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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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199 Fremont Street, 14th Floor
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
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Securities registered pursuant to Section 12(g) of the Act:
None
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Page
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continued investments in our business, including but not limited to growing our international sales, Fitbit Health Solutions and recurring revenue opportunities, and the impact of those investments;
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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 device mix, average selling price and gross margins;
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competitors and competition in our markets;
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our ability to anticipate and satisfy consumer preferences;
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our wearable products and their market acceptance and future potential;
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our ability to develop, timely introduce and effectively manage the introduction of new products and services or improve our existing products and services, or engage or expand our user base;
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our ability to expand into the healthcare sector;
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potential insurance recoveries;
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our ability to accurately forecast consumer demand and adequately manage inventory;
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our ability to deliver an adequate supply of product to meet demand;
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our ability to maintain and promote our brand and expand brand awareness;
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our ability to detect, prevent, or fix defects;
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our reliance on third-party suppliers, contract manufacturers and logistics providers and our limited control over such parties;
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trends in our quarterly operating results and other operating metrics;
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trends in revenue, costs of revenue, and gross margin;
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legal proceedings and the impact of such proceedings;
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the effect of seasonality on our results of operations;
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our ability to attract and retain highly skilled employees;
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our expectation to derive the substantial majority of our revenue from sales of devices;
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growing our sales of subscription-based services
;
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the impact of our acquisitions in enhancing the features and functionality of our devices;
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the impact of foreign currency exchange rates;
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releasing and shipping new products and services, and the timing thereof;
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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; and
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general market, political, economic and business conditions
.
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Tracking activities through our wearable 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 wearable devices span multiple styles, form factors, and price points, and, as a result, address the needs of a wide range of people—from people simply looking to get fit by increasing their activity levels to endurance athletes seeking to maximize their performance. Our devices, which include both health and fitness trackers and smartwatches and our Wi-Fi connected scale, feature proprietary and advanced sensor technologies and algorithms 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 wearable 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 wearable devices. Our internally-developed software is regularly updated and enhanced, increasing the utility of our 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 view and participate in a social feed, receive and provide support through specific groups organized by activity or health, 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 activity.
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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 daily behavior, such as going for a run or walking more to reach a goal or win a challenge. We empower our users to set their own health and fitness goals and track their progress towards these goals. We also offer premium services on a subscription basis that provide personalized insights and virtual coaching through customized fitness plans and interactive video-based exercise experiences on mobile devices and computers. Our premium services feature in-depth data analysis and personalized reports, as well as benchmarking against peers.
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Fitbit is the leading global wearables brand.
We stand for health and fitness and have a trusted relationship with our users. We have a singular focus on driving positive health outcomes by targeting activity, sleep, and nutrition.
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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
45,000
retail stores and in
86
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 would be difficult for a competitor to replicate.
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Broad range of wearable devices.
We believe everyone’s approach to fitness is different, so we offer our users a range of wearable 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 wearable devices provides us with a competitive advantage over our competitors, which often have a more limited line of products.
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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 like-minded individuals, friends, and family and attracts many new users to our platform. Achieving meaningful health and fitness outcomes over the long-term is difficult. We believe that access to a network of users who provide support and motivation can increase a user’s engagement with and duration on the platform, especially when that network provides positive support as observed on our social feed. Each of our users adds 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. It also allows us to focus on developing software that influences the behavior of our users to improve health outcomes, which can not only drive new forms of monetization, but also further engagement and duration of usage. We also utilize these communication channels to help our users become aware of our new products and services.
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Advanced, purpose-built hardware and software technologies.
Our wearable 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 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 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. 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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Transparent and Easy to Understand Policies.
We are transparent about our data practices and explain them in clear language. Our data collection practices are designed to only collect data that is useful to improving our products, services, and user experience.
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No Unexpected Uses.
We never sell personally identifiable 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.
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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 help ensure 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 the e-commerce sites of our retailers.
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Mass merchant
,
department store, and club retailers.
Our products are sold by large retailers, including Target, Costco, Macy’s, Kohl’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 and REI.
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Wireless carriers.
Our products are sold by wireless carriers, including Verizon.
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Distributors.
Our products are sold by a network of distributors.
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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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cross-platform capability (iOS, Android, and Windows Phone);
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software algorithms;
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partnerships;
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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 wearable 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 and the transition from legacy products;
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the timing and success of new product and service introductions by 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, wearable devices, and evolution of this market into smartwatches and other form factors;
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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 levels of channel inventory resulting from sales to our retailers and distributors in anticipation of future demand;
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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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impact of sales and marketing efforts and promotions by competitors, which are difficult to predict;
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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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levels of warranty claims or estimated costs of warranty claims;
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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, advertising, and taxes;
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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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price increases;
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insolvency, credit problems, or other financial difficulties confronting our suppliers, contract manufacturers, or logistic providers;
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difficulties in establishing additional or alternative contract manufacturing relationships if we experience difficulties with our existing suppliers, contract manufacturers or logistic providers;
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shortages of materials or components;
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misappropriation of our intellectual property;
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suppliers, contract manufacturers, and logistics providers may choose to limit or terminate their relationship with us;
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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. General Data Protection Regulation, and any 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 expanded;
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the uncertainty of protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad;
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tariffs and customs duties and the classification of our products by applicable governmental bodies; 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 2017
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Fourth Quarter
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$
|
7.32
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$
|
5.70
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Third Quarter
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$
|
7.09
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$
|
5.00
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Second Quarter
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$
|
6.80
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$
|
4.90
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First Quarter
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$
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8.40
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$
|
5.31
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Fiscal Year 2016
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Fourth Quarter
|
$
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15.08
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$
|
7.20
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Third Quarter
|
$
|
17.18
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|
|
$
|
12.05
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Second Quarter
|
$
|
18.85
|
|
|
$
|
11.65
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First Quarter
|
$
|
30.96
|
|
|
$
|
11.91
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For the Year Ended December 31,
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||||||||||||||||||
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2017
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2016
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2015
(1)
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2014
(1)
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2013
(1)
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(in thousands, except per share data)
|
||||||||||||||||||
Consolidated Statements of Operations Data
:
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||||||||||
Revenue
|
$
|
1,615,519
|
|
|
$
|
2,169,461
|
|
|
$
|
1,857,998
|
|
|
$
|
745,433
|
|
|
$
|
271,087
|
|
Cost of revenue
(2)
|
924,618
|
|
|
1,323,577
|
|
|
956,935
|
|
|
387,776
|
|
|
210,836
|
|
|||||
Gross profit
|
690,901
|
|
|
845,884
|
|
|
901,063
|
|
|
357,657
|
|
|
60,251
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
(2)
|
343,012
|
|
|
320,191
|
|
|
150,035
|
|
|
54,167
|
|
|
27,873
|
|
|||||
Sales and marketing
(2)
|
415,042
|
|
|
491,255
|
|
|
332,741
|
|
|
112,005
|
|
|
26,847
|
|
|||||
General and administrative
(2)
|
133,934
|
|
|
146,903
|
|
|
77,793
|
|
|
33,556
|
|
|
14,485
|
|
|||||
Change in contingent consideration
|
—
|
|
|
—
|
|
|
(7,704
|
)
|
|
—
|
|
|
—
|
|
|||||
Total operating expenses
|
891,988
|
|
|
958,349
|
|
|
552,865
|
|
|
199,728
|
|
|
69,205
|
|
|||||
Operating income (loss)
|
(201,087
|
)
|
|
(112,465
|
)
|
|
348,198
|
|
|
157,929
|
|
|
(8,954
|
)
|
|||||
Interest income (expense), net
|
3,647
|
|
|
3,156
|
|
|
(1,019
|
)
|
|
(2,222
|
)
|
|
(1,082
|
)
|
|||||
Other income (expense), net
|
2,796
|
|
|
14
|
|
|
(59,230
|
)
|
|
(15,934
|
)
|
|
(3,649
|
)
|
|||||
Income (loss) before income taxes
|
(194,644
|
)
|
|
(109,295
|
)
|
|
287,949
|
|
|
139,773
|
|
|
(13,685
|
)
|
|||||
Income tax expense (benefit)
(3)
|
82,548
|
|
|
(6,518
|
)
|
|
112,272
|
|
|
7,996
|
|
|
37,937
|
|
|||||
Net income (loss)
|
$
|
(277,192
|
)
|
|
$
|
(102,777
|
)
|
|
$
|
175,677
|
|
|
$
|
131,777
|
|
|
$
|
(51,622
|
)
|
Net income (loss) per share attributable to common stockholders
(4)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
(1.19
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.88
|
|
|
$
|
0.70
|
|
|
$
|
(1.32
|
)
|
Diluted
|
$
|
(1.19
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.75
|
|
|
$
|
0.63
|
|
|
$
|
(1.32
|
)
|
Other Data
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Devices sold
(5)
|
15,343
|
|
|
22,295
|
|
|
21,355
|
|
|
10,904
|
|
|
4,476
|
|
|||||
Active users
(6)
|
25,367
|
|
|
23,238
|
|
|
16,903
|
|
|
6,700
|
|
|
2,570
|
|
|||||
Adjusted EBITDA
(7)
|
$
|
(52,158
|
)
|
|
$
|
29,985
|
|
|
$
|
389,879
|
|
|
$
|
191,042
|
|
|
$
|
79,049
|
|
Non-GAAP free cash flow
(8)
|
$
|
(24,919
|
)
|
|
$
|
60,080
|
|
|
$
|
110,691
|
|
|
$
|
(7,708
|
)
|
|
$
|
25,685
|
|
(1)
|
In March 2014, we recalled the Fitbit Force. The recall, which primarily affected our results for the fourth quarter of 2013, the first quarter of 2014, and the fourth quarter of 2015, had the following effect on our income (loss) before income taxes in 2015, 2014, and 2013. The recall had a negligible effect on our loss before income taxes in 2016.
