- Fitbit Reports $502 Million Q4’19 Revenue and $1.43 Billion
FY’19 Revenue
- Added 2 Million Active Users Increasing Total to 29.6
Million, Grew Devices Sold 15%
Fitbit, Inc. (NYSE:FIT) today reported revenue of $502 million,
GAAP net loss per share of $(0.46), non-GAAP net loss per share of
$(0.12), GAAP net loss of $(121) million, non-GAAP net loss of
$(31) million, cash flow from operations of $28 million and free
cash flow of $18 million for its fourth quarter of 2019.
For the full year 2019, Fitbit reported revenue of $1.43
billion, GAAP net loss per share of $(1.25), non-GAAP net loss per
share of $(0.51), GAAP net loss of $(321) million, non-GAAP net
loss of $(132) million, cash flow utilized in operations of $(157)
million and cash consumption of $(193) million.
“In 2019, we continued to advance our mission of making health
accessible to more people around the world by delivering devices,
software and services at affordable prices that help improve
peoples’ health,” said James Park, co-founder and CEO. “As a
result, we sold 16 million devices and our smartwatch business grew
45 percent at retail, due to strong demand for Versa 2. Our
community of active users increased to nearly 30 million, and
Fitbit Health Solutions grew 17 percent, underscoring the strength
of the Fitbit brand. We also launched our new Premium membership,
Fitbit’s most personalized experience yet and are seeing improving
retention and engagement due to its actionable guidance and
coaching. Looking ahead, we expect to grow our higher margin
revenue streams in 2020.”
Fourth Quarter and Full Year 2019 Financial Summary
For the Three Months
Ended
For the Twelve Months
Ended
In millions, except percentages and per
share amounts
December 31, 2019
December 31, 2018
December 31, 2019
December 31, 2018
GAAP Results
Revenue
$
502.1
$
571.2
$
1,434.8
$
1,512.0
Gross Margin
24.3
%
38.0
%
29.8
%
39.9
%
Net Income (Loss)
$
(120.8
)
$
15.4
$
(320.7
)
$
(185.8
)
Net Income (Loss) Per Share
$
(0.46
)
$
0.06
$
(1.25
)
$
(0.76
)
Non-GAAP Results
Gross Margin
26.3
%
38.7
%
31.2
%
40.9
%
Net Income (Loss)
$
(31.5
)
$
36.3
$
(132.0
)
$
(48.8
)
Net Income (Loss) Per Share
$
(0.12
)
$
0.14
$
(0.51
)
$
(0.20
)
Adjusted EBITDA
$
(34.9
)
$
49.6
$
(128.3
)
$
(31.4
)
Devices Sold
6.0
5.6
16.0
13.9
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.
Fourth Quarter 2019 Financial Highlights
- Sold 6 million wearable devices, up 8% year-over-year. Average
selling price decreased 19% year-over-year to $81 per device,
driven by the introduction of more accessible and affordable
devices and higher promotions.
- International revenue declined 7% year-over-year to $226
million with EMEA up 2% to $153 million, Americas excluding the
U.S. down 2% to $44 million and APAC down 40% to $29 million, all
on a year-over-year basis.
- U.S revenue decreased 16% to $276 million and represented 55%
of total revenue.
- New devices introduced in 2019, Fitbit Versa 2™, Fitbit Versa
Lite™, Fitbit Inspire™, Fitbit Inspire HR™, Fitbit Ace 2™, and
Fitbit Aria Air™ represented 72% of revenue.
- GAAP gross margin was 24.3%, and non-GAAP gross margin was
26.3%. Gross margin declined year-over- year driven by the device
mix shift towards smartwatches, higher promotions, tariffs, and the
absence of a benefit from the release of warranty accruals
associated with certain products in 2018.
- GAAP operating expenses represented 47% of revenue, and
non-GAAP operating expenses represented 35% of revenue.
Full Year 2019 Financial Highlights
- Sold 16.0 million wearable devices, up 15% year-over-year.
Average selling price decreased 17% year-over-year to $87 per
device, driven by our decision to introduce more accessible and
affordable devices, device mix, and promotions.
- 39% of all activations came from repeat customers; of repeat
customers, 54% came from customers who were inactive during a prior
period
- U.S revenue decreased 9% year-over-year to $799 million and
represented 56% of total revenue. International revenue was flat
year-over-year to $636 million with EMEA up 7% to $410 million,
Americas excluding the U.S. down 6% to $95 million and APAC down
11% to $130 million, all on a year-over-year basis,
respectively.
