Clicky

  • Login
  • Register
  • Submit Your Content
  • Contact Us
Friday, August 23, 2024
World Tribune
No Result
View All Result
  • Home
  • News
  • Business
  • Technology
  • Sports
  • Health
  • Food
Submit
  • Home
  • News
  • Business
  • Technology
  • Sports
  • Health
  • Food
No Result
View All Result
World Tribune
No Result
View All Result

Peloton (PTON) earnings Q4 2024

August 22, 2024
in News
Reading Time: 5 mins read
A A
Peloton (PTON) earnings Q4 2024
0
SHARES
ShareShareShareShareShare

READ ALSO

July home sales break 4-month losing streak as supply rises nearly 20%

The search for a stock market alternative

Peloton (PTON) earnings Q4 2024

Peloton said Thursday it is digging itself out of the red and eked out a slight sales increase for the first time in nine quarters as it slashed its overall losses. 

The beleaguered connected fitness company, which is currently being run by two board members after former CEO Barry McCarthy resigned earlier this year, saw sales grow by 0.2% during its fiscal fourth quarter. While only a modest uptick, it’s the first time Peloton posted year-over-year revenue growth since its 2021 holiday quarter. 

The company also indicated it’s ready to focus on profitability over growth with significant cuts to its marketing and sales spending and meaningful increases to free cash flow and adjusted EBITDA. Those cuts helped Peloton narrow its quarterly losses to $30.5 million from $241.1 million in the year-ago period.

The company’s shares rose more than 10% in premarket trading.

Here’s how the Bike and Tread maker performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

  • Loss per share: 8 cents vs. 17 cents expected
  • Revenue: $644 million vs. $631 million expected

For the three-month period that ended June 30, Peloton significantly narrowed its losses. The company posted a loss of $30.5 million, or 8 cents per share, compared with a loss of $241.8 million, or 68 cents per share, a year earlier. 

Sales rose to $643.6 million, up about 0.2% from $642.1 million a year earlier. That’s only a $1.5 million increase, but Peloton did it at a time when sales are typically a bit slower for the company, because the quarter bleeds into the summer when people are more focused on going out and traveling than working out. The last time Peloton delivered year-over-year sales growth was during its holiday season in 2021, which is typically the company’s strongest quarter.

Secondary market gains

During the quarter, sales for Peloton’s pricy connected fitness hardware fell about 4%, continuing a trend for the company. But subscription revenue rose by 2.3%, and the segment’s gross margin increased by 1 percentage point.

Though hardware sales were down, Peloton is growing its subscription revenue through the secondary market where people can buy used stationary bikes for a fraction of the cost of a new one. During the quarter, subscription revenue from hardware purchased on the secondary market grew 16% year over year.

“We believe a meaningful share of these subscribers are incremental, and they exhibit lower net churn rates than rental subscribers,” the company said in a letter to shareholders.

While hardware sales have hurt Peloton’s overall performance, sales for its Tread are growing after it overcame a costly recall. During the quarter, sales from Peloton’s treadmill portfolio grew 42% year over year.

The company is also seeing some positive signs in its Bike rental program, which allowed it to clear through a glut of inventory. During the quarter, average net monthly paid subscription churn for rentals was down 1.1 percentage points. Demand has been so steady, it no longer has the refurbished inventory levels necessary to supply that side of the program. The company ceased offering its original Bike rental program on Aug. 1 and since then, has seen demand grow for its Bike+ rental, refurbished original Bike sales and financed new Bike sales.

“These alternative programs have stronger unit economics than original Bike rental, with more cash paid upfront and a stronger retention profile,” the company said in its shareholder letter.

Ever since Peloton’s pandemic heyday came to an end, the company has struggled to generate free cash flow and ensure it has enough assets on its balance sheet to cover its many liabilities. Earlier this year, it announced a sprawling restructuring plan that included cutting 15% of the company’s global workforce to achieve $200 million in annualized cost savings by the end of fiscal 2025.

Those efforts are starting to bear fruit.

During the quarter, Peloton delivered adjusted EBITDA and free cash flow for the second consecutive quarter – a feat it had not pulled off since the height of the Covid-19 pandemic. It posted $70 million of adjusted EBITDA, far more than the $53 million that analysts had expected, according to StreetAccount. 

That metric was up $105 million compared with the year-ago period and $64 million quarter over quarter.

Peloton also generated $26 million in free cash flow, compared with negative $74 million in the year-ago period and $8 million in the prior quarter.

Improvements to Peloton’s balance sheet come after the company completed massive refinancing of its debt that staved off a looming liquidity crunch and pushed out its debt maturities by several years.

