Fitbit, Inc. (NYSE:FIT), the leading global wearables brand, today reported revenue of $394 million, GAAP net loss per share of ($0.01), non-GAAP net income per share of $0.04, GAAP net loss of $2 million, non-GAAP net income of $10 million, cash flow from operations of $59 million and free cash flow of $47 million for its third quarter of 2018.
“We have been incredibly focused on executing our transition plan and as a result, saw a return to profitability this quarter, and are re-affirming our full year revenue guidance of $1.5 billion. We succeeded in growing our healthcare business by 26% and diversifying our revenue to compete in the changing wearables category and saw sequential growth in both tracker and smartwatch devices,” said James Park, co-founder and CEO. “We are now the number two player in the smartwatch space in the U.S. - a category we just entered with zero share only fourteen months ago. We also launched our most advanced tracker yet, Fitbit Charge 3, which is blurring the lines between trackers and smartwatches and is already one of the top selling devices in the U.S. All this shows the power of the Fitbit brand and our ability to continue to deliver a wearable platform consumers love and that drives positive health outcomes.”
Third Quarter 2018
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
In millions, except percentages and per share amounts |
September 29, |
September 30, |
September 29, |
September 30, |
||||||||||||
GAAP Results | ||||||||||||||||
Revenue | $ | 393.6 | $ | 392.5 | $ |
940.8 |
$ | 1,044.8 | ||||||||
Gross Margin | 39.0 | % | 44.5 | % | 41.1 |
% |
42.3 | % | ||||||||
Net Loss | $ | (2.1 | ) | $ | (113.4 | ) | $ | (201.2 | ) | $ | (231.7 | ) | ||||
Net Loss Per Share | $ | (0.01 | ) | $ | (0.48 | ) | $ | (0.83 | ) | $ | (1.00 | ) | ||||
Non-GAAP Results |
||||||||||||||||
Gross Margin | 40.1 | % | 45.2 | % | 42.2 | % | 43.0 | % | ||||||||
Net Income (Loss) | $ | 10.0 | $ | (2.8 | ) | $ | (85.1 | ) | $ | (56.5 | ) | |||||
Net Income (Loss) Per Share | $ | 0.04 | $ | (0.01 | ) | $ | (0.35 | ) | $ | (0.24 | ) | |||||
Adjusted EBITDA | $ | 21.0 | $ | 5.9 | $ | (81.0 | ) | $ | (74.6 | ) | ||||||
Devices Sold | 3.5 | 3.6 | 8.4 | 10.0 | ||||||||||||
For additional information regarding the non-GAAP financial measures, see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below.
Third Quarter 2018 Financial Highlights
Third Quarter 2018 Operational Highlights
Fourth Quarter 2018 Guidance
Full Year 2018 Guidance
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) 394-8218 or (646) 828-8193, access code 2357386. 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 fourth quarter 2018 and full year 2018; the rate of decline in tracker sales and the stabilization of the tracker market; expected device mix; consumer receptivity to Fitbit Charge 3; the features offered by our Fitbit Labs Sleep Score beta; future clinical validation and regulatory approval of our software; future opportunities in health coaching and wellness solutions; and trends in device sales, 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, non-GAAP effective 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 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 income (loss), non-GAAP operating income (loss) before income taxes, non-GAAP net income (loss), non-GAAP diluted net income (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, 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:
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 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 | Nine Months Ended | |||||||||||||||
