- Revenue of $347 million, GAAP Net Loss Per Share of $(0.20),
Non-GAAP Net Loss Per Share of $(0.10)
- Fitbit Health Solutions revenue of $73 million Year-to-Date,
up 31% year-over-year
Fitbit, Inc. (NYSE:FIT) today reported revenue of $347 million,
GAAP net loss per share of $(0.20), non-GAAP net loss per share of
$(0.10), GAAP net loss of $(52) million, non-GAAP net loss of $(27)
million, cash used in operations of $(41) million and free cash
flow of $(56) million for its third quarter of 2019.
“In Q3 we continued to make good progress shifting our business
towards the faster growing smartwatch category with the
introduction of Versa 2, expanding Fitbit Health Solutions, and
deepening our relationship with consumers with the launch of
Premium,” said James Park, co-founder and CEO. “The continued
success of the Fitbit brand is built on the trust of our users, and
our commitment to strong user privacy and security will not change.
I’m excited about the combination of Fitbit and Google and look
forward to closing the transaction and further advancing our vision
and mission, accelerating innovation in the category and ultimately
helping more people around the world get healthier.”
Third Quarter 2019
For the Three Months
Ended
For the Nine Months
Ended
In millions, except percentages and per
share amounts
September 28, 2019
September 29, 2018
September 28, 2019
September 29, 2018
GAAP Results
Revenue
$
347.2
$
393.6
$
932.6
$
940.8
Gross Margin
31.1
%
39.0
%
32.8
%
41.1
%
Net Loss
$
(51.9
)
$
(2.1
)
$
(199.9
)
$
(201.2
)
Net Loss Per Share
$
(0.20
)
$
(0.01
)
$
(0.78
)
$
(0.83)
Non-GAAP Results
Gross Margin
32.0
%
40.1
%
33.9
%
42.2
%
Net Income (Loss)
$
(26.7
)
$
10.0
$
(100.5
)
$
(85.1
)
Net Income (Loss) Per Share
$
(0.10
)
$
0.04
$
(0.39
)
$
(0.35
)
Adjusted EBITDA
$
(19.4
)
$
21.0
$
(93.5
)
$
(81.0
)
Devices Sold
3.5
3.5
10.0
8.4
For additional information regarding the non-GAAP financial
measures, see “Non-GAAP Financial Measures” and “Reconciliation of
GAAP to Non-GAAP Financial Measures” below. Please note that
certain terms used here, including “active user,” “activations,”
and “repeat users,” are defined in our Annual Report on Form 10-K
for the full year ended December 31, 2018 or our most recently
filed Quarterly Report on Form 10-Q.
Third Quarter 2019 Financial Highlights
- Sold 3.5 million devices. Overall revenue declined 12%
year-over-year driven by a 12% decline in pricing and flat
year-over-year growth in devices sold. Average selling price per
device sold was $96.
- Smartwatch revenue increased year-over-year and represented 58%
of revenue. With no new trackers launched in the third quarter and
facing a difficult comparison from the launch of Charge 3 last
year, tracker revenue declined and represented 39% of total
revenue. Accessory and non-device revenue represented 3% of
revenue.
- Fitbit Health Solutions revenue grew 10% in the quarter,
producing $73 million in revenue for the year-to-date period, up
31% year-over-year.
- Consumer direct business Fitbit.com grew 23% to $27
million.
- U.S. revenue represented 60% of total revenue or $207 million,
down 10% year-over-year.
- International revenue represented 40% of total revenue and
declined 14% to $141 million: APAC revenue grew 19% to $41 million;
EMEA revenue declined 20% to $83 million; Americas excluding U.S.
revenue declined 33% to $17 million (all on a year-over-year
basis).
- New devices introduced in the past 12 months, Fitbit InspireTM,
Fitbit Inspire HRTM, Fitbit Ace 2TM, Fitbit Versa Lite EditionTM,
and Fitbit Versa 2 TM represented 61% of revenue.
- GAAP gross margin was 31.1% and non-GAAP gross margin was
32.0%. Both GAAP and non-GAAP gross margin were negatively impacted
by lower average selling prices driven by increased promotions, the
mix shift to smartwatches, higher hosting costs, higher warranty
costs, and fixed cost de-leveraging.
