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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Fitbit Inc | NYSE:FIT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 6.93 | 0 | 01:00:00 |
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(Mark one)
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☑
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from ________________ to ________________
|
Delaware
|
|
|
20-8920744
|
(State or other jurisdiction of
incorporation or organization) |
|
|
(I.R.S. Employer Identification No.)
|
|
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|
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199 Fremont Street,
|
14th Floor
|
|
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San Francisco,
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California
|
|
94105
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(Address of principal executive offices)
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|
(Zip Code)
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Title of each class
|
Trading symbol
|
Name of each exchange on which registered
|
Class A Common Stock, $0.0001 par value
|
FIT
|
The New York Stock Exchange
|
Yes
|
☑
|
No
|
☐
|
Yes
|
☑
|
No
|
☐
|
Large accelerated filer
|
☑
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
Yes
|
☐
|
No
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☑
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Page
Number
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Condensed Consolidated Balance Sheets
—June 29, 2019 and December 31, 2018
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Condensed Consolidated Statements of Operations
—for the three and six months ended June 29, 2019 and June 30, 2018
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Condensed Consolidated Statements of Comprehensive
Loss—for the three and six months ended June 29, 2019 and June 30, 2018
|
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|
|
Condensed Consolidated Statements of Stockholders’ Equity—
for the three and six months ended June 29, 2019 and June 30, 2018
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
—for the six months ended June 29, 2019 and June 30, 2018
|
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•
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our future revenue, cost of revenue, gross margin, operating expenses, including personnel costs, research and development expense, sales and marketing expense and general and administrative expense;
|
•
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continued investments in research and development, sales and marketing and international expansion and the impact of those investments;
|
•
|
competitors and competition in our markets;
|
•
|
our ability to anticipate and satisfy consumer preferences;
|
•
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our smartwatches and their market acceptance and future potential;
|
•
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our ability to develop and introduce new products and services, including recurring non-device revenue offerings, and improve our existing products and services;
|
•
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our ability to grow and engage our user base;
|
•
|
our expectations to derive the substantial majority of our revenue from sales of devices;
|
•
|
our ability to accurately forecast consumer demand and adequately manage inventory;
|
•
|
trends in our quarterly operating results and other operating metrics;
|
•
|
the impact of tariffs or other restrictions placed on our products imported into the United States from other countries, including China;
|
•
|
the impact of changes in tax laws on our operating results;
|
•
|
the impact of our adoption of accounting pronouncements;
|
•
|
our ability to deliver an adequate supply of product to meet demand;
|
•
|
our ability to maintain and promote our brand and expand brand awareness;
|
•
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our ability to detect, prevent, or fix defects;
|
•
|
our reliance on third-party suppliers, contract manufacturers, and logistics providers and our limited control over such parties;
|
•
|
legal proceedings and the impact of such proceedings;
|
•
|
the effect of seasonality on our results of operations;
|
•
|
our ability to attract and retain highly skilled employees;
|
•
|
the impact of our acquisitions in enhancing the features and functionality of our devices;
|
•
|
the impact of foreign currency exchange rates;
|
•
|
the sufficiency of our existing cash and cash equivalent balances and cash flow from operations to meet our working capital and capital expenditure needs for at least the next 12 months; and
|
•
|
general market, political, economic and business conditions
.
|
|
|
June 29, 2019
|
|
December 31, 2018
|
||||
|
|
|
||||||
|
|
|
|
|
||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
335,229
|
|
|
$
|
473,956
|
|
Marketable securities
|
|
229,708
|
|
|
249,493
|
|
||
Accounts receivable, net
|
|
258,599
|
|
|
414,209
|
|
||
Inventories
|
|
161,931
|
|
|
124,871
|
|
||
Income tax receivable
|
|
7,365
|
|
|
6,957
|
|
||
Prepaid expenses and other current assets
|
|
24,124
|
|
|
42,325
|
|
||
Total current assets
|
|
1,016,956
|
|
|
1,311,811
|
|
||
Property and equipment, net
|
|
91,718
|
|
|
106,286
|
|
||
Operating lease right-of-use assets
|
|
75,528
|
|
|
—
|
|
||
Goodwill
|
|
60,979
|
|
|
60,979
|
|
||
Intangible assets, net
|
|
19,499
|
|
|
23,620
|
|
||
Deferred tax assets
|
|
4,222
|
|
|
4,489
|
|
||
Other assets
|
|
9,278
|
|
|
8,362
|
|
||
Total assets
|
|
$
|
1,278,180
|
|
|
$
|
1,515,547
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
157,204
|
|
|
$
|
251,657
|
|
Accrued liabilities
|
|
332,857
|
|
|
437,234
|
|
||
