[August 01, 2018] |
|
Fitbit Reports Second Quarter 2018 Results
Fitbit, Inc. (NYSE:FIT), the leading global wearables brand, today
reported revenue of $299 million, GAAP net loss per share of ($0.49),
non-GAAP net loss per share of ($0.22), GAAP net loss of ($118) million,
non-GAAP net loss of ($54) million, cash flow from operations of ($67)
million and free cash flow of ($83) million for its second quarter of
2018.
"Our performance in Q2 represents the sixth consecutive quarter that we
have delivered on our financial commitments, made important progress in
transforming our business, and continued to adapt to the changing
wearables market. Demand for Versa, our first 'mass-appeal' smartwatch,
is very strong. Within the second quarter, Versa outsold Samsung, Garmin
and Fossil smartwatches combined in North America, improving our
position with retailers, solidifying shelf space for the Fitbit brand
and providing a halo effect to our other product offerings," said James
Park, co-founder and CEO.
|
Second Quarter 2018
|
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
In millions, except percentages and per share amounts
|
|
June 30, 2018
|
|
July 1, 2017
|
|
June 30, 2018
|
|
July 1, 2017
|
GAAP Results
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
299.3
|
|
|
$
|
353.3
|
|
|
$
|
547.2
|
|
|
$
|
652.2
|
|
Gross Margin
|
|
39.8
|
%
|
|
42.2
|
%
|
|
42.6
|
%
|
|
41.0
|
%
|
Net Loss
|
|
$
|
(118.3
|
)
|
|
$
|
(58.2
|
)
|
|
$
|
(199.1
|
)
|
|
$
|
(118.3
|
)
|
Net Loss Per Share
|
|
$
|
(0.49
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.83
|
)
|
|
$
|
(0.52
|
)
|
Non-GAAP Results
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
40.9
|
%
|
|
43.0
|
%
|
|
43.7
|
%
|
|
41.6
|
%
|
Net Loss
|
|
$
|
(54.2
|
)
|
|
$
|
(19.3
|
)
|
|
$
|
(95.2
|
)
|
|
$
|
(53.7
|
)
|
Net Loss Per Share
|
|
$
|
(0.22
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.23
|
)
|
Adjusted EBITDA
|
|
$
|
(55.8
|
)
|
|
$
|
(28.2
|
)
|
|
$
|
(102.0
|
)
|
|
$
|
(80.5
|
)
|
Devices Sold
|
|
2.7
|
|
|
3.4
|
|
|
4.8
|
|
|
6.3
|
|
|
For additional information regarding the non-GAAP financial
measures, see "Non-GAAP Financial Measures" and "Reconciliation of
GAAP to Non-GAAP Financial Measures" below.
|
Second Quarter 2018 Financial Highlights
-
Sold 2.7 million wearable devices. Average selling price increased 6%
year-over-year to $106 per device driven by the growing mix of
smartwatches.
-
U.S. revenue represented 61% of revenue or $182 million, down 8%
year-over-year.
-
International revenue represented 39% and declined 24% year-over-year
to $117 million: EMEA revenue declined 39% to $66 million; Americas
excluding U.S. revenue declined 35% to $16 million; and APAC revenue
grew 66% to $35 million, all year-over-year, respectively.
-
New devices introduced in the past year, Fitbit IonicTM,
Fitbit VersaTM, Fitbit AceTM and Fitbit Aria 2TM
and accessory Fitbit Flyer, represented 59% of revenue.
-
GAAP gross margin was 39.8%, and non-GAAP gross margin was 40.9%. Both
GAAP and non-GAAP gross margins were negatively impacted by the change
in mix towards smartwatches, partially offset by improved warranty
costs.
-
GAAP operating expenses represented 73% of revenue, and non-GAAP
operating expenses represented 65% of revenue.
Second Quarter 2018 Operational Highlights
-
Smartwatch revenue grew to 55% of revenue, up from 30% on a sequential
basis.
-
Versa outsold Samsung, Garmin and Fossil smartwatches combined in
North America.
-
The retail channel reduced tracker inventory, depressing reorder rates
and tracker sales. EMEA was disproportionately exposed as tracker
revenue was a larger percentage of revenue in the region as compared
to the U.S. in prior quarters. We expect Q2 to be the trough in the
year-over-year decline in tracker sales.
