Peloton Q4 2024 Earnings Report
Key Takeaways
Peloton ended FY2024 with strong Q4 performance, meeting or exceeding guidance on key metrics. Total revenue was $644 million, up 0.2% Y/Y, with subscription revenue up 2.3% Y/Y. The company achieved a GAAP Net Loss of $30 million, an improvement of $211 million Y/Y, and positive Adjusted EBITDA and Free Cash Flow for the second consecutive quarter.
Total revenue increased modestly by 0.2% Y/Y to $644 million.
Subscription revenue grew by 2.3% Y/Y to $431 million with a gross margin of 68.2%.
GAAP Net Loss improved by $211 million Y/Y to $30 million.
Adjusted EBITDA was $70 million, up $105 million Y/Y, and Free Cash Flow was $26 million, up $100 million Y/Y.
Peloton
Peloton
Peloton Revenue by Segment
Forward Guidance
Peloton's Q1 FY25 outlook includes expectations for declining hardware sales, a similar Average Net Monthly Paid Connected Fitness Churn rate to Q4 FY24, and a sequential decline in gross additions for Paid App Subscriptions with improved churn. Revenue is expected to be between $560 million and $580 million, with a total gross margin of 50.0% and Adjusted EBITDA between $50.0 million and $60.0 million.
Positive Outlook
- Expect a sequential increase in Q1 total gross margin as a result of a seasonal mix-shift toward our Subscription segment.
- Expect a significant Y/Y improvement in Q1 Adjusted EBITDA mainly due to lower sales and marketing expense and continued progress toward achieving our cost reduction plan.
- Expect an Average Net Monthly Paid Connected Fitness Churn rate similar to Q4 FY24.
- Expect sequential improvement in Average Monthly Paid App Subscription Churn, due to stabilization in our Corporate Wellness Paid App subscriber base.
- Total Gross Margin is guided at 50.0%.
Challenges Ahead
- Q1 is typically a seasonally low quarter for hardware sales and we also expect continued sales headwinds as a result of an uncertain macroeconomic environment.
- Our sales outlook reflects our decisions to reduce sales and marketing spend Y/Y as we focus on improving media efficiency, to run fewer promotions within the quarter, and to no longer offer a rental option for our original Bike.
- Q1 Paid Connected Fitness Subscription guidance reflects an expected Y/Y decline in hardware sales based on multiple factors.
- Q1 Paid App Subscription guidance reflects an expected sequential decline in gross additions due to seasonality.
- Total Revenue is guided at between $560.0 and $580.0 million, a Y/Y decline of 4%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income