Operating lease liabilities
|
|
23,907
|
|
|
—
|
|
||
Deferred revenue
|
|
28,076
|
|
|
29,400
|
|
||
Income taxes payable
|
|
578
|
|
|
1,092
|
|
||
Total current liabilities
|
|
542,622
|
|
|
719,383
|
|
||
Long-term deferred revenue
|
|
5,285
|
|
|
7,436
|
|
||
Long-term operating lease liabilities
|
|
75,309
|
|
|
—
|
|
||
Other liabilities
|
|
29,420
|
|
|
52,790
|
|
||
Total liabilities
|
|
652,636
|
|
|
779,609
|
|
||
Commitments and contingencies (Note 6)
|
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
|
||||
Class A and Class B common stock
|
|
25
|
|
|
25
|
|
||
Additional paid-in capital
|
|
1,092,306
|
|
|
1,055,046
|
|
||
Accumulated other comprehensive income (loss)
|
|
263
|
|
|
(66
|
)
|
||
Accumulated deficit
|
|
(467,050
|
)
|
|
(319,067
|
)
|
||
Total stockholders’ equity
|
|
625,544
|
|
|
735,938
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,278,180
|
|
|
$
|
1,515,547
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Revenue
|
$
|
313,556
|
|
|
$
|
299,344
|
|
|
$
|
585,446
|
|
|
$
|
547,209
|
|
Cost of revenue
|
205,342
|
|
|
180,329
|
|
|
387,779
|
|
|
314,071
|
|
||||
Gross profit
|
108,214
|
|
|
119,015
|
|
|
197,667
|
|
|
233,138
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
70,919
|
|
|
87,047
|
|
|
147,958
|
|
|
176,383
|
|
||||
Sales and marketing
|
83,060
|
|
|
100,845
|
|
|
151,676
|
|
|
172,897
|
|
||||
General and administrative
|
24,865
|
|
|
30,211
|
|
|
51,557
|
|
|
66,299
|
|
||||
Total operating expenses
|
178,844
|
|
|
218,103
|
|
|
351,191
|
|
|
415,579
|
|
||||
Operating loss
|
(70,630
|
)
|
|
(99,088
|
)
|
|
(153,524
|
)
|
|
(182,441
|
)
|
||||
Interest income, net
|
2,622
|
|
|
2,177
|
|
|
6,088
|
|
|
3,527
|
|
||||
Other income, net
|
461
|
|
|
2,258
|
|
|
1,734
|
|
|
2,775
|
|
||||
Loss before income taxes
|
(67,547
|
)
|
|
(94,653
|
)
|
|
(145,702
|
)
|
|
(176,139
|
)
|
||||
Income tax expense
|
971
|
|
|
23,615
|
|
|
2,281
|
|
|
23,006
|
|
||||
Net loss
|
$
|
(68,518
|
)
|
|
$
|
(118,268
|
)
|
|
$
|
(147,983
|
)
|
|
$
|
(199,145
|
)
|
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.27
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.83
|
)
|
Diluted
|
$
|
(0.27
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.83
|
)
|
Shares used to compute net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
256,160
|
|
|
242,898
|
|
|
254,659
|
|
|
241,227
|
|
||||
Diluted
|
256,160
|
|
|
242,898
|
|
|
254,659
|
|
|
241,227
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Net loss
|
$
|
(68,518
|
)
|
|
$
|
(118,268
|
)
|
|
$
|
(147,983
|
)
|
|
$
|
(199,145
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
||||||||
Change in unrealized gain on cash flow hedges, net of tax (expense) of $0, ($666) and $0 and ($666), respectively
|
—
|
|
|
5,248
|
|
|
—
|
|
|
5,912
|
|
||||
Less: reclassification for realized net gains included in net loss, net of tax expense of $0, $130, $0 and $130, respectively
|
—
|
|
|
(1,028
|
)
|
|
—
|
|
|
(1,028
|
)
|
||||
Net change, net of tax
|
—
|
|
|
4,220
|
|
|
—
|
|
|
4,884
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Available-for-sale investments:
|
|
|
|
|
|
|
|
||||||||
Change in unrealized gain (loss) on investments
|
167
|
|
|
118
|
|
|
329
|
|
|
(208
|
)
|
||||
Less reclassification for realized net gain included in net loss
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||
Net change, net of tax
|
167
|
|
|
130
|
|
|
329
|
|
|
(196
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive loss
|
$
|
(68,351
|
)
|
|
$
|
(113,918
|
)
|
|
$
|
(147,654
|
)
|
|
$
|
(194,457
|
)
|
|
Three Months Ended June 29, 2019
|
|||||||||||||||||||||
|
Class A and Class B Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at March 30, 2019
|
254,744,029
|
|
|
$
|
25
|
|
|
$
|
1,070,224
|
|
|
$
|
96
|
|
|
$
|
(398,532
|
)
|
|
$
|
671,813
|
|
Issuance of common stock
|
3,395,423
|
|
|
—
|
|
|
5,881
|
|
|
—
|
|
|
—
|
|
|
5,881
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
20,424
|
|
|
—
|
|
|
—
|
|
|
20,424
|
|
|||||
Taxes related to net share settlement of restricted stock units
|
—
|
|
|
—
|
|
|
(4,223
|
)
|
|
—
|
|
|
—
|
|
|
(4,223
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68,518
|
)
|
|
(68,518
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
|
—
|
|
|
167
|
|
|||||
Balance at June 29, 2019
|
258,139,452
|
|
|
$
|
25
|
|
|
$
|
1,092,306
|
|
|
$
|
263
|
|
|
$
|
(467,050
|
)
|
|
$
|
625,544
|
|
|
Three Months Ended June 30, 2018
|
|||||||||||||||||||||
|
Class A and Class B Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at March 31, 2018
|
240,989,613
|
|
|
$
|
24
|
|
|
$
|
976,022
|
|
|
$
|
329
|
|
|
$
|
(214,116
|
)
|
|
$
|
762,259
|
|
Issuance of common stock
|
4,052,113
|
|
|
1
|
|
|
9,750
|
|
|
—
|
|
|
—
|
|
|
9,751
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
25,681
|
|
|
—
|
|
|
—
|
|
|
25,681
|
|
|||||
Taxes related to net share settlement of restricted stock units
|
—
|
|
|
—
|
|
|
(4,814
|
)
|
|
—
|
|
|
—
|
|
|
(4,814
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(118,268
|
)
|
|
(118,268
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
4,350
|
|
|
—
|
|
|
4,350
|
|
|||||
Balance at June 30, 2018
|
245,041,726
|
|
|
$
|
25
|
|
|
$
|
1,006,639
|
|
|
$
|
4,679
|
|
|
$
|
(332,384
|
)
|
|
$
|
678,959
|
|
|
Six Months Ended June 29, 2019
|
|||||||||||||||||||||
|
Class A and Class B Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2018
|
252,362,841
|
|
|
$
|
25
|
|
|
$
|
1,055,046
|
|
|
$
|
(66
|
)
|
|
$
|
(319,067
|
)
|
|
$
|
735,938
|
|
Issuance of common stock
|
5,776,611
|
|
|
—
|
|
|
6,812
|
|
|
—
|
|
|
—
|
|
|
6,812
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
41,093
|
|
|
—
|
|
|
—
|
|
|
41,093
|
|
|||||
Taxes related to net share settlement of restricted stock units
|
—
|
|
|
—
|
|
|
(10,645
|
)
|
|
—
|
|
|
—
|
|
|
(10,645