- GAAP operating expenses represented 46% of revenue, declining
7% year-over-year to $160 million, and non-GAAP operating expenses
represented 41% of revenue, declining 4% year-over-year to $143
million.
Third Quarter and Other 2019 Operational Highlights
- Active users grew 9% year-over-year.
- 45% of activations came from repeat users; of the repeat users,
52% came from users who were inactive for 90 days or more. Active
users increased year-over-year.
- Fitbit devices will be expanding to 59 Medicare Advantage plans
in 2020 as a fully covered benefit from 42 plans.
- Fitbit announced two disease detection partnerships, Fibricheck
and Bristol-Meyers Squibb Pfizer Alliance, to target chronic
condition areas and raise awareness and support from screening to
diagnosis for heart rhythm irregularities and atrial
fibrillation.
- Fitbit launched Fitbit Premium, a paid membership in the Fitbit
app that uses consumer’s unique data to deliver personalized,
actionable guidance. The offering can be purchased separately at
$9.99 per month, $79.99 per year, or bundled together with a
device.
Fitbit Acquisition by Google
- On November 1, 2019, Fitbit announced that it had entered into
a definitive agreement to be acquired by Google LLC in an all-cash
transaction that values the company at a fully diluted equity value
of approximately $2.1 billion. Under the terms of the agreement,
the company’s stockholders will receive $7.35 per share in cash
upon the closing of the transaction. The transaction is expected to
close in 2020, subject to customary closing conditions, including
approval by Fitbit’s stockholders and regulatory approvals.
- Due to the pending acquisition by Google, Fitbit does not plan
to host an earnings call nor provide forward-looking guidance.
Additional Information and Where to Find It
In connection with the proposed acquisition, Fitbit will file
relevant materials with the Securities and Exchange Commission (the
“SEC”), including a preliminary and definitive proxy statement.
Promptly after filing the definitive proxy statement, Fitbit will
mail the definitive proxy statement and a proxy card to the
stockholders of Fitbit. FITBIT’S STOCKHOLDERS ARE URGED TO READ THE
DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO) CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY
VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED
TRANSACTION BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED TRANSACTION.
Stockholders of Fitbit will be able to obtain a free copy of these
documents, when they become available, at the website maintained by
the SEC at www.sec.gov or free of charge at www.Fitbit.com.
Additionally, Fitbit will file other relevant materials in
connection with the proposed acquisition of Fitbit by Google
pursuant to the terms of an Agreement and Plan of Merger, by and
among Fitbit, Google and Magnoliophyta Inc. (the “Merger
Agreement”). Fitbit and its directors, executive officers and other
members of its management and employees, under SEC rules, may be
deemed to be participants in the solicitation of proxies of Fitbit
stockholders in connection with the proposed acquisition.
Stockholders of Fitbit may obtain more detailed information
regarding the names, affiliations and interests of certain of
Fitbit’s executive officers and directors in the solicitation by
reading Fitbit’s most recent Annual Report on Form 10-K, which was
filed with the SEC on March 1, 2019 and the proxy statement for
Fitbit’s 2019 annual meeting of stockholders, which was filed with
the SEC on April 11, 2019. These documents are available free of
charge at the SEC’s website at www.sec.gov or by going to Fitbit’s
Investor Relations website at www.Fitbit.com. Information
concerning the interests of Fitbit’s participants in the
solicitation, which may, in some cases, be different than those of
Fitbit’s stockholders generally, will be set forth in the
definitive proxy statement relating to the proposed transaction
when it becomes available.
