Peloton sees strong sales during coronavirus, subscriber growth despite mixed 3Q earnings report

Exercise bike and treadmill company posted revenue of $524.6 million, surpassing Wall Street expectations

Peloton's sales have surged 66 percent as more people are working out to keep themselves busy during the coronavirus pandemic.

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In its mixed fiscal third-quarter earnings report Wednesday, the exercise bike and treadmill company posted revenue of $524.6 million, surpassing Wall Street expectations of $486.1 million.

The company also reported a loss of $55.6 million, or 20 cents per share, missing the analyst estimate by 2 cents. The company said it was primarily due to "non-recurring litigation and settlement expenses in the quarter." Total operating expenses increased 88 percent year-over-year to $304.2 million.

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Product revenue jumped 61 percent to $420.2 million, led by the connected bike, which saw demand spike in the last few weeks of the third quarter.

Peloton

Subscription revenue surged 92 percent to $98.2 million as connected fitness subscribers grew 94 percent to over 886,100 while paid digital subscribers grew 64 percent to over 176,600. From March 16 through April 30, 1.1 million people signed up for the company's free trial, which was extended from 30 to 90 days.

Other revenue, which primarily consists of the sale of Peloton-branded apparel, grew 53 percent to $6.1 million.

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Despite the pandemic shutting down 97 of the company's retail locations, total membership grew to over 2.6 million, a 30 percent quarter-over-quarter increase.

Peloton

The company said Wednesday it expects the majority of its showrooms to remain closed for several more weeks. The company also warned customers that deliveries likely will remain delayed because of heightened demand and supply chain constraints.

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Looking to the full 2020 fiscal year, Peloton estimates full-year revenue in the range of $1.72 billion to $1.74 billion and expects 1.04 million to 1.05 million connected fitness subscribers.

TickerSecurityLastChangeChange %
PTONPELOTON INTERACTIVE42.61+1.54+3.75%

Shares of Peloton closed at $38.03 during Wednesday's trading session, up 5 percent.

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