Balance Sheet Components (Tables)

9 Months Ended

Sep. 29, 2018

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):

	Three Months Ended			Nine Months Ended
	September 29, 2018			September 29, 2018
Beginning balances	$	32,835		$	42,432
Deferral of revenue	10,176			25,885
Recognition of deferred revenue	(10,203		)	(35,509		)
Ending balances	$	32,808		$	32,808

Schedule of accounts receivable reserves

Revenue returns reserve activities were as follows (in thousands):

	Three Months Ended						Nine Months Ended
	September 29, 2018			September 30, 2017(1)			September 29, 2018			September 30, 2017(1)
Beginning balances	$	74,996		$	51,520		$	109,872		$	98,851
Increases	43,383			56,445			106,385			146,356
Returns taken	(39,862		)	(46,067		)	(137,740		)	(183,309		)
Ending balances	$	78,517		$	61,898		$	78,517		$	61,898

⁽¹⁾  The Company corrected the amounts presented as “Increases” and “Returns taken” for the three and nine months ended September 30, 2017. The Company did not consider this correction to be material since it had no impact on the beginning and ending balances of the revenue returns reserve and did not have any impact on its condensed consolidated balance sheets and statements of operations.

Schedule of inventories

Inventories consisted of the following (in thousands):

	September 29, 2018		December 31, 2017
Components	$	19,608	$	3,825
Finished goods	175,504		120,070
Total inventories	$	195,112	$	123,895

Schedule of prepaid expenses and other current asset

Prepaid expenses and other current assets consisted of the following (in thousands):

	September 29, 2018		December 31, 2017
Prepaid expenses	$	16,298	$	24,204
Point-of-purchase displays, net	8,114		14,750
Derivative assets	4,681		—
Prepaid marketing	2,525		6,074
Insurance receivable	—		37,300
Other	13,923		14,941
Total prepaid expenses and other current assets	$	45,541	$	97,269

Schedule of property and equipment

Property and equipment, net, consisted of the following (in thousands):

	September 29, 2018			December 31, 2017
Tooling and manufacturing equipment	$	69,889		$	66,854
Furniture and office equipment	22,756			20,942
Purchased and internally-developed software	20,925			18,112
Leasehold improvements	66,053			58,431
Total property and equipment	179,623			164,339
Less: Accumulated depreciation and amortization	(73,103		)	(59,431		)
Property and equipment, net	$	106,520		$	104,908

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	10,022
Balance at September 29, 2018	$	61,058

Schedule of intangible assets (excluding goodwill)

The carrying amounts of the intangible assets as of September 29, 2018 and December 31, 2017 were as follows (in thousands, except useful life):

	September 29, 2018							December 31, 2017
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Developed technology	$	35,988	$	(14,116	)	$	21,872	$	30,588	$	(8,738	)	$	21,850
Customer relationships	3,790		(316		)	3,474		—		—			—
Trademarks and other	1,278		(944		)	334		1,278		(772		)	506
Total intangible assets, net	$	41,056	$	(15,376	)	$	25,680	$	31,866	$	(9,510	)	$	22,356

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 September 29, 2018 was as follows (in thousands):

	Cost of Revenue		Operating Expenses		Total
Remaining 2018	$	1,854	$	207	$	2,061
2019	6,634		827		7,461
2020	5,854		643		6,497
2021	5,854		597		6,451
2022	1,180		597		1,777
Thereafter	—		1,433		1,433
Total finite-lived intangible assets, net	$	21,376	$	4,304	$	25,680

Schedule of accrued liabilities

Accrued liabilities consisted of the following (in thousands):

	September 29, 2018		December 31, 2017
Accrued sales incentives	$	98,812	$	111,592
Accrued revenue reserve from returns	78,517		—
Product warranty	47,855		87,882
Accrued manufacturing expense and freight	32,738		41,901
Employee-related liabilities	30,949		33,266
Accrued co-op advertising and marketing development funds	19,599		30,408
Accrued sales and marketing	15,325		44,401
Inventory received but not billed	15,218		10,526
Sales taxes and VAT payable	15,191		21,340
Accrued research and development	6,064		8,983
Accrued legal settlements and fees	4,979		36,693
Derivative liabilities	86		2,138
Other	21,051		23,007
Accrued liabilities	$	386,384	$	452,137

Schedule of product warranty reserves

Product warranty reserve activities were as follows (in thousands)⁽¹⁾:

	Three Months Ended						Nine Months Ended
	September 29, 2018			September 30, 2017			September 29, 2018			September 30, 2017
Beginning balances	$	50,468		$	72,761		$	87,882		$	99,923
Charged to cost of revenue	9,245			26,825			(1,722		)	44,167
Changes related to pre-existing warranties	(1,354		)	5,669			(9,226		)	8,142
Settlement of claims	(10,504		)	(18,576		)	(29,079		)	(65,553		)
Ending balances	$	47,855		$	86,679		$	47,855		$	86,679

⁽¹⁾  Does not include reserves established as a result of the recall of the Fitbit Force. See the section titled “—Fitbit Force Recall Reserve” in the Company’s Annual Report on Form 10-K for additional information regarding such reserves.

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			Currency Translation Adjustments		Unrealized Gains (Losses) on Available-for-Sale Investments			Total
Balance at December 31, 2017	$	66		$	—	$	(75	)	$	(9	)
Other comprehensive income (loss) before reclassifications	6,780			—		(88		)	6,692
Amounts reclassified from AOCI	(3,362		)	—		12			(3,350		)
Other comprehensive income (loss)	3,418			—		(76		)	3,342
Balance at September 29, 2018	$	3,484		$	—	$	(151	)	$	3,333