|
||||
Delaware
|
|
001-37444
|
|
20-8920744
|
|
|
|
|
|
(State or Other Jurisdiction
|
|
(Commission
|
|
(IRS Employer
|
of Incorporation)
|
|
File Number)
|
|
Identification No.)
|
|
|
|
|
199 Fremont Street,
|
14th Floor
|
|
|
San Francisco
|
California
|
|
94105
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
|
||
☐
|
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
|
☐
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
|
|
☐
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
|
|
☐
|
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each Class
|
Trading symbol
|
Name of each exchange on which registered
|
Class A Common Stock, $0.0001 par value
|
FIT
|
New York Stock Exchange
|
Emerging growth company
|
☐
|
Exhibit Number
|
|
Exhibit Title or Description
|
99.1
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
FITBIT, INC.
|
|
|
|
|
|
|
Date:
|
November 6, 2019
|
|
By:
|
/s/ Ronald W. Kisling
|
|
|
|
|
Ronald W. Kisling
|
|
|
|
|
Title: Chief Financial Officer
|
•
|
Revenue of $347 million, GAAP Net Loss Per Share of $(0.20), Non-GAAP Net Loss Per Share of $(0.10)
|
•
|
Fitbit Health Solutions revenue of $73 million Year-to-Date, up 31% year-over-year
|
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
||||||||||||
In millions, except percentages and per share amounts
|
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
GAAP Results
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
347.2
|
|
|
$
|
393.6
|
|
|
$
|
932.6
|
|
|
$
|
940.8
|
|
Gross Margin
|
|
31.1
|
%
|
|
39.0
|
%
|
|
32.8
|
%
|
|
41.1
|
%
|
||||
Net Loss
|
|
$
|
(51.9
|
)
|
|
$
|
(2.1
|
)
|
|
$
|
(199.9
|
)
|
|
$
|
(201.2
|
)
|
Net Loss Per Share
|
|
$
|
(0.20
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.83
|
)
|
Non-GAAP Results
|
|
|
|
|
|
|
|
|
||||||||
Gross Margin
|
|
32.0
|
%
|
|
40.1
|
%
|
|
33.9
|
%
|
|
42.2
|
%
|
||||
Net Income (Loss)
|
|
$
|
(26.7
|
)
|
|
$
|
10.0
|
|
|
$
|
(100.5
|
)
|
|
$
|
(85.1
|
)
|
Net Income (Loss) Per Share
|
|
$
|
(0.10
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.39
|
)
|
|
$
|
(0.35
|
)
|
Adjusted EBITDA
|
|
$
|
(19.4
|
)
|
|
$
|
21.0
|
|
|
$
|
(93.5
|
)
|
|
$
|
(81.0
|
)
|
Devices Sold
|
|
3.5
|
|
|
3.5
|
|
|
10.0
|
|
|
8.4
|
|
•
|
Sold 3.5 million devices. Overall revenue declined 12% year-over-year driven by a 12% decline in pricing and flat year-over-year growth in devices sold. Average selling price per device sold was $96.
|
•
|
Smartwatch revenue increased year-over-year and represented 58% of revenue. With no new trackers launched in the third quarter and facing a difficult comparison from the launch of Charge 3 last year, tracker revenue declined and represented 39% of total revenue. Accessory and non-device revenue represented 3% of revenue.
|
•
|
Fitbit Health Solutions revenue grew 10% in the quarter, producing $73 million in revenue for the year-to date period, up 31% year-over-year.
|
•
|
Consumer direct business Fitbit.com grew 23% to $27 million.
|
•
|
U.S. revenue represented 60% of total revenue or $207 million, down 10% year-over-year.
|
•
|
International revenue represented 40% of total revenue and declined 14% to $141 million: APAC revenue grew 19% to $41 million; EMEA revenue declined 20% to $83 million; Americas excluding U.S. revenue declined 33% to $17 million (all on a year-over-year basis).
|
•
|
New devices introduced in the past 12 months, Fitbit InspireTM, Fitbit Inspire HRTM, Fitbit Ace 2TM, Fitbit Versa Lite EditionTM, and Fitbit Versa 2 TM represented 61% of revenue.
