Company Profile & Update · Company Profile & Update . June 2017. Safe Harbor Statement. This presentation contains forward-looking statements, within the meaning of the Private Securities

Company Profile & Update June 2017

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 full year of 2017, the consumerization of the health care industry and our ability to capitalize on those trends, reductions in channel inventory, trends in sell-in versus sell through revenue, expected trends in operating margins and free cash flow, our investments in lease hold improvements, lab and testing equipment and tooling, our anticipated tax liability, our investments in research and development, sales and marketing, and general and administrative and the impact of those investments, and potential for future growth in the connected health and fitness market, smartwatch and overall wearables category and adjacent markets. 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; 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; quarterly and seasonal fluctuations; 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; 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; 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 in our Quarterly Report on Form 10-Q for the quarter ended April 1, 2017, which are available on our Investor Relations website at investor.fitbit.comand 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 or in materials posted on our Investor Relations website at investor.fitbit.com under our first quarter 2017 financial results.

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.

Fitbit helps people lead healthier, more active lives by empowering them with data, inspiration, and guidance to

reach their goals.

Tech-Enabled Health Revolution

Chronic Disease Increasingly Driven by Lifestyle / Behaviors

Cost burden shifting towards individuals

Consumerization of the Health Industry

Rising health care costs Smartphones & wearables

emerging as a key enabling platform

2016 Played Out Differently than Anticipated

• Q4 2016 demand lower than anticipated.• Consumers increasingly interested in more robust devices with smartwatch capabilities.• That said, maintaining or increasing market share position in connected fitness tracker

category.

$505$587

$504$574

$299

$45 $48 $81

($144)($52)

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Revenue Adjusted EBITDA

(In Millions)

Changes Since Q4• Reduced operating expense run rate by ~$200 million.

• Reorganized business: established two distinct groups, Consumer Health & Fitness & Enterprise Health.

• Realigned resources: Simplified engineering structure including select changes in leadership.

• Focused on reducing inventory in the channel.

• Announced Officer changes:– Hired new section 16 leader, EVP, Jeff Devine, in charge of Operations, Customer Service,

and Quality.

Entering large adjacent opportunity

(Smartwatches)

• Reduced North America channel inventory ~30%.

• Expect to enter Q3 with relatively clean channel in North America.

• Anticipate sell-in to more align with sell-thru in North America.

Achieved 1st step, delivered Q1 Guidance

2017 is a Transition Year

Q1’17 Actual Consensus Difference

Revenue ($M) $299 $279 $20

Non-GAAP EPS ($0.15) ($0.18) $0.03

Adj. EBITDA ($52) ($74) $22

(As of Q1 2017)

Focused on Returning to Growth and Profitability Driven by 3 Secular Themes• The consumerization of the health

industry is beginning to happen.

• Consumers are continuing to shift their interest towards more full featured devices and smartwatches.

• Employers are increasingly considering subsidies or discounts for fitness wearables.

Fitbit Assets

6.7

16.9

23.2

0

10

20

30

40

50

2014 2015 2016

Active Users

11.0

29.0

50.2

0

10

20

30

40

50

2014 2015 2016

Registered Device Users

Strong Brand, #1 Player in Connected Health and

Fitness Wearables

Global Distribution & Foot Print

Engaged Community of Users

Continued Investments in Innovation

~950 Engineers

(In Millions)

Growing User Community & Brand Relevancy

• Leader in connected health and fitness with 63.5 million devices sold since inception.

• Fitbit devices secured the highest average score on an April 2017 Springbuk Enterprise analytic study.

• Fitbit Blaze ranked the highest of the 21 devices reviewed for use in Corporate Wellness.

• More than 5.2 million users have utilized the feed section of the Fitbit app generating ~345 million views and greater than 1 million users have joined a Group, all within the first few weeks of launch.

60

0

10

20

30

40

50

60

70

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

Total Devices Sold

(Units in millions, as of Q1 ‘17)

63.5

2014 2015 2016 2017

$104.5$85.9

0

25

50

75

100

125

Q1 2016 Q1 2017

S&M

$61.9$70.7

$0

$25

$50

$75

$100

$125

Q1 2016 Q1 2017

R&D

$32.1 $25.1

0

25

50

75

100

125

Q1 2016 Q1 2017

G&A

• Up y/y driven by headcount.

+14%

• Optimizing S&M spend, rolled out 1 product vs. 2 products last year.

• Benefit from expense timing, shifted to Q2.