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(147,983
|
)
|
|
(147,983
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
329
|
|
|
—
|
|
|
329
|
|
|||||
Balance at June 29, 2019
|
258,139,452
|
|
|
$
|
25
|
|
|
$
|
1,092,306
|
|
|
$
|
263
|
|
|
$
|
(467,050
|
)
|
|
$
|
625,544
|
|
|
Six Months Ended June 30, 2018
|
|||||||||||||||||||||
|
Class A and Class B Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Accumulated
Deficit
|
|
Total
Stockholders’
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance at December 31, 2017
|
238,756,522
|
|
|
$
|
24
|
|
|
$
|
956,060
|
|
|
$
|
(9
|
)
|
|
$
|
(132,112
|
)
|
|
$
|
823,963
|
|
Issuance of common stock
|
6,285,204
|
|
|
1
|
|
|
10,737
|
|
|
—
|
|
|
—
|
|
|
10,738
|
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
49,829
|
|
|
—
|
|
|
—
|
|
|
49,829
|
|
|||||
Taxes related to net share settlement of restricted stock units
|
—
|
|
|
—
|
|
|
(9,987
|
)
|
|
—
|
|
|
—
|
|
|
(9,987
|
)
|
|||||
Cumulative effect adjustment related to opening retained earnings for adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,127
|
)
|
|
(1,127
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(199,145
|
)
|
|
(199,145
|
)
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
4,688
|
|
|
—
|
|
|
4,688
|
|
|||||
Balance at June 30, 2018
|
245,041,726
|
|
|
$
|
25
|
|
|
$
|
1,006,639
|
|
|
$
|
4,679
|
|
|
$
|
(332,384
|
)
|
|
$
|
678,959
|
|
|
Six Months Ended
|
||||||
|
June 29, 2019
|
|
June 30, 2018
|
||||
|
|
|
|
||||
Cash Flows from Operating Activities
|
|
|
|
||||
Net loss
|
$
|
(147,983
|
)
|
|
$
|
(199,145
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Provision for doubtful accounts
|
48
|
|
|
—
|
|
||
Provision for inventory obsolescence
|
4,122
|
|
|
8,014
|
|
||
Depreciation
|
30,106
|
|
|
23,572
|
|
||
Non-cash lease expense
|
11,615
|
|
|
—
|
|
||
Write-off of property and equipment
|
170
|
|
|
7,485
|
|
||
Amortization of intangible assets
|
4,121
|
|
|
3,805
|
|
||
Stock-based compensation
|
41,091
|
|
|
49,498
|
|
||
Deferred income taxes
|
134
|
|
|
(1,299
|
)
|
||
Other
|
162
|
|
|
(419
|
)
|
||
Changes in operating assets and liabilities, net of acquisition:
|
|
|
|
||||
Accounts receivable
|
155,561
|
|
|
164,195
|
|
||
Inventories
|
(41,183
|
)
|
|
(24,217
|
)
|
||
Prepaid expenses and other assets
|
14,007
|
|
|
37,624
|
|
||
Fitbit Force recall reserve
|
136
|
|
|
(291
|
)
|
||
Accounts payable
|
(100,517
|
)
|
|
(64,184
|
)
|
||
Accrued liabilities and other liabilities
|
(98,100
|
)
|
|
(74,033
|
)
|
||
Lease liabilities
|
(13,577
|
)
|
|
—
|
|
||
Deferred revenue
|
(3,475
|
)
|
|
(9,623
|
)
|
||
Income taxes payable
|
(514
|
)
|
|
21,801
|
|
||
Net cash used in operating activities
|
(144,076
|
)
|
|
(57,217
|
)
|
||
Cash Flows from Investing Activities
|
|
|
|
||||
Purchase of property and equipment
|
(10,827
|
)
|
|
(28,524
|
)
|
||
Purchases of marketable securities
|
(220,495
|
)
|
|
(224,812
|
)
|
||
Sales of marketable securities
|
2,016
|
|
|
73,770
|
|
||
Maturities of marketable securities
|
239,429
|
|
|
236,575
|
|
||
Acquisition, net of cash acquired
|
—
|
|
|
(13,646
|
)
|
||
Net cash provided by investing activities
|
10,123
|
|
|
43,363
|
|
||
Cash Flows from Financing Activities
|
|
|
|
||||
Repayment of debt
|
—
|
|
|
(747
|
)
|
||
Payment of financing lease liability
|
(937
|
)
|
|
—
|
|
||
Proceeds from issuance of common stock
|
6,812
|
|
|
10,738
|
|
||
Taxes paid related to net share settlement of restricted stock units
|
(10,649
|
)
|
|
(9,987
|
)
|
||
Net cash provided by (used in) financing activities
|
(4,774
|
)
|
|
4
|
|
||
Net decrease in cash and cash equivalents
|
(138,727
|
)
|
|
(13,850
|
)
|
||
Cash and cash equivalents at beginning of period
|
473,956
|
|
|
341,966
|
|
||
Cash and cash equivalents at end of period
|
$
|
335,229
|
|
|
$
|
328,116
|
|
|
June 29, 2019
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
123,291
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
123,291
|
|
U.S. government agencies
|
—
|
|
|
94,766
|
|
|
—
|
|
|
94,766
|
|
||||
Corporate debt securities
|
—
|
|
|
250,837
|
|
|
—
|
|
|
250,837
|
|
||||
Derivative assets
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||
Total
|
$
|
123,291
|
|
|
$
|
345,622
|
|
|
$
|
—
|
|
|
$
|
468,913
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
928
|
|
|
$
|
—
|
|
|
$
|
928
|
|
Total
|
$
|
—
|
|
|
$
|
928
|
|
|
$
|
—
|
|
|
$
|
928
|
|
|
December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
273,546
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
273,546
|
|
U.S. government agencies
|
—
|
|
|
72,840
|
|
|
—
|
|
|
72,840
|
|
||||
Corporate debt securities
|
—
|
|
|
228,953
|
|
|
—
|
|
|
228,953
|
|
||||
Derivative assets
|
—
|
|
|
623
|
|
|
—
|
|
|
623
|
|
||||
Total
|
$
|
273,546
|
|
|
$
|
302,416
|
|
|
$
|
—
|
|
|
$
|
575,962
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative liabilities
|
$
|
—
|
|
|
$
|
549
|
|
|
$
|
—
|
|
|
$
|
549
|
|
Stock warrant liability
|
—
|
|
|
—
|
|
|
410
|
|
|
410
|
|
||||
Total
|
$
|
—
|
|
|
$
|
549
|
|
|
$
|
410
|
|
|
$
|
959
|
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Marketable Securities
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash
|
$
|
96,043
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
96,043
|
|
|
$
|
96,043
|
|
|
$
|
—
|
|
Money market funds
|
123,291
|
|
|
—
|
|
|
—
|
|
|
123,291
|
|
|
123,291
|
|
|
—
|
|
||||||
U.S. government agencies
|
94,682
|
|
|
85
|
|
|
(1
|
)
|
|
94,766
|
|
|
25,882
|
|
|
68,884
|
|
||||||
Corporate debt securities
|
250,723
|
|
|
129
|
|
|
(15
|
)
|
|
250,837
|
|
|
90,013
|
|
|
160,824
|
|
||||||
Total
|
$
|
564,739
|
|
|
$
|
214
|
|
|
$
|
(16
|
)
|
|
$
|
564,937
|
|
|
$
|
335,229
|
|
|
$
|
229,708
|
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Marketable Securities
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash
|
$
|
148,110