- Revenue from Fitbit.com was $143 million, representing 10% of
revenue.
- The Fitbit Health Solutions business grew 17% year-over-year to
$95 million in revenue.
- New devices introduced in 2019, Fitbit Versa 2™, Fitbit Versa
Lite™, Fitbit Inspire™, Fitbit Inspire HR™, Fitbit Ace 2™, and
Fitbit Aria Air™ represented 55% of revenue.
- GAAP gross margin was 29.8%, and non-GAAP gross margin was
31.2%. Gross margin declined year-over- year driven by the shift in
device mix towards smartwatches, higher promotions, tariffs, and
the absence of a benefit from the release of warranty accruals
associated with certain products in 2018.
- GAAP operating expenses declined 6% and non-GAAP operating
expense declined 10%, each year-over-year, respectively.
- Cash, cash equivalents, and marketable securities totaled $519
million as of December 31, 2019, compared with $723 million as of
December 31, 2018.
Full Year Operational Highlights
- Active users grew 7% to 29.6 million from 27.6 million as of
December 31, 2018, driven by the introduction of more accessible
and affordable devices and improved retention and engagement of our
users.
- Smartwatch devices sold grew 27% to 50% of revenue, up from 44%
of revenue in 2018. Maintained the #2 selling smartwatch position
in the U.S.
- Tracker devices sold increased 9% to 49% of revenue, down from
53% of revenue in 2018.
- Launched Fitbit Premium, exited 2019 with improving consumer
retention and engagement results.
- Fitbit Health Solutions launched a national health program,
increased its coverage of Medicaid plans with the signing of
Wellcare of Georgia and expansion of UHC Medicare Advantage
program, and rolled out a chronic condition coaching platform.
Fitbit also announced disease detection partnerships with the BMS /
Pfizer Alliance and Fibricheck.
- Headcount totaled 1,684 employees as of December 31, 2019, with
56% of employees in research and development.
Additional Highlights and Information
- Fitbit announced its entry into a Merger Agreement with Google
LLC on November 1, 2019. Upon close of the all-cash transaction,
Fitbit stockholders will receive $7.35 per share in cash, valuing
the company at a fully diluted equity value of approximately $2.1
billion.
- Fitbit stockholders approved the transaction on January 3,
2020.
- Regulatory review of the transaction is ongoing, and we expect
Fitbit and Google to secure the necessary regulatory approvals and
close the transaction in 2020. Prior to closing, we do not expect
to provide any additional updates on the regulatory process other
than during subsequent quarterly earnings reports.
- Due to the pending acquisition by Google, Fitbit does not plan
to host an earnings conference call nor provide forward looking
guidance.
Forward Looking Statements
This press release 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 our community of
users; the anticipated growth of our premium software subscription
platform; any statements regarding the expected timing of the
completion of the transaction with Google; the ability of Google
and us 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; any statements concerning the expected development or
competitive performance relating to Fitbit’s products and services;
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
effects of the highly competitive market in which we operate,
including competition from much larger technology companies; the
impact of the COVID-19 outbreak on the development, manufacturing,
and shipment of our products, and on global economic conditions and
consumer confidence and spending; our ability to anticipate and
satisfy consumer preferences in a timely and cost-effective manner;
our ability to successfully develop, timely introduce, and achieve
retail and customer acceptance of new products and services, or
enhance existing products and services, including software and
subscription services; our ability to accurately forecast consumer
demand and adequately manage our inventory; our ability to ship
products on the timelines we anticipate and avoid unexpected
delays; our ability to detect, prevent or fix quality issues in our
products and services; our ability to attract and 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 third parties or
their suppliers; the ability of third parties to successfully
manufacture and ship quality products in a timely manner;
seasonality of demand; the concentrated nature of our retailer and
distributor base; product liability issues, security breaches or
other defects that may adversely affect product performance and
overall market acceptance of our products and services; our ability
to integrate acquired technologies and employees of acquired
businesses into our operations, particularly in new geographies;
warranty claims; the relatively new and unproven market for
trackers and wearable devices; the ability of our channel partners
to sell our products; litigation and related costs; the impact of
privacy and data security laws; changes in tax laws; the impact of
tariffs; other general market, political, economic and business
conditions, including an epidemic such as the COVID-19 outbreak;
the failure to satisfy any of the conditions to the consummation of
the proposed transaction with Google, including 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 us 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 Annual Report on Form 10-K for the fiscal year
ended December 31, 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, free cash flow, 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, acquisition-related costs, 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.