|
|
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,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Cost of revenue
|
$
|
5,312
|
|
|
$
|
4,797
|
|
|
$
|
4,739
|
|
|
$
|
890
|
|
|
$
|
37
|
|
Research and development
|
54,123
|
|
|
47,207
|
|
|
18,251
|
|
|
2,350
|
|
|
288
|
|
|||||
Sales and marketing
|
14,959
|
|
|
11,575
|
|
|
7,419
|
|
|
1,295
|
|
|
204
|
|
|||||
General and administrative
|
17,187
|
|
|
15,853
|
|
|
10,615
|
|
|
2,269
|
|
|
91
|
|
|||||
Total
|
$
|
91,581
|
|
|
$
|
79,432
|
|
|
$
|
41,024
|
|
|
$
|
6,804
|
|
|
$
|
620
|
|
(3)
|
In 2017, we established a valuation allowance of $99.6 million against our U.S. deferred tax assets. See Note 9 of the “Notes to Consolidated Financial Statements” included elsewhere in this Annual Report on Form 10-K for further details.
|
(4)
|
See Notes 2 and 10 of the “Notes to 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.
|
(5)
|
See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metrics—Devices Sold” for more information.
|
(6)
|
See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metrics—Active Users” for more information.
|
(7)
|
Adjusted EBITDA is a financial measure that is not calculated in accordance with U.S. GAAP. See the section titled “—Non-GAAP Financial Measures—Adjusted EBITDA” for information regarding our use of adjusted EBITDA and a reconciliation of adjusted EBITDA to net income (loss).
|
(8)
|
Non-GAAP free cash flow is a financial measure that is not calculated in accordance with U.S. GAAP. See the section titled “—Non-GAAP Financial Measures—Non-GAAP free cash flow” for information regarding our use of non-GAAP free cash flow and a reconciliation to net cash provided by (used in) operating activities.
|
|
As of December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents, and marketable securities
|
$
|
679,300
|
|
|
$
|
706,013
|
|
|
$
|
664,478
|
|
|
$
|
195,626
|
|
|
$
|
81,728
|
|
Working capital
|
683,065
|
|
|
724,231
|
|
|
847,157
|
|
|
101,860
|
|
|
14,457
|
|
|||||
Total assets
|
1,582,075
|
|
|
1,821,926
|
|
|
1,519,066
|
|
|
633,051
|
|
|
230,774
|
|
|||||
Total long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
132,589
|
|
|
10,710
|
|
|||||
Retained earnings (accumulated deficit)
|
(132,112
|
)
|
|
140,142
|
|
|
242,919
|
|
|
67,242
|
|
|
(64,535
|
)
|
|||||
Total stockholders’ equity (deficit)
|
823,963
|
|
|
998,532
|
|
|
981,451
|
|
|
75,262
|
|
|
(63,466
|
)
|
•
|
adjusted EBITDA excludes stock-based compensation expense, which has 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 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 external litigation expenses to support our legal proceedings with Jawbone, which may continue to be a recurring expense;
|
•
|
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 the impact of our restructuring in 2017, which has not been a recurring expense;
|
•
|
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 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 excludes interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us;
|
•
|
adjusted EBITDA excludes income tax expense (benefit); 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,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Net cash provided by operating activities
(9)
|
$
|
64,241
|
|
|
$
|
138,720
|
|
|
$
|
141,257
|
|
|
$
|
18,787
|
|
|
$
|
33,209
|
|
Purchase of property and equipment
|
(89,160
|
)
|
|
(78,640
|
)
|
|
(30,566
|
)
|
|
(26,495
|
)
|
|
(7,524
|
)
|
|||||
Non-GAAP free cash flow
|
$
|
(24,919
|
)
|
|
$
|
60,080
|
|
|
$
|
110,691
|
|
|
$
|
(7,708
|
)
|
|
$
|
25,685
|
|
Net cash used in investing activities
|
$
|
(28,718
|
)
|
|
$
|
(392,666
|
)
|
|
$
|
(170,027
|
)
|
|
$
|
(24,185
|
)
|
|
$
|
(9,834
|
)
|
Net cash provided by financing activities
(9)
|
$
|
4,635
|
|
|
$
|
19,794
|
|
|
$
|
368,953
|
|
|
$
|
119,251
|
|
|
$
|
45,205
|
|
(9)
|
Our adoption of ASU 2016-09 on January 1, 2017 resulted in excess tax benefits for share-based payments recorded as a reduction of income tax expense and reflected within operating cash flows, rather than recorded within equity and reflected within financing cash flows. We elected to adopt this new standard retrospectively, which impacted the presentation for all periods prior to the adoption date. See Note 1 of the “Notes to Consolidated Financial Statements - Recent Accounting Pronouncements” included elsewhere in this Annual Report on Form 10-K for additional information.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Revenue
|
$
|
1,615,519
|
|
|
$
|
2,169,461
|
|
|
$
|
1,857,998
|
|
Net income (loss)
|
$
|
(277,192
|
)
|
|
$
|
(102,777
|
)
|
|
$
|
175,677
|
|
|
As of or For the Year Ended
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Devices sold
|
15,343
|
|
|
22,295
|
|
|
21,355
|
|
|||
Active users
|
25,367
|
|
|
23,238
|
|
|
16,903
|
|
|||
Adjusted EBITDA
|
$
|
(52,158
|
)
|
|
$
|
29,985
|
|
|
$
|
389,879
|
|
Non-GAAP free cash flow
|
$
|
(24,919
|
)
|
|
$
|
60,080
|
|
|
$
|
110,691
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Consolidated Statements of Operations Data
:
|
|
|
|
|
|
||||||
Revenue
|
$
|
1,615,519
|
|
|
$
|
2,169,461
|
|
|
$
|
1,857,998
|
|
Cost of revenue
(1)
|
924,618
|
|
|
1,323,577
|
|
|
956,935
|
|
|||
Gross profit
|
690,901
|
|
|
845,884
|
|
|
901,063
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
(1)
|
343,012
|
|
|
320,191
|
|
|
150,035
|
|
|||
Sales and marketing
(1)
|
415,042
|
|
|
491,255
|
|
|
332,741
|
|
|||
General and administrative
(1)
|
133,934
|
|
|
146,903
|
|
|
77,793
|
|
|||
Change in contingent consideration
|
—
|
|
|
—
|
|
|
(7,704
|
)
|
|||
Total operating expenses
|
891,988
|
|
|
958,349
|
|
|
552,865
|
|
|||
Operating income (loss)
|
(201,087
|
)
|
|
(112,465
|
)
|
|
348,198
|
|
|||
Interest income (expense), net
|
3,647
|
|
|
3,156
|
|
|
(1,019
|
)
|
|||
Other income (expense), net
|
2,796
|
|
|
14
|
|
|
(59,230
|
)
|
|||
Income (loss) before income taxes
|
(194,644
|
)
|
|
(109,295
|
)
|
|
287,949
|
|
|||
Income tax expense (benefit)
|
82,548
|
|
|
(6,518
|
)
|
|
112,272
|
|
|||
Net income (loss)
|
$
|
(277,192
|
)
|
|
$
|
(102,777
|
)
|
|
$
|
175,677
|
|
(1)
|
Includes stock-based compensation expense as follows:
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Cost of revenue
|
$
|
5,312
|
|
|
$
|
4,797
|
|
|
$
|
4,739
|
|
Research and development
|
54,123
|
|
|
47,207
|
|
|
18,251
|
|
|||
Sales and marketing
|
14,959
|
|
|
11,575
|
|
|
7,419
|
|
|||
General and administrative
|
17,187
|
|
|
15,853
|
|
|
10,615
|
|
|||
Total
|
$
|
91,581
|
|
|
$
|
79,432
|
|
|
$
|
41,024
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||
|
|
|
|
|
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
Revenue
|
$
|
1,615,519
|
|
|
$
|
2,169,461
|
|
|
$
|
1,857,998
|
|
|
$
|
(553,942
|
)
|
|
(26
|
)%
|
|
$
|
311,463
|
|
|
17
|
%
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||
|
|
|
|
|
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
Cost of revenue
|
$
|
924,618
|
|
|
$
|
1,323,577
|
|
|
$
|
956,935
|
|
|
$
|
(398,959
|
)
|
|
(30
|
)%
|
|
$
|
366,642
|
|
|
38
|
%
|
Gross profit
|
690,901
|
|
|
845,884
|
|
|
901,063
|
|
|
(154,983
|
)
|
|
(18
|
)%
|
|
(55,179
|
)
|
|
(6
|
)%
|
|||||
Gross margin
|
43
|
%
|
|
39
|
%
|
|
48
|
%
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||
|
|
|
|
|
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
Research and development
|
$
|
343,012
|
|
|
$
|
320,191
|
|
|
$
|
150,035
|
|
|
$
|
22,821
|
|
|
7
|
%
|
|
$
|
170,156
|
|
|
113
|
%
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||
|
|
|
|
|
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
Sales and marketing
|
$
|
415,042
|
|
|
$
|
491,255
|
|
|
$
|
332,741
|
|
|
$
|
(76,213
|
)
|
|
(16
|
)%
|
|
$
|
158,514
|
|
|
48
|
%
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||
|
|
|
|
|
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
General and administrative
|
$
|
133,934
|
|
|
$
|
146,903
|
|
|
$
|
77,793
|
|
|
$
|
(12,969
|
)
|
|
(9
|
)%
|
|
$
|
69,110
|
|
|
89
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
|||||||||
|
|
|
|
|
|
|
$ Change
|
|
$ Change
|
|||||||||
|
(in thousands)
|
|||||||||||||||||
Change in contingent consideration
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7,704
|
)
|
|
$
|
—
|
|
|
7,704
|
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||
|
|
|
|
|
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
Interest income (expense), net
|
$
|
3,647
|
|
|
$
|
3,156
|
|
|
$
|
(1,019
|
)
|
|
$
|
491
|
|
|
16
|
%
|
|
$
|
4,175
|
|
|
(410
|
)%
|
Other income (expense), net
|
2,796
|
|
|
14
|
|
|
(59,230
|
)
|
|
2,782
|
|
|
19,871
|
%
|
|
59,244
|
|
|
(100
|
)%
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 vs. 2016
|
|
2016 vs. 2015
|
||||||||||||||||
|
|
|
|
|
|
|
$ Change
|
|
% Change
|
|
$ Change
|
|
% Change
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
Income tax expense (benefit)
|
$
|
82,548
|
|
|
$
|
(6,518
|
)
|
|
$
|
112,272
|
|
|
$
|
89,066
|
|
|
(1,366
|
)%
|
|
$
|
(118,790
|
)
|
|
(106
|
)%
|
Effective tax rate
|
(42.4
|
)%
|
|
6.0
|
%
|
|
39.0
|
%
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(in thousands)
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
64,241
|
|
|
$
|
138,720
|
|
|
$
|
141,257
|
|
Investing activities
|
(28,718
|
)
|
|
(392,666
|
)
|
|
(170,027
|
)
|
|||
Financing activities
|
4,635
|
|
|
19,794
|
|
|
368,953
|
|
|||
Net change in cash and cash equivalents
|
$
|
40,158
|
|
|
$
|
(234,152
|
)
|
|
$
|
340,183
|
|
|
Payments Due By Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More than
5 Years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating leases
(1)
|
$
|
272,198
|
|
|
$
|
40,856
|
|
|
$
|
89,655
|
|
|
$
|
82,808
|
|
|
$
|
58,879
|
|
Total
|
$
|
272,198
|
|
|
$
|
40,856
|
|
|
$
|
89,655
|
|
|
$
|
82,808
|
|
|
$
|
58,879
|
|
(1)
|
We lease our facilities under long-term operating leases, which expire at various dates through June 2024. The lease agreements frequently include provisions which require us to pay taxes, insurance, or maintenance costs.