Forward Looking Statements
This communication contains “forward-looking” statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, that involve risks and uncertainties. In some cases, you
can identify these forward-looking statements by the use of terms
such as “expect,” “will,” “continue,” or similar expressions, and
variations or negatives of these words, but the absence of these
words does not mean that a statement is not forward-looking. All
statements other than statements of historical fact are statements
that could be deemed forward-looking statements, including, but not
limited to: the anticipated continued growth of Fitbit’s community
of users; any statements regarding the expected timing of the
completion of the transaction; the ability of Google and Fitbit to
complete the proposed transaction considering the various
conditions to the transaction, some of which are outside the
parties’ control, including those conditions related to regulatory
approvals; the expected benefits and costs of the proposed
transaction; any statements concerning the expected development or
competitive performance relating to Fitbit’s products and services;
any statements regarding Google’s future intention with Fitbit; any
other statements of expectation or belief; and any statements of
assumptions underlying any of the foregoing. A number of important
factors and uncertainties could cause actual results or events to
differ materially from those described in these forward-looking
statements, including without limitation: the failure to satisfy
any of the conditions to the consummation of the proposed
transaction, including the adoption of the Merger Agreement by
Fitbit’s stockholders and the receipt of certain governmental and
regulatory approvals; the occurrence of any event, change or other
circumstance that could give rise to the termination of the Merger
Agreement; the outcome of any legal proceedings that may be
instituted against Fitbit related to the Merger Agreement or the
proposed transaction; unexpected costs, charges or expenses
resulting from the proposed transaction; the occurrence of a
Company Material Adverse Effect (as defined in the Merger
Agreement).
Additional risks and uncertainties are included under the
caption “Risk Factors” in our Annual Report on Form 10-K for the
full year ended December 31, 2018 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. Once filed with the SEC, additional information will
be set forth in our Quarterly Report on Form 10-Q for the quarter
ended September 28, 2019. 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. We may
not actually achieve the plans, intentions, or expectations
disclosed in our forward-looking statements and you should not
place undue reliance on such statements.
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 basic/diluted net loss
per share, non-GAAP free cash flow, non-GAAP effective tax rate,
non-GAAP research and development expenses, non-GAAP sales and
marketing expenses, non-GAAP general and administrative expenses,
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.
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.
- Restructuring costs primarily included severance-related costs.
We believe that excluding this expense provides greater visibility
to the underlying performance of our business operations,
facilitates comparison of our results with other periods, and may
also facilitate comparison with the results of other companies in
our industry.
- Litigation expense relates to legal costs incurred due to
litigation with Aliphcom, Inc. d/b/a Jawbone. We exclude these
expenses because we do not believe they have a direct correlation
to the operations of our business and because of the singular
nature of the claims underlying the Jawbone litigation
matters.
- Amortization of intangible assets relates to our acquisitions
of FitStar, Pebble, Vector and Twine Health. We exclude these
amortization expenses because we do not believe they have a direct
correlation to the operation of our business.
- Income tax effect of non-GAAP adjustments relates to the tax
effect of the adjustments that we incorporate into non-GAAP
financial measures such as stock-based compensation, amortization
of intangibles, restructuring and valuation allowance in order to
provide a more meaningful measure of non-GAAP net loss.
- We define free cash flow as net cash provided by (used in)
operating activities less purchase of property and equipment. We
consider free cash flow to be a liquidity measure that provides
useful information to management and investors about the amount of
cash generated by the business that can possibly be used for
investing in our business and strengthening the balance sheet, but
it is not intended to represent the residual cash flow available
for discretionary expenditures. Free cash flow is not prepared in
accordance with U.S. GAAP, and should not be considered in
isolation of, or as an alternative to, measures prepared in
accordance with U.S. GAAP.
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. 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 Inspire HR™, Fitbit Inspire™ and Fitbit Ace 2™
activity trackers, as well as the Fitbit Ionic™ and Fitbit Versa™
family of smartwatches, Fitbit Flyer™ wireless headphones, and
Fitbit Aria family of smart scales. Fitbit products are carried in
approximately 39,000 retail stores and in 100+ countries around the
globe. Powered by one of the world’s largest databases of activity,
exercise and sleep data and Fitbit’s leading health and fitness
social network, the Fitbit platform delivers personalized
experiences, insights and guidance through leading software and
interactive tools, including the Fitbit and Fitbit Coach apps, and
Fitbit OS for smartwatches. Fitbit’s paid subscription service,
Fitbit Premium, uses your unique data to deliver actionable
guidance and coaching in the Fitbit app to help you reach your
health and fitness goals. 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
Nine Months Ended
September 28, 2019
September 29, 2018
September 28, 2019
September 29, 2018
Revenue
$
347,200
$
393,575
$
932,646
$
940,784
Cost of revenue
239,248
240,061
627,027
554,132
Gross profit
107,952
153,514
305,619
386,652
Operating expenses:
Research and development
65,693
79,840
213,651
256,223
Sales and marketing
71,296
66,676
222,972
239,573
General and administrative
23,083
24,812
74,640
91,111
Total operating expenses
160,072
171,328
511,263
586,907
Operating loss
(52,120
)
(17,814
)
(205,644
)
(200,255
)
Interest income, net
2,388
2,072
8,476
5,599
Other income (expense), net
(492
)
(5,141
)
1,242
(2,366
)
Loss before income taxes
(50,224
)
(20,883
)
(195,926
)
(197,022
)
Income tax expense (benefit)
1,669
(18,827
)
3,950
4,179
Net loss
$
(51,893
)
$
(2,056
)
$
(199,876
)
$
(201,201
)
Net loss per share:
Basic
$
(0.20
)
$
(0.01
)
$
(0.78
)
$
(0.83
)
Diluted
$
(0.20
)
$
(0.01
)
$
(0.78
)
$
(0.83
)
Shares used to compute net loss per
share:
Basic
258,753
245,838
256,046
242,746
Diluted
258,753
245,838
256,046
242,746
FITBIT, INC.
