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Mar 31, 2022
Peloton Q3 2022 Earnings Report
Peloton's financial performance declined due to lower demand and higher operating expenses, but subscription revenue continued to grow.
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
Revenue by Segment
Connected Fitness Products Revenue
CapyFin.comSubscription Revenue
CapyFin.com 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