|
|
Page
|
|
|
Consolidated Financial Statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
341,966
|
|
|
$
|
301,320
|
|
Marketable securities
|
337,334
|
|
|
404,693
|
|
||
Accounts receivable, net
|
406,019
|
|
|
477,825
|
|
||
Inventories
|
123,895
|
|
|
230,387
|
|
||
Income tax receivable
|
77,882
|
|
|
481
|
|
||
Prepaid expenses and other current assets
|
97,269
|
|
|
65,865
|
|
||
Total current assets
|
1,384,365
|
|
|
1,480,571
|
|
||
Property and equipment, net
|
104,908
|
|
|
76,553
|
|
||
Goodwill
|
51,036
|
|
|
51,036
|
|
||
Intangible assets, net
|
22,356
|
|
|
27,521
|
|
||
Deferred tax assets
|
3,990
|
|
|
175,797
|
|
||
Other assets
|
15,420
|
|
|
10,448
|
|
||
Total assets
|
$
|
1,582,075
|
|
|
$
|
1,821,926
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
212,731
|
|
|
$
|
313,773
|
|
Accrued liabilities
|
452,137
|
|
|
390,561
|
|
||
Deferred revenue
|
35,504
|
|
|
42,612
|
|
||
Income taxes payable
|
928
|
|
|
9,394
|
|
||
Total current liabilities
|
701,300
|
|
|
756,340
|
|
||
Long-term deferred revenue
|
6,928
|
|
|
7,292
|
|
||
Other liabilities
|
49,884
|
|
|
59,762
|
|
||
Total liabilities
|
758,112
|
|
|
823,394
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
||||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized
|
—
|
|
|
—
|
|
||
Class A common stock, $0.0001 par value, 600,000,000 shares authorized; 207,453,624 and 177,212,531 shares issued and outstanding as of December 31, 2017 and 2016, respectively
|
21
|
|
|
18
|
|
||
Class B common stock, $0.0001 par value, 350,000,000 shares authorized; 31,302,898 and 48,450,746 shares issued and outstanding as of December 31, 2017 and 2016, respectively
|
3
|
|
|
5
|
|
||
Additional paid-in capital
|
956,060
|
|
|
859,345
|
|
||
Accumulated other comprehensive loss
|
(9
|
)
|
|
(978
|
)
|
||
Retained earnings (accumulated deficit)
|
(132,112
|
)
|
|
140,142
|
|
||
Total stockholders’ equity
|
823,963
|
|
|
998,532
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,582,075
|
|
|
$
|
1,821,926
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Revenue
|
$
|
1,615,519
|
|
|
$
|
2,169,461
|
|
|
$
|
1,857,998
|
|
Cost of revenue
|
924,618
|
|
|
1,323,577
|
|
|
956,935
|
|
|||
Gross profit
|
690,901
|
|
|
845,884
|
|
|
901,063
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
343,012
|
|
|
320,191
|
|
|
150,035
|
|
|||
Sales and marketing
|
415,042
|
|
|
491,255
|
|
|
332,741
|
|
|||
General and administrative
|
133,934
|
|
|
146,903
|
|
|
77,793
|
|
|||
Change in contingent consideration
|
—
|
|
|
—
|
|
|
(7,704
|
)
|
|||
Total operating expenses
|
891,988
|
|
|
958,349
|
|
|
552,865
|
|
|||
Operating income (loss)
|
(201,087
|
)
|
|
(112,465
|
)
|
|
348,198
|
|
|||
Interest income (expense), net
|
3,647
|
|
|
3,156
|
|
|
(1,019
|
)
|
|||
Other income (expense), net
|
2,796
|
|
|
14
|
|
|
(59,230
|
)
|
|||
Income (loss) before income taxes
|
(194,644
|
)
|
|
(109,295
|
)
|
|
287,949
|
|
|||
Income tax expense (benefit)
|
82,548
|
|
|
(6,518
|
)
|
|
112,272
|
|
|||
Net income (loss)
|
(277,192
|
)
|
|
(102,777
|
)
|
|
175,677
|
|
|||
Less: noncumulative dividends to preferred stockholders
|
—
|
|
|
—
|
|
|
(2,526
|
)
|
|||
Less: undistributed earnings to participating securities
|
—
|
|
|
—
|
|
|
(59,133
|
)
|
|||
Net income (loss) attributable to common stockholders—basic
|
(277,192
|
)
|
|
(102,777
|
)
|
|
114,018
|
|
|||
Add: adjustments for undistributed earnings to participating securities
|
—
|
|
|
—
|
|
|
8,821
|
|
|||
Net income (loss) attributable to common stockholders—diluted
|
$
|
(277,192
|
)
|
|
$
|
(102,777
|
)
|
|
$
|
122,839
|
|
Net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
(1.19
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.88
|
|
Diluted
|
$
|
(1.19
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.75
|
|
Shares used to compute net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
232,032
|
|
|
220,405
|
|
|
129,886
|
|
|||
Diluted
|
232,032
|
|
|
220,405
|
|
|
164,213
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(277,192
|
)
|
|
$
|
(102,777
|
)
|
|
$
|
175,677
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Cash flow hedges:
|
|
|
|
|
|
||||||
Change in unrealized gain on cash flow hedges, net of tax expense (benefit) of ($1), ($1,251), and $1,509, respectively
|
(19,422
|
)
|
|
9,422
|
|
|
1,276
|
|
|||
Less reclassification for realized net gains included in net income (loss), net of tax expense of $74, $509, and $759, respectively
|
19,965
|
|
|
(10,650
|
)
|
|
(525
|
)
|
|||
Net change, net of tax
|
543
|
|
|
(1,228
|
)
|
|
751
|
|
|||
Available-for-sale investments:
|
|
|
|
|
|
||||||
Change in unrealized loss on investments
|
125
|
|
|
(126
|
)
|
|
(63
|
)
|
|||
Less reclassification for realized net gains included in net income (loss)
|
(13
|
)
|
|
(6
|
)
|
|
8
|
|
|||
Net change, net of tax
|
112
|
|
|
(132
|
)
|
|
(55
|
)
|
|||
Change in foreign currency translation adjustment, net of tax
|
314
|
|
|
(309
|
)
|
|
(42
|
)
|
|||
Comprehensive income (loss)
|
$
|
(276,223
|
)
|
|
$
|
(104,446
|
)
|
|
$
|
176,331
|
|
|
Redeemable Convertible
Preferred Stock
|
|
Class A and Class B Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained
Earnings
(Accumulated
Deficit)
|
|
Total
Stockholders’
Equity
(Deficit)
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||
Balance at December 31, 2014
|
139,851,483
|
|
|
$
|
67,814
|
|
|
40,875,583
|
|
|
$
|
4
|
|
|
$
|
7,979
|
|
|
$
|
37
|
|
|
$
|
67,242
|
|
|
$
|
75,262
|
|
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
|
|
||||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
10,881,704
|
|
|
2
|
|
|
25,812
|
|
|
—
|
|
|
—
|
|
|
25,814
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
79,107
|
|
|
—
|
|
|
—
|
|
|
79,107
|
|
||||||
Taxes related to net share settlement of restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,939
|
)
|
|
—
|
|
|
—
|
|
|
(4,939
|
)
|
||||||
Excess tax benefit from stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,545
