[August 02, 2017] |
|
Fitbit Reports $353M in Revenue, Sells 3.4M Devices in Q2'17, Up 14% Sequentially
Fitbit, Inc. (NYSE:FIT), the leading global wearables brand, today
reported revenue of $353 million, GAAP net loss per share of ($0.25),
non-GAAP net loss per share of ($0.08), GAAP net loss of ($58.2) million
and Adjusted EBITDA loss of ($28) million for its second quarter of 2017.
"Consumer demand in the second quarter was better than anticipated,
enabling Fitbit to reduce channel inventory and generate better
sales. We are executing according to our transition plan and have
increased confidence in achieving our full year results," said
co-founder and CEO James Park. "Our smartwatch, which we believe will
deliver the best health and fitness experience in the category, is on
track for delivery ahead of the holiday season and will drive a strong
second half of the year. In the long term, we are confident in our
vision for the future and are uniquely positioned to succeed by
leveraging our brand, community, and data to drive positive health
outcomes."
Second Quarter 2017 Financial Summary
|
|
|
For the Three Months Ended
|
|
|
For the Six Months Ended
|
In millions, except percentages and per share amounts
|
|
|
July 1, 2017
|
|
|
July 2, 2016
|
|
|
July 1, 2017
|
|
|
July 2, 2016
|
GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
353.3
|
|
|
|
$
|
586.5
|
|
|
|
$
|
652.2
|
|
|
|
$
|
1,091.9
|
|
Gross Margin
|
|
|
42.2
|
%
|
|
|
41.8
|
%
|
|
|
41.0
|
%
|
|
|
43.8
|
%
|
Net Income (Loss)
|
|
|
$
|
(58.2
|
)
|
|
|
$
|
6.3
|
|
|
|
$
|
(118.3
|
)
|
|
|
$
|
17.4
|
|
Net Income (Loss) Per Share
|
|
|
$
|
(0.25
|
)
|
|
|
$
|
0.03
|
|
|
|
$
|
(0.52
|
)
|
|
|
$
|
0.07
|
|
Non-GAAP Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
|
43.0
|
%
|
|
|
42.0
|
%
|
|
|
41.6
|
%
|
|
|
44.1
|
%
|
Net Income (Loss)
|
|
|
$
|
(19.3
|
)
|
|
|
$
|
29.5
|
|
|
|
$
|
(53.7
|
)
|
|
|
$
|
54.0
|
|
Net Income (Loss) Per Share
|
|
|
$
|
(0.08
|
)
|
|
|
$
|
0.12
|
|
|
|
$
|
(0.23
|
)
|
|
|
$
|
0.22
|
|
Adjusted EBITDA
|
|
|
$
|
(28.2
|
)
|
|
|
$
|
48.3
|
|
|
|
$
|
(80.5
|
)
|
|
|
$
|
93.4
|
|
Devices Sold
|
|
|
3.4
|
|
|
|
5.7
|
|
|
|
6.3
|
|
|
|
10.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For additional information regarding the non-GAAP financial
measures, see "Non-GAAP Financial Measures" and "Reconciliation of
GAAP to Non-GAAP Financial Measures" below.
|
For additional information regarding our quarterly reporting
calendar, see "Change to Quarterly Reporting Calendar" below.
|
|
Second Quarter 2017 Financial Highlights
-
U.S. revenue contracted 55% to $199 million, EMEA revenue grew 9% to
$109 million, APAC revenue grew 46% to $21 million, and Americas
excluding U.S. revenue contracted 11% to $24 million, all
year-over-year from the second quarter of 2016.
-
New products introduced in the last 12 months, Fitbit Charge 2™,
Fitbit Alta HR™, and Fitbit Flex 2™ represented 81% of revenue.
-
Average selling price increased 4% sequentially from the first quarter
of 2017 and 2% year-over-year from the second quarter of 2016 to
$100.76 per device.
-
Accessory and other revenue added the equivalent of $3.98 per device.
-
Gross margin was 42.2%, and non-GAAP gross margin was 43.0%, each
favorably impacted by product mix, the increase in average selling
price and lower warranty expense.
-
GAAP operating expenses declined 10% to $213 million and non-GAAP
operating expenses declined 7% to $191 million, both year-over-year
from the second quarter of 2016.
Second Quarter 2017 Business Highlights
-
Sold 3.4 million devices, up 14% sequentially from the first quarter
of 2017, down 40% year-over-year from the second quarter of 2016.
