Document and Entity Information - shares |
3 Months Ended | |
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Mar. 30, 2019 |
Apr. 26, 2019 |
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Entity Information [Line Items] | ||
Entity Registrant Name | FITBIT INC | |
Entity Central Index Key | 0001447599 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Common Class A [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 223,736,591 | |
Common Class B [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 31,267,322 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
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Mar. 30, 2019 |
Mar. 31, 2018 |
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Income Statement [Abstract] | ||
Revenue | $ 271,890 | $ 247,865 |
Cost of revenue | 182,437 | 133,742 |
Gross profit | 89,453 | 114,123 |
Operating expenses: | ||
Research and development | 77,039 | 89,336 |
Sales and marketing | 68,616 | 72,052 |
General and administrative | 26,692 | 36,088 |
Total operating expenses | 172,347 | 197,476 |
Operating loss | (82,894) | (83,353) |
Interest income, net | 3,466 | 1,350 |
Other income, net | 1,273 | 517 |
Loss before income taxes | (78,155) | (81,486) |
Income tax expense (benefit) | 1,310 | (609) |
Net loss | $ (79,465) | $ (80,877) |
Net loss per share: | ||
Basic (in dollars per share) | $ (0.31) | $ (0.34) |
Diluted (in dollars per share) | $ (0.31) | $ (0.34) |
Shares used to compute net loss per share: | ||
Basic (in shares) | 253,124 | 239,431 |
Diluted (in shares) | 253,124 | 239,431 |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 30, 2019 |
Mar. 31, 2018 |
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Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (79,465) | $ (80,877) |
Cash flow hedges: | ||
Change in unrealized gain (loss) on cash flow hedges, net of tax benefit (expense) of $43, $192, $709 and $(7), respectively | 0 | 664 |
Less: reclassification for realized net gains included in net loss, net of tax expense (benefit) of $(115), $-, $(244) and $7, respectively | 0 | 0 |
Net change, net of tax | 0 | 664 |
Available-for-sale investments: | ||
Change in unrealized gain (loss) on available-for-sale investments, net of tax | 162 | (326) |
Less reclassification for realized net gain | 0 | 0 |
Other comprehensive income | 162 | 338 |
Net change, net of tax | (326) | |
Comprehensive loss | $ (79,303) | $ (80,539) |
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 30, 2019 |
Mar. 31, 2018 |
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Statement of Comprehensive Income [Abstract] | ||
Change in unrealized gain (loss) on cash flow hedges, tax | $ 0 | $ 0 |
Reclassification for realized net gains included in net income, tax | $ 0 | $ 0 |
Basis of Presentation and Summary of Significant Accounting Policies |
3 Months Ended |
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Mar. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying condensed consolidated financial statements of Fitbit, Inc. (the “Company”) are unaudited. The condensed consolidated balance sheet at December 31, 2018 has been derived from the audited financial statements of the Company. The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information, and in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position, its results of operations, and cash flows for the interim periods presented. The results of operations for the three months ended March 30, 2019 are not necessarily indicative of the results to be expected for the full fiscal year or any other period. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the Securities and Exchange Commission (“SEC”) on March 1, 2019. The Company’s fiscal year ends on December 31 of each year. The Company is on a 4-4-5 week quarterly calendar. There were 89 and 90 days in each of the three months ended March 30, 2019 and March 31, 2018, respectively. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. Use of Estimates The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. The primary estimates and assumptions made by management are related to revenue recognition, reserves for sales returns and incentives, reserves for warranty, valuation of stock-based awards, fair value of derivative assets and liabilities, allowance for doubtful accounts, inventory valuation, fair value of goodwill and acquired tangible and intangible assets and liabilities assumed during acquisitions, the number of reportable segments, the recoverability of intangible assets and their useful lives, contingencies, income taxes, and impairment of an equity investment. Actual results could differ from those estimates, and such differences may be material to the condensed consolidated financial statements. Significant Accounting Policies There have been no significant changes in the Company’s accounting policies from those disclosed in its Annual Report on Form 10-K, except for the policies described below in relation to the adoption of Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), discussed below in the section titled “Accounting Pronouncements Recently Adopted.” Leases The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term and long-term lease liabilities are included on the face of the condensed consolidated balance sheet. Finance lease ROU assets are presented within other assets, and finance lease liabilities are presented within accrued liabilities. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, the Company has elected the short-term lease measurement and recognition exemption, and it recognizes such lease payments on a straight-line basis over the lease term. Customer Bankruptcy In September 2017, Wynit Distribution LLC (“Wynit”) filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. Wynit was previously the Company’s largest customer. The Company ceased to recognize revenue from Wynit, which totaled $8.1 million during the third quarter of 2017. Additionally, the Company recorded a charge of $35.8 million during the third quarter ended September 30, 2017 comprised of cost of revenue of $5.5 million associated with shipments to Wynit in the third quarter of 2017 and bad debt expense of $30.3 million associated with all of Wynit’s outstanding accounts receivables. The Company maintains credit insurance that covers a portion of the exposure related to its customer receivables. The Company recorded an insurance receivable based on an analysis of its insurance policies, including their exclusions, an assessment of the nature of the claim, and information from its insurance carrier. As of September 30, 2017, the Company had recorded an insurance receivable of $26.8 million, included in prepaid expenses and other current assets, associated with the amount it had concluded was probable related to the claim. The $26.8 million insurance receivable allowed the Company to recover $22.7 million of bad debt expense and $4.1 million of cost of revenue, resulting in a net charge of $9.0 million in the consolidated statement of operations comprised of net bad debt expense of $7.6 million and net cost of revenue of $1.4 million. The Company received $21.4 million of the insurance receivable during the fourth quarter of 2017 and the remaining $5.4 million in January 2018. During the three months ended March 31, 2018, the Company released $12.4 million in product return and rebate reserves related to Wynit, as it believed the possibility of future claims associated with these reserves was remote. This reserve release resulted in a $12.4 million increase in revenue during the three months ended March 31, 2018. Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 provides for a new impairment model which requires measurement and recognition of expected credit losses for most financial assets and certain other instruments, including but not limited to accounts receivable and available for sale debt securities. ASU 2016-13 will become effective for the Company on January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test. The second step measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under ASU 2017-04, a company will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. ASU 2017-04 will be applied prospectively and is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements and will become effective for the Company on January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 clarifies the accounting for implementation costs in cloud computing arrangements and will become effective for the Company on January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. Accounting Pronouncements Recently Adopted In February 2016, the FASB issued ASU 2016-02, Leases and subsequent amendments to the initial guidance; ASU 2017-13, ASU 2018-10 and ASU 2018-11 (collectively, “Topic 842”). Topic 842 requires lessees to recognize ROU assets and lease liabilities for operating leases, initially measured at the present value of the lease payments, on the balance sheet. The Company adopted the standard effective January 1, 2019 using a modified retrospective approach. Prior periods were not retrospectively adjusted. The cumulative effect upon adoption on the opening accumulated deficit balance was zero. The Company elected the available practical expedients, which allowed for carryforward of historical assessments of whether contracts contain or are leases, historical lease classification, and remaining lease terms. The standard had a material impact on the Company’s condensed consolidated balance sheets but did not have an impact on its condensed consolidated statements of operations. The most significant impact was the recognition of ROU assets and short-term and long-term lease liabilities for operating leases. The balances of operating lease ROU assets, operating lease liabilities, and long-term operating lease liabilities as of March 30, 2019 were $99.1 million, $30.2 million, and $98.2 million, respectively. The impact to other financial statement line items was immaterial. Adoption of the standard had no impact to net cash from or used in operating, investing, or financing activities in the Company’s consolidated statement of cash flows. Refer to Note 5 for further information on leases. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 amends the hedge accounting rules to simplify the application of hedge accounting standard and better portray the economic results of risk management activities in the financial statements. The standard expands the ability to hedge non-financial and financial risk components, reduces complexity in fair value hedges of interest rate risk, eliminates the requirement to separately measure and report hedge ineffectiveness, as well as eases certain hedge effectiveness assessment requirements. ASU 2017-12 became effective for the Company on January 1, 2019 with early adoption permitted. The Company early adopted this new standard in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 became effective for the Company on January 1, 2019. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. |
Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements The carrying values of the Company’s accounts receivable, accounts payable, and accrued liabilities approximated their fair values due to the short period of time to maturity or repayment. The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):
The fair value of the Company’s Level 1 financial instruments is based on quoted market prices in active markets for identical instruments. The fair value of the Company’s Level 2 financial instruments is based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data. In addition, Level 2 assets and liabilities include derivative financial instruments associated with hedging activity, which are further discussed in Note 3. Derivative financial instruments are initially measured at fair value on the contract date and are subsequently remeasured to fair value at each reporting date using inputs such as spot rates, forward rates, and discount rates. There is not an active market for each hedge contract, but the inputs used to calculate the value of the instruments are tied to active markets. There were no Level 3 assets as of March 30, 2019 and December 31, 2018. There were no Level 3 liabilities as of March 30, 2019 and there were Level 3 liabilities as of December 31, 2018. There were no transfers between fair value measurement levels during the three months ended March 30, 2019 and March 31, 2018. |
Financial Instruments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments Cash, Cash Equivalents and Marketable Securities The Company’s marketable securities are classified as available-for-sale as of the balance sheet date and are reported at fair value with unrealized gains and losses reported, net of tax, as a separate component of accumulated other comprehensive income (loss) in stockholders’ equity. Because the Company views marketable securities as available to support current operations as needed, it has classified all available-for-sale securities as current assets. Realized gains or losses and other-than-temporary impairments, if any, on available-for-sale securities are reported in other income (expense), net, as incurred. Investments are reviewed periodically to identify potential other-than-temporary impairments. No impairment loss has been recorded on the securities included in the tables below because the Company believes that the decrease in fair value of these securities is temporary and expects to recover up to, or beyond, the initial cost of investment for these securities. The following table sets forth cash, cash equivalents and marketable securities as of March 30, 2019 (in thousands):
The following table sets forth cash, cash equivalents and marketable securities as of December 31, 2018 (in thousands):
The gross unrealized gains or losses on marketable securities as of March 30, 2019 and December 31, 2018 were not material. There were no available-for-sale investments as of March 30, 2019 and December 31, 2018 that have been in a continuous unrealized loss position for greater than 12 months on a material basis. The following table classifies marketable securities by contractual maturities (in thousands):
Derivative Financial Instruments The Company operates in foreign countries, which exposes it to market risk associated with foreign currency exchange rate fluctuations between the U.S. dollar and various foreign currencies. In order to manage this risk, the Company may hedge a portion of its foreign currency exposures related to outstanding monetary assets and liabilities as well as forecasted revenues and expenses, using foreign currency exchange forward or option contracts. In general, the market risk related to these contracts is offset by corresponding gains and losses on the hedged transactions. The Company does not enter into derivative contracts for trading or speculative purposes. Cash Flow Hedges The Company at times enters into foreign currency derivative contracts designated as cash flow hedges to hedge certain forecasted revenue and expense transactions denominated in currencies other than the U.S. dollar. The Company’s cash flow hedges consist of forward contracts with maturities of 12 months or less. The Company periodically assesses the effectiveness of its cash flow hedges. Effectiveness represents a derivative instrument’s ability to generate offsetting changes in cash flows related to the hedged risk. The Company records the gains or losses, net of tax, related to its cash flow hedges as a component of accumulated other comprehensive income (loss) in stockholders’ equity and subsequently reclassifies the gains or losses into revenue when the underlying hedged transactions are recognized. If the hedged transaction becomes probable of not occurring, the corresponding amounts in accumulated other comprehensive income (loss) would immediately be reclassified to other income (expense), net. Cash flows related to the Company’s cash flow hedging program are recognized as cash flows from operating activities in its statements of cash flows. The Company had no outstanding contracts that were designated as cash flow hedges for forecasted revenue as of March 30, 2019 and December 31, 2018, respectively. Balance Sheet Hedges The Company enters into foreign exchange contracts to hedge certain monetary assets and liabilities that are denominated in currencies other than the functional currency of its subsidiaries. These foreign exchange contracts are carried at fair value, do not qualify for hedge accounting treatment, and are not designated as hedging instruments. Changes in the value of the foreign exchange contracts are recognized in other income (expense), net, and offset the foreign currency gain or loss on the underlying net monetary assets or liabilities. The Company had outstanding balance sheet hedges with a total notional amount of $67.2 million and $101.4 million as of March 30, 2019 and December 31, 2018, respectively. Fair Value of Foreign Currency Derivatives The foreign currency derivative contracts that were not settled at the end of the period are recorded at fair value, on a gross basis, in the condensed consolidated balance sheets. The following table presents the fair value of the Company’s foreign currency derivative contracts as of the periods presented (in thousands):
Financial Statement Effect of Foreign Currency Derivative Contracts The following table presents the pre-tax impact of the Company’s foreign currency derivative contracts on other comprehensive income (“OCI”) and the condensed consolidated statements of operations for the periods presented (in thousands):
