Cover page
Cover page - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Feb. 20, 2020 | Feb. 14, 2020 | Jun. 28, 2019 | |
Entity Information [Line Items] | ||||
Document Type | 10-K | |||
Document Annual Report | true | |||
Document Transition Report | false | |||
Document Period End Date | Dec. 31, 2019 | |||
Entity File Number | 001-37444 | |||
Entity Registrant Name | FITBIT, INC. | |||
Entity Incorporation, State or Country Code | DE | |||
Entity Tax Identification Number | 20-8920744 | |||
Entity Address, Address Line One | 199 Fremont Street | |||
Entity Address, Address Line Two | 14th Floor | |||
Entity Address, City or Town | San Francisco | |||
Entity Address, State or Province | CA | |||
Entity Address, Postal Zip Code | 94105 | |||
City Area Code | 415 | |||
Local Phone Number | 513-1000 | |||
Title of 12(b) Security | Class A Common Stock, $0.0001 par value | |||
Trading Symbol | FIT | |||
Security Exchange Name | NYSE | |||
Entity Voluntary Filers | No | |||
Entity Interactive Data Current | Yes | |||
Entity Well-known Seasoned Issuer | Yes | |||
Entity Current Reporting Status | Yes | |||
Entity Filer Category | Large Accelerated Filer | |||
Entity Small Business | false | |||
Entity Emerging Growth Company | false | |||
Entity Shell Company | false | |||
Entity Public Float | $ 1,000 | |||
Amendment Flag | false | |||
Document Fiscal Year Focus | 2019 | |||
Document Fiscal Period Focus | FY | |||
Entity Central Index Key | 0001447599 | |||
Current Fiscal Year End Date | --12-31 | |||
Common Class A [Member] | ||||
Entity Information [Line Items] | ||||
Entity Common Stock, Shares Outstanding | 235,956,941 | |||
Common Class B [Member] | ||||
Entity Information [Line Items] | ||||
Entity Common Stock, Shares Outstanding | 29,318,245 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 334,479 | $ 473,956 |
Marketable securities | 184,023 | 249,493 |
Accounts receivable, net | 435,269 | 414,209 |
Inventories | 136,752 | 124,871 |
Income tax receivable | 573 | 6,957 |
Prepaid expenses and other current assets | 28,656 | 42,325 |
Total current assets | 1,119,752 | 1,311,811 |
Property and equipment, net | 82,756 | 106,286 |
Operating lease right-of-use assets | 70,225 | |
Goodwill | 64,812 | 60,979 |
Intangible assets, net | 16,746 | 23,620 |
Deferred tax assets | 4,111 | 4,489 |
Other assets | 9,684 | 8,362 |
Total assets | 1,368,086 | 1,515,547 |
Current liabilities: | ||
Accounts payable | 194,626 | 251,657 |
Accrued liabilities | 513,530 | 437,234 |
Operating lease liabilities | 23,511 | |
Deferred revenue | 32,307 | 29,400 |
Income taxes payable | 636 | 1,092 |
Total current liabilities | 764,610 | 719,383 |
Long-term deferred revenue | 8,535 | 7,436 |
Long-term operating lease liabilities | 67,902 | |
Other liabilities | 39,776 | 52,790 |
Total liabilities | 880,823 | 779,609 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value, 10,000,000 shares authorized | 0 | 0 |
Additional paid-in capital | 1,126,827 | 1,055,046 |
Accumulated other comprehensive income (loss) | 188 | (66) |
Accumulated deficit | (639,778) | (319,067) |
Total stockholders’ equity | 487,263 | 735,938 |
Total liabilities and stockholders’ equity | $ 1,368,086 | $ 1,515,547 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Class A common stock, $0.0001 par value, 600,000,000 shares authorized; 221,081,203 and 207,453,624 shares issued and outstanding as of December 31, 2018 and 2017, respectively [Member] | ||
Stockholders’ equity: | ||
Common stock | $ 23 | $ 22 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 600,000,000 | 600,000,000 |
Common Stock, Shares, Issued | 235,565,181 | 221,081,203 |
Common stock outstanding (in shares) | 235,565,181 | 221,081,203 |
Class B common stock, $0.0001 par value, 350,000,000 shares authorized; 31,281,638 and 31,302,898 shares issued and outstanding as of December 31, 2018 and 2017, respectively [Member] | ||
Stockholders’ equity: | ||
Common stock | $ 3 | $ 3 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 350,000,000 | 350,000,000 |
Common Stock, Shares, Issued | 29,318,245 | 31,281,638 |
Common stock outstanding (in shares) | 29,318,245 | 31,281,638 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Class A common stock, $0.0001 par value, 600,000,000 shares authorized; 221,081,203 and 207,453,624 shares issued and outstanding as of December 31, 2018 and 2017, respectively [Member] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock issued (in shares) | 235,565,181 | 221,081,203 |
Common stock outstanding (in shares) | 235,565,181 | 221,081,203 |
Class B common stock, $0.0001 par value, 350,000,000 shares authorized; 31,281,638 and 31,302,898 shares issued and outstanding as of December 31, 2018 and 2017, respectively [Member] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 350,000,000 | 350,000,000 |
Common stock issued (in shares) | 29,318,245 | 31,281,638 |
Common stock outstanding (in shares) | 29,318,245 | 31,281,638 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,434,788 | $ 1,511,983 | $ 1,615,519 |
Cost of revenue | 1,007,116 | 908,404 | 924,618 |
Gross profit | 427,672 | 603,579 | 690,901 |
Operating expenses: | |||
Research and development | 300,354 | 332,169 | 343,012 |
Sales and marketing | 329,800 | 344,091 | 415,042 |
General and administrative | 118,231 | 116,627 | 133,934 |
Total operating expenses | 748,385 | 792,887 | 891,988 |
Operating loss | (320,713) | (189,308) | (201,087) |
Interest income, net | 10,291 | 7,808 | 3,647 |
Other income (expense), net | 1,357 | (2,642) | 2,796 |
Loss before income taxes | (309,065) | (184,142) | (194,644) |
Provision for income taxes | 11,646 | 1,687 | 82,548 |
Net loss | $ (320,711) | $ (185,829) | $ (277,192) |
Net loss per share attributable to common stockholders: | |||
Basic (in dollars per share) | $ (1.25) | $ (0.76) | $ (1.19) |
Diluted (in dollars per share) | $ (1.25) | $ (0.76) | $ (1.19) |
Shares used to compute net loss per share attributable to common stockholders: | |||
Basic (in shares) | 257,500 | 244,603 | 232,032 |
Diluted (in shares) | 257,500 | 244,603 | 232,032 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income (Loss) Attributable to Parent | $ (320,711) | $ (185,829) | $ (277,192) |
Cash flow hedges: | |||
unrealized gain (loss) on cash flow hedges, net of tax expense (benefit) of | (66) | 7,587 | (19,422) |
reclassification for realized net loss (gain) included in net loss, net of tax expense (benefit) of | 0 | (7,587) | 19,965 |
Net change, net of tax | (66) | 0 | 543 |
Available-for-sale investments: | |||
Change in unrealized gain (loss) on investments | 320 | (68) | 125 |
Less reclassification for realized net (gain) loss included in net loss | 0 | 11 | (13) |
Net change, net of tax | 320 | (57) | 112 |
Change in foreign currency translation adjustment, net of tax | 0 | 0 | 314 |
Comprehensive loss | (320,457) | (185,886) | (276,223) |
Change in unrealized gain on cash flow hedges, tax | 0 | 819 | (1) |
Reclassification for realized net gains included in net income, tax | $ 0 | $ 74 | $ (819) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Change in unrealized gain on cash flow hedges, tax | $ 0 | $ 819 | $ (1) |
Reclassification for realized net gains included in net income, tax | $ 0 | $ 74 | $ (819) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity Statement - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings (Accumulated Deficit) [Member] |
Beginning balance (in shares) at Dec. 31, 2016 | 225,663,277 | ||||
Beginning balance at Dec. 31, 2016 | $ 998,532 | $ 23 | $ 859,345 | $ (978) | $ 140,142 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options (in shares) | 13,093,245 | ||||
Issuance of common stock | 19,011 | $ 1 | 19,010 | ||
Stock-based compensation expense | 92,081 | 92,081 | |||
Taxes related to net share settlement of restricted stock units | (14,376) | (14,376) | |||
Net Income (Loss) Attributable to Parent | (277,192) | (277,192) | |||
Other comprehensive income | 969 | 969 | |||
Ending balance (in shares) at Dec. 31, 2017 | 238,756,522 | ||||
Ending balance at Dec. 31, 2017 | 823,963 | $ 24 | 956,060 | (9) | (132,112) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options (in shares) | 13,606,319 | ||||
Issuance of common stock | 21,470 | $ 1 | 21,469 | ||
Stock-based compensation expense | 96,953 | 96,953 | |||
Taxes related to net share settlement of restricted stock units | (19,436) | (19,436) | |||
Net Income (Loss) Attributable to Parent | (185,829) | (185,829) | |||
Other comprehensive income | (57) | (57) | |||
Ending balance (in shares) at Dec. 31, 2018 | 252,362,841 | ||||
Ending balance at Dec. 31, 2018 | 735,938 | $ 25 | 1,055,046 | (66) | (319,067) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options (in shares) | 12,520,585 | ||||
Issuance of common stock | 13,019 | $ 1 | 13,018 | ||
Stock-based compensation expense | 76,934 | 76,934 | |||
Taxes related to net share settlement of restricted stock units | (18,171) | (18,171) | |||
Net Income (Loss) Attributable to Parent | (320,711) | (320,711) | |||
Other comprehensive income | 254 | 254 | |||
Ending balance (in shares) at Dec. 31, 2019 | 264,883,426 | ||||
Ending balance at Dec. 31, 2019 | $ 487,263 | $ 26 | $ 1,126,827 | $ 188 | $ (639,778) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows from Operating Activities | |||
Net Income (Loss) Attributable to Parent | $ (320,711) | $ (185,829) | $ (277,192) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Provision for doubtful accounts | 297 | 56 | 7,893 |
Provision for excess and obsolete inventory | 6,011 | 11,828 | 14,833 |
Depreciation | 54,139 | 48,889 | 39,971 |
Non-cash lease expense | 19,170 | 0 | 0 |
Amortization of intangible assets | 8,699 | 7,926 | 5,722 |
Accelerated depreciation of property and equipment | 206 | 7,731 | 5,250 |
Amortization of issuance costs and discount on debt | 0 | 785 | 951 |
Stock-based compensation | 77,739 | 97,009 | 91,581 |
Deferred income taxes | 384 | (2,548) | 173,906 |
Impairment of equity investment | 0 | 6,000 | 0 |
Other | 515 | (1,395) | 216 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | (21,313) | (8,036) | 63,784 |
Inventories | (18,471) | (12,860) | 92,129 |
Prepaid expenses and other assets | 15,141 | 125,914 | (113,111) |
Fitbit Force recall reserve | (1) | (445) | (789) |
Accounts payable | (52,560) | 35,207 | (86,115) |
Accrued liabilities and other liabilities | 93,262 | (11,978) | 56,172 |
Increase (Decrease) in Lease Liabilities | (22,889) | 0 | 0 |
Deferred revenue | 4,006 | (5,622) | (7,472) |
Income taxes payable | (456) | 575 | (3,488) |
Net cash provided by (used in) operating activities | (156,832) | 113,207 | 64,241 |
Cash Flows from Investing Activities | |||
Purchase of property and equipment | (36,531) | (52,880) | (89,160) |
Purchase of marketable securities | (347,579) | (353,948) | (597,933) |
Sales of marketable securities | 9,124 | 9,983 | 42,406 |
Maturities of marketable securities | 405,596 | 433,594 | 622,525 |
Acquisitions, net of cash acquired | (4,849) | (19,253) | (556) |
Equity investment | 0 | 0 | (6,000) |
Net cash provided by (used in) investing activities | 25,761 | 17,496 | (28,718) |
Cash Flows from Financing Activities | |||
Repayment of debt | (550) | (747) | 0 |
Finance Lease, Principal Payments | (2,703) | 0 | 0 |
Proceeds from issuance of common stock | 13,018 | 21,470 | 19,011 |
Taxes paid related to net share settlement of restricted stock units | (18,171) | (19,436) | (14,376) |
Net cash provided by (used in) financing activities | (8,406) | 1,287 | 4,635 |
Net increase (decrease) in cash and cash equivalents | (139,477) | 131,990 | 40,158 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | 488 |
Cash and cash equivalents at beginning of period | 473,956 | 341,966 | 301,320 |
Cash and cash equivalents at end of period | 334,479 | 473,956 | 341,966 |
Supplemental Disclosure | |||
Cash paid for interest | 669 | 631 | 1,019 |
Cash paid (received) for income taxes, net of $72 million income tax refund in 2018 | (4,181) | (69,868) | 382 |
Supplemental Disclosure of Non-Cash Investing and Financing Activity | |||
Purchase of property and equipment included in accounts payable and accrued liabilities | 5,720 | 6,615 | 4,197 |
Property acquired under capital leases | 0 | 2,700 | 0 |
Contingent consideration related to acquisitions | $ 1,889 | $ 0 | $ 0 |
Business Overview and Basis of
Business Overview and Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview and Basis of Presentation | Business Overview and Basis of Presentation Description of Business Fitbit, Inc. (the “Company”) is a technology company focused on driving health solutions and positively impacting health outcomes. The Fitbit platform combines wearable devices with software and services to give its users tools to help them reach their health and fitness goals. The Company’s wearable devices, which include trackers and smartwatches, enable its users to view data about their daily activity, exercise and sleep in real-time. The Company’s software and services, which include an online dashboard and mobile app, provide its users with data analytics, motivational and social tools, and virtual coaching through customized fitness plans and interactive workouts, drive user engagement and can be leveraged to provide personalized insights. The Company sells devices through diversified sales channels that include distributors, retailers, Fitbit Health Solutions, and Fitbit.com. The Company has established wholly-owned subsidiaries globally and its corporate headquarters are located in San Francisco, California. Basis of Presentation and Principles of Consolidation The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated. The Company’s fiscal year ends on December 31 of each year. The Company operates on a 4-4-5 week quarterly calendar. Use of Estimates The preparation of 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 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 recoverability of intangible assets and their useful lives, contingencies, income taxes, recoverability of unused advertising credits, and impairment of an equity investment. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. Comprehensive Loss Comprehensive loss consists of two components, net loss and other comprehensive loss, net of tax. Other comprehensive loss refers to revenue, expenses, and gains and losses that are recorded as an element of stockholders’ equity but are excluded from net loss. The Company’s other comprehensive loss consists of net unrealized gains and losses on derivative instruments accounted for as cash flow hedges, foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency, and unrealized gains and losses on available-for-sale securities. Google Acquisition On November 1, 2019, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Google LLC, a Delaware limited liability company (“Google”) and Magnoliophyta Inc., a Delaware corporation and wholly owned subsidiary of Google (the “Merger Sub”). Pursuant to the terms of, and subject to the conditions specified in, the Merger Agreement, the Merger Sub will merge with and into the Company, and the Company will become a wholly owned subsidiary of Google (the “Merger”). If the Merger is completed, Google will acquire all the shares of the Company’s Class A common stock and Class B common stock (together, the “Shares”) for $7.35 per share in cash, without interest (the “Merger Consideration”). All Shares underlying vested stock options and vested stock-based awards will be converted into the right to receive the Merger Consideration (or, in the case of stock options, the difference between the Merger Consideration and the applicable per share exercise price), less any applicable tax withholdings. Unvested stock options and stock-based awards will generally be converted into cash-based awards with an equivalent value based on the Merger Consideration and vesting schedule. The Merger is expected to close in 2020, subject to customary closing conditions, including approval by the expiration or termination of any waiting periods or receipt of any requisite consents under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and approval under the antitrust laws of the European Union and other jurisdictions agreed by the parties and satisfaction of other closing conditions. The Merger was approved by our stockholders on January 3, 2020. Customer Bankruptcy In September 2017, Wynit Distribution (“Wynit”) filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. Wynit was the Company’s largest customer, historically representing 11% of total revenue during the six months ended July 1, 2017 and 19% of total accounts receivables as of July 1, 2017. In connection with Wynit’s bankruptcy filing, the Company believed that the collectability of the product shipments to Wynit during the third quarter of 2017 was not reasonably assured. However, as of July 1, 2017, collectability of accounts receivables from Wynit was reasonably assured. 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 the first quarter of 2018. During 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 year ended December 31, 2018. See to Note 7, "Commitments and Contingencies," for information regarding legal proceedings related to Wynit. Non-Monetary Transaction The Company entered into an agreement with a third party during 2016 to exchange inventory for advertising credits and cash, which was amended in October 2018 to extend the contractual period from four to six years. The Company recorded the transaction based on the estimated fair value of the products exchanged. For the year ended December 31, 2016, the Company recorded $15.0 million of revenue and $7.0 million of associated cost of goods sold upon exchange of the products for advertising credits of $13.0 million and cash of $2.0 million. The $13.0 million of unused advertising credits remaining as of December 31, 2016 were recorded in prepaid expenses and other current assets, and other assets. Such credits are expected to be used over the contractual period of six years, and will be expensed as advertising services are received. During the years ended December 31, 2019 and 2018, $1.9 million and $2.3 million, respectively, of credits were utilized. The Company’s prepaid and other assets related to unused advertising credits as of December 31, 2019 and December 31, 2018 were $7.9 million and $9.9 million, respectively. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Cash, Cash Equivalents and Marketable Securities Cash and cash equivalents include all cash balances and highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents and marketable securities consist of money market funds, U.S. government and agency securities, commercial paper, and corporate notes and bonds. 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. The Company views marketable securities as available to support current operations as needed, and 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 expense, net as incurred. Realized gains and losses on the sale of securities are determined by specific identification of each security’s cost basis. Investments are reviewed periodically to identify possible other-than-temporary impairments. No impairment loss has been recorded on the securities as the Company believes that any 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. Fair Value of Financial Instruments Assets and liabilities recorded at fair value on a recurring basis are categorized based upon the level of judgment associated with inputs used to measure their fair values. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. The Company estimates fair value by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 —Quoted prices in active markets for identical assets or liabilities; Level 2 —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 for substantially the full term of the assets or liabilities; and Level 3 —Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. Foreign Currencies The Company and all of its wholly-owned subsidiaries use the U.S. dollar as their functional currency. The Company’s subsidiaries that use the U.S. dollar as their functional currency remeasure local currency denominated monetary assets and liabilities at exchange rates in effect at the end of each period, and inventories, property, plant and equipment, right-of-use assets, and other nonmonetary assets and liabilities at historical rates. Gains and losses from these remeasurements have been included in the Company’s operating results within other income (expense), net. Local currency transactions of these international operations are remeasured into U.S. dollars at the rates of exchange in effect at the date of the transaction. Foreign currency transaction gains (losses) were $(3.6) million, $4.6 million, and $2.6 million for 2019, 2018, and 2017, respectively. Derivative Instruments The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. Derivatives held by the Company that are not designated as hedges are adjusted to fair value through earnings at each reporting date. In addition, the Company enters into derivatives that are accounted for as cash flow hedges. The Company records the gains or losses, net of tax, related to the effective portion of 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 and operating expenses when the underlying hedged transactions are recognized. The Company periodically assesses the effectiveness of its cash flow hedges. The fair value of derivative assets and liabilities are included in prepaid expenses and other current assets and accrued liabilities on the consolidated balance sheets. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities, accounts receivables, and derivative instruments. Cash is deposited with high quality financial institutions and may, at times, exceed federally insured limits. The Company’s Investment Policy requires that cash equivalents and marketable securities are invested only in investment grade securities and limits the amount of credit exposure to any single issuance, issuer, or type of investment. Management believes that the financial institutions that hold the Company’s deposits are financially credit worthy and, accordingly, minimal credit risk exists with respect to those balances. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal interest rate risk. The Company’s accounts receivable is derived from customers located primarily in the United States. The Company maintains credit insurance for the majority of its customer balances, performs ongoing credit evaluations of its customers, and maintains allowances for potential credit losses on customers’ accounts when deemed necessary. Credit losses historically have not been significant. The Company continuously monitors customer payments and maintains an allowance for doubtful accounts based on its assessment of various factors including historical experience, age of the receivable balances, and other current economic conditions or other factors that may affect customers’ ability to pay. The Company’s derivative instruments expose it to credit risk to the extent that its counterparties may be unable to meet the terms of the agreements. The Company seeks to mitigate this risk by limiting counterparties to major financial institutions and by spreading the risk across several major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. Supplier Concentration The Company relies on third parties for the supply and manufacture of its products, as well as third-party logistics providers. In instances where these parties fail to perform their obligations, the Company may be unable to find alternative suppliers or satisfactorily deliver its products to its customers on time, if at all. Inventories Inventories consist of finished goods and component parts, which are purchased from contract manufacturers and component suppliers. Inventories are stated at the lower of cost or net realizable value. The Company assesses the valuation of inventory and periodically writes down the value for estimated excess and obsolete inventory based upon estimates of future demand and market conditions. Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Cost of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. The useful lives of the property and equipment are as follows: Tooling and manufacturing equipment One Furniture and office equipment Three years Purchased software Three years Capitalized internally-developed software Two Leasehold improvements Shorter of remaining lease term or ten years Internally-Developed Software Costs The Company capitalizes eligible costs to acquire, develop, or modify internal-use software that are incurred subsequent to the preliminary project stage. Capitalized internally-developed software costs, net, were $4.0 million as of December 31, 2019 and $2.6 million as of December 31, 2018. Research and Development Research and development expenses consist primarily of personnel-related expenses, consulting and contractor expenses, tooling and prototype materials, and allocated overhead costs. Substantially all of the Company’s research and development expenses are related to developing new products and services and improving existing products and services. To date, research and development expenses have been expensed as incurred, because the release of products and services for sale has been short and development costs qualifying for capitalization have been immaterial. 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 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 practical expedients, and it recognizes such lease payments on a straight-line basis over the lease term. Business Combinations, Goodwill, and Intangible Assets The Company allocates the fair value of purchase consideration to tangible assets, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is allocated to goodwill. The allocation of the purchase consideration requires management to make significant estimates and assumptions, especially with respect to intangible assets. These estimates can include, but are not limited to, future expected cash flows from acquired customers, acquired technology, and trade names from a market participant perspective, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. The Company assesses goodwill for impairment at least annually during the fourth quarter and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Consistent with the determination that the Company has one operating segment, the Company has determined that there is one reporting unit and tests goodwill for impairment at the entity level. Goodwill is tested using the two-step process in accordance with ASC 350, Intangibles—Goodwill and Other . In the first step, the carrying amount of the reporting unit is compared to the fair value based on the fair value of the Company’s common stock. If the fair value of the reporting unit exceeds the carrying value, goodwill is not considered impaired and no further testing is required. If the carrying value of the reporting unit exceeds the fair value, goodwill is potentially impaired and the second step of the impairment test must be performed. In the second step, the implied fair value of the goodwill, as defined by ASC 350, is compared to its carrying amount to determine the amount of impairment loss, if any. The Company tested goodwill for impairment as of October 31, 2019 and 2018, and the fair value of the reporting unit exceeded the carrying value. The Company considered other factors in the performance of the annual goodwill impairment test in the fourth quarter of 2019, including assumptions about expected future revenue forecasts, changes in the overall economy, trends in its stock price, and other operating conditions. It is reasonably possible that the Company could perform significantly below its expectations or a deterioration of market and economic conditions could occur. This would adversely impact the Company's ability to meet its projected results, which could cause its goodwill to become impaired. If the Company determines that its goodwill is impaired, it would be required to record a non-cash charge that could have a material adverse effect on its results of operations and financial position. Acquired finite-lived intangible assets are amortized over their estimated useful lives. The Company evaluates the recoverability of intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. The Company has not recorded any such impairment charge during the years presented. Impairment of Long-Lived Assets The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amounts to the expected future undiscounted cash flows attributable to these assets. If it is determined that an asset is not recoverable, an impairment loss is recorded in the amount by which the carrying amount of the assets exceeds the expected discounted future cash flows arising from those assets. The Company has not recorded any such impairment charge during the years presented. Revenue Recognition The Company recognizes revenue upon transfer of control of promised goods or services to customers at transaction price, an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Transaction price is calculated as selling price net of variable consideration which may include estimates for future returns and sales incentives related to current period product revenue. The Company adopted ASU 2014-09 (Topic 606) effective January 1, 2018, utilizing the modified retrospective transition method. Prior periods were not retrospectively adjusted. Upon adoption, the Company recognized an immaterial cumulative effect of adopting this guidance as an adjustment to its opening accumulated deficit balance. The new standard impacted the timing of when revenue is recognized for certain products shipped, and the timing and classification of certain sales incentives, which are generally recognized earlier than historical guidance. The Company believes the ASU 2014-09 guidance is materially consistent with its historical revenue recognition policy. Products and Services The Company derives substantially all of its revenue from sales of its wearable devices, which includes trackers, smartwatches and accessories. The Company also generates a small portion of revenue from its subscription-based services. The Company considers transfer of control of its products to have occurred once control has transferred and delivery of services to have occurred. The Company recognizes revenue, net of estimated sales returns, sales incentives, discounts, and sales tax. Arrangements with Multiple Performance Obligations The Company enters into contracts that have multiple performance obligations that include hardware, software, and services. The first performance obligation is the hardware and firmware essential to the functionality of the tracker or smartwatch delivered at the time of sale. The second performance obligation is the software services included with the products, which are provided free of charge and enable users to sync, view, and access real-time data on the Company’s online dashboard and mobile apps. The third performance obligation is the embedded right included with the purchase of the device to receive, on a when-and-if-available basis, future unspecified firmware upgrades and features relating to the product’s essential firmware. In addition, the Company occasionally offers a fourth performance obligation in bundled arrangements that allows access to subscription-based services related to the Company’s Fitbit Premium and Fitbit Coach offerings. The Company allocates revenue to all performance obligations based on their relative standalone selling prices (“SSP”). The Company’s process for determining its SSP considers multiple factors including consumer behaviors, the Company’s internal pricing model, and cost-plus margin and may vary depending upon the facts and circumstances related to each deliverable. SSP for the trackers and smartwatches reflect the Company’s best estimate of the selling prices if they were sold regularly on a stand-alone basis and comprise the majority of the arrangement consideration. SSP for upgrade rights currently ranges from $1.00 to $3.00. SSP for the online dashboard and mobile apps is currently estimated at $0.99. SSP for access to Fitbit Coach subscription-based services is based on the price charged when sold separately. Amounts allocated to the delivered wearable devices are recognized at the time of delivery, provided the other conditions for revenue recognition have been met. Amounts allocated to the online dashboard and mobile apps and unspecified upgrade rights are deferred and recognized on a straight-line basis over the estimated usage period. The Company offers its users the ability to purchase subscription-based services, through which the users receive incremental features, including customized programs, advanced sleep features, personal insights, in-depth analytics regarding the user’s personal metrics, or video-based customized workouts. Amounts paid for subscriptions are deferred and recognized ratably over the service period, which is typically one year. Revenue from subscription-based services was less than 2% of revenue for all periods presented. In addition, the Company offers subscription-based software and services to certain customers in Fitness Health Solutions, which includes a real-time dashboard, and the ability to create corporate challenges. SSP for the Fitness Health Solutions subscription is determined based on the Company’s internal pricing model for anticipated renewals for existing customers and pricing for new customers. Revenue allocated to the Fitness Health Solutions subscription is deferred and recognized on a straight-line basis over the estimated access period of one year, which is the typical service period. Revenue for Fitness Health Solutions software and services was less than 2% of revenue for all periods presented. The Company applies a practical expedient to expense costs to obtain a contract with a customer as incurred when the amortization period would be one year or less. The Company applies a practical expedient to not consider the effect of a significant financing component as it expects that the period between transfer of control and payment from customer to be one year or less. The Company accounts for shipping and handling fees billed to customers as revenue. Sales taxes and value added taxes (“VAT”) collected from customers which are remitted to governmental authorities are not included in revenue, and are reflected as a liability on the consolidated balance sheets. Rights of Return, Stock Rotation Rights, and Price Protection The Company offers limited rights of return, stock rotation rights, and price protection under various policies and programs with its retailer and distributor customers and end-users. Below is a summary of the general provisions of such policies and programs: • Retailers and distributors are generally allowed to return products that were originally sold through to an end-user under provisions of their contracts, called “open-box” returns, and such returns may be made at any time after the original sale. • All purchases through Fitbit.com are covered by a 45-day right of return. • Certain distributors are allowed stock rotation rights which are limited rights of return of products purchased during a prior period, generally one quarter. • Certain distributors are offered price protection that allows for the right to a partial credit for unsold inventory held by the distributor if the Company reduces the selling price of a product. The Company estimates reserves for these policies and programs based on historical experience, and records the reserves as a reduction of revenue and an accrued liability. Through December 31, 2019, actual returns have primarily been open-box returns. On a quarterly basis, the amount of revenue that is reserved for future returns is calculated based on historical trends and data specific to each reporting period. For recently introduced devices, historical trends of similar Fitbit products are used. The historical trends consider product life cycles, new product introductions, market acceptance of products, product sell-through, the type of customer, seasonality, and other factors. Return rates can fluctuate over time, but have been sufficiently predictable to allow the Company to estimate expected future product returns. The Company reviews the actual returns evidenced in prior quarters as a percent of related revenue to determine the historical rate of returns. The Company then applies the historical rate of returns to the current period revenue as a basis for estimating future returns. When necessary, the Company also provides a specific reserve for products in the distribution channel in excess of estimated requirements. This estimate can be affected by the amount of a particular product in the channel, the rate of sell-through, product plans, and other factors. The Company also considers whether there are circumstances which may result in anticipated returns higher than the historical return rate from direct customers and records an additional specific reserve as necessary. The estimates and assumptions used to reserve for rights of return, stock rotation rights, and price protection have been accurate in all material respects and have not materially changed in the past. Sales Incentives The Company offers sales incentives through various programs, consisting primarily of cooperative advertising and pricing promotions to retailers and distributors. The Company records advertising with customers as a reduction to revenue unless it receives a distinct benefit in exchange for credits claimed by the customer and can reasonably estimate the fair value of the distinct benefit received, in which case the Company records it as a marketing expense. The Company recognizes a liability and reduces revenue for rebates or other incentives related to products in the distribution channel. This estimate is based on the projected amount of rebates or credits that will be claimed by customers and can be affected by the amount of a particular product in the channel, the rate of sell-through, product promotion plans, and other factors. Refer to Note 11, “Significant Customer Information and Other Information,” for disaggregated revenue by geographic region, based on ship-to destinations. Cost of Revenue Cost of revenue consists of product costs, including costs of contract manufacturers for production, shipping and handling costs, warranty replacement costs, packaging, fulfillment costs, manufacturing and tooling equipment depreciation, warehousing costs, hosting costs, write-downs of excess and obsolete inventory, amortization of developed technology intangible assets acquired, and certain allocated costs related to management, facilities, and personnel-related expenses and other expenses associated with supply chain logistics. Personnel-related expenses include salaries, bonuses, benefits, and stock-based compensation. Advertising Costs and Point of Purchase (“POP”) Displays Costs related to advertising and promotions, excluding cooperative advertising costs, are expensed to sales and marketing as incurred. Advertising and promotion expenses, including expenses for POP displays, for 2019, 2018, and 2017 were $170.4 million, $161.5 million and $226.3 million, respectively. Co-op advertising costs are recorded as a reduction to revenue, and for 2019, 2018 and 2017 were $89.8 million, $80.3 million and $45.0 million, respectively. The Company provides retailers with POP displays, generally free of charge, in order to facilitate the marketing of the Company’s products within retail stores. Any amounts related to the costs of the POP displays are expensed as incurred, and included in sales and marketing expenses on the consolidated statements of operations. Prior to 2019, POP displays were recorded as prepaid expenses and other current assets on the consolidated balance sheet and recognized as expense over the expected period of the benefit provided by these assets, which was generally 12 months. Product Warranty The Company offers a standard product warranty that its products will operate under normal use for a period of one two Stock-Based Compensation Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period of the respective award. Determining the fair value of stock-based awards at the grant date requires judgment. The fair value of restricted stock units ("RSUs") without market conditions is the fair value of the Company’s common stock on the grant date. The Company estimates the fair value of RSUs subject to market conditions using a Monte Carlo simulation model. The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options, warrants and shares issued under the 2015 Employee Stock Purchase Plan (the “2015 ESPP”). The Company recognizes tax benefits related to stock-based compensation to the extent that the total reduction to its income tax liability from stock-based compensation is greater than the amount of the deferred tax assets previously recorded in anticipation of these benefits. Segment Information The Company operates as one operating segment as it only reports financial information on an aggregate and consolidated basis to its Chief Executive Officer, who is the Company’s chief operating decision maker. Income Taxes The Company utilizes the asset and liability method of accounting for income taxes, which requires the recognition of deferred tax assets and liabilities for expected future consequences of temporary differences between the financial reporting and income tax bases of assets and liabilities using enacted tax rates. The Company makes estimates, assumptions, and judgments to determine its expense (benefit) for income taxes and also for deferred tax assets and liabilities and any valuation allowances recorded against its deferred tax assets. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes that recovery is not likely, the Company establishes a valuation allowance. The calculation of the Company’s income tax expense involves the use of estimates, assumptions, and judgments while taking into account current tax laws, its interpretation of current tax laws, and possible outcomes of future tax audits. The Company has established reserves to address potential exposures related to tax positions that could be challenged by tax authorities. Although the Company believes its estimates, assumptions, and judgments to be reasonable, any changes in tax law or its interpretation of tax laws and the resolutions of potential tax audits could significantly impact the amounts provided for income taxes in its consolidated financial statements. The calculation of the Company’s deferred tax asset balance involves the use of estimates, assumptions, and judgments while taking into account estimates of the amounts and type of future taxable income. Actual future operating results and the underlying amount and type of income could differ materially from its estimates, assumptions, and judgments, thereby impacting its financial position and operating results. The Company includes interest and penalties related to unrecognized tax benefits within income tax expense. Interest and penalties related to unrecognized tax benefits have been recognized in the appropriate periods presented. Net Income (Loss) per Share Attributable to Common Stockholders Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers its redeemable convertible preferred stock to be participating securities. The holders of the redeemable convertible preferred stock did not have a contractual obligation to share in losses. In accordance with the two-class method, earnings allocated to these participating securities and the related number of outstanding shares of the participating securities, which include contractual participation rights in undistributed earnings, have been excluded from the computation of basic and diluted net income per share attributable to common stockholders. For the calculation of diluted net income per share, net income attributable to common stockholders for basic net income per share is adjusted by the effect of dilutive securities. Diluted net income per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding, including all potentially dilutive common shares, if the effect of such shares is dilutive. In connection with the Company’s initial public offering (“IPO”) in 2015, the Company established two classes of authorized common stock: Class A common stock and Class B common stock. As a result, all then-outstanding shares of common stock were converted into shares of Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock, generally automatically converts into Class A common stock upon a transfer, and has no expiration date. The Company applies the two-class method of calculating earnings per share, but as the dividend rights of both classes are identical, basic and diluted earnings per share are the same for both classes. As the Company was in a net loss position from 2017 through 2019, basic net loss per share attributable to common stockholders was the same as diluted net loss per share attributable to common stockholders as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. Recent Accounting Pronouncements Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, Fin |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair Value Measurement of Financial Assets and Liabilities The carrying values of the Company’s accounts receivable and accounts payable, 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): December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 107,708 $ — $ — $ 107,708 U.S. government agencies — 77,364 — 77,364 Corporate debt securities — 207,137 — 207,137 Total $ 107,708 $ 284,501 $ — $ 392,209 Liabilities: Contingent consideration $ — $ — $ 1,889 $ 1,889 Derivative liabilities — 748 — 748 Total $ — $ 748 $ 1,889 $ 2,637 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 273,546 $ — $ — $ 273,546 U.S. government agencies — 72,840 — 72,840 Corporate debt securities — 228,953 — 228,953 Derivative assets — 623 — 623 Total $ 273,546 $ 302,416 $ — $ 575,962 Liabilities: Derivative liabilities $ — $ 549 $ — $ 549 Stock warrant liability — — 410 410 Total $ — $ 549 $ 410 $ 959 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 4. 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. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [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 the cash, cash equivalents, and marketable securities as of December 31, 2019 (in thousands): Amortized Gross Gross Fair Value Cash and Marketable Cash $ 126,293 $ — $ — $ 126,293 $ 126,293 $ — Money market funds 107,708 — — 107,708 107,708 — U.S. government agencies 77,316 48 — 77,364 30,375 46,989 Corporate debt securities 207,063 85 (11) 207,137 70,103 137,034 Total $ 518,380 $ 133 $ (11) $ 518,502 $ 334,479 $ 184,023 The following table sets forth the cash, cash equivalents, and marketable securities as of December 31, 2018 (in thousands): Amortized Gross Gross Fair Value Cash and Marketable Cash $ 148,110 $ — $ — $ 148,110 $ 148,110 $ — Money market funds 273,546 — — 273,546 273,546 — U.S. government agencies 72,884 1 (45) 72,840 9,738 63,102 Corporate debt securities 229,040 — (87) 228,953 42,562 186,391 Total $ 723,580 $ 1 $ (132) $ 723,449 $ 473,956 $ 249,493 The gross unrealized gains or losses on marketable securities as of December 31, 2019 and December 31, 2018 were not material. There were no available-for-sale investments as of December 31, 2019 and December 31, 2018 that have been in a continuous unrealized loss position for greater than twelve months on a material basis. The following table classifies marketable securities by contractual maturities (in thousands): December 31, 2019 December 31, 2018 Due in one year $ 173,827 $ 249,493 Due in one to two years 10,196 — Total $ 184,023 $ 249,493 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 has entered 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 and operating expenses 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. Prior to the adoption of ASU 2017-12, the Company recorded the gains or losses related to the ineffective portion of its cash flow hedges, if any, immediately in other income (expense), net. For the periods ended December 31, 2018 and December 31, 2019, there was no ineffective impact from the Company’s cash flow hedges. The Company had no outstanding contracts that were designated in cash flow hedges for forecasted revenue as of December 31, 2019 and December 31, 2018. Balance Sheet Hedges The Company enters into foreign exchange contracts to hedge 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 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 $83.4 million and $101.4 million as of December 31, 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 consolidated balance sheets. The following table presents the fair value of the Company’s foreign currency derivative contracts as of the dates presented (in thousands): December 31, 2019 December 31, 2018 Balance Sheet Location Fair Fair Fair Fair Hedges not designated Prepaid expense and other current assets $ — $ — $ 623 $ — Hedges not designated Accrued liabilities — 748 — 549 Total fair value of derivative instruments $ — $ 748 $ 623 $ 549 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 consolidated statement of operations for the periods presented (in thousands): Year Ended Income Statement Location 2019 2018 2017 Foreign exchange cash flow hedges: Gain (loss) recognized in OCI—effective portion $ — $ 8,405 $ (19,436) Gain (loss) reclassified from OCI into income—effective portion Revenue — 8,405 (18,532) Gain (loss) reclassified from OCI into income—effective portion Operating expenses — — (1,405) Gain (loss) recognized in income—ineffective portion Other income (expense), net — — 21 Gain recognized in income—excluded time value portion Other income (expense), net — — 1,771 Foreign exchange balance sheet hedges: Gain (loss) recognized in income Other income (expense), net $ (2,122) $ 6,240 $ (10,516) As of December 31, 2019, all net derivative gains related to the Company’s cash flow hedges have been reclassified from OCI into net income. Effect of Derivative Contracts on Consolidated Statements of Operations The following table provides the location in the consolidated statements of operations and amount of the recognized gains or losses to the Company’s derivative instruments designated as hedging instruments (in thousands): Year Ended December 31, 2019 2018 2017 Total amounts presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded in revenue $ 1,434,788 $ 1,511,983 $ 1,615,519 Total amounts presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded in operating expenses 748,385 792,887 891,988 Gain (loss) on foreign exchange contracts designated as cash flow hedges reclassified from OCI into revenue — 8,405 (18,532) Loss on foreign exchange contracts designated as cash flow hedges reclassified from OCI into operating expenses — — (1,405) Offsetting of Foreign Currency Derivative Contracts The Company presents its derivative assets and derivative liabilities at gross fair values in the 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 table sets forth the available offsetting of net derivative assets and net derivative liabilities under the master netting arrangements as of December 31, 2019 and December 31, 2018 (in thousands): December 31, 2019 Gross Amounts Offset in the Consolidated Balance Sheets Gross Amounts Not Offset in Consolidated Balance Sheets Gross Amount Recognized Gross Amount Offset Net Amount Presented Financial Instruments Cash Collateral Received Net Amount Foreign exchange contracts assets $ — $ — $ — $ — $ — $ — Foreign exchange contracts liabilities 748 — 748 — — 748 December 31, 2018 Gross Amounts Offset in the Consolidated Balance Sheets Gross Amounts Not Offset in Consolidated Balance Sheets Gross Amounts Recognized Gross Amounts Offset Net Amount Presented Financial Cash Collateral Net Foreign exchange contracts assets $ 623 $ — $ 623 $ 549 $ — $ 74 Foreign exchange contracts liabilities 549 — 549 549 — — |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2019 | |
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 one to eighteen months. Changes in the total short-term and long-term deferred revenue balance were as follows (in thousands): December 31, 2019 2018 2017 Beginning balances $ 36,836 $ 42,432 $ 49,904 Deferral of revenue 45,040 40,003 46,193 Recognition of deferred revenue (41,034) (45,599) (53,665) Ending balances $ 40,842 $ 36,836 $ 42,432 Revenue Returns Reserve Changes in the revenue returns reserve were as follows (in thousands): December 31, 2019 2018 2017 Beginning balances $ 104,001 $ 109,872 $ 98,851 Increases (1) 178,962 170,957 229,610 Returns taken (181,637) (176,828) (218,589) Ending balances $ 101,326 $ 104,001 $ 109,872 (1) Increases in the revenue returns reserve include provisions for open box returns and stock rotations. Allowance for Doubtful Accounts Changes in the allowance for doubtful accounts were as follows (in thousands): December 31, 2019 2018 2017 (1) Beginning balances $ 3,742 $ 9,229 $ 282 Increases 297 56 30,551 Write-offs (291) (5,543) (21,604) Ending balances $ 3,748 $ 3,742 $ 9,229 (1) Write-offs in 2017 was primarily related to the Wynit bankruptcy described in Note 7. Inventories Inventories consisted of the following (in thousands): December 31, 2019 2018 Components $ 5,397 $ 8,866 Finished goods 131,355 116,005 Total inventories $ 136,752 $ 124,871 Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2019 2018 Prepaid expenses $ 11,219 $ 18,100 Prepaid marketing 3,347 3,258 Point-of-purchase displays, net — 5,143 Derivative assets — 623 Other 14,090 15,201 Total prepaid expenses and other current assets $ 28,656 $ 42,325 Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands): December 31, 2019 2018 Tooling and manufacturing equipment $ 103,177 $ 80,685 Furniture and office equipment 19,922 22,738 Purchased and internally-developed software 27,424 21,741 Leasehold improvements 59,926 67,715 Total property and equipment 210,449 192,879 Less: Accumulated depreciation and amortization (127,693) (86,593) Property and equipment, net $ 82,756 $ 106,286 Total depreciation and amortization expense related to property and equipment, net was $54.1 million, $48.9 million and $40.0 million for 2019, 2018 and 2017, respectively. Goodwill and Intangible Assets The changes in the carrying amount of goodwill were as follows (in thousands): Goodwill Balance at December 31, 2017 $ 51,036 Goodwill acquired 9,943 Balance at December 31, 2018 60,979 Goodwill acquired 3,833 Balance at December 31, 2019 $ 64,812 The carrying amounts of the intangible assets as of December 31, 2019 and December 31, 2018 were as follows (in thousands): December 31, 2019 December 31, 2018 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Developed technology $ 37,813 $ (23,910) $ 13,903 $ 35,988 $ (15,983) $ 20,005 Customer relationships 3,790 (991) 2,799 3,790 (451) 3,339 Trademarks and other 1,278 (1,234) 44 1,278 (1,002) 276 Total intangible assets, net $ 42,881 $ (26,135) $ 16,746 $ 41,056 $ (17,436) $ 23,620 The increase in the carrying amount of goodwill and intangible assets during the year ended December 31, 2019 was attributable to an acquisition in October 2019 described in Note 12, “Acquisitions.” Total amortization expense related to intangible assets was $8.7 million, $7.9 million, and $5.7 million for 2019, 2018 and 2017, respectively. The estimated future amortization expense of acquired finite-lived intangible assets to be charged to cost of revenue and operating expenses after 2019, is as follows (in thousands): Cost of Operating Total 2020 $ 6,325 $ 1,269 $ 7,594 2021 5,037 597 5,634 2022 1,488 597 2,085 2023 — 597 597 2024 — 597 597 Thereafter — 239 239 Total intangible assets, net $ 12,850 $ 3,896 $ 16,746 Accrued Liabilities Accrued liabilities consisted of the following (in thousands): December 31, 2019 2018 Accrued sales incentives $ 156,839 $ 126,400 Sales returns reserve (1) 101,326 104,001 Product warranty 52,403 45,605 Accrued co-op advertising and marketing development funds 40,689 30,435 Employee-related liabilities 37,355 33,916 Accrued manufacturing expense and freight 35,112 21,357 Accrued sales and marketing 26,781 18,171 Sales taxes and VAT payable 19,603 20,121 Accrued research and development 19,232 8,783 Accrued legal settlements and fees 8,854 2,821 Inventory received but not billed 1,669 6,373 Finance lease liabilities 1,384 — Derivative liabilities 748 549 Other 11,535 18,702 Accrued liabilities $ 513,530 $ 437,234 (1) The adoption of ASU 2014-09 on January 1, 2018 requires the presentation of sales returns reserve as a current liability. This reserve was reported within “Accounts receivables, net” prior to the adoption of this new standard. Product warranty reserve activities were as follows (in thousands): December 31, 2019 2018 2017 Beginning balances $ 45,605 $ 87,882 $ 99,923 Charged to cost of revenue 45,092 15,720 53,840 Changes in estimate related to pre-existing warranties (1) 7,421 (20,545) 11,788 Settlement of claims (45,715) (37,452) (77,669) Ending balances $ 52,403 $ 45,605 $ 87,882 (1) During 2019, the change related to pre-existing warranties resulting primarily due to a higher smartwatch mix, which has a higher cost content. During 2018, the change related to pre-existing warranties resulted primarily from improved product quality and a decrease in the estimated cost of replacement units. During 2017, changes related to pre-existing warranties resulted primarily from an increase in the estimated cost of replacement units. Accumulated Other Comprehensive Income (Loss) The components and activity of accumulated other comprehensive income (“AOCI”), net of tax, were as follows (in thousands): Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Available-for-Sale Investments Total Balance at December 31, 2017 $ 66 $ (75) $ (9) Other comprehensive income (loss) before reclassifications 7,587 (68) 7,519 Amounts reclassified from AOCI (7,587) 11 (7,576) Other comprehensive loss — (57) (57) Balance at December 31, 2018 66 (132) (66) Other comprehensive income (loss) before reclassifications (66) 320 254 Amounts reclassified from AOCI — — — Other comprehensive income (loss) (66) 320 254 Balance at December 31, 2019 $ — $ 188 $ 188 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
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 2020 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 consolidated balance sheet. Finance lease ROU assets are presented within other assets, and finance lease liabilities are presented within accrued liabilities. In June 2019, the lessors of certain of the Company’s San Francisco offices exercised their right to recapture a portion of the office space, which resulted in a reduction of ROU assets of $18.0 million and a reduction of lease liabilities of $22.5 million for a net benefit to operating lease costs of $4.3 million. In addition, the Company accelerated depreciation of leasehold improvements related to the recaptured office space of $5.2 million. The Company has no leases that have not yet commenced as of December 31, 2019. Total lease cost consists of the following (in thousands): Year Ended December 31, 2019 Finance lease costs: Amortization of ROU assets $ 2,746 Interest on lease liabilities — Operating lease costs (1) 23,211 Variable lease costs 5,061 Sublease income (4,703) Total lease costs $ 26,315 (1) includes short-term leases, which are immaterial. Prior to the adoption of Topic 842, total rent expense for operating leases, net of sublease income, was $25.4 million and $39.2 million for the years ended December 31, 2018 and December 31, 2017, respectively. Sublease income was $5.0 million and $0.8 million for the years ended December 31, 2018 and December 31, 2017, respectively. Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 2,703 Operating cash flows from finance leases — Operating cash flows from operating leases 27,467 ROU assets obtained in exchange for lease obligations: Finance lease liabilities $ 1,384 Operating lease liabilities 3,242 Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2019 Finance leases: Other assets $ 1,384 Accrued liabilities $ 1,384 Operating leases: Operating lease ROU assets $ 70,225 Operating lease liabilities $ 23,511 Long-term operating lease liabilities 67,902 Total operating lease liabilities $ 91,413 Weighted-average lease terms and discount rates are as follows: December 31, 2019 Weighted-average remaining lease terms (in years): Finance leases 0.5 Operating leases 4.2 Weighted-average discount rates: Finance leases —% Operating leases 5.5% Maturities of lease liabilities as of December 31, 2019 were as follow (in thousands): Finance Leases Operating Leases 2020 $ 1,384 24,789 2021 — 23,749 2022 — 23,225 2023 — 20,585 2024 — 8,321 Thereafter — — Total minimum lease payments $ 1,384 $ 100,669 Less: amount representing interest — (9,256) Total lease liabilities $ 1,384 $ 91,413 |
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 2020 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 consolidated balance sheet. Finance lease ROU assets are presented within other assets, and finance lease liabilities are presented within accrued liabilities. In June 2019, the lessors of certain of the Company’s San Francisco offices exercised their right to recapture a portion of the office space, which resulted in a reduction of ROU assets of $18.0 million and a reduction of lease liabilities of $22.5 million for a net benefit to operating lease costs of $4.3 million. In addition, the Company accelerated depreciation of leasehold improvements related to the recaptured office space of $5.2 million. The Company has no leases that have not yet commenced as of December 31, 2019. Total lease cost consists of the following (in thousands): Year Ended December 31, 2019 Finance lease costs: Amortization of ROU assets $ 2,746 Interest on lease liabilities — Operating lease costs (1) 23,211 Variable lease costs 5,061 Sublease income (4,703) Total lease costs $ 26,315 (1) includes short-term leases, which are immaterial. Prior to the adoption of Topic 842, total rent expense for operating leases, net of sublease income, was $25.4 million and $39.2 million for the years ended December 31, 2018 and December 31, 2017, respectively. Sublease income was $5.0 million and $0.8 million for the years ended December 31, 2018 and December 31, 2017, respectively. Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 2,703 Operating cash flows from finance leases — Operating cash flows from operating leases 27,467 ROU assets obtained in exchange for lease obligations: Finance lease liabilities $ 1,384 Operating lease liabilities 3,242 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments The aggregate amount of open purchase orders as of December 31, 2019 was approximately $347.0 million, of which $177.0 million related to the Company’s transition to a third-party hosting provider and $12.7 million was accrued for as of December 31, 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 reduce 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 December 31, 2019, $17.6 million was accrued for such liabilities to contract manufacturers. Letters of Credit As of December 31, 2019 and 2018, the Company had outstanding letters of credit of $24.6 million and $36.6 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 and February 1, 2018, the Company received subpoenas for documents from the same office. 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. Charges were dismissed against one individual in December 2019. On February 3, 2020, a jury returned a not-guilty verdict on all counts in favor of the first individual to be tried. On February 14, 2020, the government dropped all charges against the remaining individuals. 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 sought class certification, restitution, unspecified compensatory and punitive damages, and reasonable costs and expenses including attorneys’ fees. 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, which the court denied on December 8, 2017. The parties subsequently 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. On November 29, 2018, the court granted preliminary settlement approval and the final approval hearing was scheduled for August 1, 2019. On May 10, 2019, the plaintiffs filed a request for attorneys’ fees and expenses. The Company opposed that request. At the hearing on August 1, 2019, the court asked the parties to submit a re-notice plan in order to achieve a higher claims rate. On the fee request, the court offered the plaintiffs alternative conditions, and on August 18, 2019, the plaintiffs filed their fee election, opting for a 90% reduction of challenged fees and expenses. The re-notice plan was approved on October 16, 2019, and the re-notice resulted in approximately 80,000 more claims, for a total of approximately 141,000 claims. The court granted final approval of the settlement on February 6, 2020, in an amount that is not material to the Company. The court has not yet ruled on plaintiffs’ request for fees and expenses. 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, and reasonable costs and expenses including attorneys’ fees. 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 was filed on behalf of plaintiff Rob Dunn, the only plaintiff not ordered to arbitration, as a purported class action. The complaint 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 complaint seeks class certification, injunctive and declaratory relief, restitution, unspecified compensatory damages, exemplary damages, punitive damages, statutory penalties and damages, and reasonable costs and expenses including attorneys’ fees. 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. The 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. On April 3, 2018, the Company received an arbitration demand from Kate McLellan, one of the original plaintiffs who was compelled to arbitration. On July 19, 2019, the parties entered into a settlement of the lawsuit and the arbitration on confidential terms, which are not material to the Company. 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 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 second putative class action was filed in California state court involving the same statements. The parties agreed to settle the federal and state class actions for $33.3 million, which the Company accrued for as of December 31, 2017. Following court approval of the settlement, the federal and state class action cases were dismissed with prejudice in May 2018. During 2016 and 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. On February 10, 2020, the parties agreed to a tentative settlement of all of the derivative lawsuits, which is subject to approval by the court. 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 the fourth quarter of 2016 and full fiscal year 2016 that was provided during the third and fourth quarters of 2016. On November 15, 2018, a second putative securities class action was filed in the same court alleging similar claims against the same defendants. On April 25, 2019, the two actions were consolidated, and a consolidated amended class action complaint was filed on June 24, 2019. The consolidated complaint also alleges violations of Sections 10(b) and 20 of the Exchange Act against the Company and certain officers relating to the Company’s 2016 guidance, on behalf of a putative class of stockholders who purchased Fitbit stock from August 2, 2016 through January 30, 2017. Plaintiffs seek class certification, unspecified compensatory damages, and reasonable costs and expenses including attorneys’ fees. On August 23, 2019, the Company filed a motion to dismiss. The January 8, 2020 hearing was taken off calendar. The court has not issued a ruling. 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. Koninklijke Philips. On December 4, 2017, Koninklijke Philips N.V. filed a patent infringement suit in Germany in the Regional Court of Mannheim alleging infringement by certain of Fitbit’s products of the German part of EP 1 247 229 B1 (EP229). In October 2018, the case was stayed, pending an appeal of a January 2014 decision by the European Patent Office (EPO) to revoke EP229. On May 31, 2019, the EPO Board of Appeal dismissed the appeal, affirming the decision to revoke EP229. Koninklijke Philips N.V. appealed the EPO Board of Appeal decision on July 30, 2019. On May 30, 2018, Koninklijke Philips N.V. filed a patent infringement suit in the Regional Court of Mannheim alleging infringement by certain of Fitbit’s products of the German part of EP 1 076 806 B1 (EP806). In October 2018, the case was stayed, pending the decision in a parallel nullity proceeding challenging the validity of EP806. On July 22, 2019, Philips North America filed a patent infringement suit in U.S. District Court for the District of Massachusetts alleging infringement of U.S. Patent No. 6,013,007, U.S. Patent No. 7,088,233, U.S. Patent No. 8,277,377, and U.S. Patent No. 6,976,958 by certain of Fitbit’s products. On November 13, 2019, the Company filed a motion to dismiss. On November 27, 2019, Philips filed an amended complaint. On December 10, 2019, the Company filed a motion to dismiss the amended complaint. No hearing date has been scheduled. On December 10, 2019, Philips North America, LLC and Koninklijke Philips N.V. filed a complaint for patent infringement in the International Trade Commission naming Fitbit, Garmin International, Inc., Garmin USA, Inc. Garmin Ltd., d/b/a Garmin Switzerland GmbH, Ingram Micro Inc., Maintek Computer (Suzhou) Co., Ltd., and Inventec Applicances (Pudong) as proposed respondents. The complaint asserts that all proposed respondents infringe U.S. Patent Nos. 7,845,228 (“’228 Patent”), 9,820,698 (“’698 Patent”), and 9,717,464 (“’464 Patent”), and that the Garmin entities additionally infringe U.S. Patent No. 9,961,186 (“’186 Patent”), and requests that the ITC institute an investigation, and after the investigation, issue a limited exclusion order and cease and desist orders. On January 10, 2020, the ITC instituted the investigation, titled "In the Matter of Certain Wearable Monitoring Devices, Systems, and Components Thereof," Inv. No. 337-TA-1190, and the case was assigned to ALJ Dee Lord. On January 21, 2020, ALJ Lord set key dates for the case, including a Markman hearing on May 27, 2020, the Evidentiary hearing from October 5-9, 2020, the Initial Determination by January 14, 2021, and the Target Date for completion of the investigation on May 14, 2021. 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 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. Wynit. 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 of 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 the first quarter of 2018. During 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 year ended December 31, 2018. On September 4, 2019, plaintiff Nauni Manty, as the chapter 7 trustee of the bankruptcy estate of Wynit Distribution, LLC, et al, filed a complaint in U.S. Bankruptcy Court in the District of Minnesota. The complaint seeks: (1) avoidance and recovery under 11 U.S.C. §§ 547, 550, and 551 against Fitbit; and (2) avoidance and preservation under 11 U.S.C. §§ 547, 551 of a second lien granted to Fitbit on substantially all the debtors’ assets. On February 12, 2020, the parties participated in a mediation and agreed in principle to a settlement of the trustee’s claims, which is subject to court approval upon motion expected to be filed by the trustee. 