1)
|
|
2013
(1)
|
|
$
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Cost of revenue
|
$
|
387,776
|
|
|
$
|
210,836
|
|
|
$
|
176,940
|
|
|
84
|
%
|
Gross profit
|
357,657
|
|
|
60,251
|
|
|
297,406
|
|
|
494
|
%
|
|||
Gross margin
|
48
|
%
|
|
22
|
%
|
|
|
|
|
(1)
|
The Fitbit Force recall resulted in an increase to cost of revenue of $51.2 million and $11.3 million in 2013 and 2014, respectively, a decrease in gross profit of $81.8 million and $19.5 million in 2013 and 2014, respectively, and a decrease of 30 percentage points and 3 percentage points in gross margin in 2013 and 2014, respectively. See the section titled “—Fitbit Force Product Recall” for additional information.
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Research and development
|
$
|
54,167
|
|
|
$
|
27,873
|
|
|
$
|
26,294
|
|
|
94
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Sales and marketing
|
$
|
112,005
|
|
|
$
|
26,847
|
|
|
$
|
85,158
|
|
|
317
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2014
(1)
|
|
2013
(1)
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
General and administrative
|
$
|
33,556
|
|
|
$
|
14,485
|
|
|
$
|
19,071
|
|
|
132
|
%
|
(1)
|
The Fitbit Force recall resulted in an increase to general and administrative expenses of $2.8 million and $3.4 million in 2013 and 2014, respectively. See the section titled “—Fitbit Force Product Recall” for additional information.
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Interest expense, net
|
$
|
(2,222
|
)
|
|
$
|
(1,082
|
)
|
|
$
|
(1,140
|
)
|
|
105
|
%
|
Other expense, net
|
(15,934
|
)
|
|
(3,649
|
)
|
|
(12,285
|
)
|
|
337
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(in thousands)
|
|||||||||||||
Income tax expense
|
$
|
7,996
|
|
|
$
|
37,937
|
|
|
$
|
(29,941
|
)
|
|
(79
|
)%
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
109,157
|
|
|
$
|
18,774
|
|
|
$
|
33,171
|
|
Investing activities
|
(170,027
|
)
|
|
(24,185
|
)
|
|
(9,834
|
)
|
|||
Financing activities
|
401,053
|
|
|
119,264
|
|
|
45,243
|
|
|||
Net change in cash and cash equivalents
|
$
|
340,183
|
|
|
$
|
113,853
|
|
|
$
|
68,580
|
|
|
Payments Due By Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More than
5 Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating leases
(1)
|
$
|
143,624
|
|
|
$
|
16,843
|
|
|
$
|
40,660
|
|
|
$
|
34,101
|
|
|
$
|
52,020
|
|
Total
|
$
|
143,624
|
|
|
$
|
16,843
|
|
|
$
|
40,660
|
|
|
$
|
34,101
|
|
|
$
|
52,020
|
|
(1)
|
We lease our facilities under long-term operating leases, which expire at various dates through July 2024. The lease agreements frequently include provisions which require us to pay taxes, insurance, or maintenance costs.
|
•
|
Certain retailers and distributors are allowed to return products that were originally sold through to an end-user, called “open box” returns, and such returns may be made at any time after original sale.
|
•
|
All purchases through Fitbit.com are covered by a 45-day right of return.
|
•
|
Distributors are allowed stock rotation rights which are limited rights of return of products purchased during a prior period, generally one quarter.
|
•
|
Distributors and retailers are allowed return rights for defective products.
|
•
|
Certain distributors are offered price protection that allows for the right to a partial credit for unsold inventory held by the distributor if we reduce the selling price of a product.
|
•
|
refunds and product returns from retailer and distributor customers and end-users, which were charged to revenue and cost of revenue on the consolidated statements of operations;
|
•
|
logistics and handling fees for managing product returns and processing refunds, obsolescence of on-hand inventory, cancellation charges for existing purchase commitments and rework of component inventory by our contract
|
•
|
legal fees and settlement costs, which were charged to general and administrative expenses on the consolidated statements of operations.
|
|
Page
|
|
|
Consolidated Financial Statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
535,846
|
|
|
$
|
195,626
|
|
Marketable securities
|
128,632
|
|
|
—
|
|
||
Accounts receivable, net
|
469,260
|
|
|
238,859
|
|
||
Inventories
|
178,146
|
|
|
115,072
|
|
||
Prepaid expenses and other current assets
|
43,530
|
|
|
13,614
|
|
||
Total current assets
|
1,355,414
|
|
|
563,171
|
|
||
Property and equipment, net
|
44,501
|
|
|
26,435
|
|
||
Goodwill
|
22,157
|
|
|
—
|
|
||
Intangible assets, net
|
12,216
|
|
|
—
|
|
||
Deferred tax assets
|
83,020
|
|
|
42,001
|
|
||
Other assets
|
1,758
|
|
|
1,444
|
|
||
Total assets
|
$
|
1,519,066
|
|
|
$
|
633,051
|
|
Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
260,842
|
|
|
$
|
195,666
|
|
Accrued liabilities
|
194,977
|
|
|
70,940
|
|
||
Deferred revenue
|
44,448
|
|
|
9,009
|
|
||
Fitbit Force recall reserve
|
5,122
|
|
|
22,476
|
|
||
Income taxes payable
|
2,868
|
|
|
30,631
|
|
||
Long-term debt, current portion
|
—
|
|
|
132,589
|
|
||
Total current liabilities
|
508,257
|
|
|
461,311
|
|
||
Other liabilities
|
29,358
|
|
|
12,867
|
|
||
Redeemable convertible preferred stock warrant liability
|
—
|
|
|
15,797
|
|
||
Total liabilities
|
537,615
|
|
|
489,975
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
||||
Redeemable convertible preferred stock, $0.0001 par value: no shares and 144,528,912 shares authorized as of December 31, 2015 and 2014, respectively; no shares and 139,851,483 shares issued and outstanding as of December 31, 2015 and 2014, respectively; aggregate liquidation preference of $0 as of December 31, 2015
|
—
|
|
|
67,814
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.0001 par value, no shares and 230,400,000 shares authorized as of December 31, 2015 and 2014, respectively; no shares and 40,875,583 shares issued and outstanding as of December 31, 2015 and 2014, respectively
|
—
|
|
|
4
|
|
||
Class A common stock, $0.0001 par value, 600,000,000 and no shares authorized as of December 31, 2015 and 2014, respectively; 99,416,351 and no shares issued and outstanding as of December 31, 2015 and 2014, respectively
|
10
|
|
|
—
|
|
||
Class B common stock, $0.0001 par value, 350,000,000 and no shares authorized as of December 31, 2015 and 2014, respectively; 115,365,222 and no shares issued and outstanding as of December 31, 2015 and 2014, respectively
|
11
|
|
|
—
|
|
||
Additional paid-in capital
|
737,820
|
|
|
7,979
|
|
||
Accumulated other comprehensive income
