powerpoint presentation...•sold 2.2 million devices. introduced 2 new smartwatches, fitbit versatm...

May 2018

Safe Harbor StatementThis presentation contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties, including statements regarding our financial outlook for the first quarter 2018 and the full year of 2018; our future collaboration with Google in digital health and wearables; expected revenue from new product introductions; expected growth in Fitbit Health Solutions; expected trends in free cash flow, average selling price, capital expenditures, tax rate and device mix; our expansion within healthcare; increasing user engagement; and consumer demand for connected health and fitness trackers and smartwatches. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors, including: the effects of the highly competitive market in which we operate, including competition from much larger technology companies; our ability to anticipate and satisfy consumer preferences in a timely manner; our ability to successfully develop and timely introduce new products and services or enhance existing products and services; retail and customer acceptance of existing and new products; any inability to accurately forecast consumer demand and adequately manage our inventory; our ability to ship products on the timelines we anticipate and unexpected delays; our ability to detect, prevent or fix quality issues in our products or services; uncertain ability to retain employees; our reliance on third-party suppliers, contract manufacturers, and logistics providers, and our limited control over such parties; delays in procuring components and product from these third parties or their suppliers; the ability of third parties to successfully manufacture and ship in a timely manner quality products; seasonality; product liability issues, security breaches or other defects, which may adversely affect product performance, our reputation and brand awareness and overall market acceptance of our products and services; ability to integrate acquired technologies and employees into our operations, particularly in new geographies; warranty claims; the fact that the market for connected health and fitness devices is relatively new and unproven; the ability of our channel partners to sell our products; litigation and related costs; privacy; and other general market, political, economic and business conditions.

Additional risks and uncertainties that could affect our financial results are included under the caption “Risk Factors” in our Annual Report on Form 10-K for the full year ended December 31, 2016, and our most recently filed Quarterly Report on Form 10-Q, which are available on our Investor Relations website at investor.fitbit.com and on the SEC website at www.sec.gov. All forward-looking statements contained herein are based on information available to us as of the date hereof and we do not assume any obligation to update these statements as a result of new information or future events. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

This presentation also includes certain financial measures that are not calculated in accordance with U.S. generally accepted accounting principles, or GAAP. These non-GAAP financial measures are in addition to, and not as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. We have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the appendix.

Trademarks: Fitbit and the Fitbit logo are trademarks or registered trademarks of Fitbit, Inc. in the United States and other countries. Additional Fitbit trademarks can be found at www.fitbit.com/legal/trademark-list. Third-party trademarks are the property of their respective owners.

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http://www.sec.gov/

http://www.fitbit.com/legal/trademark-list

TO MAKE EVERYONE IN THE WORLD HEALTHIER

Our Vision

Our Mission

Help people achieve greater health and fitness results by empowering them with intelligent insights, personalized guidance, and the motivation to reach their goals.

Our History

2009 2010-2015 2015 2018

Founded. Launched first product..

Scaling business and rapid growth.

Went Public. Transitioning the business.

Who We Are:We're a passionate team dedicated to health and fitness who are building products that help transform people's lives. While health can be serious business, we feel it doesn't have to be. We believe you're more likely to reach your goals if you're encouraged to have fun, smile, and feel empowered along the way.

2007

Our Assets

Brand:#1 Wearables Brand Globally

Community:Large Social Fitness Network with 25 million active users*

Data:One of the largest activity, exercise, & sleep databases

*(As of 12/31/17)

78M

47K WIDE RANGE of devices and

price pointsStores

Health & Fitness app on iOS and Android (U.S.)*

86 CountriesWearable brand globally

1#

1# Devices sold to date

(*As of 12/31/17)

hours of heart rate data tracked

116B

6.5B

One of the Largest Activity, Exercise & Sleep Databases

213Bnights of sleep

102Tsteps

(*As of 3/15/18)

minutes of exercise tracked

©2017 Fitbit Inc. All rights reserved. 9

DiabetesHeart HealthSleep Apnea

Manage WeightGet More Active & FitSleep BetterReduce Stress

Focus on Outcomes and Conditions

Wellness Health

Across All Ages

Mental Health

• Generated $248 million revenue, non-GAAP net loss per share of ($0.17).