September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | |||||||||||||
Revenue | $ | 393,575 | $ | 392,522 | $ | 940,784 | $ | 1,044,763 | ||||||||
Cost of revenue | 240,061 | 217,762 | 554,132 | 602,459 | ||||||||||||
Gross profit | 153,514 | 174,760 | 386,652 | 442,304 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 79,840 | 84,170 | 256,223 | 252,471 | ||||||||||||
Sales and marketing | 66,676 | 77,536 | 239,573 | 269,442 | ||||||||||||
General and administrative | 24,812 | 40,690 | 91,111 | 102,815 | ||||||||||||
Total operating expenses | 171,328 | 202,396 | 586,907 | 624,728 | ||||||||||||
Operating loss | (17,814 | ) | (27,636 | ) | (200,255 | ) | (182,424 | ) | ||||||||
Interest income, net | 2,072 | 1,162 | 5,599 | 2,451 | ||||||||||||
Other income (expense), net | (5,141 | ) | (702 | ) | (2,366 | ) | 134 | |||||||||
Loss before income taxes | (20,883 | ) | (27,176 | ) | (197,022 | ) | (179,839 | ) | ||||||||
Income tax expense (benefit) | (18,827 | ) | 86,227 | 4,179 | 51,883 | |||||||||||
Net loss | $ | (2,056 | ) | $ | (113,403 | ) | $ | (201,201 | ) | $ | (231,722 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.01 | ) | $ | (0.48 | ) | $ | (0.83 | ) | $ | (1.00 | ) | ||||
Diluted | $ | (0.01 | ) | $ | (0.48 | ) | $ | (0.83 | ) | $ | (1.00 | ) | ||||
Shares used to compute net loss per share: | ||||||||||||||||
Basic | 245,838 | 234,242 | 242,746 | 230,918 | ||||||||||||
Diluted | 245,838 | 234,242 | 242,746 | 230,918 | ||||||||||||
FITBIT, INC. Condensed Consolidated Balance Sheets (In thousands) (unaudited) |
||||||||
September 29, 2018 | December 31, 2017 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 402,237 | $ | 341,966 | ||||
Marketable securities | 221,083 | 337,334 | ||||||
Accounts receivable, net | 325,964 | 406,019 | ||||||
Inventories | 195,112 | 123,895 | ||||||
Income tax receivable | 8,962 | 77,882 | ||||||
Prepaid expenses and other current assets | 45,541 | 97,269 | ||||||
Total current assets | 1,198,899 | 1,384,365 | ||||||
Property and equipment, net | 106,520 | 104,908 | ||||||
Goodwill | 61,058 | 51,036 | ||||||
Intangible assets, net | 25,680 | 22,356 | ||||||
Deferred tax assets | 3,920 | 3,990 | ||||||
Other assets | 10,003 | 15,420 | ||||||
Total assets | $ | 1,406,080 | $ | 1,582,075 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 232,991 | $ | 212,731 | ||||
Accrued liabilities | 386,384 | 452,137 | ||||||
Deferred revenue | 27,350 | 35,504 | ||||||
Income taxes payable | 6,580 | 928 | ||||||
Total current liabilities | 653,305 | 701,300 | ||||||
Long-term deferred revenue | 5,458 | 6,928 | ||||||
Other liabilities | 52,596 | 49,884 | ||||||
Total liabilities | 711,359 | 758,112 | ||||||
Stockholders’ equity: | ||||||||
Class A and Class B common stock | 25 | 24 | ||||||
Additional paid-in capital | 1,025,803 | 956,060 | ||||||
Accumulated other comprehensive income (loss) | 3,333 | (9 | ) | |||||
Accumulated deficit | (334,440 | ) | (132,112 | ) | ||||
Total stockholders’ equity | 694,721 | 823,963 | ||||||
Total liabilities and stockholders’ equity | $ | 1,406,080 | $ | 1,582,075 | ||||
FITBIT, INC. | ||||||||||||||||
Condensed Consolidated Statements of Cash Flow | ||||||||||||||||
(In thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 29, |
September 30, |
September 29, |
September 30, |
|||||||||||||
Cash Flows from Operating Activities | ||||||||||||||||
Net loss | $ | (2,056 | ) | $ | (113,403 | ) | $ | (201,201 | ) | $ | (231,722 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||
