SAN FRANCISCO–Fitbit, Inc. (NYSE:FIT) the leader in the connected health and fitness market, today reported revenue of $711.6 million, GAAP diluted net income per share of $0.26, non-GAAP diluted net income per share of $0.35, and adjusted EBITDA of $125.3 million, for its fourth quarter of 2015.
For the full-year 2015, the company reported revenue of $1.86 billion, GAAP diluted net income per share of $0.75, non-GAAP diluted net income per share of $1.07, and adjusted EBITDA of $389.9 million.
“We believe we are beginning 2016 with strong customer engagement and retention, an accelerating pace of innovation and competitive differentiation, and a foundation of significant revenue growth and profitability in 2015,” said James Park, Fitbit co-founder and CEO. “I am very optimistic about our growth opportunities and long-term vision as a broader digital health company.”
Fourth Quarter and Full Year 2015Financial Summary
For additional information regarding the non-GAAP financial measures, see “Non-GAAP Financial Measures” and “Reconciliation of GAAP to Non-GAAP Financial Measures” below.
Fourth Quarter 2015 Financial Highlights
- Sold 8.2 million connected health and fitness devices
- Q415 revenue increased 92% year-over-year; adjusted EBITDA increased 66%
- U.S. comprised 75% of Q4 revenue; EMEA 12%, APAC 8%, and Other Americas 5%
- U.S. revenue grew 100% year-over-year; EMEA 191%, APAC 6%, and Other Americas 77%
- Newer products, Fitbit ChargeTM, Fitbit Charge HRTM and Fitbit SurgeTM, comprised 79% of revenue
- Q4 non-GAAP gross margin adjusted for foreign currency exchange rate impact was 50.0%
- Non-GAAP operating expenses comprised 32.2% of revenue in Q415, compared to 25.9% in Q414 and 28.6% in Q315
Full-Year 2015 Financial Highlights
- Sold 21.4 million connected health and fitness devices
- FY15 revenue increased 149% year-over-year; adjusted EBITDA increased 104%
- U.S. comprised 74% of FY15 revenue; EMEA 11%, APAC 10%, and Other Americas 5%
- U.S. revenue grew 146% year-over-year; EMEA 244%, APAC 110%, and Other Americas 139%
- Cash, cash equivalents and marketable securities totaled $664.5 million at December 31, 2015, compared to $195.6 million at December 31, 2014 and $575.5 million at September 30, 2015
Fourth Quarter 2015 and Recent Fitbit Operational Highlights
- Active users grew 152% to 16.9 million at year-end 2015 from 6.7 million at year-end 2014
- Added 18.0 million new registered device users in 2015, of which 13.0 million, 72%, were active users at year-end; Total year-end 2015 registered device users was 29.0 million
- Introduced Fitbit BlazeTM and Fitbit AltaTM. Fitbit Blaze won 18 top-pick awards at CES
- Pre-order volume for Alta and Blaze exceeded internal forecasts; Blaze was already ranked 2nd last week in Amazon’s best selling smartwatches over $100
- Introduced SmartTrackTM automatic exercise tracking
- New partnerships with Public School, Westin and Thermos
- R&D headcount grew to 624 at year-end 2015, comprising 57% of the company’s employees
- Added 1,000 Fitbit Wellness enterprise customers in 2015
Outlook and Guidance
Fitbit expects full-year 2016 revenue in the range of $2.4 to $2.5B, driven by new product introductions and geographic expansion, with gross margins ranging from 48.5% to 49.0% driven by the margin profile of new products and related accessories. Operating margins reflect strategic investments expected in 2016 to further develop Fitbit’s Digital Health strategy, expand corporate wellness offerings, support 2017 and 2018 product roadmaps and further build out back office infrastructure to support increasing scale and global breadth, including migrating business systems to SAP.
Fitbit expects 2016 adjusted EBITDA ranging from $400 to $480 million, and non-GAAP diluted net income per share ranging from $1.08 to $1.20. Stock-based compensation is expected to be in the range of $85 to $95 million. Full-year 2016 guidance reflects an expected effective tax rate of approximately 30% which will vary depending on the mix between domestic and international revenue, and a fully diluted share count of 245 to 251 million.
For the first quarter 2016, Fitbit expects several dynamics to drive results. For the first time in the company’s history, Fitbit will make a global launch of new products, Fitbit Blaze and Alta. Launching media campaigns around the world is expected to drive higher sales and marketing expenses for the quarter. Also, the timing of shipments into sales channels may result in the majority of reorders, especially for Alta, coming in the second quarter of 2016. The company also expects to incur additional manufacturing costs in the first quarter to maximize production of new products to meet expected demand, which is expected to impact gross margins in the quarter.
As a result, for the first quarter of 2016, Fitbit estimates revenue in the range of $420 million to $440 million. Non-GAAP gross margin is expected to be approximately 46.5%. First quarter adjusted EBITDA is projected to be in the range of $5 million to $16 million, and non-GAAP diluted net income per share is expected in the range of $0.00 to $0.02. Stock-based compensation expense is estimated at $18 million to $20 million. First quarter guidance reflects an expected tax rate of 30%, and a fully diluted share count of 244 to 246 million.