As of March 30, 2019, there were no net derivative gains related to the Company’s cash flow hedges to be reclassified from OCI into revenue within the next 12 months. Effect of Derivative Contracts on Condensed Consolidated Statements of Operations The following table provides the location in the condensed consolidated statements of operations and amount of the recognized gains or losses to the Company’s derivative instruments designated as hedging instruments (in thousands):
Offsetting of Foreign Currency Derivative Contracts The Company presents its derivative assets and derivative liabilities at gross fair values in the condensed consolidated balance sheets. The Company generally enters into master netting arrangements, which mitigate credit risk by permitting net settlement of transactions with the same counterparty. The Company is not required to pledge, and is not entitled to receive, cash collateral related to these derivative instruments. The following tables set forth the available offsetting of net derivative assets under the master netting arrangements as of March 30, 2019 and December 31, 2018 (in thousands):
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Balance Sheet Components |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | Balance Sheet Components Deferred Revenue Deferred revenue relates to performance obligations for which payments have been received by the customer prior to revenue recognition. Deferred revenue primarily consists of deferred software, or amounts allocated to mobile dashboard and on-line apps and unspecified upgrade rights. Deferred revenue also includes deferred subscription-based services. The deferred software and deferred subscription-based service performance obligations are anticipated to be recognized over the useful life or service periods of twelve to seventeen months. Changes in the total short-term and long-term deferred revenue balances were as follows (in thousands):
Revenue Returns Reserve Revenue returns reserve activities were as follows (in thousands):
Inventories Inventories consisted of the following (in thousands):
Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands):
Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands):
Total depreciation and amortization expense related to property and equipment, net was $13.4 million and $10.5 million for the three months ended March 30, 2019 and March 31, 2018, respectively. Goodwill and Intangible Assets The carrying amount of goodwill was $61.0 million as of March 30, 2019 and December 31, 2018. The carrying amounts of the intangible assets as of March 30, 2019 and December 31, 2018 were as follows (in thousands, except useful life):
Total amortization expense related to intangible assets was $2.1 million and $1.7 million for the three months ended March 30, 2019 and March 31, 2018, respectively. The estimated future amortization expense of acquired finite-lived intangible assets to be charged to cost of revenue and operating expenses after March 30, 2019 is as follows (in thousands):
Accrued Liabilities Accrued liabilities consisted of the following (in thousands):
Product warranty reserve activities were as follows (in thousands):
Accumulated Other Comprehensive Income (Loss) The components and activity of accumulated other comprehensive income (“AOCI”), net of tax, were as follows (in thousands):
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company leases its principal facilities located in San Francisco, California. The Company also leases office space in various locations with expiration dates between 2019 and 2024. The lease agreements often include leasehold improvement incentives, escalating lease payments, renewal provisions and other provisions which require the Company to pay taxes, insurance, maintenance costs or defined rent increases. The Company’s leases are primarily accounted for as operating leases. Operating lease ROU assets and short-term and long-term operating lease liabilities are included on the face of the condensed consolidated balance sheet. Finance lease ROU assets are presented within other assets, and finance lease liabilities are presented within accrued liabilities. The Company has no leases that have not yet commenced as of March 30, 2019. Total lease cost consists of the following (in thousands):
(1) includes short-term leases, which are immaterial. Supplemental cash flow information related to leases was as follows (in thousands):
Supplemental balance sheet information related to leases was as follows (in thousands):
Weighted-average lease terms and discount rates are as follows:
Maturities of lease liabilities as of March 30, 2019 were as follow (in thousands):
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Leases | Leases The Company leases its principal facilities located in San Francisco, California. The Company also leases office space in various locations with expiration dates between 2019 and 2024. The lease agreements often include leasehold improvement incentives, escalating lease payments, renewal provisions and other provisions which require the Company to pay taxes, insurance, maintenance costs or defined rent increases. The Company’s leases are primarily accounted for as operating leases. Operating lease ROU assets and short-term and long-term operating lease liabilities are included on the face of the condensed consolidated balance sheet. Finance lease ROU assets are presented within other assets, and finance lease liabilities are presented within accrued liabilities. The Company has no leases that have not yet commenced as of March 30, 2019. Total lease cost consists of the following (in thousands):
(1) includes short-term leases, which are immaterial. Supplemental cash flow information related to leases was as follows (in thousands):
Supplemental balance sheet information related to leases was as follows (in thousands):
Weighted-average lease terms and discount rates are as follows:
Maturities of lease liabilities as of March 30, 2019 were as follow (in thousands):
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Commitments and Contingencies |
3 Months Ended |
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Mar. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments The aggregate amount of open purchase orders as of March 30, 2019 was approximately $605.8 million, of which $185.0 million related to the Company’s migration to a third-party hosting provider and $5.9 million was accrued for as of March 30, 2019. The Company cannot determine the aggregate amount of such purchase orders that represent contractual obligations because purchase orders may represent authorizations to purchase rather than binding agreements. The Company’s purchase orders are based on its current needs and are fulfilled by its suppliers, contract manufacturers, and logistics providers within short periods of time. During the normal course of business, the Company and its contract manufacturers procure components based upon a forecasted production plan. If the Company cancels all or part of the orders, or materially reduces forecasted orders, it may be liable to its suppliers and contract manufacturers for the cost of the excess components purchased by its contract manufacturers. As of March 30, 2019, $12.7 million was accrued for such liabilities to contract manufacturers. Letters of Credit As of March 30, 2019 and December 31, 2018, the Company had outstanding letters of credit of $36.6 million and $36.9 million, respectively, issued to cover the security deposit on the lease of its office headquarters in San Francisco, California, and other facility leases. Legal Proceedings Jawbone. Aliphcom, Inc. d/b/a Jawbone (“Jawbone”) and the Company each initiated civil lawsuits against each other in 2015. These included a complaint filed by Jawbone in California state court alleging the misappropriation of certain trade secrets by six former Jawbone employees who had joined Fitbit and who were also named as defendants. On December 8, 2017, the parties announced the global settlement of all of the outstanding civil litigation on confidential terms, and all of the cases were dismissed with prejudice. On August 12, 2016, the Company was notified by Jawbone that Jawbone had received a confidential subpoena from the U.S. Attorney’s Office for the Northern District of California requesting certain of the Company’s confidential business information that appeared to be related to Jawbone’s allegations of trade secret misappropriation. On February 17, 2017, the Company received a subpoena for documents from the same office. On February 1, 2018, the Company received a second subpoena for documents. The Company is cooperating with the