Provision for doubtful accounts | 41 | 7,622 | 37 | 7,805 | ||||||||||||
Provision for inventory obsolescence | 1,005 | 4,986 | 9,019 | 13,395 | ||||||||||||
Depreciation | 11,816 | 9,139 | 35,388 | 28,338 | ||||||||||||
Write-off of property and equipment | 28 | — | 7,513 | 5,250 | ||||||||||||
Amortization of intangible assets | 2,061 | 1,381 | 5,866 | 4,134 | ||||||||||||
Stock-based compensation | 24,115 | 22,797 | 73,613 | 67,256 | ||||||||||||
Deferred income taxes | (391 | ) | 116,678 | (1,690 | ) | 132,815 | ||||||||||
Impairment of equity investment | 6,000 | — | 6,000 | — | ||||||||||||
Other | (278 | ) | 56 | (693 | ) | 1,301 | ||||||||||
Changes in operating assets and liabilities, net of acquisition: | ||||||||||||||||
Accounts receivable | (83,968 | ) | (52,266 | ) | 80,227 | 208,899 | ||||||||||
Inventories | (55,847 | ) | (2,038 | ) | (80,064 | ) | 79,448 | |||||||||
Prepaid expenses and other assets |
85,732 | (75,180 | ) | 123,356 | (125,504 | ) | ||||||||||
Accounts payable | 80,541 | 94,799 | 16,357 | (122,160 | ) | |||||||||||
Accrued liabilities and other liabilities | 6,116 | (4,406 | ) | (68,208 | ) | (48,869 | ) | |||||||||
Deferred revenue |
(26 | ) | (4,369 | ) | (9,649 | ) | (9,846 | ) | ||||||||
Income taxes payable |
(16,148 | ) | (306 | ) | 5,653 | (1,822 | ) | |||||||||
Net cash provided by operating activities |
58,741 | 5,490 | 1,524 | 8,718 | ||||||||||||
Cash Flows from Investing Activities | ||||||||||||||||
Purchase of property and equipment | (11,650 | ) | (18,382 | ) | (40,174 | ) | (58,199 | ) | ||||||||
Purchases of marketable securities | (60,174 | ) | (176,862 | ) | (284,986 | ) | (494,540 | ) | ||||||||
Sales of marketable securities | 19,250 | 6,000 | 93,020 | 19,806 | ||||||||||||
Maturities of marketable securities | 72,748 | 149,432 | 309,323 | 500,576 | ||||||||||||
Acquisition, net of cash acquired | — | (556 | ) | (13,646 | ) | (556 | ) | |||||||||
Net cash provided by (used in) investing activities | 20,174 | (40,368 | ) | 63,537 | (32,913 | ) | ||||||||||
Cash Flows from Financing Activities | ||||||||||||||||
Repayment of debt | — | — | (747 | ) | — | |||||||||||
Proceeds from issuance of common stock | 903 | 2,486 | 11,641 | 13,893 | ||||||||||||
Taxes paid related to net share settlement of restricted stock units | (5,697 | ) | (5,570 | ) | (15,684 | ) | (10,804 | ) | ||||||||
Net cash (used in) provided by financing activities | (4,794 | ) | (3,084 | ) | (4,790 | ) | 3,089 | |||||||||
Net increase (decrease) in cash and cash equivalents | 74,121 | (37,962 | ) | 60,271 | (21,106 | ) | ||||||||||
Effect of exchange rate on cash and cash equivalents | — | (63 | ) | — | 467 | |||||||||||
Cash and cash equivalents at beginning of period | 328,116 | 318,706 | 341,966 |
|
301,320 | |||||||||||
Cash and cash equivalents at end of period | $ | 402,237 | $ | 280,681 | $ | 402,237 | $ | 280,681 | ||||||||
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 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | |||||||||||||
Non-GAAP gross profit: | ||||||||||||||||
GAAP gross profit | $ | 153,514 | $ | 174,760 | $ | 386,652 | $ | 442,304 | ||||||||
Stock-based compensation expense | 1,999 | 1,379 | 5,129 | 2,889 | ||||||||||||
Impact of restructuring | — | — | — | 37 | ||||||||||||
Intangible assets amortization | 2,304 | 1,319 | 5,336 | 3,957 | ||||||||||||
Non-GAAP gross profit | $ | 157,817 | $ | 177,458 | $ | 397,117 | $ | 449,187 | ||||||||
Non-GAAP gross margin (as a percentage of revenue): | ||||||||||||||||