|
691
|
|
|
37
|
|
||
Retained earnings
|
242,919
|
|
|
67,242
|
|
||
Total stockholders’ equity
|
981,451
|
|
|
75,262
|
|
||
Total liabilities, redeemable convertible preferred stock and stockholders’ equity
|
$
|
1,519,066
|
|
|
$
|
633,051
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
Revenue
|
$
|
1,857,998
|
|
|
$
|
745,433
|
|
|
$
|
271,087
|
|
Cost of revenue
|
956,935
|
|
|
387,776
|
|
|
210,836
|
|
|||
Gross profit
|
901,063
|
|
|
357,657
|
|
|
60,251
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
150,035
|
|
|
54,167
|
|
|
27,873
|
|
|||
Sales and marketing
|
332,741
|
|
|
112,005
|
|
|
26,847
|
|
|||
General and administrative
|
77,793
|
|
|
33,556
|
|
|
14,485
|
|
|||
Change in contingent consideration
|
(7,704
|
)
|
|
—
|
|
|
—
|
|
|||
Total operating expenses
|
552,865
|
|
|
199,728
|
|
|
69,205
|
|
|||
Operating income (loss)
|
348,198
|
|
|
157,929
|
|
|
(8,954
|
)
|
|||
Interest expense, net
|
(1,019
|
)
|
|
(2,222
|
)
|
|
(1,082
|
)
|
|||
Other expense, net
|
(59,230
|
)
|
|
(15,934
|
)
|
|
(3,649
|
)
|
|||
Income (loss) before income taxes
|
287,949
|
|
|
139,773
|
|
|
(13,685
|
)
|
|||
Income tax expense
|
112,272
|
|
|
7,996
|
|
|
37,937
|
|
|||
Net income (loss)
|
175,677
|
|
|
131,777
|
|
|
(51,622
|
)
|
|||
Less: noncumulative dividends to preferred stockholders
|
(2,526
|
)
|
|
(5,326
|
)
|
|
—
|
|
|||
Less: undistributed earnings to participating securities
|
(59,133
|
)
|
|
(98,103
|
)
|
|
—
|
|
|||
Net income (loss) attributable to common stockholders—basic
|
114,018
|
|
|
28,348
|
|
|
(51,622
|
)
|
|||
Add: adjustments for undistributed earnings to participating securities
|
8,821
|
|
|
10,175
|
|
|
—
|
|
|||
Net income (loss) attributable to common stockholders—diluted
|
$
|
122,839
|
|
|
$
|
38,523
|
|
|
$
|
(51,622
|
)
|
Net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.88
|
|
|
$
|
0.70
|
|
|
$
|
(1.32
|
)
|
Diluted
|
$
|
0.75
|
|
|
$
|
0.63
|
|
|
$
|
(1.32
|
)
|
Shares used to compute net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
129,886
|
|
|
40,351
|
|
|
39,179
|
|
|||
Diluted
|
164,213
|
|
|
61,179
|
|
|
39,179
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
175,677
|
|
|
$
|
131,777
|
|
|
$
|
(51,622
|
)
|
Other comprehensive income:
|
|
|
|
|
|
||||||
Cash flow hedges:
|
|
|
|
|
|
||||||
Change in unrealized gain on cash flow hedges, net of tax expense of $1,509, $ —, and $ —, respectively
|
1,276
|
|
|
—
|
|
|
—
|
|
|||
Less reclassification for realized net gains included in net income, net of tax expense of $759, $ —, and $ —, respectively
|
(525
|
)
|
|
—
|
|
|
—
|
|
|||
Net change, net of tax
|
751
|
|
|
—
|
|
|
—
|
|
|||
Available-for-sale investments:
|
|
|
—
|
|
|
—
|
|
||||
Change in unrealized loss on investments
|
(63
|
)
|
|
—
|
|
|
—
|
|
|||
Less reclassification for realized net gains included in net income
|
8
|
|
|
—
|
|
|
—
|
|
|||
Net change, net of tax
|
(55
|
)
|
|
—
|
|
|
—
|
|
|||
Change in foreign currency translation adjustment, net of tax
|
(42
|
)
|
|
37
|
|
|
—
|
|
|||
Comprehensive income (loss)
|
$
|
176,331
|
|
|
$
|
131,814
|
|
|
$
|
(51,622
|
)
|
|
Redeemable Convertible
Preferred Stock
|
|
Class A and Class B Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
(Accumulated
Deficit)
|
|
Total
Stockholders’
Equity
(Deficit)
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance at December 31, 2012
|
110,354,028
|
|
|
$
|
23,425
|
|
|
36,856,749
|
|
|
$
|
4
|
|
|
$
|
202
|
|
|
$
|
—
|
|
|
$
|
(12,913
|
)
|
|
$
|
(12,707
|
)
|
Issuance of redeemable convertible preferred stock for cash, net of issuance costs
|
29,149,887
|
|
|
42,811
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock upon exercise of stock options
|
—
|
|
|
—
|
|
|
3,283,410
|
|
|
—
|
|
|
205
|
|
|
—
|
|
|
—
|
|
|
205
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
620
|
|
|
—
|
|
|
—
|
|
|
620
|
|
||||||
Excess tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
38
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51,622
|
)
|
|
(51,622
|
)
|
||||||
Balance at December 31, 2013
|
139,503,915
|
|
|
66,236
|
|
|
40,140,159
|
|
|
4
|
|
|
1,065
|
|
|
—
|
|
|
(64,535
|
)
|
|
(63,466
|
)
|
||||||
Issuance of redeemable convertible preferred stock upon exercise of redeemable convertible preferred stock warrants
|
347,568
|
|
|
1,578
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock upon exercise of stock options
|
—
|
|
|
—
|
|
|
735,424
|
|
|
—
|
|
|
97
|
|
|
—
|
|
|
—
|
|
|
97
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,804
|
|
|
—
|
|
|
—
|
|
|
6,804
|
|
||||||
Excess tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
131,777
|
|
|
131,777
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
37
|
|
||||||
Balance at December 31, 2014
|
139,851,483
|
|
|
67,814
|
|
|
40,875,583
|
|
|
4
|
|
|
7,979
|
|
|
37
|
|
|
67,242
|
|
|
75,262
|
|
|
Redeemable Convertible
Preferred Stock
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
(Accumulated
Deficit)
|
|
Total
Stockholders’
Equity
(Deficit)
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Issuance of common stock upon public offerings, net of offering costs
|
—
|
|
|
—
|
|
|
25,387,500
|
|
|
3
|
|
|
499,102
|
|
|
—
|
|
|
—
|
|
|
499,105
|
|
||||||
Issuance of redeemable convertible preferred stock upon net exercise of redeemable convertible preferred stock warrants
|
1,485,583
|
|
|
56,678
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Conversion of redeemable convertible preferred stock to common stock upon initial public offering
|
(141,337,066
|
)
|
|
(124,492
|
)
|
|
141,337,066
|
|
|
14
|
|
|
124,478
|
|
|
—
|
|
|
—
|
|
|
124,492
|
|
||||||
Reclassification of redeemable convertible preferred stock warrant liability into additional paid in capital upon initial public offering
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,774
|
|
|
—
|
|
|
—
|
|
|
15,774
|
|
||||||
Issuance of common stock upon exercise of stock options
|
—
|
|
|
—
|
|
|
5,396,591
|
|
|
—
|
|
|
4,018
|
|
|
—
|
|
|
—
|
|
|
4,018
|
|
||||||
Issuance of common stock in connection with acquisition
|
—
|
|
|
—
|
|
|
1,059,688
|
|
|
—
|
|
|
13,317
|
|
|
—
|
|
|
—
|
|
|
13,317
|
|
||||||
Issuance of common stock subject to vesting in connection with acquisition
|
—
|
|
|
—
|
|
|
308,216
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock upon net exercise of common stock warrants
|
—
|
|
|
—
|
|
|
416,929
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,052
|
|
|
—
|
|
|
—
|
|
|
41,052
|
|
