Grew Active Users 9% to 27.6 Million, Grew
Device Shipments in Q4’18
Fitbit, Inc. (NYSE:FIT), today reported revenue of $571 million,
GAAP net income per share of $0.06, non-GAAP net income per share
of $0.14, GAAP net income of $15 million, non-GAAP net income of
$36 million, cash flow from operations of $108 million and free
cash flow of $96 million for its fourth quarter of 2018.
For the full year 2018, Fitbit reported revenue of $1.51
billion, GAAP net loss per share of $(0.76), non-GAAP net loss per
share of $(0.20), GAAP net loss of $(186) million, non-GAAP net
loss of $(49) million, cash flow from operations of $113 million
and free cash flow of $60 million. Excluding a tax refund payment,
free cash flow was ($12) million.
“I’m proud of our performance this year - our results
demonstrate that our strategy is the right one, placing us on a
path back to growth and profitability. We grew our active users 9%
to 27.6 million, became the #2 player in the smartwatch
category in the U.S., and grew the number of devices sold in
the fourth quarter,” said James Park, co-founder and CEO. “In 2019
we’re committed to offering more affordable devices with
engaging health and fitness features, making the health benefits of
being on Fitbit even more accessible. As a result, we are
forecasting active users, devices sold, and revenue to grow in
2019. We expect our Fitbit Health Solutions revenue growth to
accelerate to approximately $100 million and to grow non-device
consumer revenue.”
Fourth Quarter and Full Year 2018 Financial
Summary
For the Three Months Ended For the Twelve
Months Ended In millions, except percentages and per share
amounts
December 31,2018
December 31,2017
December 31,2018
December 31,2017
GAAP Results Revenue
$ 571.2 $ 570.8
$
1,512.0 $ 1,615.5 Gross Margin
38.0 % 43.6 %
39.9 % 42.8 % Net Income (Loss)
$ 15.4
$ (45.5 )
$ (185.8 ) $ (277.2 ) Net Income
(Loss) Per Share
$ 0.06 $ (0.19 )
$
(0.76 ) $ (1.19 )
Non-GAAP Results Gross
Margin
38.7 % 44.2 %
40.9 % 43.4 % Net
Income (Loss)
$ 36.3 $ (4.7 )
$ 48.8 $
(61.1 ) Net Income (Loss) Per Share
$ 0.14 $ (0.02 )
$ (0.20 ) $ (0.26 )
Adjusted EBITDA
$ 49.6 $ 22.5
$ (31.4 ) $ (52.2
)
Devices Sold 5.6 5.4
13.9 15.3
For additional information regarding the non-GAAP financial
measures, see “Non-GAAP Financial Measures” and “Reconciliation of
GAAP to Non-GAAP Financial Measures” below.
Fourth Quarter 2018 Financial Highlights
- Sold 5.6 million wearable devices, up
3% year-over-year. Average selling price decreased 2%
year-over-year to $100 per device, driven by adding Fitbit Charge
3TM, our most intelligent tracker, to our device mix.
- APAC grew 26% to $49 million, U.S
revenue decreased 1% to $328 million, EMEA revenue decreased 4% to
$150 million, and Americas excluding U.S. revenue decreased 5% to
$45 million, all year-over-year respectively. International revenue
was $243 million, representing 43% of total revenue.
- New devices Fitbit VersaTM, Fitbit
AceTM and Fitbit Charge 3 represented 79% of revenue.
- GAAP gross margin was 38.0%, and
non-GAAP gross margin was 38.7%. Gross margin declined year-over-
year driven by the mix shift towards smartwatches.
- GAAP operating expenses represented 36%
of revenue, and non-GAAP operating expenses represented 32% of
revenue.
Full Year 2018 Financial Highlights
- Sold 13.9 million wearable devices,
down 9% year-over-year. Average selling price increased 4%
year-over-year to $105 per device, driven by our device mix.
