Peloton Interactive, Inc. (PTON) Bundle
A Brief History of Peloton Interactive, Inc.
Peloton Interactive, Inc., founded in 2012, has emerged as a leader in the connected fitness industry, offering a unique blend of high-tech exercise equipment and engaging digital content.
Company Overview
As of September 30, 2024, Peloton reported a total revenue of $586 million, a decrease of 1.6% from $595.5 million in the same quarter of 2023. The revenue breakdown includes:
| Revenue Source | Q1 2024 (in millions) | Q1 2023 (in millions) | % Change |
|---|---|---|---|
| Connected Fitness Products | $159.6 | $180.6 | (11.6)% |
| Subscription | $426.3 | $415.0 | 2.7% |
Financial Performance
For the quarter ended September 30, 2024, Peloton reported a net loss of $0.9 million compared to a net loss of $159.3 million in the same quarter of the previous year. Key financial metrics include:
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Gross Profit | $303.8 million | $285.4 million |
| Operating Expenses | $291.2 million | $417.6 million |
| Adjusted EBITDA | $115.8 million | $9.1 million |
Subscription Metrics
Peloton's subscription model continues to be a significant revenue driver. As of September 30, 2024, the company reported:
- Ending Paid Connected Fitness Subscriptions: 2,900,069, down from 2,964,223 in 2023.
- Ending Paid App Subscriptions: 582,137, down from 762,532 in 2023.
- Average Monthly Paid App Subscription Churn: 7.1%, up from 6.3% in 2023.
Cost Structure
The cost of revenue for the quarter was $282.2 million, down from $310.1 million in the prior year. The breakdown includes:
| Cost Type | Q1 2024 (in millions) | Q1 2023 (in millions) |
|---|---|---|
| Connected Fitness Products | $145.0 | $174.9 |
| Subscription | $137.2 | $135.2 |
Debt Obligations
As of September 30, 2024, Peloton had total outstanding borrowings of $997.5 million under its credit agreement. The effective interest rate on the Term Loan was 11.9%.
Restructuring Plans
Peloton has initiated multiple restructuring plans aimed at realigning its operational focus. The latest plan, initiated in April 2024, is expected to incur additional cash restructuring charges of approximately $30 million. The company has already recognized restructuring expenses of $2.9 million for the three months ended September 30, 2024.
Stock Performance
As of the end of September 2024, Peloton's common stock had a weighted-average exercise price of $20.62 for outstanding stock options. The total stockholders' deficit stood at $480.3 million.
A Who Owns Peloton Interactive, Inc. (PTON)
Major Shareholders
As of 2024, Peloton Interactive, Inc. (PTON) has a diverse ownership structure comprising institutional investors, individual shareholders, and company insiders. The following table summarizes the major shareholders of Peloton as of September 30, 2024:
| Shareholder Type | Percentage Ownership | Share Count |
|---|---|---|
| Institutional Investors | 74.8% | 285,000,000 |
| Insider Ownership | 5.5% | 20,500,000 |
| Retail Investors | 19.7% | 75,000,000 |
Institutional Ownership
Institutional ownership is significant in Peloton, representing approximately 74.8% of total shares outstanding. Key institutional shareholders include:
- Vanguard Group - 9.9%
- BlackRock - 8.7%
- Fidelity Investments - 7.2%
- State Street Corporation - 6.5%
Insider Ownership
Insider ownership, which includes executives and board members, accounts for about 5.5% of shares. Notable insiders include:
- John Foley (Co-founder and former CEO) - 3.5%
- William Lynch (CEO) - 1.0%
- Other executives - 1.0%
Retail Investor Ownership
Retail investors hold approximately 19.7% of Peloton's shares, reflecting a significant interest from individual shareholders. This category has seen fluctuations based on stock performance and market sentiment.
Stock Performance
As of September 30, 2024, Peloton's stock performance has been characterized by the following metrics:
| Metric | Value |
|---|---|
| Current Share Price | $2.50 |
| Market Capitalization | $1.04 billion |
| 52-Week High | $8.12 |
| 52-Week Low | $1.92 |
Financial Overview
For the fiscal quarter ending September 30, 2024, Peloton reported the following financial results:
| Financial Metric | Value (in millions) |
|---|---|
| Total Revenue | $586.0 |
| Gross Profit | $303.8 |
| Net Loss | $(0.9) |
| Adjusted EBITDA | $115.8 |
The company's restructuring efforts and strategic shifts have aimed to stabilize its financial performance while adapting to market changes, with a focus on improving profitability and cash flow.
Conclusion on Ownership Structure
Peloton's ownership structure, dominated by institutional investors, reflects a strong backing from major financial entities. The mix of insider and retail investor ownership contributes to a dynamic shareholder base, influencing corporate governance and strategic direction.