|
•
|
GAAP gross margin was 31.1% and non-GAAP gross margin was 32.0%. Both GAAP and non-GAAP gross margin were negatively impacted by lower average selling prices driven by increased promotions, the mix shift to smartwatches, higher hosting costs, higher warranty costs, and fixed cost de-leveraging.
|
•
|
GAAP operating expenses represented 46% of revenue, declining 7% year-over-year to $160 million, and non-GAAP operating expenses represented 41% of revenue, declining 4% year-over-year to $143 million.
|
•
|
Active users grew 9% year-over-year.
|
•
|
45% of activations came from repeat users; of the repeat users, 52% came from users who were inactive for 90 days or more. Active users increased year-over-year.
|
•
|
Fitbit devices will be expanding to 59 Medicare Advantage plans in 2020 as a fully covered benefit from 42 plans.
|
•
|
Fitbit announced two disease detection partnerships, Fibricheck and Bristol-Meyers Squibb Pfizer Alliance, to target chronic condition areas and raise awareness and support from screening to diagnosis for heart rhythm irregularities and atrial fibrillation.
|
•
|
Fitbit launched Fitbit Premium, a paid membership in the Fitbit app that uses consumer’s unique data to deliver personalized, actionable guidance. The offering can be purchased separately at $9.99 per month, $79.99 per year, or bundled together with a device.
|
•
|
Stock-based compensation expense relates to equity awards granted primarily to our employees. We exclude stock-based compensation expense because we believe that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance. In particular, companies calculate stock-based compensation expense using a variety of valuation methodologies and subjective assumptions.
|
•
|
Restructuring costs primarily included severance-related costs. We believe that excluding this expense provides greater visibility to the underlying performance of our business operations, facilitates comparison of our results with other periods, and may also facilitate comparison with the results of other companies in our industry.
|
•
|
Litigation expense relates to legal costs incurred due to litigation with Aliphcom, Inc. d/b/a Jawbone. We exclude these expenses because we do not believe they have a direct correlation to the operations of our business and because of the singular nature of the claims underlying the Jawbone litigation matters.
|
•
|
Amortization of intangible assets relates to our acquisitions of FitStar, Pebble, Vector and Twine Health. We exclude these amortization expenses because we do not believe they have a direct correlation to the operation of our business.
|
•
|
Income tax effect of non-GAAP adjustments relates to the tax effect of the adjustments that we incorporate into non-GAAP financial measures such as stock-based compensation, amortization of intangibles, restructuring and valuation allowance in order to provide a more meaningful measure of non-GAAP net loss.
|
•
|
We define free cash flow as net cash provided by (used in) operating activities less purchase of property and equipment. We consider free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can possibly be used for investing in our business and strengthening the balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. Free cash flow is not prepared in accordance with U.S. GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with U.S. GAAP.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