GAAP gross margin | 39.0 | % | 44.5 | % | 41.1 | % | 42.3 | % | ||||||||
Stock-based compensation expense | 0.5 | 0.4 | 0.5 | 0.3 | ||||||||||||
Impact of restructuring | — | — | — | — | ||||||||||||
Intangible assets amortization | 0.6 | 0.3 | 0.6 | 0.4 | ||||||||||||
Non-GAAP gross margin | 40.1 | % | 45.2 | % | 42.2 | % | 43.0 | % | ||||||||
Non-GAAP research and development: | ||||||||||||||||
GAAP research and development | $ | 79,840 | $ | 84,170 | $ | 256,223 | $ | 252,471 | ||||||||
Stock-based compensation expense | (14,097 | ) | (12,947 | ) | (43,858 | ) | (39,939 | ) | ||||||||
Impact of restructuring | — | — | — | (2,744 | ) | |||||||||||
Non-GAAP research and development | $ | 65,743 | $ | 71,223 | $ | 212,365 | $ | 209,788 | ||||||||
Non-GAAP sales and marketing: | ||||||||||||||||
GAAP sales and marketing | $ | 66,676 | $ | 77,536 | $ | 239,573 | $ | 269,442 | ||||||||
Stock-based compensation expense | (3,638 | ) | (3,679 | ) | (10,996 | ) | (10,914 | ) | ||||||||
Impact of restructuring | — | — | — | (2,000 | ) | |||||||||||
Intangible assets amortization | 315 | — | (316 | ) | — | |||||||||||
Non-GAAP sales and marketing | $ | 63,353 | $ | 73,857 | $ | 228,261 | $ | 256,528 | ||||||||
Non-GAAP general and administrative: | ||||||||||||||||
GAAP general and administrative | $ | 24,812 | $ | 40,690 | $ | 91,111 | $ | 102,815 | ||||||||
Stock-based compensation expense | (4,381 | ) | (4,792 | ) | (13,630 | ) | (12,786 | ) | ||||||||
Litigation expense | — | (874 | ) | (765 | ) | (2,293 | ) | |||||||||
Impact of restructuring | — | — | — | (1,594 | ) | |||||||||||
Intangible assets amortization | (71 | ) | (62 | ) | (214 | ) | (177 | ) | ||||||||
Non-GAAP general and administrative | $ | 20,360 | $ | 34,962 | $ | 76,502 | $ | 85,965 | ||||||||
Non-GAAP operating expenses: | ||||||||||||||||
GAAP operating expenses | $ | 171,328 | $ | 202,396 | $ | 586,907 | $ | 624,728 | ||||||||
Stock-based compensation expense | (22,116 | ) | (21,418 | ) | (68,484 | ) | (63,639 | ) | ||||||||
Litigation expense | — | (874 | ) | (765 | ) | (2,293 | ) | |||||||||
Impact of restructuring | — | — | — | (6,338 | ) | |||||||||||
Intangible assets amortization | 244 | (62 | ) | (530 | ) | (177 | ) | |||||||||
Non-GAAP operating expenses | $ | 149,456 | $ | 180,042 | $ | 517,128 | $ | 552,281 | ||||||||
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 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | |||||||||||||
Non-GAAP operating income (loss) and income (loss) before income taxes: | ||||||||||||||||
GAAP operating loss | $ | (17,814 | ) | $ | (27,636 | ) | $ | (200,255 | ) | $ | (182,424 | ) | ||||
Stock-based compensation expense | 24,115 | 22,797 | 73,613 | 66,528 | ||||||||||||
Litigation expense | — | 874 | 765 | 2,293 | ||||||||||||
Impact of restructuring | — | — | — | 6,375 | ||||||||||||
Intangible assets amortization | 2,060 | 1,381 | 5,866 | 4,134 | ||||||||||||
Non-GAAP operating income (loss) | 8,361 | (2,584 | ) | (120,011 | ) | (103,094 | ) | |||||||||
Interest income, net | 2,072 | 1,162 | 5,599 | 2,451 | ||||||||||||
Other income (expense), net | (5,141 | ) | (702 | ) | (2,366 | ) | 134 | |||||||||
Non-GAAP operating income (loss) before income taxes | $ | 5,292 | $ | (2,124 | ) | $ | (116,778 | ) | $ | (100,509 | ) | |||||
Non-GAAP net income (loss) and net income (loss) per share: | ||||||||||||||||
Net loss | $ | (2,056 | ) | $ | (113,403 | ) | $ | (201,201 | ) | $ | (231,722 | ) | ||||
Stock-based compensation expense | 24,115 | 22,797 | 73,613 | 66,528 | ||||||||||||
