Peloton, best known for at-home fitness equipment and accompanying streaming fitness services, is planning to raise $500 million in its initial public offering. The filing with the Securities and Exchange Commission also showed the company posting steep losses to support massive revenue gains.
Peloton previously submitted a confidential draft submission of its S-1 statement to SEC in June.
Revenues reached $915 million in its year ending June 30, 2019, a jump of 110 percent from $435 million in fiscal 2018 and up from $218.6 million in 2017. Losses widened to $245.7 million in 2019, up significantly from a loss of $47.9 million the prior year.
According to the filing, Peloton was the first company to make cycles and treadmills equipped with screens for users to join live and recorded fitness classes from their homes, hotel rooms or offices. Its goal, according to the registration documents is to make the at-home fitness experience “as physically rewarding and addictive as attending a live, in-studio class.”
Peloton customers subscribe to the company’s digital library of fitness content, streamed live and on-demand, for $39 per month, in addition to purchasing its bicycles and treadmills, which costs $2,200 to $4,295 apiece.
Peleton has reached 1.4 million total community members, defined as any individual who has a Peloton account. The company’s connected fitness subscriber base, or users with a paid subscription or one that has been paused for up to three months, climbed to 511,202 in 2019 from 245,667 a year ago.
The company says 58 million workouts were completed by Peloton users in fiscal 2019. The company also said it has “consistently seen workouts increase over time,” as evidence of the engagement of its subscribers. On average, its connected fitness subscribers completed 7.5, 8.4, and 11.5 workouts per month in fiscal 2017, 2018, and 2019, respectively.
The weighted average retention rate of its connected fitness subscribers has been 95 percent since fiscal 2016. Peloton also said that 92 percent of its connected fitness products it has sold still had an active subscription as of June 30.
Envisioning a world in which 67 million households own connected fitness equipment, Peloton co-founder and chief executive officer John Foley writes in the S-1 that “Peloton sells happiness.”
“Peloton is so much more than a Bike — we believe we have the opportunity to create one of the most innovative global technology platforms of our time,” writes Foley. “It is an opportunity to create one of the most important and influential interactive media companies in the world; a media company that changes lives, inspires greatness, and unites people.”
Peloton, founded in 2012, raised $550 million in venture capital funding last year at a valuation of $4.15 billion. Sources familiar with Peloton’s plans have said the company is seeking a valuation of $8 billion or $10 billion
Goldman Sachs & Co. and J.P. Morgan Securities are managing the IPO as lead underwriters. The stock will list under the symbol “PTON.”
Photo courtesy Peloton