347,200
|
|
|
$
|
393,575
|
|
|
$
|
932,646
|
|
|
$
|
940,784
|
|
Cost of revenue
|
239,248
|
|
|
240,061
|
|
|
627,027
|
|
|
554,132
|
|
||||
Gross profit
|
107,952
|
|
|
153,514
|
|
|
305,619
|
|
|
386,652
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
65,693
|
|
|
79,840
|
|
|
213,651
|
|
|
256,223
|
|
||||
Sales and marketing
|
71,296
|
|
|
66,676
|
|
|
222,972
|
|
|
239,573
|
|
||||
General and administrative
|
23,083
|
|
|
24,812
|
|
|
74,640
|
|
|
91,111
|
|
||||
Total operating expenses
|
160,072
|
|
|
171,328
|
|
|
511,263
|
|
|
586,907
|
|
||||
Operating loss
|
(52,120
|
)
|
|
(17,814
|
)
|
|
(205,644
|
)
|
|
(200,255
|
)
|
||||
Interest income, net
|
2,388
|
|
|
2,072
|
|
|
8,476
|
|
|
5,599
|
|
||||
Other income (expense), net
|
(492
|
)
|
|
(5,141
|
)
|
|
1,242
|
|
|
(2,366
|
)
|
||||
Loss before income taxes
|
(50,224
|
)
|
|
(20,883
|
)
|
|
(195,926
|
)
|
|
(197,022
|
)
|
||||
Income tax expense (benefit)
|
1,669
|
|
|
(18,827
|
)
|
|
3,950
|
|
|
4,179
|
|
||||
Net loss
|
$
|
(51,893
|
)
|
|
$
|
(2,056
|
)
|
|
$
|
(199,876
|
)
|
|
$
|
(201,201
|
)
|
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.20
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.83
|
)
|
Diluted
|
$
|
(0.20
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.78
|
)
|
|
$
|
(0.83
|
)
|
Shares used to compute net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
258,753
|
|
|
245,838
|
|
|
256,046
|
|
|
242,746
|
|
||||
Diluted
|
258,753
|
|
|
245,838
|
|
|
256,046
|
|
|
242,746
|
|
|
|
September 28, 2019
|
|
December 31, 2018
|
||||
|
|
|||||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
287,431
|
|
|
$
|
473,956
|
|
Marketable securities
|
|
214,817
|
|
|
249,493
|
|
||
Accounts receivable, net
|
|
345,562
|
|
|
414,209
|
|
||
Inventories
|
|
245,096
|
|
|
124,871
|
|
||
Income tax receivable
|
|
965
|
|
|
6,957
|
|
||
Prepaid expenses and other current assets
|
|
33,376
|
|
|
42,325
|
|
||
Total current assets
|
|
1,127,247
|
|
|
1,311,811
|
|
||
Property and equipment, net
|
|
88,232
|
|
|
106,286
|
|
||
Operating lease right-of use-assets
|
|
71,529
|
|
|
—
|
|
||
Goodwill
|
|
60,979
|
|
|
60,979
|
|
||
Intangible assets, net
|
|
17,519
|
|
|
23,620
|
|
||
Deferred tax assets
|
|
3,925
|
|
|
4,489
|
|
||
Other assets
|
|
7,170
|
|
|
8,362
|
|
||
Total assets
|
|
$
|
1,376,601
|
|
|
$
|
1,515,547
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
263,181
|
|
|
$
|
251,657
|
|
Accrued liabilities
|
|
365,812
|
|
|
437,234
|
|
||
Operating lease liabilities
|
|
23,313
|
|
|
—
|
|
||
Deferred revenue
|
|
28,076
|
|
|
29,400
|
|
||
Income taxes payable
|
|
986
|
|
|
1,092
|
|
||
Total current liabilities
|
|
681,368
|
|
|
719,383
|
|
||
Long-term deferred revenue
|
|
6,174
|
|
|
7,436
|
|
||
Long-term operating lease liabilities
|
|
70,202
|
|
|
—
|
|
||
Other liabilities
|
|
29,883
|
|
|
52,790
|
|
||
Total liabilities
|
|
787,627
|
|
|
779,609
|
|
||
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Class A and Class B common stock
|
|
26
|
|
|
25
|
|
||
Additional paid-in capital
|
|
1,107,659
|
|
|
1,055,046
|
|
||
Accumulated other comprehensive income (loss)
|
|
232
|
|
|
(66
|
)
|
||
Accumulated deficit
|
|
(518,943
|
)
|
|
(319,067
|
)
|
||
Total stockholders’ equity
|
|
588,974
|
|
|
735,938
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,376,601
|
|
|
$
|
1,515,547
|
|
FITBIT, INC.
