Peloton Pedals Past Expectations, but Weak Guidance Has Stock Declining

Peloton saw revenue jump 77.4% year over year, but 50% growth in the third quarter wasn't enough to match estimates.
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Peloton Interactive, Inc. (PTON) - Get Report dropped after hours after reporting second-quarter results that beat estimates, but third-quarter revenue guidance that was short of expectations.

The streaming fitness company reported revenue of $466 million, a 77.4% year over year increase, with a net loss of 20 cents per share. Analysts were expecting the company to report a net loss of 36 per share on revenue of $422.9 million.

However, the company expects third-quarter revenue to rise 50% year over year to between $470 million and $480 million. Analysts are expecting the company to report revenue of $494.26 million.

The company did report strong engagement from its subscriber network, with Peloton’s 712,005 users working out over 24.3 million times in the quarter with an average 12.6 monthly workouts per subscriber.

For the full year, the company expects to have between 920,000 and 930,000 connected fitness subscribers, representing 81% growth.

Revenue guidance for the year is between $1.53 billion and $1.55 billion, ahead of Wall Street estimates of $1.49 billion.

The company said that its Home Trial holiday marketing push was a success, helping “drive higher conversion on our e-commerce site and in our showrooms without having a meaningful impact on our low return rate.”

The company opened 15 new showrooms in the quarter, bringing its global showroom count to 96. The company launched in new markets in North America and the U.K.

Despite the mostly positive quarter, poor third-quarter guidance has the stock down nearly 12% after hours to $28.75. Peloton debuted at $27 per share in September.