Earnings

Peloton Doubles Revenue, Grows Subscribers By 100 Pct In Q1 FY 2020

Peloton

Peloton's revenue increased by more than 100 percent year over year in the fitness company’s first quarter of fiscal 2020, hitting $228 million. Even so, its shares slid roughly 4 percent after that earnings news, according to a report, as investors are apparently impatient about the company’s profitability.

The company’s net loss stood at $49.8 million in the quarter, down from $54.5 million during the same period last year. “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,” said the company in its shareholder letter.

Peloton also said its connected fitness subscribers grew 103 percent to 562,774. The fitness platform now has a total member base of more than 1.6 million. The company’s average net monthly churn rate stood at 0.9 percent, and Peloton reports a 94 percent 12-month retention rate.

The company, which sells fitness equipment such as stationary bikes and treadmills, filed its initial public offering (IPO) prospectus in August. The thought at the time was that while the company’s revenue was increasing, its losses were said to be broadening. Peloton was reportedly the first to combine bikes and treadmills with screens that allow subscribers to take part in fitness classes with others from their own locations. Per past reports, the company aims to enable people to have an at-home workout experience “as physically rewarding and addictive as attending a live, in-studio class.”

At its IPO price, Peloton was valued at about $8 billion, or roughly double its private market valuation a year earlier.

In related action, news recently emerged that Peloton has acquired Gossamer Engineering, which has designed devices for Google and Facebook. Bloomberg reported that it is unknown how much Peloton paid for the business, but sources said that on May 16 Gossamer’s engineers in mechanical and electrical engineering, quality assurance, and technical program management joined Peloton, which declined to comment.

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