Fitbit IPO: Everything You Need to Know

Fitbit IPO Everything You Need to KnowFitbit Inc. recently submitted a filing to the Securities and Exchange Commission (SEC) about its initial public offering (IPO). (Source: Securities and Exchange Commission, June 2, 2015.)

Who is Fitbit?

Fitbit is a company that makes wearable products that track people’s fitness activity. Its products can measure the number of steps walked, heart rate, amount of calories burned, sleep quality, and other personal metrics. The data gathered from fitness trackers can be analyzed by software. There is an online dashboard and mobile apps for the tracker as well.

The company was founded in May 2007 by Eric Friedman, the current chief technology officer, and James Park, its CEO.

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What is Fitbit’s Business Model?

Fitbit generates revenue from the sale of its fitness tracking devices. It also makes money from “Fitbit Premium,” a paid subscription service for deeper analysis and guidance.

Right now, Fitbit has six wearable connected health and fitness trackers that are either wrist-based or “clippable.” The company also sells a Wi-Fi-connected scale that measures weight, body fat, and body mass index (BMI).

Fitbit currently sells its products in over 45,000 retail stores in more than 50 countries and through its retailers’ web sites and online store at Fitbit.com. The company also takes part in corporate wellness offerings.

Also Read: Fitbit IPO: What it Means for Investors

How Many Devices is Fitbit Selling?

The number of devices sold enjoyed geometric growth in the past four years: from 200,000 devices in 2011, 1.3 million in 2012, 4.5 million in 2013, to a whopping 10.3 million in 2014. In the first three months of this year, Fitbit has already sold 3.9 million units. It also had 9.5 million paid active users by March 31, 2015.

What is Fitbit’s Revenue?

In 2014, Fitbit’s revenue was $745.4 million. The company’s revenue has grown tremendously over the past several years: from $14.5 million in 2011, to $76.4 million in 2012, to $271.1 million in 2013, to $745.4 in 2014.

Net income also increased during the period. In 2011, 2012, and 2013, there were net losses of $4.3 million, $4.2 million, and $51.6 million, respectively. In 2014, the company finally made profit, with net income of $131.8 million. One important reason for the fluctuation is the product recall in 2013. A boost in international sales in 2014 aided in the company’s profits.

For the past four years, adjusted EBITDA were $4.0 million, $2.4 million, $79.0 million, and $191.0 million, respectively.

The upward momentum is continuing into this year. In the first three months of 2015, Fitbit generated $336.8 million in revenue, with a net income of $48.0 million and EBITDA of $93.4 million.

Also Read: Is the FitBit IPO Valuation Justified?

What is Fitbit’s IPO Price?

Fitbit expects its shares to be priced between $14.00 and $16.00 a share.

What is Fitbit’s Stock Symbol?

Fitbit plans to list its shares on the New York Stock Exchange (NYSE) under the ticker symbol “FIT.”

How Much Money will Fitbit’s IPO Raise?

Fitbit Plans to issue 22.4 million shares. At share prices between $14.00 and $16.00 apiece, the IPO would raise around $358 million.

Adding the 7.5 million shares that existing stockholders are expected to sell, the total value of the IPO is around $448 million.

How will Fitbit Use the Money?

Fitbit does not say exactly how it would use the money raised from the IPO. The company said the money could go to research and development or acquisitions.

Also Read: Fitbit IPO: 5 Reasons Warren Buffett Wouldn’t Invest in It