-
38% of the activations in the quarter came from customers who made
repeat purchases. Of the repeat purchasers, 39% came from customers
who were inactive for 90 days or greater.
-
The Fitbit app was the #1 downloaded health and fitness application,
based on U.S. downloads, on both the iOS and Android platforms.
-
The Community section in the Fitbit app, which includes a Feed feature
designed to increase engagement and offer users a supportive
environment continued to grow. Since launching the feature in March
2017, more than 2.5 million users have joined a Group and more than
11.2 million users have utilized the Feed, with more than 648 million
views of shared posts.
Third Quarter 2017 Guidance
-
Revenue in the range of $380 million to $400 million.
-
Non-GAAP net loss per share in the range of ($0.05) to ($0.02).
-
Adjusted EBITDA loss in the range of ($12) million to breakeven.
-
Effective non-GAAP tax rate of approximately 46%.
-
Stock-based compensation expense estimated in the range of $23 million
to $25 million and share count of approximately 230 million.
Full Year 2017 Guidance
-
Revenue in the range of $1.55 billion to $1.7 billion.
-
Non-GAAP gross margin of 42.5% to 44%.
-
Non-GAAP net loss per share in the range of ($0.40) to ($0.22).
-
Non-GAAP free cash flow loss in the range of ($80) million to ($50)
million.
-
Effective non-GAAP tax rate of approximately 46%.
-
Stock-based compensation expense in the range of $90 million to $100
million and share count of approximately 230 million.
For additional information regarding the non-GAAP financial measures
presented above, see "Non-GAAP Financial Measures" below.
Webcast and Conference Call Information
Fitbit will host a conference call today at 5:00 p.m. Eastern Time, 2:00
p.m. Pacific Time, to discuss its results. Investors may access a free,
live webcast of the call through the Investor section of Fitbit's
website at investor.fitbit.com.
The call can also be accessed by dialing (877) 719-9786 or (719)
325-2499, access code 5413896. A replay of the call will be archived on
Fitbit's website for the following six months.
Forward Looking Statements
This press release contains forward-looking statements that involve
risks and uncertainties, including statements regarding our outlook for
the third quarter 2017 and full year 2017, the quality of our smartwatch
user experience, the timing of the retail availability of our
smartwatch, our performance in the second half of the year, and our
long-term market opportunity. These forward-looking statements are only
predictions and may differ materially from actual results due to a
variety of factors, including: the effects of the highly competitive
market in which we operate, including competition from much larger
technology companies; our ability to anticipate and satisfy consumer
preferences in a timely manner; our ability to successfully develop and
timely introduce new products and services or enhance existing products
and services; retail and customer acceptance of existing and new
products; any inability to accurately forecast consumer demand and
adequately manage our inventory; our ability to ship products on the
timelines we anticipate and unexpected delays; our ability to detect,
prevent or fix quality issues in our products or services; uncertain
ability to retain employees; our reliance on third-party suppliers,
contract manufacturers, and logistics providers, and our limited control
over such parties; delays in procuring components and product from these
third parties or their suppliers; the ability of third parties to
successfully manufacture and ship in a timely manner quality products;
seasonality; product liability issues, security breaches or other
defects, which may adversely affect product performance, our reputation
and brand awareness and overall market acceptance of our products and
services; ability to integrate acquired technologies and employees into
our operations, particularly in new geographies; warranty claims; the
fact that the market for connected health and fitness devices is
relatively new and unproven; the ability of our channel partners to sell
our products; litigation and related costs; privacy; and other general
market, political, economic and business conditions.
Additional risks and uncertainties that could affect our financial
results are included under the caption "Risk Factors" in our Annual
Report on Form 10-K for the full year ended December 31, 2016, and our
most recently filed Quarterly Report on Form 10-Q which are available on
our Investor Relations website at investor.fitbit.com and on the SEC
website at www.sec.gov.
All forward-looking statements contained herein are based on information
available to us as of the date hereof and we do not assume any
obligation to update these statements as a result of new information or
future events.
Change to Quarterly Reporting Calendar
Our fiscal year ends on December 31 of each year. In the first quarter
of 2016, we adopted a 4-4-5 week quarterly calendar. We did not adjust
operating results for quarters prior to 2016. There were 91 days in each
of the three months ended July 1, 2017 and July 2, 2016.