- Acquisition-related costs relates to acquisition retention
bonuses, integration costs, advisory and consulting, legal,
accounting, tax, other professional service fees, and SEC filing
fees to the extent associated with the pending Merger or our
acquisition of other companies.
- 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 connected scales. Fitbit products are
carried in approximately 39,000 retail stores and in over 100
countries around the globe. Powered by one of the world’s largest
health and fitness social 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
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 United States 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, 2019
December 31, 2018
December 31, 2019
December 31, 2018
Revenue
$
502,142
$
571,199
$
1,434,788
$
1,511,983
Cost of revenue
380,089
354,272
1,007,116
908,404
Gross profit
122,053
216,927
427,672
603,579
Operating expenses:
Research and development
86,703
75,946
300,354
332,169
Sales and marketing
106,828
104,518
329,800
344,091
General and administrative
43,591
25,516
118,231
116,627
Total operating expenses
237,122
205,980
748,385
792,887
Operating income (loss)
(115,069
)
10,947
(320,713
)
(189,308
)
Interest income, net
1,815
2,209
10,291
7,808
Other income (expense), net
115
(276
)
1,357
(2,642
)
Loss before income taxes
(113,139
)
12,880
(309,065
)
(184,142
)
Income tax expense (benefit)
7,696
(2,492
)
11,646
1,687
Net income (loss)
$
(120,835
)
$
15,372
$
(320,711
)
$
(185,829
)
Net income (loss) per share:
Basic
$
(0.46
)
$
0.06
$
(1.25
)
$
(0.76
)
Diluted
$
(0.46
)
$
0.06
$
(1.25
)
$
(0.76
)
Shares used to compute net income (loss)
per share:
Basic
261,693
249,973
257,500
244,603
Diluted
261,693
260,399
257,500
244,603
FITBIT, INC.
Condensed Consolidated Balance
Sheets
(In thousands)
(unaudited)
December 31, 2019
December 31, 2018
Assets
Current assets:
Cash and cash equivalents
$
334,479
$
473,956
Marketable securities
184,023
249,493
Accounts receivable, net
435,269
414,209
Inventories
136,752
124,871
Income tax receivable
573
6,957
Prepaid expenses and other current
assets
28,656
42,325
Total current assets
1,119,752
1,311,811
Property and equipment, net
82,756
106,286
Operating lease right-of use-assets
70,225
—
Goodwill
64,812
60,979
Intangible assets, net
16,746
23,620
Deferred tax assets
4,111
4,489
Other assets
9,684
8,362
Total assets
$
1,368,086
$
1,515,547
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
194,626
$
251,657
Accrued liabilities
513,530
437,234
Operating lease liabilities
23,511
—
Deferred revenue
32,307
29,400
Income taxes payable
636
1,092
Total current liabilities
764,610
719,383
Long-term deferred revenue
8,535
7,436
Long-term operating lease liabilities
67,902
—
Other liabilities
39,776
52,790
Total liabilities
880,823
779,609
Stockholders’ equity:
Class A and Class B common stock
26
25
Additional paid-in capital
1,126,827
1,055,046
Accumulated other comprehensive income
(loss)
187
(66
)
Accumulated deficit
(639,777
)
(319,067
)
Total stockholders’ equity
487,263
735,938
Total liabilities and stockholders’
equity
$
1,368,086
$
1,515,547
FITBIT, INC.