- 38% of all activations came from repeat
customers; of repeat customers, 52% came from customers who were
inactive during a prior period.
- APAC revenue grew 27% to $146 million.
U.S. revenue decreased 7% to $881 million, EMEA revenue decreased
13% to $384 million, and Americas excluding U.S. revenue decreased
13% to $101 million, all on a year-over-year basis
respectively.
- U.S. comprised 58% of revenue; EMEA
25%, APAC 10%, and Americas, excluding U.S. comprised 7% of
revenue. International revenue was $631 million, or 42% of revenue,
down 6%, year-over-year.
- Revenue from Fitbit.com was $155
million, representing 10% of revenue.
- New devices Fitbit Versa, Fitbit Ace
and Fitbit Charge 3 represented 57% of revenue.
- GAAP gross margin was 39.9% and
non-GAAP gross margin was 40.9%. Non-GAAP gross margin declined 250
basis points year-over-year driven by the device mix shift towards
smartwatches.
- GAAP operating expenses declined 11%
and non-GAAP operating expense declined 12%, each year-over-year,
respectively.
- Cash, cash equivalents, and marketable
securities totaled $723 million as of December 31, 2018, compared
with $679 million as of December 31, 2017.
Full Year 2018 Operational Highlights
- Active users grew 9% to 27.6 million
from 25.4 million as of December 31, 2017, driven by our continued
innovation and investments in hardware and software, bringing new
users to our community and engaging existing users.
- Smartwatch revenue grew to 44% of
revenue, up from 8% in 2017. Became the #2 selling smartwatch
company in the U.S.
- Headcount totaled 1,694 employees as of
December 31, 2018, with 56% of employees in research and
development.
- The Fitbit Health Solutions business
grew 8% in 2018. Fitbit extended its reach with employers, acquired
Twine Health (Fitbit Care), and expanded our relationship with
payors and health systems. Fitbit became a key Medicare Advantage
partner in 27 states with a top payer. Fitbit Care was chosen as
the preferred coaching solution for Humana’s employer group
segment.
First Quarter 2019 Guidance
- We expect an increase in devices sold
and a decline in average selling price. We expect revenue to
increase 1% to 8% year-over-year, in the range of $250 million to
$268 million.
- Non-GAAP gross margin to be
approximately 34% to 35%.
- Non-GAAP basic net loss per share in
the range of ($0.24) to ($0.22).
- Capital expenditures as a percentage of
revenue of approximately 3%.
- Adjusted EBITDA to be in the range of a
loss of ($72) million to a loss of ($64) million.
- Effective non-GAAP tax rate of
approximately 25%.
- Stock-based compensation expense of
approximately $24 million and basic share count of approximately
254 million.
Full Year 2019 Guidance
- We expect devices sold to increase in
2019, but average selling price to decline, driven by our intention
to increase accessibility to our platform and grow our community of
active users. We expect revenue to grow 1% to 4% year-over-year, in
the range of $1.52 billion to $1.58 billion.
- We expect a lower warranty benefit and
the mix shift towards smartwatches to put downward pressure on
gross margin, partially offset by improved efficiencies. We expect
non-GAAP gross margin to trend higher from the first quarter
towards 40% for the full year, driven by improving device gross
margin and a small benefit from the growth of non-device consumer
revenue in the back half of the year.
- We expect to continue to drive
operating leverage into the business and are targeting operating
expenses in the range of $660 million to $690 million.
- Capital expenditures as a percentage of
revenue of approximately 3%.
- We expect adjusted EBITDA to be in the
range of ($30) million to breakeven.
- With the year-over-year change in
working capital less of a benefit in 2019 versus 2018, we expect
free cash flow to be less than adjusted EBITDA in the range of
approximately ($40) million to ($70) million.
- Effective non-GAAP tax rate of
approximately 30%. We expect effective non-GAAP tax rate to be
volatile driven by geographic mix of revenue, tax credits, and our
shift to profitability.