|
|||||||||||||||
Condensed Consolidated Statements of Cash Flow
|
|||||||||||||||
(In thousands)
|
|||||||||||||||
(unaudited)
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(51,893
|
)
|
|
$
|
(2,056
|
)
|
|
$
|
(199,876
|
)
|
|
$
|
(201,201
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
||||||||
Provision for doubtful accounts
|
(19
|
)
|
|
41
|
|
|
29
|
|
|
37
|
|
||||
Provision for inventory obsolescence
|
1,041
|
|
|
1,005
|
|
|
5,163
|
|
|
9,019
|
|
||||
Depreciation
|
13,109
|
|
|
11,816
|
|
|
43,215
|
|
|
35,388
|
|
||||
Non-cash lease expense
|
6,346
|
|
|
—
|
|
|
17,961
|
|
|
—
|
|
||||
Write-off of property and equipment
|
(1
|
)
|
|
28
|
|
|
169
|
|
|
7,513
|
|
||||
Amortization of intangible assets
|
1,979
|
|
|
2,061
|
|
|
6,100
|
|
|
5,866
|
|
||||
Stock-based compensation
|
18,084
|
|
|
24,115
|
|
|
59,175
|
|
|
73,613
|
|
||||
Deferred income taxes
|
484
|
|
|
(391
|
)
|
|
618
|
|
|
(1,690
|
)
|
||||
Impairment of equity investment
|
—
|
|
|
6,000
|
|
|
—
|
|
|
6,000
|
|
||||
Other
|
(212
|
)
|
|
(278
|
)
|
|
(50
|
)
|
|
(693
|
)
|
||||
Changes in operating assets and liabilities, net of acquisition:
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
(86,944
|
)
|
|
(83,968
|
)
|
|
68,617
|
|
|
80,227
|
|
||||
Inventories
|
(84,317
|
)
|
|
(55,847
|
)
|
|
(125,500
|
)
|
|
(80,064
|
)
|
||||
Prepaid expenses and other assets
|
(2,135
|
)
|
|
85,732
|
|
|
11,872
|
|
|
123,356
|
|
||||
Fitbit force recall reserve
|
106
|
|
|
(104
|
)
|
|
242
|
|
|
(395
|
)
|
||||
Accounts payable
|
112,343
|
|
|
80,541
|
|
|
11,826
|
|
|
16,357
|
|
||||
Accrued liabilities and other liabilities
|
37,095
|
|
|
6,220
|
|
|
(61,005
|
)
|
|
(67,813
|
)
|
||||
Lease liabilities
|
(7,398
|
)
|
|
—
|
|
|
(20,975
|
)
|
|
—
|
|
||||
Deferred revenue
|
889
|
|
|
(26
|
)
|
|
(2,586
|
)
|
|
(9,649
|
)
|
||||
Income taxes payable
|
407
|
|
|
(16,148
|
)
|
|
(107
|
)
|
|
5,653
|
|
||||
Net cash provided by (used in) operating activities
|
(41,036
|
)
|
|
58,741
|
|
|
(185,112
|
)
|
|
1,524
|
|
||||
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
||||||||
Purchase of property and equipment
|
(15,450
|
)
|
|
(11,650
|
)
|
|
(26,277
|
)
|
|
(40,174
|
)
|
||||
Purchases of marketable securities
|
(67,474
|
)
|
|
(60,174
|
)
|
|
(287,969
|
)
|
|
(284,986
|
)
|
||||
Sales of marketable securities
|
—
|
|
|
19,250
|
|
|
2,016
|
|
|
93,020
|
|
||||
Maturities of marketable securities
|
82,703
|
|
|
72,748
|
|
|
322,132
|
|
|
309,323
|
|
||||
Acquisition, net of cash acquired
|
(2,625
|
)
|
|
—
|
|
|
(2,625
|
)
|
|
(13,646
|
)
|
||||
Net cash provided by (used in) investing activities
|
(2,846
|
)
|
|
20,174
|
|
|
7,277
|
|
|
63,537
|
|
||||
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
||||||||
Repayment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
(747
|
)
|
||||
Financing lease
|
(1,302
|
)
|
|
—
|
|
|
(2,239
|
)
|
|
—
|
|
||||
Proceeds from issuance of common stock
|
232
|
|
|
903
|
|
|
7,044
|
|
|
11,641
|
|
||||
Taxes paid related to net share settlement of restricted stock units
|
(2,846
|
)
|
|
(5,697
|
)
|
|
(13,495
|
)
|
|
(15,684
|
)
|
||||
Net cash used in financing activities
|
(3,916
|
)
|
|
(4,794
|
)
|
|
(8,690
|
)
|
|
(4,790
|
)
|
||||
Net increase (decrease) in cash and cash equivalents
|
(47,798
|
)
|
|
74,121
|
|
|
(186,525
|
)
|
|
60,271
|
|
||||
Cash and cash equivalents at beginning of period
|
335,229
|
|
|
328,116
|
|
|
473,956
|
|
|
341,966
|
|
||||
Cash and cash equivalents at end of period
|
$
|
287,431
|
|
|
$
|
402,237
|
|
|
$
|
287,431
|
|
|
$
|
402,237
|
|
FITBIT, INC.
