Peloton shares have fallen 13.5 per cent after the beleaguered fitness company flagged major losses for the current quarter, driven by a A$112 million settlement with Dish Network over streaming technology.
The company posted better-than-expected revenue for the March quarter, despite slipping by 22 per cent, to $1.12 billion.
They also posted A$411.35 million in net losses for the March quarter, with EBITDA losses of A$27.9 million.
Although the company is still bleeding money, this reduced EBITDA loss is a sign of the furious cost cutting the company has undergone since posted a whopping A$289.4 EBITDA loss for the first quarter of 2022, as COVID-era subscribers dried up.
Subscriptions from Peloton equipment owners rose 5 per cent to 3.11 million, a modest increase but also above Wall Street predictions of 3.09 million.
The company’s digital subscriber growth — those who use the mobile or TV app without equipment — was slower than expected with 853,00 subs, compared to the expected 904,563.
The current quarter will fall far behind Wall Street forecast, with a EBITDA loss of between A$14.9 million and A$37 million blowing out far beyond the $1.79 million in losses expected by analysts.
CEO Barry McCarthy put a rosy face on the financials, highlighting the wins, and noting overseas expansion.
“Last quarter I described our performance as the best in my twelve months with Peloton. Our Q3 performance was even better,” he enthused.
“You also see us leaning into international growth in FY24,” McCarthy explained in his letter to investors.
“This past year we dramatically reduced our operating losses internationally, but it’s not enough to reduce operating losses. We have more work to do to unlock international growth and profit.
“We’ll have more to say about our international business next quarter. In Q3, international Connected Fitness Subscriptions grew faster than the U.S.”
CFO Liz Coddington is more realistic, admitting “lower near-term visibility as we enter what is typically the lowest volume quarter of our fiscal year.”
Coddington added: “While driving operational and cost efficiency remains an important business objective, accelerating subscriber growth is our north star goal at Peloton and remains a challenge that we are fully embracing.”
