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Sep 30, 2022
Peloton Q1 2023 Earnings Report
Peloton's turnaround plan showed significant progress with improved free cash flow, gross margin, and adjusted EBITDA.
Key Takeaways
Peloton's Q1 2023 results indicate substantial progress in its turnaround efforts. The company demonstrated improvements in free cash flow, gross margin, and adjusted EBITDA. Peloton ended the quarter with $938 million of unrestricted cash and an unused revolving credit line of $500 million.
Implemented a restructuring plan to variablize cost structure and generate significant annual cost savings.
Secured $750 million in financing and maintained a liquid cash balance of roughly one billion dollars.
Simplified operations by exiting owned-manufacturing in Taiwan.
Entered into new partnerships with iconic retailers Amazon and Dick’s Sporting Goods.
Revenue by Segment
Forward Guidance
Peloton anticipates near-term demand for Connected Fitness hardware to remain challenged due to macro economic uncertainties. The forecast incorporates a seasonal mix-shift toward the Connected Fitness segment, expected holiday promotional activity, a mix-shift of sales toward the rental program, as well as the impact from expanding third-party retail partnerships. Connected Fitness churn is expected to be similar to Q1.
Positive Outlook
- Seasonal mix-shift toward Connected Fitness segment
- Expected holiday promotional activity
- Mix-shift of sales toward rental program
- Impact from expanding third-party retail partnerships
- Connected Fitness churn expected to be similar to Q1
Challenges Ahead
- Near-term demand for Connected Fitness hardware likely to remain challenged
- Macro economic uncertainties
- Approximately $70 million of additional restructuring related cash charges expected in FY'23
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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