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 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock The Company's Restated Certificate of Incorporation authorizes the issuance of preferred stock with rights and preferences, including voting rights, designated from time to time by the board of directors. As of December 31, 2019, there were 10 million shares of preferred stock authorized with a par value of 0.0001 per share, and no shares of preferred stock issued or outstanding. Common Stock The Company has two classes of authorized common stock: Class A common stock with 600 million shares authorized with a par value of $0.0001 per share and Class B common stock with 350 million shares authorized with a par value of $0.0001 per share. As of December 31, 2019, 235.6 million shares of Class A common stock were issued and outstanding and 29.3 million shares of Class B common stock were issued and outstanding. As of December 31, 2018, 221.1 million shares of Class A common stock were issued and outstanding and 31.3 million shares of Class B common stock were issued and outstanding. Holders of Class A common stock are entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of stockholders and holders of Class B common stock are entitled to ten votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. Except with respect to voting, the rights of the holders of Class A common stock and Class B common stock are identical. Shares of Class B common stock are voluntarily convertible into shares of Class A common stock at the option of the holder and generally automatically convert into shares of the Company’s Class A common stock upon a transfer. Stock Option Exchange On May 25, 2017, the Company’s stockholders approved a stock option exchange program (“the Program”) at the 2017 Annual Meeting of Stockholders. The Program allowed the Company employees, including its executive officers other than its President, Chief Executive Officer, and Chairman, Chief Technology Officer, and Chief Financial Officer (“Eligible Employees”), to exchange out-of-the-money or “underwater” options to purchase shares of the Company’s Class A common stock or Class B common stock currently held by such Eligible Employees for a lesser number of restricted stock units (“RSUs”) that may be settled for shares of its Class A common stock, (“New RSUs”), under the Company’s 2015 Equity Incentive Plan (the “2015 Plan”). Eligible Employees participating in the Program received one New RSU for every two “out-of-the-money” options that they exchanged. The New RSUs would generally vest over the remaining vesting period of the exchanged option (subject to a one-year minimum vesting period). None of the members of the Company’s board of directors were eligible to participate in the Program. A total of 3.7 million “underwater” stock options were tendered by the Eligible Employees, representing approximately 85% of the stock options eligible for exchange. On July 20, 2017, the Company granted an aggregate of 1.8 million New RSUs under the 2015 Plan in exchange for the “underwater” stock options tendered. The completion of the Program resulted in total incremental unrecognized stock-based compensation expense of $8.5 million, to be recognized over the greater of one year or the remaining vesting service period of the tendered stock options. 2007 Equity Incentive Plan The Amended and Restated 2007 Stock Plan (the “2007 Plan”) provided for the grant of incentive and non-statutory stock options and RSUs to employees, directors, and consultants under terms and provisions established by the board of directors. Stock options granted under the 2007 Plan are generally subject to a four ten three four The 2015 Plan became effective in June 2015. As a result, the Company will not grant any additional stock options under the 2007 Plan and the 2007 Plan has been terminated. Any outstanding stock options and RSUs granted under the 2007 Plan will remain outstanding, subject to the terms of the 2007 Plan and applicable award agreements, until such shares are issued under those awards, by exercise of stock options or settlement of RSUs, or until the awards terminate or expire by their terms. 2015 Equity Incentive Plan In May 2015, the Company’s board of directors and stockholders adopted and approved the 2015 Plan. The 2015 Plan became effective in June 2015 and serves as the successor to the 2007 Plan. The remaining shares available for issuance under the 2007 Plan became reserved for issuance under the 2015 Plan. The number of shares reserved for issuance under the 2015 Plan will increase automatically on the first day of January of each year starting in 2016 through 2025 by the number of shares of Class A common stock equal to 5% of the total outstanding shares of common stock as of the immediately preceding December 31. The share reserve may also increase to the extent that outstanding awards expire or terminate un-exercised. As of December 31, 2019, 24.6 million shares were available for grant under the 2015 Plan. The 2015 Plan authorizes the award of stock options, restricted stock awards, stock appreciation rights, RSUs, performance awards, and stock bonuses to employees, directors, consultants, independent contractors, and advisors. In general, stock options and RSUs will vest over a three four 2015 Employee Stock Purchase Plan In May 2015, the Company’s board of directors adopted the 2015 ESPP, which was effective in June 2015. The number of shares reserved for issuance under the 2015 Plan was increased automatically on the first day of January of each year starting in 2016 through 2020 by the number of shares of Class A common stock equal to 1% of the total outstanding shares of common stock as of the immediately preceding December 31. The 2015 ESPP allowed eligible employees to purchase shares of the Company’s Class A common stock at a discount through payroll deductions of up to 15% of eligible compensation, subject to any plan limitations. Except for the initial offering period, the 2015 ESPP provided for 6-month offering periods beginning in May and November of each year. The last offering period ended on November 15, 2019. No new offering period under the 2015 ESPP will commence on or after November 1, 2019, and the ESPP will terminate as of immediately prior to the closing date of the Merger. On each purchase date, eligible employees purchased Class A common stock 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. Stock Options Activity under the 2007 Plan and 2015 Plan is as follows (in thousands except per share amounts): Stock Options Outstanding Number of Weighted– Weighted– Aggregate Balance—December 31, 2018 16,263 $ 3.00 Granted — Exercised (3,290) $ 0.85 $ 18,059 Canceled (102) $ 8.45 Balance—December 31, 2019 12,871 $ 3.51 4.4 $ 43,320 Stock options exercisable—December 31, 2019 12,755 $ 3.47 4.4 $ 43,249 Stock options vested and expected to vest—December 31, 2019 12,871 $ 3.51 4.4 $ 43,320 The aggregate intrinsic values of stock options outstanding, exercisable, vested and expected to vest were calculated as the difference between the exercise price of the stock options and the fair value of the Class A common stock of $6.57 as of December 31, 2019. Restricted Stock Units RSU activity under the equity incentive plans is as follows: RSUs Weighted- (in thousands) Unvested balance—December 31, 2018 18,376 $ 6.69 Granted 15,614 5.77 Vested (10,354) 7.22 Forfeited or canceled (4,704) 6.50 Unvested balance—December 31, 2019 18,932 5.68 On March 15, 2019, the Company issued RSUs with market conditions for 0.5 million shares of Class A common stock 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. 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. Warrants On July 10, 2017, the Company issued a warrant to a third party vendor to purchase 0.5 million shares of Class A common stock. The warrant is exercisable based on service and performance-based conditions and has an exercise price of $5.23 per share and a contractual term of ten years. As of December 31, 2019, 0.2 million shares were vested and exercisable. Stock-Based Compensation Expense Total stock-based compensation recognized was as follows (in thousands): Year Ended December 31, 2019 2018 2017 Cost of revenue $ 6,403 $ 7,312 $ 5,312 Research and development 44,855 57,188 54,123 Sales and marketing 11,585 14,726 14,959 General and administrative 14,896 17,783 17,187 Total stock-based compensation expense $ 77,739 $ 97,009 $ 91,581 The weighted-average grant date fair value of stock options granted during 2017 was $2.00 per share. There were no stock options granted in 2019 or 2018. The total grant date fair value of stock options that vested during 2019, 2018, and 2017 was $2.8 million, $10.1 million and $20.2 million, respectively. As of December 31, 2019, the total unrecognized compensation expense related to unvested stock options was $0.3 million, which the Company expects to recognize over an estimated weighted average period of 0.2 years. As of December 31, 2019, the total unrecognized compensation expense related to unvested RSUs was $94.2 million, which the Company expects to recognize over an estimated weighted average period of 1.9 years. As of December 31, 2019, there was zero unrecognized compensation expense related to unvested warrants. Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period of the respective award. The Company accounts for forfeitures as they occur. The fair value of RSUs without market conditions is the fair value of the Company’s Class A common stock on the grant date. The fair value of RSUs with market conditions is estimated using a Monte Carlo simulation model. In determining the fair value of the stock options, warrants and the equity awards issued under the 2015 ESPP, the Company used the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment. Fair Value of Common Stock —The fair value of the shares of common stock underlying stock options had historically been established by the Company’s board of directors. Following the completion of the IPO, the Company began using the market closing price for the Company’s Class A common stock as reported on the New York Stock Exchange. Expected Term —The Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time stock-based awards have been exercisable. As a result, for stock options, the Company used the simplified method to calculate the expected term, which is equal to the average of the stock-based award’s weighted average vesting period and its contractual term. The expected term of the 2015 ESPP was based on the contractual term. Volatility —The Company estimates the expected volatility of the common stock underlying its stock options at the grant date. Prior to 2018, the Company estimated the expected volatility of the common stock underlying stock options, warrants and equity awards issued under its 2015 ESPP at the grant date by taking the average historical volatility of the common stock of a group of comparable publicly traded companies over a period equal to the expected life. The Company used this method because it had limited information on the volatility of its Class A common stock because of its short trading history. Beginning in 2018, the Company used a combination of historical volatility from its Class A common stock along with historical volatility from the group of comparable publicly traded companies. Risk-Free Rate —The risk-free interest rate is estimated average interest rate based on U.S. Treasury zero-coupon notes with terms consistent with the expected term of the awards. Dividend Yield —The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Consequently, it used an expected dividend yield of zero. The assumptions used in calculating the fair value of the stock-based awards represent management judgment. As a result, if factors change and different assumptions are used, the stock-based compensation expense could be materially different in the future. The fair value of the stock option awards, warrants, awards issued under the 2015 ESPP, and awards granted to employees was estimated at the date of grant using a Black-Scholes option-pricing model. The fair value of the RSUs with market conditions were estimated using a Black-Scholes option-pricing model combined with a Monte Carlo simulation model. The fair value of these awards were estimated using the following Black-Scholes assumptions: Year Ended December 31, 2019 2018 2017 Employee stock options Expected term (in years) — — 6.25 Volatility —% —% 32.2% Risk-free interest rate —% —% 2.1% Dividend yield —% —% —% Warrants Expected term (in years) — — 9.5 Volatility —% —% 32.0% Risk-free interest rate —% —% 2.1% Dividend yield —% —% —% Employee stock purchase plan Expected term (in years) 0.5 0.5 0.5 Volatility 44.8% - 60.1% 47.8% - 60.1% 27.7% - 31.3% Risk-free interest rate 2.4% - 2.5% 2.1% - 2.5% 1.0% - 1.4% Dividend yield —% —% —% RSUs with market conditions Expected term (in years) 3.0 3.0 — Volatility 45.8% 39.3% —% Risk-free interest rate 2.4% 2.6% —% Dividend yield —% —% —% |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table presents domestic and foreign components of profits/(losses) before income taxes for the periods presented (in thousands): Year Ended December 31, 2019 2018 2017 United States $ (241,923) $ (170,040) $ (158,187) Foreign (67,142) (14,102) (36,457) Total $ (309,065) $ (184,142) $ (194,644) The income tax expense (benefit) is composed of the following (in thousands): Year Ended December 31, 2019 2018 2017 Current tax provision: Federal $ 5,640 $ (1,048) $ (87,961) State 981 388 (8,429) Foreign 4,641 4,895 5,032 Total current 11,262 4,235 (91,358) Deferred tax provision: Federal 60 (1,570) 154,817 State 40 (210) 18,902 Foreign 284 (768) 187 Total deferred 384 (2,548) 173,906 Total income tax expense $ 11,646 $ 1,687 $ 82,548 The reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows: Year Ended December 31, 2019 2018 2017 Tax at federal statutory rate 21.0 % 21.0 % 35.0 % State taxes, net of federal effect (0.3) (0.1) (5.4) Foreign rate differential (6.0) (3.9) (9.3) Tax credits 1.6 6.3 4.1 Domestic production activities deduction — — (3.5) Stock-based compensation (1.0) (4.9) (5.3) Change in prior year reserves (1.5) (0.1) (2.0) Change in valuation allowance (13.4) (15.2) (35.2) Effect of change in tax rate due to Tax Act — — (23.4) Other (1) (4.2) (4.0) 2.6 Effective tax rate (3.8) % (0.9) % (42.4) % (1) For the years ended December 31, 2019 and December 31, 2018, this is inclusive of (3.4%) and (3.8%) impact, respectively, that is primarily related to the change in uncertain tax positions. For 2019, the Company recorded an expense for income taxes of $11.6 million, resulting in an effective tax rate of (3.8)%. The effective tax rate is different than the U.S. statutory federal tax rate primarily due to stock-based compensation expense following the decision in Altera Corp v. Commissioner by the U.S. Court of Appeals for the Ninth Circuit discussed below, the full valuation allowance on the Company's U.S. deferred tax assets, the mix of income/losses among the Company’s foreign jurisdictions, and pretax losses in jurisdictions for which no tax benefit will be recognized. On June 7, 2019, the U.S. Court of Appeals for the Ninth Circuit in Altera Corp. v. Commissioner upheld U.S. Treasury Department regulations requiring that related parties in a cost-sharing arrangement share expenses related to stock-based compensation in proportion to the economic activity of the parties. The ruling reversed the prior decision of the U.S. Tax Court. On November 12, 2019, the Ninth Circuit Court of Appeals denied the plaintiff’s request for an en banc rehearing. Based on the appellate court’s ruling, the Company recorded a cumulative income tax expense of $5.3 million in the fourth quarter of 2019. The plaintiff filed a petition for a writ of certiorari in the U.S. Supreme Court on February 10, 2020, and the Company will continue to monitor developments in this matter. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets were as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Net operating losses and credits $ 113,475 $ 61,494 Fixed assets and intangible assets 61,932 55,476 Accruals and reserves 75,133 53,818 Stock-based compensation 8,615 9,494 Inventory 429 911 Other 5,287 4,806 Total deferred tax assets 264,871 185,999 Less: valuation allowance (244,581) (181,122) Deferred tax assets, net of valuation allowance 20,290 4,877 Deferred tax liabilities: Accruals and reserves (15,525) — Other (914) (560) Total deferred tax liabilities (16,439) (560) Net deferred tax assets $ 3,851 $ 4,317 The Company accounts for deferred taxes under ASC Topic 740, “Income Taxes” (“ASC 740”) which involves weighing positive and negative evidence concerning the realizability of the Company’s deferred tax assets in each jurisdiction. The Company evaluated its ability to realize the benefit of its net deferred tax assets and weighed all available positive and negative evidence both objective and subjective in nature. In determining the need for a valuation allowance, the weight given to positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. Consideration was given to negative evidence such as: the duration and severity of losses in prior years, high seasonal revenue concentrations, increasing competitive pressures, and a challenging retail environment. Realization of the Company’s net deferred tax assets is dependent upon its generation of sufficient taxable income in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences, net operating loss carryforwards and tax credit carryforwards. The amount of net deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change. The Company recorded a valuation allowance to reduce its deferred tax assets to the net amount that the Company believes is more likely than not to be realized. As of December 31, 2019, the Company has a valuation allowance of $191.7 million against its U.S. deferred tax assets and a valuation allowance of $52.9 million against certain of its foreign deferred tax assets that the Company is not expected to realize. The Company will continue to assess the realizability of its deferred tax assets in each of the applicable jurisdictions going forward. As of December 31, 2019, the Company has U.S. federal net operating loss carryforwards of $316.2 million which expire beginning after 2032, California net operating loss carryforwards of $57.3 million which expire beginning after 2032, and other states net operating loss carryforwards of $52.1 million which expire beginning after 2023. As of December 31, 2019, the Company has U.S. federal research tax credit carryforwards of approximately $22.6 million, which if not utilized, begin to expire after 2031, California research tax credit carryforwards of approximately $45.0 million, which do not expire, Massachusetts research tax credit carryforwards of approximately $2.9 million, which if not utilized, begin to expire after 2028, and California hiring tax credit carryforwards of approximately $0.3 million, which if not utilized, begin to expire after 2026. As of December 31, 2019, the Company has United Kingdom net operating loss carryforwards of $10.5 million, which do not expire. Utilization of the net operating loss and tax credit carry forwards are subject to an annual limitation due to the ownership percentage change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of the net operating loss before utilization. The Company does not expect the limitation to result in a reduction in the total amount utilizable. The Company is subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. The Company establishes reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when the Company believes that certain positions might be challenged despite its belief that its tax return positions are fully supportable. The Company adjusts these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. As of December 31, 2019 and 2018, the Company had $67.0 million and $41.2 million of unrecognized tax benefits, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): December 31, 2019 2018 2017 Balance at beginning of year $ 41,198 $ 29,938 $ 35,584 Reductions based on tax positions related to prior year (207) (820) (6,335) Additions based on tax positions related to prior year 9,562 263 108 Additions based on tax positions related to current year 16,517 11,860 9,289 Reductions due to tax authorities’ settlements — (43) (8,603) Reductions due to expiration of statutes of limitation (45) — (105) Balance at end of year $ 67,025 $ 41,198 $ 29,938 At December 31, 2019, the total amount of gross unrecognized tax benefits was $67.0 million, of which $31.9 million would affect the Company’s effective tax rate if recognized. The Company does not have any tax positions as of December 31, 2019 for which it is reasonably possible the total amount of gross unrecognized tax benefits will increase or decrease within the following 12 months. The Company’s policy is to record interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2019 and 2018, respectively, the Company has accrued $5.2 million and $3.1 million related to interest and penalties, respectively. The material jurisdictions in which the Company is subject to potential examination include the United States and Ireland. The Company believes that adequate amounts have been reserved for these jurisdictions. For the United States, the Company is currently under examination by the Internal Revenue Service ("IRS") for fiscal 2015 to 2017. For state and non-U.S. tax returns, the Company is generally no longer subject to tax examinations for years prior to 2014. |
Net Loss per Share Attributable
Net Loss per Share Attributable to Common Stockholders | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share Attributable to Common Stockholders | Net Loss Per Share Attributable to Common Stockholders The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders (in thousands, except per share amounts): Year Ended December 31, 2019 2018 2017 Numerator: Net loss $ (320,711) $ (185,829) $ (277,192) Denominator: Weighted-average shares of common stock—basic for Class A and Class B 257,500 244,603 232,032 Effect of dilutive securities — — — Weighted-average shares of common stock—diluted for Class A and Class B 257,500 244,603 232,032 Net loss per share attributable to common stockholders: Basic $ (1.25) $ (0.76) $ (1.19) Diluted $ (1.25) $ (0.76) $ (1.19) The following potentially dilutive common shares on a weighted average basis 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): December 31, 2019 2018 2017 RSUs 18,932 8,514 10,030 Stock options to purchase common stock 12,871 11,647 17,469 Warrants 230 230 216 Diluted impact of ESPP — 159 162 Diluted common stock subject to vesting — — 84 Total 32,033 20,550 27,961 |
Significant Customer Informatio
Significant Customer Information and Other Information | 12 Months Ended |
Dec. 31, 2019 | |
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 revenue were as follows: December 31, 2019 2018 2017 C 10 % 10 % 13 % D 11 10 * * Revenue was less than 10%. Retailers and distributors that accounted for equal to or greater than 10% of accounts receivable at December 31, 2019 and 2018 were as follows: December 31, 2019 2018 C 18 % 12 % D 11 10 E 10 11 B * 16 F * 10 * Accounts receivable were less than 10%. Geographic and Other Information Revenue by geographic region, based on ship-to destinations, was as follows (in thousands): December 31, 2019 2018 2017 United States $ 799,016 $ 880,534 $ 944,052 Americas excluding United States 94,961 101,282 116,330 Europe, Middle East, and Africa 410,485 384,196 440,135 Asia Pacific 130,326 145,971 115,002 Total $ 1,434,788 $ 1,511,983 $ 1,615,519 The United States represented 56%, 58% and 58% of revenue for 2019, 2018 and 2017, respectively. Revenue in the United Kingdom was $159.9 million in 2019 and $196.0 million in 2017, representing 11% of revenue in 2019 and 12% of revenue for 2017. Revenue in the United Kingdom was less than 10% of revenue in 2018. No other single country represented more than 10% of revenue during these periods. As of December 31, 2019 and 2018, long-lived assets, which represent property and equipment, located outside the United States were $27.9 million and $36.9 million, respectively. |
