Is Peloton Really Back on Track?

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Peloton Interactive Inc. (NASDAQ: PTON) released its fiscal first-quarter earnings report before the opening bell Tuesday. The firm said that it had a net loss of $1.29 per share and $228.0 million in revenue, which compares with consensus estimates calling for a net loss of $0.40 per share and $196.86 million in revenue. The same period of last year reportedly had a net loss of $2.18 per share and $112.1 million in revenue.

During the most recent quarter, total revenue increased 103% year over year. Connected Fitness Product revenue was $157.6 million, representing 102% year-over-year growth and 69% of total revenue. Subscription revenue was $67.2 million, a 112% year-over-year increase, and 29% of total revenue.

Peloton ended the quarter with 562,774 Connected Fitness subscribers, an increase of 103% year over year. As of quarter’s end, 90% of Connected Fitness subscribers were on month-to-month payment plans. At the same time, the company boasted 105,856 Digital subscribers, up 116% from last year.

Looking ahead to the fiscal second quarter, the company expects to see total revenue in the range of $410 million to $420 million and an adjusted EBITDA between −$70 million and −$65 million. The consensus estimates are a net loss of $0.41 per share and $384.26 million in revenue for the quarter.

John Paul Foley, co-founder, board chair and CEO of Peloton, commented:

We had a strong start to our fiscal year ended June 30, 2020 with revenue growth of 103% in our first quarter versus last year. We benefited from continued strong demand for our connected fitness experience, attributable to our effective brand and performance marketing and growing word-of-mouth referrals from our loyal Members. Despite the significant investments we are making to grow internationally, scale operations, and enhance our end-to-end Member experience, we narrowed our Net Loss by $4.8 million to $(49.8) million and improved our Adjusted EBITDA margin of (9.2)% by 283 basis points versus last year.

Shares of Peloton closed Monday at $24.61, in a post-IPO range of $20.46 to $27.98. The consensus price target is $30.95. Following the announcement, the stock was up over 5% at $25.89 in early trading indications Tuesday.

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