• Peloton reported a net loss per share of USD 2.27 in Q3 FY2022, nearly 3x worse off than the consensus estimated loss per share of USD 0.83 and significantly wider than the net loss per share of USD 0.03 recorded in Q3 FY2021. The company reported revenue of USD 964.3 million in Q3, down 23.6% YoY, and also below the consensus estimate of USD 972.9 million.

<ul><li>Connected fitness product revenue (61.6% of total revenue) declined 41.9% YoY to USD 594.4 million in Q3 FY2022. The significant decline can be attributed to a reduction in bike prices, falling consumer demand from existing pandemic-peak levels, and Tread+ returns valued at USD 18 million (higher than expected), resulting from a product recall. This was despite 42.3% YoY growth in the connected fitness subscriber base to 3.0 million in Q3 FY2022. The average monthly churn rate for the quarter stood at 0.75% (up from 0.31% a year ago).</ul>

• On the other hand, subscription revenue grew 54.4% YoY to 369.9 million in Q3 FY2022. This is due to its fitness-as-service (FaaS) strategy that combines the cost of connected fitness equipment and its subscription service into one low monthly fee. 

• Peloton reported an adjusted EBITDA loss of USD 194.0 million in Q3 FY2022 (vs. a profit of USD 63.2 million a year ago). The decline in EBITDA is due to an increase in general and administrative expenses (up 34.2% YoY) and the incurring of one-time expenses such as goodwill impairment, impairment expenses, loss on disposals on long-lived assets, and restructuring expenses during the quarter. 

• For the upcoming quarter, the company expects to generate total revenue in the range of USD 675 million–700 million (implying a decline of 27% YoY on average) and an adjusted EBITDA loss in the range of USD 115 million–120 million (2.6x the loss in Q3 FY2021). Following the earnings announcement, Peloton’s share price plummeted 8.7% during the trading hours.