Peloton Nets Another Bump in Revenues, Subscribers

Peloton’s drive for two million subscribers by next fall for its connected bikes and treadmills is ahead of schedule as the at-home fitness giant reported a gain of another 240,0000 users after markets closed on Nov. 5. 

The growth was on the upper end of analyst estimates, although Peloton’s revenue well outpaced expectations. Peloton reported revenues of $757.9 million for its first fiscal quarter, a 20% increase over last quarter and 232% more than the same period a year ago. 

The connected fitness company announced its first profitable quarter in September since it went public in 2019. Peloton revised its fiscal 2021 estimates upward for revenues and connected subscribers to $3.9 billion and 2.17 million, respectively.

The pandemic fueled Peleton’s rise as people shifted to at-home alternatives. Now, it’s actually holding Peloton back in one regard: delivery times. 

“It pains us that we have been underperforming recently compared to the high standards we strive for,” Peloton co-founder and CEO John Foley said in a conference call with analysts after the earnings release. “Wait times for our products have been unexpectedly long. None of us could have expected to see all-time spikes in COVID-19 cases in October and the threat of lockdowns in our global markets.”

Customers are seeing the lengthiest delays for its high-end Bike Plus, which went on sale in September. The wait time for the $2,495 bike was listed at 10-plus weeks on the company’s website on Nov. 5.

Foley said delays at the Port of Los Angeles, COVID-related warehouse closures along with fires on the West Coast, and hurricanes elsewhere in the U.S. have been factors in the long wait times.  

Peloton CFO Jill Woodworth said there will be Bike Plus delays “for a couple more quarters.” She added that shipping-related costs are expected to rise as Peloton seeks to utilize air freight to bolster shipments of equipment from Asia. 

“It is an anomaly,” Woodworth said. “We don’t expect [to use air shipments] moving forward. We thought it was 100% the right thing to do.”

Peloton has more than doubled its U.S. warehouses over the last year to 47, its delivery employee count to 2,200 and the number of vans to 700 to keep up with demand.