Disclosure of Material Information
Fitbit announces material information to its investors using SEC
filings, press releases, public conference calls and on its Investor
Relations page on the company's website at http://investor.fitbit.com.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared
and presented in accordance with GAAP, we use the following non-GAAP
financial measures in this press release: non-GAAP gross profit,
non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating
income (loss), non-GAAP net income (loss), non-GAAP diluted net income
or loss per share, adjusted EBITDA, and non-GAAP effective tax rate. The
presentation of these financial measures is not intended to be
considered in isolation or as a substitute for, or superior to,
financial information prepared and presented in accordance with GAAP.
We use non-GAAP measures to internally evaluate and analyze financial
results. We believe these non-GAAP financial measures provide investors
with useful supplemental information about the financial performance of
our business, enable comparison of financial results between periods
where certain items may vary independent of business performance, and
enable comparison of our financial results with other public companies,
many of which present similar non-GAAP financial measures.
There are limitations associated with the use of non-GAAP financial
measures as an analytical tool. In particular, many of the adjustments
to our GAAP financial measures reflect the exclusion of certain items,
specifically stock-based compensation expense, depreciation,
amortization of intangible assets, interest income (expense), net and
the related income tax effects of the aforementioned exclusions, that
are recurring and will be reflected in our financial results for the
foreseeable future. In addition, these measures may be different from
non-GAAP financial measures used by other companies, limiting their
usefulness for comparison purposes. A reconciliation of our non-GAAP
financial measures to their most directly comparable GAAP measures has
been provided in the financial statement tables included in this press
release, and investors are encouraged to review the reconciliation.
Guidance for non-GAAP financial measures excludes Jawbone litigation
costs, stock-based compensation, impact of restructuring, amortization
of acquired intangible assets, and tax effects associated with these
items. We have not reconciled guidance for non-GAAP financial measures
to their most directly comparable GAAP measures because certain items
that impact these measures are uncertain, out of our control and/or
cannot be reasonably predicted. Accordingly, a reconciliation of the
non-GAAP financial measure guidance to the corresponding GAAP measures
is not available without unreasonable effort.
The following are explanations of the adjustments that are reflected in
one or more of our non-GAAP financial measures:
-
Stock-based compensation expense relates to equity awards granted
primarily to our employees. We exclude stock-based compensation
expense because we believe that the non-GAAP financial measures
excluding this item provide meaningful supplemental information
regarding operational performance. In particular, companies calculate
stock-based compensation expense using a variety of valuation
methodologies and subjective assumptions.
-
In January 2017, the Company conducted a reorganization of its
business, including a reduction in workforce. The restructuring costs
impacted our results for the first quarter of 2017. Restructuring
costs primarily included severance-related costs. We believe that
excluding this expense provides greater visibility to the underlying
performance of our business operations, facilitates comparison of our
results with other periods, and may also facilitate comparison with
the results of other companies in our industry.
-
Litigation expense relates to legal costs incurred due to litigation
with Aliphcom, Inc. d/b/a Jawbone. We exclude these expenses because
we do not believe these expenses have a direct correlation to the
operations of our business and because of the singular nature of the
claims underlying the Jawbone litigation matters. We began excluding
Jawbone litigation costs in the second quarter of 2016 as these costs
significantly increased in 2016, and may continue to be material for
the remainder of 2017. Although not excluded in reporting for the
first quarter of 2016, these litigation expenses were $9.1 million in
that quarter.
-
In March 2014, we recalled the Fitbit Force after some of our users
experienced allergic reactions to adhesives in the wristband. This
recall primarily impacted our results for the fourth quarter of 2013,
the first quarter of 2014 and the fourth quarter of 2015.
-
Amortization of intangible assets relates to our acquisition of
FitStar, Pebble and Vector. We exclude these amortization expenses
because we do not believe these expenses have a direct correlation to
the operation of our business.
-
Income tax effect of non-GAAP adjustments relates to the tax effect of
the adjustments that we incorporate into non-GAAP financial measures
such as stock-based compensation, amortization of intangibles,
restructuring and valuation allowance in order to provide a more
meaningful measure of non-GAAP net income (loss).
