PTON Shares Up 5% After Hours, Peloton Releases Q3 2021 Earnings with 141% Sales Growth

PTON Shares Up 5% After Hours, Peloton Releases Q3 2021 Earnings with 141% Sales Growth

American exercise equipment and media company, Peloton Interactive Inc (NASDAQ: PTON) has released its third-quarter earnings with a record 141% growth in its sales when compared to the year-ago period. Here is how the company performed in its relatively better Q3.

Total revenue came in at $1.2623 billion, up from $524.6 million a year earlier. The exercise firm recorded 3 cents per share, as against the 12 cents polled by Refinitiv analysts. Connected Fitness subscriptions, a measure of those who own a Peloton exercise device and pays the monthly subscription shot up 135% to over 2.08 million. Paid Digital Subscriptions surged 404% to approximately 891,000 while Peloton reported that its total Members grew to over 5.4 million in the quarter.

According to the firm, the Connected Fitness Churn rate which measures resubscribing users hit its 6-year lowest levels of 0.31% for the quarter against a 92% 12-month retention rate. Atop this performance, Peloton recorded a net loss of $8.6 million with Q3 Adjusted EBITDA coming in at $63.2 million, representing an Adjusted EBITDA margin of 5.0%.

The improved performance in the company’s sales was fueled by its targeted investments in its shipping line, a venture that has helped it reduce the hassles surrounding the delivery of its product.

“Over the past year, we have invested aggressively in the continued expansion of our supply chain,” the company said in the earnings report. “Today we’re pleased to say that these investments have yielded significant improvements for our Members, as average wait times for our original Bike are now back to pre-COVID-19 levels. While progress has been made, additional work remains to reduce delivery times across the remainder of our product portfolio and regions.”

The push by Peloton to meet up with customer demands for its products is also complemented by its new market expansionary drives and Australia is listed as the next-in-line. The firm also unveiled it has acquired Precor, a fitness startup focused on designing and manufacturing treadmills and other exercise equipment.

These positive tickers have spiked investor activity, pushing the company’s stock to a 1.40% close to $83.78 per share. Peloton is down by about 45% year-to-date.

Peloton Q4 Earnings Projections Trimmed Due to Recalled Treadmills

Over the past year, Peloton has decisively handled its global supply chain challenge, and just as it is about to start reaping the benefits, the firm got hit by a new problem entirely. Its Treadmills in the US are being recalled due to a reported death involving a child as well as many cases of accidents.

The design of the Treadmills is faulted and with the recall, Peloton will effect a redesign of the devices, refund the customers and waive about 3-month subscriptions, all of which is already impacting its Q4 earnings. As reported by CNBC, the recall will also delay the launch of its cheaper Treadmill model, costing about a $165 million decline in the projected fourth-quarter sales.

“Our goal is to have the best safety features for treadmill products on the market,” Chief Executive John Foley said during the call. “There will be a short-term financial impact due to the steps we’re taking.”

The redesign of the new treadmills will have to be approved by the US Consumer Product Safety Commission (CPSC). The process could last as long as 6 to 8 weeks.


PTON Shares Up 5% After Hours, Peloton Releases Q3 2021 Earnings with 141% Sales Growth

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