||||||
Excess tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,100
|
|
|
—
|
|
|
—
|
|
|
32,100
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175,677
|
|
|
175,677
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
654
|
|
|
—
|
|
|
654
|
|
||||||
Balance at December 31, 2015
|
—
|
|
|
$
|
—
|
|
|
214,781,573
|
|
|
$
|
21
|
|
|
$
|
737,820
|
|
|
$
|
691
|
|
|
$
|
242,919
|
|
|
$
|
981,451
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
175,677
|
|
|
$
|
131,777
|
|
|
$
|
(51,622
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Provision for doubtful accounts
|
1,115
|
|
|
864
|
|
|
651
|
|
|||
Provision for inventory obsolescence
|
5,060
|
|
|
2,964
|
|
|
1,099
|
|
|||
Provision for inventory obsolescence related to Fitbit Force recall
|
—
|
|
|
—
|
|
|
10,251
|
|
|||
Depreciation
|
19,405
|
|
|
6,131
|
|
|
3,012
|
|
|||
Amortization of intangible assets
|
1,702
|
|
|
—
|
|
|
—
|
|
|||
Write-off of property and equipment
|
1,206
|
|
|
1,004
|
|
|
1,712
|
|
|||
Revaluation of redeemable convertible preferred stock warrant liability
|
56,655
|
|
|
13,272
|
|
|
3,370
|
|
|||
Amortization of issuance costs and discount on debt
|
961
|
|
|
795
|
|
|
82
|
|
|||
Stock-based compensation
|
41,024
|
|
|
6,804
|
|
|
620
|
|
|||
Change in contingent consideration
|
(7,704
|
)
|
|
—
|
|
|
—
|
|
|||
Deferred income taxes
|
(42,538
|
)
|
|
(42,001
|
)
|
|
—
|
|
|||
Excess of tax benefit from stock-based compensation
|
(32,100
|
)
|
|
(13
|
)
|
|
(38
|
)
|
|||
Other
|
(263
|
)
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities, net of acquisition:
|
|
|
|
|
|
||||||
Accounts receivable
|
(231,100
|
)
|
|
(158,788
|
)
|
|
(55,630
|
)
|
|||
Inventories
|
(68,108
|
)
|
|
(61,595
|
)
|
|
(47,376
|
)
|
|||
Prepaid expenses and other assets
|
(29,215
|
)
|
|
(9,679
|
)
|
|
(2,225
|
)
|
|||
Fitbit Force recall reserve
|
(17,354
|
)
|
|
(60,462
|
)
|
|
72,687
|
|
|||
Accounts payable
|
56,759
|
|
|
123,761
|
|
|
50,881
|
|
|||
Accrued liabilities and other liabilities
|
138,748
|
|
|
47,733
|
|
|
27,043
|
|
|||
Deferred revenue
|
34,891
|
|
|
3,403
|
|
|
859
|
|
|||
Income taxes payable
|
4,336
|
|
|
12,804
|
|
|
17,795
|
|
|||
Net cash provided by operating activities
|
109,157
|
|
|
18,774
|
|
|
33,171
|
|
|||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||
Change in restricted cash
|
—
|
|
|
2,310
|
|
|
(2,310
|
)
|
|||
Purchase of property and equipment
|
(30,566
|
)
|
|
(26,495
|
)
|
|
(7,524
|
)
|
|||
Purchase of marketable securities
|
(230,935
|
)
|
|
—
|
|
|
—
|
|
|||
Sales of marketable securities
|
58,011
|
|
|
—
|
|
|
—
|
|
|||
Maturities of marketable securities
|
44,500
|
|
|
—
|
|
|
—
|
|
|||
Acquisitions, net of cash acquired
|
(11,037
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(170,027
|
)
|
|
(24,185
|
)
|
|
(9,834
|
)
|
|||
Cash Flows from Financing Activities
|
|
|
|
|
|
||||||
Proceeds from public offerings, net of underwriting discounts and commissions
|
505,275
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of debt and revolving credit facility
|
160,000
|
|
|
163,000
|
|
|
2,830
|
|
|||
Repayment of debt
|
(294,503
|
)
|
|
(41,346
|
)
|
|
(596
|
)
|
|||
Payment of issuance costs
|
(748
|
)
|
|
(2,575
|
)
|
|
(45
|
)
|
|||
Payment of offering costs
|
(5,089
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs
|
—
|
|
|
—
|
|
|
42,811
|
|
|||
Proceeds from exercise of stock options
|
4,018
|
|
|
97
|
|
|
205
|
|
|||
Excess of tax benefit from stock-based compensation
|
32,100
|
|
|
13
|
|
|
38
|
|
|||
Proceeds from exercise of redeemable convertible preferred stock warrants
|
—
|
|
|
75
|
|
|
—
|
|
|||
Net cash provided by financing activities
|
401,053
|
|
|
119,264
|
|
|
45,243
|
|
|||
Net increase in cash and cash equivalents
|
340,183
|
|
|
113,853
|
|
|
68,580
|
|
|||
Effect of exchange rate on cash and cash equivalents
|
37
|
|
|
45
|
|
|
—
|
|
|||
Cash and cash equivalents at beginning of period
|
195,626
|
|
|
81,728
|
|
|
13,148
|
|
|||
Cash and cash equivalents at end of period
|
$
|
535,846
|
|
|
$
|
195,626
|
|
|
$
|
81,728
|
|
Supplemental Disclosure
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
1,157
|
|
|
$
|
835
|
|
|
$
|
999
|
|
Cash paid for income taxes
|
$
|
150,923
|
|
|
$
|
34,616
|
|
|
$
|
12,930
|
|
Supplemental Disclosure of Non-Cash Investing and Financing Activity
|
|
|
|
|
|
||||||
Conversion of redeemable convertible preferred stock into Class B common stock
|
$
|
124,492
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Reclassification of redeemable convertible preferred stock warrant liability to additional paid in capital
|
$
|
15,774
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of redeemable convertible preferred stock upon net exercise of redeemable convertible preferred stock warrants
|
$
|
56,678
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Purchase of property and equipment included in accounts payable
|
$
|
10,534
|
|
|
$
|
2,492
|
|
|
$
|
1,904
|
|
Issuance of redeemable convertible preferred stock warrants in connection with debt financing
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
170
|
|
Deferred offering costs included in accounts payable and accruals
|
$
|
1,080
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of common stock in connection with acquisitions
|
$
|
13,317
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Contingent consideration related to acquisitions
|
$
|
(7,704
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
The Company authorized
two
new classes of common stock— Class A common stock and Class B common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to
one
vote per share and each share of Class B common stock is entitled to
ten
votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into
one
share of Class A common stock, generally automatically converts into Class A common stock upon a transfer, and has no expiration date.
|
•
|
All shares of the then-outstanding common stock, as well as options to purchase common stock and restricted stock units (“RSUs”), were reclassified into the right to receive an equivalent number of shares of Class B common stock.
|
•
|
All
139,851,483
shares of the then-outstanding redeemable convertible preferred stock were converted and reclassified into an equivalent number of shares of Class B common stock. This resulted in a reclassification of the redeemable convertible preferred stock balance of
$67.8 million
to additional paid-in capital.