- Stock-based compensation expense of
approximately $90 million and basic/diluted share count of
approximately 260/276 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 (800) 458-4121 or (929) 477-0324, access code
3270591. 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 first quarter of 2019 and full year 2019; growth of
the global wearables market; expected growth in active users;
expected device mix; future opportunities in health coaching and
wellness solutions, including the expected growth of our Fitbit
Health Solutions business; growth in non-device consumer revenue;
and trends in device sales, revenue, average selling price,
operating expenses, capital expenditures, free cash flow, gross
margins, non-GAAP gross margins, non-GAAP net (loss) income per
share, stock-based compensation expense, adjusted EBITDA, effective
non-GAAP tax rate and basic/diluted share count. 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 trackers and wearable 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.
Additional information will also be set forth in our Annual Report
on Form 10-K for the full year ended December 31, 2018. 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 income (loss), non-GAAP income (loss)
before income taxes, non-GAAP net income (loss), non-GAAP diluted
net income (loss) per share, free cash flow, non-GAAP research and
development expenses, non-GAAP sales and marketing expenses,
non-GAAP general and administrative expenses, adjusted EBITDA, and
effective non-GAAP 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,
impairment of equity investment, interest income, net, and the
related income tax effects of the aforementioned exclusions, that
may be recurring and will be reflected in our financial results for
the foreseeable future. Our adjustments to our non-GAAP financial
measures previously included the exclusion of litigation expense
related to matters with Aliphcom, Inc. d/b/a Jawbone. 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 stock-based
compensation, 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 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.
- A non-recurring impairment charge of $6
million to reflect the write-down of an equity investment.
- 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).
- We define free cash flow as net cash
provided by (used in) operating activities less purchase of
property and equipment. We consider free cash flow to be a
liquidity measure that provides useful information to management
and investors about the amount of cash generated by the business
that can possibly be used for investing in our business and
strengthening the balance sheet, but it is not intended to
represent the residual cash flow available for discretionary
expenditures. Free cash flow is not prepared in accordance
with U.S. GAAP, and should not be considered in isolation of, or as
an alternative to, measures prepared in accordance with U.S.
GAAP.
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 Charge 3™, 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 87
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 Twelve Months Ended
December 31, 2018
December 31, 2017
December 31, 2018
December 31, 2017
Revenue $ 571,199 $ 570,756 $ 1,511,983 $ 1,615,519 Cost of
revenue 354,272 322,159 908,404 924,618
Gross profit 216,927 248,597 603,579
690,901 Operating expenses: Research and development
75,946 90,541 332,169 343,012 Sales and marketing 104,518 145,600
344,091 415,042 General and administrative 25,516 31,119
116,627 133,934 Total operating expenses
205,980 267,260 792,887 891,988
Operating income (loss) 10,947 (18,663 ) (189,308 ) (201,087 )
Interest income, net 2,209 1,197 7,808 3,647 Other income
(expense), net (276 ) 2,661 (2,642 ) 2,796 Income
(loss) before income taxes 12,880 (14,805 ) (184,142 ) (194,644 )
Income tax expense (benefit) (2,492 ) 30,665 1,687
82,548 Net income (loss) $ 15,372 $ (45,470 ) $
(185,829 ) $ (277,192 ) Net income (loss) per share: Basic $ 0.06
$ (0.19 ) $ (0.76 ) $ (1.19 ) Diluted $ 0.06 $ (0.19
) $ (0.76 ) $ (1.19 ) Shares used to compute net income (loss) per
share: Basic 249,973 237,421 244,603 232,032
Diluted 260,399 237,421 244,603 232,032
FITBIT, INC.