Condensed Consolidated Balance
Sheets
(In thousands)
(unaudited)
September 28, 2019
December 31, 2018
Assets
Current assets:
Cash and cash equivalents
$
287,431
$
473,956
Marketable securities
214,817
249,493
Accounts receivable, net
345,562
414,209
Inventories
245,096
124,871
Income tax receivable
965
6,957
Prepaid expenses and other current
assets
33,376
42,325
Total current assets
1,127,247
1,311,811
Property and equipment, net
88,232
106,286
Operating lease right-of use-assets
71,529
—
Goodwill
60,979
60,979
Intangible assets, net
17,519
23,620
Deferred tax assets
3,925
4,489
Other assets
7,170
8,362
Total assets
$
1,376,601
$
1,515,547
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
263,181
$
251,657
Accrued liabilities
365,812
437,234
Operating lease liabilities
23,313
—
Deferred revenue
28,076
29,400
Income taxes payable
986
1,092
Total current liabilities
681,368
719,383
Long-term deferred revenue
6,174
7,436
Long-term operating lease liabilities
70,202
—
Other liabilities
29,883
52,790
Total liabilities
787,627
779,609
Stockholders’ equity:
Class A and Class B common stock
26
25
Additional paid-in capital
1,107,659
1,055,046
Accumulated other comprehensive income
(loss)
232
(66
)
Accumulated deficit
(518,943
)
(319,067
)
Total stockholders’ equity
588,974
735,938
Total liabilities and stockholders’
equity
$
1,376,601
$
1,515,547
FITBIT, INC.
Condensed Consolidated
Statements of Cash Flow
(In thousands)
(unaudited)
Three Months Ended
Nine Months Ended
September 28, 2019
September 29, 2018
September 28, 2019
September 29, 2018
Cash Flows from Operating
Activities
Net loss
$
(51,893
)
$
(2,056
)
$
(199,876
)
$
(201,201
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Provision for doubtful accounts
(19
)
41
29
37
Provision for inventory obsolescence
1,041
1,005
5,163
9,019
Depreciation
13,109
11,816
43,215
35,388
Non-cash lease expense
6,346
—
17,961
—
Write-off of property and equipment
(1
)
28
169
7,513
Amortization of intangible assets
1,979
2,061
6,100
5,866
Stock-based compensation
18,084
24,115
59,175
73,613
Deferred income taxes
484
(391
)
618
(1,690
)
Impairment of equity investment
—
6,000
—
6,000
Other
(212
)
(278
)
(50
)
(693
)
Changes in operating assets and
liabilities, net of acquisition:
Accounts receivable
(86,944
)
(83,968
)
68,617
80,227
Inventories
(84,317
)
(55,847
)
(125,500
)
(80,064
)
Prepaid expenses and other assets
(2,135
)
85,732
11,872
123,356
Fitbit force recall reserve
106
(104
)
242
(395
)
Accounts payable
112,343
80,541
11,826
16,357
Accrued liabilities and other
liabilities
37,095
6,220
(61,005
)
(67,813
)
Lease liabilities
(7,398
)
—
(20,975
)
—
Deferred revenue
889
(26
)
(2,586
)
(9,649
)
Income taxes payable
407
(16,148
)
(107
)
5,653
Net cash provided by (used in)
operating activities
(41,036
)
58,741
(185,112
)
1,524
Cash Flows from Investing
Activities
Purchase of property and equipment
(15,450
)
(11,650
)
(26,277
)
(40,174
)
Purchases of marketable securities
(67,474
)
(60,174
)
(287,969
)
(284,986
)
Sales of marketable securities
—
19,250
2,016
93,020
Maturities of marketable securities
82,703
72,748
322,132
309,323
Acquisition, net of cash acquired
(2,625
)
—
(2,625
)
(13,646
)
Net cash provided by (used in)
investing activities
