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About Fitbit, Inc.

Fitbit is counting on you to step up and step out to get in shape. The company's wrist-worn fitness tracking devices are some of the most popular in the emerging fitness market. Its line of devices track daily steps, calories burned, active minutes, and display real-time feedback. Other measurements taken by the spectrum of Fitbit devices include floors climbed, sleep duration and quality, heart rate, and speed, distance and route. All Fitbit devices sync with computers and some sync with apps on mobile devices to show trends and achievements and access motivational tools such as coaching and guidance, or connections to our community. More than 39,000 stores carry Fitbits including Best Buy, Target, Costco, Macy's, Kohl's, Walmart, Dick's Sporting Goods, REI and Verizon, as does Amazon.com. The company also sells devices directly to consumers and through corporate wellness programs. Most of Fitbit's revenue is from the US. In late 2019 Fitbit agreed to be acquired by Google for about $2.1 billion.

Change in Company Type

In late-2019, Fitbit entered into an Agreement and Plan of Merger (the "Merger Agreement") with Google LLC, or Google, pursuant to which Google has agreed to acquire them for $7.35 per share in cash, valuing them at a fully diluted equity value of approximately $2.1 billion. Pursuant to the terms of, and subject to the conditions specified in, the Merger Agreement, they will become a wholly owned subsidiary of Google (the "Merger"). The Merger is expected to close in 2020, subject to customary closing conditions, including regulatory approvals.

Operations

While Fitbit develops the devices, sensors, algorithms, firmware and and online dashboard and mobile apps. Fitbit devices range in price from about $70 for the entry level Fitbit Inspire up to $250 for the Fitbit Ionic, which has the features of a GPS watch, heart-rate tracker, activity tracker, and smartwatch. The company updates its products through wireless connections. Fitbit also sells a WiFi-enabled scale, called Aria that tracks weight, body fat percentage, and body mass index.

The company offers premium services, for which customers pay extra. They include personalized insights, virtual coaching through customized guidance and coaching, customized programs, advanced sleep features, and interactive video-based exercise experiences on mobile devices and computers. The company's open application programming interface (API) allows third-party developers to create health and fitness apps for Fitbit's platform.

Geographic Reach

Fitbit is headquartered in San Francisco and has other offices in San Diego, California, Issaquah, Washington, and Boston. It has international operations in Ireland, Belarus, Romania, India, China, South Korea, Japan, and Singapore.

Fitbit relies on the US for more than 55% of its sales, with over 25% from the Europe, Africa, and Middle East region, almost 10% from the Asia/Pacific region and above 5% the Americas excluding the US.

Sales and Marketing

Fitbit sells mainly through several distributors and some 39,000 retail stores, which often have dedicated displays. The company's five largest retailers and distributors account for more than 40% of sales, with its two largest D&H Distributing and Amazon.com accounting for 10% or more of sales each. The company also gets about 10% of sales through its website.

The company marketing and advertising programs are focused on building global brand awareness, increasing product adoption, and driving sales. Their marketing and advertising efforts target a wide range of consumers and leverage traditional advertising methods (including television and print magazines), sponsorships and public relations, digital marketing, channel marketing, and endorsements by professional athletes and celebrities.

Their in-store merchandising strategy focuses on their point of purchase, or POP displays. They install their freestanding, in-line, and endcap POP displays of varying sizes at their various retailers. These displays communicate their marketing messages, present their products and its features and, in many cases, allow consumers to try on their devices and view an interactive app that enables them to learn more about their products.

Financial Performance

Revenue decreased $77.2 million, or 5%, from $1.5 billion for 2018 to $1.4 billion for 2019. The decrease was driven by three primary factors: weaker than expected consumer receptivity to the introduction of our low cost smartwatch, Fitbit Versa Lite; decline in tracker revenue driven by the introduction of lower priced devices and a shift in consumer demand towards smartwatches within the wearable device category; and an increase in discounts, rebates, and promotions to retailers and distributors given the increased competitive environment.

The company further fall into a loss of $320.7 million in 2019, compared to $185.8 million in the prior year. The fall was due to the decrease on their revenue while having an increasing cost of revenue.

The company had about $334.5 million in cash and equivalents in 2019 compared to $474 million in 2018. Operations used $156.8 million in 2019 and financing activities used $8.4 million, while investing activities provided $25.8 million.

Strategy

Broad and differentiated go-to-market strategy. The company have developed a broad go-to-market strategy designed to reach individuals regardless of where the customers shop. Fitbit sell their products in over 39,000 retail stores and in over 100 countries, through their retailers' websites, through their online store at Fitbit.com, and through Fitbit Health Solutions. The company believe the breadth and depth of their established selling channels and prominent presence in retail stores would be difficult for a competitor to replicate.

Fitbit's in-store merchandising strategy focuses on their point of purchase, or POP displays. The company install their freestanding, in-line, and endcap POP displays of varying sizes at their various retailers. These displays communicate their marketing messages, present the company's products and their features and, in many cases, allow consumers to try on their devices and view an interactive app that enables them to learn more about their products.

Mergers and Acquisitions

In late-2019, the Company completed a purchase of a privately-held company, which was accounted for as a business combination, for total purchase price consideration of $4.8 million, of which $1.6 million was allocated to developed technology intangible assets, $3.8 million to goodwill, and $0.6 million net assumed liabilities. Approximately $1.9 million of the consideration payable was recorded as contingent consideration.

Fitbit, Inc.

199 Fremont St FL 14
San Francisco, CA 94105-2253
Phone: 1 (415) 513-1000

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: FIT
Stock Exchange: , NYSE
VP Operations: Patrick McGivern
Chairman, President, and CEO: James Park
CFO: William Zerella
Employees (This Location): 242
Employees (All Locations): 1,684

Major Office Locations

San Francisco, CA

Other Locations

San Diego, CA
Boston, MA
Seoul, South Korea