-
Active community of users: 56% of our active users viewed Fitbit Feed
in the quarter and our female health tracking feature has experienced
more than 2.9 million total signups.
-
60% of activations came from new users, while 40% came from repeat
buyers. Of the repeat buyers, 51% were previously inactive for 90 days
or greater, up from 39% in Q2 2017, driven by smartwatches.
Third Quarter 2018 Guidance
-
We expect revenue to decline (3%) year-over-year to a range of $370
million to $390 million, and the EMEA region to return back to growth.
-
Non-GAAP basic net (loss) income per share in the range of ($.02) to
$.01.
-
Capital expenditures as a percentage of revenue of approximately 5%.
-
We anticipate free cash flow to be approximately ($30) million,
excluding $72 million in tax refund payments that we received in early
July 2018.
-
Non-GAAP effective tax rate of approximately 2%, but can vary
significantly depending on profitability.
-
Stock-based compensation expense of approximately $26 million and
basic share count of approximately 247 million.
Full Year 2018 Guidance
-
We reiterate our full-year 2018 revenue guidance of approximately $1.5
billion.
-
We expect the year-over-year decline in revenue from tracker devices
to improve, driven by clean channel inventory levels, consumer
feedback, and our product pipeline. In addition, we anticipate
additional supply of Versa to become available.
-
We expect gross margins to be approximately flat from the second
quarter.
-
We expect to drive non-GAAP operating expenses 7% lower, to a target
of $740 million.
-
Capital expenditures as a percentage of revenue of approximately 5%.
-
We expect free cash flow to decline less than revenue to approximately
($20) million for 2018. Guidance excludes the benefit of the tax
refund payment we received in early July and the potential impact of
tariffs.
-
We expect non-GAAP effective tax rate to be approximately 25%, but may
vary depending on geographic mix of revenue, tax credits, and shift to
profitability.
-
Stock-based compensation expense of approximately $102 million and
basic/diluted share count of approximately 248/260 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 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 (888) 468-2440 or (719)
325-4750, access code 7830797. 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 2018 and full year 2018; the rate of decline in
tracker sales; expected device mix; trends in revenue, average selling
price, operating expenses, capital expenditures, free cash flow, gross
margins, non-GAAP basic net (loss) income per share, stock-based
compensation expense and non-GAAP effective tax rate; growth in the EMEA
region; channel inventory levels; future product launches; product
supply, including supply of Versa; consumer and retail demand for
smartwatches and trackers; and any potential financial impact of
tariffs. 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; the impact of changes in tax law; the impact of tariffs;
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, 2017, and our
most recently filed Quarterly Report on Form 10-Q. 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.
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
loss, non-GAAP operating loss before income taxes, non-GAAP net loss,
non-GAAP diluted net loss per share, non-GAAP free cash flow, and
adjusted EBITDA. The presentation of these financial measures is not
intended to be considered in isolation or as a substitute for, or
superior to, financial information prepared and presented in accordance
with GAAP.
We use non-GAAP measures to internally evaluate and analyze financial
results. We believe these non-GAAP financial measures provide investors
with useful supplemental information about the financial performance of
our business, enable comparison of financial results between periods
where certain items may vary independent of business performance, and
enable comparison of our financial results with other public companies,
many of which present similar non-GAAP financial measures.
There are limitations associated with the use of non-GAAP financial
measures as an analytical tool. In particular, many of the adjustments
to our GAAP financial measures reflect the exclusion of certain items,
specifically stock-based compensation expense, depreciation,
amortization of intangible assets, interest income, net 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.
-
Amortization of intangible assets relates to our acquisition of
FitStar, Pebble, Vector and Twine Health. 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 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 and provide motivation for everyday health and fitness. Fitbit's
diverse line of innovative and popular products
include Fitbit Blaze®, Fitbit Charge 2®, Fitbit Alta HR™, Fitbit
Alta®, Fitbit Ace™, Fitbit Flex 2®, and Fitbit Zip® activity trackers,
as well as the Fitbit Ionic™ and Fitbit Versa™ smartwatches, Fitbit
Flyer™ wireless headphones and Fitbit Aria 2™Wi-Fi Smart Scale. Fitbit
products are carried in over 39,000 retail stores and in 86 countries
around the globe. Powered by one of the world's largest social fitness
networks and databases of health and fitness data, the Fitbit platform
delivers personalized experiences, insights and guidance through leading
software and interactive tools, including the Fitbit and Fitbit Coach
apps, and the Fitbit OS for smartwatches. Fitbit Health Solutions
develops health and wellness solutions designed to help increase
engagement, improve health outcomes, and drive a positive return for
employers, health plans and health systems.
