Peloton's Q4 Highlights: 28% Decline In Revenue, Focus On Restructuring, Inventory Reduction & More

Peloton's Q4 Highlights: 28% Decline In Revenue, Focus On Restructuring, Inventory Reduction & More
  • Peloton Interactive, Inc. PTON reported a fourth-quarter FY22 sales decline of 28% year-on-year to $678.70 million, missing the consensus of $722.19 million.
  • The total number of members in the quarter grew 15% Y/Y to 6.9 million.
  • Ending connected fitness subscription additions rose 27% Y/Y to 2.96 million, and Ending App subscriptions climbed 12% to 0.98 million.
  • Average net monthly connected fitness churn was 1.41% versus 0.73% a year ago.
  • Gross loss for the quarter was $(29.8) million. The operating expenses jumped 111% to $1.2 billion.
  • Adjusted EBITDA loss for the quarter was $(288.7) million.
  • The company held $1.3 billion in cash and equivalents as of June 30, 2022.
  • EPS loss was $(3.68) versus a $(1.05) loss a year ago.
  • PTON said it had achieved its goals of reducing inventory commitments and outsourcing all manufacturing for connected fitness hardware. The company has shut down its owned manufacturing activities in Taiwan.
  • Subsequently, in early August, PTON simplified its Supply Chain and Member Support organizations, resulting in a downsizing of its employee base by roughly 760 team members.
  • Yesterday, PTON announced first generation Bikes, Guide, select apparel, and accessories are for sale on Amazon.Com, Inc. AMZN amazon.com in the U.S.
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  • The company expects the market for connected fitness to remain challenging for the foreseeable future in FY23.
  • Outlook: Peloton sees Q1 FY23 revenue of $625 million - $650 million, widely missing the consensus of $783.28 million.
  • The company expects Q1 adjusted EBITDA loss of $(115) million - $(90) million.
  • The company's Q1 outlook reflects near-term demand weakness associated with recent hardware price increases and typical seasonal demand softness.
  • Price Action: PTON shares are trading lower by 20.56% at $10.71 on the last check Thursday.

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