(2,846
)
20,174
7,277
63,537
Cash Flows from Financing
Activities
Repayment of debt
—
—
—
(747
)
Financing lease
(1,302
)
—
(2,239
)
—
Proceeds from issuance of common stock
232
903
7,044
11,641
Taxes paid related to net share settlement
of restricted stock units
(2,846
)
(5,697
)
(13,495
)
(15,684
)
Net cash used in financing
activities
(3,916
)
(4,794
)
(8,690
)
(4,790
)
Net increase (decrease) in cash and cash
equivalents
(47,798
)
74,121
(186,525
)
60,271
Cash and cash equivalents at beginning of
period
335,229
328,116
473,956
341,966
Cash and cash equivalents at end of
period
$
287,431
$
402,237
$
287,431
$
402,237
FITBIT, INC.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(In thousands, except percentages
and per share amounts)
(unaudited)
Three Months Ended
Nine Months Ended
September 28, 2019
September 29, 2018
September 28, 2019
September 29, 2018
Non-GAAP gross profit:
GAAP gross profit
$
107,952
$
153,514
$
305,619
$
386,652
Stock-based compensation expense
1,446
1,999
4,397
5,129
Impact of restructuring
—
—
190
—
Intangible assets amortization
1,773
2,304
5,480
5,336
Non-GAAP gross profit
$
111,171
$
157,817
$
315,686
$
397,117
Non-GAAP gross margin (as a percentage
of revenue):
GAAP gross margin
31.1
%
39.0
%
32.8
%
41.1
%
Stock-based compensation expense
0.4
0.5
0.5
0.5
Intangible assets amortization
0.5
0.6
0.6
0.6
Non-GAAP gross margin
32.0
%
40.1
%
33.9
%
42.2
%
Non-GAAP research and
development:
GAAP research and development
$
65,693
$
79,840
$
213,651
$
256,223
Stock-based compensation expense
(10,557
)
(14,097
)
(34,437
)
(43,858
)
Impact of restructuring
—
—
(1,550
)
—
Non-GAAP research and development
$
55,136
$
65,743
$
177,664
$
212,365
Non-GAAP sales and marketing
expense:
GAAP sales and marketing
$
71,296
$
66,676
$
222,972
$
239,573
Stock-based compensation expense
(2,587
)
(3,638
)
(8,900
)
(10,996
)
Impact of restructuring
—
—
(589
)
—
Intangible assets amortization
(135
)
315
(406
)
(316
)
Non-GAAP sales and marketing
$
68,574
$
63,353
$
213,077
$
228,261
Non-GAAP general and administrative
expense:
GAAP general and administrative
$
23,083
$
24,812
$
74,640
$
91,111
Stock-based compensation expense
(3,494
)
(4,381
)
(11,441
)
(13,630
)
Litigation expense
—
—
—
(765
)
Impact of restructuring
—
—
(129
)
—
Intangible assets amortization
(71
)
(71
)
(214
)
(214
)
Non-GAAP general and administrative
$
19,518
$
20,360
$
62,856
$
76,502
Non-GAAP operating expenses:
GAAP operating expenses
$
160,072
$
171,328
$
511,263
$
586,907
Stock-based compensation expense
(16,638
)
(22,116
)
(54,778
)
(68,484
)
Litigation expense
—
—
—
(765
)
Impact of restructuring
—
—
(2,268
)
—
Intangible assets amortization
(206
)
244
(620
)
(530
)
Non-GAAP operating expenses
$
143,228
$
149,456
$
453,597
$
517,128
FITBIT, INC.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(In thousands, except percentages
and per share amounts)
(unaudited)
Three Months Ended
Nine Months Ended
September 28, 2019
September 29, 2018
September 28, 2019
September 29, 2018
Non-GAAP operating income (loss) and
income (loss) before income taxes:
GAAP operating loss
$
(52,120
)
$
(17,814
)
$
(205,644
)
$
(200,255
)
Stock-based compensation expense
18,084
24,115
59,175
73,613
Litigation expense
—
