Peloton Stock Up on Q4 Earnings and Revenue Beat

Peloton Interactive, Inc. PTON reported fourth-quarter fiscal 2024 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. Following the results, the company's shares increased 12% in the pre-market trading session on Aug 22.

Earnings and Revenues

PTON reported an adjusted loss per share of 8 cents, narrower than the Zacks Consensus Estimate of a loss of 18 cents. In the prior-year quarter, the company had reported an adjusted loss of 68 cents per share. Revenues for the quarter under review came in at $643.6 million, beating the Zacks Consensus Estimate of $626 million. The metric was almost flat year over year.

It reported Connected Fitness segment revenues of $212.1 million, down 4% year over year. However, Subscription revenues increased 2% year over year to $431.4 million.

Operating Metrics

At the close of the quarter, Peloton recorded 2.98 million Ending Paid Connected Fitness Subscriptions, marking a 75 thousand net decline. The average net monthly paid Connected Fitness subscription churn stood at 1.9%.

Concluding the quarter, it registered 615 thousand Peloton App subscribers, reflecting a net decrease of 59 thousand. Average monthly paid app subscription churn stood at 8.4%.

Costs

In the three months ending on Jun 30, 2024, total operating expenses, incorporating restructuring and impairment expenses, amounted to $375.3 million compared with $426.8 million in the prior-year quarter. General and administrative expenses saw a decline of $23.3 million to $186.2 million compared with a year ago.

Outlook

For first-quarter fiscal 2025, management expects Ending Paid Connected Fitness Subscriptions in the range of 2.88-2.89 million, down 3% year over year. On the other hand, Ending Paid App Subscriptions is predicted in the range of 0.56-0.57 million. Revenues for the quarter are projected to be between $560 million and $580 million, down 4% (from the midpoint of guidance) from the year-ago level.

For fiscal 2025, the company forecasts Ending Paid Connected Fitness Subscriptions in the range of 2.68-2.75 million, down 9% (from the midpoint of guidance) from the year-earlier level. On the other hand, Ending Paid App Subscriptions is anticipated in the range of 0.57-0.62 million, down 3% (from the midpoint of guidance) from the year-earlier level. Revenues for the quarter are expected to be between $2,400 million and $2,500 million, down 9% (from the midpoint of guidance) from a year ago.

The company currently has a Zacks Rank #3 (Hold).

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