Peloton Interactive Inc. reported total revenue grew 232 percent in the first quarter ended September 30 to $757.9 million, exceeding Wall Street’s consensus target of $748.1 million. The company lifted its sales outlook for the full fiscal year but again warned of supply chain constraints.

The gains were driven by strong demand for its Bike and Bike+, the full resumption of Tread+ sales and sustained low churn levels. During the quarter, Peloton launched Bike+, reduced the price of its flagship Peloton Bike and announced the upcoming availability of its new Peloton Tread.

Connected Fitness segment revenue was $601.4 million, representing 274 percent year-over-year growth and 79 percent of total revenue. Connected Fitness revenue benefited from a large backlog of Bike orders from Q4 of fiscal 2020 and continued strong global demand for its Bike product portfolio. The full resumption of Tread+ sales across the U.S. also materially contributed to growth in the quarter.

Subscription revenue grew to $156.5 million, representing 133 percent year-over-year growth and 21 percent of total revenue, driven by strong Connected Fitness Product sales and continued low Average Net Monthly Connected Fitness Churn of 0.65 percent. Peloton’s Connected Fitness Subscription base climbed to over 1.33 million at the end of Q1, representing year-over-year growth of 137 percent. As of September 30, 96 percent of its Connected Fitness Subscriptions were on month-to-month payment plans.

Connected fitness subscribers are people who pay a monthly fee to sync Peloton’s workout classes to their Peloton equipment, versus accessing the programs separately through a phone or tablet device and paying a lower rate.

Reflecting typical seasonality, Member engagement eased modestly from Q420 but remained well above year-ago levels. In Q1,

Average Monthly Workouts per Connected Fitness Subscription was 20.7, compared to 11.7 in the year-ago period. Users with Connected Fitness Subscriptions worked out with the service approximately 77.8 million times, up from 19.2 million workouts, in the same period last year, representing a 306 percent year-over-year growth.

Net income reached $69.3 million, or 20 cents a share, in its first quarter ended September 30 against a loss of $49.8 million, or $1.29 a year ago. Wall Street’s consensus estimate had been 11 cents. Adjusted EBITDA was $118.9 million representing an Adjusted EBITDA Margin of 15.7 percent versus a negative 9.2 percent in the same period last year.

The company now expects to bring in more than $3.9 billion in total revenue in 2021, up from a prior range of $3.5 billion to $3.65 billion. Analysts on average had been calling for $3.63 billion.

Peloton, however, expects profits to be pressured as it quickly opens new manufacturing facilities and because of extra shipping-related expenses it will incur during the holiday season.

“As we rapidly scale our organization to meet the extraordinary demand for our products, we realize that some of our members have faced extended delays associated with receiving our products or are having support requests fulfilled,” CEO John Foley said in a letter to shareholders.

The September 9 launch of the Peloton Bike+, which includes more features than its original spinning bike, “drove call volumes and unacceptably long wait times, well beyond our expectations,” Foley added. Peloton said it hopes to meet normalized order-to-delivery windows for its bikes by the end of the calendar year, but that wait times for its newest Bike+ “will likely be elevated for the next couple of quarters.”

Photo courtesy Peloton