|
|
|
—
|
|
|
—
|
|
|
21,545
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102,777
|
)
|
|
(102,777
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,669
|
)
|
|
—
|
|
|
(1,669
|
)
|
||||||
Balance at December 31, 2016
|
—
|
|
|
—
|
|
|
225,663,277
|
|
|
23
|
|
|
859,345
|
|
|
(978
|
)
|
|
140,142
|
|
|
998,532
|
|
||||||
Issuance of common stock
|
—
|
|
|
—
|
|
|
13,093,245
|
|
|
1
|
|
|
19,010
|
|
|
—
|
|
|
—
|
|
|
19,011
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,081
|
|
|
—
|
|
|
—
|
|
|
92,081
|
|
||||||
Taxes related to net share settlement of restricted stock units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,376
|
)
|
|
—
|
|
|
—
|
|
|
(14,376
|
)
|
||||||
Cumulative effect adjustment related to recognition of previously unrecognized excess tax benefits from adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,938
|
|
|
4,938
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(277,192
|
)
|
|
(277,192
|
)
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
969
|
|
|
—
|
|
|
969
|
|
||||||
Balance at December 31, 2017
|
—
|
|
|
$
|
—
|
|
|
238,756,522
|
|
|
$
|
24
|
|
|
$
|
956,060
|
|
|
$
|
(9
|
)
|
|
$
|
(132,112
|
)
|
|
$
|
823,963
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(277,192
|
)
|
|
$
|
(102,777
|
)
|
|
$
|
175,677
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Provision for doubtful accounts
|
7,893
|
|
|
339
|
|
|
1,115
|
|
|||
Provision for excess and obsolete inventory
|
14,833
|
|
|
4,993
|
|
|
5,060
|
|
|||
Depreciation
|
39,971
|
|
|
36,046
|
|
|
19,405
|
|
|||
Amortization of intangible assets
|
5,722
|
|
|
2,087
|
|
|
1,702
|
|
|||
Accelerated depreciation of property and equipment
|
5,250
|
|
|
19,805
|
|
|
1,206
|
|
|||
Amortization of issuance costs and discount on debt
|
951
|
|
|
466
|
|
|
961
|
|
|||
Stock-based compensation
|
91,581
|
|
|
79,432
|
|
|
41,024
|
|
|||
Deferred income taxes
|
173,906
|
|
|
(100,434
|
)
|
|
(42,538
|
)
|
|||
Revaluation of redeemable convertible preferred stock warrant liability
|
—
|
|
|
—
|
|
|
56,655
|
|
|||
Change in contingent consideration
|
—
|
|
|
—
|
|
|
(7,704
|
)
|
|||
Other
|
216
|
|
|
(423
|
)
|
|
(263
|
)
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
63,784
|
|
|
(8,701
|
)
|
|
(231,100
|
)
|
|||
Inventories
|
92,129
|
|
|
(61,975
|
)
|
|
(68,108
|
)
|
|||
Prepaid expenses and other assets
|
(113,111
|
)
|
|
(37,876
|
)
|
|
(29,215
|
)
|
|||
Fitbit Force recall reserve
|
(789
|
)
|
|
(3,869
|
)
|
|
(17,354
|
)
|
|||
Accounts payable
|
(86,115
|
)
|
|
45,654
|
|
|
56,759
|
|
|||
Accrued liabilities and other liabilities
|
56,172
|
|
|
213,361
|
|
|
138,748
|
|
|||
Deferred revenue
|
(7,472
|
)
|
|
5,456
|
|
|
34,891
|
|
|||
Income taxes payable
|
(3,488
|
)
|
|
47,136
|
|
|
4,336
|
|
|||
Net cash provided by operating activities
|
64,241
|
|
|
138,720
|
|
|
141,257
|
|
|||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||
Purchase of property and equipment
|
(89,160
|
)
|
|
(78,640
|
)
|
|
(30,566
|
)
|
|||
Purchase of marketable securities
|
(597,933
|
)
|
|
(638,055
|
)
|
|
(230,935
|
)
|
|||
Sales of marketable securities
|
42,406
|
|
|
46,511
|
|
|
58,011
|
|
|||
Maturities of marketable securities
|
622,525
|
|
|
315,774
|
|
|
44,500
|
|
|||
Acquisitions, net of cash acquired
|
(556
|
)
|
|
(38,256
|
)
|
|
(11,037
|
)
|
|||
Equity investment
|
(6,000
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(28,718
|
)
|
|
(392,666
|
)
|
|
(170,027
|
)
|
|||
Cash Flows from Financing Activities
|
|
|
|
|
|
||||||
Payment of offering costs
|
—
|
|
|
(1,236
|
)
|
|
(5,089
|
)
|
|||
Proceeds from issuance of common stock
|
19,011
|
|
|
25,969
|
|
|
4,018
|
|
|||
Taxes paid related to net share settlement of restricted stock units
|
(14,376
|
)
|
|
(4,939
|
)
|
|
—
|
|
|||
Proceeds from public offerings, net of underwriting discounts and commissions
|
—
|
|
|
—
|
|
|
505,275
|
|
|||
Proceeds from issuance of debt and revolving credit facility
|
—
|
|
|
—
|
|
|
160,000
|
|
|||
Repayment of debt
|
—
|
|
|
—
|
|
|
(294,503
|
)
|
|||
Payment of issuance costs
|
—
|
|
|
—
|
|
|
(748
|
)
|
|||
Net cash provided by financing activities
|
4,635
|
|
|
19,794
|
|
|
368,953
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
40,158
|
|
|
(234,152
|
)
|
|
340,183
|
|
|||
Effect of exchange rates on cash and cash equivalents
|
488
|
|
|
(374
|
)
|
|
37
|
|
|||
Cash and cash equivalents at beginning of period
|
301,320
|
|
|
535,846
|
|
|
195,626
|
|
|||
Cash and cash equivalents at end of period
|
$
|
341,966
|
|
|
$
|
301,320
|
|
|
$
|
535,846
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosure
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
1,019
|
|
|
$
|
624
|
|
|
$
|
1,157
|
|
Cash paid for income taxes
|
$
|
382
|
|
|
$
|
34,014
|
|
|
$
|
150,923
|
|
Supplemental Disclosure of Non-Cash Investing and Financing Activity
|
|
|
|
|
|
||||||
Purchase of property and equipment included in accounts payable and accrued liabilities
|
$
|
4,197
|
|
|
$
|
19,778
|
|
|
$
|
10,534
|
|
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
|
|
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
|
)
|
Tooling and manufacturing equipment
|
|
One to three years
|
Furniture and office equipment
|
|
Three years
|
Purchased software
|
|
Three years
|
Capitalized internally-developed software
|
|
Two to eight years
|
Leasehold improvements
|
|
Shorter of remaining lease term or ten years
|
•
|
Retailers and distributors are generally allowed to return products that were originally sold through to an end-user under provisions of their contracts, called “open-box” returns, and such returns may be made at any time after the original sale.
|
•
|
All purchases through Fitbit.com are covered by a 45-day right of return.
|
•
|
Certain distributors are allowed stock rotation rights which are limited rights of return of products purchased during a prior period, generally one quarter.
