The peaks and valleys of Peloton’s IPO filing
Peloton has a hit on its hands. What will it become?
Peloton, the connected exercise bike/treadmill company, filed to go public this week. For a high-level overview, including how Peloton made it this far, Erin Griffith does a nice job at the New York Times. She also asks the right question: “Peloton is a phenomenon. Can it last?”
Peloton is a phenomenon: Now five years old, it generated almost $720 million in hardware revenue during its last fiscal year — 80% of its business — and roughly $180 million of subscription revenue. It finished June with more than 511,000 subscribers that pay $39 a month for workout classes. Both segments more than doubled year over year — as did its number of subscriptions — and both generated a 40%+ gross margin.
(Peloton, operating in growth mode, lost almost $200 million during the year — due in large part to its more than doubling its sales and marketing spend, which is around 35% of its revenue.)
And while one slide in its filing — declaring Peloton a “technology, media, software, product, experience, fitness, design, retail, apparel, logistics” company — has been passed around and poked fun of a bit, it’s worth highlighting that this is precisely why Peloton has been so successful.
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