Fitbit and the Fitbit logo are trademarks or registered trademarks
of Fitbit, Inc. in the 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 per share amounts)
|
(unaudited)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
June 30, 2018
|
|
July 1, 2017
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
299,344
|
|
|
$
|
353,299
|
|
|
$
|
547,209
|
|
|
$
|
652,241
|
|
Cost of revenue
|
|
180,329
|
|
|
204,054
|
|
|
314,071
|
|
|
384,697
|
|
Gross profit
|
|
119,015
|
|
|
149,245
|
|
|
233,138
|
|
|
267,544
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Research and development
|
|
87,047
|
|
|
80,543
|
|
|
176,383
|
|
|
168,301
|
|
Sales and marketing
|
|
100,845
|
|
|
100,732
|
|
|
172,897
|
|
|
191,906
|
|
General and administrative
|
|
30,211
|
|
|
31,379
|
|
|
66,299
|
|
|
62,125
|
|
Total operating expenses
|
|
218,103
|
|
|
212,654
|
|
|
415,579
|
|
|
422,332
|
|
Operating loss
|
|
(99,088
|
)
|
|
(63,409
|
)
|
|
(182,441
|
)
|
|
(154,788
|
)
|
Interest income, net
|
|
2,177
|
|
|
193
|
|
|
3,527
|
|
|
1,289
|
|
Other income, net
|
|
2,258
|
|
|
303
|
|
|
2,775
|
|
|
836
|
|
Loss before income taxes
|
|
(94,653
|
)
|
|
(62,913
|
)
|
|
(176,139
|
)
|
|
(152,663
|
)
|
Income tax expense (benefit)
|
|
23,615
|
|
|
(4,673
|
)
|
|
23,006
|
|
|
(34,344
|
)
|
Net loss
|
|
$
|
(118,268
|
)
|
|
$
|
(58,240
|
)
|
|
$
|
(199,145
|
)
|
|
$
|
(118,319
|
)
|
Net loss per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.49
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.83
|
)
|
|
$
|
(0.52
|
)
|
Diluted
|
|
$
|
(0.49
|
)
|
|
$
|
(0.25
|
)
|
|
$
|
(0.83
|
)
|
|
$
|
(0.52
|
)
|
Shares used to compute net loss per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
242,898
|
|
|
230,322
|
|
|
241,227
|
|
|
228,788
|
|
Diluted
|
|
242,898
|
|
|
230,322
|
|
|
241,227
|
|
|
228,788
|
|
|
FITBIT, INC.
|
Condensed Consolidated Balance Sheets
|
(In thousands)
|
(unaudited)
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
328,116
|
|
|
$
|
341,966
|
|
Marketable securities
|
|
252,347
|
|
|
337,334
|
|
Accounts receivable, net
|
|
242,038
|
|
|
406,019
|
|
Inventories
|
|
140,430
|
|
|
123,895
|
|
Income tax receivable
|
|
78,385
|
|
|
77,882
|
|
Prepaid expenses and other current assets
|
|
63,227
|
|
|
97,269
|
|
Total current assets
|
|
1,104,543
|
|
|
1,384,365
|
|
Property and equipment, net
|
|
110,185
|
|
|
104,908
|
|
Goodwill
|
|
61,058
|
|
|
51,036
|
|
Intangible assets, net
|
|
27,740
|
|
|
22,356
|
|
Deferred tax assets
|
|
3,528
|
|
|
3,990
|
|
Other assets
|
|
16,147
|
|
|
15,420
|
|
Total assets
|
|
$
|
1,323,201
|
|
|
$
|
1,582,075
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
155,970
|
|
|
$
|
212,731
|
|
Accrued liabilities
|
|
377,058
|
|
|
452,137
|
|
Deferred revenue
|
|
28,116
|
|
|
35,504
|
|
Income taxes payable
|
|
22,729
|
|
|
928
|
|
Total current liabilities
|
|
583,873
|
|
|
701,300
|
|
Long-term deferred revenue
|
|
4,719
|
|
|
6,928
|
|
Other liabilities
|
|
55,650
|
|
|
49,884
|
|
Total liabilities
|
|
644,242
|
|
|
758,112
|
|
|
Stockholders' equity:
|
|
|
|
|
Class A and Class B common stock
|
|
25
|
|
|
24
|
|
Additional paid-in capital
|
|
1,006,639
|
|
|
956,060
|
|
Accumulated other comprehensive income (loss)
|
|
4,679
|
|
|
(9
|
)
|
Accumulated deficit
|
|
(332,384
|
)
|
|
(132,112
|
)
|
Total stockholders' equity
