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Peloton has announced its Q2 fiscal 2021 earnings, and it’s now posted its first billion-dollar quarter, as the momentum keeps climbing for the connected fitness provider.
Peloton also increased its full-year revenue outlook, but warned it still faces challenges in the near term getting products to its customers quickly amid the strong demand.
Peloton Q2 for fiscal 2021 Earnings:
- Earnings per share: 18 cents vs. 9 cents, expected
- Revenue: $1.06 billion vs. $1.03 billion, expected
Peloton’s revenue continued to grow rapidly as sales grew 128% to $1.06 billion compared to $466.3 million a year earlier, beating expectations of $1.03 billion. Peloton has raised its Q3 sales guidance to $1.10 billion. In the wake of the continued demand, Peloton now expects full-year revenue to be over $4 billion, up from the previous forecast of more than $3.9 billion.
In a letter to its shareholders, Peloton said it will be investing more than $100 million in air and expedited ocean freight over the next six months to speed up deliveries to customers.
‘While this investment will dampen our near-term profitability, improving our member experience is our first priority,’ the company said.
Peloton subscriber growth
Peloton expects to more than 2.28 million subscribers by the end of the fiscal year, up from a previous outlook for 2.17 million users. Peloton’s subscription revenue grew to $194.7 million, representing 152% year-over-year growth and 18% of total revenue.
One of Peloton’s key metrics long term is their churn rate. For the Q2 2021 quarter, the average net monthly connected fitness churn was 0.76%, which was a slight increase from 0.65% during the prior period. The company said it expects its churn rate during the current quarter will be below 0.75%, and its churn rate for the entire fiscal 2021 will be below 0.80%, which is better than a prior outlook of under 0.90%. One of the major benefits of Peloton’s platform is as they grow their subscriber base, their cost to provide classes doesn’t dramatically grow. The same instructor can teach a class to 2,000 people with the same cost as 20,000 people.
Other key metrics
Peloton’s Average Monthly Workouts per Connected Fitness Subscription was 21.1, which is 67% year-over-year growth and slightly up from the previous quarter.
Customers with Connected Fitness Subscriptions logged over 98.1 million workouts, which is an increase from 24.3 million workouts in the same period last year (303% year-over-year growth).