|
|||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|||||||||||||||
(In thousands, except percentages and per share amounts)
|
|||||||||||||||
(unaudited)
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Non-GAAP gross profit:
|
|
|
|
|
|
|
|
||||||||
GAAP gross profit
|
$
|
107,952
|
|
|
$
|
153,514
|
|
|
$
|
305,619
|
|
|
$
|
386,652
|
|
Stock-based compensation expense
|
1,446
|
|
|
1,999
|
|
|
4,397
|
|
|
5,129
|
|
||||
Impact of restructuring
|
—
|
|
|
—
|
|
|
190
|
|
|
—
|
|
||||
Intangible assets amortization
|
1,773
|
|
|
2,304
|
|
|
5,480
|
|
|
5,336
|
|
||||
Non-GAAP gross profit
|
$
|
111,171
|
|
|
$
|
157,817
|
|
|
$
|
315,686
|
|
|
$
|
397,117
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP gross margin (as a percentage of revenue):
|
|
|
|
|
|
|
|
||||||||
GAAP gross margin
|
31.1
|
%
|
|
39.0
|
%
|
|
32.8
|
%
|
|
41.1
|
%
|
||||
Stock-based compensation expense
|
0.4
|
|
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
||||
Intangible assets amortization
|
0.5
|
|
|
0.6
|
|
|
0.6
|
|
|
0.6
|
|
||||
Non-GAAP gross margin
|
32.0
|
%
|
|
40.1
|
%
|
|
33.9
|
%
|
|
42.2
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Non-GAAP research and development:
|
|
|
|
|
|
|
|
||||||||
GAAP research and development
|
$
|
65,693
|
|
|
$
|
79,840
|
|
|
$
|
213,651
|
|
|
$
|
256,223
|
|
Stock-based compensation expense
|
(10,557
|
)
|
|
(14,097
|
)
|
|
(34,437
|
)
|
|
(43,858
|
)
|
||||
Impact of restructuring
|
—
|
|
|
—
|
|
|
(1,550
|
)
|
|
—
|
|
||||
Non-GAAP research and development
|
$
|
55,136
|
|
|
$
|
65,743
|
|
|
$
|
177,664
|
|
|
$
|
212,365
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP sales and marketing expense:
|
|
|
|
|
|
|
|
||||||||
GAAP sales and marketing
|
$
|
71,296
|
|
|
$
|
66,676
|
|
|
$
|
222,972
|
|
|
$
|
239,573
|
|
Stock-based compensation expense
|
(2,587
|
)
|
|
(3,638
|
)
|
|
(8,900
|
)
|
|
(10,996
|
)
|
||||
Impact of restructuring
|
—
|
|
|
—
|
|
|
(589
|
)
|
|
—
|
|
||||
Intangible assets amortization
|
(135
|
)
|
|
315
|
|
|
(406
|
)
|
|
(316
|
)
|
||||
Non-GAAP sales and marketing
|
$
|
68,574
|
|
|
$
|
63,353
|
|
|
$
|
213,077
|
|
|
$
|
228,261
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP general and administrative expense:
|
|
|
|
|
|
|
|
||||||||
GAAP general and administrative
|
$
|
23,083
|
|
|
$
|
24,812
|
|
|
$
|
74,640
|
|
|
$
|
91,111
|
|
Stock-based compensation expense
|
(3,494
|
)
|
|
(4,381
|
)
|
|
(11,441
|
)
|
|
(13,630
|
)
|
||||
Litigation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
(765
|
)
|
||||
Impact of restructuring
|
—
|
|
|
—
|
|
|
(129
|
)
|
|
—
|
|
||||
Intangible assets amortization
|
(71
|
)
|
|
(71
|
)
|
|
(214
|
)
|
|
(214
|
)
|
||||
Non-GAAP general and administrative
|
$
|
19,518
|
|
|
$
|
20,360
|
|
|
$
|
62,856
|
|
|
$
|
76,502
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP operating expenses:
|
|
|
|
|
|
|
|
||||||||
GAAP operating expenses
|
$
|
160,072
|
|
|
$
|
171,328
|
|
|
$
|
511,263
|
|
|
$
|
586,907
|
|
Stock-based compensation expense
|
(16,638
|
)
|
|
(22,116
|
)
|
|
(54,778
|
)
|
|
(68,484
|
)
|
||||
Litigation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
(765
|
)
|
||||
Impact of restructuring
|
—
|
|
|
—
|
|
|
(2,268
|
)
|
|
—
|
|
||||
Intangible assets amortization
|
(206
|
)
|
|
244
|
|
|
(620
|
)
|
|
(530
|
)
|
||||
Non-GAAP operating expenses
|
$
|
143,228
|
|
|
$
|
149,456
|
|
|
$
|
453,597
|
|
|
$
|
517,128
|
|
FITBIT, INC.