|
|
678,959
|
|
|
823,963
|
|
Total liabilities and stockholders' equity
|
|
$
|
1,323,201
|
|
|
$
|
1,582,075
|
|
|
FITBIT, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
|
(In thousands)
|
(unaudited)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
June 30, 2018
|
|
July 1, 2017
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(118,268
|
)
|
|
$
|
(58,240
|
)
|
|
$
|
(199,145
|
)
|
|
$
|
(118,319
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:
|
|
|
|
|
|
|
|
|
Provision for inventory obsolescence
|
|
1,677
|
|
|
4,412
|
|
|
8,014
|
|
|
8,409
|
|
Depreciation
|
|
13,116
|
|
|
10,059
|
|
|
23,572
|
|
|
19,199
|
|
Write-off of property and equipment
|
|
226
|
|
|
5,851
|
|
|
7,485
|
|
|
5,250
|
|
Amortization of intangible assets
|
|
2,057
|
|
|
1,376
|
|
|
3,805
|
|
|
2,753
|
|
Stock-based compensation
|
|
25,857
|
|
|
21,966
|
|
|
49,498
|
|
|
44,459
|
|
Deferred income taxes
|
|
500
|
|
|
21,142
|
|
|
(1,299
|
)
|
|
16,137
|
|
Other
|
|
(144
|
)
|
|
1,010
|
|
|
(419
|
)
|
|
1,428
|
|
Changes in operating assets and liabilities, net of acquisition:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(27,787
|
)
|
|
(21,752
|
)
|
|
164,195
|
|
|
261,165
|
|
Inventories
|
|
3,090
|
|
|
54,293
|
|
|
(24,217
|
)
|
|
81,486
|
|
Prepaid expenses and other assets
|
|
(1,986
|
)
|
|
(49,348
|
)
|
|
37,624
|
|
|
(50,324
|
)
|
Fitbit Force recall reserve
|
|
(159
|
)
|
|
(205
|
)
|
|
(291
|
)
|
|
(500
|
)
|
Accounts payable
|
|
19,971
|
|
|
(40,340
|
)
|
|
(64,184
|
)
|
|
(216,959
|
)
|
Accrued liabilities and other liabilities
|
|
(3,886
|
)
|
|
8,210
|
|
|
(74,033
|
)
|
|
(43,963
|
)
|
Deferred revenue
|
|
(3,613
|
)
|
|
(2,477
|
)
|
|
(9,623
|
)
|
|
(5,477
|
)
|
Income taxes payable
|
|
21,974
|
|
|
(1,867
|
)
|
|
21,801
|
|
|
(1,516
|
)
|
Net cash (used in) provided by operating activities
|
|
(67,375
|
)
|
|
(45,910
|
)
|
|
(57,217
|
)
|
|
3,228
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
(15,908
|
)
|
|
(11,660
|
)
|
|
(28,524
|
)
|
|
(39,817
|
)
|
Purchases of marketable securities
|
|
(83,408
|
)
|
|
(188,017
|
)
|
|
(224,812
|
)
|
|
(317,678
|
)
|
Sales of marketable securities
|
|
22,975
|
|
|
9,550
|
|
|
73,770
|
|
|
13,806
|
|
Maturities of marketable securities
|
|
88,534
|
|
|
173,116
|
|
|
236,575
|
|
|
351,144
|
|
Acquisition, net of cash acquired
|
|
-
|
|
|
-
|
|
|
(13,646
|
)
|
|
-
|
|
Net cash provided by investing activities
|
|
12,193
|
|
|
(17,011
|
)
|
|
43,363
|
|
|
7,455
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
Repayment of debt
|
|
-
|
|
|
-
|
|
|
(747
|
)
|
|
-
|
|
Proceeds from issuance of common stock
|
|
9,746
|
|
|
8,826
|
|
|
10,738
|
|
|
11,407
|
|
Taxes paid related to net share settlement of restricted stock
units
|
|
(4,808
|
)
|
|
(2,107
|
)
|
|
(9,987
|
)
|
|
(5,234
|
)
|
Net cash provided by financing activities
|
|
4,938
|
|
|
6,719
|
|
|
4
|
|
|
6,173
|
|
Net (decrease) increase in cash and cash equivalents
|
|
(50,244
|
)
|
|
(56,202
|
)
|
|
(13,850
|
)
|
|
16,856
|
|
Effect of exchange rate on cash and cash equivalents
|
|
-
|
|
|
631
|
|
|
-
|
|
|
532
|
|
Cash and cash equivalents at beginning of period
|
|
378,360
|
|
|
374,279
|
|
|
341,966
|
|
|
301,320
|
|
Cash and cash equivalents at end of period
|
|
$
|
328,116
|
|
|
$
|
318,708
|
|
|
$
|
328,116
|
|
|
$
|
318,708
|
|
|
FITBIT, INC.