|
•
|
Certain 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, accelerated depreciation 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, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
193,066
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
193,066
|
|
U.S. government agencies
|
—
|
|
|
79,624
|
|
|
—
|
|
|
79,624
|
|
||||
Corporate debt securities
|
—
|
|
|
291,582
|
|
|
—
|
|
|
291,582
|
|
||||
Total
|
$
|
193,066
|
|
|
$
|
371,206
|
|
|
$
|
—
|
|
|
$
|
564,272
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
2,138
|
|
|
$
|
—
|
|
|
$
|
2,138
|
|
Stock warrant liability
|
—
|
|
|
—
|
|
|
208
|
|
|
208
|
|
||||
|
$
|
—
|
|
|
$
|
2,138
|
|
|
$
|
208
|
|
|
$
|
2,346
|
|
|
December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
50,125
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50,125
|
|
U.S. government agencies
|
—
|
|
|
86,526
|
|
|
—
|
|
|
86,526
|
|
||||
Corporate debt securities
|
—
|
|
|
390,286
|
|
|
—
|
|
|
390,286
|
|
||||
Derivative assets
|
—
|
|
|
10,625
|
|
|
—
|
|
|
10,625
|
|
||||
Total
|
$
|
50,125
|
|
|
$
|
487,437
|
|
|
$
|
—
|
|
|
$
|
537,562
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
3,780
|
|
|
$
|
—
|
|
|
$
|
3,780
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Cash and
Cash
Equivalents
|
|
Marketable
Securities
|
||||||||||||
Cash
|
$
|
115,028
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
115,028
|
|
|
$
|
115,028
|
|
|
$
|
—
|
|
Money market funds
|
193,066
|
|
|
—
|
|
|
—
|
|
|
193,066
|
|
|
193,066
|
|
|
—
|
|
||||||
U.S. government agencies
|
79,722
|
|
|
1
|
|
|
(99
|
)
|
|
79,624
|
|
|
6,595
|
|
|
73,029
|
|
||||||
Corporate debt securities
|
291,738
|
|
|
15
|
|
|
(171
|
)
|
|
291,582
|
|
|
27,277
|
|
|
264,305
|
|
||||||
Total
|
$
|
679,554
|
|
|
$
|
16
|
|
|
$
|
(270
|
)
|
|
$
|
679,300
|
|
|
$
|
341,966
|
|
|
$
|
337,334
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
|
|
Cash and
Cash
Equivalents
|
|
Marketable
Securities
|
||||||||||||
Cash
|
$
|
179,076
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
179,076
|
|
|
$
|
179,076
|
|
|
$
|
—
|
|
Money market funds
|
50,125
|
|
|
—
|
|
|
—
|
|
|
50,125
|
|
|
50,125
|
|
|
—
|
|
||||||
U.S. government agencies
|
86,533
|
|
|
8
|
|
|
(15
|
)
|
|
86,526
|
|
|
—
|
|
|
86,526
|
|
||||||
Corporate debt securities
|
390,466
|
|
|
24
|
|
|
(204
|
)
|
|
390,286
|
|
|
72,119
|
|
|
318,167
|
|
||||||
Total
|
$
|
706,200
|
|
|
$
|
32
|
|
|
$
|
(219
|
)
|
|
$
|
706,013
|
|
|
$
|
301,320
|
|
|
$
|
404,693
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
|
|
||||||
Due in one year
|
$
|
319,112
|
|
|
$
|
355,152
|
|
Due in one to two years
|
18,222
|
|
|
49,541
|
|
||
Total
|
$
|
337,334
|
|
|
$
|
404,693
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
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
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
813
|
|
|
$
|
—
|
|
Cash flow designated hedges
|
Accrued liabilities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,428
|
|
||||
Hedges not designated
|
Prepaid expense and other current assets
|
|
—
|
|
|
—
|
|
|
9,812
|
|
|
—
|
|
||||
Hedges not designated
|
Accrued liabilities
|
|
—
|
|
|
2,138
|
|
|
—
|
|
|
2,352
|
|
||||
Total fair value of derivative instruments
|
|
|
$
|
—
|
|
|
$
|
2,138
|
|
|
$
|
10,625
|
|
|
$
|
3,780
|
|
|
|
|
Year Ended
December 31,
|
||||||||||
|
Income Statement Location
|
|
2017
|
|
2016
|
|
2015
|
||||||
Foreign exchange cash flow hedges:
|
|
|
|
|
|
|
|
||||||
Gain (loss) recognized in OCI—effective portion
|
|
|
$
|
(19,436
|
)
|
|
$
|
8,171
|
|
|
$
|
2,785
|
|
Gain (loss) reclassified from OCI into income—effective portion
|
Revenue
|
|
(18,532
|
)
|
|
10,153
|
|
|
2,183
|
|
|||
Gain (loss) reclassified from OCI into income—effective portion
|
Operating expenses
|
|
(1,405
|
)
|
|
17
|
|
|
(899
|
)
|
|||
Gain (loss) recognized in income—ineffective portion
|
Other income (expense), net
|
|
21
|
|
|
(1,026
|
)
|
|
202
|
|
|||
Gain (loss) recognized in income—excluded time value portion
|
Other income (expense), net
|
|
1,771
|
|
|
—
|
|
|
—
|
|
|||
Foreign exchange balance sheet hedges:
|
|
|
|
|
|
|
|
||||||
Gain (loss) recognized in income
|
Other income (expense), net
|
|
$
|
(10,516
|
)
|
|
$
|
10,916
|
|
|
$
|
5,861
|
|
|
December 31, 2017
|
||||||||||||||||||||||
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Gross Amounts Not Offset in Consolidated Balance Sheets
|
||||||||||||||||||||
|
Gross Amount Recognized
|
|
Gross Amount Offset
|
|
Net Amount Presented
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
|||||||||||||
Foreign exchange contracts assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts liabilities
|
2,138
|
|
|
—
|
|
|
2,138
|
|
|
—
|
|
|
—
|
|
|
2,138
|
|
|
December 31, 2016
|
||||||||||||||||||||||
|
Gross Amounts Offset in the Consolidated Balance Sheets
|
|
Gross Amounts Not Offset in Consolidated Balance Sheets
|
||||||||||||||||||||
|
Gross Amounts Recognized
|
|
Gross Amounts Offset
|
|
Net Amount Presented
|
Financial
Instruments
|
|
Cash Collateral
Received
|
|
Net
Amount
|
|||||||||||||
Foreign exchange contracts assets
|
$
|
10,625
|
|
|
$
|
—
|
|
|
$
|
10,625
|
|
|
$
|
3,780
|
|
|
$
|
—
|
|
|
$
|
6,845
|
|
Foreign exchange contracts liabilities
|
3,780
|
|
|
—
|
|
|
3,780
|
|
|
3,780
|
|
|
—
|
|
|
—
|
|
|
Allowance for
Doubtful
Accounts
|
|
Revenue Returns
Reserve
(1)
|
||||
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
|
|
||
Increases
|
339
|
|
|
275,815
|
|
||
Write-offs/returns taken
|
(1,882
|
)
|
|
(251,009
|
)
|
||
Balance at December 31, 2016
|
282
|
|
|
98,851
|
|
||
Increases
(2)
|
30,551
|
|
|
229,610
|
|
||
Write-offs/returns taken
(2)
|
(21,604
|
)
|
|
(218,589
|
)
|
||
Balance at December 31, 2017
|
$
|
9,229
|
|
|
$
|
109,872
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Components
|
$
|
3,825
|
|
|
$
|
1,035
|
|
Finished goods
|
120,070
|
|
|
229,352
|
|
||
Total inventories
|
$
|
123,895
|
|
|
$
|
230,387
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
POP displays, net
|
$
|
14,750
|
|
|
$
|
22,804
|
|
Prepaid expenses
|
24,204
|
|
|
17,161
|
|
||
Derivative assets
|
—
|
|
|
10,625
|
|
||
Prepaid marketing
|
6,074
|
|
|
5,764
|
|
||
Insurance receivable
|
37,300
|
|
|
—
|
|
||
Other
|
14,941
|
|
|
9,511
|
|
||
Total prepaid expenses and other current assets
|
$
|
97,269
|
|
|
$
|
65,865
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Tooling and manufacturing equipment
|
$
|
66,854
|
|
|
$
|
60,944
|
|
Furniture and office equipment
|
20,942
|
|
|
14,424
|
|
||
Purchased and internally-developed software
|
18,112
|
|
|
12,032
|
|
||
Leasehold improvements
|
58,431
|
|
|
28,489
|
|
||
Total property and equipment
|
164,339
|
|
|
115,889
|
|
||
Less: Accumulated depreciation and amortization
|
(59,431
|
)
|
|
(39,336
|
)
|
||
Property and equipment, net
|
$
|
104,908
|
|
|
$
|
76,553
|
|
|
Goodwill
|
||
Balance at December 31, 2015
|
$
|
22,157
|
|
Goodwill acquired
|
28,879
|
|
|
Balance at December 31, 2016
|
$
|
51,036
|
|
Goodwill acquired
|
—
|
|
|
Balance at December 31, 2017
|
$
|
51,036
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
Weighted Average Remaining Useful Life
(years)
|
||||||||||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Developed technology
|
$
|
30,588
|
|
|
$
|
(8,738
|
)
|
|
$
|
21,850
|
|
|
$
|
26,092
|
|
|
$
|
(3,247
|
)
|
|
$
|
22,845
|
|
|
4.0
|
Trademarks and other
|
1,278
|
|
|
(772
|
)
|
|
506
|
|
|
1,278
|
|
|
(542
|
)
|
|
736
|
|
|
0.9
|
||||||
Total finite-lived intangible assets subject to amortization, net
|
31,866
|
|
|
(9,510
|
)
|
|
22,356
|
|
|
27,370
|
|
|
(3,789
|
)
|
|
23,581
|
|
|
|
||||||
In-process research and development
|
—
|
|
|
—
|
|
|
—
|
|
|
3,940
|
|
|
—
|
|
|
3,940
|
|
|
|
||||||
Total intangible assets, net
|
$
|
31,866
|
|
|
$
|
(9,510
|
)
|
|
$
|
22,356
|
|
|
$
|
31,310
|
|
|
$
|
(3,789
|
)
|
|
$
|
27,521
|
|
|
|
|
Cost of
Revenue
|
|
Operating
Expenses
|
|
Total
|
||||||
2018
|
$
|
6,120
|
|
|
$
|
230
|
|
|
$
|
6,350
|
|
2019
|
5,340
|
|
|
230
|
|
|
5,570
|
|
|||
2020
|
4,560
|
|
|
46
|
|
|
4,606
|
|
|||
2021
|
4,560
|
|
|
—
|
|
|
4,560
|
|
|||
2022
|
1,270
|
|
|
—
|
|
|
1,270
|
|
|||
Total intangible assets, net
|
$
|
21,850
|
|
|
$
|
506
|
|
|
$
|
22,356
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Product warranty
|
$
|
87,882
|
|
|
$
|
99,923
|
|
Accrued manufacturing expense and freight
|
41,901
|
|
|
75,579
|
|
||
Accrued sales incentives
|
111,592
|
|
|
74,181
|
|
||
Accrued sales and marketing
|
44,401
|
|
|
41,948
|
|
||
Accrued research and development
|
8,983
|
|
|
5,989
|
|
||
Accrued co-op advertising and marketing development funds
|
30,408
|
|
|
40,002
|
|
||
Employee-related liabilities
|
33,266
|
|
|
13,934
|
|
||
Sales taxes and VAT payable
|
21,340
|
|
|
8,891
|
|
||
Inventory received but not billed
|
10,526
|
|
|
7,363
|
