Peloton Interactive Inc (NASDAQ: PTON) stock fell over 6.8% in the pre-market session of Feb 5th, 2021 (Source: Google finance) post second quarter of FY 21. The company’s manufacturing output has significantly increased, and the company has officially begun ramping up production at our new Shin Ji factory in Taiwan. However, well-publicized West Coast port delays and COVID-related factors continue to present challenges to returning the delivery times to pre-pandemic levels.
Q2 ending Connected Fitness Subscriptions rose 134% to approximately 1.67 million and paid Digital Subscriptions rose 472% to approximately 625,000. The total Members grew to over 4.4 million. Q2 Connected Fitness Subscription Workouts grew 303% to over 98.1 million, averaging 21.1 Monthly Workouts per Connected Fitness Subscription, versus 12.6 in the year ago period. Q2 Average Net Monthly Connected Fitness Churn was 0.76%; Q2 12-month retention rate was 92%. The company posted Q2 Gross Margin of 39.9%; Connected Fitness Product Gross Margin was 35.3%, Subscription Gross Margin was 60.3%, and Subscription Contribution Margin was 65.3%. The company has reported Q2 Net Income was $63.6 million, Q2 Adjusted EBITDA was $116.9 million, representing an Adjusted EBITDA Margin of 11.0%.
PTON in the second quarter of FY 21 has reported the adjusted earnings per share of 18 cents, while reported the adjusted revenue growth of 128 percent to $1.06 billion in the second quarter of FY 21.
Going forward, Peleton expects Q3 revenue to be of $1.1 billion. It also revised its 2021 outlook, stating it now expects revenue of at least $4.08 billion. The analysts polled by Capital IQ estimated the company would report Q3 revenue to be of $1.08 billion and 2021 revenue to be of $3.92 billion.
In addition, for the third quarter 2021, the company expects 1.980 million ending Connected Fitness Subscriptions, Average Net Monthly Connected Fitness Churn to be under 0.75%, gross profit margin to be of approximately 35% and Adjusted EBITDA to be $10 million.
For fiscal 2021, the company expects 2.275 million or more ending Connected Fitness Subscriptions, Average Net Monthly Connected Fitness Churn to be under 0.80%, Gross profit margin to be of approximately 39% and $300 million or more of Adjusted EBITDA