Peloton Tumbles 17% on Big Guidance Miss, Now Down 96% From Peak

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By Senad Karaahmetovic

Shares of Peloton (NASDAQ:PTON) are trading almost 17% lower in pre-open Thursday after the company reported weaker-than-expected FQ1 results and offered weak guidance.

Peloton reported a loss per share of $1.20, significantly worse than the expected loss per share of $0.64. Revenue fell 23% to $616.5 million, again below the consensus estimate of $637.07 million.

The company reported 2.97 million connected fitness subs, an increase of 19% compared to a year-ago period, but below the 3 million estimate. Peloton also had a cash outflow of $202.8 million, almost double the consensus that called for a negative cash flow of $109.4 million.

“Peloton’s turnaround remains a work-in-progress, with $199 million in 1Q23 recall reserves, restructuring, and impairment expenses. And not all the changes we’ve implemented are working as well as we’d like– especially as it relates to some last mile delivery and customer service issues. We remain committed to fixing these,” the company said in a shareholder letter.

For this quarter, Peloton said it expects to generate between $700 million and $725 million, a wide miss compared to the $874 million consensus. Peloton also sees adjusted EBITDA loss coming in between $100 million and $115 million, worse than the estimated loss of $97 million.

The company also said it expects to hit 3 million fitness subs in its second fiscal quarter as “near-term demand for Connected Fitness hardware is likely to remain challenged” due to macroeconomic uncertainties.

“Looking ahead, we expect continued pressure on our App subscription count as we balance our effort to grow our current App subscription offering with our work toward the launch of a new Peloton App strategy early in the next calendar year,” it is further stated in the letter.