U.S. Attorney’s Office. On June 14, 2018, the six former Jawbone employees who were named as individual defendants in the state trade secret case were charged in a federal indictment with being in possession of certain Jawbone trade secrets. Sleep Tracking. On May 8, 2015, a purported class action lawsuit was filed against the Company in the U.S. District Court for the Northern District of California, alleging that the sleep tracking function available in certain trackers does not perform as advertised. Plaintiffs seek class certification, restitution, unspecified compensatory and punitive damages, reasonable costs and expenses including attorneys’ fees, and other further relief as the court may deem just and proper. On January 31, 2017, plaintiffs filed a motion for class certification. Plaintiffs’ motion for class certification was granted on November 20, 2017. On April 20, 2017, the Company filed a motion for summary judgment. The Company’s motion for summary judgment was denied on December 8, 2017. During the three months ended June 30, 2018, the parties agreed to a settlement and on August 1, 2018, the plaintiffs filed a motion for preliminary approval of the class action settlement. At the hearing on September 13, 2018, the court denied preliminary settlement approval without prejudice and ordered revised settlement papers be filed by October 26, 2018. On November 29, 2018, the court granted preliminary settlement approval. The final approval hearing is scheduled for July 11, 2019. Heart Rate Tracking. On January 6, 2016 and February 16, 2016, two purported class action lawsuits were filed against the Company in the U.S. District Court for the Northern District of California alleging that the PurePulse® heart rate tracking technology does not consistently and accurately record users’ heart rates. Plaintiffs allege common law claims, as well as violations of various states’ false advertising, unfair competition, and consumer protection statutes, and seek class certification, injunctive and declaratory relief, restitution, unspecified compensatory damages, exemplary damages, punitive damages, statutory penalties and damages, reasonable costs and expenses including attorneys’ fees, and other further relief as the court may deem just and proper. On April 15, 2016, the plaintiffs filed a consolidated master class action complaint, and on May 19, 2016, they filed an amended consolidated master class action complaint. On January 9, 2017, the Company filed a motion to compel arbitration. On October 11, 2017, the court granted the motion to compel arbitration. Plaintiffs filed a motion for reconsideration, and that motion was denied on January 24, 2018. On February 20, 2018, a second amended consolidated master class action complaint (“SAC”) was filed on behalf of plaintiff Rob Dunn, the only plaintiff not ordered to arbitration, as a purported class action. The SAC alleges the same common law claims as the prior class actions, as well as violations of false advertising, unfair competition, and consumer protection statutes of California and Arizona. The SAC also seeks class certification, injunctive and declaratory relief, restitution, unspecified compensatory damages, exemplary damages, punitive damages, statutory penalties and damages, reasonable costs and expenses including attorneys’ fees, and other further relief as the court may deem just and proper. On March 13, 2018, the Company filed a motion to dismiss for failure to state a claim and separately moved to strike the class allegations. The court dismissed the claims for revocation of acceptance, violation of California’s Song-Beverly Consumer Warranty Act, and unjust enrichment, but allowed the remaining claims pending amendment to the complaint with further details. Plaintiff filed a third amended complaint on June 19, 2018. The court granted the Company’s motion to strike and ordered the plaintiff to amend to make clear that he is seeking to represent a class of opt-outs only, but added that plaintiff may amend in the event the Company’s arbitration agreement is found to be unenforceable. In response to an April 3, 2018 arbitration demand from Kate McLellan, one of the original plaintiffs who was compelled to arbitration, the Company attempted to resolve the individual claim with Ms. McLellan. At a May 31, 2018 hearing, the court expressed concern that the Company was “picking off” Ms. McLellan, thereby undermining the arbitration option and the court’s prior order compelling arbitration, and it ordered additional briefing. On July 24, 2018, the court awarded the plaintiffs their attorneys’ fees on the motion practice, but denied plaintiffs’ request that the arbitration right should be waived as a sanction. The Company is moving forward in private arbitration with Ms. McLellan. The Company believes that the plaintiffs’ allegations are without merit and intends to vigorously defend against the claims. Because the Company is in the early stages of this litigation matter, the Company is unable to estimate a reasonably possible loss or range of loss, if any, that may result from this matter. Securities Litigation I. In 2016, a putative class action was filed in federal court against the Company, certain of its officers and directors, and the underwriters of the Company’s initial public offering (“IPO”) alleging violations of the federal securities laws based on alleged materially false and misleading statements about the Company’s PurePulse® heart rate tracking technology. A putative class action was also filed in California state court involving the same statements. The parties agreed to settle the putative federal and state class actions for $33.3 million, which the Company accrued for as of December 31, 2017. On January 19, 2018, the court entered an order preliminarily approving the proposed settlement, and on April 20, 2018, the court approved the final settlement. The federal and state class action cases have been dismissed with prejudice. In the fourth quarter of 2016 and each quarter of 2017, a total of seven derivative lawsuits were filed in various federal courts and in the Delaware Court of Chancery naming the Company as nominal plaintiff and certain of the Company’s officers and directors as defendants. The federal cases are all stayed. The three cases filed in the Delaware Court of Chancery were consolidated and a second amended complaint was filed in which plaintiffs allege breach of fiduciary duty and insider trading against certain defendants who sold shares in the Company’s initial public offering and/or a secondary offering. On April 26, 2017, the Company filed a motion to dismiss the Delaware cases for failure to state a claim. On December 14, 2018, the court denied the motion to dismiss. The Company filed a motion for interlocutory appeal, which was denied on January 14, 2019. The Company then filed a Notice of Appeal in the Delaware Supreme Court, which was denied on January 30, 2019. The Company believes that the allegations in the derivative lawsuits are without merit and intends to vigorously defend against the claims. Because the Company is in the early stages of these litigation matters, the Company is unable to estimate a reasonably possible loss or range of loss, if any, that may result from these matters. Securities Litigation II. On November 1, 2018, a putative securities class action was filed in the U.S. District Court for the Northern District of California naming the Company and certain of its officers as defendants. The complaint alleges violations of Sections 10(b) and 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) arising out of alleged materially false and misleading statements about the Company’s guidance for fiscal 2017 provided during the fourth quarter of 2016, as well as its updated guidance for the fourth quarter of 2016. Plaintiffs seek class certification, unspecified compensatory damages, reasonable costs and expenses including attorneys’ fees, and other relief as the court may deem just and proper. The Company believes that the plaintiffs’ allegations are without merit and intends to vigorously defend against the claims. Because the Company is in the early stages of this litigation matter, the Company is unable to estimate a reasonably possible loss or range of loss, if any, that may result from this matter. Other. The Company is and, from time to time, may in the future become, involved in other legal proceedings in the ordinary course of business. The Company currently believes that the outcome of any of these existing legal proceedings, including the aforementioned cases, either individually or in the aggregate, will not have a material impact on the operating results, financial condition or cash flows of the Company. With respect to existing legal proceedings, the Company has either determined that the existence of a material loss is not reasonably possible or that it is unable to estimate a reasonably possible loss or range of loss. The Company may incur substantial legal fees, which are expensed as incurred, in defending against these legal proceedings. Indemnification In the ordinary course of business, the Company enters into commercial agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. To date, the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company also currently has directors’ and officers’ insurance. |