|
•
|
The Company issued
274,992
shares of Series B redeemable convertible preferred stock and
1,210,591
shares of Series C redeemable convertible preferred stock upon the net exercise of redeemable convertible preferred stock warrants, which occurred immediately prior to the completion of its IPO. These shares were converted into and then sold as Class A common stock by the selling stockholders in the IPO. As a result, the Company revalued the warrants settled upon exercise as of the completion of the IPO and reclassified $
56.7 million
from the redeemable convertible preferred stock warrant liability balance to additional paid-in capital. In addition, all of the remaining outstanding redeemable convertible preferred stock warrants automatically converted to Class B common stock warrants upon the closing of the IPO. As a result, the Company revalued the warrants as of the completion of the IPO and reclassified the remaining redeemable convertible preferred stock warrant liability balance of
$15.8 million
to additional paid-in capital.
|
•
|
The Company recorded proceeds of
$420.9 million
to additional paid-in capital and reclassified
$5.0 million
of deferred offering costs previously recorded in other current assets as an offset to the proceeds from the IPO.
|
Tooling and manufacturing equipment
|
|
One to three years
|
Furniture and office equipment
|
|
Three years
|
Purchased software
|
|
Three years
|
Capitalized internally-developed software
|
|
Two to three years
|
Leasehold improvements
|
|
Shorter of remaining lease term or ten years
|
•
|
Certain retailers and distributors are allowed to return products that were originally sold through to an end user, called “open box” returns, and such returns may be made at any time after original sale.
|
•
|
All purchases through Fitbit.com are covered by a
45
-day right of return.
|
•
|
Distributors are allowed stock rotation rights which are limited rights of return of products purchased during a prior period, generally one quarter.
|
•
|
Distributors and retailers are allowed return rights for defective products.
|
•
|
Certain distributors are offered price protection that allows for the right to a partial credit for unsold inventory held by the distributor if the Company reduces the selling price of a product.
|
•
|
refunds and product returns from retailer and distributor customers and end-users, which were charged to revenue and cost of revenue on the consolidated statements of operations;
|
•
|
logistics and handling fees for managing product returns and processing refunds, obsolescence of on-hand inventory, cancellation charges for existing purchase commitments and rework of component inventory by the Company’s contract manufacturers, write-offs of tooling and manufacturing equipment, which were charged to cost of revenue on the consolidated statements of operations; and
|
•
|
legal fees and settlement costs, which were charged to general and administrative expenses on the consolidated statements of operations.
|
|
December 31, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
248,128
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
248,128
|
|
U.S. government agencies
|
—
|
|
|
113,314
|
|
|
—
|
|
|
113,314
|
|
||||
Corporate debt securities
|
—
|
|
|
193,964
|
|
|
—
|
|
|
193,964
|
|
||||
Derivative assets
|
—
|
|
|
6,002
|
|
|
—
|
|
|
6,002
|
|
||||
Total
|
$
|
248,128
|
|
|
$
|
313,280
|
|
|
$
|
—
|
|
|
$
|
561,408
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
2,640
|
|
|
$
|
—
|
|
|
$
|
2,640
|
|
|
December 31, 2014
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative assets
|
$
|
—
|
|
|
$
|
316
|
|
|
$
|
—
|
|
|
$
|
316
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Redeemable convertible preferred stock warrant liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,797
|
|
|
$
|
15,797
|
|
Derivative liabilities
|
—
|
|
|
105
|
|
|
—
|
|
|
105
|
|
||||
Total
|
$
|
—
|
|
|
$
|
105
|
|
|
$
|
15,797
|
|
|
$
|
15,902
|
|
Balance at December 31, 2012
|
$
|
488
|
|
Fair value of redeemable convertible preferred stock warrants issued
|
170
|
|
|
Change in fair value
|
3,370
|
|
|
Balance at December 31, 2013
|
4,028
|
|
|
Settlement of warrant liability upon exercise
|
(1,503
|
)
|
|
Change in fair value
|
13,272
|
|
|
Balance at December 31, 2014
|
15,797
|
|
|
Change in fair value
|
56,655
|
|
|
Settlement of warrant liability upon exercise
|
(56,678
|
)
|
|
Reclassification of unexercised warrants to additional paid in capital upon the IPO
|
(15,774
|
)
|
|
Balance at December 31, 2015
|
$
|
—
|
|
|
|
||
Balance at December 31, 2014
|
$
|
—
|
|
Addition from acquisition
|
7,704
|
|
|
Change in fair value of contingent consideration
|
(7,704
|
)
|
|
Balance at December 31, 2015
|
$
|
—
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Cash and
Cash
Equivalents
|
|
Marketable
Securities
|
||||||||||||
Cash
|
$
|
109,072
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
109,072
|
|
|
$
|
109,072
|
|
|
$
|
—
|
|
Money market funds
|
248,128
|
|
|
—
|
|
|
—
|
|
|
248,128
|
|
|
248,128
|
|
|
—
|
|
||||||
U.S. government agencies
|
113,315
|
|
|
3
|
|
|
(4
|
)
|
|
113,314
|
|
|
63,464
|
|
|
49,850
|
|
||||||
Corporate debt securities
|
194,018
|
|
|
1
|
|
|
(55
|
)
|
|
193,964
|
|
|
115,182
|
|
|
78,782
|
|
||||||
Total
|
$
|
664,533
|
|
|
$
|
4
|
|
|
$
|
(59
|
)
|
|
$
|
664,478
|
|
|
$
|
535,846
|
|
|
$
|
128,632
|
|
|
Fair
Value
|
|
Gross
Unrealized
Losses
|
||||
U.S. government agencies
|
$
|
113,314
|
|
|
$
|
(4
|
)
|
Corporate debt securities
|
193,964
|
|
|
(55
|
)
|
||
Total
|
$
|
307,278
|
|
|
$
|
(59
|
)
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
Balance Sheet Location
|
|
Fair
Value
Derivative
Assets
|
|
Fair
Value
Derivative
Liabilities
|
|
Fair
Value
Derivative
Assets
|
|
Fair
Value
Derivative
Liabilities
|
||||||||
Cash flow designated hedges
|
Prepaid expense and other current assets
|
|
$
|
3,116
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash flow designated hedges
|
Accrued liabilities
