Executive Briefing
The peaks and valleys of Peloton’s IPO filing
Peloton has a hit on its hands. What will it become?
By Dan Frommer on Friday, August 30, 2019 at 12:30 pm
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.
The New Consumer Executive Briefing is exclusive to members — join now to unlock this 2,000-word post and the entire archive. Subscribers should sign in here to continue reading.
Hi, I’m Dan Frommer and this is The New Consumer, a publication about how and why people spend their time and money.
I’m a longtime tech and business journalist, and I’m excited to focus my attention on how technology continues to profoundly change how things are created, experienced, bought, and sold. The New Consumer is supported entirely by your membership — join now to receive my reporting, analysis, and commentary directly in your inbox, via my twice-weekly, member-exclusive newsletter. Thanks in advance.