Peloton Raises Guidance After Cruising To Q2 Beat

In just its second quarterly earnings report since going public, Peloton Interactive Inc. notched impressive earnings and revenue beat as the company grew its number of connected fitness subscribers 96 percent to 712,005 and its total members to more than 2 million.

The company, which released fiscal second-quarter earnings Wednesday afternoon, reported a net loss of $55.4 million and an adjusted EBITDA loss of $28.4 million representing an adjusted EBITDA margin of -6.1 percent. Earnings per share of a loss of 20 cents beat estimates by 15 cents.

And Peloton reported total revenue grew 77 percent to $466.3 million, topping Wall Street estimates by $42.6 million.

Based on the strong performance, Peloton raised its full-year guidance for FY 2020 from 920,000 to 930,000 ending connected fitness subscribers based on 81 percent growth at the midpoint. It also now projects $1.53 billion to $1.55 billion in total revenue with 68 percent growth at the midpoint.

The company also projects a loss of $115 million to $95 million in adjusted EBITDA with a -6.8 percent adjusted EBITDA margin at the midpoint of ranges.

For the third quarter, Peloton is estimating 843,000 to 848,000 ending connected fitness subscribers based on growth of 85 percent at midpoint. It also calls for $470 million to $480 million total revenue with 50 percent growth at midpoint and a loss of $35 million to $25 million in adjusted EBITDA with a -6.3 percent adjusted EBITDA margin at midpoint of ranges.

Digging deeper into the Q2 numbers, the company touted strong engagement during the period with its connected fitness subscribers working out more than 24.3 million times within Q2 and averaging 12.6 monthly workouts, up from 9.7 in the year-ago period.

Q2 gross profit was $197.1 million, representing 77 percent year-over-year growth. Gross margin for the quarter was steady year-over-year at 42.3 percent.

Total operating expenses of $258.7 million were up 55 percent year-over-year primarily due to increases in marketing expenses, personnel-related expenses 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/PopSugar Fitness