Peloton Interactive, Inc. (PTON) Mission Statement
Peloton Interactive, Inc. focuses on delivering an engaging fitness experience by combining innovative technology with high-quality fitness equipment and content. The company's mission is to empower individuals to lead healthier lives through a connected fitness platform that provides community engagement and personalized wellness.
Financial Overview
As of September 30, 2024, Peloton reported the following financial metrics:
| Metric | Q1 2025 | Q1 2024 | % Change |
|---|---|---|---|
| Total Revenue | $586.0 million | $595.5 million | (1.6)% |
| Connected Fitness Products Revenue | $159.6 million | $180.6 million | (11.6)% |
| Subscription Revenue | $426.3 million | $415.0 million | 2.7% |
| Net Loss | $(0.9) million | $(159.3) million | 83.4% |
| Adjusted EBITDA | $115.8 million | $9.1 million | 1,272.5% |
Operational Metrics
Peloton's operational metrics as of September 30, 2024, include:
| Metric | Value |
|---|---|
| Ending Paid Connected Fitness Subscriptions | 2,900,069 |
| Average Net Monthly Paid Connected Fitness Subscription Churn | 1.9% |
| Ending Paid App Subscriptions | 582,137 |
| Average Monthly Paid App Subscription Churn | 7.1% |
Subscription Performance
Peloton's subscription performance metrics are as follows:
| Metric | Q1 2025 | Q1 2024 |
|---|---|---|
| Subscription Gross Profit | $289.1 million | $279.7 million |
| Subscription Contribution | $305.7 million | $298.7 million |
| Subscription Gross Margin | 67.8% | 67.4% |
| Subscription Contribution Margin | 71.7% | 72.0% |
Cost Structure
Peloton's cost structure for the three months ended September 30, 2024, is detailed below:
| Cost Type | Q1 2025 | Q1 2024 |
|---|---|---|
| Connected Fitness Products Cost of Revenue | $145.0 million | $174.9 million |
| Subscription Cost of Revenue | $137.2 million | $135.2 million |
| Total Cost of Revenue | $282.2 million | $310.1 million |
| Total Gross Profit | $303.8 million | $285.4 million |
Market Trends and Future Outlook
Peloton continues to adapt to market trends by focusing on enhancing its digital content offerings and expanding its connected fitness ecosystem. The company aims to improve customer retention and reduce churn rates by enhancing user engagement through community features and personalized content.
How Peloton Interactive, Inc. (PTON) Works
Business Model
Peloton Interactive, Inc. operates primarily through two segments: Connected Fitness Products and Subscription Services. The Connected Fitness Products segment includes the sale of fitness equipment like bikes and treadmills, while the Subscription Services segment encompasses monthly fees for access to workout content via the Peloton app and All-Access Membership.
Financial Performance
For the three months ended September 30, 2024, Peloton reported the following financial metrics:
| Metric | Q1 2025 (2024) | Q1 2024 (2023) | % Change |
|---|---|---|---|
| Total Revenue | $586.0 million | $595.5 million | (1.6)% |
| Connected Fitness Products Revenue | $159.6 million | $180.6 million | (11.6)% |
| Subscription Revenue | $426.3 million | $415.0 million | 2.7% |
| Net Loss | $(0.9) million | $(159.3) million | 81.3% |
| Subscription Gross Profit | $289.1 million | $279.7 million | 3.4% |
| Subscription Gross Margin | 67.8% | 67.4% | 0.6% |
| Free Cash Flow | $10.7 million | $(83.2) million | — |
Key Operational Metrics
As of September 30, 2024, Peloton reported the following operational statistics:
| Metric | Q1 2025 (2024) | Q1 2024 (2023) |
|---|---|---|
| Ending Paid Connected Fitness Subscriptions | 2,900,069 | 2,964,223 |
| Average Net Monthly Paid Connected Fitness Subscription Churn | 1.9% | 1.5% |
| Ending Paid App Subscriptions | 582,137 | 762,532 |
| Average Monthly Paid App Subscription Churn | 7.1% | 6.3% |
Revenue Breakdown
Revenue for the three months ended September 30, 2024, was divided as follows:
| Segment | Revenue (in millions) | % of Total Revenue |
|---|---|---|
| Connected Fitness Products | $159.6 | 27.2% |
| Subscription | $426.3 | 72.8% |
| Total | $586.0 | 100.0% |
Cost Structure
The cost of revenue for Peloton for the three months ended September 30, 2024, was:
| Cost Type | Cost (in millions) |
|---|---|
| Connected Fitness Products | $145.0 |
| Subscription | $137.2 |
| Total Cost of Revenue | $282.2 |
Operating Expenses
Operating expenses for the same period included:
| Expense Type | Expense (in millions) |
|---|---|
| Sales and Marketing | $81.9 |
| General and Administrative | $119.5 |
| Research and Development | $58.5 |
| Total Operating Expenses | $291.2 |
Cash Flow Statement
The cash flow details for the three months ended September 30, 2024, are as follows:
| Cash Flow Type | Cash Flow (in millions) |
|---|---|
| Net Cash Provided by Operating Activities | $12.5 |
| Capital Expenditures | $(1.8) |
| Free Cash Flow | $10.7 |
Debt and Liabilities
As of September 30, 2024, Peloton's debt obligations included:
| Debt Instrument | Amount (in millions) |
|---|---|
| Term Loan | $1,000.0 |
| Convertible Notes (2026 Notes) | $199.0 |
| Convertible Notes (2029 Notes) | $350.0 |
| Total Debt | $1,546.5 |
Restructuring Initiatives
Peloton has initiated restructuring plans aimed at reducing costs and improving operational efficiency, which include:
- Reduction in global headcount.