Condensed Consolidated
Statements of Cash Flow
(In thousands)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2019
December 31, 2018
December 31, 2019
December 31, 2018
Cash Flows from Operating
Activities
Net income (loss)
$
(120,835
)
$
15,372
$
(320,711
)
$
(185,829
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Provision for doubtful accounts
268
19
297
56
Provision for excess and obsolete
inventory
848
2,809
6,011
11,828
Depreciation
10,924
13,501
54,139
48,889
Non-cash lease expense
1,209
—
19,170
Accelerated depreciation of property and
equipment
37
218
206
7,731
Amortization of intangible assets
2,599
2,060
8,699
7,926
Amortization of issuance costs and
discount on debt
—
475
—
785
Stock-based compensation
18,564
23,396
77,739
97,009
Deferred income taxes
(234
)
(858
)
384
(2,548
)
Impairment of equity investment
—
—
—
6,000
Other
565
(392
)
515
(1,395
)
Changes in operating assets and
liabilities, net of acquisition:
Accounts receivable
(89,930
)
(88,263
)
(21,313
)
(8,036
)
Inventories
107,029
67,204
(18,471
)
(12,860
)
Prepaid expenses and other assets
3,269
2,558
15,141
125,914
Fitbit force recall reserve
(243
)
(50
)
(1
)
(445
)
Accounts payable
(64,386
)
18,850
(52,560
)
35,207
Accrued liabilities and other
liabilities
154,267
52,478
93,262
(11,978
)
Lease liabilities
(1,914
)
—
(22,889
)
—
Deferred revenue
6,592
4,027
4,006
(5,622
)
Income taxes payable
(349
)
(5,078
)
(456
)
575
Net cash provided by (used in)
operating activities
28,280
108,326
(156,832
)
113,207
Cash Flows from Investing
Activities
Purchase of property and equipment
(10,254
)
(12,706
)
(36,531
)
(52,880
)
Purchases of marketable securities
(59,610
)
(104,684
)
(347,579
)
(353,948
)
Sales of marketable securities
7,108
1,038
9,124
9,983
Maturities of marketable securities
83,464
75,918
405,596
433,594
Acquisition, net of cash acquired
(2,224
)
(2,250
)
(4,849
)
(19,253
)
Net cash provided by (used in)
investing activities
18,484
(42,684
)
25,761
17,496
Cash Flows from Financing
Activities
Repayment of debt
(550
)
—
(550
)
(747
)
Payment of financing lease liability
(464
)
—
(2,703
)
—
Proceeds from issuance of common stock
5,974
9,829
13,018
21,470
Taxes paid related to net share settlement
of restricted stock units
(4,676
)
(3,752
)
(18,171
)
(19,436
)
Net cash provided by (used in)
financing activities
284
6,077
(8,406
)
1,287
Net increase (decrease) in cash and cash
equivalents
47,048
71,719
(139,477
)
131,990
Cash and cash equivalents at beginning of
period
287,431
402,237
473,956
341,966
Cash and cash equivalents at end of
period
$
334,479
$
473,956
$
334,479
$
473,956
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, 2019
December 31, 2018
December 31, 2019
December 31, 2018
Non-GAAP gross profit:
GAAP gross profit
$
122,053
$
216,927
$
427,672
$
603,579
Stock-based compensation expense
2,006
2,183
6,403
7,312
Impact of restructuring
—
—
190
—
Acquisition-related costs
5,638
—
5,638
—
Intangible assets amortization
2,392
1,853
7,872
7,189
Non-GAAP gross profit
$
132,089
$
220,963
$
447,775
$
618,080
Non-GAAP gross margin (as a percentage
of revenue):
GAAP gross margin
24.3
%
38.0
%
29.8
%
39.9
%
Stock-based compensation expense
0.4
0.4
0.4
0.5
Impact of restructuring
—
—
—
—
Acquisition-related costs
1.1
—
0.4
—
Intangible assets amortization
0.5
0.3
0.6
0.5
Non-GAAP gross margin
26.3
%
38.7
%
31.2
%
40.9
%
Non-GAAP research and
development:
GAAP research and development
$
86,703
$
75,946
$
300,354
$
332,169
Stock-based compensation expense
(10,418
)
(13,330
)
(44,855
)
(57,188
)
Impact of restructuring
—
—
(1,550
)
—
Acquisition-related costs
(18,411
)
—
(18,411
)
—
Non-GAAP research and development
$
57,874
$
62,616
$
235,538
$
274,981
Non-GAAP sales and marketing
expense:
GAAP sales and marketing
$
106,828
$
104,518
$
329,800
$
344,091
Stock-based compensation expense
(2,685
)
(3,730
)
(11,585
)
(14,726
)
Impact of restructuring
—
—
(589
)
—
Acquisition-related costs
(4,222
)
—
(4,222
)
—
Intangible assets amortization
(135
)
(135
)
(541
)
(451
)
Non-GAAP sales and marketing
$
99,786
$
100,653
$
312,863
$
328,914
Non-GAAP general and administrative
expense:
GAAP general and administrative
$
43,591
$
25,516
$
118,231
$
116,627
Stock-based compensation expense