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
148,110
|
|
|
$
|
148,110
|
|
|
$
|
—
|
|
Money market funds
|
273,546
|
|
|
—
|
|
|
—
|
|
|
273,546
|
|
|
273,546
|
|
|
—
|
|
||||||
U.S. government agencies
|
72,884
|
|
|
1
|
|
|
(45
|
)
|
|
72,840
|
|
|
9,738
|
|
|
63,102
|
|
||||||
Corporate debt securities
|
229,040
|
|
|
—
|
|
|
(87
|
)
|
|
228,953
|
|
|
42,562
|
|
|
186,391
|
|
||||||
Total
|
$
|
723,580
|
|
|
$
|
1
|
|
|
$
|
(132
|
)
|
|
$
|
723,449
|
|
|
$
|
473,956
|
|
|
$
|
249,493
|
|
|
June 29, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
||||
Due in one year
|
$
|
209,478
|
|
|
$
|
249,493
|
|
Due in one to two years
|
20,230
|
|
|
—
|
|
||
Total
|
$
|
229,708
|
|
|
$
|
249,493
|
|
|
|
|
June 29, 2019
|
|
December 31, 2018
|
||||||||||||
|
Balance Sheet Location
|
|
Fair Value Derivative
Assets
|
|
Fair Value Derivative Liabilities
|
|
Fair Value Derivative
Assets
|
|
Fair Value Derivative Liabilities
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Hedges not designated
|
Prepaid expenses and other current assets
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
623
|
|
|
$
|
—
|
|
Hedges not designated
|
Accrued liabilities
|
|
—
|
|
|
928
|
|
|
—
|
|
|
549
|
|
||||
Total fair value of derivative instruments
|
|
|
$
|
19
|
|
|
$
|
928
|
|
|
$
|
623
|
|
|
$
|
549
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
Income Statement Location
|
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange cash flow hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recognized in OCI – effective portion
|
|
|
$
|
—
|
|
|
$
|
5,914
|
|
|
$
|
—
|
|
|
$
|
6,578
|
|
Gain (loss) reclassified from OCI into income – effective portion
|
Revenue
|
|
—
|
|
|
1,157
|
|
|
—
|
|
|
1,157
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange balance sheet hedges:
|
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) recognized in income
|
Other income, net
|
|
$
|
(115
|
)
|
|
$
|
4,793
|
|
|
$
|
(474
|
)
|
|
$
|
2,299
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded in revenue
|
|
$
|
313,556
|
|
|
$
|
299,344
|
|
|
$
|
585,446
|
|
|
$
|
547,209
|
|
Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded in operating expenses
|
|
178,844
|
|
|
218,103
|
|
|
351,191
|
|
|
415,579
|
|
||||
Gains (losses) on foreign exchange contracts designated as cash flow hedges reclassified from OCI into revenue
|
|
—
|
|
|
1,157
|
|
|
—
|
|
|
1,157
|
|
|
June 29, 2019
|
||||||||||||||||||||||
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
|
|
Gross Amounts Not Offset in Condensed Consolidated Balance Sheets
|
||||||||||||||||||||
|
Gross Amounts Recognized
|
|
Gross Amounts Offset
|
|
Net Amounts Presented
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts assets
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Foreign exchange contracts liabilities
|
928
|
|
|
—
|
|
|
928
|
|
|
19
|
|
|
—
|
|
|
909
|
|
||||||
|
|||||||||||||||||||||||
|
December 31, 2018
|
||||||||||||||||||||||
|
Gross Amounts Offset in the Condensed Consolidated Balance Sheets
|
|
Gross Amounts Not Offset in Condensed Consolidated Balance Sheets
|
||||||||||||||||||||
|
Gross Amounts Recognized
|
|
Gross Amounts Offset
|
|
Net Amounts Presented
|
|
Financial Instruments
|
|
Cash Collateral Received
|
|
Net Amount
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts assets
|
$
|
623
|
|
|
$
|
—
|
|
|
$
|
623
|
|
|
$
|
549
|
|
|
$
|
—
|
|
|
$
|
74
|
|
Foreign exchange contracts liabilities
|
549
|
|
|
—
|
|
|
549
|
|
|
549
|
|
|
—
|
|
|
—
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
June 29, 2019
|
|
June 29, 2019
|
||||
|
|
|
|
||||
Beginning balances
|
$
|
34,578
|
|
|
$
|
36,836
|
|
Deferral of revenue
|
9,151
|
|
|
16,810
|
|
||
Recognition of deferred revenue
|
(10,368
|
)
|
|
(20,285
|
)
|
||
Ending balances
|
$
|
33,361
|
|
|
$
|
33,361
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Beginning balances
|
$
|
75,998
|
|
|
$
|
82,612
|
|
|
$
|
104,001
|
|
|
$
|
109,872
|
|
Increases
(1)
|
45,866
|
|
|
36,929
|
|
|
77,125
|
|
|
63,001
|
|
||||
Returns taken
|
(46,820
|
)
|
|
(44,545
|
)
|
|
(106,082
|
)
|
|
(97,877
|
)
|
||||
Ending balances
|
$
|
75,044
|
|
|
$
|
74,996
|
|
|
$
|
75,044
|
|
|
$
|
74,996
|
|
(1)
|
Increases in the revenue returns reserve include provisions for open box returns and stock rotations.
|
|
|
|
|
||||
|
June 29, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
||||
Components
|
$
|
11,515
|
|
|
$
|
8,866
|
|
Finished goods
|
150,416
|
|
|
116,005
|
|
||
Total inventories
|
$
|
161,931
|
|
|
$
|
124,871
|
|
|
|
|
|
||||
|
June 29, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
||||
Prepaid expenses
|
$
|
9,427
|
|
|
$
|
18,100
|
|
Point-of-purchase (“POP”) displays, net
|
3,201
|
|
|
5,143
|
|
||
Prepaid marketing
|
2,207
|
|
|
3,258
|
|
||
Derivative asset
|
19
|
|
|
623
|
|
||
Other
|
9,270
|
|
|
15,201
|
|
||
Total prepaid expenses and other current assets
|
$
|
24,124
|
|
|
$
|
42,325
|
|
|
|
|
|
||||
|
June 29, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
||||
Tooling and manufacturing equipment
|
$
|
92,440
|
|
|
$
|
80,685
|
|
Furniture and office equipment
|
20,049
|
|
|
22,738
|
|
||
Purchased and internally-developed software
|
24,538
|
|
|
21,741
|
|
||
Leasehold improvements
|
59,428
|
|
|
67,715
|
|
||
Total property and equipment
|
196,455
|
|
|
192,879
|
|
||
Less: Accumulated depreciation and amortization
|
(104,737
|
)
|
|
(86,593
|
)
|
||
Property and equipment, net
|
$
|
91,718
|
|
|
$
|
106,286
|
|
|
June 29, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Developed technology
|
$
|
35,988
|
|
|
$
|
(19,718
|
)
|
|
$
|
16,270
|
|
|
$
|
35,988
|
|
|
$
|
(15,983
|
)
|
|
$
|
20,005
|
|
Customer relationships
|
3,790
|
|
|
(721
|
)
|
|
3,069
|
|
|
3,790
|
|
|
(451
|
)
|
|
3,339
|
|
||||||
Trademarks and other
|
1,278
|
|
|
(1,118
|
)
|
|
160
|