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
(In thousands, except percentages and per share amounts)
|
(unaudited)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
June 30, 2018
|
|
July 1, 2017
|
Non-GAAP gross profit:
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
$
|
119,015
|
|
|
$
|
149,245
|
|
|
$
|
233,138
|
|
|
$
|
267,544
|
|
Stock-based compensation expense
|
|
2,032
|
|
|
1,492
|
|
|
3,130
|
|
|
1,510
|
|
Impact of restructuring
|
|
-
|
|
|
-
|
|
|
-
|
|
|
37
|
|
Intangible assets amortization
|
|
1,516
|
|
|
1,319
|
|
|
3,032
|
|
|
2,638
|
|
Non-GAAP gross profit
|
|
$
|
122,563
|
|
|
$
|
152,056
|
|
|
$
|
239,300
|
|
|
$
|
271,729
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP gross margin (as a percentage of revenue):
|
|
|
|
|
|
|
|
|
GAAP gross margin
|
|
39.8
|
%
|
|
42.2
|
%
|
|
42.6
|
%
|
|
41.0
|
%
|
Stock-based compensation expense
|
|
0.7
|
|
|
0.4
|
|
|
0.6
|
|
|
0.2
|
|
Impact of restructuring
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Intangible assets amortization
|
|
0.5
|
|
|
0.4
|
|
|
0.6
|
|
|
0.4
|
|
Non-GAAP gross margin
|
|
40.9
|
%
|
|
43.0
|
%
|
|
43.7
|
%
|
|
41.6
|
%
|
|
|
|
|
|
|
|
|
|
Non-GAAP research and development:
|
|
|
|
|
|
|
|
|
GAAP research and development
|
|
$
|
87,047
|
|
|
$
|
80,543
|
|
|
$
|
176,383
|
|
|
$
|
168,301
|
|
Stock-based compensation expense
|
|
(15,090
|
)
|
|
(12,648
|
)
|
|
(29,762
|
)
|
|
(26,992
|
)
|
Impact of restructuring
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2,744
|
)
|
Non-GAAP research and development
|
|
$
|
71,957
|
|
|
$
|
67,895
|
|
|
$
|
146,621
|
|
|
$
|
138,565
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP sales and marketing:
|
|
|
|
|
|
|
|
|
GAAP sales and marketing
|
|
$
|
100,845
|
|
|
$
|
100,732
|
|
|
$
|
172,897
|
|
|
$
|
191,906
|
|
Stock-based compensation expense
|
|
(3,911
|
)
|
|
(3,987
|
)
|
|
(7,358
|
)
|
|
(7,235
|
)
|
Impact of restructuring
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2,000
|
)
|
Intangible assets amortization
|
|
(470
|
)
|
|
-
|
|
|
(630
|
)
|
|
-
|
|
Non-GAAP sales and marketing
|
|
$
|
96,464
|
|
|
$
|
96,745
|
|
|
$
|
164,909
|
|
|
$
|
182,671
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP general and administrative:
|
|
|
|
|
|
|
|
|
GAAP general and administrative
|
|
$
|
30,211
|
|
|
$
|
31,379
|
|
|
$
|
66,299
|
|
|
$
|
62,125
|
|
Stock-based compensation expense
|
|
(4,824
|
)
|
|
(3,839
|
)
|
|
(9,249
|
)
|
|
(7,994
|
)
|
Litigation expense
|
|
-
|
|
|
(1,533
|
)
|
|
(765
|
)
|
|
(1,419
|
)
|
Impact of restructuring
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,594
|
)
|
Intangible assets amortization
|
|
(71
|
)
|
|
(58
|
)
|
|
(143
|
)
|
|
(115
|
)
|
Non-GAAP general and administrative
|
|
$
|
25,316
|
|
|
$
|
25,949
|
|
|
$
|
56,142
|
|
|
$
|
51,003