(3,455
)
(4,153
)
(14,896
)
(17,783
)
Litigation expense
—
—
—
(765
)
Impact of restructuring
—
—
(129
)
—
Acquisition-related costs
(19,719
)
—
(19,719
)
—
Intangible assets amortization
(71
)
(73
)
(285
)
(286
)
Non-GAAP general and administrative
$
20,346
$
21,290
$
83,202
$
97,793
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, 2019
December 31, 2018
December 31, 2019
December 31, 2018
Non-GAAP operating expenses:
GAAP operating expenses
$
237,122
$
205,980
$
748,385
$
792,887
Stock-based compensation expense
(16,558
)
(21,213
)
(71,336
)
(89,697
)
Litigation expense
—
—
—
(765
)
Impact of restructuring
—
—
(2,268
)
—
Acquisition-related costs
(42,352
)
—
(42,352
)
—
Intangible assets amortization
(206
)
(208
)
(826
)
(737
)
Non-GAAP operating expenses
$
178,006
$
184,559
$
631,603
$
701,688
Non-GAAP operating income (loss) and
income (loss) before income taxes:
GAAP operating income (loss)
$
(115,069
)
$
10,947
$
(320,713
)
$
(189,308
)
Stock-based compensation expense
18,564
23,396
77,739
97,009
Litigation expense
—
—
—
765
Impact of restructuring
—
—
2,458
—
Acquisition-related costs
47,990
—
47,990
—
Intangible assets amortization
2,598
2,061
8,698
7,926
Non-GAAP operating income (loss)
(45,917
)
36,404
(183,828
)
(83,608
)
Interest income, net
1,815
2,209
10,291
7,808
Other income (expense), net
115
(276
)
1,357
3,358
Non-GAAP income (loss) before income
taxes
$
(43,987
)
$
38,337
$
(172,180
)
$
(72,442
)
Non-GAAP net income (loss) and net
income (loss) per share:
Net income (loss)
$
(120,835
)
$
15,372
$
(320,711
)
$
(185,829
)
Stock-based compensation expense
18,564
23,396
77,739
97,009
Litigation expense
—
—
—
765
Impact of restructuring
—
—
2,458
—
Acquisition-related costs
47,990
—
47,990
—
Impairment of equity investment
—
—
—
6,000
Intangible assets amortization
2,598
2,061
8,698
7,926
Income tax effect of non-GAAP
adjustments
20,193
(4,481
)
51,808
25,330
Non-GAAP net income (loss)
$
(31,490
)
$
36,348
$
(132,018
)
$
(48,799
)
GAAP diluted shares
261,693
249,973
257,500
244,603
Other dilutive equity awards
—
10,426
—
—
Non-GAAP diluted shares
261,693
260,399
257,500
244,603
Non-GAAP diluted net income (loss) per
share
$
(0.12
)
$
0.14
$
(0.51
)
$
(0.20
)
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, 2019
December 31, 2018
December 31, 2019
December 31, 2018
Free cash flow:
Net cash provided by (used in) operating
activities
$
28,280
$
108,326
$
(156,832
)
$
113,207
Purchases of property and equipment
(10,254
)
(12,706
)
(36,531
)
(52,880
)
Free cash flow
$
18,026
$
95,620
$
(193,363
)
$
60,327
Net cash provided by (used in) investing
activities
$
18,484
$
(42,684
)
$
25,761
$
17,496
Net cash provided by (used in) financing
activities
$
284
$
6,077
$
(8,406
)
$
1,287
Adjusted EBITDA:
Net income (loss)
$
(120,835
)
$
15,372
$
(320,711
)
$
(185,829
)
Stock-based compensation expense
18,564
23,396
77,739
97,009
Litigation expense
—
—
—
765
Impact of restructuring
—
—
2,458
—
Acquisition-related costs
47,990
—
47,990
—
Impairment of equity investment
—
—
—
6,000
Depreciation and intangible assets
amortization
13,522
15,561
62,836
56,815
Interest income, net
(1,815
)
(2,209
)
(10,291
)
(7,808
)
Income tax expense (benefit)
7,696
(2,492
)
11,646
1,687
Adjusted EBITDA
$
(34,878
)
$
49,628
$
(128,333
)
$
(31,361
)
Stock-based compensation
expense:
Cost of revenue
$
2,006
$
2,183
$
6,403
$
7,312
Research and development
10,418
13,330
44,855
57,188
Sales and marketing
2,685
3,730
11,585
14,726
General and administrative
3,455
4,153
14,896
17,783
Total stock-based compensation expense
$
18,564
$
23,396
$
77,739
$
97,009
FITBIT, INC.
Revenue by Geographic
Region
(In thousands)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2019
December 31, 2018
December 31, 2019
December 31, 2018
United States
$
276,409
$
328,416
$
799,016
$
880,534
Americas, excluding United States
43,734
44,545
94,961
101,282
Europe, Middle East, and Africa
152,873
149,503
410,485
384,196
Asia Pacific
29,126
48,735
130,326
145,971
Total
$
502,142
$
571,199
$
1,434,788
$
1,511,983
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200220005904/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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