|
|
1,278
|
|
|
(1,002
|
)
|
|
276
|
|
||||||
Total intangible assets, net
|
$
|
41,056
|
|
|
$
|
(21,557
|
)
|
|
$
|
19,499
|
|
|
$
|
41,056
|
|
|
$
|
(17,436
|
)
|
|
$
|
23,620
|
|
|
Cost of Revenue
|
|
Operating Expenses
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Remaining 2019
|
$
|
2,928
|
|
|
$
|
414
|
|
|
$
|
3,342
|
|
2020
|
5,854
|
|
|
643
|
|
|
6,497
|
|
|||
2021
|
5,854
|
|
|
597
|
|
|
6,451
|
|
|||
2022
|
1,180
|
|
|
597
|
|
|
1,777
|
|
|||
2023
|
—
|
|
|
597
|
|
|
597
|
|
|||
Thereafter
|
—
|
|
|
835
|
|
|
835
|
|
|||
Total finite-lived intangible assets, net
|
$
|
15,816
|
|
|
$
|
3,683
|
|
|
$
|
19,499
|
|
|
June 29, 2019
|
|
December 31, 2018
|
||||
|
|
||||||
Accrued sales incentives
|
$
|
85,762
|
|
|
$
|
126,400
|
|
Accrued revenue reserve from returns
|
75,044
|
|
|
104,001
|
|
||
Product warranty
|
45,260
|
|
|
45,605
|
|
||
Accrued co-op advertising and marketing development funds
|
26,434
|
|
|
30,435
|
|
||
Accrued manufacturing expense and freight
|
27,651
|
|
|
21,357
|
|
||
Accrued sales and marketing
|
16,106
|
|
|
18,171
|
|
||
Employee-related liabilities
|
14,582
|
|
|
33,916
|
|
||
Sales taxes and VAT payable
|
13,376
|
|
|
20,121
|
|
||
Accrued research and development
|
12,474
|
|
|
8,783
|
|
||
Accrued legal settlements and fees
|
3,608
|
|
|
2,821
|
|
||
Inventory received but not billed
|
545
|
|
|
6,373
|
|
||
Finance lease liabilities
|
1,762
|
|
|
—
|
|
||
Derivative liabilities
|
928
|
|
|
549
|
|
||
Other
|
9,325
|
|
|
18,702
|
|
||
Accrued liabilities
|
$
|
332,857
|
|
|
$
|
437,234
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Beginning balances
|
$
|
48,034
|
|
|
$
|
71,975
|
|
|
$
|
45,605
|
|
|
$
|
87,882
|
|
Charged to cost of revenue
|
8,990
|
|
|
(8,486
|
)
|
|
17,228
|
|
|
(10,967
|
)
|
||||
Changes related to pre-existing warranties
|
(2,074
|
)
|
|
(4,469
|
)
|
|
2,673
|
|
|
(7,872
|
)
|
||||
Settlement of claims
|
(9,690
|
)
|
|
(8,552
|
)
|
|
(20,246
|
)
|
|
(18,575
|
)
|
||||
Ending balances
|
$
|
45,260
|
|
|
$
|
50,468
|
|
|
$
|
45,260
|
|
|
$
|
50,468
|
|
|
Unrealized Gains (Losses) on Cash Flow Hedges
|
|
Currency Translation Adjustments
|
|
Unrealized Gains (Losses) on Available-for-Sale Investments
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2018
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
(132
|
)
|
|
$
|
(66
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
|
—
|
|
|
329
|
|
|
329
|
|
||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
329
|
|
|
329
|
|
||||
Balance at June 29, 2019
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
197
|
|
|
$
|
263
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
June 29, 2019
|
|
June 29, 2019
|
||||
|
|
|
|
||||
Finance lease costs:
|
|
|
|
||||
Amortization of ROU assets
|
$
|
1,078
|
|
|
$
|
1,651
|
|
Interest on lease liabilities
|
—
|
|
|
—
|
|
||
Operating lease costs
(1)
|
3,410
|
|
|
10,984
|
|
||
Variable lease costs
|
1,330
|
|
|
2,645
|
|
||
Sublease income
|
(1,665
|
)
|
|
(3,631
|
)
|
||
Total lease costs
|
$
|
4,153
|
|
|
$
|
11,649
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
June 29, 2019
|
|
June 29, 2019
|
||||
|
|
|
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
||||
Financing cash flows from finance leases
|
$
|
340
|
|
|
$
|
937
|
|
Operating cash flows from finance leases
|
—
|
|
|
—
|
|
||
Operating cash flows from operating leases
|
8,526
|
|
|
14,038
|
|
||
|
|
|
|
||||
ROU assets obtained in exchange for lease obligations:
|
|
|
|
||||
Finance lease liabilities
|
$
|
—
|
|
|
—
|
|
|
Operating lease liabilities
|
—
|
|
|
$
|
288
|
|
|
June 29, 2019
|
||
|
|
||
Finance leases:
|
|
||
Other assets
|
$
|
1,048
|
|
|
|
||
Accrued liabilities
|
$
|
1,762
|
|
|
|
||
Operating leases:
|
|
||
Operating lease ROU assets
|
$
|
75,528
|
|
|
|
||
Operating lease liabilities
|
$
|
23,907
|
|
Long-term operating lease liabilities
|
75,309
|
|
|
Total operating lease liabilities
|
$
|
99,216
|
|
|
June 29, 2019
|
|
|
Weighted-average remaining lease terms (in years):
|
|
Finance leases
|
0.5
|
Operating leases
|
4.7
|
|
|
Weighted-average discount rates:
|
|
Finance leases
|
—%
|
Operating leases
|
5.5%
|
|
|
|
|
||||
|
Finance Leases
|
|
Operating Leases
|
||||
Remaining 2019
|
$
|
1,762
|
|
|
$
|
15,544
|
|
2020
|
—
|
|
|
23,876
|
|
||
2021
|
—
|
|
|
22,470
|
|
||
2022
|
—
|
|
|
21,941
|
|
||
2023
|
—
|
|
|
20,149
|
|
||
Thereafter
|
—
|
|
|
7,022
|
|
||
Total minimum lease payments
|
$
|
1,762
|
|
|
$
|
111,002
|
|
Less: amount representing interest
|
—
|
|
|
(11,786
|
)
|
||
Total lease liabilities
|
$
|
1,762
|
|
|
$
|
99,216
|
|
|
Stock Options Outstanding
|
|||||||||
|
Number of
Shares Subject
to
Stock Options
|
|
Weighted–
Average
Exercise
Price
|
|
Aggregate
Intrinsic
Value
(1)
|
|||||
Balance—December 31, 2018
|
16,263
|
|
|
$
|
3.00
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|||
Exercised
|
(658
|
)
|
|
$
|
1.55
|
|
|
|
||
Forfeited or canceled
|
(11
|
)
|
|
$
|
6.16
|
|
|
|
||
Balance—June 29, 2019
|
15,594
|
|
|
$
|
3.06
|
|
|
$
|
28,482
|
|
|
|
|
|
|
|
|||||
Stock options vested and expected to vest—June 29, 2019
|
15,594
|
|
|
$
|
3.06
|
|
|
$
|
28,482
|
|
Stock options exercisable—June 29, 2019
|
15,255
|
|
|
$
|
2.96
|
|
|
$
|
28,479
|
|
|
RSUs
Outstanding
|
|
Weighted-
Average
Grant Date
Fair Value
|
|||
Unvested balance—December 31, 2018
|
18,376
|
|
|
$
|
6.69
|
|
Granted
|
10,919
|
|
|
$
|
5.77
|
|
Vested
|
(5,739
|
)
|
|
$
|
7.36
|
|
Forfeited or canceled
|
(2,844
|
)
|
|
$
|
6.55
|
|
Unvested balance—June 29, 2019
|
20,712
|
|
|
$
|
6.04
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Cost of revenue
|
$
|
1,521
|
|
|
$
|
2,032
|
|
|
$
|
2,951
|
|
|
$
|
3,130
|
|
Research and development
|
11,892
|
|
|
15,090
|
|
|
23,880
|
|
|
29,761
|
|
||||
Sales and marketing
|
3,175
|
|
|
3,911
|
|
|
6,313
|
|
|
7,358
|
|
||||
