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Why Peloton Interactive Shares Are Plunging Today

  • Peloton Interactive Inc (NASDAQ:PTONreported a third-quarter FY22 sales decline of 24% year-on-year to $964.3 million, missing the consensus of $972.88 million.
  • Ending digital subscriptions rose 10% Y/Y to 0.976 million, and ending connected fitness subscriptions grew 42% to 2.962 million.
  • The gross profit fell 59% Y/Y to $184.2 million and the gross profit margin contracted by 1,610 basis points to 19.1%.
  • The operating expenses jumped 101% Y/Y to $920 million. The operating loss for the quarter was $(735.8) million.
  • The adjusted EBITDA loss for the quarter was $(194) million.
  • The company held $879.3 million in cash and equivalents as of March 31, 2022.
  • EPS loss was $(2.27) versus $(0.03) last year.
  • Outlook: Peloton sees Q4 revenue of about $675 million - $700 million, against the consensus of $821.68 million.
  • It expects a Q4 adjusted EBITDA loss of $(120) million - $(115) million.
  • The company aims to restore the business to positive free cash flow in FY23.
  • Price Action: PTON shares are trading lower by 27.7% at $10.21 in premarket on the last check Tuesday.