Peloton Q1 2021 Earnings Report
Key Takeaways
Peloton Interactive, Inc. reported a significant increase in revenue and subscriptions for Q1 2021. Total revenue grew by 232% to $757.9 million, and ending Connected Fitness Subscriptions increased by 137% to over 1.33 million. The company launched Bike+ and announced the new Peloton Tread, contributing to its growth and profitability, with a net income of $69.3 million and an Adjusted EBITDA of $118.9 million.
Total revenue grew 232% year-over-year to $757.9 million, driven by strong demand for Bike and Bike+.
Ending Connected Fitness Subscriptions increased 137% year-over-year to over 1.33 million.
Net income was $69.3 million, with Adjusted EBITDA at $118.9 million, representing a 15.7% Adjusted EBITDA margin.
The company launched Bike+ and announced the new Peloton Tread, expanding its product offerings.
Peloton
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Peloton Revenue by Segment
Forward Guidance
Peloton anticipates continued growth and high demand, but expects to operate under supply constraints for the foreseeable future. They are also incurring additional shipping-related expenses in Q2 to alleviate delivery delays. For Q2, they expect revenue of $1.0 billion and an Adjusted EBITDA of $70 million, representing a 7.0% Adjusted EBITDA Margin. For the full fiscal year, they now expect revenue of at least $3.9 billion and Adjusted EBITDA of at least $300 million.
Positive Outlook
- Expect normalized order-to-delivery windows for the Bike by the end of the calendar year.
- Expect leverage in fixed costs of content production to be offset by elevated engagement levels.
- Expect higher penetration of Digital Subscriptions.
- Expect continued fitness and wellness programming investments.
- For the full fiscal year, they now expect revenue of at least $3.9 billion.
Challenges Ahead
- Expect to operate under supply constraints for the foreseeable future.
- Bike+ wait times will likely be elevated for the next couple of quarters.
- Incurring additional shipping-related expenses in Q2 to alleviate delivery delays.
- Expect Q2 gross margin to temporarily decline to about 39%, implying a Connected Fitness Product Gross Margin of 35% and Subscription Contribution Margin of 63%.
- Challenges associated with port congestion and COVID-19-related warehouse closures impacted Bike+ delivery dates.
Revenue & Expenses
Visualization of income flow from segment revenue to net income