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating expenses:
|
|
|
|
|
|
|
|
|
GAAP operating expenses
|
|
$
|
218,103
|
|
|
$
|
212,654
|
|
|
$
|
415,579
|
|
|
$
|
422,332
|
|
Stock-based compensation expense
|
|
(23,825
|
)
|
|
(20,474
|
)
|
|
(46,369
|
)
|
|
(42,221
|
)
|
Litigation expense
|
|
-
|
|
|
(1,533
|
)
|
|
(765
|
)
|
|
(1,419
|
)
|
Impact of restructuring
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(6,338
|
)
|
Intangible assets amortization
|
|
(541
|
)
|
|
(58
|
)
|
|
(773
|
)
|
|
(115
|
)
|
Non-GAAP operating expenses
|
|
$
|
193,737
|
|
|
$
|
190,589
|
|
|
$
|
367,672
|
|
|
$
|
372,239
|
|
|
FITBIT, INC.
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
(In thousands, except percentages and per share amounts)
|
(unaudited)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
June 30, 2018
|
|
July 1, 2017
|
Non-GAAP operating loss and loss before income taxes:
|
|
|
|
|
|
|
GAAP operating loss
|
|
$
|
(99,088
|
)
|
|
$
|
(63,409
|
)
|
|
$
|
(182,441
|
)
|
|
$
|
(154,788
|
)
|
Stock-based compensation expense
|
|
25,857
|
|
|
21,966
|
|
|
49,498
|
|
|
43,731
|
|
Litigation expense
|
|
-
|
|
|
1,533
|
|
|
765
|
|
|
1,419
|
|
Impact of restructuring
|
|
-
|
|
|
-
|
|
|
-
|
|
|
6,375
|
|
Intangible assets amortization
|
|
2,057
|
|
|
1,377
|
|
|
3,805
|
|
|
2,753
|
|
Non-GAAP operating loss
|
|
(71,174
|
)
|
|
(38,533
|
)
|
|
(128,373
|
)
|
|
(100,510
|
)
|
Interest income, net
|
|
2,177
|
|
|
193
|
|
|
3,527
|
|
|
1,289
|
|
Other income, net
|
|
2,258
|
|
|
303
|
|
|
2,775
|
|
|
836
|
|
Non-GAAP operating loss before income taxes
|
|
$
|
(66,739
|
)
|
|
$
|
(38,037
|
)
|
|
$
|
(122,071
|
)
|
|
$
|
(98,385
|
)
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss and net loss per share:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(118,268
|
)
|
|
$
|
(58,240
|
)
|
|
$
|
(199,145
|
)
|
|
$
|
(118,319
|
)
|
Stock-based compensation expense
|
|
25,857
|
|
|
21,966
|
|
|
49,498
|
|
|
43,731
|
|
Litigation expense
|
|
-
|
|
|
1,533
|
|
|
765
|
|
|
1,419
|
|
Impact of restructuring
|
|
-
|
|
|
-
|
|
|
-
|
|
|
6,375
|
|
Intangible assets amortization
|
|
2,057
|
|
|
1,377
|
|
|
3,805
|
|
|
2,753
|
|
Income tax effect of non-GAAP adjustments
|
|
36,121
|
|
|
14,056
|
|
|
49,888
|
|
|
10,335
|
|
Non-GAAP net loss
|
|
$
|
(54,233
|
)
|
|
$
|
(19,308
|
)
|
|
$
|
(95,189
|
)
|
|
$
|
(53,706
|
)
|
|
|
|
|
|
|
|
|
|
GAAP diluted shares
|
|
242,898
|
|
|
230,322
|
|
|
241,227
|
|
|
228,788
|
|
Other dilutive equity awards
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Non-GAAP diluted shares
|
|
242,898
|
|
|
230,322
|
|
|
241,227
|
|
|
228,788
|
|
Non-GAAP diluted net loss per share
|
|
$
|
(0.22
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.23
|
)
|
|
|
|
|
|
|
|
|
|
Non-GAAP free cash flow:
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