|
||
Accrued legal settlements and fees
|
36,693
|
|
|
3,963
|
|
||
Derivative liabilities
|
2,138
|
|
|
3,780
|
|
||
Other
|
23,007
|
|
|
15,008
|
|
||
Accrued liabilities
|
$
|
452,137
|
|
|
$
|
390,561
|
|
|
|
||
|
Reserve For
Product
Warranty
(1)
|
||
Balance at December 31, 2014
|
$
|
20,098
|
|
Charged to cost of revenue
|
84,184
|
|
|
Changes in estimate related to pre-existing warranties
|
(8,968
|
)
|
|
Settlement of claims
|
(55,102
|
)
|
|
Balance at December 31, 2015
|
$
|
40,212
|
|
Charged to cost of revenue
|
185,434
|
|
|
Changes in estimate related to pre-existing warranties
|
4,072
|
|
|
Settlement of claims
|
(129,795
|
)
|
|
Balance at December 31, 2016
|
$
|
99,923
|
|
Charged to cost of revenue
|
53,840
|
|
|
Changes in estimate related to pre-existing warranties
|
11,788
|
|
|
Settlement of claims
|
(77,669
|
)
|
|
Balance at December 31, 2017
|
$
|
87,882
|
|
(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, 2014
|
$
|
22,476
|
|
Charged to cost of revenue
|
(5,755
|
)
|
|
Charged to general and administrative
|
(1,174
|
)
|
|
Settlement of claims
|
(10,425
|
)
|
|
Balance at December 31, 2015
|
5,122
|
|
|
Settlement of claims
|
(3,869
|
)
|
|
Balance at December 31, 2016
|
1,253
|
|
|
Settlement of claims
|
(789
|
)
|
|
Balance at December 31, 2017
|
$
|
464
|
|
|
Restructuring Reserve
|
||
Balance at December 31, 2016
|
$
|
—
|
|
Restructuring charges
|
6,375
|
|
|
Cash paid
|
(4,983
|
)
|
|
Other - noncash
|
(1,392
|
)
|
|
Balance at December 31, 2017
|
$
|
—
|
|
|
Unrealized Gains on Cash Flow Hedges
|
|
Currency Translation Adjustments
|
|
Unrealized Gains (Losses) on Available-for-Sale Investments
|
|
Total
|
||||||||
Balance at December 31, 2015
|
$
|
751
|
|
|
$
|
(5
|
)
|
|
$
|
(55
|
)
|
|
$
|
691
|
|
Other comprehensive income (loss) before reclassifications
|
9,422
|
|
|
(309
|
)
|
|
(126
|
)
|
|
8,987
|
|
||||
Amounts reclassified from AOCI
|
(10,650
|
)
|
|
—
|
|
|
(6
|
)
|
|
(10,656
|
)
|
||||
Other comprehensive income (loss)
|
(1,228
|
)
|
|
(309
|
)
|
|
(132
|
)
|
|
(1,669
|
)
|
||||
Balance at December 31, 2016
|
(477
|
)
|
|
(314
|
)
|
|
(187
|
)
|
|
(978
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
(19,422
|
)
|
|
314
|
|
|
125
|
|
|
(18,983
|
)
|
||||
Amounts reclassified from AOCI
|
19,965
|
|
|
—
|
|
|
(13
|
)
|
|
19,952
|
|
||||
Other comprehensive income (loss)
|
543
|
|
|
314
|
|
|
112
|
|
|
969
|
|
||||
Balance at December 31, 2017
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
(75
|
)
|
|
$
|
(9
|
)
|
|
|
||
Year ending December 31,
|
Amounts
|
||
2018
|
$
|
40,856
|
|
2019
|
46,713
|
|
|
2020
|
42,942
|
|
|
2021
|
41,331
|
|
|
2022
|
41,477
|
|
|
Thereafter
|
58,879
|
|
|
Total
|
$
|
272,198
|
|
|
Stock Options Outstanding
|
|||||||||||
|
Number of
Shares Subject
to
Stock Options
|
|
Weighted–
Average
Exercise
Price
|
|
Weighted–
Average Remaining Contractual Term
(in years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Balance—December 31, 2016
|
34,454
|
|
|
$
|
3.85
|
|
|
|
|
|
||
Granted
|
1,150
|
|
|
$
|
5.63
|
|
|
|
|
|
||
Exercised
|
(7,164
|
)
|
|
$
|
1.22
|
|
|
|
|
|
||
Canceled
|
(7,054
|
)
|
|
$
|
9.35
|
|
|
|
|
|
||
Balance—December 31, 2017
|
21,386
|
|
|
$
|
3.01
|
|
|
5.7
|
|
$
|
64,582
|
|
Stock options exercisable—December 31, 2017
|
16,827
|
|
|
$
|
2.52
|
|
|
5.3
|
|
$
|
57,472
|
|
Stock options vested and expected to vest—December 31, 2017
|
21,386
|
|
|
$
|
3.01
|
|
|
5.7
|
|
$
|
64,582
|
|
|
RSUs
Outstanding
|
|
Weighted-
Average
Grant Date
Fair Value
|
|||
|
(in thousands)
|
|
|
|||
Unvested balance—December 31, 2016
|
11,578
|
|
|
$
|
16.85
|
|
Granted
|
18,912
|
|
|
6.47
|
|
|
Vested
|
(6,191
|
)
|
|
12.57
|
|
|
Forfeited or canceled
|
(5,111
|
)
|
|
12.61
|
|
|
Unvested balance—December 31, 2017
|
19,188
|
|
|
9.13
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Cost of revenue
|
$
|
5,312
|
|
|
$
|
4,797
|
|
|
$
|
4,739
|
|
Research and development
|
54,123
|
|
|
47,207
|
|
|
18,251
|
|
|||
Sales and marketing
|
14,959
|
|
|
11,575
|
|
|
7,419
|
|
|||
General and administrative
|
17,187
|
|
|
15,853
|
|
|
10,615
|
|
|||
Total stock-based compensation expense
|
$
|
91,581
|
|
|
$
|
79,432
|
|
|
$
|
41,024
|
|
|
Year Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Employee stock options
|
|
|
|
|
|
Expected term (in years)
|
6.25
|
|
6.25
|
|
6.25
|
Volatility
|
32.2%
|
|
40.7%
|
|
52.1% - 56.9%
|
Risk-free interest rate
|
2.1%
|
|
1.6%
|
|
1.5% - 1.9%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
|
|
|
|
|
|
Warrants
|
|
|
|
|
|
Expected term (in years)
|
9.5
|
|
—
|
|
—
|
Volatility
|
32.0%
|
|
—%
|
|
—%
|
Risk-free interest rate
|
2.1%
|
|
—%
|
|
—%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
|
|
|
|
|
|
Employee stock purchase plan
|
|
|
|
|
|
Expected term (in years)
|
0.5
|
|
0.5
|
|
0.5 – 0.9
|
Volatility
|
27.7% - 31.3%
|
|
30.1% - 39.0%
|
|
27.7% - 35.0%
|
Risk-free interest rate
|
1.0% - 1.4%
|
|
0.4% - 0.6%
|
|
0.3%
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(87,961
|
)
|
|
$
|
78,782
|
|
|
$
|
140,396
|
|
State
|
(8,429
|
)
|
|
9,878
|
|
|
13,307
|
|
|||
Foreign
|
5,032
|
|
|
5,256
|
|
|
1,107
|
|
|||
Total current
|
(91,358
|
)
|
|
93,916
|
|
|
154,810
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
154,817
|
|
|
(87,584
|
)
|
|
(33,421
|
)
|
|||
State
|
18,902
|
|
|
(11,622
|
)
|
|
(8,941
|
)
|
|||
Foreign
|
187
|
|
|
(1,228
|
)
|
|
(176
|
)
|
|||
Total deferred
|
173,906
|
|
|
(100,434
|
)
|
|
(42,538
|
)
|
|||
Total income tax expense (benefit)
|
$
|
82,548
|
|
|
$
|
(6,518
|
)
|
|
$
|
112,272
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating losses and credits
|
$
|
23,338
|
|
|
$
|
9,446
|
|
Fixed assets and intangible assets
|
10,625
|
|
|
16,272
|
|
||
Accruals and reserves
|
49,886
|
|
|
112,915
|
|
||
Stock-based compensation
|
12,154
|
|
|
17,864
|
|
||
Inventory
|
4,345
|
|
|
8,513
|
|
||
Other
|
3,325
|
|
|
11,134
|
|
||
Total deferred tax assets
|
103,673
|
|
|
176,144
|
|
||
Less: valuation allowance
|
(99,570
|
)
|
|
—
|
|
||
Deferred tax assets, net of valuation allowance
|
4,103
|
|
|
176,144
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Other
|
(369
|
)
|
|
(353
|
)
|
||
Total deferred tax liabilities
|
(369
|
)
|
|
(353
|
)
|
||
Net deferred tax assets
|
$
|
3,734
|
|
|
$
|
175,791
|
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of year
|
$
|
35,584
|
|
|
$
|
23,518
|
|
|
$
|
10,594
|
|
Reductions based on tax positions related to prior year
|
(6,335
|
)
|
|
(2,100
|
)
|
|
(18
|
)
|
|||
Additions based on tax positions related to prior year
|
108
|
|
|
2,809
|
|
|
—
|
|
|||
Additions based on tax positions related to current year
|
9,289
|
|
|
11,357
|
|
|
12,942
|
|
|||
Reductions due to tax authorities’ settlements
|
(8,603
|
)
|
|
—
|
|
|
—
|
|
|||
Reductions due to expiration of statutes of limitation
|
(105
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at end of year
|
$
|
29,938
|
|
|
$
|
35,584
|
|
|
$
|
23,518
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
(277,192
|
)
|
|
$
|
(102,777
|
)
|
|
$
|
175,677
|
|
Less: noncumulative dividends to preferred stockholders
|
—
|
|
|
—
|
|
|
(2,526
|
)
|
|||
Less: undistributed earnings to participating securities
|
—
|
|
|
—
|
|
|
(59,133
|
)
|
|||
Net income (loss) attributable to common stockholders—basic
|
(277,192
|
)
|
|
(102,777
|
)
|
|
114,018
|
|
|||
Add: adjustments to undistributed earnings to participating securities
|
—
|
|
|
—
|
|
|
8,821
|
|
|||
Net income (loss) attributable to common stockholders—diluted
|
$
|
(277,192
|
)
|
|
$
|
(102,777
|
)
|
|
$
|
122,839
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted-average shares of common stock—basic for Class A and Class B
|
232,032
|
|
|
220,405
|
|
|
129,886
|
|
|||
Effect of dilutive securities
|
—
|
|
|
—
|
|
|
34,327
|
|
|||
Weighted-average shares of common stock—diluted for Class A and Class B
|
232,032
|
|
|
220,405
|
|
|
164,213
|
|
|||
Net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
(1.19
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.88
|
|
Diluted
|
$
|
(1.19
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
0.75
|
|
|
December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
|
|
|
|
|
|||
Stock options to purchase common stock
|
17,469
|
|
|
34,454
|
|
|
445
|
|
RSUs
|
10,030
|
|
|
11,578
|
|
|
692
|
|
Warrants
|
216
|
|
|
—
|
|
|
—
|
|
Diluted common stock subject to vesting
|
84
|
|
|
—
|
|
|
—
|
|
Diluted impact of ESPP
|
162
|
|
|
—
|
|
|
—
|
|
Redeemable stock unites
|
—
|
|
|
—
|
|
|
65,903
|
|
Redeemable convertible preferred stock warrants
|
—
|
|
|
—
|
|
|
921
|
|
Total
|
27,961
|
|
|
46,032
|
|
|
67,961
|
|
|
December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
C
|
13
|
%
|
|
14
|
%
|
|
14
|
%
|
A
|
*
|
|
|
14
|
|
|
15
|
|
B
|
*
|
|
|
10
|
|
|
14
|
|
*
|
Revenue was less than 10%.
