Peloton beat second-quarter sales estimates.
David Paul Morris/Bloomberg
Peloton Interactive
stock was rising after the at-home fitness company reported that second-quarter subscription revenue was better than hardware sales, boosting margins.
Peloton (ticker: PTON) posted a fiscal second-quarter loss of 98 cents a share on revenue of $792 million, compared with a year-earlier loss of $1.39 a share on sales of $1.13 billon. Analysts surveyed by FactSet were expecting a loss of 66 cents a share on revenue of $710 million.
For the second quarter, connected fitness products revenue was $381.4 million, while subscription revenue was $411.3 million. It’s the third consecutive quarter that subscription revenue outpaced hardware sales.
“This trend is gross margin accretive because subscription gross margins significantly exceed hardware gross margins,” the company said in a press release. “If this trend continues, which seems likely since we sell more hardware in Q2 than any other quarter of the fiscal year, it represents a structural shift toward improving gross margins in the business.”
Peloton said it expects revenue for the fiscal third quarter to be between $690 million and $715 million, which is lower than the second quarter as the holiday season ends and so do many promotions. Peloton added that it expects the current macroeconomic environment impacting consumers to remain uncertain and “near-term demand for connected fitness hardware is likely to remain challenged.”
Shares of Peloton were 7.2% higher in premarket trading Wednesday to $13.86.
Write to Angela Palumbo at angela.palumbo@dowjones.com
Write to Angela Palumbo at angela.palumbo@dowjones.com
Credit: marketwatch.com