|
|
—
|
|
|
1,327
|
|
|
—
|
|
|
—
|
|
||||
Hedges not designated
|
Prepaid expense and other current assets
|
|
2,886
|
|
|
—
|
|
|
316
|
|
|
—
|
|
||||
Hedges not designated
|
Accrued liabilities
|
|
—
|
|
|
1,313
|
|
|
—
|
|
|
105
|
|
||||
Total fair value of derivative instruments
|
|
|
$
|
6,002
|
|
|
$
|
2,640
|
|
|
$
|
316
|
|
|
$
|
105
|
|
|
|
|
Year Ended
December 31,
|
||||||
|
Income Statement Location
|
|
2015
|
|
2014
|
||||
Foreign exchange cash flow hedges:
|
|
|
|
|
|
||||
Gain (loss) recognized in OCI—effective portion
|
|
|
$
|
2,785
|
|
|
$
|
—
|
|
Gain (loss) reclassified from OCI into income—effective portion
|
Revenue
|
|
2,183
|
|
|
—
|
|
||
Gain (loss) reclassified from OCI into income—effective portion
|
Operating expenses
|
|
(899
|
)
|
|
—
|
|
||
Gain (loss) recognized in income—ineffective portion
|
Other expense, net
|
|
202
|
|
|
—
|
|
||
Foreign exchange balance sheet hedges:
|
|
|
|
|
|
||||
Gain (loss) recognized in income
|
Other expense, net
|
|
$
|
5,861
|
|
|
$
|
211
|
|
|
Gross Amounts
of Recognized
Assets
|
|
Gross Amounts
Offset in the
Condensed
Consolidated
Balance Sheets
|
|
Net Amounts
Presented in
Condensed
Consolidated
Balance Sheets
|
|
Gross Amounts Not
Offset in Condensed
Consolidated Balance
Sheets
|
|
|
||||||||||||||
|
Financial
Instruments
|
|
Cash
Collateral
Received
|
|
Net
Amount
|
||||||||||||||||||
Foreign exchange contracts
|
$
|
6,002
|
|
|
$
|
—
|
|
|
$
|
6,002
|
|
|
$
|
2,100
|
|
|
$
|
—
|
|
|
$
|
3,902
|
|
|
Gross Amounts
of Recognized
Liabilities
|
|
Gross Amounts
Offset in the
Condensed
Consolidated
Balance Sheets
|
|
Net Amounts
Presented in
Condensed
Consolidated
Balance Sheets
|
|
Gross Amounts Not
Offset in Condensed
Consolidated Balance
Sheets
|
|
|
||||||||||||
|
Financial
Instruments
|
|
Cash
Collateral
Pledged
|
|
Net
Amount
|
||||||||||||||||
Foreign exchange contracts
|
$
|
2,640
|
|
|
$
|
—
|
|
|
$
|
2,640
|
|
|
$
|
2,100
|
|
|
|
|
$
|
540
|
|
|
Allowance for
Doubtful
Accounts
|
|
Revenue
Reserve
|
||||
Balance at December 31, 2012
|
$
|
92
|
|
|
$
|
3,187
|
|
Increases
|
651
|
|
|
20,307
|
|
||
Write-offs/returns taken
|
—
|
|
|
(8,078
|
)
|
||
Balance at December 31, 2013
|
743
|
|
|
15,416
|
|
||
Increases
|
864
|
|
|
42,740
|
|
||
Write-offs/returns taken
|
(769
|
)
|
|
(31,597
|
)
|
||
Balance at December 31, 2014
|
838
|
|
|
26,559
|
|
||
Increases
|
1,115
|
|
|
169,677
|
|
||
Write-offs/returns taken
|
(128
|
)
|
|
(122,191
|
)
|
||
Balance at December 31, 2015
|
$
|
1,825
|
|
|
$
|
74,045
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Components
|
$
|
5,359
|
|
|
$
|
53,383
|
|
Finished goods
|
172,787
|
|
|
61,689
|
|
||
Total inventories
|
$
|
178,146
|
|
|
$
|
115,072
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Prepaid income taxes
|
$
|
11,889
|
|
|
$
|
—
|
|
POP displays, net
|
9,990
|
|
|
7,121
|
|
||
Derivative assets
|
6,002
|
|
|
316
|
|
||
Prepaid expenses and other current assets
|
15,649
|
|
|
6,177
|
|
||
Total prepaid expenses and other current assets
|
$
|
43,530
|
|
|
$
|
13,614
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Tooling and manufacturing equipment
|
$
|
53,092
|
|
|
$
|
28,344
|
|
Furniture and office equipment
|
6,809
|
|
|
2,891
|
|
||
Purchased and internally-developed software
|
3,794
|
|
|
1,396
|
|
||
Leasehold improvements
|
8,388
|
|
|
3,594
|
|
||
Total property and equipment
|
72,083
|
|
|
36,225
|
|
||
Less: Accumulated depreciation and amortization
|
(27,582
|
)
|
|
(9,790
|
)
|
||
Property and equipment, net
|
$
|
44,501
|
|
|
$
|
26,435
|
|
|
Goodwill
|
||
Balance at December 31, 2014
|
$
|
—
|
|
Goodwill acquired
|
22,562
|
|
|
Subsequent goodwill adjustments
|
(405
|
)
|
|
Balance at December 31, 2015
|
$
|
22,157
|
|
|
December 31, 2015
|
|
Weighted
Average
Remaining
Useful Life
(years)
|
||||||||||
|
Gross
|
|
Accumulated
Amortization
|
|
Net
|
|
|||||||
Developed technology
|
$
|
12,640
|
|
|
$
|
(1,442
|
)
|
|
$
|
11,198
|
|
|
6.3
|
Trademarks and other
|
1,278
|
|
|
(260
|
)
|
|
1,018
|
|
|
4.1
|
|||
Total intangible assets, net
|
$
|
13,918
|
|
|
$
|
(1,702
|
)
|
|
$
|
12,216
|
|
|
|
|
Cost of
Revenue
|
|
Operating
Expenses
|
|
Total
|
||||||
2016
|
$
|
1,806
|
|
|
$
|
281
|
|
|
$
|
2,087
|
|
2017
|
1,806
|
|
|
230
|
|
|
2,036
|
|
|||
2018
|
1,806
|
|
|
230
|
|
|
2,036
|
|
|||
2019
|
1,806
|
|
|
230
|
|
|
2,036
|
|
|||
2020
|
1,806
|
|
|
47
|
|
|
1,853
|
|
|||
Thereafter
|
2,168
|
|
|
—
|
|
|
2,168
|
|
|||
Total intangible assets, net
|
$
|
11,198
|
|
|
$
|
1,018
|
|
|
$
|
12,216
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Product warranty
|
$
|
40,212
|
|
|
$
|
20,098
|
|
Accrued sales and marketing
|
33,389
|
|
|
154
|
|
||
Accrued co-op advertising and marketing development funds
|
29,077
|
|
|
7,679
|
|
||
Employee related liabilities
|
27,394
|
|
|
4,115
|
|
||
Accrued sales incentives
|
24,324
|
|
|
3,426
|
|
||
Accrued manufacturing expense and freight
|
10,723
|
|
|
16,229
|
|
||
Sales taxes and VAT payable
|
8,349
|
|
|
2,291
|
|
||
Inventory received but not billed
|
4,292
|
|
|
6,242
|
|
||
Accrued legal fees
|
3,138
|
|
|
678
|
|
||
Derivative liabilities
|
2,640
|
|
|
105
|
|
||
Customer deposits
|
2,062
|
|
|
6,391
|
|
||
Other
|
9,377
|
|
|
3,532
|
|
||
Accrued liabilities
|
$
|
194,977
|
|
|
$
|
70,940
|
|
|
|
||
|
Reserve For
Product
Warranty
(1)
|
||
Balance at December 31, 2012
|
$
|
2,232
|
|
Charged to cost of revenue
|
9,078
|
|
|
Settlement of claims
|
(2,830
|
)
|
|
Balance at December 31, 2013
|
8,480
|
|
|
Charged to cost of revenue
|
19,462
|
|
|
Settlement of claims
|
(7,844
|
)
|
|
Balance at December 31, 2014
|
20,098
|
|
|
Charged to cost of revenue
|
55,642
|
|
|
Changes in estimate related to pre-existing warranties
|
(8,968
|
)
|
|
Settlement of claims
|
(26,560
|
)
|
|
Balance at December 31, 2015
|
$
|
40,212
|
|
(1)
|
Does not include reserves established as a result of the recall of the Fitbit Force. See the section titled “—Fitbit Force Recall Reserve” for additional information regarding such reserves.
