In just its third quarterly earnings report since going public, Peloton Interactive Inc. notched another revenue beat as the company grew its number of connected fitness subscribers 94 percent to 886,100 and its total members to more than 2.6 million.
Peloton, which released fiscal third-quarter earnings Wednesday afternoon, reported total revenue grew 65.6 percent to $524.6 million, topping Wall Street estimates by $33.5 million.
The company reported a net loss of $55.6 million but adjusted EBITDA of $23.5 million, representing an adjusted EBITDA margin of 4.5 percent. Earnings per share of a loss of 20 cents was short of estimates by 1 cent.
Based on the strong performance, for the fourth quarter, Peloton is estimating $500 million to $520 million total revenue with 128 percent growth at midpoint and $55 million to $65 million in EBITDA margin at midpoint of ranges.
Peloton also raised its full-year guidance for FY 2020 from 1.04 million to 1.05 million connected fitness subscribers based on 104 percent growth at the midpoint. It also now projects $1.72 billion to $1.74 billion in total revenue with 89 percent growth at the midpoint.
The company also projects $30 million to $40 million in adjusted EBITDA with a 2 percent adjusted EBITDA margin at the midpoint of ranges.
Total operating expenses of $304.2 million were up 88 percent year-over-year, representing 58 percent of total revenue versus the prior-year period of 51 percent.
Excluding non-recurring litigation and settlement expenses of $49.3 million, total operating expense grew 63 percent year-over-year, and was flat year-over-year as a percentage of revenue. Operating expense growth was driven by higher marketing, personnel-related, and rent and occupancy expenses to support growth, including expansion into new international markets and fitness verticals.
Look for more on Peloton’s quarter in Thursday’s SGB Executive.
Photo courtesy Peloton