|
|||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|||||||||||||||
(In thousands, except percentages and per share amounts)
|
|||||||||||||||
(unaudited)
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Non-GAAP operating income (loss) and income (loss) before income taxes:
|
|
|
|
|
|
|
|
||||||||
GAAP operating loss
|
$
|
(52,120
|
)
|
|
$
|
(17,814
|
)
|
|
$
|
(205,644
|
)
|
|
$
|
(200,255
|
)
|
Stock-based compensation expense
|
18,084
|
|
|
24,115
|
|
|
59,175
|
|
|
73,613
|
|
||||
Litigation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
765
|
|
||||
Impact of restructuring
|
—
|
|
|
—
|
|
|
2,458
|
|
|
—
|
|
||||
Intangible assets amortization
|
1,979
|
|
|
2,060
|
|
|
6,100
|
|
|
5,866
|
|
||||
Non-GAAP operating income (loss)
|
(32,057
|
)
|
|
8,361
|
|
|
(137,911
|
)
|
|
(120,011
|
)
|
||||
Interest income, net
|
2,388
|
|
|
2,072
|
|
|
8,476
|
|
|
5,599
|
|
||||
Other income (expense), net
|
(492
|
)
|
|
(5,141
|
)
|
|
1,242
|
|
|
(2,366
|
)
|
||||
Non-GAAP income (loss) before income taxes
|
$
|
(30,161
|
)
|
|
$
|
5,292
|
|
|
$
|
(128,193
|
)
|
|
$
|
(116,778
|
)
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP net income (loss) and net income (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(51,893
|
)
|
|
$
|
(2,056
|
)
|
|
$
|
(199,876
|
)
|
|
$
|
(201,201
|
)
|
Stock-based compensation expense
|
18,084
|
|
|
24,115
|
|
|
59,175
|
|
|
73,613
|
|
||||
Litigation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
765
|
|
||||
Impact of restructuring
|
—
|
|
|
—
|
|
|
2,458
|
|
|
—
|
|
||||
Impairment of equity investment
|
—
|
|
|
6,000
|
|
|
—
|
|
|
6,000
|
|
||||
Intangible assets amortization
|
1,979
|
|
|
2,060
|
|
|
6,100
|
|
|
5,866
|
|
||||
Income tax effect of non-GAAP adjustments
|
5,141
|
|
|
(20,077
|
)
|
|
31,615
|
|
|
29,810
|
|
||||
Non-GAAP net income (loss)
|
$
|
(26,689
|
)
|
|
$
|
10,042
|
|
|
$
|
(100,528
|
)
|
|
$
|
(85,147
|
)
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted shares
|
258,753
|
|
|
245,838
|
|
|
256,046
|
|
|
242,746
|
|
||||
Other dilutive equity awards
|
—
|
|
|
14,509
|
|
|
—
|
|
|
—
|
|
||||
Non-GAAP diluted shares
|
258,753
|
|
|
260,347
|
|
|
256,046
|
|
|
242,746
|
|
||||
Non-GAAP diluted net income (loss) per share
|
$
|
(0.10
|
)
|
|
$
|
0.04
|
|
|
$
|
(0.39
|
)
|
|
$
|
(0.35
|
)
|
|
|
|
|
|
|
|
|
||||||||
Free cash flow:
|
|
|
|
|
|
|
|
||||||||
Net cash provided by (used in) operating activities
|
$
|
(41,036
|
)
|
|
$
|
58,741
|
|
|
$
|
(185,112
|
)
|
|
$
|
1,524
|
|
Purchases of property and equipment
|
(15,450
|
)
|
|
(11,650
|
)
|
|
(26,277
|
)
|
|
(40,174
|
)
|
||||
Free cash flow
|
$
|
(56,486
|
)
|
|
$
|
47,091
|
|
|
$
|
(211,389
|
)
|
|
$
|
(38,650
|
)
|
Net cash provided by (used in) investing activities
|
$
|
(2,846
|
)
|
|
$
|
20,174
|
|
|
$
|
7,277
|
|
|
$
|
63,537
|
|
Net cash used in financing activities
|
$
|
(3,916
|
)
|
|
$
|
(4,794
|
)
|
|
$
|
(8,690
|
)
|
|
$
|
(4,790
|
)
|
FITBIT, INC.