|
*
|
Accounts receivable were less than 10%.
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
United States
|
$
|
944,052
|
|
|
$
|
1,539,600
|
|
|
$
|
1,381,152
|
|
Americas excluding United States
|
116,330
|
|
|
110,111
|
|
|
92,252
|
|
|||
Europe, Middle East, and Africa
|
440,135
|
|
|
389,154
|
|
|
208,767
|
|
|||
APAC
|
115,002
|
|
|
130,596
|
|
|
175,827
|
|
|||
Total
|
$
|
1,615,519
|
|
|
$
|
2,169,461
|
|
|
$
|
1,857,998
|
|
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,
2017
(3)
|
|
September 30,
2017
(2)
|
|
July 1,
2017
|
|
April 1,
2017
(1)
|
||||||||
Revenue
|
$
|
570,756
|
|
|
$
|
392,522
|
|
|
$
|
353,299
|
|
|
$
|
298,942
|
|
Gross profit
|
$
|
248,597
|
|
|
$
|
174,760
|
|
|
$
|
149,245
|
|
|
$
|
118,299
|
|
Net loss
|
$
|
(45,470
|
)
|
|
$
|
(113,403
|
)
|
|
$
|
(58,240
|
)
|
|
$
|
(60,079
|
)
|
Net loss per share attributable to common stockholders—basic
|
$
|
(0.19
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.27
|
)
|
Net loss per share attributable to common stockholders—diluted
|
$
|
(0.19
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.27
|
)
|
|
Three Months Ended
|
||||||||||||||
|
December 31,
2016
|
|
October 1,
2016
|
|
July 2,
2016
|
|
April 2,
2016
|
||||||||
Revenue
|
$
|
573,775
|
|
|
$
|
503,802
|
|
|
$
|
586,528
|
|
|
$
|
505,356
|
|
Gross profit
|
$
|
126,502
|
|
|
$
|
240,658
|
|
|
$
|
244,969
|
|
|
$
|
233,755
|
|
Net income (loss)
|
$
|
(146,273
|
)
|
|
$
|
26,120
|
|
|
$
|
6,341
|
|
|
$
|
11,035
|
|
Net income (loss) per share attributable to common stockholders—basic
|
$
|
(0.65
|
)
|
|
$
|
0.12
|
|
|
$
|
0.03
|
|
|
$
|
0.05
|
|
Net income (loss) per share attributable to common stockholders—diluted
|
$
|
(0.65
|
)
|
|
$
|
0.11
|
|
|
$
|
0.03
|
|
|
$
|
0.05
|
|
(1)
|
During the first quarter of 2017, the Company recorded restructuring expenses of
$6.3 million
. See Note 5. Balance Sheet Components for more information. In addition, the Company’s adoption of ASU 2016-09 on January 1, 2017 resulted in an increase to the provision for income taxes of
$2.8 million
. See Note 2. Significant Accounting Policies for more information.
|
(2)
|
During the third quarter of 2017, as a result of one of the Company’s customers filing for bankruptcy, the Company recorded a net charge of
$9.0 million
comprised of net bad debt expense of
$7.6 million
and net cost of revenue of
$1.4 million
. See Note 1. Customer Bankruptcy for more information. In addition, during the third quarter of 2017, the Company recorded a
$111.4 million
valuation allowance against a portion of its U.S. deferred taxes.
|
(3)
|
During the fourth quarter of 2017, as a result of the Tax Act, the Company recorded a provisional tax expense for the impact of the 2017 Tax Act of
$45.5 million
as a result of re-measurement of the federal portion of its deferred tax assets as of December 31, 2017 from 35% to the new 21% tax rate.
|
1.
|
Consolidated Financial Statements
|
2.
|
Financial Statement Schedules
|
3.
|
Exhibits
|
|
|
Incorporated by Reference
|
|
|
|||||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
3.1
|
|
|
10-Q
|
|
001-37444
|
|
3.1
|
|
|
8/7/2015
|
|
|
|
3.2
|
|
|
10-Q
|
|
001-37444
|
|
3.2
|
|
|
8/7/2015
|
|
|
|
4.1
|
|
|
S-1/A
|
|
333-203941
|
|
4.1
|
|
|
6/2/2015
|
|
|
|
4.2
|
|
|
S-1
|
|
333-203941
|
|
4.2
|
|
|
5/7/2015
|
|
|
|
4.3
|
|
|
10-Q
|
|
001-37444
|
|
10.1
|
|
|
11/3/2017
|
|
|
|
10.1*
|
|
|
S-1
|
|
333-203941
|
|
10.1
|
|
|
5/7/2015
|
|
|
|
10.2*
|
|
|
S-1
|
|
333-203941
|
|
10.2
|
|
|
5/7/2015
|
|
|
|
10.3*
|
|
|
S-1
|
|
333-203941
|
|
10.3
|
|
|
5/7/2015
|
|
|
|
10.4*
|
|
|
8-K
|
|
001-37444
|
|
10.1
|
|
|
2/9/2016
|
|
|
|
10.5*
|
|
|
S-1
|
|
333-203941
|
|
10.4
|
|
|
5/7/2015
|
|
|
|
10.6*
|
|
|
S-1
|
|
333-203941
|
|
10.5
|
|
|
5/7/2015
|
|
|
|
10.7*
|
|
|
10-K
|
|
001-37444
|
|
10.8
|
|
|
2/29/2016
|
|
|
|
10.8*
|
|
|
|
|
|
|
|
|
|
|
X
|
||
10.9
|
|
|
S-1
|
|
333-203941
|
|
10.6
|
|
|
5/7/2015
|
|
|
|
10.10
|
|
|
10-Q
|
|
001-37444
|
|
10.3
|
|
|
8/7/2015
|
|
|
|
10.11
|
|
|
8-K
|
|
001-37444
|
|
10.1
|
|
|
12/15/2015
|
|
|
|
|
Incorporated by Reference
|
|
|
|||||||||
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing
Date
|
|
Filed
Herewith
|
|
10.12
|
|
|
10-Q
|
|
001-37444
|
|
10.1
|
|
|
5/5/2017
|
|
|
|
10.13
|
|
|
S-1
|
|
333-203941
|
|
10.9
|
|
|
5/7/2015
|
|
|
|
10.14*
|
|
|
S-1/A
|
|
333-203941
|
|
10.10
|
|
|
5/21/2015
|
|
|
|
10.15*
|
|
|
|
|
|
|
|
|
|
|
X
|
||
10.16*
|
|
|
10-Q
|
|
001-37444
|
|
10.3
|
|
|
5/6/2016
|
|
|
|
10.17†
|
|
|
10-Q
|
|
001-37444
|
|
10.1
|
|
|
8/4/2016
|
|
|
|
21.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
23.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
24.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
||
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
||
32.1◊
|
|
|
|
|
|
|
|
|
|
|
X
|
||
32.2◊
|
|
|
|
|
|
|
|
|
|
|
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.LAB
|
|
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.