Acquisitions
Acquisitions | 1 Months Ended |
Oct. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions 2019 Acquisition In October 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. 2018 Acquisition two seven |
Selected Unaudited Quarterly Fi
Selected Unaudited Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Unaudited Quarterly Financial Data | Selected Unaudited Quarterly Financial DataThe following tables show a summary of the Company’s unaudited quarterly financial information for each of the four quarters of 2019 and 2018 (in thousands, except per share amounts): Three Months Ended December 31, September 28, June 29, March 30, Revenue $ 502,142 $ 347,200 $ 313,556 $ 271,890 Gross profit $ 122,053 $ 107,952 $ 108,214 $ 89,453 Net loss $ (120,835) $ (51,893) $ (68,518) $ (79,465) Net loss per share attributable to common stockholders—basic $ (0.46) $ (0.20) $ (0.27) $ (0.31) Net income loss per share attributable to common stockholders—diluted $ (0.46) $ (0.20) $ (0.27) $ (0.31) Three Months Ended December 31, September 29, 2018 June 30, March 31, Revenue $ 571,199 $ 393,575 $ 299,344 $ 247,865 Gross profit $ 216,927 $ 153,514 $ 119,015 $ 114,123 Net income (loss) $ 15,372 $ (2,056) $ (118,268) $ (80,877) Net income (loss) per share attributable to common stockholders—basic $ 0.06 $ (0.01) $ (0.49) $ (0.34) Net income (loss) per share attributable to common stockholders—diluted $ 0.06 $ (0.01) $ (0.49) $ (0.34) |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The 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 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 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 recoverability of intangible assets and their useful lives, contingencies, income taxes, recoverability of unused advertising credits, and impairment of an equity investment. Actual results could differ from those estimates, and such differences may be material to the consolidated financial statements. | |
Comprehensive Income (Loss) | Comprehensive Loss Comprehensive loss consists of two components, net loss and other comprehensive loss, net of tax. Other comprehensive loss refers to revenue, expenses, and gains and losses that are recorded as an element of stockholders’ equity but are excluded from net loss. The Company’s other comprehensive loss consists of net unrealized gains and losses on derivative instruments accounted for as cash flow hedges, foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency, and unrealized gains and losses on available-for-sale securities. | |
Cash and Cash Equivalents | Cash, Cash Equivalents and Marketable Securities Cash and cash equivalents include all cash balances and highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents and marketable securities consist of money market funds, U.S. government and agency securities, commercial paper, and corporate notes and bonds. | |
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. The Company views marketable securities as available to support current operations as needed, and 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 expense, net as incurred. Realized gains and losses on the sale of securities are determined by specific identification of each security’s cost basis. Investments are reviewed periodically to identify possible other-than-temporary impairments. No impairment loss has been recorded on the securities as the Company believes that any 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. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities recorded at fair value on a recurring basis are categorized based upon the level of judgment associated with inputs used to measure their fair values. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. The Company estimates fair value by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 —Quoted prices in active markets for identical assets or liabilities; Level 2 —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 for substantially the full term of the assets or liabilities; and Level 3 —Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. | |
Foreign Currencies | Foreign Currencies The Company and all of its wholly-owned subsidiaries use the U.S. dollar as their functional currency. The Company’s subsidiaries that use the U.S. dollar as their functional currency remeasure local currency denominated monetary assets and liabilities at exchange rates in effect at the end of each period, and inventories, property, plant and equipment, right-of-use assets, and other nonmonetary assets and liabilities at historical rates. Gains and losses from these remeasurements have been included in the Company’s operating results within other income (expense), net. Local currency transactions of these international operations are remeasured into U.S. dollars at the rates of exchange in effect at the date of the transaction. Foreign currency transaction gains (losses) were $(3.6) million, $4.6 million, and $2.6 million for 2019, 2018, and 2017, respectively. | |
Derivative Instruments | Derivative Instruments The Company accounts for its derivative instruments as either assets or liabilities and carries them at fair value. Derivatives held by the Company that are not designated as hedges are adjusted to fair value through earnings at each reporting date. In addition, the Company enters into derivatives that are accounted for as cash flow hedges. The Company records the gains or losses, net of tax, related to the effective portion of 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 and operating expenses when the underlying hedged transactions are recognized. The Company periodically assesses the effectiveness of its cash flow hedges. The fair value of derivative assets and liabilities are included in prepaid expenses and other current assets and accrued liabilities on the consolidated balance sheets. | |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities, accounts receivables, and derivative instruments. Cash is deposited with high quality financial institutions and may, at times, exceed federally insured limits. The Company’s Investment Policy requires that cash equivalents and marketable securities are invested only in investment grade securities and limits the amount of credit exposure to any single issuance, issuer, or type of investment. Management believes that the financial institutions that hold the Company’s deposits are financially credit worthy and, accordingly, minimal credit risk exists with respect to those balances. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal interest rate risk. The Company’s accounts receivable is derived from customers located primarily in the United States. The Company maintains credit insurance for the majority of its customer balances, performs ongoing credit evaluations of its customers, and maintains allowances for potential credit losses on customers’ accounts when deemed necessary. Credit losses historically have not been significant. The Company continuously monitors customer payments and maintains an allowance for doubtful accounts based on its assessment of various factors including historical experience, age of the receivable balances, and other current economic conditions or other factors that may affect customers’ ability to pay. The Company’s derivative instruments expose it to credit risk to the extent that its counterparties may be unable to meet the terms of the agreements. The Company seeks to mitigate this risk by limiting counterparties to major financial institutions and by spreading the risk across several major financial institutions. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. | |
Supplier Concentration | Supplier Concentration The Company relies on third parties for the supply and manufacture of its products, as well as third-party logistics providers. In instances where these parties fail to perform their obligations, the Company may be unable to find alternative suppliers or satisfactorily deliver its products to its customers on time, if at all. | |
Inventories | Inventories Inventories consist of finished goods and component parts, which are purchased from contract manufacturers and component suppliers. Inventories are stated at the lower of cost or net realizable value. The Company assesses the valuation of inventory and periodically writes down the value for estimated excess and obsolete inventory based upon estimates of future demand and market conditions. | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets. Cost of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. The useful lives of the property and equipment are as follows: Tooling and manufacturing equipment One Furniture and office equipment Three years Purchased software Three years Capitalized internally-developed software Two Leasehold improvements Shorter of remaining lease term or ten years | |
Internally-Development Software Costs | Internally-Developed Software Costs | |
Research and Development | Research and Development Research and development expenses consist primarily of personnel-related expenses, consulting and contractor expenses, tooling and prototype materials, and allocated overhead costs. Substantially all of the Company’s research and development expenses are related to developing new products and services and improving existing products and services. To date, research and development expenses have been expensed as incurred, because the release of products and services for sale has been short and development costs qualifying for capitalization have been immaterial. | |
Business Combinations | Business Combinations, Goodwill, and Intangible Assets The Company allocates the fair value of purchase consideration to tangible assets, liabilities assumed, and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is allocated to goodwill. The allocation of the purchase consideration requires management to make significant estimates and assumptions, especially with respect to intangible assets. These estimates can include, but are not limited to, future expected cash flows from acquired customers, acquired technology, and trade names from a market participant perspective, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. | |
Goodwill | The Company assesses goodwill for impairment at least annually during the fourth quarter and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Consistent with the determination that the Company has one operating segment, the Company has determined that there is one reporting unit and tests goodwill for impairment at the entity level. Goodwill is tested using the two-step process in accordance with ASC 350, Intangibles—Goodwill and Other | |
Intangible Assets | Acquired finite-lived intangible assets are amortized over their estimated useful lives. The Company evaluates the recoverability of intangible assets for possible impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of intangible assets is not recoverable, the carrying amount of such assets is reduced to fair value. The Company has not recorded any such impairment charge during the years presented. | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | |
Revenue Recognition | Revenue Recognition The Company recognizes revenue upon transfer of control of promised goods or services to customers at transaction price, an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Transaction price is calculated as selling price net of variable consideration which may include estimates for future returns and sales incentives related to current period product revenue. The Company adopted ASU 2014-09 (Topic 606) effective January 1, 2018, utilizing the modified retrospective transition method. Prior periods were not retrospectively adjusted. Upon adoption, the Company recognized an immaterial cumulative effect of adopting this guidance as an adjustment to its opening accumulated deficit balance. The new standard impacted the timing of when revenue is recognized for certain products shipped, and the timing and classification of certain sales incentives, which are generally recognized earlier than historical guidance. The Company believes the ASU 2014-09 guidance is materially consistent with its historical revenue recognition policy. Products and Services The Company derives substantially all of its revenue from sales of its wearable devices, which includes trackers, smartwatches and accessories. The Company also generates a small portion of revenue from its subscription-based services. The Company considers transfer of control of its products to have occurred once control has transferred and delivery of services to have occurred. The Company recognizes revenue, net of estimated sales returns, sales incentives, discounts, and sales tax. Arrangements with Multiple Performance Obligations The Company enters into contracts that have multiple performance obligations that include hardware, software, and services. The first performance obligation is the hardware and firmware essential to the functionality of the tracker or smartwatch delivered at the time of sale. The second performance obligation is the software services included with the products, which are provided free of charge and enable users to sync, view, and access real-time data on the Company’s online dashboard and mobile apps. The third performance obligation is the embedded right included with the purchase of the device to receive, on a when-and-if-available basis, future unspecified firmware upgrades and features relating to the product’s essential firmware. In addition, the Company occasionally offers a fourth performance obligation in bundled arrangements that allows access to subscription-based services related to the Company’s Fitbit Premium and Fitbit Coach offerings. The Company allocates revenue to all performance obligations based on their relative standalone selling prices (“SSP”). The Company’s process for determining its SSP considers multiple factors including consumer behaviors, the Company’s internal pricing model, and cost-plus margin and may vary depending upon the facts and circumstances related to each deliverable. SSP for the trackers and smartwatches reflect the Company’s best estimate of the selling prices if they were sold regularly on a stand-alone basis and comprise the majority of the arrangement consideration. SSP for upgrade rights currently ranges from $1.00 to $3.00. SSP for the online dashboard and mobile apps is currently estimated at $0.99. SSP for access to Fitbit Coach subscription-based services is based on the price charged when sold separately. Amounts allocated to the delivered wearable devices are recognized at the time of delivery, provided the other conditions for revenue recognition have been met. Amounts allocated to the online dashboard and mobile apps and unspecified upgrade rights are deferred and recognized on a straight-line basis over the estimated usage period. The Company offers its users the ability to purchase subscription-based services, through which the users receive incremental features, including customized programs, advanced sleep features, personal insights, in-depth analytics regarding the user’s personal metrics, or video-based customized workouts. Amounts paid for subscriptions are deferred and recognized ratably over the service period, which is typically one year. Revenue from subscription-based services was less than 2% of revenue for all periods presented. In addition, the Company offers subscription-based software and services to certain customers in Fitness Health Solutions, which includes a real-time dashboard, and the ability to create corporate challenges. SSP for the Fitness Health Solutions subscription is determined based on the Company’s internal pricing model for anticipated renewals for existing customers and pricing for new customers. Revenue allocated to the Fitness Health Solutions subscription is deferred and recognized on a straight-line basis over the estimated access period of one year, which is the typical service period. Revenue for Fitness Health Solutions software and services was less than 2% of revenue for all periods presented. The Company applies a practical expedient to expense costs to obtain a contract with a customer as incurred when the amortization period would be one year or less. The Company applies a practical expedient to not consider the effect of a significant financing component as it expects that the period between transfer of control and payment from customer to be one year or less. The Company accounts for shipping and handling fees billed to customers as revenue. Sales taxes and value added taxes (“VAT”) collected from customers which are remitted to governmental authorities are not included in revenue, and are reflected as a liability on the consolidated balance sheets. Rights of Return, Stock Rotation Rights, and Price Protection The Company offers limited rights of return, stock rotation rights, and price protection under various policies and programs with its retailer and distributor customers and end-users. Below is a summary of the general provisions of such policies and programs: • Retailers and distributors are generally allowed to return products that were originally sold through to an end-user under provisions of their contracts, called “open-box” returns, and such returns may be made at any time after the original sale. • All purchases through Fitbit.com are covered by a 45-day right of return. • Certain distributors are allowed stock rotation rights which are limited rights of return of products purchased during a prior period, generally one quarter. • Certain distributors are offered price protection that allows for the right to a partial credit for unsold inventory held by the distributor if the Company reduces the selling price of a product. The Company estimates reserves for these policies and programs based on historical experience, and records the reserves as a reduction of revenue and an accrued liability. Through December 31, 2019, actual returns have primarily been open-box returns. On a quarterly basis, the amount of revenue that is reserved for future returns is calculated based on historical trends and data specific to each reporting period. For recently introduced devices, historical trends of similar Fitbit products are used. The historical trends consider product life cycles, new product introductions, market acceptance of products, product sell-through, the type of customer, seasonality, and other factors. Return rates can fluctuate over time, but have been sufficiently predictable to allow the Company to estimate expected future product returns. The Company reviews the actual returns evidenced in prior quarters as a percent of related revenue to determine the historical rate of returns. The Company then applies the historical rate of returns to the current period revenue as a basis for estimating future returns. When necessary, the Company also provides a specific reserve for products in the distribution channel in excess of estimated requirements. This estimate can be affected by the amount of a particular product in the channel, the rate of sell-through, product plans, and other factors. The Company also considers whether there are circumstances which may result in anticipated returns higher than the historical return rate from direct customers and records an additional specific reserve as necessary. The estimates and assumptions used to reserve for rights of return, stock rotation rights, and price protection have been accurate in all material respects and have not materially changed in the past. Sales Incentives The Company offers sales incentives through various programs, consisting primarily of cooperative advertising and pricing promotions to retailers and distributors. The Company records advertising with customers as a reduction to revenue unless it receives a distinct benefit in exchange for credits claimed by the customer and can reasonably estimate the fair value of the distinct benefit received, in which case the Company records it as a marketing expense. The Company recognizes a liability and reduces revenue for rebates or other incentives related to products in the distribution channel. This estimate is based on the projected amount of rebates or credits that will be claimed by customers and can be affected by the amount of a particular product in the channel, the rate of sell-through, product promotion plans, and other factors. | |
Cost of Revenue | Cost of Revenue Cost of revenue consists of product costs, including costs of contract manufacturers for production, shipping and handling costs, warranty replacement costs, packaging, fulfillment costs, manufacturing and tooling equipment depreciation, warehousing costs, hosting costs, write-downs of excess and obsolete inventory, amortization of developed technology intangible assets acquired, and certain allocated costs related to management, facilities, and personnel-related expenses and other expenses associated with supply chain logistics. Personnel-related expenses include salaries, bonuses, benefits, and stock-based compensation. | |
Advertising Costs | Advertising Costs and Point of Purchase (“POP”) Displays Costs related to advertising and promotions, excluding cooperative advertising costs, are expensed to sales and marketing as incurred. Advertising and promotion expenses, including expenses for POP displays, for 2019, 2018, and 2017 were $170.4 million, $161.5 million and $226.3 million, respectively. Co-op advertising costs are recorded as a reduction to revenue, and for 2019, 2018 and 2017 were $89.8 million, $80.3 million and $45.0 million, respectively. The Company provides retailers with POP displays, generally free of charge, in order to facilitate the marketing of the Company’s products within retail stores. Any amounts related to the costs of the POP displays are expensed as incurred, and included in sales and marketing expenses on the consolidated statements of operations. Prior to 2019, POP displays were recorded as prepaid expenses and other current assets on the consolidated balance sheet and recognized as expense over the expected period of the benefit provided by these assets, which was generally 12 months. | |
Product Warranty | Product Warranty The Company offers a standard product warranty that its products will operate under normal use for a period of one two | |
Share-Based Compensation | Stock-Based Compensation Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period of the respective award. Determining the fair value of stock-based awards at the grant date requires judgment. The fair value of restricted stock units ("RSUs") without market conditions is the fair value of the Company’s common stock on the grant date. The Company estimates the fair value of RSUs subject to market conditions using a Monte Carlo simulation model. The Company uses the Black-Scholes option-pricing model to determine the fair value of stock options, warrants and shares issued under the 2015 Employee Stock Purchase Plan (the “2015 ESPP”). | |
Segment Information | Segment Information The Company operates as one operating segment as it only reports financial information on an aggregate and consolidated basis to its Chief Executive Officer, who is the Company’s chief operating decision maker. | |