—
—
765
Impact of restructuring
—
—
2,458
—
Intangible assets amortization
1,979
2,060
6,100
5,866
Non-GAAP operating income (loss)
(32,057
)
8,361
(137,911
)
(120,011
)
Interest income, net
2,388
2,072
8,476
5,599
Other income (expense), net
(492
)
(5,141
)
1,242
(2,366
)
Non-GAAP income (loss) before income
taxes
$
(30,161
)
$
5,292
$
(128,193
)
$
(116,778
)
Non-GAAP net income (loss) and net
income (loss) per share:
Net loss
$
(51,893
)
$
(2,056
)
$
(199,876
)
$
(201,201
)
Stock-based compensation expense
18,084
24,115
59,175
73,613
Litigation expense
—
—
—
765
Impact of restructuring
—
—
2,458
—
Impairment of equity investment
—
6,000
—
6,000
Intangible assets amortization
1,979
2,060
6,100
5,866
Income tax effect of non-GAAP
adjustments
5,141
(20,077
)
31,615
29,810
Non-GAAP net income (loss)
$
(26,689
)
$
10,042
$
(100,528
)
$
(85,147
)
GAAP diluted shares
258,753
245,838
256,046
242,746
Other dilutive equity awards
—
14,509
—
—
Non-GAAP diluted shares
258,753
260,347
256,046
242,746
Non-GAAP diluted net income (loss) per
share
$
(0.10
)
$
0.04
$
(0.39
)
$
(0.35
)
Free cash flow:
Net cash provided by (used in) operating
activities
$
(41,036
)
$
58,741
$
(185,112
)
$
1,524
Purchases of property and equipment
(15,450
)
(11,650
)
(26,277
)
(40,174
)
Free cash flow
$
(56,486
)
$
47,091
$
(211,389
)
$
(38,650
)
Net cash provided by (used in) investing
activities
$
(2,846
)
$
20,174
$
7,277
$
63,537
Net cash used in financing activities
$
(3,916
)
$
(4,794
)
$
(8,690
)
$
(4,790
)
FITBIT, INC.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(In thousands, except percentages
and per share amounts)
(unaudited)
Three Months Ended
Nine Months Ended
September 28, 2019
September 29, 2018
September 28, 2019
September 29, 2018
Adjusted EBITDA:
Net loss
$
(51,893
)
$
(2,056
)
$
(199,876
)
$
(201,201
)
Stock-based compensation expense
18,084
24,115
59,175
73,613
Litigation expense
—
—
—
765
Impact of restructuring
—
—
2,458
—
Impairment of equity investment
—
6,000
—
6,000
Depreciation and intangible assets
amortization
15,089
13,877
49,314
41,254
Interest income, net
(2,388
)
(2,072
)
(8,476
)
(5,599
)
Income tax expense (benefit)
1,669
(18,827
)
3,950
4,179
Adjusted EBITDA
$
(19,439
)
$
21,037
$
(93,455
)
$
(80,989
)
Stock-based compensation
expense:
Cost of revenue
$
1,446
$
1,999
$
4,397
$
5,129
Research and development
10,557
14,097
34,437
43,858
Sales and marketing
2,587
3,638
8,900
10,996
General and administrative
3,494
4,381
11,441
13,630
Total stock-based compensation expense
$
18,084
$
24,115
$
59,175
$
73,613
FITBIT, INC.
Revenue by Geographic
Region
(In thousands)
(unaudited)
Three Months Ended
Nine Months Ended
September 28, 2019
September 29, 2018
September 28, 2019
September 29, 2018
United States
$
206,654
$
230,171
$
522,607
$
552,118
Americas, excluding United States
16,722
24,799
51,227
56,737
Europe, Middle East, and Africa
82,951
104,186
257,612
234,693
APAC
40,873
34,419
101,200
97,236
Total
$
347,200
$
393,575
$
932,646
$
940,784
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191106005984/en/
Investor Contact:
Tom Hudson, (415) 604-4106 investor@fitbit.com
Media Contact:
Jen Ralls, (415) 722-6937 PR@fitbit.com
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