Peloton Interactive (PTON) on Wednesday forecast current-quarter revenue above expectations, in an early sign, that its efforts to boost sales, including by selling on third-party platforms, were beginning to yield fruit. Shares of the fitness equipment maker jumped as much as 22.4% after it also reported a slowing cash burn on a string of cost-cutting measures.
The company’s reported net loss for the period was $335.4 million, or 98 cents per share, compared with a loss of $439.4 million, or $1.39 per share, a year earlier. While it’s the eighth quarter in a row the exercise company has reported losses, it’s the narrowest loss Peloton has marked since its 2021 fiscal fourth quarter. Revenue dropped 30% compared with the year ago period but exceeded the company’s expected range of $700 to $725 million.
The company has generated almost $824 million in subscription revenue in the first half of fiscal 2023, compared to just $586 million for hardware. However, growth among subscribers appears to have slowed significantly for Peloton. The company ended Q2 with just over 3 million subscribers, up just 2% from the previous quarter.
Why it matters
Since new CEO Barry McCarthy took over he has cut Peloton’s workforce by more than half, expanded its Bike rental program nationwide, started selling certified pre-owned Bikes, debuted a rowing machine, and partnered with Amazon and Dick’s Sporting Goods to sell its Bikes and Treads.