Income Taxes | Income Taxes The Company utilizes the asset and liability method of accounting for income taxes, which requires the recognition of deferred tax assets and liabilities for expected future consequences of temporary differences between the financial reporting and income tax bases of assets and liabilities using enacted tax rates. The Company makes estimates, assumptions, and judgments to determine its expense (benefit) for income taxes and also for deferred tax assets and liabilities and any valuation allowances recorded against its deferred tax assets. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes that recovery is not likely, the Company establishes a valuation allowance. The calculation of the Company’s income tax expense involves the use of estimates, assumptions, and judgments while taking into account current tax laws, its interpretation of current tax laws, and possible outcomes of future tax audits. The Company has established reserves to address potential exposures related to tax positions that could be challenged by tax authorities. Although the Company believes its estimates, assumptions, and judgments to be reasonable, any changes in tax law or its interpretation of tax laws and the resolutions of potential tax audits could significantly impact the amounts provided for income taxes in its consolidated financial statements. The calculation of the Company’s deferred tax asset balance involves the use of estimates, assumptions, and judgments while taking into account estimates of the amounts and type of future taxable income. Actual future operating results and the underlying amount and type of income could differ materially from its estimates, assumptions, and judgments, thereby impacting its financial position and operating results. The Company includes interest and penalties related to unrecognized tax benefits within income tax expense. Interest and penalties related to unrecognized tax benefits have been recognized in the appropriate periods presented. | |
Net Income (Loss) per Share Attributable to Common Stockholders | Net Income (Loss) per Share Attributable to Common Stockholders Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers its redeemable convertible preferred stock to be participating securities. The holders of the redeemable convertible preferred stock did not have a contractual obligation to share in losses. In accordance with the two-class method, earnings allocated to these participating securities and the related number of outstanding shares of the participating securities, which include contractual participation rights in undistributed earnings, have been excluded from the computation of basic and diluted net income per share attributable to common stockholders. For the calculation of diluted net income per share, net income attributable to common stockholders for basic net income per share is adjusted by the effect of dilutive securities. Diluted net income per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding, including all potentially dilutive common shares, if the effect of such shares is dilutive. In connection with the Company’s initial public offering (“IPO”) in 2015, the Company established two classes of authorized common stock: Class A common stock and Class B common stock. As a result, all then-outstanding shares of common stock were converted into shares of Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Each share of Class B common stock is convertible at any time at the option of the stockholder into one share of Class A common stock, generally automatically converts into Class A common stock upon a transfer, and has no expiration date. The Company applies the two-class method of calculating earnings per share, but as the dividend rights of both classes are identical, basic and diluted earnings per share are the same for both classes. As the Company was in a net loss position from 2017 through 2019, basic net loss per share attributable to common stockholders was the same as diluted net loss per share attributable to common stockholders as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. | |
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. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. This ASU clarifies and corrects guidance related to Topic 326, Topic 815, and Topic 825. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief. This ASU provides an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost. The Company will adopt Topic 326 utilizing the modified retrospective method through a cumulative-effect adjustment on January 1, 2020, and will not restate comparative periods. The Company does not expect the adoption to have a material impact 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. The Company does not expect the adoption to have a material impact 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 consolidated balance sheets but did not have an impact on its 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 December 31, 2019 were $70.2 million, $23.5 million, and $67.9 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 6 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. | |
Lessee, Leases | 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 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 practical expedients, and it recognizes such lease payments on a straight-line basis over the lease term. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of useful lives of property and equipment | The useful lives of the property and equipment are as follows: Tooling and manufacturing equipment One Furniture and office equipment Three years Purchased software Three years Capitalized internally-developed software Two Leasehold improvements Shorter of remaining lease term or ten years Property and equipment, net, consisted of the following (in thousands): December 31, 2019 2018 Tooling and manufacturing equipment $ 103,177 $ 80,685 Furniture and office equipment 19,922 22,738 Purchased and internally-developed software 27,424 21,741 Leasehold improvements 59,926 67,715 Total property and equipment 210,449 192,879 Less: Accumulated depreciation and amortization (127,693) (86,593) Property and equipment, net $ 82,756 $ 106,286 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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): December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 107,708 $ — $ — $ 107,708 U.S. government agencies — 77,364 — 77,364 Corporate debt securities — 207,137 — 207,137 Total $ 107,708 $ 284,501 $ — $ 392,209 Liabilities: Contingent consideration $ — $ — $ 1,889 $ 1,889 Derivative liabilities — 748 — 748 Total $ — $ 748 $ 1,889 $ 2,637 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 273,546 $ — $ — $ 273,546 U.S. government agencies — 72,840 — 72,840 Corporate debt securities — 228,953 — 228,953 Derivative assets — 623 — 623 Total $ 273,546 $ 302,416 $ — $ 575,962 Liabilities: Derivative liabilities $ — $ 549 $ — $ 549 Stock warrant liability — — 410 410 Total $ — $ 549 $ 410 $ 959 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of cash, cash equivalents and marketable securities | The following table sets forth the cash, cash equivalents, and marketable securities as of December 31, 2019 (in thousands): Amortized Gross Gross Fair Value Cash and Marketable Cash $ 126,293 $ — $ — $ 126,293 $ 126,293 $ — Money market funds 107,708 — — 107,708 107,708 — U.S. government agencies 77,316 48 — 77,364 30,375 46,989 Corporate debt securities 207,063 85 (11) 207,137 70,103 137,034 Total $ 518,380 $ 133 $ (11) $ 518,502 $ 334,479 $ 184,023 The following table sets forth the cash, cash equivalents, and marketable securities as of December 31, 2018 (in thousands): Amortized Gross Gross Fair Value Cash and Marketable Cash $ 148,110 $ — $ — $ 148,110 $ 148,110 $ — Money market funds 273,546 — — 273,546 273,546 — U.S. government agencies 72,884 1 (45) 72,840 9,738 63,102 Corporate debt securities 229,040 — (87) 228,953 42,562 186,391 Total $ 723,580 $ 1 $ (132) $ 723,449 $ 473,956 $ 249,493 The following table classifies marketable securities by contractual maturities (in thousands): December 31, 2019 December 31, 2018 Due in one year $ 173,827 $ 249,493 Due in one to two years 10,196 — Total $ 184,023 $ 249,493 |
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 dates presented (in thousands): December 31, 2019 December 31, 2018 Balance Sheet Location Fair Fair Fair Fair Hedges not designated Prepaid expense and other current assets $ — $ — $ 623 $ — Hedges not designated Accrued liabilities — 748 — 549 Total fair value of derivative instruments $ — $ 748 $ 623 $ 549 |
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 consolidated statement of operations for the periods presented (in thousands): Year Ended Income Statement Location 2019 2018 2017 Foreign exchange cash flow hedges: Gain (loss) recognized in OCI—effective portion $ — $ 8,405 $ (19,436) Gain (loss) reclassified from OCI into income—effective portion Revenue — 8,405 (18,532) Gain (loss) reclassified from OCI into income—effective portion Operating expenses — — (1,405) Gain (loss) recognized in income—ineffective portion Other income (expense), net — — 21 Gain recognized in income—excluded time value portion Other income (expense), net — — 1,771 Foreign exchange balance sheet hedges: Gain (loss) recognized in income Other income (expense), net $ (2,122) $ 6,240 $ (10,516) |
Schedule of effects of derivative contracts on Consolidated Statements Of Operations | The following table provides the location in the consolidated statements of operations and amount of the recognized gains or losses to the Company’s derivative instruments designated as hedging instruments (in thousands): Year Ended December 31, 2019 2018 2017 Total amounts presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded in revenue $ 1,434,788 $ 1,511,983 $ 1,615,519 Total amounts presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded in operating expenses 748,385 792,887 891,988 Gain (loss) on foreign exchange contracts designated as cash flow hedges reclassified from OCI into revenue — 8,405 (18,532) Loss on foreign exchange contracts designated as cash flow hedges reclassified from OCI into operating expenses — — (1,405) |
Schedule of offsetting derivative assets | The following table sets forth the available offsetting of net derivative assets and net derivative liabilities under the master netting arrangements as of December 31, 2019 and December 31, 2018 (in thousands): December 31, 2019 Gross Amounts Offset in the Consolidated Balance Sheets Gross Amounts Not Offset in Consolidated Balance Sheets Gross Amount Recognized Gross Amount Offset Net Amount Presented Financial Instruments Cash Collateral Received Net Amount Foreign exchange contracts assets $ — $ — $ — $ — $ — $ — Foreign exchange contracts liabilities 748 — 748 — — 748 December 31, 2018 Gross Amounts Offset in the Consolidated Balance Sheets Gross Amounts Not Offset in Consolidated Balance Sheets Gross Amounts Recognized Gross Amounts Offset Net Amount Presented Financial Cash Collateral Net Foreign exchange contracts assets $ 623 $ — $ 623 $ 549 $ — $ 74 Foreign exchange contracts liabilities 549 — 549 549 — — |
Schedule of offsetting derivative liabilities | The following table sets forth the available offsetting of net derivative assets and net derivative liabilities under the master netting arrangements as of December 31, 2019 and December 31, 2018 (in thousands): December 31, 2019 Gross Amounts Offset in the Consolidated Balance Sheets Gross Amounts Not Offset in Consolidated Balance Sheets Gross Amount Recognized Gross Amount Offset Net Amount Presented Financial Instruments Cash Collateral Received Net Amount Foreign exchange contracts assets $ — $ — $ — $ — $ — $ — Foreign exchange contracts liabilities 748 — 748 — — 748 December 31, 2018 Gross Amounts Offset in the Consolidated Balance Sheets Gross Amounts Not Offset in Consolidated Balance Sheets Gross Amounts Recognized Gross Amounts Offset Net Amount Presented Financial Cash Collateral Net Foreign exchange contracts assets $ 623 $ — $ 623 $ 549 $ — $ 74 Foreign exchange contracts liabilities 549 — 549 549 — — |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of deferred revenue | Changes in the total short-term and long-term deferred revenue balance were as follows (in thousands): December 31, 2019 2018 2017 Beginning balances $ 36,836 $ 42,432 $ 49,904 Deferral of revenue 45,040 40,003 46,193 Recognition of deferred revenue (41,034) (45,599) (53,665) Ending balances $ 40,842 $ 36,836 $ 42,432 |
Schedule of accounts receivable and revenue reserves | Changes in the revenue returns reserve were as follows (in thousands): December 31, 2019 2018 2017 Beginning balances $ 104,001 $ 109,872 $ 98,851 Increases (1) 178,962 170,957 229,610 Returns taken (181,637) (176,828) (218,589) Ending balances $ 101,326 $ 104,001 $ 109,872 (1) Increases in the revenue returns reserve include provisions for open box returns and stock rotations. |
Schedule of Allowance for Doubtful Accounts | Changes in the allowance for doubtful accounts were as follows (in thousands): December 31, 2019 2018 2017 (1) Beginning balances $ 3,742 $ 9,229 $ 282 Increases 297 56 30,551 Write-offs (291) (5,543) (21,604) Ending balances $ 3,748 $ 3,742 $ 9,229 |
Schedule of inventories | Inventories consisted of the following (in thousands): December 31, 2019 2018 Components $ 5,397 $ 8,866 Finished goods 131,355 116,005 Total inventories $ 136,752 $ 124,871 |
Schedule of prepaid expenses and other current asset | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2019 2018 Prepaid expenses $ 11,219 $ 18,100 Prepaid marketing 3,347 3,258 Point-of-purchase displays, net — 5,143 Derivative assets — 623 Other 14,090 15,201 Total prepaid expenses and other current assets $ 28,656 $ 42,325 |
Schedule of property and equipment | The useful lives of the property and equipment are as follows: Tooling and manufacturing equipment One Furniture and office equipment Three years Purchased software Three years Capitalized internally-developed software Two Leasehold improvements Shorter of remaining lease term or ten years Property and equipment, net, consisted of the following (in thousands): December 31, 2019 2018 Tooling and manufacturing equipment $ 103,177 $ 80,685 Furniture and office equipment 19,922 22,738 Purchased and internally-developed software 27,424 21,741 Leasehold improvements 59,926 67,715 Total property and equipment 210,449 192,879 Less: Accumulated depreciation and amortization (127,693) (86,593) Property and equipment, net $ 82,756 $ 106,286 |
Schedule of goodwill | The changes in the carrying amount of goodwill were as follows (in thousands): Goodwill Balance at December 31, 2017 $ 51,036 Goodwill acquired 9,943 Balance at December 31, 2018 60,979 Goodwill acquired 3,833 Balance at December 31, 2019 $ 64,812 |
Schedule of intangible assets (excluding goodwill) | The carrying amounts of the intangible assets as of December 31, 2019 and December 31, 2018 were as follows (in thousands): December 31, 2019 December 31, 2018 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Developed technology $ 37,813 $ (23,910) $ 13,903 $ 35,988 $ (15,983) $ 20,005 Customer relationships 3,790 (991) 2,799 3,790 (451) 3,339 Trademarks and other 1,278 (1,234) 44 1,278 (1,002) 276 Total intangible assets, net $ 42,881 $ (26,135) $ 16,746 $ 41,056 $ (17,436) $ 23,620 |
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 2019, is as follows (in thousands): Cost of Operating Total 2020 $ 6,325 $ 1,269 $ 7,594 2021 5,037 597 5,634 2022 1,488 597 2,085 2023 — 597 597 2024 — 597 597 Thereafter — 239 239 Total intangible assets, net $ 12,850 $ 3,896 $ 16,746 |
Schedule of accrued liabilities | Accrued liabilities consisted of the following (in thousands): December 31, 2019 2018 Accrued sales incentives $ 156,839 $ 126,400 Sales returns reserve (1) 101,326 104,001 Product warranty 52,403 45,605 Accrued co-op advertising and marketing development funds 40,689 30,435 Employee-related liabilities 37,355 33,916 Accrued manufacturing expense and freight 35,112 21,357 Accrued sales and marketing 26,781 18,171 Sales taxes and VAT payable 19,603 20,121 Accrued research and development 19,232 8,783 Accrued legal settlements and fees 8,854 2,821 Inventory received but not billed 1,669 6,373 Finance lease liabilities 1,384 — Derivative liabilities 748 549 Other 11,535 18,702 Accrued liabilities $ 513,530 $ 437,234 |
Schedule of product warranty reserves | Product warranty reserve activities were as follows (in thousands): December 31, 2019 2018 2017 Beginning balances $ 45,605 $ 87,882 $ 99,923 Charged to cost of revenue 45,092 15,720 53,840 Changes in estimate related to pre-existing warranties (1) 7,421 (20,545) 11,788 Settlement of claims (45,715) (37,452) (77,669) Ending balances $ 52,403 $ 45,605 $ 87,882 |
Schedule of accumulated other comprehensive income | The components and activity of accumulated other comprehensive income (“AOCI”), net of tax, were as follows (in thousands): Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Available-for-Sale Investments Total Balance at December 31, 2017 $ 66 $ (75) $ (9) Other comprehensive income (loss) before reclassifications 7,587 (68) 7,519 Amounts reclassified from AOCI (7,587) 11 (7,576) Other comprehensive loss — (57) (57) Balance at December 31, 2018 66 (132) (66) Other comprehensive income (loss) before reclassifications (66) 320 254 Amounts reclassified from AOCI — — — Other comprehensive income (loss) (66) 320 254 Balance at December 31, 2019 $ — $ 188 $ 188 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease, Cost | Total lease cost consists of the following (in thousands): Year Ended December 31, 2019 Finance lease costs: Amortization of ROU assets $ 2,746 Interest on lease liabilities — Operating lease costs (1) 23,211 Variable lease costs 5,061 Sublease income (4,703) Total lease costs $ 26,315 (1) includes short-term leases, which are immaterial. Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 2,703 Operating cash flows from finance leases — Operating cash flows from operating leases 27,467 ROU assets obtained in exchange for lease obligations: Finance lease liabilities $ 1,384 Operating lease liabilities 3,242 |
Assets And Liabilities, Lessee | Supplemental balance sheet information related to leases was as follows (in thousands): December 31, 2019 Finance leases: Other assets $ 1,384 Accrued liabilities $ 1,384 Operating leases: Operating lease ROU assets $ 70,225 Operating lease liabilities $ 23,511 Long-term operating lease liabilities 67,902 Total operating lease liabilities $ 91,413 |
Schedule of Weighted-Average Lease Terms and Discount Rates | Weighted-average lease terms and discount rates are as follows: December 31, 2019 Weighted-average remaining lease terms (in years): Finance leases 0.5 Operating leases 4.2 Weighted-average discount rates: Finance leases —% Operating leases 5.5% |
Finance Lease Maturity Schedule | Maturities of lease liabilities as of December 31, 2019 were as follow (in thousands): Finance Leases Operating Leases 2020 $ 1,384 24,789 2021 — 23,749 2022 — 23,225 2023 — 20,585 2024 — 8,321 Thereafter — — Total minimum lease payments $ 1,384 $ 100,669 Less: amount representing interest — (9,256) Total lease liabilities $ 1,384 $ 91,413 |
Operating Lease Maturity Schedule | Maturities of lease liabilities as of December 31, 2019 were as follow (in thousands): Finance Leases Operating Leases 2020 $ 1,384 24,789 2021 — 23,749 2022 — 23,225 2023 — 20,585 2024 — 8,321 Thereafter — — Total minimum lease payments $ 1,384 $ 100,669 Less: amount representing interest — (9,256) Total lease liabilities $ 1,384 $ 91,413 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock option activity | Activity under the 2007 Plan and 2015 Plan is as follows (in thousands except per share amounts): Stock Options Outstanding Number of Weighted– Weighted– Aggregate Balance—December 31, 2018 16,263 $ 3.00 Granted — Exercised (3,290) $ 0.85 $ 18,059 Canceled (102) $ 8.45 Balance—December 31, 2019 12,871 $ 3.51 4.4 $ 43,320 Stock options exercisable—December 31, 2019 12,755 $ 3.47 4.4 $ 43,249 Stock options vested and expected to vest—December 31, 2019 12,871 $ 3.51 4.4 $ 43,320 |
Schedule of restricted stock unit activity | RSU activity under the equity incentive plans is as follows: RSUs Weighted- (in thousands) Unvested balance—December 31, 2018 18,376 $ 6.69 Granted 15,614 5.77 Vested (10,354) 7.22 Forfeited or canceled (4,704) 6.50 Unvested balance—December 31, 2019 18,932 5.68 |
Schedule of stock-based compensation expense | Total stock-based compensation recognized was as follows (in thousands): Year Ended December 31, 2019 2018 2017 Cost of revenue $ 6,403 $ 7,312 $ 5,312 Research and development 44,855 57,188 54,123 Sales and marketing 11,585 14,726 14,959 General and administrative 14,896 17,783 17,187 Total stock-based compensation expense $ 77,739 $ 97,009 $ 91,581 |
Schedule of options valuation assumptions | The fair value of the stock option awards, warrants, awards issued under the 2015 ESPP, and awards granted to employees was estimated at the date of grant using a Black-Scholes option-pricing model. The fair value of the RSUs with market conditions were estimated using a Black-Scholes option-pricing model combined with a Monte Carlo simulation model. The fair value of these awards were estimated using the following Black-Scholes assumptions: Year Ended December 31, 2019 2018 2017 Employee stock options Expected term (in years) — — 6.25 Volatility —% —% 32.2% Risk-free interest rate —% —% 2.1% Dividend yield —% —% —% Warrants Expected term (in years) — — 9.5 Volatility —% —% 32.0% Risk-free interest rate —% —% 2.1% Dividend yield —% —% —% Employee stock purchase plan Expected term (in years) 0.5 0.5 0.5 Volatility 44.8% - 60.1% 47.8% - 60.1% 27.7% - 31.3% Risk-free interest rate 2.4% - 2.5% 2.1% - 2.5% 1.0% - 1.4% Dividend yield —% —% —% RSUs with market conditions Expected term (in years) 3.0 3.0 — Volatility 45.8% 39.3% —% Risk-free interest rate 2.4% 2.6% —% Dividend yield —% —% —% |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income (loss) before income taxes | The following table presents domestic and foreign components of profits/(losses) before income taxes for the periods presented (in thousands): Year Ended December 31, 2019 2018 2017 United States $ (241,923) $ (170,040) $ (158,187) Foreign (67,142) (14,102) (36,457) Total $ (309,065) $ (184,142) $ (194,644) |
Schedule of components for income tax expense | The income tax expense (benefit) is composed of the following (in thousands): Year Ended December 31, 2019 2018 2017 Current tax provision: Federal $ 5,640 $ (1,048) $ (87,961) State 981 388 (8,429) Foreign 4,641 4,895 5,032 Total current 11,262 4,235 (91,358) Deferred tax provision: Federal 60 (1,570) 154,817 State 40 (210) 18,902 Foreign 284 (768) 187 Total deferred 384 (2,548) 173,906 Total income tax expense $ 11,646 $ 1,687 $ 82,548 |
Schedule of reconciliation of effective tax to statutory federal rate | The reconciliation of the Company’s effective tax rate to the statutory federal rate is as follows: Year Ended December 31, 2019 2018 2017 Tax at federal statutory rate 21.0 % 21.0 % 35.0 % State taxes, net of federal effect (0.3) (0.1) (5.4) Foreign rate differential (6.0) (3.9) (9.3) Tax credits 1.6 6.3 4.1 Domestic production activities deduction — — (3.5) Stock-based compensation (1.0) (4.9) (5.3) Change in prior year reserves (1.5) (0.1) (2.0) Change in valuation allowance (13.4) (15.2) (35.2) Effect of change in tax rate due to Tax Act — — (23.4) Other (1) (4.2) (4.0) 2.6 Effective tax rate (3.8) % (0.9) % (42.4) % (1) For the years ended December 31, 2019 and December 31, 2018, this is inclusive of (3.4%) and (3.8%) impact, respectively, that is primarily related to the change in uncertain tax positions. |
Schedule of tax effects of temporary differences for deferred tax assets | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets were as follows (in thousands): December 31, 2019 2018 Deferred tax assets: Net operating losses and credits $ 113,475 $ 61,494 Fixed assets and intangible assets 61,932 55,476 Accruals and reserves 75,133 53,818 Stock-based compensation 8,615 9,494 Inventory 429 911 Other 5,287 4,806 Total deferred tax assets 264,871 185,999 Less: valuation allowance (244,581) (181,122) Deferred tax assets, net of valuation allowance 20,290 4,877 Deferred tax liabilities: Accruals and reserves (15,525) — Other (914) (560) Total deferred tax liabilities (16,439) (560) Net deferred tax assets $ 3,851 $ 4,317 |