General and administrative
|
3,959
|
|
|
4,824
|
|
|
7,947
|
|
|
9,249
|
|
||||
Total stock-based compensation expense
|
$
|
20,547
|
|
|
$
|
25,857
|
|
|
$
|
41,091
|
|
|
$
|
49,498
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(68,518
|
)
|
|
$
|
(118,268
|
)
|
|
$
|
(147,983
|
)
|
|
$
|
(199,145
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares of common stock—basic for Class A and Class B
|
256,160
|
|
|
242,898
|
|
|
254,659
|
|
|
241,227
|
|
||||
Effect of dilutive securities
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|||||
Weighted-average shares of common stock—diluted for Class A and Class B
|
256,160
|
|
|
242,898
|
|
|
254,659
|
|
|
241,227
|
|
||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.27
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.83
|
)
|
Diluted
|
$
|
(0.27
|
)
|
|
$
|
(0.49
|
)
|
|
$
|
(0.58
|
)
|
|
$
|
(0.83
|
)
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||
|
|
|
|
|
|
|
|
||||
Stock options to purchase common stock
|
15,594
|
|
|
12,201
|
|
|
15,684
|
|
|
12,203
|
|
RSUs
|
20,712
|
|
|
8,035
|
|
|
22,357
|
|
|
8,865
|
|
Warrant
|
230
|
|
|
—
|
|
|
230
|
|
|
—
|
|
Diluted impact of ESPP
|
1,354
|
|
|
189
|
|
|
1,321
|
|
|
170
|
|
Total
|
37,890
|
|
|
20,425
|
|
|
39,592
|
|
|
21,238
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
|||
C
|
11
|
%
|
|
11
|
%
|
|
*
|
|
*
|
|
B
|
*
|
|
|
*
|
|
|
*
|
|
10
|
%
|
|
June 29, 2019
|
|
December 31, 2018
|
||
C
|
13
|
%
|
|
12
|
%
|
B
|
11
|
|
|
16
|
|
D
|
11
|
|
|
10
|
|
E
|
*
|
|
|
11
|
|
F
|
*
|
|
|
10
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
United States
|
$
|
180,862
|
|
|
$
|
182,451
|
|
|
$
|
315,953
|
|
|
$
|
321,947
|
|
Americas excluding United States
|
19,178
|
|
|
15,838
|
|
|
34,505
|
|
|
31,938
|
|
||||
Europe, Middle East, and Africa
|
87,563
|
|
|
65,969
|
|
|
174,661
|
|
|
130,507
|
|
||||
APAC
|
25,953
|
|
|
35,086
|
|
|
60,327
|
|
|
62,817
|
|
||||
Total
|
$
|
313,556
|
|
|
$
|
299,344
|
|
|
$
|
585,446
|
|
|
$
|
547,209
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Revenue
|
$
|
313,556
|
|
|
$
|
299,344
|
|
|
$
|
585,446
|
|
|
$
|
547,209
|
|
Net loss
|
$
|
(68,518
|
)
|
|
$
|
(118,268
|
)
|
|
$
|
(147,983
|
)
|
|
$
|
(199,145
|
)
|
Adjusted EBITDA
|
$
|
(30,830
|
)
|
|
$
|
(55,800
|
)
|
|
$
|
(74,016
|
)
|
|
$
|
(102,026
|
)
|
Devices sold
|
3,529
|
|
|
2,684
|
|
|
6,459
|
|
|
4,834
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Net loss
|
$
|
(68,518
|
)
|
|
$
|
(118,268
|
)
|
|
$
|
(147,983
|
)
|
|
$
|
(199,145
|
)
|
Stock-based compensation expense
|
20,547
|
|
|
25,857
|
|
|
41,091
|
|
|
49,498
|
|
||||
Litigation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
765
|
|
||||
Restructuring
|
—
|
|
|
—
|
|
|
2,458
|
|
|
—
|
|
||||
Depreciation and intangible assets amortization
|
18,792
|
|
|
15,173
|
|
|
34,225
|
|
|
27,377
|
|
||||
Interest income, net
|
(2,622
|
)
|
|
(2,177
|
)
|
|
(6,088
|
)
|
|
(3,527
|
)
|
||||
Income tax expense
|
971
|
|
|
23,615
|
|
|
2,281
|
|
|
23,006
|
|
||||
Adjusted EBITDA
|
$
|
(30,830
|
)
|
|
$
|
(55,800
|
)
|
|
$
|
(74,016
|
)
|
|
$
|
(102,026
|
)
|
|
Six Months Ended
|
||||||
|
June 29, 2019
|
|
June 30, 2018
|
||||
Net cash used in operating activities
|
$
|
(144,076
|
)
|
|
$
|
(57,217
|
)
|
Purchase of property and equipment
|
(10,827
|
)
|
|
(28,524
|
)
|
||
Non-GAAP free cash flow
|
$
|
(154,903
|
)
|
|
$
|
(85,741
|
)
|
Net cash provided by investing activities
|
$
|
10,123
|
|
|
$
|
43,363
|
|
Net cash provided by (used in) financing activities
|
$
|
(4,774
|
)
|
|
$
|
4
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
313,556
|
|
|
$
|
299,344
|
|
|
$
|
585,446
|
|
|
$
|
547,209
|
|
Cost of revenue
(1)
|
205,342
|
|
|
180,329
|
|
|
387,779
|
|
|
314,071
|
|
||||
Gross profit
|
108,214
|
|
|
119,015
|
|
|
197,667
|
|
|
233,138
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
(1)
|
70,919
|
|
|
87,047
|
|
|
147,958
|
|
|
176,383
|
|
||||
Sales and marketing
(1)
|
83,060
|
|
|
100,845
|
|
|
151,676
|
|
|
172,897
|
|
||||
General and administrative
(1)
|
24,865
|
|
|
30,211
|
|
|
51,557
|
|
|
66,299
|
|
||||
Total operating expenses
|
178,844
|
|
|
218,103
|
|
|
351,191
|
|
|
415,579
|
|
||||
Operating loss
|
(70,630
|
)
|
|
(99,088
|
)
|
|
(153,524
|
)
|
|
(182,441
|
)
|
||||
Interest income, net
|
2,622
|
|
|
2,177
|
|
|
6,088
|
|
|
3,527
|
|
||||
Other income, net
|
461
|
|
|
2,258
|
|
|
1,734
|
|
|
2,775
|
|
||||
Loss before income taxes
|
(67,547
|
)
|
|
(94,653
|
)
|
|
(145,702
|
)
|
|
(176,139
|
)
|
||||
Income tax expense
|
971
|
|
|
23,615
|
|
|
2,281
|
|
|
23,006
|
|
||||
Net loss
|
$
|
(68,518
|
)
|
|
$
|
(118,268
|
)
|
|
$
|
(147,983
|
)
|
|
$
|
(199,145
|
)
|
(1)
|
Includes stock-based compensation expense as follows (in thousands):
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
Stock-Based Compensation Expense:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
$
|
1,521
|
|
|
$
|
2,032
|
|
|
$
|
2,951
|
|
|
$
|
3,130
|
|
Research and development
|
11,892
|
|
|
15,090
|
|
|
23,880
|
|
|
29,761
|
|
||||
Sales and marketing
|
3,175
|
|
|
3,911
|
|
|
6,313
|
|
|
7,358
|
|
||||
General and administrative
|
3,959
|
|
|
4,824
|
|
|
7,947
|
|
|
9,249
|
|
||||
Total stock-based compensation expense
|
$
|
20,547
|
|
|
$
|
25,857
|
|
|
$
|
41,091
|
|
|
$
|
49,498
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||
|
(as a percentage of revenue)
|
||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
||||
Revenue
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Cost of revenue
|
65
|
|
|
60
|
|
|
66
|
|
|
57
|
|
Gross profit
|
35
|
|
|
40
|
|
|
34
|
|
|
43
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||
Research and development
|
23
|
|
|
29
|
|
|
25
|
|
|
32
|
|
Sales and marketing
|
26
|
|
|
34
|
|
|
26
|
|
|
32
|
|
General and administrative
|
8
|
|
|
10
|
|
|
9
|
|
|
12
|
|