About Fitbit, Inc. (NYSE: FIT)
Fitbit helps people lead healthier, more active lives by empowering them
with data, inspiration and guidance to reach their goals. As the leading
global wearables brand, Fitbit designs products and experiences that
track everyday health and fitness. Fitbit's diverse line of
award-winning products
includes Fitbit Surge®, Fitbit Blaze®, Fitbit Charge 2™, Alta
HR™, Alta®, Fitbit Flex 2™, Fitbit One® and Fitbit Zip® activity
trackers, as well as the Aria® Wi-Fi Smart Scale. Fitbit products are
carried in 54,000 retail stores and in 65 countries around the globe.
Fitbit Health Solutions develops health and wellness solutions designed
to help increase engagement, improve health outcomes, and drive a
positive return for employers, health plans and health systems. Fitstar
by Fitbit offers a digital health and fitness platform that helps and
inspires users to get fit anytime, anywhere, and has a footprint of over
9 million downloads across the Fitstar Personal Trainer and Fitstar Yoga
apps, with availability in 155 countries.
Fitbit and the Fitbit logo are trademarks or registered trademarks
of Fitbit, Inc. in the U.S. and other countries. Additional Fitbit
trademarks can be found at www.fitbit.com/legal/trademark-list.
Third-party trademarks are the property of their respective owners.
Connect with us on Facebook, Instagram or Twitter and
share your Fitbit experience.
|
FITBIT, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands, except for per share amounts)
|
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
July 1, 2017
|
|
|
July 2, 2016
|
|
|
July 1, 2017
|
|
|
July 2, 2016
|
Revenue
|
|
|
$
|
353,299
|
|
|
|
$
|
586,528
|
|
|
|
$
|
652,241
|
|
|
|
$
|
1,091,884
|
Cost of revenue
|
|
|
204,054
|
|
|
|
341,559
|
|
|
|
384,697
|
|
|
|
613,160
|
Gross profit
|
|
|
149,245
|
|
|
|
244,969
|
|
|
|
267,544
|
|
|
|
478,724
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
80,543
|
|
|
|
79,909
|
|
|
|
168,301
|
|
|
|
152,157
|
Sales and marketing
|
|
|
100,732
|
|
|
|
118,138
|
|
|
|
191,906
|
|
|
|
225,189
|
General and administrative
|
|
|
31,379
|
|
|
|
37,262
|
|
|
|
62,125
|
|
|
|
72,964
|
Total operating expenses
|
|
|
212,654
|
|
|
|
235,309
|
|
|
|
422,332
|
|
|
|
450,310
|
Operating income (expense)
|
|
|
(63,409
|
)
|
|
|
9,660
|
|
|
|
(154,788
|
)
|
|
|
28,414
|
Interest income, net
|
|
|
193
|
|
|
|
839
|
|
|
|
1,289
|
|
|
|
1,421
|
Other income, net
|
|
|
303
|
|
|
|
(463
|
)
|
|
|
836
|
|
|
|
1,105
|
Income (loss) before income taxes
|
|
|
(62,913
|
)
|
|
|
10,036
|
|
|
|
(152,663
|
)
|
|
|
30,940
|
Income tax expense (benefit)
|
|
|
(4,673
|
)
|
|
|
3,695
|
|
|
|
(34,344
|
)
|
|
|
13,564
|
Net income (loss)
|
|
|
$
|
(58,240
|
)
|
|
|
$
|
6,341
|
|
|
|
$
|
(118,319
|
)
|
|
|
$
|
17,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.25
|
)
|
|
|
$
|
0.03
|
|
|
|
$
|
(0.52
|
)
|
|
|
$
|
0.08
|
Diluted
|
|
|
$
|
(0.25
|
)
|
|
|
$
|
0.03
|
|
|
|
$
|
(0.52
|
)
|
|
|
$
|
0.07
|
Weighted average shares used to compute net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
230,322
|
|
|
|
218,850
|
|
|
|
228,788
|
|
|
|
217,431
|
Diluted
|
|
|
230,322
|
|
|
|
242,328
|
|
|
|
228,788
|
|
|
|
242,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FITBIT, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
July 1, 2017
|
|
|
December 31, 2016
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
