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Dec 31, 2022
Peloton Q2 2023 Earnings Report
Peloton significantly outperformed expectations for Connected Fitness subs, Connected Fitness Unit (CFU) orders, CFU deliveries, hardware revenue, subscription revenue, and Total Revenue, Adjusted EBITDA, and Free Cash Flow.
Key Takeaways
Peloton's Q2 FY2023 results show significant outperformance in key areas, including Connected Fitness subscriptions, hardware revenue, subscription revenue, and free cash flow. The company has focused on restructuring, cost reduction, and new product launches. They are aiming for free cash flow breakeven by year-end FY23.
Significantly outperformed expectations for Connected Fitness subs, CFU orders, CFU deliveries, hardware revenue, subscription revenue, and Total Revenue.
Generated more revenue from subscriptions than from hardware sales for the third consecutive quarter, improving gross margins.
Improved free cash flow to $(94) million, with positive free cash flow of approximately $8 million when excluding supplier settlement costs.
Launched new products and initiatives, including Peloton Row, Guide, Fitness as a Service (FaaS), and partnerships with Amazon and Dick’s Sporting Goods.
Revenue by Segment
Forward Guidance
Peloton anticipates lower Connected Fitness unit sales due to the end of the holiday season. They expect macroeconomic uncertainty to continue impacting consumer spending and believe demand for Connected Fitness hardware will remain challenged.
Positive Outlook
- Expect Connected Fitness churn to be similar to Q2.
Challenges Ahead
- Expect lower Connected Fitness unit sales as they exit the holiday selling season and promotional activity eases.
- Believe macro-economic uncertainty is impacting consumer spending patterns.
- Near-term demand for Connected Fitness hardware is likely to remain challenged.
- Forecast incorporates a mix shift of CF unit sales from our first-party web channel towards our bike rental program and third-party retail partners.
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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