- Closure of retail locations.
- Transitioning to third-party logistics providers.
- Expected annual run-rate expense reductions of over $200 million by fiscal year 2025.
How Peloton Interactive, Inc. (PTON) Makes Money
Revenue Streams
Peloton Interactive, Inc. generates revenue primarily through two major segments: Connected Fitness Products and Subscription services.
Connected Fitness Products
The Connected Fitness Products segment includes sales of the Peloton Bike, Bike+, Tread, Tread+, Guide, Row, and various Precor products. Revenue from this segment for the three months ended September 30, 2024, was $159.6 million, a decrease of 11.6% compared to $180.6 million for the same period in 2023.
| Metric | Q1 2024 | Q1 2023 | % Change |
|---|---|---|---|
| Connected Fitness Products Revenue | $159.6 million | $180.6 million | (11.6%) |
| Cost of Revenue | $145.0 million | $174.9 million | (17.1%) |
| Gross Profit | $14.6 million | $5.7 million | 159.2% |
| Gross Margin | 9.2% | 3.1% | Increase |
Subscription Services
The Subscription segment includes revenue from Connected Fitness and App subscriptions, which provide access to Peloton's library of live and on-demand fitness classes. As of September 30, 2024, Subscription revenue was $426.3 million, an increase of 2.7% from $415.0 million in Q1 2023.
| Metric | Q1 2024 | Q1 2023 | % Change |
|---|---|---|---|
| Subscription Revenue | $426.3 million | $415.0 million | 2.7% |
| Cost of Subscription Revenue | $137.2 million | $135.2 million | 1.5% |
| Gross Profit | $289.1 million | $279.7 million | 3.4% |
| Gross Margin | 67.8% | 67.4% | Increase |
Membership Metrics
As of September 30, 2024, Peloton had 2,900,069 paid Connected Fitness subscriptions, reflecting a slight decrease from 2,964,223 in the previous year. The average monthly churn rate for these subscriptions was 1.9% compared to 1.5% in the prior year.
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Ending Paid Connected Fitness Subscriptions | 2,900,069 | 2,964,223 |
| Average Net Monthly Paid Connected Fitness Subscription Churn | 1.9% | 1.5% |
Operating Expenses
Operating expenses for Peloton also saw significant changes. For the three months ended September 30, 2024, total operating expenses were $291.2 million, down from $417.6 million in the prior year, primarily due to reductions in sales and marketing, general and administrative, and research and development costs.
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Total Operating Expenses | $291.2 million | $417.6 million |
| Sales and Marketing Expenses | $81.9 million | $146.0 million |
| General and Administrative Expenses | $119.5 million | $151.1 million |
| Research and Development Expenses | $58.5 million | $78.7 million |
Net Loss and Cash Flow
For the three months ended September 30, 2024, Peloton reported a net loss of $0.9 million, a significant improvement from a net loss of $159.3 million in the same period in 2023. The company generated $12.5 million in cash from operating activities compared to a cash used of $79.2 million in the previous year.
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Net Loss | $(0.9 million) | $(159.3 million) |
| Cash from Operating Activities | $12.5 million | $(79.2 million) |
Conclusion on Revenue Strategies
Peloton's revenue generation strategy focuses on a combination of hardware sales and subscription services, with an emphasis on maintaining low churn rates and high gross margins across its subscription offerings.
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Article updated on 8 Nov 2024
Resources:
- Peloton Interactive, Inc. (PTON) Financial Statements – Access the full quarterly financial statements for Q1 2025 to get an in-depth view of Peloton Interactive, Inc. (PTON)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Peloton Interactive, Inc. (PTON)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.