318,708
|
|
|
|
$
|
301,320
|
|
Marketable securities
|
|
|
357,090
|
|
|
|
404,693
|
|
Accounts receivable, net
|
|
|
216,346
|
|
|
|
477,825
|
|
Inventories
|
|
|
141,504
|
|
|
|
230,387
|
|
Prepaid expenses and other current assets
|
|
|
97,717
|
|
|
|
66,346
|
|
Total current assets
|
|
|
1,131,365
|
|
|
|
1,480,571
|
|
Property and equipment, net
|
|
|
80,135
|
|
|
|
76,553
|
|
Goodwill
|
|
|
51,036
|
|
|
|
51,036
|
|
Intangible assets, net
|
|
|
24,768
|
|
|
|
27,521
|
|
Deferred tax assets
|
|
|
162,899
|
|
|
|
174,097
|
|
Other assets
|
|
|
10,886
|
|
|
|
10,448
|
|
Total assets
|
|
|
$
|
1,461,089
|
|
|
|
$
|
1,820,226
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
83,966
|
|
|
|
$
|
313,773
|
|
Accrued liabilities
|
|
|
347,517
|
|
|
|
390,561
|
|
Deferred revenue
|
|
|
44,427
|
|
|
|
49,904
|
|
Income taxes payable
|
|
|
599
|
|
|
|
7,694
|
|
Total current liabilities
|
|
|
476,509
|
|
|
|
761,932
|
|
Other liabilities
|
|
|
59,244
|
|
|
|
59,762
|
|
Total liabilities
|
|
|
535,753
|
|
|
|
821,694
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Common stock and additional paid-in capital
|
|
|
911,080
|
|
|
|
859,368
|
|
Accumulated other comprehensive loss
|
|
|
(12,733
|
)
|
|
|
(978
|
)
|
Retained earnings
|
|
|
26,989
|
|
|
|
140,142
|
|
Total stockholders' equity
|
|
|
925,336
|
|
|
|
998,532
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
1,461,089
|
|
|
|
$
|
1,820,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(In thousands, except percentages and per share amounts)
|
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
July 1, 2017
|
|
|
July 2, 2016
|
|
|
July 1, 2017
|
|
|
July 2, 2016
|
Non-GAAP gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
|
$
|
149,245
|
|
|
|
$
|
244,969
|
|
|
|
$
|
267,544
|
|
|
|
$
|
478,724
|
|
Stock-based compensation expense
|
|
|
1,492
|
|
|
|
1,084
|
|
|
|
1,510
|
|
|
|
2,393
|
|
Impact of restructuring
|
|
|
-
|
|
|
|
-
|
|
|
|
37
|
|
|
|
-
|
|
Intangible assets amortization
|
|
|
1,319
|
|
|
|
451
|
|
|
|
2,638
|
|
|
|
903
|
|
Non-GAAP gross profit
|
|
|
$
|
152,056
|
|
|
|
$
|
246,504
|
|
|
|
$
|
271,729
|
|
|
|
$
|
482,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin
|
|
|
42.2
|
%
|
|
|
41.8
|
%
|
|
|
41.0
|
%
|
|
|
43.8
|
%
|
Stock-based compensation expense
|
|
|
0.4
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Impact of restructuring
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
|
|
0.0
|
|
Intangible assets amortization
|
|
|
0.4
|
|
|
|
0.0
|
|
|
|
0.4
|
|
|
|
0.1
|
|
Non-GAAP gross margin
|
|
|
43.0
|
%
|
|
|
42.0
|
%
|
|
|
41.6
|
%
|
|
|
44.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP research and development:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP research and development
|
|
|
$
|
80,543
|
|
|
|
$
|
79,909
|
|
|
|
$
|
168,301
|
|
|
|
$
|
152,157
|
|
Stock-based compensation expense
|
|
|
(12,648
|
)
|
|
|
(11,725
|
)
|
|
|
(26,992
|
)
|
|
|
(22,118
|
)
|
Impact of restructuring
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,744
|
)
|
|
|
-
|
|
Non-GAAP research and development
|
|
|
$
|
67,895
|
|
|
|
$
|
68,184
|
|
|
|
$
|
138,565
|
|
|
|
$
|
130,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP sales and marketing:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP sales and marketing
|
|
|
$
|
100,732
|
|
|
|
$
|
118,138
|
|
|
|
$
|
191,906
|
|
|
|
$
|