|
|
|
|
March 1, 2018
|
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
|
|
March 1, 2018
|
James Park
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ William Zerella
|
|
Chief Financial Officer
|
|
March 1, 2018
|
William Zerella
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Eric N. Friedman
|
|
Chief Technology Officer and Director
|
|
March 1, 2018
|
Eric N. Friedman
|
|
|
|
|
|
|
|
|
|
/s/ Laura J. Alber
|
|
Director
|
|
March 1, 2018
|
Laura J. Alber
|
|
|
|
|
|
|
|
|
|
/s/ Jonathan D. Callaghan
|
|
Director
|
|
March 1, 2018
|
Jonathan D. Callaghan
|
|
|
|
|
|
|
|
|
|
/s/ Glenda Flanagan
|
|
Director
|
|
March 1, 2018
|
Glenda Flanagan
|
|
|
|
|
|
|
|
|
|
/s/ Steven Murray
|
|
Director
|
|
March 1, 2018
|
Steven Murray
|
|
|
|
|
|
|
|
|
|
/s/ Christopher Paisley
|
|
Director
|
|
March 1, 2018
|
Christopher Paisley
|
|
|
|
|
Signed:
|
|
|
|
1/26/2017
|
|
Jeff Devine
|
|
Date
|
|
|
|
|
|
Bonus Plan, as amended through February 8, 2018
|
|
|
1.
|
EFFECTIVE DATE; OBJECTIVE:
This Bonus Plan (“Plan”) shall be effective as of January 1, 2016, and is effective for calendar year 2016 and each year thereafter (each, an “Eligibility Period”), unless otherwise amended or terminated by Fitbit, Inc. (“Fitbit” or the “Company”) in accordance with the Plan. The Plan supersedes all prior bonus plans. The objective of the Plan is to financially incentivize and reward employees based upon the Company’s performance and for their individual contributions to the success of Fitbit.
|
2.
|
ADMINISTRATION.
The Plan shall be administered by the Compensation Committee of the Board of Directors (the “Plan Administrator”), which shall have the discretionary authority to interpret and administer the Plan, including all terms defined herein, and to adopt rules and regulations to implement the Plan, as it deems necessary. In addition, the Plan Administrator hereby delegates to the Company’s CEO, CFO and the Head of Human Resources or such other officers of the Company approved by the Company’s CEO (such individuals, the “Executive Administrators” and together with the Plan Administrator, the “Administrators”) the approval of payouts under the Plan to employees other than Fitbit’s “executive officers” (as determined by the Board of Directors for purposes of Section 16 under the Securities Exchange Act of 1934).. All of the foregoing may also be approved by the Board of Directors. For covered employees within the meaning of Internal Revenue Code (“Code”) Section 162(m), the Plan Administrator may choose to take applicable actions in conformance with the requirements of Code Section 162(m). Any action that requires the approval of the Executive Administrators must be approved unanimously, and any action that may be approved by the Executive Administrators may instead also be approved by the Plan Administrator. The decisions of the Administrators are final and binding and shall be given the maximum deference permitted by law.
|
|
|
3.
|
PARTICIPANTS:
Participation in the Plan is limited to Full-Time regular and Part-Time regular
Fitbit employees who are employed by Fitbit on or before the start of the applicable Eligibility Period who are not covered by any other bonus, commission, or incentive plan (“Participants”). Participation in the Plan is effective on the later of January 1, 2016 or the applicable subsequent calendar year or the day the Participant commences as a Full-Time/Part-Time regular employee of Fitbit. A Participant may be considered ineligible for the Plan at any time and for any reason at the Administrators’ discretion regardless of whether he or she remains an employee of the Company. This Plan is intended to compensate individuals for performance as well as encourage employee retention through and until the date the bonus is paid; retention is therefore a key component of Plan eligibility. This Plan excludes employees who are not expressly classified by Fitbit as “regular,” including but not limited to temporary employees.
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4.
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CHANGES IN PLAN:
The Company reserves the right, in its sole discretion, to modify or terminate the Plan in total or in part, at any time. Any such change must be in writing and approved by the Plan Administrator. However, no modification or termination shall apply retroactively as to cause a forfeiture of an earned Bonus.
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5.
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INTERPRETATION OF PLAN:
In the event of a question or dispute involving the interpretation or administration of the Plan, the Plan Administrator will interpret and administer the Plan. The decision of the Plan Administrator shall be made based upon its sole discretion, and shall be final and binding. All inquiries should be in writing to the Head of Human Resources, who will forward the inquiry to the Plan Administrator for consideration and decision within 30 business days.
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6.
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ENTIRE AGREEMENT:
This Plan is the entire plan between Fitbit and Participants and supersedes all prior compensation or incentive plans or any written or verbal representations regarding the subject matter of this Plan.
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7.
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BONUS POOL.
Each Eligibility Period, the Plan Administrator, in its sole discretion, will establish a Bonus Pool, which may be established before, during or after the applicable Eligibility Period. Actual awards will be paid from the Bonus Pool.
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8.
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DISCRETION TO DETERMINE CRITERIA
. The Plan Administrator will, in its sole discretion, determine the performance goals applicable to any award which shall be selected from the Performance Factors set forth in the 2015 Equity Incentive Plan. The goals may be on the basis of any such factors the Plan Administrator determines relevant, and may be on an individual, divisional, business unit or Company-wide basis. Performance goals may be measured over the period of time determined by the Plan Administrator in its sole discretion. An Eligibility Period may be divided into one or more shorter periods if, for example, but not by way of limitation, the Plan Administrator desires to measure some performance criteria over 12 months and other criteria over fewer months. The performance goals may differ from Participant to Participant and from award to award. Failure to meet the goals will result in a failure to earn the award, except as provided herein. As determined by the Plan Administrator, the performance goals may be based on GAAP or non-GAAP results and any actual results may be adjusted by the Plan Administrator for one-time items, unbudgeted or unexpected items, acquisition-related activities or changes in applicable accounting rules when determining whether the performance goals have been met. It is within the sole discretion of the Plan Administrator to make or not make any such equitable adjustments.
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9.
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ELIGIBLE EARNINGS
are defined as base salary (“Eligible Earnings”), prorated for hire date, base salary rate changes, bonus target percent changes and leaves of absence (proration based on 365 days in the year) that occur in the Eligibility Period. Eligible earnings exclude Company payments that are in addition to base salary including but not limited to payments for moving or relocation allowances, or other bonuses or commissions. Changes to base salary throughout the calendar year will be reflected in final wages used to calculate the bonus.
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10.
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BONUS TARGET
is the percentage of Eligible Earnings to be paid out at 100% performance achievement, determined by each Participant’s position and communicated at the time of hire or as amended in writing. The bonus may be weighted based on individual performance and Company performance. The bonus can provide for payout above target for performance in excess of the individual performance factors and/or Company performance
factors or below target for performance below the individual performance factors and/or Company performance factors.
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11.
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BONUS VESTING AND PAYMENTS
: Bonuses are earned on the date of payment and not sooner, either in whole or in part. Bonuses will be paid in cash. Bonuses will be paid as soon as practicable after the Company announces its financial results for the fiscal year, which generally occurs in the first quarter of the succeeding year. All bonus payments will be made net of applicable withholding taxes.
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12.
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TRANSFERS:
Employees who participate in the Plan and who transfer to a new position not covered by this Plan and instead covered by another bonus, sales or incentive plan may be considered for a Bonus calculated on a pro-rata basis for the applicable period. The Administrators will coordinate and administer this Plan with the other bonus, sales, or incentive plan and his/her/its determinations shall be final and binding.
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13.
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INACTIVE EMPLOYEES
: Employees on a Company-approved leave of absence will be considered for a prorated Bonus for both the Company performance and individual performance (based upon their level of performance and contribution while actively employed during the plan year). The proration will be calculated based on the percentage of the year worked. The Administrators will determine the appropriate proration and his/her determinations shall be final and binding.
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14.
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TERMINATION
OF EMPLOYMENT BEFORE DATE OF PAYMENT
: A Participant who terminates employment before the date the bonus is earned, whether termination is voluntary or involuntary, shall earn no Bonus.
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15.
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EMPLOYMENT AT WILL
: The employment of all Participants at Fitbit is for an indefinite period of time and is terminable at will, at any time by either party, with or without cause being shown or advance notice by either party. This Plan shall not be construed to create a contract of employment for a specified period of time between Fitbit and any Participant, or to change the at-will employment status of any Participant.
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16.
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GENERAL PROVISIONS
: Bonus payments represent unfunded and unsecured obligations of the Company and a holder of any right hereunder in respect of any incentive payment shall have no rights other than those of a general unsecured creditor to the Company. No Participant will have the right to alienate, pledge or encumber his or her interest in this Plan, and such interest will not (to the extent permitted by law) be subject in any way to the claims of the Participant’s creditors or to attachment, execution or other process of law. The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan, and any bonus payment shall be determined in accordance with the laws of the State of California (without giving effect to principles of conflicts of laws thereof) and applicable Federal law. No incentive payment made under the Plan shall be intended to be deferred compensation under Section 409A of the Code and will be interpreted accordingly. The Plan is intended to be a “bonus program” as defined under U.S. Department of Labor regulation 2510.3-2(c) and will be construed and administered in accordance with such intention.
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Date:
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March 1, 2018
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/s/ James Park
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James Park
President, Chief Executive Officer, and Chairman
(Principal Executive Officer)
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Date:
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March 1, 2018
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/s/ William Zerella
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William Zerella
Chief Financial Officer
(Principal Financial and Accounting Officer)
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•
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the Annual Report on Form 10-K of Fitbit, Inc. for the year ended December 31, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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•
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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.
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Date:
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March 1, 2018
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By:
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/s/ James Park
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James Park
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President, Chief Executive Officer, and Chairman
(Principal Executive Officer)
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•
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the Annual Report on Form 10-K of Fitbit, Inc. for the year ended December 31, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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•
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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.
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Date:
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March 1, 2018
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By:
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/s/ William Zerella
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William Zerella
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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