Total operating expenses
|
57
|
|
|
73
|
|
|
60
|
|
|
76
|
|
Operating loss
|
(23
|
)
|
|
(33
|
)
|
|
(26
|
)
|
|
(33
|
)
|
Interest income, net
|
1
|
|
|
—
|
|
|
1
|
|
|
1
|
|
Other income, net
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
Loss before income taxes
|
(22
|
)
|
|
(32
|
)
|
|
(25
|
)
|
|
(31
|
)
|
Income tax expense
|
—
|
|
|
8
|
|
|
—
|
|
|
5
|
|
Net loss
|
(22
|
)%
|
|
(40
|
)%
|
|
(25
|
)%
|
|
(36
|
)%
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
(dollars in thousands)
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
||||||||||||||
Revenue
|
$
|
313,556
|
|
|
$
|
299,344
|
|
|
$
|
14,212
|
|
|
5
|
%
|
|
$
|
585,446
|
|
|
$
|
547,209
|
|
|
$
|
38,237
|
|
|
7
|
%
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
(dollars in thousands)
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
||||||||||||||
Cost of revenue
|
$
|
205,342
|
|
|
$
|
180,329
|
|
|
$
|
25,013
|
|
|
14
|
%
|
|
$
|
387,779
|
|
|
$
|
314,071
|
|
|
$
|
73,708
|
|
|
23
|
%
|
Gross profit
|
108,214
|
|
|
119,015
|
|
|
(10,801
|
)
|
|
(9
|
)%
|
|
197,667
|
|
|
233,138
|
|
|
(35,471
|
)
|
|
(15
|
)%
|
||||||
Gross margin
|
35
|
%
|
|
40
|
%
|
|
|
|
|
|
34
|
%
|
|
43
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
(dollars in thousands)
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
||||||||||||||
Research and development
|
$
|
70,919
|
|
|
$
|
87,047
|
|
|
$
|
(16,128
|
)
|
|
(19
|
)%
|
|
$
|
147,958
|
|
|
$
|
176,383
|
|
|
$
|
(28,425
|
)
|
|
(16
|
)%
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
(dollars in thousands)
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
||||||||||||||
Sales and marketing
|
$
|
83,060
|
|
|
$
|
100,845
|
|
|
$
|
(17,785
|
)
|
|
(18
|
)%
|
|
$
|
151,676
|
|
|
$
|
172,897
|
|
|
$
|
(21,221
|
)
|
|
(12
|
)%
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
(dollars in thousands)
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
||||||||||||||
General and administrative
|
$
|
24,865
|
|
|
$
|
30,211
|
|
|
$
|
(5,346
|
)
|
|
(18
|
)%
|
|
$
|
51,557
|
|
|
$
|
66,299
|
|
|
$
|
(14,742
|
)
|
|
(22
|
)%
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
(dollars in thousands)
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
||||||||||||||
Interest income, net
|
$
|
2,622
|
|
|
$
|
2,177
|
|
|
$
|
445
|
|
|
20
|
%
|
|
$
|
6,088
|
|
|
$
|
3,527
|
|
|
$
|
2,561
|
|
|
73
|
%
|
Other income, net
|
461
|
|
|
2,258
|
|
|
(1,797
|
)
|
|
(80
|
)%
|
|
1,734
|
|
|
2,775
|
|
|
(1,041
|
)
|
|
(38
|
)%
|
|
Three Months Ended
|
|
Change
|
|
Six Months Ended
|
|
Change
|
||||||||||||||||||||||
(dollars in thousands)
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
||||||||||||||
Income tax expense
|
$
|
971
|
|
|
$
|
23,615
|
|
|
$
|
(22,644
|
)
|
|
(96
|
)%
|
|
$
|
2,281
|
|
|
$
|
23,006
|
|
|
$
|
(20,725
|
)
|
|
(90
|
)%
|
Effective tax rate
|
(1.4
|
)%
|
|
(24.9
|
)%
|
|
|
|
|
|
(1.5
|
)%
|
|
(13.1
|
)%
|
|
|
|
|
|
Six Months Ended
|
||||||
|
June 29, 2019
|
|
June 30, 2018
|
||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
(144,076
|
)
|
|
$
|
(57,217
|
)
|
Investing activities
|
10,123
|
|
|
43,363
|
|
||
Financing activities
|
(4,774
|
)
|
|
4
|
|
||
Net change in cash and cash equivalents
|
$
|
(138,727
|
)
|
|
$
|
(13,850
|
)
|
•
|
the level of demand for our wearable devices and our ability to maintain or increase the size and engagement of our community of users;
|
•
|
the timing and success of new product and service introductions by us and the transition from legacy products;
|
•
|
the timing and success of new product and service introductions by our competitors or any other change in the competitive landscape of our market;
|
•
|
the mix of products sold in a quarter;
|
•
|
the continued market acceptance of, and the growth of the market for, wearable devices, and evolution of this market into smartwatches and other form factors;
|
•
|
pricing pressure as a result of competition or otherwise;
|
•
|
delays or disruptions in our supply, manufacturing, or distribution chain;
|
•
|
errors in our forecasting of the demand for our products, which could lead to lower revenue or increased costs, or both;
|
•
|
seasonal buying patterns of consumers;
|
•
|
increases in levels of channel inventory resulting from sales to our retailers and distributors in anticipation of future demand;
|
•
|
increases in and timing of sales and marketing and other operating expenses that we may incur to grow and expand our operations and to remain competitive;
|
•
|
impact of sales and marketing efforts and promotions by competitors, which are difficult to predict;
|
•
|
insolvency, credit, or other difficulties faced by our distributors and retailers affecting their ability to purchase or pay for our products;
|
•
|
insolvency, credit, or other difficulties confronting our suppliers, contract manufacturers, or logistics providers leading to disruptions in our supply or distribution chain;
|
•
|
levels of product returns, stock rotation, and price protection rights;
|
•
|
levels of warranty claims or estimated costs of warranty claims;
|
•
|
adverse litigation judgments, settlements, or other litigation-related costs;
|
•
|
changes in the legislative or regulatory environment, such as with respect to privacy, information security, health and wellness devices, consumer product safety, advertising, and taxes;
|
•
|
product recalls, regulatory proceedings, or other adverse publicity about our products;
|
•
|
fluctuations in foreign exchange rates;
|
•
|
costs related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially significant amortization costs and possible write-downs;
|
•
|
changes in the trade policies of the United States or other countries, such as the imposition of new tariffs on goods made in China; and
|
•
|
general economic conditions in either domestic or international markets.