225,189
|
|
Stock-based compensation expense
|
|
|
(3,987
|
)
|
|
|
(2,927
|
)
|
|
|
(7,235
|
)
|
|
|
(5,462
|
)
|
Impact of restructuring
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,000
|
)
|
|
|
-
|
|
Non-GAAP sales and marketing
|
|
|
$
|
96,745
|
|
|
|
$
|
115,211
|
|
|
|
$
|
182,671
|
|
|
|
$
|
219,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP general and administrative:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP general and administrative
|
|
|
$
|
31,379
|
|
|
|
$
|
37,262
|
|
|
|
$
|
62,125
|
|
|
|
$
|
72,964
|
|
Stock-based compensation expense
|
|
|
(3,839
|
)
|
|
|
(4,664
|
)
|
|
|
(7,994
|
)
|
|
|
(8,197
|
)
|
Impact of restructuring
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,594
|
)
|
|
|
-
|
|
Litigation expense - Jawbone
|
|
|
(1,533
|
)
|
|
|
(11,558
|
)
|
|
|
(1,419
|
)
|
|
|
(11,558
|
)
|
Impact of Fitbit Force recall
|
|
|
-
|
|
|
|
11
|
|
|
|
-
|
|
|
|
-
|
|
Intangible assets amortization
|
|
|
(58
|
)
|
|
|
(82
|
)
|
|
|
(115
|
)
|
|
|
(163
|
)
|
Non-GAAP general and administrative
|
|
|
$
|
25,949
|
|
|
|
$
|
20,969
|
|
|
|
$
|
51,003
|
|
|
|
$
|
53,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(In thousands, except percentages and per share amounts)
|
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
July 1, 2017
|
|
|
July 2, 2016
|
|
|
July 1, 2017
|
|
|
July 2, 2016
|
Non-GAAP operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses
|
|
|
$
|
212,654
|
|
|
|
$
|
235,309
|
|
|
|
$
|
422,332
|
|
|
|
$
|
450,310
|
|
Stock-based compensation expense
|
|
|
(20,474
|
)
|
|
|
(19,316
|
)
|
|
|
(42,221
|
)
|
|
|
(35,777
|
)
|
Impact of restructuring
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,338
|
)
|
|
|
-
|
|
Litigation expense - Jawbone
|
|
|
(1,533
|
)
|
|
|
(11,558
|
)
|
|
|
(1,419
|
)
|
|
|
(11,558
|
)
|
Impact of Fitbit Force recall
|
|
|
-
|
|
|
|
11
|
|
|
|
-
|
|
|
|
-
|
|
Intangible assets amortization
|
|
|
(58
|
)
|
|
|
(82
|
)
|
|
|
(115
|
)
|
|
|
(163
|
)
|
Non-GAAP operating expenses
|
|
|
$
|
190,589
|
|
|
|
$
|
204,364
|
|
|
|
$
|
372,239
|
|
|
|
$
|
402,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss)
|
|
|
$
|
(63,409
|
)
|
|
|
$
|
9,660
|
|
|
|
$
|
(154,788
|
)
|
|
|
$
|
28,414
|
|
Stock-based compensation expense
|
|
|
21,966
|
|
|
|
20,400
|
|
|
|
43,731
|
|
|
|
38,170
|
|
Impact of restructuring
|
|
|
-
|
|
|
|
-
|
|
|
|
6,375
|
|
|
|
-
|
|
Litigation expense - Jawbone
|
|
|
1,533
|
|
|
|
11,558
|
|
|
|
1,419
|
|
|
|
11,558
|
|
Impact of Fitbit Force recall
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
-
|
|
|
|
-
|
|
Intangible assets amortization
|
|
|
1,377
|
|
|
|
533
|
|
|
|
2,753
|
|
|
|
1,066
|
|
Non-GAAP operating income (loss)
|
|
|
$
|
(38,533
|
)
|
|
|
$
|
42,140
|
|
|
|
$
|
(100,510
|
)
|
|
|
$
|
79,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income (loss) and net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(58,240
|
)
|
|
|
$
|
6,341
|
|
|
|
$
|
(118,319
|
)
|
|
|
$
|
17,376
|
|
Stock-based compensation expense
|
|
|
21,966
|
|
|
|
20,400
|
|
|
|
43,731
|
|
|
|
38,170
|
|
Impact of restructuring
|
|
|
-
|
|
|
|
-
|
|
|
|
6,375
|
|
|
|
-
|
|
Litigation expense - Jawbone
|
|
|
1,533
|
|
|
|
11,558
|
|
|
|
1,419
|
|
|
|
11,558
|
|
Impact of Fitbit Force recall
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
-
|
|
|
|
-
|
|
Intangible assets amortization
|
|
|
1,377
|
|
|
|
533