Condensed Consolidated Balance
Sheets
(In thousands)
(unaudited)
December 31, 2018
December 31, 2017
Assets Current assets: Cash and cash equivalents $
473,956 $ 341,966 Marketable securities 249,493 337,334 Accounts
receivable, net 414,209 406,019 Inventories 124,871 123,895 Income
tax receivable 6,957 77,882 Prepaid expenses and other current
assets 42,325 97,269 Total current assets 1,311,811
1,384,365 Property and equipment, net 106,286 104,908 Goodwill
60,979 51,036 Intangible assets, net 23,620 22,356 Deferred tax
assets 4,489 3,990 Other assets 8,362 15,420 Total
assets $ 1,515,547 $ 1,582,075
Liabilities and
Stockholders’ Equity Current liabilities: Accounts payable $
251,657 $ 212,731 Accrued liabilities 437,234 452,137 Deferred
revenue 29,400 35,504 Income taxes payable 1,092 928
Total current liabilities 719,383 701,300 Long-term deferred
revenue 7,436 6,928 Other liabilities 52,790 49,884
Total liabilities 779,609 758,112
Stockholders’ equity: Class A and Class B common stock 25 24
Additional paid-in capital 1,055,046 956,060 Accumulated other
comprehensive loss (66 ) (9 ) Accumulated deficit (319,067 )
(132,112 ) Total stockholders’ equity 735,938 823,963
Total liabilities and stockholders’ equity $ 1,515,547 $
1,582,075
FITBIT, INC. Condensed
Consolidated Statements of Cash Flow (In thousands) (unaudited)
Three Months Ended Twelve Months
Ended
December 31,2018
December 31,2017
December 31,2018
December 31,2017
Cash Flows from Operating Activities Net income (loss) $
15,372 $ (45,470 ) $ (185,829 ) $ (277,192 ) Adjustments to
reconcile net income (loss) to net cash provided by operating
activities: Provision for doubtful accounts 19 87 56 7,893
Provision for inventory obsolescence 2,809 1,438 11,828 14,833
Depreciation 13,501 11,633 48,889 39,971 Write-off of property and
equipment 218 — 7,731 5,250 Amortization of intangible assets 2,060
1,588 7,926 5,722 Amortization of issuance costs and discount on
debt 475 74 785 951 Stock-based compensation 23,396 24,325 97,009
91,581 Deferred income taxes (858 ) 41,091 (2,548 ) 173,906
Impairment of equity investment — — 6,000 — Other (392 ) (208 )
(1,395 ) 216 Changes in operating assets and liabilities, net of
acquisition: Accounts receivable (88,263 ) (145,115 ) (8,036 )
63,784 Inventories 67,204 12,681 (12,860 ) 92,129 Prepaid expenses
and other assets 2,558 12,393 125,914 (113,111 ) Fitbit force
recall reserve (50 ) (121 ) (445 ) (789 ) Accounts payable 18,850
36,045 35,207 (86,115 ) Accrued liabilities and other liabilities
52,478 104,373 (11,978 ) 56,172 Deferred revenue 4,027 2,374 (5,622
) (7,472 ) Income taxes payable (5,078 ) (1,666 ) 575 (3,488
)
Net cash provided by operating activities 108,326
55,522 113,207 64,241
Cash Flows from
Investing Activities Purchase of property and equipment (12,706
) (30,959 ) (52,880 ) (89,160 ) Purchases of marketable securities
(104,684 ) (103,393 ) (353,948 ) (597,933 ) Sales of marketable
securities 1,038 22,600 9,983 42,406 Maturities of marketable
securities 75,918 121,949 433,594 622,525 Acquisition, net of cash
acquired (2,250 ) — (19,253 ) (556 ) Equity investment —
(6,000 ) — (6,000 )
Net cash provided by (used in)
investing activities (42,684 ) 4,197 17,496
(28,718 )
Cash Flows from Financing Activities Repayment of
