Peloton Interactive

Peloton Interactive is a manufacturer of fitness equipment founded in 2012. The company produces exercise bikes and treadmills with screens and Internet access. Peloton has a platform that allows for instructor-led online lessons. The cost of such equipment is from $2245.

Performance indicators

2022: Loss of $2.82 billion

At the end of fiscal 2022 (closed on June 30, 2022), the American company Peloton, the world's largest manufacturer of sports simulators, received a net loss of $2.82 billion. For comparison: losses for the previous fiscal year were approximately 15 times less - approximately $189 million. Such figures are given in a report published on August 25, 2022.

Peloton's revenue also declined. In fiscal 2022, it amounted to about $3.58 billion, while a year earlier the figure was $4.02 billion. Thus, a reduction of 11% was recorded. In total revenue, fitness products accounted for $2.19 billion, and another $1.39 billion was brought by subscriptions to related services.

American company Peloton received a net loss of $2.82 billion

The demand for Peloton simulators and services has risen sharply amid the COVID-19 pandemic, when users around the world found themselves in self-isolation. However, in the future, as the restrictions were lifted, fitness lovers and fans of a healthy lifestyle began to return to gyms, and sales of Peloton equipment began to decline.

Nevertheless, despite the deterioration in financial performance, the company speaks of a gradual stabilization of the situation. In particular, in its report, Peloton points to a reduction in cash outflows and a revision of a number of contracts for the supply of sports products. In addition, new appointments were made in the leadership team. All these changes are expected to ensure the growth and sustainability of the business in the long term.

The changes also affected supply chains and manufacturing. Peloton closed its own enterprise at, Taiwan transferring production to. outsourcing Plus, the company has taken a number of measures to reduce inventory. The reorganization led to the reduction of approximately 760 employees.^[1]

2019: Revenue - $915 million, net losses - $195 million

In the 2019 fiscal year, closed at the end of July 2019 calendar, Peloton's revenue amounted to $915 million, and net losses - $195 million. At the same time, co-founder and CEO John Foley called the company "incredibly profitable."

Peloton linked its cash losses to sales and marketing costs, which will continue to grow as the company prepares for international expansion.

By the end of June 2019, Peloton had 510 thousand users who signed up for a paid subscription to online lessons. 1.4 million people are registered in the system.

History

2022: Peleton losses lead to 20% of employees and CEO laid off

On February 8, 2022, it became known that due to losses, treadmill manufacturer Peloton fired CEO John Foley and cut about 20% of its workforce in order to revive the business amid declining demand for simulators.

Number of layoffs at tech companies in 2022

The boom in home workouts caused by the COVID-19 pandemic has provided Peloton with a significant boost, but the momentum has weakened sharply. In the first half of 2021 alone, the company's losses reached $785.4 million.

Peleton losses led to the dismissal of 20% of employees and CEO

Peloton will cut about 2,800 jobs worldwide. As of September 30, 2021, the company employed 8,976 people. The company is also reducing the number of warehouses it owns and operates and expanding delivery agreements with third-party suppliers, which will help the company save $800 million in annual costs.

In a memo sent to employees and posted on Peloton's website, it was announced that co-founder and CEO John Foley would become executive chairman of the company's board, with Barry McCarthy, a former Spotify and Netflix executive, taking over as CEO. The company's president, William Lynch, will leave his position to become a "non-executive director" on Peloton's board.

This restructuring program is the result of careful planning aimed at addressing key areas of the business and reorganizing our operations so that we can effectively and disciplined leverage our growth opportunities, the company said.

Foley noted in the memo that Peloton would provide "meaningful cash severance to" furloughed employees "based on the level of position and length of service at Peloton." For those in the company's benefits program, Peloton will extend health care coverage "for a period of time," Foley said.

Peloton also noted that it is "winding down construction" of its first US plant in Ohio, which the company announced in May 2021, which helped save $60 million.^[2]

2021

Collapse of capitalization due to a new television series

Shares of simulator manufacturer Peloton fell 11.33% in December 2021 after the launch of the sequel to the television series Sex and the City. In the first episode of the series, one of the heroes, Mr. Big, dies of a heart attack after training on a Peloton exercise bike.

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2020: Buying fitness trainer maker Precor

At the end of December 2020, the manufacturer of fitness simulators Peloton announced the acquisition of its competitor, Precor. The purchase will be made as part of a deal totaling $420 million, which, according to a press release, will allow Peloton to significantly increase production capacity and benefit from integration with Precor products. Read more here.

2019: Going public: Shares fall 11%, capitalisation $7.4 billion

On September 26, 2019, Peloton went public on the Nasdaq, listing its shares there under the ticker symbol PTON. The first of the day in the status of a public company was unsuccessful.

On the eve of the listing, Peloton set the IPO price at $29 per share, and after the opening of the exchange, quotes sank 7%. By the end of trading, securities fell by 11%, to $25.76. The company's market capitalization amounted to $7.4 billion, while initially the manufacturer of sports simulators estimated itself at $8.1 billion. In 2018, when Peloton held another round of financing, the company was valued by investors at $4 billion.

Peloton entered the Nasdaq exchange, placing its shares there under the ticker symbol PTON

As part of the IPO, the company raised $994.7 million. Where it is planned to spend this money is not reported. In Peloton invested:

• NBCUniversal;
• Wellington Management;
• Winslow Capital;
• Tiger Global Management;
• Kleiner Perkins;
• Balyasny Asset Management;
• TCV;
• Felix Capital;
• GGV Capital;
• True Ventures.^[3]

Notes