5 Things You Need to Know About Fitbit's Impending IPO

NEW YORK (TheStreet) -- Fitness technology provider Fitbit just filed to go public on the New York Stock Exchange, as competition in the wearable technology space heats up in the wake of the release of the Apple (AAPL) Watch.

San Francisco-based Fitbit, led by CEO James Park, plans to list shares under the ticker FIT. Its offering is aimed at raising as much as $100 million, according to a government filing, but that's likely a placeholder number until the proposed size of the offering and pricing are determined.

The company lists several underwriters for the upcoming offering, including Morgan Stanley (MS), Deutsche Bank (DB), Bank of Amercia/Merrill Lynch (BAC),  Barclays (BCS), Piper Jaffray (PJC), SunTrust Robinson Humphrey (STI), Raymond James (RJF), Stifel (SF), and William Blair.

Here are five things to know about a Fitbit IPO.

Fitbit is clearly profitable.

Most tech companies go public prior to profitability, but Fitbit isn't one of them. In 2014, the company ended the year with $745.4 million in revenue, generating net income of $131.8 million with adjusted EBITDA of $191 million. That's a significant improvement over 2013, when it earned $79 million on $271.1 million in revenue.

In the first three months of 2015, Fitbit said it generated $336.8 million in revenue, with net income of $48 million and adjusted EBITDA of $93.4 million.

The devices are really selling well.

Device sales are really ramping up, having surpassed 10 million in 2014.

The company recently launched a number of new fitness trackers, including the Fitbit Charge, Fitbit Charge HR and the Fitbit Surge.

(See TheStreet's review of the Fitbit Charge right here.)

In total, the company has seven devices -- Fitbit Zip, Fitbit One, Fitbit Flex, Fitbit Charge, Fitbit Charge HR, Fitbit Surge and Fitbit Aria, a "Wi-Fi connected scale that tracks weight, body fat percentage, and BMI. Fitbit Aria has a U.S. MSRP of $129.95."

Apple is a factor, like it or not.

The company lists Apple, among several other companies, including Google (GOOG) (GOOGL) and Microsoft (MSFT), as its primary competition.

We operate in a highly competitive market. If we do not compete effectively, our prospects, operating results, and financial condition could be adversely affected. The connected health and fitness devices market is highly competitive, with companies offering a variety of competitive products and services. We expect competition in our market to intensify in the future as new and existing competitors introduce new or enhanced products and services that are potentially more competitive than our products and services. 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. For example, Apple has recently introduced the Apple Watch smartwatch, with broad-based functionalities, including some health and fitness tracking capabilities. We also compete with a wide range of stand-alone health and fitness-related mobile apps that can be purchased or downloaded through mobile app stores. We believe many of our competitors and potential competitors have significant competitive advantages, including longer operating histories, ability to leverage their sales efforts and marketing expenditures across a broader portfolio of products and services, larger and broader customer bases, more established relationships with a larger number of suppliers, contract manufacturers, and channel partners, greater brand recognition, ability to leverage app stores which they may operate, and greater financial, research and development, marketing, distribution, and other resources than we do. Our competitors and potential competitors may also be able to develop products or services that are equal or superior to ours, achieve greater market acceptance of their products and services, and increase sales by utilizing different distribution channels than we do. Some of our competitors may aggressively discount their products and services in order to gain market share, which could result in pricing pressures, reduced profit margins, lost market share, or a failure to grow market share for us. If we are not able to compete effectively against our current or potential competitors, our prospects, operating results, and financial condition could be adversely affected.

Recalls are an issue.

The company has recently recalled some of its products, including the aforementioned Fitbit Force, due to issues with skin rashes and irritation. The company noted this may have an effect on sales, the company's financial results as well as perception surrounding the company.

"We recalled the Fitbit Force in March 2014. The recall has exposed us to CPSC regulatory proceedings and extensive litigation in various jurisdictions, including multi-jurisdiction complex federal and state class action and personal injury claims, which required significant management attention and disrupted our business operations, and adversely affected our financial condition, operating results, and our brand."

The team is young.

Park, who used to work at Morgan Stanley, is only 38, as is Chief Technology Officer and Director Eric N. Friedman. There is a bit of public company experience on the management team, as William Zerella, the company's CFO since June 2014, used to be the CFO of Vocera Communications, a wireless health care communications company. Prior to that, he was CFO of Force10 Networks, which was acquired by Dell. 

More from Technology

EU Apple Users Can Now Download All the Info It Has on Them

EU Apple Users Can Now Download All the Info It Has on Them

Did Trump Just Torpedo the Stock Market Again?

Did Trump Just Torpedo the Stock Market Again?

Venture Capital Funding Surges 49% as Tech Innovation Piques Investor Interest

Venture Capital Funding Surges 49% as Tech Innovation Piques Investor Interest

10 Questions for PayPal Ahead of Its Big Investor Day

10 Questions for PayPal Ahead of Its Big Investor Day

How the Public Really Feels About Autonomous Driving Right Now

How the Public Really Feels About Autonomous Driving Right Now