​Fitbit files for IPO: 7 key facts

Fitbit files for an initial public offering and the company outlines how corporate wellness programs are likely to be a tricky but strong avenue for growth.

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Fitbit on Thursday filed for an initial public offering and may open the door for other wearable players to float shares to the public. Fitbit is among the first pure play wearable companies to file and its profitability shows a good bit of maturity.

The fitness tracking company's financials look solid, but Fitbit does note that competition will be stiff. However, the company's global opportunity and plan to tap the corporate wellness market may give Fitbit some legs. Here's a look at the 10 key facts from the company's regulatory filings.

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Fitbit makes money. For the three months ending March 31, Fitbit reported net income of $48 million on revenue of $336.75 million. Fitbit was also profitable in the same quarter a year ago. For 2014, Fitbit reported net income of $131.77 million on revenue of $745.43 million.

The company sold 3,866,000 devices in the March quarter. Paid active users were 9.5 million.

Competition is brutal. From Fitbit's SEC filing:

The connected health and fitness devices market has a multitude of participants, including specialized consumer electronics companies, such as Garmin, Jawbone, and Misfit, and traditional health and fitness companies, such as Adidas and Under Armour. In addition, many large, broad-based consumer electronics companies either compete in our market or adjacent markets or have announced plans to do so, including Apple, Google, LG, Microsoft, and Samsung.

Flextronics is Fitbit's primary contract manufacturer. Fitbit needs to come up with a secondary supplier at some point: " Our reliance on sole contract manufacturers for each of our products increases our risks since we do not currently have any alternative or replacement manufacturers."

The company reserves 3 percent of net revenue for warranty claims. That reserve is needed given the Fitbit Force recall in March 2014 that hurt results. Fitbit is facing a number of lawsuits related to the Force recall as well as a few surrounding the Fitbit Flex.

Fitbit suffered a 5-hour IT outage in December 2014 when systems cracked under high holiday demand.

Open source software is used for some of Fitbit's infrastructure. Fitbit lists open source licensing issues as a risk factor.

21 percent of Fitbit's sales in the March quarter were international. For 2014, 25 percent of sales were international.

Corporate wellness is seen as a growth driver. Fitbit said:

The corporate wellness market for connected health and fitness devices is new and is subject to a variety of challenges, including whether employers will continue to invest in such programs, long sales cycles, and substantial upfront sales costs. However, we believe that as healthcare costs continue to rise and as employers continue to seek ways to keep their employees active, engaged, and productive, more employers will implement or enhance their corporate wellness programs. In order to grow our corporate wellness presence, we intend to enhance our corporate wellness offering as well as expand our sales team focused on this market.

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