|
|
|
||
|
Reserve For
Fitbit Force
Recall
|
||
Balance at December 31, 2012
|
$
|
—
|
|
Charged to revenue
|
30,607
|
|
|
Charged to cost of revenue
|
49,493
|
|
|
Charged to general and administrative
|
2,838
|
|
|
Settlement of claims
|
—
|
|
|
Balance at December 31, 2013
|
82,938
|
|
|
Charged to revenue
|
8,112
|
|
|
Charged to cost of revenue
|
11,339
|
|
|
Charged to general and administrative
|
505
|
|
|
Settlement of claims
|
(80,418
|
)
|
|
Balance at December 31, 2014
|
22,476
|
|
|
Benefit to cost of revenue
|
(5,755
|
)
|
|
Benefit to general and administrative
|
(1,174
|
)
|
|
Settlement of claims
|
(10,425
|
)
|
|
Balance at December 31, 2015
|
$
|
5,122
|
|
|
Unrealized Gains on Cash Flow Hedges
|
|
Currency Translation Adjustments
|
|
Unrealized Gains (Losses) on Available-for-Sale Investments
|
|
Total
|
||||||||
Balance at December 31, 2014
|
$
|
—
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
37
|
|
Other comprehensive income (loss) before reclassifications
|
1,276
|
|
|
(42
|
)
|
|
(63
|
)
|
|
1,171
|
|
||||
Amounts reclassified from AOCI
|
(525
|
)
|
|
—
|
|
|
8
|
|
|
(517
|
)
|
||||
Other comprehensive income (loss)
|
751
|
|
|
(42
|
)
|
|
(55
|
)
|
|
654
|
|
||||
Balance at December 31, 2015
|
$
|
751
|
|
|
$
|
(5
|
)
|
|
$
|
(55
|
)
|
|
$
|
691
|
|
|
|
||
Year ending December 31,
|
Amounts
|
||
2016
|
$
|
16,843
|
|
2017
|
20,825
|
|
|
2018
|
19,835
|
|
|
2019
|
18,789
|
|
|
2020
|
15,312
|
|
|
Thereafter
|
52,020
|
|
|
Total
|
$
|
143,624
|
|
|
Shares
Authorized
|
|
Shares
Outstanding
|
|
Price per
Share
|
|
Net
Carrying
Value
|
|
Liquidation
Preference
|
||||||||
Series A
|
10,200
|
|
|
10,200
|
|
|
$
|
0.04167
|
|
|
$
|
421
|
|
|
$
|
425
|
|
Series A-1
|
22,369
|
|
|
22,369
|
|
|
0.09164
|
|
|
2,000
|
|
|
2,050
|
|
|||
Series B
|
42,360
|
|
|
42,052
|
|
|
0.21580
|
|
|
10,533
|
|
|
9,075
|
|
|||
Series C
|
39,600
|
|
|
36,080
|
|
|
0.33452
|
|
|
12,049
|
|
|
12,069
|
|
|||
Series D
|
30,000
|
|
|
29,150
|
|
|
1.47513
|
|
|
42,811
|
|
|
43,000
|
|
|||
Total
|
144,529
|
|
|
139,851
|
|
|
|
|
$
|
67,814
|
|
|
$
|
66,619
|
|
Warrant Class:
|
|
Number of Shares Underlying Warrants
|
|
Fair Value
|
|
Issuance Date
|
|
Exercise
Price per Share |
|||||
Series B
|
|
278
|
|
|
2,351
|
|
|
June 2011
|
|
$
|
0.22
|
|
|
Series C
|
|
57
|
|
|
475
|
|
|
April 2012
|
|
0.33
|
|
||
Series C
|
|
1,215
|
|
|
9,728
|
|
|
September 2012
|
|
0.67
|
|
||
Series C
(1)
|
|
405
|
|
|
3,243
|
|
|
September 2012
|
|
0.67
|
|
||
Total
|
|
1,955
|
|
|
$
|
15,797
|
|
|
|
|
|
(1)
|
Represents additional shares that may be exercised pursuant to the Series C redeemable convertible preferred stock warrant issued in September 2012 due to a draw down on a debt financing arrangement in March 2013.
|
|
Year Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Expected term (in years)
|
0.5
|
|
0.8 – 1.3
|
|
0.6 – 6.9
|
Volatility
|
81.3%
|
|
46.7 – 54.9%
|
|
31.2 – 62.7%
|
Risk-free interest rate
|
0.1%
|
|
0.1 – 0.2%
|
|
0.1 – 2.5%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
|
Options Outstanding
|
|||||||||
|
Number of
Shares Subject
to
Options
|
|
Weighted–
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
|
|||||
Balance—December 31, 2012
|
20,947
|
|
|
$
|
0.06
|
|
|
|
||
Granted
|
6,476
|
|
|
0.61
|
|
|
|
|||
Exercised
|
(3,283
|
)
|
|
0.05
|
|
|
$
|
1,111
|
|
|
Canceled
|
(736
|
)
|
|
0.16
|
|
|
|
|||
Balance—December 31, 2013
|
23,404
|
|
|
0.21
|
|
|
|
|||
Granted
|
22,094
|
|
|
3.25
|
|
|
|
|||
Exercised
|
(735
|
)
|
|
0.14
|
|
|
$
|
3,001
|
|
|
Canceled
|
(765
|
)
|
|
0.95
|
|
|
|
|||
Balance—December 31, 2014
|
43,998
|
|
|
1.72
|
|
|
$
|
207,863
|
|
|
Granted
|
6,950
|
|
|
10.67
|
|
|
|
|||
Exercised
|
(5,397
|
)
|
|
0.74
|
|
|
$
|
173,507
|
|
|
Canceled
|
(1,189
|
)
|
|
3.21
|
|
|
|
|||
Balance—December 31, 2015
|
44,362
|
|
|
3.20
|
|
|
$
|
1,171,688
|
|
|
Options exercisable—December 31, 2015
|
20,763
|
|
|
0.99
|
|
|
$
|
593,810
|
|
|
Options vested and expected to vest—December 31, 2015
|
43,502
|
|
|
3.16
|
|
|
$
|
1,150,881
|
|
|
RSUs
Outstanding
|
|
Weighted-
Average
Grant Date
Fair Value
|
|||
|
(in thousands)
|
|
|
|||
Unvested balance—December 31, 2014
|
—
|
|
|
$
|
—
|
|
Granted
|
3,326
|
|
|
34.27
|
|
|
Forfeited or canceled
|
(34
|
)
|
|
34.26
|
|
|
Unvested balance—December 31, 2015
|
3,292
|
|
|
34.27
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
4,739
|
|
|
$
|
890
|
|
|
$
|
37
|
|
Research and development
|
18,251
|
|
|
2,350
|
|
|
288
|
|
|||
Sales and marketing
|
7,419
|
|
|
1,295
|
|
|
204
|
|
|||
General and administrative
|
10,615
|
|
|
2,269
|
|
|
91
|
|
|||
Total stock-based compensation expense
|
$
|
41,024
|
|
|
$
|
6,804
|
|
|
$
|
620
|
|
|
Year Ended December 31,
|
||||
|
2015
|
|
2014
|
|
2013
|
Employee stock options
|
|
|
|
|
|
Expected term (in years)
|
6.25
|
|
6.25
|
|
6.00 – 6.25
|
Volatility
|
52.1% - 56.9%
|
|
54.83% – 60.94%
|
|
60.57% – 62.03%
|
Risk-free interest rate
|
1.5% - 1.9%
|
|
1.73% – 2.04%
|
|
1.04% – 1.93%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
|
|
|
|
|
|
Employee stock purchase plan
|
|
|
|
|
|
Expected term (in years)
|
0.5 – 0.9
|
|
—
|
|
—
|
Volatility
|
27.7% - 35.0%
|
|
—%
|
|
—%
|
Risk-free interest rate
|
0.3%
|
|
—%
|
|
—%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
140,396
|
|
|
$
|
47,565
|
|
|
$
|
31,176
|
|
State
|
13,307
|
|
|
2,319
|
|
|
6,736
|
|
|||
Foreign
|
1,107
|
|
|
113
|
|
|
25
|
|
|||
Total current
|
154,810
|
|
|
49,997
|
|
|
37,937