Litigation expense | — | 874 | 765 | 2,293 | ||||||||||||
Impact of restructuring | — | — | — | 6,375 | ||||||||||||
Impairment of equity investment | 6,000 | — | 6,000 | — | ||||||||||||
Intangible assets amortization | 2,060 | 1,381 | 5,866 | 4,134 | ||||||||||||
Income tax effect of non-GAAP adjustments | (20,077 | ) | 85,574 | 29,810 | 95,909 | |||||||||||
Non-GAAP net income (loss) | $ | 10,042 | $ | (2,777 | ) | $ | (85,147 | ) | $ | (56,483 | ) | |||||
GAAP diluted shares | 245,838 | 234,242 | 242,746 | 230,918 | ||||||||||||
Other dilutive equity awards | 14,509 | — | — | — | ||||||||||||
Non-GAAP diluted shares | 260,347 | 234,242 | 242,746 | 230,918 | ||||||||||||
Non-GAAP diluted net income (loss) per share | $ | 0.04 | $ | (0.01 | ) | $ | (0.35 | ) | $ | (0.24 | ) | |||||
Non-GAAP free cash flow: | ||||||||||||||||
Net cash provided by operating activities | $ | 58,741 | $ | 5,490 | $ | 1,524 | $ | 8,718 | ||||||||
Purchases of property and equipment | (11,650 | ) | (18,382 | ) | (40,174 | ) | (58,199 | ) | ||||||||
Non-GAAP free cash flow | $ | 47,091 | $ | (12,892 | ) | $ | (38,650 | ) | $ | (49,481 | ) | |||||
Net cash provided by (used in) investing activities | $ | 20,174 | $ | (40,368 | ) | $ | 63,537 | $ | (32,913 | ) | ||||||
Net cash provided by (used in) financing activities | $ | (4,794 | ) | $ | (3,084 | ) | $ | (4,790 | ) | $ | 3,089 | |||||
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 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | |||||||||||||
Adjusted EBITDA: | ||||||||||||||||
Net loss | $ | (2,056 | ) | $ | (113,403 | ) | $ | (201,201 | ) | $ | (231,722 | ) | ||||
Stock-based compensation expense* | 24,115 | 22,797 | 73,613 | 66,528 | ||||||||||||
Litigation expense | — | 874 | 765 | 2,293 | ||||||||||||
Impact of restructuring | — | — | — | 6,375 | ||||||||||||
Impairment of equity investment | 6,000 | — | 6,000 | — | ||||||||||||
Depreciation and intangible assets amortization | 13,877 | 10,520 | 41,254 | 32,472 | ||||||||||||
Interest income, net | (2,072 | ) | (1,162 | ) | (5,599 | ) | (2,451 | ) | ||||||||
Income tax expense (benefit) | (18,827 | ) | 86,227 | 4,179 | 51,883 | |||||||||||
Adjusted EBITDA | $ | 21,037 | $ | 5,853 | $ | (80,989 | ) | $ | (74,622 | ) | ||||||
Stock-based compensation expense: | ||||||||||||||||
Cost of revenue | $ | 1,999 | $ | 1,379 | $ | 5,129 | $ | 2,889 | ||||||||
Research and development | 14,097 | 12,947 | 43,858 | 40,281 | ||||||||||||
Sales and marketing | 3,638 | 3,679 | 10,996 | 11,300 | ||||||||||||
General and administrative | 4,381 | 4,792 | 13,630 | 12,786 | ||||||||||||
Total stock-based compensation expense* | $ | 24,115 | $ | 22,797 | $ | 73,613 | $ | 67,256 | ||||||||
|
* A portion of stock-based compensation expense for the nine months ended September 30, 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 | Nine Months Ended | |||||||||||||
September 29, 2018 | September 30, 2017 | September 29, 2018 | September 30, 2017 | |||||||||||
United States | $ | 230,171 | $ | 244,204 | $ | 552,118 | $ | 613,825 | ||||||
Americas, excluding United States | 24,799 | 25,276 | 56,737 | 69,656 | ||||||||||
Europe, Middle East, and Africa | 104,186 | 88,672 | 234,693 | 285,045 | ||||||||||
APAC | 34,419 | 34,370 | 97,236 | 76,237 | ||||||||||
Total | $ | 393,575 | $ | 392,522 | $ | 940,784 | $ | 1,044,763 | ||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181031005754/en/
Fitbit, Inc.
Investor Contact:
Tom Hudson, 415-604-4106
[email protected]
or
Media
Contact:
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