Peloton tops revenue estimates in fiscal Q2

Peloton Interactive Inc (NASDAQ: PTON) is trading down in premarket on Thursday even though it reported better than expected revenue for its fiscal second quarter.

Peloton Interactive's guidance for Q3

Investors are concerned also because the guidance wasn’t all too encouraging either.

Peloton now forecasts its revenue to fall between $700 million and $725 million in the current quarter. Analysts, in comparison, were at $749 million. Barry McCarthy – its chief executive said in a press release today:

The connected fitness company expects up to $75 million of adjusted EBITDA loss this year. Wall Street currently has a consensus “hold” rating on Peloton stock.

Peloton Q2 earnings snapshot

• Lost $194.9 million versus the year-ago $335.4 million
• Per-share loss also narrowed from 98 cents to 54 cents
• Adjusted EBITDA loss printed at $82 million in Q2
• Revenue fell about 6.0% year-over-year to $744 million
• Consensus was 54 cents loss on 733 million in revenue

Peloton now expects to turn free cash flow positive in its fiscal fourth quarter. CEO McCarthy also said in the earnings report on Thursday:

What else was noteworthy in the earnings release?

Peloton Interactive ended Q2 with 3.004 million paid subscribers – up sequentially from 2.964 million. Analysts had called for 2.989 million connected fitness subscribers at the end of the second quarter.

Peloton benefitted from exceptional strength in sales from third-party retailers like Amazon and Dick’s Sporting Goods in Q2. Its rental program helped “attract a more diverse, more female, and younger customer” as well. According to the chief executive:

Peloton stock has been cut in more than half over the past 52 weeks.