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(33,421
|
)
|
|
(39,339
|
)
|
|
—
|
|
|||
State
|
(8,941
|
)
|
|
(2,651
|
)
|
|
—
|
|
|||
Foreign
|
(176
|
)
|
|
(11
|
)
|
|
—
|
|
|||
Total deferred
|
(42,538
|
)
|
|
(42,001
|
)
|
|
—
|
|
|||
Total income tax expense
|
$
|
112,272
|
|
|
$
|
7,996
|
|
|
$
|
37,937
|
|
|
Year Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Tax at federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
(35.0
|
)%
|
State taxes, net of federal effect
|
1.5
|
|
|
(0.2
|
)
|
|
32.0
|
|
Foreign rate differential
|
(0.8
|
)
|
|
2.7
|
|
|
(0.1
|
)
|
Tax credits
|
(2.0
|
)
|
|
(1.1
|
)
|
|
(9.6
|
)
|
Domestic production activities deduction
|
(3.3
|
)
|
|
(2.6
|
)
|
|
(12.7
|
)
|
Warrant fair value adjustment
|
6.9
|
|
|
3.3
|
|
|
8.6
|
|
Stock-based compensation
|
1.7
|
|
|
—
|
|
|
—
|
|
Change in valuation allowance
|
—
|
|
|
(32.0
|
)
|
|
292.6
|
|
Other
|
—
|
|
|
0.6
|
|
|
1.4
|
|
Effective tax rate
|
39.0
|
%
|
|
5.7
|
%
|
|
277.2
|
%
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Net operating losses and credits
|
$
|
5,225
|
|
|
$
|
1,331
|
|
Fixed assets and intangible assets
|
1,227
|
|
|
2,436
|
|
||
Accruals and reserves
|
54,891
|
|
|
23,331
|
|
||
Fitbit Force recall reserve
|
1,910
|
|
|
8,159
|
|
||
Stock-based compensation
|
9,642
|
|
|
1,306
|
|
||
Other
|
10,566
|
|
|
5,438
|
|
||
Gross deferred tax assets
|
83,461
|
|
|
42,001
|
|
||
Debt issuance costs
|
(441
|
)
|
|
—
|
|
||
Net deferred tax assets
|
$
|
83,020
|
|
|
$
|
42,001
|
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Balance at beginning of year
|
$
|
10,594
|
|
|
$
|
7,991
|
|
|
$
|
634
|
|
Reductions based on tax positions related to prior year
|
(18
|
)
|
|
(418
|
)
|
|
(87
|
)
|
|||
Additions based on tax positions related to current year
|
12,942
|
|
|
3,021
|
|
|
7,444
|
|
|||
Balance at end of year
|
$
|
23,518
|
|
|
$
|
10,594
|
|
|
$
|
7,991
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
175,677
|
|
|
$
|
131,777
|
|
|
$
|
(51,622
|
)
|
Less: noncumulative dividends to preferred stockholders
|
(2,526
|
)
|
|
(5,326
|
)
|
|
—
|
|
|||
Less: undistributed earnings to participating securities
|
(59,133
|
)
|
|
(98,103
|
)
|
|
—
|
|
|||
Net income (loss) attributable to common stockholders—basic
|
114,018
|
|
|
28,348
|
|
|
(51,622
|
)
|
|||
Add: adjustments to undistributed earnings to participating securities
|
8,821
|
|
|
10,175
|
|
|
—
|
|
|||
Net income (loss) attributable to common stockholders—diluted
|
$
|
122,839
|
|
|
$
|
38,523
|
|
|
$
|
(51,622
|
)
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average shares of common stock—basic for Class A and Class B
|
129,886
|
|
|
40,351
|
|
|
39,179
|
|
|||
Effect of dilutive securities
|
34,327
|
|
|
20,828
|
|
|
—
|
|
|||
Weighted-average shares of common stock—diluted for Class A and Class B
|
164,213
|
|
|
61,179
|
|
|
39,179
|
|
|||
Net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.88
|
|
|
$
|
0.70
|
|
|
$
|
(1.32
|
)
|
Diluted
|
$
|
0.75
|
|
|
$
|
0.63
|
|
|
$
|
(1.32
|
)
|
|
December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
|
|
|
|
|
|
|||
Redeemable convertible preferred stock
|
65,903
|
|
|
139,851
|
|
|
139,504
|
|
Stock options to purchase common stock
|
445
|
|
|
4,420
|
|
|
23,440
|
|
Restricted stock units
|
692
|
|
|
—
|
|
|
—
|
|
Redeemable convertible preferred stock warrants
|
921
|
|
|
1,955
|
|
|
2,302
|
|
Total
|
67,961
|
|
|
146,226
|
|
|
165,246
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
|
2013
|
||
A
|
15
|
%
|
|
13
|
%
|
|
*
|
B
|
14
|
|
|
12
|
|
|
14
|
C
|
14
|
|
|
11
|
|
|
14
|
*
|
Revenue was less than 10%.
|
*
|
Accounts receivable were less than 10%.
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
United States
|
$
|
1,381,152
|
|
|
$
|
562,553
|
|
|
$
|
206,082
|
|
Americas excluding United States
|
92,252
|
|
|
38,576
|
|
|
9,094
|
|
|||
Europe, Middle East, and Africa
|
208,767
|
|
|
60,699
|
|
|
25,041
|
|
|||
APAC
|
175,827
|
|
|
83,605
|
|
|
30,870
|
|
|||
Total
|
$
|
1,857,998
|
|
|
$
|
745,433
|
|
|
$
|
271,087
|
|
Goodwill
|
$
|
22,157
|
|
Developed and core technology
|
12,640
|
|
|
Customer relationships
|
128
|
|
|
Trademarks
|
1,150
|
|
|
Assumed liabilities, net of assets
|
(3,552
|
)
|
|
Total
|
$
|
32,523
|
|
|
Three Months Ended
|
||||||||||||||
|
December 31,
2015
|
|
September 30,
2015
|
|
June 30,
2015
|
|
March 31,
2015
|
||||||||
Revenue
|
$
|
711,570
|
|
|
$
|
409,262
|
|
|
$
|
400,412
|
|
|
$
|
336,754
|
|
Gross profit
|
$
|
348,299
|
|
|
$
|
196,013
|
|
|
$
|
187,542
|
|
|
$
|
169,209
|
|
Net income
|
$
|
64,165
|
|
|
$
|
45,834
|
|
|
$
|
17,681
|
|
|
$
|
47,997
|
|
Net income per share attributable to common stockholders—basic
|
$
|
0.30
|
|
|
$
|
0.22
|
|
|
$
|
0.09
|
|
|
$
|
0.26
|
|
Net income per share attributable to common stockholders—diluted
|
$
|
0.26
|
|
|
$
|
0.19
|
|
|
$
|
0.07
|
|
|
$
|
0.22
|
|
|
Three Months Ended
|
||||||||||||||
|
December 31,
2014
|
|
September 30,
2014
|
|
June 30,
2014
|
|
March 31,
2014
|
||||||||
Revenue
|
$
|
370,184
|
|
|
$
|
152,862
|
|
|
$
|
113,572
|
|
|
$
|
108,815
|
|
Gross profit
|
$
|
170,894
|
|
|
$
|
83,605
|
|
|
$
|
58,389
|
|
|
$
|
44,769
|
|
Net income
|
$
|
39,240
|
|
|
$
|
68,912
|
|
|
$
|
14,753
|
|
|
$
|
8,872
|
|
Net income per share attributable to common stockholders—basic
|
$
|
0.21
|
|
|
$
|
0.38
|
|
|
$
|
0.07
|
|
|
$
|
0.04
|
|
Net income per share attributable to common stockholders—diluted
|
$
|
0.19
|
|
|
$
|
0.34
|
|
|
$
|
0.07
|
|
|
$
|
0.04
|
|
1.