• Generated $10 million in cash flow from operations and free cash flow of ($2) million.

• Average selling price up 16% y/y to $112 per device. Accessory and other revenue added an addition $3.67 per device.

• Non-GAAP gross margin increased 710 basis points y/y to 47%. (Improved product quality and lower warranty costs. Benefited from $12.4 million in revenue recognized from the release of outstanding reserves and rebates related to Wynit.)

• Non-GAAP operating expenses declined 4% y/y to $174 million.

• $658 million in cash, cash equivalents, and marketable securities on the balance sheet as of the quarter end.

Q1 Financial Highlights

Q1 Business Highlights• Sold 2.2 million devices. Introduced 2 new smartwatches, Fitbit

VersaTM our mass appeal smartwatch, and co-branded Adidas Fitbit Ionic. Introduced kids targeted tracker, Fitbit AceTM. Products introduced over the past year represented 34% of revenue.

• Acquired Twine Health, an innovative, proven health coaching platform.

• Non-device revenue, including paid premium and Fitbit Health Solutions software revenue, grew 30% y/y.

• Leveraged Fitbit OS investment, launched Versa with approximately 45% lower developmental hours than Ionic.

• Reduced warranty costs declined and released $12.4 million in reserves associated with the Q3 ’17 bankruptcy filing of distributor, Wynit.

• Leading global wearable brand with 78 million devices sold since inception.

• Added 8 million social Feed users in and users collectively joined Feed an additional 2.4 million times in Q1.

• One of the largest social fitness networks as of year-end.

• 18,000 developers have joined the Fitbit developer community.

• In Q1, 38% percent of all activations came from repeat users; of the repeat customers, 49% came from users who were inactive for 90 days or greater.

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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Total Devices Sold78

2015 2016 2017 2018

Growing User Community & Brand Relevancy

(units in millions)

• Significant financial flexibility.

• Anticipate approximately $80 million in cash refunds related to taxes paid in prior years.

• Expect to invest in the business both organically and in-organically. Key areas of focus, International, Fitbit Health Solutions and Software Services.

Q4’16

($ in millions, excluding % cap X, turns and DSO)

Balance Sheet and Cash Flow

Inventory $145.4

Inventory Turns 4.0

Accounts Receivables $214.4

Days Sales Outstanding 61

Capital Expenditures $12.6Cap Expenditures as % of Revenue 5.1%

Free Cash Flow ($2.4)

Cash & Marketable Securities $658.4

Q1’18

• Focused on three key areas:

Announced Recent Partnership with Google

• Cloud: Move data infrastructure to Google’s cloud platform.

• Healthcare: Work together to drive positive health outcomes at scale, leveraging Google’s Healthcare API and Fitbit’s Health Solutions platform. Fitbit data will not share data, but leverage Google’s tools and machine learning.

• Wearables: Collaborate on the future of wearables. Will work together to leverage both company’s assets to drive innovation from OS to hardware and software experiences.

• Adapting to the changing wearable device market.

• Expand within healthcare.

• Build business sustainability / operational excellence.

• Driving behavior change / increase engagement.

Key Initiatives: Transforming business

FY ’17 Guidance

($ in millions, except percentages and per share amounts)

FY’18 Guidance

Revenue ~$1.5 BillionNon-GAAP OPEX $740 millionCapex as % of revenue ~4%Non-GAAP free cash flow BreakevenStock-based compensation ~$110MNon-GAAP share count (basic/diluted) 248M/260M

Guidance Context:

• We extrapolated the demand trend forecasted in Q1 2018 and incorporated a further reduction in channel inventory levels. We expect smartwatches to become the majority of revenue in H2.