|
|||||||||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures
|
|||||||||||||||
(In thousands, except percentages and per share amounts)
|
|||||||||||||||
(unaudited)
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(51,893
|
)
|
|
$
|
(2,056
|
)
|
|
$
|
(199,876
|
)
|
|
$
|
(201,201
|
)
|
Stock-based compensation expense
|
18,084
|
|
|
24,115
|
|
|
59,175
|
|
|
73,613
|
|
||||
Litigation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
765
|
|
||||
Impact of restructuring
|
—
|
|
|
—
|
|
|
2,458
|
|
|
—
|
|
||||
Impairment of equity investment
|
—
|
|
|
6,000
|
|
|
—
|
|
|
6,000
|
|
||||
Depreciation and intangible assets amortization
|
15,089
|
|
|
13,877
|
|
|
49,314
|
|
|
41,254
|
|
||||
Interest income, net
|
(2,388
|
)
|
|
(2,072
|
)
|
|
(8,476
|
)
|
|
(5,599
|
)
|
||||
Income tax expense (benefit)
|
1,669
|
|
|
(18,827
|
)
|
|
3,950
|
|
|
4,179
|
|
||||
Adjusted EBITDA
|
$
|
(19,439
|
)
|
|
$
|
21,037
|
|
|
$
|
(93,455
|
)
|
|
$
|
(80,989
|
)
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation expense:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
$
|
1,446
|
|
|
$
|
1,999
|
|
|
$
|
4,397
|
|
|
$
|
5,129
|
|
Research and development
|
10,557
|
|
|
14,097
|
|
|
34,437
|
|
|
43,858
|
|
||||
Sales and marketing
|
2,587
|
|
|
3,638
|
|
|
8,900
|
|
|
10,996
|
|
||||
General and administrative
|
3,494
|
|
|
4,381
|
|
|
11,441
|
|
|
13,630
|
|
||||
Total stock-based compensation expense
|
$
|
18,084
|
|
|
$
|
24,115
|
|
|
$
|
59,175
|
|
|
$
|
73,613
|
|
FITBIT, INC.
|
|||||||||||||||
Revenue by Geographic Region
|
|||||||||||||||
(In thousands)
|
|||||||||||||||
(unaudited)
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 28, 2019
|
|
September 29, 2018
|
|
September 28, 2019
|
|
September 29, 2018
|
||||||||
United States
|
$
|
206,654
|
|
|
$
|
230,171
|
|
|
$
|
522,607
|
|
|
$
|
552,118
|
|
Americas, excluding United States
|
16,722
|
|
|
24,799
|
|
|
51,227
|
|
|
56,737
|
|
||||
Europe, Middle East, and Africa
|
82,951
|
|
|
104,186
|
|
|
257,612
|
|
|
234,693
|
|
||||
APAC
|
40,873
|
|
|
34,419
|
|
|
101,200
|
|
|
97,236
|
|
||||
Total
|
$
|
347,200
|
|
|
$
|
393,575
|
|
|
$
|
932,646
|
|
|
$
|
940,784
|
|