|
Consolidated Financial Statements
|
2.
|
Financial Statement Schedules
|
3.
|
Exhibits
|
February 26, 2016
|
|
|
|
FITBIT, INC.
|
|
|
|
|
|
By:
|
/s/ James Park
|
|
|
James Park
|
|
|
President, Chief Executive Officer, and Chairman
|
|
|
|
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ James Park
|
|
President, Chief Executive Officer, and Chairman
|
|
February 26, 2016
|
James Park
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ William Zerella
|
|
Chief Financial Officer
|
|
February 26, 2016
|
William Zerella
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Eric N. Friedman
|
|
Chief Technology Officer and Director
|
|
February 26, 2016
|
Eric N. Friedman
|
|
|
|
|
|
|
|
|
|
/s/ Jonathan D. Callaghan
|
|
Director
|
|
February 26, 2016
|
Jonathan D. Callaghan
|
|
|
|
|
|
|
|
|
|
/s/ Steven Murray
|
|
Director
|
|
February 26, 2016
|
Steven Murray
|
|
|
|
|
|
|
|
|
|
/s/ Christopher Paisley
|
|
Director
|
|
February 26, 2016
|
Christopher Paisley
|
|
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
3.1
|
|
Restated Certificate of Incorporation of Registrant.
|
|
10-Q
|
|
001-37444
|
|
3.1
|
|
|
8/7/2015
|
|
|
3.2
|
|
Restated Bylaws of Registrant.
|
|
10-Q
|
|
001-37444
|
|
3.2
|
|
|
8/7/2015
|
|
|
4.1
|
|
Form of Registrant’s Class A common stock certificate.
|
|
S-1/A
|
|
333-203941
|
|
4.1
|
|
|
6/2/2015
|
|
|
4.2
|
|
Third Amended and Restated Investors’ Rights Agreement by and among the Registrant and certain stockholders of the Registrant, dated June 6, 2013.
|
|
S-1
|
|
333-203941
|
|
4.2
|
|
|
5/7/2015
|
|
|
10.1*
|
|
Form of Indemnification Agreement.
|
|
S-1
|
|
333-203941
|
|
10.1
|
|
|
5/7/2015
|
|
|
10.2*
|
|
Amended and Restated 2007 Stock Plan, as amended, and forms of award agreements.
|
|
S-1
|
|
333-203941
|
|
10.2
|
|
|
5/7/2015
|
|
|
10.3*
|
|
2015 Equity Incentive Plan and forms of award agreements.
|
|
S-1
|
|
333-203941
|
|
10.3
|
|
|
5/7/2015
|
|
|
10.4*
|
|
Form of Notice of Stock Option Grant and Stock Option Agreement under the 2015 Equity Incentive Plan.
|
|
8-K
|
|
001-37444
|
|
10.1
|
|
|
2/9/2016
|
|
|
10.5*
|
|
2015 Employee Stock Purchase Plan.
|
|
S-1
|
|
333-203941
|
|
10.4
|
|
|
5/7/2015
|
|
|
10.6*
|
|
Offer Letter by and between the Registrant and William Zerella, dated April 24, 2014.
|
|
S-1
|
|
333-203941
|
|
10.5
|
|
|
5/7/2015
|
|
|
10.7*
|
|
Offer Letter by and between the Registrant and Edward Scal, dated October 9, 2010.
|
|
|
|
|
|
|
|
|
|
X
|
|
10.8*
|
|
Offer Letter by and between the Registrant and Andy Missan, dated March 15, 2013.
|
|
|
|
|
|
|
|
|
|
X
|
|
10.9
|
|
Office Lease by and between the Registrant and 405 Howard, LLC, dated September 30, 2013.
|
|
S-1
|
|
333-203941
|
|
10.6
|
|
|
5/7/2015
|
|
|
10.10
|
|
Office Lease by and between the Registrant and GLL BIT Fremont Street Partners, L.P., dated June 26, 2015.
|
|
10-Q
|
|
001-37444
|
|
10.3
|
|
|
8/7/2015
|
|
|
10.11†
|
|
Flextronics Manufacturing Services Agreement by and among Fitbit International Limited, the Registrant, and Flextronics Sales & Marketing (A-P) Ltd., dated March 19, 2015.
|
|
S-1/A
|
|
333-203941
|
|
10.7
|
|
|
5/21/2015
|
|
|
10.12
|
|
Second Amended and Restated Credit Agreement, by and among Fitbit, Inc., the lenders party thereto and Silicon Valley Bank, as administrative agent, dated December 10, 2015.
|
|
8-K
|
|
001-37444
|
|
10.1
|
|
|
12/15/2015
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
10.13
|
|
Revolving Credit and Guaranty Agreement by and among Registrant, the Guarantors party thereto, the Lenders party thereto, Morgan Stanley Bank N.A., and Morgan Stanley Senior Funding, Inc., dated August 13, 2014.
|
|
S-1
|
|
333-203941
|
|
10.9
|
|
|
5/7/2015
|
|
|
10.14*
|
|
Form of Retention Agreement.
|
|
S-1/A
|
|
333-203941
|
|
10.10
|
|
|
5/21/2015
|
|
|
21.1
|
|
List of Subsidiaries of Registrant.
|
|
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm.
|
|
|
|
|
|
|
|
|
|
X
|
|
24.1
|
|
Power of Attorney (included on page II-2).
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer.
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
Rule 13a-14(a)/ 15d-14(a) Certification of Chief Financial Officer.
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1◊
|
|
Section 1350 Certification of Chief Executive Officer.
|
|
|
|
|
|
|
|
|
|
X
|
|
32.2◊
|
|
Section 1350 Certification of Chief Financial Officer.
|
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
101.SCH
|
|
XBRL Schema Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
101.CAL
|
|
XBRL Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
101.DEF
|
|
XBRL Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
101.EXT
|
|
XBRL Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
|
101.PRE
|
|
XBRL Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
*
|
Indicates a management contract or compensatory plan.
|
†
|
Portions of this exhibit have been granted confidential treatment by the SEC
|
◊
|
These certifications are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
|
|
||
|
|
|
Date:
|
February 26, 2016
|
/s/ James Park
|
|
|
James Park
President, Chief Executive Officer, and Chairman
(Principal Executive Officer)
|
|
||
|
|
|
Date:
|
February 26, 2016
|
/s/ William Zerella
|
|
|
William Zerella
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
•
|
the Annual Report on Form 10-K of Fitbit, Inc. for the year ended December 31, 2015 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
the information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Fitbit, Inc.
|
Date: February 26, 2016
|
By:
|
/s/ James Park
|
|
|
James Park
|
|
|
President, Chief Executive Officer, and Chairman
(Principal Executive Officer)
|
•
|
the Annual Report on Form 10-K of Fitbit, Inc. for the year ended December 31, 2015 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
•
|
the information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Fitbit, Inc.
|
Date: February 26, 2016
|
By:
|
/s/ William Zerella
|
|
|
William Zerella
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|