Schedule of reconciliation of unrecognized tax benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): December 31, 2019 2018 2017 Balance at beginning of year $ 41,198 $ 29,938 $ 35,584 Reductions based on tax positions related to prior year (207) (820) (6,335) Additions based on tax positions related to prior year 9,562 263 108 Additions based on tax positions related to current year 16,517 11,860 9,289 Reductions due to tax authorities’ settlements — (43) (8,603) Reductions due to expiration of statutes of limitation (45) — (105) Balance at end of year $ 67,025 $ 41,198 $ 29,938 |
Net Loss per Share Attributab_2
Net Loss per Share Attributable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 31, 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 attributable to common stockholders (in thousands, except per share amounts): Year Ended December 31, 2019 2018 2017 Numerator: Net loss $ (320,711) $ (185,829) $ (277,192) Denominator: Weighted-average shares of common stock—basic for Class A and Class B 257,500 244,603 232,032 Effect of dilutive securities — — — Weighted-average shares of common stock—diluted for Class A and Class B 257,500 244,603 232,032 Net loss per share attributable to common stockholders: Basic $ (1.25) $ (0.76) $ (1.19) Diluted $ (1.25) $ (0.76) $ (1.19) |
Schedule of antidilutive securities excluded from earnings per share | The following potentially dilutive common shares on a weighted average basis 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): December 31, 2019 2018 2017 RSUs 18,932 8,514 10,030 Stock options to purchase common stock 12,871 11,647 17,469 Warrants 230 230 216 Diluted impact of ESPP — 159 162 Diluted common stock subject to vesting — — 84 Total 32,033 20,550 27,961 |
Significant Customer Informat_2
Significant Customer Information and Other Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Schedules of concentration of risk | Retailers and distributors with revenue equal to or greater than 10% of revenue were as follows: December 31, 2019 2018 2017 C 10 % 10 % 13 % D 11 10 * * Revenue was less than 10%. Retailers and distributors that accounted for equal to or greater than 10% of accounts receivable at December 31, 2019 and 2018 were as follows: December 31, 2019 2018 C 18 % 12 % D 11 10 E 10 11 B * 16 F * 10 * Accounts receivable were less than 10%. Revenue by geographic region, based on ship-to destinations, was as follows (in thousands): December 31, 2019 2018 2017 United States $ 799,016 $ 880,534 $ 944,052 Americas excluding United States 94,961 101,282 116,330 Europe, Middle East, and Africa 410,485 384,196 440,135 Asia Pacific 130,326 145,971 115,002 Total $ 1,434,788 $ 1,511,983 $ 1,615,519 |
Selected Unaudited Quarterly _2
Selected Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | The following tables show a summary of the Company’s unaudited quarterly financial information for each of the four quarters of 2019 and 2018 (in thousands, except per share amounts): Three Months Ended December 31, September 28, June 29, March 30, Revenue $ 502,142 $ 347,200 $ 313,556 $ 271,890 Gross profit $ 122,053 $ 107,952 $ 108,214 $ 89,453 Net loss $ (120,835) $ (51,893) $ (68,518) $ (79,465) Net loss per share attributable to common stockholders—basic $ (0.46) $ (0.20) $ (0.27) $ (0.31) Net income loss per share attributable to common stockholders—diluted $ (0.46) $ (0.20) $ (0.27) $ (0.31) Three Months Ended December 31, September 29, 2018 June 30, March 31, Revenue $ 571,199 $ 393,575 $ 299,344 $ 247,865 Gross profit $ 216,927 $ 153,514 $ 119,015 $ 114,123 Net income (loss) $ 15,372 $ (2,056) $ (118,268) $ (80,877) Net income (loss) per share attributable to common stockholders—basic $ 0.06 $ (0.01) $ (0.49) $ (0.34) Net income (loss) per share attributable to common stockholders—diluted $ 0.06 $ (0.01) $ (0.49) $ (0.34) |
Business Overview and Basis o_2
Business Overview and Basis of Presentation (Details) | Nov. 01, 2019$ / shares |
Agreement and Plant of Merger [Member] | Google LLC and Magnoliophyta Inc. [Member] | |
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | |
Share price | $ 7.35 |
Significant Accounting Polici_4
Significant Accounting Policies - Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Tooling and manufacturing equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 1 year |
Tooling and manufacturing equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Furniture and office equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Purchased software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 3 years |
Capitalized internally-developed software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 2 years |
Capitalized internally-developed software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 8 years |
Leasehold improvements [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, useful life | 10 years |
Significant Accounting Polici_5
Significant Accounting Policies - Narrative (Details) | 12 Months Ended | ||||
Dec. 31, 2019USD ($)votesegmentreporting_unit | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016voteclass | Jul. 02, 2016class | |
Significant Accounting Policies [Line Items] | |||||
Best estimated selling price on upgrade rights | $ 0.99 | ||||
OTTI investment loss | 0 | ||||
Foreign currency transaction gains (losses) | (3,600,000) | $ 4,600,000 | $ 2,600,000 | ||
Capitalized software costs | $ 4,000,000 | 2,600,000 | |||
Number of operating segments | segment | 1 | ||||
Number of reporting units | reporting_unit | 1 | ||||
Advertising and promotion expenses | $ 170,400,000 | 161,500,000 | 226,300,000 | ||
Cooperative advertising and promotion expense | $ 89,800,000 | 80,300,000 | 45,000,000 | ||
Product warranty term | 1 year | ||||
Number of classes of stock | class | 2 | 2 | |||
Net cash provided by operations | $ (156,832,000) | 113,207,000 | 64,241,000 | ||
Net cash provided by financing activities | 8,406,000 | (1,287,000) | $ (4,635,000) | ||
Estimated operating lease liability | 91,413,000 | ||||
Sales returns reserve | $ 101,326,000 | $ 104,001,000 | |||
Common Class A [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Common stock, votes per share | vote | 1 | 1 | |||
Common Class B [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Common stock, votes per share | vote | 10 | 10 | |||
European Union [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Product warranty term | 2 years | ||||
Minimum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated selling price | $ 1 | ||||
Maximum [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Estimated selling price | $ 3 | ||||
Subscription-based Premium Services [Member] | Customer Concentration Risk [Member] | |||||
Significant Accounting Policies [Line Items] | |||||
Percent of revenue (less than) | 2.00% |
Significant Accounting Polici_6
Significant Accounting Policies - Accounting Pronouncements Recently Adopted (Details) $ in Thousands | Dec. 31, 2019USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Operating lease right-of-use assets | $ 70,225 |
Operating lease liabilities | 23,511 |
Long-term operating lease liabilities | $ 67,902 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Available for sale securities | $ 518,502,000 | $ 723,449,000 |
Corporate debt securities [Member] | ||
Assets: | ||
Available for sale securities | 207,137,000 | 228,953,000 |
U.S. government agencies [Member] | ||
Assets: | ||
Available for sale securities | 77,364,000 | 72,840,000 |
Fair Value, Measurements, Recurring [Member] | ||
Assets: | ||
Money market funds | 107,708,000 | 273,546,000 |
Derivative assets | 623,000 | |
Total | 392,209,000 | 575,962,000 |
Liabilities: | ||
Derivative liabilities | 748,000 | 549,000 |
Stock warrant liability | 410,000 | |
Total liabilities | 2,637,000 | 959,000 |
Fair Value, Measurements, Recurring [Member] | Corporate debt securities [Member] | ||
Assets: | ||
Available for sale securities | 207,137,000 | 228,953,000 |
Fair Value, Measurements, Recurring [Member] | U.S. government agencies [Member] | ||
Assets: | ||
Available for sale securities | 77,364,000 | 72,840,000 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | ||
Assets: | ||
Money market funds | 107,708,000 | 273,546,000 |
Derivative assets | 0 | |
Total | 107,708,000 | 273,546,000 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Stock warrant liability | 0 | |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Corporate debt securities [Member] | ||
Assets: | ||
Available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | U.S. government agencies [Member] | ||
Assets: | ||
Available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Assets: | ||
Money market funds | 0 | 0 |
Derivative assets | 623,000 | |
Total | 284,501,000 | 302,416,000 |
Liabilities: | ||
Derivative liabilities | 748,000 | 549,000 |
Stock warrant liability | 0 | |
Total liabilities | 748,000 | 549,000 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | Corporate debt securities [Member] | ||
Assets: | ||
Available for sale securities | 207,137,000 | 228,953,000 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | U.S. government agencies [Member] | ||
Assets: | ||
Available for sale securities | 77,364,000 | 72,840,000 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Assets: | ||
Money market funds | 0 | 0 |
Derivative assets | 0 | |
Total | 0 | 0 |
Liabilities: | ||
Derivative liabilities | 0 | 0 |
Stock warrant liability | 410,000 | |
Total liabilities | 1,889,000 | 410,000 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Corporate debt securities [Member] | ||
Assets: | ||
Available for sale securities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | U.S. government agencies [Member] | ||
Assets: | ||
Available for sale securities | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available for sale investments in continuous loss position for greater than twelve months | $ 0 | $ 0 |
Transfers, net | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets, fair value | 392,209,000 | 575,962,000 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets, fair value | $ 0 | $ 0 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Derivative, notional amount based on forecasted revenue | $ 0 | $ 0 |
Foreign currency exchange contract [Member] | Not designated as hedging instrument [Member] | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 83,400 | $ 101,400 |
Financial Instruments - Amortiz
Financial Instruments - Amortized to fair value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Cash and cash equivalents | $ 334,479 | $ 473,956 |
Available-for-sale debt securities, amortized cost | 518,380 | 723,580 |
Gross Unrealized Gains | 133 | 1 |
Gross Unrealized Losses | (11) | (132) |
Available for sale securities | 518,502 | 723,449 |
Marketable Securities | 184,023 | 249,493 |
Debt Securities, Available-for-sale, Amortized Cost | 518,380 | 723,580 |
U.S. government agencies [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash and cash equivalents | 30,375 | 9,738 |
Available-for-sale debt securities, amortized cost | 77,316 | 72,884 |
Gross Unrealized Gains | 48 | 1 |
Gross Unrealized Losses | 0 | (45) |
Available for sale securities | 77,364 | 72,840 |
Marketable Securities | 46,989 | 63,102 |
Debt Securities, Available-for-sale, Amortized Cost | 77,316 | 72,884 |
Corporate debt securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash and cash equivalents | 70,103 | 42,562 |
Available-for-sale debt securities, amortized cost | 207,063 | 229,040 |
Gross Unrealized Gains | 85 | 0 |
Gross Unrealized Losses | (11) | (87) |
Available for sale securities | 207,137 | 228,953 |
Marketable Securities | 137,034 | 186,391 |
Debt Securities, Available-for-sale, Amortized Cost | 207,063 | 229,040 |
Cash [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash and cash equivalents | 126,293 | 148,110 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Marketable Securities | 0 | 0 |
Money market funds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cash and cash equivalents | 107,708 | 273,546 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Marketable Securities | $ 0 | $ 0 |
Financial Instruments - Contrac
Financial Instruments - Contractual Maturity Dates (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Due in one year | $ 173,827 | $ 249,493 |
Due in one to two years | 10,196 | 0 |
Available for sale securities | $ 184,023 | $ 249,493 |
Financial Instruments - Financi
Financial Instruments - Financial Position, Fair Value (Details) - Foreign currency exchange contract [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Fair Value Derivative Assets | $ 0 | $ 623 |
Fair Value Derivative Liabilities | 748 | 549 |
Not designated as hedging instrument [Member] | Prepaid expenses and other current assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Fair Value Derivative Assets | 0 | 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 | $ 748 | $ 549 |
Financial Instruments - Stateme
Financial Instruments - Statement of Operations and Other Comprehensive Income (Details) - Foreign currency exchange contract [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Designated as hedging instrument [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification and Tax | $ 8,405 | ||
Gain (loss) recognized in OCI—effective portion | $ (19,436) | ||
Designated as hedging instrument [Member] | Revenue [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, before Tax | 8,405 | ||
Designated as hedging instrument [Member] | Cash flow hedges [Member] | Revenue [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from OCI into income—effective portion | (18,532) | ||
Designated as hedging instrument [Member] | Cash flow hedges [Member] | Operating expenses [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from OCI into income—effective portion | 0 | (1,405) | |
Designated as hedging instrument [Member] | Cash flow hedges [Member] | Other income (expense), net [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in income—ineffective portion | 0 | 21 | |
Gain recognized in income—excluded time value portion | 0 | 1,771 | |
Not designated as hedging instrument [Member] | Other income (expense), net [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in income | $ (2,122) | $ 6,240 | $ (10,516) |
Financial Instruments - Schedul
Financial Instruments - Schedule of Derivative Contracts on Consolidated Statement of Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total amounts presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded in revenue | $ 1,434,788 | $ 1,511,983 | $ 1,615,519 |
Operating Expenses | 748,385 | 792,887 | 891,988 |
Total amounts presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded in operating expenses | 1,007,116 | 908,404 | 924,618 |
Cash flow hedges [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total amounts presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded in revenue | 1,434,788 | 1,511,983 | 1,615,519 |
Total amounts presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded in operating expenses | 748,385 | 792,887 | 891,988 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains on Cash Flow Hedges [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total amounts presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded in operating expenses | 0 | 0 | (1,405) |
Gain (loss) on foreign exchange contracts designated as cash flow hedges reclassified from OCI into revenue | $ 0 | $ 8,405 | $ (18,532) |
Financial Instruments - Offsett
Financial Instruments - Offsetting of Foreign Currency Derivative Contracts (Details) - Foreign currency exchange contract [Member] - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Foreign exchange contracts liabilities [Line Items] | ||
Gross Amounts Offset in the Consolidated Balance Sheets, Gross Amount Recognized | $ 748 | $ 549 |
Gross Amounts Offset in the Consolidated Balance Sheets, Gross Amount Offset | 0 | 0 |
Gross Amounts Offset in the Consolidated Balance Sheets, Net Amount Presented | 748 | 549 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Financial Instruments | 0 | 549 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Cash Collateral Received | 0 | 0 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Net Amount | 748 | 0 |
Foreign exchange contracts assets [Line Items] | ||
Gross Amounts Offset in the Consolidated Balance Sheets, Gross Amount Recognized | 0 | 623 |
Gross Amounts Offset in the Consolidated Balance Sheets, Gross Amount Offset | 0 | 0 |
Gross Amounts Offset in the Consolidated Balance Sheets, Net Amount Presented | 0 | 623 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Financial Instruments | 0 | 549 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Cash Collateral Received | 0 | 0 |
Gross Amounts Not Offset in the Consolidated Balance Sheets, Net Amount | $ 0 | $ 74 |
Balance Sheet Components - Defe
Balance Sheet Components - Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement in Deferred Revenue [Roll Forward] | |||
Beginning balances | $ 36,836 | $ 42,432 | $ 49,904 |
Deferral of revenue | 45,040 | 40,003 | 46,193 |
Recognition of deferred revenue | (41,034) | (45,599) | (53,665) |
Ending balances | $ 40,842 | $ 36,836 | $ 42,432 |
Balance Sheet Components - Allo
Balance Sheet Components - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning balances | $ 104,001 | $ 109,872 | $ 98,851 |
Increases | 178,962 | 170,957 | 229,610 |
Write-offs | (181,637) | (176,828) | (218,589) |
Ending balances | $ 101,326 | $ 104,001 | $ 109,872 |
Balance Sheet Components - Acco
Balance Sheet Components - Account Receivable and Revenue Reserves (Details) - SEC Schedule, 12-09, Allowance, Credit Loss [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balances | $ 3,742 | $ 9,229 | $ 282 |
Increases | 297 | 56 | 30,551 |
Returns taken | (291) | (5,543) | (21,604) |
Ending balances | $ 3,748 | $ 3,742 | $ 9,229 |
Balance Sheet Components - Inve
Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Components | $ 5,397 | $ 8,866 |
Finished goods | 131,355 | 116,005 |
Total inventories | $ 136,752 | $ 124,871 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 11,219 | $ 18,100 |
Prepaid marketing | 3,347 | 3,258 |
Point-of-purchase displays, net | 0 | 5,143 |
Derivative assets | 0 | 623 |
Other | 14,090 | 15,201 |
Total prepaid expenses and other current assets | $ 28,656 | $ 42,325 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 210,449 | $ 192,879 | |
Less: Accumulated depreciation and amortization | (127,693) | (86,593) | |
Property and equipment, net | 82,756 | 106,286 | |
Depreciation and amortization expense, net | 54,100 | 48,900 | $ 40,000 |
Tooling and manufacturing equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 103,177 | 80,685 | |
Property and equipment, net | 82,756 | 106,286 | |
Furniture and office equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 19,922 | 22,738 | |
Purchased and internally-developed software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 27,424 | 21,741 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 59,926 | $ 67,715 |
Balance Sheet Components - Good
Balance Sheet Components - Goodwill Roll forward (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 60,979 | $ 51,036 |
Goodwill acquired | 3,833 | 9,943 |
Ending balance | $ 64,812 | $ 60,979 |
Balance Sheet Components - Inta
Balance Sheet Components - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated Amortization | $ (26,135) | $ (17,436) | |
Total intangible assets, net | 16,746 | ||
Total Gross | 42,881 | 41,056 | |
Intangible Assets, Net (Excluding Goodwill) | 16,746 | 23,620 | |
Amortization of Intangible Assets | 8,699 | 7,926 | $ 5,722 |
Developed technology [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 37,813 | 35,988 | |
Accumulated Amortization | (23,910) | (15,983) | |
Total intangible assets, net | 13,903 | 20,005 | |
Customer relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 3,790 | 3,790 | |
Accumulated Amortization | (991) | (451) | |
Total intangible assets, net | 2,799 | 3,339 | |
Trademarks and other [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross | 1,278 | 1,278 | |
Accumulated Amortization | (1,234) | (1,002) | |
Total intangible assets, net | $ 44 | $ 276 |
Balance Sheet Components - Esti
Balance Sheet Components - Estimated Future Amortization Expense (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2020 | $ 7,594 |
2021 | 5,634 |
2022 | 2,085 |
2023 | 597 |
2024 | 597 |
Thereafter | 239 |
Total intangible assets, net | 16,746 |
Cost of revenue [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2020 | 6,325 |
2021 | 5,037 |
2022 | 1,488 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total intangible assets, net | 12,850 |
Operating expenses [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2020 | 1,269 |
2021 | 597 |
2022 | 597 |
2023 | 597 |
2024 | 597 |
Thereafter | 239 |
Total intangible assets, net | $ 3,896 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued sales incentives | $ 156,839 | $ 126,400 |
Sales returns reserve | 101,326 | 104,001 |
Product warranty | 52,403 | 45,605 |
Accrued co-op advertising and marketing development funds | 40,689 | 30,435 |
Employee-related liabilities | 37,355 | 33,916 |
Accrued manufacturing expense and freight | 35,112 | 21,357 |
Accrued sales and marketing | 26,781 | 18,171 |
Sales taxes and VAT payable | 19,603 | 20,121 |
Accrued research and development | 19,232 | 8,783 |
Accrued legal settlements and fees | 8,854 | 2,821 |
Inventory received but not billed | 1,669 | 6,373 |
Finance lease liabilities | 1,384 | 0 |
Derivative liabilities | 748 | 549 |
Other | 11,535 | 18,702 |
Accrued liabilities | $ 513,530 | $ 437,234 |
Balance Sheet Components - Prod
Balance Sheet Components - Product Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | |||
Beginning balances | $ 45,605 | $ 87,882 | $ 99,923 |
Charged to cost of revenue | 45,092 | 15,720 | 53,840 |
Changes in estimate related to pre-existing warranties | 7,421 | (20,545) | 11,788 |
Settlement of claims | (45,715) | (37,452) | (77,669) |
Ending balances | $ 52,403 | $ 45,605 | 87,882 |
Restatement Adjustment [Member] | Immaterial Reclassification of Cost of Revenue and Settlement of Claims [Member] | |||
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | |||
Settlement of claims | $ (50,700) |
Balance Sheet Components - Accu
Balance Sheet Components - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 735,938 | $ 823,963 | $ 998,532 |
Other comprehensive loss | 254 | (57) | 969 |
Ending balance | 487,263 | 735,938 | 823,963 |
Unrealized Gains on Cash Flow Hedges [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 66 | 66 | |
Other comprehensive income (loss) before reclassifications | (66) | 7,587 | |
Amounts reclassified from AOCI | 0 | (7,587) | |
Other comprehensive loss | (66) | 0 | |
Ending balance | 0 | 66 | 66 |
Unrealized Gains (Losses) on Available-for-Sale Investments [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (132) | (75) | |
Other comprehensive income (loss) before reclassifications | 320 | (68) | |
Amounts reclassified from AOCI | 0 | 11 | |
Other comprehensive loss | 320 | (57) | |
Ending balance | 188 | (132) | (75) |
AOCI Attributable to Parent [Member] | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (66) | (9) | (978) |
Other comprehensive income (loss) before reclassifications | 254 | 7,519 | |
Amounts reclassified from AOCI | 0 | (7,576) | |
Other comprehensive loss | 254 | (57) | 969 |
Ending balance | $ 188 | $ (66) | $ (9) |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jun. 29, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | ||||
Reduction of ROU assets | $ (18,000) | |||
Lease liabilities | (22,500) | $ 22,889 | $ 0 | $ 0 |
Operating lease cost | (4,300) | |||