• Up marginally excluding Jawbone expenses which were included in Q1 ’16 ($9.1m). Jawbone expense down significantly Q1’17, net of insurance settlement, credit of $0.1

-22%

-18%

(In Millions)

Exhibiting Expense Discipline While Investing to Drive Innovation

Strong Balance Sheet

Inventory $212.1 $190.6 $215.0 $230.4 $200.3

Inventory Turns 5.6 6.8 5.2 8.0 3.4

Accounts Receivables $339.7 $377.5 $461.4 $477.8 $194.8

Days Sales Outstanding 56 67 86 85 68

Capital Expenditures $16.7 $20.1 $30.1 $11.8 $28.2

Cap Expenditures as % of Revenue 3.3% 3.4% 6.0% 2.1% 9.4%

Non-GAAP Free Cash Flow (1) $126.8 ($39.1) ($88.8) $61.2 $21.0

Cash & Marketable Securities $791.7 $759.7 $672.1 $706.0 $726.1

Q1’16 Q2’16 Q3’16 Q4’16 Q1’17

($ in millions)

1) The Company's adoption of ASU 2016-09 on January 1, 2017 resulted in excess tax benefits for share-based payments recorded as a reduction of income tax expense and reflected within operating cash flows, rather than recorded within equity and reflected within financing cash flows. The Company elected to adopt this new standard retrospectively, which impacted the presentation for all periods prior to the adoption date.

FY ’17 Guidance

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

FY’17 Guidance

Revenue $1,500 $1,700y/y decline (31%) (22%)

Non-GAAP gross margin 42.5% 44%Non-GAAP free cash flow ($100) ($50)Non-GAAP EPS ($0.44) ($0.22)Non-GAAP tax rate ~43%Stock-based compensation $100 $110Non-GAAP share count ~228

Guidance Context:• Continued reduction in channel inventory.

• Expect op. margins trough in H1. Expect free cash flow to trend towards lower end due to increased working capital needs.

• Continued investment in leasehold improvements, lab & testing equipment, and tooling.

• Tax rate declined from prior guidance of ~50% to ~43% because geographic mix of income, lower loss in the U.S. and less R&D credit.

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THANK YOU

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Appendix

Low High

GAAP to Non-GAAP Reconciliation(In thousands, except percentages)

GAAP gross profit

GAAP to Non-GAAP Reconciliation(In thousands)

GAAP to Non-GAAP Reconciliation(In thousands)

GAAP to Non-GAAP Reconciliation(In thousands)

GAAP to Non-GAAP Reconciliation(In thousands)

GAAP to Non-GAAP Reconciliation(In thousands)

GAAP to Non-GAAP Reconciliation(In thousands)

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-GAAP financial measures in this presentation: non-GAAP gross profit, non-GAAP gross margin; non-GAAP operating expenses, non-GAAP operating income (loss); non-GAAP net income (loss), non-GAAP diluted net income (loss) per share, adjusted EBITDA, revenue on a constant currency basis, and non-GAAP free cash flow. The presentation of these financial measures is not intended 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 with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of our business performance, and enable comparison of our financial results with other public companies, many of which present similar 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 GAAP financial measures reflect the exclusion of items, specifically stock-based compensation expense, amortization of intangible assets, and the related income tax effects of the aforementioned exclusions, that are recurring and will be reflected in our financial results for the foreseeable future. In addition, these measures may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial 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, amortization of acquired intangible assets, and tax effects associated with these items. We have not reconciled guidance for non-GAAP financial measures to their most directly comparable 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 unreasonable effort.

GAAP to Non-GAAP Reconciliation

The 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 because we believe that the non-GAAP financial measures excluding this item provide meaningfulsupplemental information regarding our operational performance. In particular, companies calculate stock-based compensationexpense using a variety of valuation methodologies and subjective assumptions.

• In January 2017, we conducted a reorganization of its business, including a reduction in workforce. The restructuring costsimpacted our results for the first quarter of 2017. Restructuring costs primarily included severance-related costs. We believe thatexcluding these expenses provides great visibility to the underlying performance of our business operations, facilitatescomparison of our results with other periods, and may also facilitate comparison with the results of other companies in ourindustry.

• Litigation expense related to legal costs incurred due to litigation with Aliphcom, Inc. d/b/a Jawbone. We exclude theseexpenses because we do not believe they have a direct correlation to the operations of our business and because of thesingular nature of the claims underlying the Jawbone litigation. We began excluding Jawbone litigation costs in the secondquarter of 2016 as these costs significantly in 2016, and may continue to be material for the remainder of 2017. Although notexcluded in reporting for the first quarter of 2016, these litigation expenses were $9.1 million in that quarter.

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

• In March 2014, we recalled the Fitbit Force after some of our users experienced allergic reactions to adhesives inthe wristband. This recall primarily impacted our results for the fourth quarter of 2013, the first quarter of 2014 andthe fourth quarter of 2015.

• Amortization of intangible assets relates to our acquisitions of FitStar, Pebble and Vector. We exclude theseamortization expenses because we do not believe these expenses have a direct correlation to the operation of ourbusiness.

• Income tax effect of non-GAAP adjustments relates to the tax effect of the adjustments that we incorporate intonon-GAAP financial measures in order to provide a more meaningful measure of non-GAAP net income (loss).

• Purchase of property and equipment is deducted from net cash provided by (used in) operating activities to arriveat non-GAAP free cash flow, which reflects the amount of cash generated that is available to be used forinvestments in our business.

• We translated revenue from non-US dollar based transactions for the three months ended April 1, 2017 using theexchange rates that were effective in the comparable prior year period to calculate revenue to exclude the effectof changes in foreign exchange rates.