Stockholders' Equity |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity Equity Incentive Plans In May 2015, the Company’s board of directors and stockholders adopted and approved the 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan became effective on June 16, 2015 and serves as the successor to the Amended and Restated 2007 Stock Plan (the “2007 Plan”). The Company ceased granting awards under the 2007 Plan, and any outstanding stock options and RSUs granted under the 2007 Plan would remain subject to the terms of the 2007 Plan. As of March 30, 2019, 24.4 million shares of Class A common stock were reserved and available for future issuance under the 2015 Plan. Stock Options Stock option activity under the equity incentive plans was as follows (in thousands, except per share amounts):
(1) The aggregate intrinsic values of stock options outstanding, exercisable, vested and expected to vest as of March 30, 2019 were calculated as the difference between the exercise price of the stock options and the fair value of the Class A common stock of $5.92 as of March 30, 2019. Restricted Stock Units RSU activity under the equity incentive plans was as follows (in thousands, except per share amounts):
In March 2019, the Company issued 0.5 million shares of market-based awards that vest based upon the achievement of a specified stock price. Market conditions were factored into the grant date fair value using a Monte Carlo valuation model, which utilized multiple input variables to determine the probability of the Company achieving the specified stock price targets. Stock-based compensation expense related to these awards will be recognized over the requisite service period regardless of whether the market condition is satisfied, provided that the requisite service period has been completed. Employee Stock Purchase Plan In May 2015, the Company’s board of directors adopted the 2015 Employee Stock Purchase Plan (the “2015 ESPP”), which became effective on June 17, 2015. The 2015 ESPP allows eligible employees to purchase shares of the Company’s Class A common stock through payroll deductions at a price per share equal to 85% of the lesser of the fair market value of the Company’s Class A common stock (i) on the first trading day of the applicable offering period and (ii) the last trading day of each purchase period in the applicable offering period. Except for the initial offering period, the 2015 ESPP provides for 6-month offering periods beginning in May and November of each year. Stock-Based Compensation Expense Total stock-based compensation expense recognized was as follows (in thousands):
As of March 30, 2019, the total unrecognized stock-based compensation expense related to unvested stock options and RSUs was $138.8 million, which the Company expects to recognize over an estimated weighted average period of 2.2 years. |
Income Taxes |
3 Months Ended |
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Mar. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is subject to income tax in the United States as well as other tax jurisdictions in which it conducts business. Earnings from non-U.S. activities are subject to local country income tax. For the three months ended March 30, 2019, the Company recorded an expense for income taxes of $1.3 million for an effective tax rate of (1.7)%. The effective tax rate for the three months ended March 30, 2019, was different than the statutory federal tax rate primarily due to the impact of a full valuation allowance on the Company’s U.S. and certain of its foreign deferred tax assets, the mix of income/losses between the Company’s foreign jurisdictions, and pretax losses in jurisdictions for which no tax benefit will be recognized. For the three months ended March 31, 2018, the Company recorded a benefit for income taxes of $0.6 million, for an effective tax rate of 0.8%. The effective tax rate for the three months ended March 31, 2018 was different than the statutory federal tax rate primarily due to the impact of a full valuation allowance on the Company’s U.S. deferred tax assets. On December 22, 2017, the U.S. Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”) was signed into law and includes several key tax provisions that affect the Company, including a reduction of the statutory corporate tax rate from 35% to 21% effective for tax years beginning after December 31, 2017, elimination of the carryback of net operating losses generated after December 31, 2017, and changes to how the United States imposes income tax on multinational corporations, among others. In December 2017, the SEC Staff issued Staff Accounting Bulletin No. 118 (“SAB 118”), Income Tax Accounting Implications of the Tax Cuts and Jobs Act, which allowed the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. As of December 31, 2018, the Company had finalized all provisional amounts related to the 2017 Tax Act. Finalizing provisional adjustments related to the 2017 Tax Act did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2018. On July 24, 2018, the Ninth Circuit Court of Appeals (the “Court”) issued an opinion in Altera Corp. v. Commissioner requiring related parties in an intercompany cost sharing arrangement to share expenses related to share-based compensation. This opinion reversed the prior decision of the U.S. Tax Court. On August 7, 2018, the appellate court withdrew the opinion issued on July 24, 2018 to allow time for a reconstituted panel of judges to confer. We will continue to monitor the case. The Company accounts for deferred taxes under ASC Topic 740, “Income Taxes,” which involves weighing positive and negative evidence concerning the realizability of the Company’s deferred tax assets in each jurisdiction. In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. As of March 30, 2019, the Company maintains a valuation allowance against all its U.S. deferred tax assets and against certain of its foreign deferred tax assets. The Company will continue to assess the realizability of its deferred tax assets in each of the applicable jurisdictions going forward. As of March 30, 2019, the total amount of gross unrecognized tax benefits was $48.6 million, of which $25.0 million would affect the effective tax rate if recognized. The Company did not have any tax positions as of March 30, 2019 for which it is reasonably possible that the total amount of gross unrecognized tax benefits will increase or decrease within the following 12 months. |
Net Loss per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss per Share | Net Loss per Share The following table sets forth the computation of the Company’s basic and diluted net loss per share (in thousands, except per share amounts):
The following potentially dilutive common shares were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive (in thousands):
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Significant Customer Information and Other Information |
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Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Customer Information and Other Information | Significant Customer Information and Other Information Retailer and Distributor Concentration Retailers and distributors with revenue equal to or greater than 10% of total revenue for the three months ended March 30, 2019 and March 31, 2018 were as follows:
* Represents less than 10%. Retailers and distributors that accounted for equal to or greater than 10% of accounts receivable at March 30, 2019 and December 31, 2018 were as follows:
* Represents less than 10%. Geographic and Other Information Revenue by geographic region, based on ship-to destinations, was as follows (in thousands):
As of March 30, 2019 and December 31, 2018, long-lived assets, which represent property and equipment, located outside the United States were $27.9 million and $36.9 million, respectively. |
Acquisitions |
3 Months Ended |
