Home Health Peloton (PTON) earnings Q2 2020 shows widening net loss

Peloton (PTON) earnings Q2 2020 shows widening net loss


A monitor displays Peloton Interactive Inc. signage during the company’s initial public offering (IPO) across from the Nasdaq MarketSite in New York, U.S., on Thursday, Sept. 26, 2019.

Michael Nagle | Bloomberg | Getty Images

Peloton shares plummeted as much as 12% in extended trading Wednesday after the fitness company reported mounting losses and slower revenue growth.

In its second earnings report since going public in September, Peloton said its net losses widened to $55.4 million, or 20 cents per share, from a net loss of $55.1 million a year earlier. Analysts had expected an even bigger loss of 36 cents per share, according to estimates from Refinitiv.

The company also said revenue rose 77% to $466.3 million from $262.9 million a year earlier. Analysts predicted total revenue of $423 million, according to estimates from Refinitiv.

Although the revenue growth topped predictions, it was a slower pace than in the prior quarter when revenue more than doubled year over year. 

Peloton also reported strong growth of its connected fitness subscribers, defined as a Peloton user with a paid subscription. Peloton reported more than 712,000 such subscribers at the end of the second fiscal quarter, up 96% from about 362,000 a year ago.

Total members grew to more than 2 million. 

Peloton announced Tuesday that it settled legal disputes with Flywheel, which also produces stationary bikes with training programs, over alleged technology patent infringements. Peloton co-founder and chief legal officer claimed the development as a “massive win” that “reinforces the strength of our patent portfolio,” which is key for the company as it seeks to distinguish itself as more than a hardware company.

The company, which sells computer-connected fitness equipment and subscriptions to stream its workout classes, has reported strong revenue growth in the past, but has yet to post a profit.

Wall Street is growing increasingly skeptical of money-losing start-ups, with names like SmileDirectClub, Uber and Pinterest among those that struggled in the public market last year.

Peloton sells most of its products in the U.S., though it introduced them to the U.K. and Canada in 2018. Peloton also entered Germany in November last year.

Disclosure: CNBC parent Comcast-NBCUniversal is an investor in Peloton.

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