Peloton noted that the search for its next CEO is “top of mind for all stakeholders.” “The process is well underway and we look forward to sharing more when we have an announcement,” it said.

Profit over growth

For the year ahead, Peloton is planning to invest in its hardware and software to deliver a better user experience, among other initiatives. However, its guidance assumes that investments in these new initiatives “will not deliver subscriber growth within the fiscal year,” indicating Peloton may finally be shifting its focus away from growth in favor of profitability and free cash flow generation.

That’s evidenced by its reductions to sales and marketing spending — an expense that has long dragged down Peloton’s balance sheet and has been criticized as being too high for the company’s size.

During the quarter, Peloton cut sales and marketing spending by $25.5 million, or 19% year over year. It said it expects to continue to make reductions to its marketing budget throughout fiscal 2025.

For the current quarter, Peloton is projecting sales to be worse than Wall Street expected but is guiding to higher-than-forecast adjusted EBITDA. The company said it anticipates sales to be between $560 million and $580 million, compared with estimates of $609 million, according to LSEG. It’s expecting to post adjusted EBITDA of $50 million to $60 million, compared with estimates of $45 million, according to StreetAccount.

StreetAccount analysts had expected the number of connected fitness subscribers to be 2.96 million during the current quarter, but Peloton projects a range of 2.88 million to 2.89 million instead.

For the full year, Peloton expects sales to be between $2.4 billion and $2.5 billion, compared with estimates of $2.7 billion, according to LSEG.

Don’t miss these insights from CNBC PRO

Credit: Source link

ShareTweetSendSharePin
Previous Post

Our verdict on the Pixel 9 Pro and XL

Next Post

What’s a rage ritual retreat?

Related Posts

July home sales break 4-month losing streak as supply rises nearly 20%
News

July home sales break 4-month losing streak as supply rises nearly 20%

August 22, 2024
The search for a stock market alternative
News

The search for a stock market alternative

August 22, 2024
What a Kamala Harris victory could mean for Europe
News

What a Kamala Harris victory could mean for Europe

August 22, 2024
Kamala Harris’ record shows she would focus on China, Indo-Pacific: CFR expert
News

Kamala Harris’ record shows she would focus on China, Indo-Pacific: CFR expert

August 22, 2024
FTX Sam Bankman-Fried former partner Ryan Salame seeks to void guilty plea
News

FTX Sam Bankman-Fried former partner Ryan Salame seeks to void guilty plea

August 22, 2024
Microsoft changes reporting to boost cloud consumption visibility
News

Microsoft changes reporting to boost cloud consumption visibility

August 22, 2024
Next Post
What’s a rage ritual retreat?

What's a rage ritual retreat?

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

What's New Here!

Paulina Gretzky, Dustin Johnson get cozy in Portugal in new photos

Paulina Gretzky, Dustin Johnson get cozy in Portugal in new photos

July 24, 2024
Kevin James recreates viral video in electric Mets moment

Kevin James recreates viral video in electric Mets moment

August 21, 2024
China to use ultra-long bonds for consumption as retail sales slump

China to use ultra-long bonds for consumption as retail sales slump

July 25, 2024
Caeleb Dressel finishes sixth in 50-meter freestyle shocker

Caeleb Dressel finishes sixth in 50-meter freestyle shocker

August 2, 2024
Why has the world’s happiest country just plummeted in expat rankings?

Why has the world’s happiest country just plummeted in expat rankings?

August 5, 2024
How Nerio Alessandri started Technogym in his parent’s garage and turned it into a billion-dollar company heading the Paris Olympics

How Nerio Alessandri started Technogym in his parent’s garage and turned it into a billion-dollar company heading the Paris Olympics

August 8, 2024
Colin Huang, founder of Temu parent company, now China’s richest person

Colin Huang, founder of Temu parent company, now China’s richest person

August 9, 2024

About

World Tribune is an online news portal that shares the latest news on world, business, health, tech, sports, and related topics.

Follow us

Recent Posts

  • Zach Wilson’s Broncos future in question after losing starting QB battle
  • Mindset Care raises $13 million to streamline disability benefit applications
  • Snap is reportedly working on a new pair of augmented reality Spectacles
  • In election race, prediction markets are challenging traditional polling

Newslatter

Loading
  • Submit Your Content
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2024 World Tribune - All Rights Reserved!

No Result
View All Result
  • Home
  • News
  • Business
  • Technology
  • Sports
  • Health
  • Food

© 2024 World Tribune - All Rights Reserved!

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In