• Expect ASP to be up y/y driven by mix shift and roughly flat with Q1.

• Expect gross margins to decline as smartwatches become a greater % of mix, partially offset by operating efficiencies in how we run the business.

• Expect to reduce non-GAAP opex by ~$60 million y/y.

• Expect free cash flow to be break-even, excluding expected ~$80 million tax refund payment.

• Expect full-year tax rate volatility driven by geographic mix of revenue and shift to profitability / tax credits.

THANK YOU

GAAP to Non-GAAP Reconciliation

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAPfinancial measures in this presentation: non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating loss, non-GAAP net loss, non-GAAP diluted net loss per share, adjusted EBITDA, and non-GAAP free cash flow. The presentation of these financial measures is notintended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP.

We use non-GAAP measures to internally evaluate and analyze financial results. We believe these non-GAAP financial measures provide investors withuseful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certainitems may vary independent of business performance, and enable comparison of our financial results with other public companies, many of which presentsimilar non-GAAP financial measures.

There are limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, many of the adjustments to our GAAPfinancial measures reflect the exclusion of certain items, specifically stock-based compensation expense, depreciation, amortization of intangible assets,interest income, net and the related income tax effects of the aforementioned exclusions, that are recurring and will be reflected in our financial results forthe foreseeable future. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulnessfor comparison purposes. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in thefinancial statement tables included in this presentation, and investors are encouraged to review the reconciliation.

Guidance for non-GAAP financial measures excludes Jawbone litigation costs, stock-based compensation, impact of restructuring, amortization of acquiredintangible assets, and tax effects associated with these items. We have not reconciled guidance for non-GAAP financial measures to their most directlycomparable GAAP measures because certain items that impact these measures are uncertain, out of our control and/or cannot be reasonably predicted.Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measures is not available without unreasonableeffort.

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GAAP to Non-GAAP ReconciliationThe following are explanations of the adjustments that are reflected in one or more of our non-GAAP financial measures:

Stock-based compensation expense relates to equity awards granted primarily to our employees. We exclude stock-based compensation expense becausewe believe that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance. Inparticular, companies calculate stock-based compensation expense using a variety of valuation methodologies and subjective assumptions.

In January 2017, the Company conducted a reorganization of its business, including a reduction in workforce. The restructuring costs impacted our resultsfor the first quarter of 2017. Restructuring costs primarily included severance-related costs. We believe that excluding the is expenses provides greatvisibility to the underlying performance of our business operations, facilitates comparison of our results with other periods, and may also facilitatecomparison with the results of other companies in our industry.

Litigation expense relates to legal costs incurred due to litigation with Aliphcom, Inc. d/b/a Jawbone. We exclude these expenses because we do notbelieve these expenses have a direct correlation to the operations of our business and because of the singular nature of the claims underlying the Jawbonelitigation matters. We began excluding Jawbone litigation costs in the second quarter of 2016 as these costs significantly increased in 2016, and maycontinue to be material for the remainder of 2017. Although not excluded in reporting for the first quarter of 2016, these litigation expenses were $9.1million in that quarter.

Amortization of intangible assets relates to our acquisitions of FitStar, Pebble, Vector and Twine Health. We exclude these amortization expenses becausewe do not believe these expenses have a direct correlation to the operation of our business.

Income tax effect of non-GAAP adjustments relates to the tax effect of the adjustments that we incorporate into non-GAAP financial measures such asstock-based compensation, amortization of intangibles, restructuring and valuation allowance in order to provide a more meaningful measure of non-GAAPnet income (loss).

