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Mar 31, 2020
Peloton Q3 2020 Earnings Report
Peloton's revenue and subscriber base grew significantly, driven by increased demand during the COVID-19 crisis, while also raising full-year guidance.
Key Takeaways
Peloton Interactive, Inc. reported a 66% increase in total revenue to $524.6 million for Q3 2020, driven by a 94% growth in Connected Fitness Subscribers, which reached over 886,100. The company's average net monthly connected fitness churn was 0.46%, and total members grew to over 2.6 million. Despite a net loss of $55.6 million, adjusted EBITDA was $23.5 million, representing a 4.5% adjusted EBITDA margin. Peloton raised its FY2020 guidance, expecting 1.04 million to 1.05 million ending Connected Fitness Subscribers and $1.72 billion to $1.74 billion in total revenue.
Total revenue increased by 66% to $524.6 million.
Ending Connected Fitness Subscribers grew by 94% to over 886,100.
Average Net Monthly Connected Fitness Churn was 0.46%, the lowest level in four years.
Adjusted EBITDA was $23.5 million, with an Adjusted EBITDA Margin of 4.5%.
Peloton
Peloton
Peloton Revenue by Segment
Revenue by Segment
Connected Fitness Products Revenue
CapyFin.comSubscription Revenue
CapyFin.com Forward Guidance
Peloton provided Q4 and full fiscal year 2020 business outlook, including revenue and adjusted EBITDA guidance.
Positive Outlook
- Expects $500 million to $520 million in total revenue for Q4, representing 128% growth at the midpoint.
- Projects $55 million to $65 million in Adjusted EBITDA for Q4, with an 11.8% Adjusted EBITDA Margin at the midpoint.
- Anticipates subscription contribution margin of 63.0% to 64.0% for Q4.
- Expects better Connected Fitness reactivations and elevated levels of Member engagement to continue.
- Forecasts $1.72 billion to $1.74 billion in total revenue for full fiscal year 2020, an 89% growth at the midpoint.
Challenges Ahead
- Anticipates elongated order-to-delivery windows due to unexpected sharp increase in sales.
- Expects Connected Fitness Product Gross Margin to decline year-over-year to 40.0% to 41.0% due to additional shipping costs and COVID-19 related costs.
- Assumes Tread sales will not resume prior to the end of fiscal year 2020.
- Expects to not materially improve order-to-delivery windows before the end of Q4.
- The unexpected sharp increase in sales has created an imbalance of supply and demand in many geographies.
Revenue & Expenses
Visualization of income flow from segment revenue to net income