Accelerated depreciation of leasehold improvements | $ 5,200 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Amortization of ROU assets | $ 2,746 |
Operating cash flows from finance leases | 0 |
Operating lease costs | 23,211 |
Variable lease costs | 5,061 |
Sublease Income | (4,703) |
Lease, Cost, Total | $ 26,315 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||
Financing cash flows from finance leases | $ 2,703 | $ 0 | $ 0 |
Interest on lease liabilities | 0 | ||
Operating cash flows from operating leases | 27,467 | ||
ROU assets obtained in exchange for Finance lease liabilities | 1,384 | ||
ROU assets obtained in exchange for Operating lease liabilities | $ 3,242 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Finance leases: Other assets | $ 1,384 |
Accrued liabilities | 1,384 |
Operating lease right-of-use assets | 70,225 |
Operating lease liabilities | 23,511 |
Long-term operating lease liabilities | 67,902 |
Total operating lease liabilities | $ 91,413 |
Leases - Weighted-Average Lease
Leases - Weighted-Average Lease Terms and Discount Rates (Details) | Dec. 31, 2019 |
Leases [Abstract] | |
Finance leases, weighted average remaining lease term | 6 months |
Operating leases, weighted average remaining lease term | 4 years 2 months 12 days |
Finance leases, weighted-average discount rates | 0.00% |
Operating leases, weighted-average discount rates | 5.50% |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liability (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 1,384 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Total minimum lease payments | 1,384 |
Finance Lease, Liability, Undiscounted Excess Amount | 0 |
Total lease liabilities | 1,384 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2020 | 24,789 |
2021 | 23,749 |
2022 | 23,225 |
2023 | 20,585 |
2024 | 8,321 |
Thereafter | 0 |
Total minimum lease payments | 100,669 |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (9,256) |
Total lease liabilities | $ 91,413 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | Jan. 19, 2018USD ($) | Jan. 31, 2018USD ($) | Feb. 16, 2016lawsuit | Dec. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)lawsuit | Dec. 31, 2015lawsuit | Sep. 29, 2018USD ($) |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Sublease income | $ 4,703 | |||||||||
Number of lawsuits | lawsuit | 7 | |||||||||
Number of lawsuits, consolidated | lawsuit | 3 | |||||||||
Provision for doubtful accounts | 297 | $ 56 | $ 7,893 | |||||||
Release of product return and rebate reserves | 12,400 | |||||||||
Wynit Distribution [Member] | Customer Concentration Risk [Member] | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Unrecognized revenue | $ 8,100 | |||||||||
Accounts receivable charge recorded | 35,800 | |||||||||
Unrecoverable inventory costs | 5,500 | |||||||||
Bad debt expense | $ 30,300 | |||||||||
Insurance receivable | $ 26,800 | |||||||||
Insurance settlements receivable | 22,700 | |||||||||
Insurance settlements receivable, inventory | $ 4,100 | |||||||||
Charges offset by insurance recorded | 9,000 | |||||||||
Provision for doubtful accounts | $ 7,600 | |||||||||
Inventory expense, net of insurance recovery | 1,400 | |||||||||
Insurance proceeds received | $ 5,400 | 21,400 | ||||||||
Letter of Credit [Member] | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Credit facility, amount outstanding | $ 36,600 | 24,600 | $ 36,600 | |||||||
PurePulse Class Action Lawsuit [Member] | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Litigation settlement, amount | $ 33,300 | |||||||||
Aliphcom, Inc. dba Jawbone [Member] | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Number of defendants | lawsuit | 6 | |||||||||
Purchase Commitment [Member] | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Purchase commitment | 347,000 | |||||||||
Purchase Commitment to Third Party Hosting Provider [Member] | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Purchase commitment | 177,000 | |||||||||
Purchase Commitment Accrual [Member] | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Purchase commitment | 12,700 | |||||||||
Pending Litigation [Member] | PurePulse Class Action Lawsuit [Member] | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Purported class action lawsuits filed against Company | lawsuit | 2 | |||||||||
Accrued liabilities [Member] | Purchase Commitment [Member] | ||||||||||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||||||||||
Purchase commitment | $ 17,600 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) $ / shares in Units, $ in Millions | May 04, 2018shares | Jul. 20, 2017USD ($)shares | May 31, 2015 | Dec. 31, 2019USD ($)vote$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / shares | Jul. 19, 2017shares | Jul. 10, 2017$ / sharesshares | Dec. 31, 2016voteclass | Jul. 02, 2016class |
Class of Stock [Line Items] | ||||||||||
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, shares issued (in shares) | 0 | |||||||||
Preferred stock, shares outstanding (in shares) | 0 | |||||||||
Number of classes of stock | class | 2 | 2 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 2 | |||||||||
Total grant date fair value of options that vested | $ | $ 2.8 | $ 10.1 | $ 20.2 | |||||||
Market-based Awards [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 500,000 | |||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 15,614,000 | |||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 94.2 | |||||||||
Unrecognized compensation expense related to unvested options, estimated weighted average period | 1 year 10 months 24 days | |||||||||
Employee Stock Options And Restricted Stock Units [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 0.3 | |||||||||
Unrecognized compensation expense related to unvested options, estimated weighted average period | 2 months 12 days | |||||||||
Warrant [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 0 | |||||||||
Amended And Restated 2007 Stock Plan [Member] | Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 4 years | |||||||||
Vesting percentage | 25.00% | |||||||||
Requisite period | 1 year | |||||||||
Expiration period | 10 years | |||||||||
2015 Plan [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 24,600,000 | |||||||||
2015 Plan [Member] | Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 4 years | |||||||||
Expiration period | 10 years | |||||||||
Maximum percentage of purchase price of fair value for employee purchase | 100.00% | |||||||||
2015 Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 4 years | |||||||||
Expiration period | 10 years | |||||||||
Common Class A [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Share price (in dollars per share) | $ / shares | $ 6.57 | |||||||||
Common stock authorized (in shares) | 600,000,000 | 600,000,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Common stock issued (in shares) | 235,565,181 | 221,081,203 | ||||||||
Common stock outstanding (in shares) | 235,565,181 | 221,081,203 | ||||||||
Common stock, votes per share | vote | 1 | 1 | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Expiration period | 10 years | |||||||||
Number of securities called by each warrant (in shares) | 500,000 | |||||||||
Exercise price of warrant (in usd per share) | $ / shares | $ 5.23 | |||||||||
Vested shares | 200,000 | |||||||||
Common Class A [Member] | 2015 Plan [Member] | Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Annual increase in shares reserved for issuance | 5.00% | |||||||||
Common Class A [Member] | 2015 Employee Stock Purchase Plan [Member] | Stock Options [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Annual increase in shares reserved for issuance | 1.00% | |||||||||
Common stock discount available to employees | 15.00% | |||||||||
Common stock, fair value of market value of stock, available to employees, percent | 85.00% | |||||||||
Common Class B [Member] | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common stock authorized (in shares) | 350,000,000 | 350,000,000 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||
Common stock issued (in shares) | 29,318,245 | 31,281,638 | ||||||||
Common stock outstanding (in shares) | 29,318,245 | 31,281,638 | ||||||||
Common stock, votes per share | vote | 10 | 10 | ||||||||
Minimum [Member] | Amended And Restated 2007 Stock Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 3 years | |||||||||
Maximum [Member] | Amended And Restated 2007 Stock Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period | 4 years | |||||||||
Eligible Employees [Member] | 2015 Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Underwater options vested (in shares) | 3,700,000 | |||||||||
Underwater options tendered, percent | 85.00% | |||||||||
Stock issued in exchange (in shares) | 1,800,000 | |||||||||
Stock issued in exchange | $ | $ 8.5 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Balance, beginning of period (in shares) | shares | 16,263 |
Balance, end of period (in shares) | shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Balance, weighted average exercise price, beginning of period (in dollars per share) | $ / shares | $ 3 |
Balance, weighted average exercise price, end of period (in dollars per share) | $ / shares | |
2007 And 2015 Equity Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (3,290) |
Canceled (in shares) | shares | (102) |
Balance, end of period (in shares) | shares | 12,871 |
Options exercisable (in shares) | shares | 12,755 |
Options vested and expected to vest (in shares) | shares | 12,871 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Granted, weighted average exercise price (in dollars per share) | $ / shares | |
Exercised, weighted average exercise price (in dollars per share) | $ / shares | 0.85 |
Canceled, weighted average exercise price (in dollars per share) | $ / shares | 8.45 |
Balance, weighted average exercise price, end of period (in dollars per share) | $ / shares | 3.51 |
Options exercisable, weighted average exercise price (in dollars per share) | $ / shares | 3.47 |
Options vested and expected to vest, weighted average exercise price (in dollars per share) | $ / shares | $ 3.51 |
Options outstanding, weighted average remaining contractual term | 4 years 4 months 24 days |
Options exercisable, weighted average remaining contractual term | 4 years 4 months 24 days |
Options vested and expected to vest, weighted average remaining contractual term | 4 years 4 months 24 days |
Options exercised, aggregate intrinsic value | $ | $ 18,059 |
Options outstanding, aggregate intrinsic value | $ | 43,320 |
Options exercisable, aggregate intrinsic value | $ | 43,249 |
Options vested and expected to vest, aggregate intrinsic value | $ | $ 43,320 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Unvested balance—December 31 (in shares) | shares | 18,376,000 |
Granted (in shares) | shares | 15,614,000 |
Vested (in shares) | shares | (10,354,000) |
Forfeited or canceled (in shares) | shares | (4,704,000) |
Unvested balance—December 31 (in shares) | shares | 18,932,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Unvested balance—December 31 (in dollars per share) | $ / shares | $ 6.69 |
Granted (in dollars per share) | $ / shares | 5.77 |
Vested (in dollars per share) | $ / shares | 7.22 |
Forfeited or canceled (in dollars per share) | $ / shares | 6.50 |
Unvested balance—December 31 (in dollars per share) | $ / shares | $ 5.68 |
Stockholders' Equity - Stock Co
Stockholders' Equity - Stock Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 77,739 | $ 97,009 | $ 91,581 |
Cost of revenue [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 6,403 | 7,312 | 5,312 |
Research and development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 44,855 | 57,188 | 54,123 |
Sales and marketing [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 11,585 | 14,726 | 14,959 |
General and administrative [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 14,896 | $ 17,783 | $ 17,187 |
Stockholders' Equity - Valuatio
Stockholders' Equity - Valuation Assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 6 years 3 months | ||
Volatility rate | 0.00% | 0.00% | 3220.00% |
Risk-free interest rate | 0.00% | 0.00% | 210.00% |
Dividend yield rate | 0.00% | ||
Warrant [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 9 years 6 months | ||
Volatility rate | 0.00% | 0.00% | 32.00% |
Risk-free interest rate | 0.00% | 0.00% | |
Dividend yield rate | 0.00% | ||
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 6 months | 6 months | 6 months |
Minimum risk-free interest rate | 2.40% | 2.10% | 1.00% |
Maximum risk-free interest rate | 2.50% | 2.50% | 1.40% |
Employee Stock Purchase Plan [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility rate | 44.80% | 47.80% | 27.70% |
Employee Stock Purchase Plan [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Volatility rate | 60.10% | 60.10% | 31.30% |
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 3 years | 3 years | |
Volatility rate | 45.80% | 39.30% | 0.00% |
Risk-free interest rate | 2.40% | 2.60% | 0.00% |
Dividend yield rate | 0.00% | 0.00% | 0.00% |
Income Taxes - Components of In
Income Taxes - Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (241,923) | $ (170,040) | $ (158,187) |
Foreign | (67,142) | (14,102) | (36,457) |
Loss before income taxes | $ (309,065) | $ (184,142) | $ (194,644) |
Income Taxes - Components of _2
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax provision: | ||||
Federal | $ 5,640 | $ (1,048) | $ (87,961) | |
State | 981 | 388 | (8,429) | |
Foreign | 4,641 | 4,895 | 5,032 | |
Total current | 11,262 | 4,235 | (91,358) | |
Deferred tax provision: | ||||
Federal | 60 | (1,570) | 154,817 | |
State | 40 | (210) | 18,902 | |
Foreign | 284 | (768) | 187 | |
Total deferred | 384 | (2,548) | 173,906 | |
Total income tax expense | $ 5,300 | $ 11,646 | $ 1,687 | $ 82,548 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Tax to Statutory Federal Rate (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Tax at federal statutory rate | 21.00% | 21.00% | 35.00% |
State taxes, net of federal effect | (0.30%) | (0.10%) | (5.40%) |
Foreign rate differential | (6.00%) | (3.90%) | (9.30%) |
Tax credits | 1.60% | 6.30% | 4.10% |
Domestic production activities deduction | 0.00% | 0.00% | (3.50%) |
Stock-based compensation | (1.00%) | (4.90%) | (5.30%) |
Change in prior year reserves | (1.50%) | (0.10%) | (2.00%) |
Change in valuation allowance | (13.40%) | (15.20%) | (35.20%) |
Effect of change in tax rate due to Tax Act | 0.00% | 0.00% | (23.40%) |
Other | (4.20%) | (4.00%) | 2.60% |
Effective tax rate | (3.80%) | (0.90%) | (42.40%) |
Income Taxes - Tax Effects of T
Income Taxes - Tax Effects of Temporary Differences for Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating losses and credits | $ 113,475 | $ 61,494 |
Fixed assets and intangible assets | 61,932 | 55,476 |
Accruals and reserves | 75,133 | 53,818 |
Stock-based compensation | 8,615 | 9,494 |
Inventory | 429 | 911 |
Other | 5,287 | 4,806 |
Total deferred tax assets | 264,871 | 185,999 |
Less: valuation allowance | (244,581) | (181,122) |
Deferred tax assets, net of valuation allowance | 20,290 | 4,877 |
Accruals and reserves | (15,525) | 0 |
Other | (914) | (560) |
Total deferred tax liabilities | (16,439) | (560) |
Net deferred tax assets | $ 3,851 | $ 4,317 |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of year | $ 41,198 | $ 29,938 | $ 35,584 |
Reductions based on tax positions related to prior year | (207) | (820) | (6,335) |
Additions based on tax positions related to prior year | 9,562 | 263 | 108 |
Additions based on tax positions related to current year | 16,517 | 11,860 | 9,289 |
Reductions due to tax authorities’ settlements | 0 | (43) | (8,603) |
Reductions due to expiration of statutes of limitation | (45) | 0 | (105) |
Balance at end of year | $ 67,025 | $ 41,198 | $ 29,938 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Examination [Line Items] | |||||
Provision for income taxes | $ 5,300 | $ 11,646 | $ 1,687 | $ 82,548 | |
Effective income tax rate | (3.80%) | (0.90%) | (42.40%) | ||
Valuation allowance | 244,581 | $ 244,581 | $ 181,122 | ||
Deferred Tax Assets, Operating Loss Carryforwards, Domestic | 316,200 | 316,200 | |||
Unrecognized tax benefits | 67,025 | 67,025 | 41,198 | $ 29,938 | $ 35,584 |
Unrecognized that would affect the effective tax rate if recognized | 31,900 | 31,900 | |||
Unrecognized tax benefits, interest on income taxes expense | 5,200 | $ 3,100 | |||
Domestic Tax Authority [Member] | |||||
Income Tax Examination [Line Items] | |||||
Valuation allowance | 191,700 | 191,700 | |||
Deferred tax assets, research credit carryforwards | 22,600 | 22,600 | |||
Foreign Tax Authority [Member] | |||||
Income Tax Examination [Line Items] | |||||
Valuation allowance | 52,900 | 52,900 | |||
California [Member] | |||||
Income Tax Examination [Line Items] | |||||
State net operating loss carryforwards | 57,300 | 57,300 | |||
California [Member] | State and Local Jurisdiction [Member] | |||||
Income Tax Examination [Line Items] | |||||
Deferred tax assets, research credit carryforwards | 45,000 | 45,000 | |||
Deferred Tax Assets, Tax Credit Carryforwards, General Business | 300 | 300 | |||
Other States [Member] | |||||
Income Tax Examination [Line Items] | |||||
State net operating loss carryforwards | 52,100 | 52,100 | |||
Massachusetts [Member] | State and Local Jurisdiction [Member] | |||||
Income Tax Examination [Line Items] | |||||
Deferred tax assets, research credit carryforwards | 2,900 | 2,900 | |||
United Kingdom [Member] | |||||
Income Tax Examination [Line Items] | |||||
Foreign net operating loss carryforwards | $ 10,500 | $ 10,500 |
Net Loss per Share Attributab_3
Net Loss per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 31, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Net Income (Loss) Attributable to Parent | $ (120,835) | $ (51,893) | $ (68,518) | $ (79,465) | $ 15,372 | $ (2,056) | $ (118,268) | $ (80,877) | $ (320,711) | $ (185,829) | $ (277,192) |
Denominator: | |||||||||||
Weighted-average shares of common stock— basic for Class A and Class B (in shares) | 257,500 | 244,603 | 232,032 | ||||||||
Effect of dilutive securities (in shares) | 0 | 0 | 0 | ||||||||
Weighted-average shares of common stock—diluted for Class A and Class B (in shares) | 257,500 | 244,603 | 232,032 | ||||||||
Net loss per share attributable to common stockholders: | |||||||||||
Basic (in dollars per share) | $ (0.46) | $ (0.20) | $ (0.27) | $ (0.31) | $ 0.06 | $ (0.01) | $ (0.49) | $ (0.34) | $ (1.25) | $ (0.76) | $ (1.19) |
Diluted (in dollars per share) | $ (0.46) | $ (0.20) | $ (0.27) | $ (0.31) | $ 0.06 | $ (0.01) | $ (0.49) | $ (0.34) | $ (1.25) | $ (0.76) | $ (1.19) |
Net Loss per Share Attributab_4
Net Loss per Share Attributable to Common Stockholders - Antidilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 32,033 | 20,550 | 27,961 |
Restricted Stock Units (RSUs) [Member] | Common Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 18,932 | 8,514 | 10,030 |
Stock Options [Member] | Common Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 12,871 | 11,647 | 17,469 |
Warrant [Member] | Common Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 230 | 230 | 216 |
Diluted Common Stock Subject to Vesting [Member] | Common Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 159 | 162 |
Employee Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 0 | 84 |
Significant Customer Informat_3
Significant Customer Information and Other Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,434,788 | $ 1,511,983 | $ 1,615,519 |
United States [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 56.00% | 58.00% | 58.00% |
Geographic Concentration Risk [Member] | Non-US [Member] | |||
Concentration Risk [Line Items] | |||
Long-lived assets including property and equipment | $ 27,900 | $ 36,900 | |
Revenue [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | 10.00% | 13.00% |
Revenue [Member] | Customer Concentration Risk [Member] | Customer D [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | 10.00% | |
Revenue [Member] | Geographic Concentration Risk [Member] | United States [Member] | |||
Concentration Risk [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | $ 799,016 | $ 880,534 | $ 944,052 |
Revenue [Member] | Geographic Concentration Risk [Member] | United Kingdom [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | 12.00% | |
Revenue from Contract with Customer, Including Assessed Tax | $ 159,900 | $ 196,000 | |
Revenue [Member] | Geographic Concentration Risk [Member] | Americas excluding United States [Member] | |||
Concentration Risk [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | 94,961 | 101,282 | 116,330 |
Revenue [Member] | Geographic Concentration Risk [Member] | Europe, Middle East, and Africa [Member] | |||
Concentration Risk [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | 410,485 | 384,196 | 440,135 |
Revenue [Member] | Geographic Concentration Risk [Member] | APAC [Member] | |||
Concentration Risk [Line Items] | |||
Revenue from Contract with Customer, Including Assessed Tax | $ 130,326 | $ 145,971 | $ 115,002 |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 18.00% | 12.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer D [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 11.00% | 10.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer E [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% | 11.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 16.00% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer F [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 10.00% |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||
Oct. 31, 2019 | Feb. 28, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 64,812 | $ 60,979 | $ 51,036 | ||
Privately Held Company [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash paid for acquisition | $ 4,800 | ||||
Contingent consideration payable | 1,900 | ||||
Assumed liabilities | 600 | ||||
Privately Held Company [Member] | Developed technology [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangibles acquired | 1,600 | ||||
Privately Held Company [Member] | Goodwill [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 3,800 | ||||
Twine Health, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash paid for acquisition | $ 16,700 | ||||
Assumed liabilities | 600 | ||||
Goodwill | 9,900 | ||||
Deferred tax liabilities | 1,700 | ||||
Deferred revenue | 200 | ||||
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 | 2 years | ||||
Twine Health, Inc. [Member] | Customer relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangibles acquired | $ 3,800 | ||||
Amortization period | 7 years |
Selected Unaudited Quarterly _3
Selected Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Dec. 31, 2018 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 502,142 | $ 347,200 | $ 313,556 | $ 271,890 | $ 571,199 | $ 393,575 | $ 299,344 | $ 247,865 | |||
Gross profit | 122,053 | 107,952 | 108,214 | 89,453 | 216,927 | 153,514 | 119,015 | 114,123 | $ 427,672 | $ 603,579 | $ 690,901 |
Net loss | $ (120,835) | $ (51,893) | $ (68,518) | $ (79,465) | $ 15,372 | $ (2,056) | $ (118,268) | $ (80,877) | $ (320,711) | $ (185,829) | $ (277,192) |
Net income (loss) per share attributable to common stockholders—basic (in dollars per share) | $ (0.46) | $ (0.20) | $ (0.27) | $ (0.31) | $ 0.06 | $ (0.01) | $ (0.49) | $ (0.34) | $ (1.25) | $ (0.76) | $ (1.19) |
Net income (loss) per share attributable to common stockholders—diluted (in dollars per share) | $ (0.46) | $ (0.20) | $ (0.27) | $ (0.31) | $ 0.06 | $ (0.01) | $ (0.49) | $ (0.34) | $ (1.25) | $ (0.76) | $ (1.19) |
Uncategorized Items - fit-20191
Label | Element | Value |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,126,000) |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (1,126,000) |
Accounting Standards Update 2016-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 4,938,000 |
Accounting Standards Update 2016-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 4,938,000 |