debt — — (747 ) — Proceeds from issuance of common stock 9,829
5,118 21,470 19,011 Taxes paid related to net share settlement of
restricted stock units (3,752 ) (3,572 ) (19,436 ) (14,376 )
Net
cash provided by financing activities 6,077 1,546
1,287 4,635 Net increase in cash and cash equivalents
71,719 61,265 131,990 40,158 Effect of exchange rate on cash and
cash equivalents — 20 — 488 Cash and cash equivalents at beginning
of period 402,237 280,681 341,966 301,320
Cash and cash equivalents at end of period $ 473,956
$ 341,966 $ 473,956 $ 341,966
FITBIT, INC. Reconciliation of GAAP to Non-GAAP Financial
Measures (In thousands, except percentages and per share
amounts) (unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2018
December 31, 2017
December 31, 2018
December 31, 2017
Non-GAAP gross profit: GAAP gross profit $ 216,927 $ 248,597
$ 603,579 $ 690,901 Stock-based compensation expense 2,183 2,423
7,312 5,312 Impact of restructuring — — — 37 Intangible assets
amortization 1,853 1,516 7,189 5,473
Non-GAAP gross profit $ 220,963 $ 252,536 $ 618,080
$ 701,723
Non-GAAP gross margin (as a
percentage of revenue): GAAP gross margin 38.0 % 43.6 % 39.9 %
42.8 % Stock-based compensation expense 0.4 0.3 0.5 0.3 Impact of
restructuring — — — — Intangible assets amortization 0.3 0.3
0.5 0.3 Non-GAAP gross margin 38.7 % 44.2 %
40.9 % 43.4 %
Non-GAAP research and development: GAAP
research and development $ 75,946 $ 90,541 $ 332,169 $ 343,012
Stock-based compensation expense (13,330 ) (13,842 ) (57,188 )
(53,781 ) Impact of restructuring — — — (2,744
) Non-GAAP research and development $ 62,616 $ 76,699
$ 274,981 $ 286,487
Non-GAAP sales and
marketing expense: GAAP sales and marketing $ 104,518 $ 145,600
$ 344,091 $ 415,042 Stock-based compensation expense (3,730 )
(3,658 ) (14,726 ) (14,572 ) Impact of restructuring — — — (2,000 )
Intangible assets amortization (135 ) — (451 ) —
Non-GAAP sales and marketing $ 100,653 $ 141,942 $
328,914 $ 398,470
Non-GAAP general and
administrative expense: GAAP general and administrative $
25,516 $ 31,119 $ 116,627 $ 133,934 Stock-based compensation
expense (4,153 ) (4,402 ) (17,783 ) (17,188 ) Litigation expense —
(919 ) (765 ) (3,212 ) Impact of restructuring — — — (1,594 )
Intangible assets amortization (73 ) (71 ) (286 ) (248 ) Non-GAAP
general and administrative $ 21,290 $ 25,727 $ 97,793
$ 111,692
Non-GAAP operating expenses:
GAAP operating expenses $ 205,980 $ 267,260 $ 792,887 $ 891,988
Stock-based compensation expense (21,213 ) (21,902 ) (89,697 )
(85,541 ) Litigation expense — (919 ) (765 ) (3,212 ) Impact of
restructuring — — — (6,338 ) Intangible assets amortization (208 )
(71 ) (737 ) (248 ) Non-GAAP operating expenses $ 184,559 $
244,368 $ 701,688 $ 796,649
FITBIT, INC. Reconciliation of GAAP to Non-GAAP Financial
Measures (In thousands, except percentages and per share
amounts) (unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2018
December 31, 2017
December 31, 2018
December 31, 2017
Non-GAAP operating income (loss) and income (loss) before income
taxes: GAAP operating income (loss) $ 10,947 $ (18,663 ) $
(189,308 ) $ (201,087 ) Stock-based compensation expense 23,396
24,325 97,009 90,853 Litigation expense — 919 765 3,212 Impact of