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Mar. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions 2018 Acquisition In February 2018, the Company completed a purchase of Twine Health, Inc., a privately-held company, which was accounted for as a business combination, for total purchase price consideration of $16.7 million, of which $5.4 million was allocated to developed technology intangible assets, $3.8 million to customer relationships intangible asset, $9.9 million to goodwill, $1.7 million to deferred tax liabilities, $0.2 million to deferred revenue, and $0.6 million to net assumed liabilities. Approximately $2.6 million of the consideration payable to Twine Health, Inc. was held as partial security for certain indemnification obligations, and will be held back for payment until August 2019. The acquisition is expected to extend the Company’s reach into healthcare and lay the foundation to expand its offerings to health plans, health systems and self-insured employers, while creating opportunities to increase subscription-based revenue. The amortization periods of the acquired developed technology and customer relationships are approximately four and seven years, respectively. Goodwill is not deductible for tax purposes. |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Mar. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | The accompanying condensed consolidated financial statements of Fitbit, Inc. (the “Company”) are unaudited. The condensed consolidated balance sheet at December 31, 2018 has been derived from the audited financial statements of the Company. The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information, and in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position, its results of operations, and cash flows for the interim periods presented. The results of operations for the three months ended March 30, 2019 are not necessarily indicative of the results to be expected for the full fiscal year or any other period. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the Securities and Exchange Commission (“SEC”) on March 1, 2019. The Company’s fiscal year ends on December 31 of each year. The Company is on a 4-4-5 week quarterly calendar. There were 89 and 90 days in each of the three months ended March 30, 2019 and March 31, 2018, respectively. |
Principles of Consolidation | The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. The primary estimates and assumptions made by management are related to revenue recognition, reserves for sales returns and incentives, reserves for warranty, valuation of stock-based awards, fair value of derivative assets and liabilities, allowance for doubtful accounts, inventory valuation, fair value of goodwill and acquired tangible and intangible assets and liabilities assumed during acquisitions, the number of reportable segments, the recoverability of intangible assets and their useful lives, contingencies, income taxes, and impairment of an equity investment. Actual results could differ from those estimates, and such differences may be material to the condensed consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU 2016-13 provides for a new impairment model which requires measurement and recognition of expected credit losses for most financial assets and certain other instruments, including but not limited to accounts receivable and available for sale debt securities. ASU 2016-13 will become effective for the Company on January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test. The second step measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Under ASU 2017-04, a company will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. ASU 2017-04 will be applied prospectively and is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements on fair value measurements and will become effective for the Company on January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 clarifies the accounting for implementation costs in cloud computing arrangements and will become effective for the Company on January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. Accounting Pronouncements Recently Adopted In February 2016, the FASB issued ASU 2016-02, Leases and subsequent amendments to the initial guidance; ASU 2017-13, ASU 2018-10 and ASU 2018-11 (collectively, “Topic 842”). Topic 842 requires lessees to recognize ROU assets and lease liabilities for operating leases, initially measured at the present value of the lease payments, on the balance sheet. The Company adopted the standard effective January 1, 2019 using a modified retrospective approach. Prior periods were not retrospectively adjusted. The cumulative effect upon adoption on the opening accumulated deficit balance was zero. The Company elected the available practical expedients, which allowed for carryforward of historical assessments of whether contracts contain or are leases, historical lease classification, and remaining lease terms. The standard had a material impact on the Company’s condensed consolidated balance sheets but did not have an impact on its condensed consolidated statements of operations. The most significant impact was the recognition of ROU assets and short-term and long-term lease liabilities for operating leases. The balances of operating lease ROU assets, operating lease liabilities, and long-term operating lease liabilities as of March 30, 2019 were $99.1 million, $30.2 million, and $98.2 million, respectively. The impact to other financial statement line items was immaterial. Adoption of the standard had no impact to net cash from or used in operating, investing, or financing activities in the Company’s consolidated statement of cash flows. Refer to Note 5 for further information on leases. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 amends the hedge accounting rules to simplify the application of hedge accounting standard and better portray the economic results of risk management activities in the financial statements. The standard expands the ability to hedge non-financial and financial risk components, reduces complexity in fair value hedges of interest rate risk, eliminates the requirement to separately measure and report hedge ineffectiveness, as well as eases certain hedge effectiveness assessment requirements. ASU 2017-12 became effective for the Company on January 1, 2019 with early adoption permitted. The Company early adopted this new standard in the first quarter of 2018. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 became effective for the Company on January 1, 2019. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. |
Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of assets and liabilities measured on recurring basis | The following tables set forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):
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Financial Instruments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of cash, cash equivalents and marketable securities | The following table sets forth cash, cash equivalents and marketable securities as of March 30, 2019 (in thousands):
The following table sets forth cash, cash equivalents and marketable securities as of December 31, 2018 (in thousands):
The following table classifies marketable securities by contractual maturities (in thousands):
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Schedule of derivative instruments in statement of financial position, fair value | The following table presents the fair value of the Company’s foreign currency derivative contracts as of the periods presented (in thousands):
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Schedule of cash flow hedging instruments, statement of operations | The following table presents the pre-tax impact of the Company’s foreign currency derivative contracts on other comprehensive income (“OCI”) and the condensed consolidated statements of operations for the periods presented (in thousands):
|
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Schedule of cash flow hedging instruments, comprehensive income | The following table presents the pre-tax impact of the Company’s foreign currency derivative contracts on other comprehensive income (“OCI”) and the condensed consolidated statements of operations for the periods presented (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of derivative contracts on consolidated statement of operations | The following table provides the location in the condensed consolidated statements of operations and amount of the recognized gains or losses to the Company’s derivative instruments designated as hedging instruments (in thousands):
|
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Schedule of offsetting of foreign currency derivative contracts | The following tables set forth the available offsetting of net derivative assets under the master netting arrangements as of March 30, 2019 and December 31, 2018 (in thousands):
|
