Released on November 2, 2023, Peloton Interactive Inc (PTON, Financial)'s Q1 FY2024 earnings report shows a solid performance, meeting or exceeding the company's guidance. The report highlights the company's focus on business performance, leaving behind the negative surprises and distractions of past quarters. The company is preparing for the seasonal holiday rush and cementing important partnerships expected to drive increased brand relevance and growth.
Performance and Challenges
Peloton Interactive Inc (PTON, Financial) has announced collaborations with Liverpool Football Club (LFC), the University of Michigan, lululemon, New York Road Runners, and most recently, the NBA and WNBA. These partnerships are expected to broaden awareness for Peloton and the impact it has on Members’ lives. The company's largest growth initiative so far, Peloton Bike Rental subscriptions, ended 1QFY24 with 54 thousand rental subscribers in the US and Canada. The company expects to finish the fiscal year with ~75 thousand subscribers and to grow its Bike rental subscription revenues for FY24 by ~90%+ Y/Y.
Financial Achievements
The company's financial results for Q1 FY2024 show a total revenue of $595.5 million, comprised of $180.6 million of Connected Fitness segment revenue and $415.0 million of Subscription revenue. Total Gross profit was $285.4 million for the three months ended September 30, 2023, yielding a gross margin of 47.9%. The company ended the quarter with 2.96 million Ending Paid Connected Fitness Subscriptions and 763 thousand Peloton App subscribers.
Future Outlook
Peloton Interactive Inc (PTON, Financial) expects a return to revenue growth in the second half of the fiscal year, with positive adjusted EBITDA and substantial positive free cash flow. The company's Full Year guidance reflects revenue growth acceleration in the second half of the fiscal year, fueled, in part, by the expected relaunch of Tread+. It also reflects expected continued growth of its Bike rental program and strong growth in its International markets.
Explore the complete 8-K earnings release (here) from Peloton Interactive Inc for further details.