|
•
|
inability to satisfy demand for our products;
|
•
|
reduced control over delivery timing and product reliability;
|
•
|
reduced ability to oversee the manufacturing process and components used in our products;
|
•
|
reduced ability to monitor compliance with our product manufacturing specifications;
|
•
|
price increases;
|
•
|
insolvency, credit problems, or other financial difficulties confronting our suppliers, contract manufacturers, or logistic providers;
|
•
|
risks related to the computer systems used by our suppliers, contract manufacturers, or logistic providers, such as system failures, viruses, cyberattacks, computer hackers and similar disruptions;
|
•
|
difficulties in establishing additional or alternative contract manufacturing relationships if we experience difficulties with our existing suppliers, contract manufacturers or logistic providers;
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•
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shortages of materials or components;
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•
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misappropriation of our intellectual property;
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•
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suppliers, contract manufacturers, and logistics providers may choose to limit or terminate their relationship with us;
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•
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exposure to natural catastrophes, political unrest, terrorism, labor disputes, and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured;
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•
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changes in local economic conditions in countries where our suppliers, contract manufacturers, or logistics providers are located;
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•
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the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds and tariffs; and
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•
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insufficient warranties and indemnities on components supplied to our contract manufacturers.
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•
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establishing and maintaining effective controls at foreign locations and the associated increased costs;
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•
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adapting our technologies, products, and services to non-U.S. consumers’ preferences and customs;
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•
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variations in margins by geography;
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•
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increased competition from local providers of similar products;
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•
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longer sales or collection cycles in some countries;
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•
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compliance with foreign laws and regulations;
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•
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compliance with the laws of numerous taxing jurisdictions where we conduct business, potential double taxation of our international earnings, and potentially adverse tax consequences due to U.S. and foreign tax laws as they relate to our international operations;
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•
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compliance with anti-bribery laws, such as the FCPA and the U.K. Bribery Act, by us, our employees, and our business partners;
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•
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complexity and other risks associated with current and future foreign legal requirements, including legal requirements related to consumer protection, consumer product safety, and data privacy frameworks, such as the GDPR, and any applicable privacy and data protection laws in foreign jurisdictions where we currently conduct business or intend to conduct business in the future;
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•
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currency exchange rate fluctuations and related effects on our operating results;
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•
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economic and political instability in some countries, particularly those in China where we have expanded;
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•
|
the uncertainty of protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad;
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•
|
tariffs and customs duties and the classification of our products by applicable governmental bodies; and
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•
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other costs of doing business internationally.
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•
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overall performance of the equity markets;
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•
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actual or anticipated fluctuations in our revenue and other operating results;
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•
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changes in the financial projections we may provide to the public or our failure to meet these projections;
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•
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failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow us, or our failure to meet these estimates or the expectations of investors;
|
•
|
recruitment or departure of key personnel;
|
•
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the economy as a whole and market conditions in our industry;
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•
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negative publicity related to problems in our manufacturing or the real or perceived quality of our products, as well as the failure to timely launch new products that gain market acceptance;
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•
|
rumors and market speculation involving us or other companies in our industry;
|
•
|
announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;
|
•
|
new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
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•
|
lawsuits threatened or filed against us;
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•
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other events or factors, including those resulting from war, incidents of terrorism, or responses to these events; and
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•
|
sales of shares of our Class A common stock by us or our stockholders.
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•
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provide that our board of directors will be classified into three classes of directors with staggered three-year terms at such time as the outstanding shares of our Class B common stock represent less than a majority of the combined voting power of our common stock;
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•
|
permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships;
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•
|
require super-majority voting to amend some provisions in our restated certificate of incorporation and restated bylaws;
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•
|
authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;
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•
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provide that only the chairman of our board of directors, our chief executive officer, or a majority of our board of directors will be authorized to call a special meeting of stockholders;
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•
|
provide for a dual class common stock structure in which holders of our Class B common stock have the ability to control the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the outstanding shares of our Class A and Class B common stock, including the election of directors and significant corporate transactions, such as a merger or other sale of our Company or its assets;
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•
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prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
|
•
|
provide that the board of directors is expressly authorized to make, alter, or repeal our bylaws; and
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•
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establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
|
Exhibit
|
|
|
|
Incorporated by Reference
|
|
Filed
|
||||||
Number
|
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
|
Herewith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1#
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.2#
|
|
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
X
|
104
|
|
Cover Page Interactive Data File - the cover page from the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 29, 2019 is formatted in iXBRL.
|
|
|
|
|
|
|
|
|
|
X
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FITBIT, INC.
|
|
|
|
|
|
Date:
|
August 2, 2019
|
|
|
/s/ Ronald W. Kisling
|
|
|
|
|
Ronald W. Kisling
|
|
|
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
1 Year Fitbit Chart |
1 Month Fitbit Chart |
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