Balance Sheet Components (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of deferred revenue | Changes in the total short-term and long-term deferred revenue balances were as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts receivable reserves | Revenue returns reserve activities were as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventories | Inventories consisted of the following (in thousands):
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Schedule of prepaid expenses and other current asset | Prepaid expenses and other current assets consisted of the following (in thousands):
|
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Schedule of property and equipment | Property and equipment, net, consisted of the following (in thousands):
|
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Schedule of intangible assets (excluding goodwill) | The carrying amounts of the intangible assets as of March 30, 2019 and December 31, 2018 were as follows (in thousands, except useful life):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of estimated future amortization expense | The estimated future amortization expense of acquired finite-lived intangible assets to be charged to cost of revenue and operating expenses after March 30, 2019 is as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accrued liabilities | Accrued liabilities consisted of the following (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of product warranty reserves | Product warranty reserve activities were as follows (in thousands):
|
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Schedule of accumulated other comprehensive income | The components and activity of accumulated other comprehensive income (“AOCI”), net of tax, were as follows (in thousands):
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | Total lease cost consists of the following (in thousands):
(1) includes short-term leases, which are immaterial. Supplemental cash flow information related to leases was as follows (in thousands):
|
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Assets And Liabilities, Lessee | Supplemental balance sheet information related to leases was as follows (in thousands):
|
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Schedule of Weighted-Average Lease Terms and Discount Rates | Weighted-average lease terms and discount rates are as follows:
|
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Lessee, Operating Lease, Liability, Maturity | Maturities of lease liabilities as of March 30, 2019 were as follow (in thousands):
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Finance Lease, Liability, Maturity | Maturities of lease liabilities as of March 30, 2019 were as follow (in thousands):
|
Stockholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock option activity | Stock option activity under the equity incentive plans was as follows (in thousands, except per share amounts):
(1) The aggregate intrinsic values of stock options outstanding, exercisable, vested and expected to vest as of March 30, 2019 were calculated as the difference between the exercise price of the stock options and the fair value of the Class A common stock of $5.92 as of March 30, 2019. |
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Schedule of restricted stock unit activity | RSU activity under the equity incentive plans was as follows (in thousands, except per share amounts):
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Schedule of stock-based compensation expense | Total stock-based compensation expense recognized was as follows (in thousands):
|
Net Loss per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of basic and diluted net income (loss) per share | The following table sets forth the computation of the Company’s basic and diluted net loss per share (in thousands, except per share amounts):
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Schedule of antidilutive securities excluded from earnings per share | The following potentially dilutive common shares were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive (in thousands):
|
Significant Customer Information and Other Information (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedules of concentration of risk | Retailers and distributors that accounted for equal to or greater than 10% of accounts receivable at March 30, 2019 and December 31, 2018 were as follows:
* Represents less than 10%. Retailers and distributors with revenue equal to or greater than 10% of total revenue for the three months ended March 30, 2019 and March 31, 2018 were as follows:
* Represents less than 10%. Revenue by geographic region, based on ship-to destinations, was as follows (in thousands):
|
Basis of Presentation and Summary of Significant Accounting Policies - Customer Bankruptcy & Non-Monetary Transactions (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|
Jan. 31, 2018 |
Mar. 30, 2019 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Sep. 30, 2017 |
|
Concentration Risk [Line Items] | ||||||
Bad debt expense | $ 32 | $ 0 | ||||
Release of product return and rebate reserves | 12,400 | |||||
WynitDistribution [Member] | Customer Concentration Risk [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Unrecognized revenue, net | $ 8,100 | |||||
Allowance for Doubtful Accounts Receivable | 35,800 | |||||
Unrecoverable inventory | 5,500 | |||||
Accounts receivable for shipments made in the quarter | $ 30,300 | |||||
Insurance proceeds receivable, accounts receivable | 22,700 | $ 22,700 | ||||
Probably insurance proceeds | 26,800 | 26,800 | ||||
Insurance proceeds receivable, inventory | $ 4,100 | 4,100 | ||||
Charges offset by insurance recorded | 9,000 | |||||
Bad debt expense | 7,600 | |||||
Cost of revenue | $ 1,400 | |||||
Proceeds from insurance settlement | $ 5,400 | $ 21,400 |
Basis of Presentation and Summary of Significant Accounting Policies - Accounting Pronouncements Recently Adopted (Details) $ in Thousands |
Mar. 30, 2019
USD ($)
|
---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operating lease right-of-use assets | $ 99,144 |
Operating lease liabilities | 30,209 |
Long-term operating lease liabilities | $ 98,219 |
Financial Instruments - Unrealized Loss Position (Details) - USD ($) |
Mar. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Available-for-sale securities in continuous loss position for one year or more, gross unrealized losses | $ 0 | $ 0 |
Financial Instruments - Contractual maturity dates (Details) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Due in one year | $ 230,382 | $ 249,493 |
Due in one to two years | 3,001 | 0 |
Total | $ 233,383 | $ 249,493 |
Financial Instruments - Additional Derivative Information (Details) - USD ($) $ in Millions |
Mar. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Foreign currency exchange contract [Member] | Not designated as hedging instrument [Member] | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 67.2 | $ 101.4 |
Financial Instruments - Financial Position, Fair Value (Details) - Foreign currency exchange contract [Member] - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Fair Value Derivative Assets | $ 464 | $ 623 |
Fair Value Derivative Liabilities | 28 | 549 |
Not designated as hedging instrument [Member] | Prepaid expenses and other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value Derivative Assets | 464 | 623 |
Fair Value Derivative Liabilities | 0 | 0 |
Not designated as hedging instrument [Member] | Accrued liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value Derivative Assets | 0 | 0 |
Fair Value Derivative Liabilities | $ 28 | $ 549 |
Financial Instruments - Statement of Operations and Other Comprehensive Income (Details) - Foreign currency exchange contract [Member] - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Designated as hedging instrument [Member] | Cash flow hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in OCI – effective portion | $ 0 | $ 664 |
Designated as hedging instrument [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) on Cash Flow Hedges [Member] | Cash flow hedges [Member] | Revenue [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) reclassified from OCI into income – effective portion | 0 | 0 |
Not designated as hedging instrument [Member] | Other Income, Net [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income | $ (359) | $ (2,493) |
Financial Instruments - Schedule of Derivative Contracts on Consolidated Statement of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded in revenue | $ 271,890 | $ 247,865 |
Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded in operating expenses | $ 182,437 | 133,742 |
Cash flow hedges [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded in revenue | 247,865 | |
Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded in operating expenses | $ 197,476 |
Balance Sheet Components - Deferred Revenue (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 30, 2019