restructuring — — — 6,375 Intangible assets amortization 2,061
1,587 7,926 5,722 Non-GAAP operating
income (loss) 36,404 8,168 (83,608 ) (94,925 ) Interest income, net
2,209 1,197 7,808 3,647 Other income (expense), net (276 ) 2,661
3,358 2,796 Non-GAAP income (loss) before
income taxes $ 38,337 $ 12,026 $ (72,442 ) $ (88,482
)
Non-GAAP net income (loss) and net income (loss) per
share: Net income (loss) $ 15,372 $ (45,470 ) $ (185,829 ) $
(277,192 ) Stock-based compensation expense 23,396 24,325 97,009
90,853 Litigation expense — 919 765 3,212 Impact of restructuring —
— — 6,375 Impairment of equity investment — — 6,000 — Intangible
assets amortization 2,061 1,587 7,926 5,722 Income tax effect of
non-GAAP adjustments (4,481 ) 13,979 25,330 109,887
Non-GAAP net income (loss) $ 36,348 $ (4,660 ) $
(48,799 ) $ (61,143 ) GAAP diluted shares 249,973 237,421
244,603 232,032 Other dilutive equity awards 10,426 —
— — Non-GAAP diluted shares 260,399 237,421
244,603 232,032 Non-GAAP diluted net income
(loss) per share $ 0.14 $ (0.02 ) $ (0.20 ) $ (0.26 )
Free cash flow: Net cash provided by operating activities $
108,326 $ 55,522 $ 113,207 $ 64,241 Purchases of property and
equipment (12,706 ) (30,959 ) (52,880 ) (89,160 ) Free cash flow $
95,620 $ 24,563 $ 60,327 $ (24,919 ) Net cash
provided by (used in) investing activities $ (42,684 ) $ 4,197
$ 17,496 $ (28,718 ) Net cash provided by financing
activities $ 6,077 $ 1,546 $ 1,287 $ 4,635
FITBIT, INC. Reconciliation of GAAP
to Non-GAAP Financial Measures (In thousands, except
percentages and per share amounts) (unaudited)
Three Months Ended Twelve Months Ended
December 31, 2018
December 31, 2017
December 31, 2018
December 31, 2017
Adjusted EBITDA: Net income (loss) $ 15,372 $ (45,470 ) $
(185,829 ) $ (277,192 ) Stock-based compensation expense* 23,396
24,325 97,009 90,853 Litigation expense — 919 765 3,212 Impact of
restructuring — — — 6,375 Impairment of equity investment — — 6,000
— Depreciation and intangible assets amortization 15,561 13,221
56,815 45,693 Interest income, net (2,209 ) (1,197 ) (7,808 )
(3,647 ) Income tax expense (benefit) (2,492 ) 30,665 1,687
82,548 Adjusted EBITDA $ 49,628 $ 22,463
$ (31,361 ) $ (52,158 )
Stock-based compensation
expense: Cost of revenue $ 2,183 $ 2,423 $ 7,312 $ 5,312
Research and development 13,330 13,842 57,188 54,123 Sales and
marketing 3,730 3,658 14,726 14,959 General and administrative
4,153 4,402 17,783 17,187 Total
stock-based compensation expense* $ 23,396 $ 24,325 $
97,009 $ 91,581
* A portion of stock-based compensation expense for the year
ended December 31, 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 Geographic Region (In
thousands) (unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2018
December 31, 2017
December 31, 2018
December 31, 2017
United States $ 328,416 $ 330,227 $ 880,534 $ 944,052 Americas,
excluding United States 44,545 46,674 101,282 116,330 Europe,
Middle East, and Africa 149,503 155,090 384,196 440,135 APAC 48,735
38,765 145,971 115,002 Total $ 571,199 $ 570,756 $ 1,511,983 $
1,615,519
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190227005783/en/
Investor Contact:
Tom Hudson, (415) 604-4106investor@fitbit.com
Media Contact:
Jen Ralls, (415) 722-6937PR@fitbit.com
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