(67,375
|
)
|
|
$
|
(45,910
|
)
|
|
$
|
(57,217
|
)
|
|
$
|
3,228
|
|
Purchases of property and equipment
|
|
(15,908
|
)
|
|
(11,660
|
)
|
|
(28,524
|
)
|
|
(39,817
|
)
|
Non-GAAP free cash flow
|
|
$
|
(83,283
|
)
|
|
$
|
(57,570
|
)
|
|
$
|
(85,741
|
)
|
|
$
|
(36,589
|
)
|
Net cash provided by investing activities
|
|
$
|
12,193
|
|
|
$
|
(17,011
|
)
|
|
$
|
43,363
|
|
|
$
|
7,455
|
|
Net cash used in financing activities
|
|
$
|
4,938
|
|
|
$
|
6,719
|
|
|
$
|
4
|
|
|
$
|
6,173
|
|
|
FITBIT, INC.
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
(In thousands, except percentages and per share amounts)
|
(unaudited)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
June 30, 2018
|
|
July 1, 2017
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(118,268
|
)
|
|
$
|
(58,240
|
)
|
|
$
|
(199,145
|
)
|
|
$
|
(118,319
|
)
|
Stock-based compensation expense*
|
|
25,857
|
|
|
21,966
|
|
|
49,498
|
|
|
43,731
|
|
Litigation expense
|
|
-
|
|
|
1,533
|
|
|
765
|
|
|
1,419
|
|
Impact of restructuring
|
|
-
|
|
|
-
|
|
|
-
|
|
|
6,375
|
|
Depreciation and intangible assets amortization
|
|
15,173
|
|
|
11,435
|
|
|
27,377
|
|
|
21,952
|
|
Interest income, net
|
|
(2,177
|
)
|
|
(193
|
)
|
|
(3,527
|
)
|
|
(1,289
|
)
|
Income tax expense (benefit)
|
|
23,615
|
|
|
(4,673
|
)
|
|
23,006
|
|
|
(34,344
|
)
|
Adjusted EBITDA
|
|
$
|
(55,800
|
)
|
|
$
|
(28,172
|
)
|
|
$
|
(102,026
|
)
|
|
$
|
(80,475
|
)
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense:
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
$
|
2,032
|
|
|
$
|
1,492
|
|
|
$
|
3,130
|
|
|
$
|
1,510
|
|
Research and development
|
|
15,090
|
|
|
12,648
|
|
|
29,761
|
|
|
27,333
|
|
Sales and marketing
|
|
3,911
|
|
|
3,987
|
|
|
7,358
|
|
|
7,622
|
|
General and administrative
|
|
4,824
|
|
|
3,839
|
|
|
9,249
|
|
|
7,994
|
|
Total stock-based compensation expense*
|
|
$
|
25,857
|
|
|
$
|
21,966
|
|
|
$
|
49,498
|
|
|
$
|
44,459
|
|
* 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 by
function presented in this table compared to the amounts presented
in the above tables.
|
|
FITBIT, INC.
|
REVENUE BY GEOGRAPHICAL REGION
|
(In thousands)
|
(unaudited)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30, 2018
|
|
July 1, 2017
|
|
June 30, 2018
|
|
July 1, 2017
|
United States
|
|
$
|
182,451
|
|
|
$
|
199,201
|
|
|
$
|
321,947
|
|
|
$
|
369,621
|
Americas, excluding United States
|
|
15,838
|
|
|
24,412
|
|
|
31,938
|
|
|
44,380
|
Europe, Middle East, and Africa
|
|
65,969
|
|
|
108,601
|
|
|
130,507
|
|
|
196,373
|
APAC
|
|
35,086
|
|
|
21,085
|
|
|
62,817
|
|
|
41,867
|
Total
|
|
$
|
299,344
|
|
|
$
|
353,299
|
|
|
$
|
547,209
|
|
|
$
|
652,241
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180801005819/en/
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