Why One of the Hottest IPOs of 2020 May Be Cooling Off
Peloton released its fiscal second-quarter earnings report after the closing bell Thursday.
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Peloton Interactive Inc. (NASDAQ: PTON) released its fiscal second-quarter earnings report after the closing bell Thursday. This was one of the hottest IPOs of last year, withstanding the pandemic. Despite the eye-popping numbers we saw this quarter, will these be enough to carry Peloton even higher?
The firm said that it had $0.18 in earnings per share (EPS) and $1.06 billion in revenue, which compares with consensus estimates calling for $0.09 in EPS and $1.03 billion in revenue. The same period of last year reportedly had a net loss of $0.02 per share and $466.3 million in revenue.
During the most recent quarter, total revenue increased 128% year over year. Connected Fitness Product revenue was $870.1 million, representing 124% year over year growth and 82% of total revenue. Subscription revenue was $194.7 million, a 152% year over year increase, and 18% of total revenue.
Peloton ended the quarter with 1.67 million Connected Fitness subscribers, an increase of 134% year over year. As of quarter’s end, 97% of Connected Fitness subscribers were on month-to-month payment plans. At the same time, the company boasted 625,000 Digital subscribers, up 472% from last year.
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Connected Fitness Subscription Workouts grew 303% in the first quarter to over 98.1 million, averaging 21.1 Monthly Workouts per Connected Fitness Subscription, versus 12.6 in the same period last year.
Cash, cash equivalents and marketable securities totaled $2.1 billion at the end of the quarter. The firm also has additional liquidity of $250.0 million in the form of an undrawn revolving credit facility.
Looking ahead to the fiscal third quarter, the company expects to see total revenue reaching $1.1 billion and an adjusted EBITDA of $10 million. The consensus estimates are calling for $0.04 per share and $1.09 billion in revenue for the quarter.
Shares of Peloton closed Thursday at $157.53, in a post-IPO range of $17.70 to $171.09. The consensus price target is $155.42. Following the announcement, the stock was down 6% at $147.08 in the after-hours trading session on Thursday.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