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GAAP to Non-GAAP Reconciliation(In thousands, except percentages and per share amounts)

GAAP gross profit

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Three Months EndedMarch 31, 2018 April 1, 2017

Non-GAAP gross profit:GAAP gross profit $ 114,123 $ 118,299Stock-based compensation expense 1,098 18Impact of restructuring — 37Intangible assets amortization 1,516 1,319Non-GAAP gross profit $ 116,737 $ 119,673

Non-GAAP gross margin (as a percentage of revenue):GAAP gross margin 46.0% 39.6%Stock-based compensation expense 0.4 —Impact of restructuring 0.0 0.0Intangible assets amortization 0.6 0.4Non-GAAP gross margin 47.1% 40.0%


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Non-GAAP research and development:GAAP research and development $ 89,336 $ 87,758Stock-based compensation expense (14,671) (14,344)Impact of restructuring — (2,744)Non-GAAP research and development $ 74,665 $ 70,670

Non-GAAP sales and marketing:GAAP sales and marketing $ 72,052 $ 91,174Stock-based compensation expense (3,447) (3,248)Impact of restructuring — (2,000)Intangible assets amortization (161) —Non-GAAP sales and marketing $ 68,444 $ 85,926

Non-GAAP general and administrative:GAAP general and administrative $ 36,088 $ 30,746Stock-based compensation expense (4,425) (4,155)Litigation (expense) credit (765) 114Impact of restructuring — (1,594)Intangible assets amortization (71) (58)Non-GAAP general and administrative $ 30,827 $ 25,053


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Three Months Ended

March 31, 2018 April 1, 2017Non-GAAP operating expenses:GAAP operating expenses $ 197,476 $ 209,678Stock-based compensation expense (22,543) (21,747)Litigation (expense) credit (765) 114Impact of restructuring — (6,338)Intangible assets amortization (232) (58)Non-GAAP operating expenses $ 173,936 $ 181,649


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Non-GAAP operating income (loss) and operating income (loss) before income taxes:

GAAP operating loss $ (83,353) $ (91,379)Stock-based compensation expense 23,641 21,765Litigation (expense) credit 765 (114)Impact of restructuring — 6,375Intangible assets amortization 1,748 1,377Non-GAAP operating loss (57,199) (61,976)Interest income, net 1,350 1,096Other income, net 517 533Non-GAAP operating loss before income taxes $ (55,332) $ (60,347)


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Non-GAAP net loss and net loss per share:Net loss $ (80,877) $ (60,079)Stock-based compensation expense 23,641 21,765Litigation (expense) credit 765 (114)Impact of restructuring — 6,375Intangible assets amortization 1,748 1,377Income tax effect of non-GAAP adjustments 13,767 (3,722)Non-GAAP net loss $ (40,956) $ (34,398)

GAAP diluted shares 239,431 226,511Other dilutive equity awards — —Non-GAAP diluted shares 239,431 226,511Non-GAAP diluted net loss per share $ (0.17) $ (0.15)


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Non-GAAP free cash flow:Net cash provided by operating activities $ 10,158 $ 49,138Purchase of property and equipment (12,616) (28,157)Non-GAAP free cash flow $ (2,458) $ 20,981Net cash provided by investing activities $ 31,170 $ 24,466Net cash used in financing activities $ (4,934) $ (546)


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Three Months Ended

March 31, 2018 April 1, 2017Revenue on a Constant Currency BasisInternational GAAP Revenue $ 108,368 $ 128,523Foreign exchange effect (9,306)International revenue excluding foreign exchange effect $ 99,062International GAAP revenue year-over-year change (16)%International GAAP revenue excluding foreign exchange effect year-over-over change (23)%

US GAAP revenue $ 139,496 $ 170,420US GAAP revenue year-over-year change (18)%


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Adjusted EBITDA:Net loss $ (80,877) $ (60,079)Stock-based compensation expense* 23,641 21,765Litigation (expense) credit 765 (114)Impact of restructuring — 6,375Depreciation and intangible assets amortization 12,204 10,517Interest income, net (1,350) (1,096)Income tax benefit (609) (29,671)Adjusted EBITDA $ (46,226) $ (52,303)

* A portion of stock-based compensation expense for the year ended December 31, 2017 was allocated to and included in "Impact of restructuring," thus explaining the difference between the total by function presented in this table compared to the amounts presented in the above tables.

THANK YOU

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