Peloton Q3 2022 Earnings Report
Key Takeaways
Peloton's Q3 2022 revenue decreased by 24% year-over-year to $964.3 million. The company reported a net loss of $757.1 million, and free cash flow was $(746.7) million. However, subscription revenue grew by 55% year-over-year, reaching $369.9 million, and the company is implementing cost reduction initiatives to improve cash flow and profitability.
Total revenue decreased by 24% year-over-year to $964.3 million.
Net loss was $(757.1) million, compared to $(8.6) million in the prior year.
Ending Connected Fitness Subscriptions grew to 2.96 million, a 42% increase year-over-year.
Subscription revenue grew by 55% year-over-year to $369.9 million.
Peloton
Peloton
Peloton Revenue by Segment
Forward Guidance
Peloton expects Q4 revenue to be between $675 million and $700 million, with a gross margin of approximately 31%. Adjusted EBITDA is projected to be between $(120) million and $(115) million.
Positive Outlook
- Accelerated sales due to recent hardware price reductions.
- Gross margin expected to be approximately 31%.
- FCF to be meaningfully better in Q4 vs. Q3.
- Leveraging of fixed costs in Subscription margin in Q4.
- Small positive impact from the Subscription pricing change.
Challenges Ahead
- Softer demand than previously forecast.
- Modest negative impact from Subscription pricing increase starting June 1.
- Small increase to cancellations due to the Connected Fitness subscription price increase announcement.
- CF margin significantly impacted by recent pricing changes.
- Continued headwinds in freight, storage, and logistics due to the reduction in our demand outlook.
Revenue & Expenses
Visualization of income flow from segment revenue to net income