USD ($)
| |
Deferred Revenue [Roll Forward] | |
Beginning balances | $ 36,836 |
Deferral of revenue | 7,659 |
Recognition of deferred revenue | (9,917) |
Ending balances | $ 34,578 |
Balance Sheet Components - Revenue Returns Reserves (Details) - Revenue Return Reserve [Member] - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | ||
Beginning balance | $ 104,001 | $ 109,872 |
Increases | 31,259 | 26,073 |
Returns taken | (59,262) | (53,333) |
Ending balances | $ 75,998 | $ 82,612 |
Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Components | $ 19,010 | $ 8,866 |
Finished goods | 155,468 | 116,005 |
Total inventories | $ 174,478 | $ 124,871 |
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Point-of-purchase (“POP”) displays, net | $ 4,262 | $ 5,143 |
Prepaid marketing | 2,673 | 3,258 |
Derivative asset | 464 | 623 |
Prepaid expenses | 11,136 | 18,100 |
Other | 7,946 | 15,201 |
Total prepaid expenses and other current assets | $ 26,481 | $ 42,325 |
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 191,445 | $ 192,879 | |
Less: Accumulated depreciation and amortization | (96,170) | (86,593) | |
Property and equipment, net | 95,275 | 106,286 | |
Depreciation and amortization expense | 13,400 | $ 10,500 | |
Tooling and manufacturing equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 80,200 | 80,685 | |
Furniture and office equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 22,454 | 22,738 | |
Purchased and internally-developed software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 24,200 | 21,741 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 64,591 | $ 67,715 |
Balance Sheet Components - Goodwill (Details) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Goodwill | $ 60,979 | $ 60,979 |
Balance Sheet Components - Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
Dec. 31, 2018 |
|
Finite-Lived Intangible Assets [Line Items] | |||
Gross | $ 41,056 | $ 41,056 | |
Accumulated Amortization | (19,497) | (17,436) | |
Net | 21,559 | 23,620 | |
Amortization of intangible assets | 2,060 | $ 1,748 | |
Developed technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 35,988 | 35,988 | |
Accumulated Amortization | (17,852) | (15,983) | |
Net | 18,136 | 20,005 | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 3,790 | 3,790 | |
Accumulated Amortization | (586) | (451) | |
Net | 3,204 | 3,339 | |
Trademarks and other [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 1,278 | 1,278 | |
Accumulated Amortization | (1,059) | (1,002) | |
Net | $ 219 | $ 276 |
Balance Sheet Components - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Remaining 2019 | $ 5,401 | |
2020 | 6,497 | |
2021 | 6,451 | |
2022 | 1,777 | |
2023 | 597 | |
Thereafter | 836 | |
Net | 21,559 | $ 23,620 |
Cost of revenue [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining 2019 | 4,781 | |
2020 | 5,854 | |
2021 | 5,854 | |
2022 | 1,180 | |
2023 | 0 | |
Thereafter | 0 | |
Net | 17,669 | |
Operating expenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Remaining 2019 | 620 | |
2020 | 643 | |
2021 | 597 | |
2022 | 597 | |
2023 | 597 | |
Thereafter | 836 | |
Net | $ 3,890 |
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued sales incentives | $ 101,352 | $ 126,400 |
Accrued revenue reserve from returns | 75,998 | 104,001 |
Product warranty | 48,034 | 45,605 |
Finance lease liabilities | 2,102 | 0 |
Sales taxes and VAT payable | 12,873 | 20,121 |
Accrued manufacturing expense and freight | 30,288 | 21,357 |
Accrued co-op advertising and marketing development funds | 27,605 | 30,435 |
Employee-related liabilities | 19,196 | 33,916 |
Accrued sales and marketing | 15,573 | 18,171 |
Accrued research and development | 12,655 | 8,783 |
Inventory received but not billed | 4,091 | 6,373 |
Accrued legal settlements and fees | 2,912 | 2,821 |
Derivative liabilities | 28 | 549 |
Other | 11,044 | 18,702 |
Accrued liabilities | $ 363,751 | $ 437,234 |
Balance Sheet Components - Product Warranty (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Beginning balances | $ 45,605 | $ 87,882 |
Charged to cost of revenue | 8,238 | (2,481) |
Changes related to pre-existing warranties | 4,747 | (3,402) |
Settlement of claims | (10,556) | (10,024) |
Ending balances | $ 48,034 | $ 71,975 |
Schedule of Lease Cost (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 30, 2019
USD ($)
| |
Leases [Abstract] | |
Finance lease costs: Amortization of ROU assets | $ 573 |
Finance lease costs: Interest on lease liabilities | 0 |
Operating lease costs | 7,574 |
Variable lease costs | 1,315 |
Sublease income | (1,966) |
Total lease costs | $ 7,496 |
Leases Supplemental Cash Flows - Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Financing cash flows from finance leases | $ 597 | $ 0 |
Operating cash flows from finance leases | 0 | |
Operating cash flows from operating leases | 5,512 | |
ROU assets obtained in exchange for lease obligations: | ||
Finance lease liabilities | 0 | |
Operating lease liabilities | $ 288 |
Leases Supplemental Balance Sheet - Leases (Details) $ in Thousands |
Mar. 30, 2019
USD ($)
|
---|---|
Finance leases: | |
Other assets | $ 2,127 |
Accrued liabilities | 2,102 |
Operating leases: | |
Operating lease ROU assets | 99,144 |
Operating lease liabilities | 30,209 |
Long-term operating lease liabilities | 98,219 |
Total operating lease liabilities | $ 128,428 |
Leases Weighted Average Remaining Lease Term and Discount Rates (Details) |
3 Months Ended |
---|---|
Mar. 30, 2019 | |
Weighted-Average Remaining Lease Terms [Abstract] | |
Finance leases (in years) | 9 months 18 days |
Operating leases (in years) | 4 years 10 months 24 days |
Weighted-Average Discount Rates [Abstract] | |
Finance leases, percent | 0.00% |
Operating leases, percent | 5.50% |
Leases Maturity of Lease Liabilties (Details) - USD ($) $ in Thousands |
Mar. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Finance Lease Liabilities, Payments, Due [Abstract] | ||
Remaining 2019 | $ 2,102 | |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
Thereafter | 0 | |
Total minimum lease payments | 2,102 | |
Less: amount representing interest | 0 | |
Total lease liabilities | 2,102 | $ 0 |
Operating Lease Liabilities, Payments Due [Abstract] | ||
Remaining 2019 | 28,140 | |
2020 | 29,017 | |
2021 | 27,216 | |
2022 | 26,819 | |
2023 | 25,159 | |
Thereafter | 8,700 | |
Total minimum lease payments | 145,051 | |
Less: amount representing interest | (16,623) | |
Total lease liabilities | $ 128,428 |
Stockholders' Equity - Stock Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | $ 20,544 | $ 23,641 |
Cost of revenue [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 1,430 | 1,098 |
Research and development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 11,988 | 14,671 |
Sales and marketing [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | 3,138 | 3,447 |
General and administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock-based compensation | $ 3,988 | $ 4,425 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ 1,310 | $ (609) |
Effective income tax rate | (1.70%) | 0.80% |
Unrecognized tax benefits | $ 48,600 | |
Unrecognized tax benefits that would impact effective tax rate | $ 25,000 |
Net Loss per Share - Schedule of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 30, 2019 |
Mar. 31, 2018 |
|
Numerator: | ||
Net loss | $ (79,465) | $ (80,877) |
Denominator: | ||
Weighted-average shares of common stock—basic (in shares) | 253,124 | 239,431 |
Effect of dilutive securities (in shares) | 0 | 0 |
Weighted-average shares of common stock—diluted (in shares) | 253,124 | 239,431 |
Net loss per share: | ||
Basic (in dollars per share) | $ (0.31) | $ (0.34) |
Diluted (in dollars per share) | $ (0.31) | $ (0.34) |
Acquisitions - Narrative (Details) - USD ($) $ in Thousands |
1 Months Ended | ||
---|---|---|---|
Feb. 28, 2018 |
Mar. 30, 2019 |
Dec. 31, 2018 |
|
Business Acquisition [Line Items] | |||
Goodwill | $ 60,979 | $ 60,979 | |
Twine Health, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Cash paid for acquisition | $ 16,700 | ||
Goodwill | 9,900 | ||
Deferred tax liabilities | 1,700 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Deferred Revenue | 200 | ||
Assumed liabilities | 600 | ||
Consideration held as security for indemnifications obligations | 2,600 | ||
Twine Health, Inc. [Member] | In Process Research and Development [Member] | |||
Business Acquisition [Line Items] | |||
Intangibles acquired | $ 5,400 | ||
Amortization period | 4 years | ||
Twine Health, Inc. [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Intangibles acquired | $ 3,800 | ||
Amortization period | 7 years |
Label | Element | Value |
---|---|---|
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,127,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,127,000) |