|
|
|
|
2,753
|
|
|
|
1,066
|
|
Income tax effect of non-GAAP adjustments
|
|
|
14,056
|
|
|
|
(9,297
|
)
|
|
|
10,335
|
|
|
|
(14,126
|
)
|
Non-GAAP net income (loss)
|
|
|
$
|
(19,308
|
)
|
|
|
$
|
29,524
|
|
|
|
$
|
(53,706
|
)
|
|
|
$
|
54,044
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted shares
|
|
|
230,322
|
|
|
|
242,328
|
|
|
|
228,788
|
|
|
|
242,143
|
|
Other dilutive equity awards
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Non-GAAP diluted shares
|
|
|
230,322
|
|
|
|
242,328
|
|
|
|
228,788
|
|
|
|
242,143
|
|
Non-GAAP diluted net income (loss) per share
|
|
|
$
|
(0.08
|
)
|
|
|
$
|
0.12
|
|
|
|
$
|
(0.23
|
)
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(In thousands, except percentages and per share amounts)
|
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
July 1,
|
|
|
July 2,
|
|
|
July 1,
|
|
|
July 2,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
(58,240
|
)
|
|
|
$
|
6,341
|
|
|
|
$
|
(118,319
|
)
|
|
|
$
|
17,376
|
|
Impact of Fitbit Force recall
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
-
|
|
|
|
-
|
|
Stock-based compensation expense
|
|
|
21,966
|
|
|
|
20,400
|
|
|
|
43,731
|
|
|
|
38,170
|
|
Impact of restructuring
|
|
|
-
|
|
|
|
-
|
|
|
|
6,375
|
|
|
|
-
|
|
Litigation expense - Jawbone
|
|
|
1,533
|
|
|
|
11,558
|
|
|
|
1,419
|
|
|
|
11,558
|
|
Depreciation and intangible assets amortization
|
|
|
11,435
|
|
|
|
7,178
|
|
|
|
21,952
|
|
|
|
14,186
|
|
Interest income, net
|
|
|
(193
|
)
|
|
|
(839
|
)
|
|
|
(1,289
|
)
|
|
|
(1,421
|
)
|
Income tax expense (benefit)
|
|
|
(4,673
|
)
|
|
|
3,695
|
|
|
|
(34,344
|
)
|
|
|
13,564
|
|
Adjusted EBITDA
|
|
|
$
|
(28,172
|
)
|
|
|
$
|
48,322
|
|
|
|
$
|
(80,475
|
)
|
|
|
$
|
93,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
$
|
1,492
|
|
|
|
$
|
1,084
|
|
|
|
$
|
1,510
|
|
|
|
$
|
2,393
|
|
Research and development
|
|
|
12,648
|
|
|
|
11,725
|
|
|
|
27,333
|
|
|
|
22,118
|
|
Sales and marketing
|
|
|
3,987
|
|
|
|
2,927
|
|
|
|
7,622
|
|
|
|
5,462
|
|
General and administrative
|
|
|
3,839
|
|
|
|
4,664
|
|
|
|
7,994
|
|
|
|
8,197
|
|
Total stock-based compensation expense*
|
|
|
$
|
21,966
|
|
|
|
$
|
20,400
|
|
|
|
$
|
44,459
|
|
|
|
$
|
38,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* A portion of stock-based compensation expense for the six months
ended July 1, 2017 was allocated to and included in "Impact of
restructuring," thus explaining the difference between the total
stock-based compensation expense by function presented in the
immediately above table compared to the amounts presented in the
other tables presented above.
|
|
|
FITBIT, INC.
|
Revenue by Geographical Region
|
(In thousands)
|
(unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
July 1,
|
|
|
July 2,
|
|
|
July 1,
|
|
|
July 2,
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
$
|
199,201
|
|
|
|
$
|
445,192
|
|
|
|
$
|
369,621
|
|
|
|
$
|
796,877
|
Americas, excluding United States
|
|
|
24,412
|
|
|
|
27,375
|
|
|
|
44,380
|
|
|
|
50,769
|
Europe, Middle East, and Africa
|
|
|
108,601
|
|
|
|
99,471
|
|
|
|
196,373
|
|
|
|
174,195
|
APAC
|
|
|
21,085
|
|
|
|
14,490
|
|
|
|
41,867
|
|
|
|
70,043
|
Total
|
|
|
$
|
353,299
|
|
|
|
$
|
586,528
|
|
|
|
$
|
652,241
|
|
|
|
$
|
1,091,884
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170802006242/en/
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