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Mar 31, 2023
Peloton Q3 2023 Earnings Report
Peloton's Q3 2023 performance showcased growth in connected fitness subscriptions and gross profit, alongside significant reductions in Adjusted EBITDA and Free Cash Flow losses.
Key Takeaways
Peloton's Q3 2023 showed positive year-over-year trends, including a 5% increase in connected fitness subscriptions, a 47% rise in gross profit, and substantial reductions in both Adjusted EBITDA and Free Cash Flow losses. The company also settled a patent license agreement with DISH Technologies, which is expected to impact Q4 cash flow.
Connected fitness subscriptions grew by 5% year-over-year.
Gross profit increased by 47% year-over-year.
Adjusted EBITDA loss decreased by $175 million year-over-year.
Free Cash Flow loss reduced by $691 million year-over-year.
Peloton
Peloton
Peloton Revenue by Segment
Revenue by Segment
Connected Fitness Products Revenue
CapyFin.comSubscription Revenue
CapyFin.com Forward Guidance
Peloton's Q4 FY23 outlook anticipates a decrease in ending connected fitness subscriptions and revenue, reflecting typical seasonality. Gross margin is expected to improve sequentially due to a mix-shift towards the Subscription segment, while connected fitness subscription churn is anticipated to increase modestly.
Positive Outlook
- Sequential gross margin improvement is expected.
- Improvement will be driven by a continued mix-shift of total revenues toward our Subscription segment.
- Progress toward achieving our financial targets for FY23.
- Progress on free cash flow which improved $691 million compared to one year ago.
Challenges Ahead
- Guidance range for end of period Connected Fitness Subscriptions reflects lower near-term visibility.
- Guidance range for revenue reflects lower near-term visibility.
- Typically the lowest volume quarter of our fiscal year.
- Anticipate a modest sequential increase in Connected Fitness subscription churn.
Revenue & Expenses
Visualization of income flow from segment revenue to net income