Highlights from Peloton’s Investor and Analyst Session

Peloton Investor

Last week, Peloton held a virtual “Investor and Analyst Session” to discuss the previous quarter’s earnings.

The entire deck is available online, but I’ll highlight some of the more important things to save you the time.

Peloton highlights its vertically integrated business. Now that Apple has announced Fitness+, it’s going to be important for Peloton to continue to show investors that Apple isn’t competing with them, but rather competing with Beach Body on Demand and Daily Burn.

Peloton also highlights how it’s been growing its annual revenue 100% year over year, and its great quarter wasn’t just because of COVID-19.

Peloton says something that I’ve been repeating to anyone who’ll listen. Peloton wants to be the next Nike more than they want to be a technology-only company. I firmly believe that Peloton’s apparel business is a key part of increasing average revenue per user over the next few years.

It then highlighted its new products (Bike+ and Tread), and discussed the success of its expansion beyond classes that are tied to a Bike or Tread along with the success of its artists series.

The growth of the strength, floor, yoga, and outdoor classes is key as it shows Peloton’s brand growing past “just the classes for my bike.” It’s becoming a key brand for all types of fitness.

A common thing I hear on social media is that Peloton is only for rich people. Peloton products are certainly a premium, but they last much longer than cell phones that people easily pay $1,000 for. 46% of Peloton’s sales last quarter came from people making less than $100,000 per year. Its partnership with Affirm is certainly helping that, and I believe Peloton will offer leases in the future. I could see a $79-$99/month lease option that includes the subscription.

The final slide says that subscriptions will remain its priority, and I think that shows a very healthy future for Peloton’s business. Its churn is under 1%, and once people invest in Peloton hardware, they aren’t likely to cancel in the future. Even when people upgrade, if they sell their Bike/Tread on Facebook, the person who upgrades will become a subscriber.

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