Peloton (PTON) reports Q2 2021 earnings, sales beat

Peloton Interactive Inc. stationary bicycles sit on display at the company’s showroom on Madison Avenue in New York, U.S., on Wednesday, Dec. 18, 2019.

Jeenah Moon | Bloomberg | Getty Images

Peloton on Thursday reported quarterly sales growth of 128%, marking its first billion-dollar quarter, as the momentum keeps climbing for the at-home fitness equipment maker.

The company also increased its full-year revenue outlook. But it warned it still faces hurdles in the near term in getting items to its customers quickly, amid the demand surge.

Peloton shares fell more than 6% in extended trading Thursday. The stock had closed up 7%, at $157.53.

Here’s how Peloton did during its fiscal second quarter compared with what analysts were expecting, based on a survey by Refinitiv:

  • Earnings per share: 18 cents vs. 9 cents, expected
  • Revenue: $1.06 billion vs. $1.03 billion, expected

For the three-month period ended Dec. 31, Peloton earnings grew to $63.6 million, or 18 cents per share, from a loss of $55.4 million, or 20 cents per share, a year ago. Analysts had been calling for Peloton to earn 9 cents a share, according to Refinitiv.

Revenue skyrocketed 128% to $1.06 billion from $466.3 million a year earlier, topping expectations for $1.03 billion.

For its current fiscal third quarter, Peloton forecasts sales to reach $1.10 billion. Analysts had been calling for $1.09 billion.

Investing in the supply chain

Retention rates remain strong

Peloton ended its latest quarter with 1.67 million connected fitness subscribers, up 134% from the prior year. Connected fitness subscribers are people who pay a monthly fee to sync the company’s workout classes to their Peloton equipment, versus accessing the programs separately through a phone or tablet device and paying a smaller rate.

The company expects to have 2.28 million or more connected fitness subscriptions by the end of the fiscal year, up from a previous outlook for 2.17 million users.

Peloton’s retention rates also remain strong, a good indication of its future success.

Average net monthly connected fitness churn was 0.76% during the latest quarter, which marked a slight uptick from 0.65% during the prior period. But the company said it expects its churn rate during the current quarter will be below 0.75%, and its churn rate for fiscal 2021 will be below 0.80%, better than a prior outlook of under 0.90%. The lower the churn rate, the less turnover Peloton is seeing with its user base.

And the cycle maker continues to look for ways to entice its customers to exercise more. It said total workouts during the latest period surged to more than 113 million from 26 million a year ago. It recently launched a feature where users can “stack” classes back to back, and have them play automatically one after another. It also recently added Pilates classes to its catalog.

Peloton has made these investments as competition in the at-home fitness space continues to intensify during the Covid pandemic. Companies like Mirror, which is owned by Lululemon, Hydrow and Tonal make high-end products that offer workouts to tone arms and legs, as well as cardio classes, from the convenience of a basement or bedroom.

Peloton shares are up more than 365% from a year ago. The company has a market cap of $46 billion.

Find the full earnings release from Peloton here.



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