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Peloton interactions (NASDAQ:PTON) obtained after reporting FQ2 The results showed that revenue exceeded expectations and operating loss was narrowed.
Despite the strong seasonal increase in hardware sales, for the third consecutive quarter, Peloton noted that it generated more revenue from subscriptions compared to we did from selling hardware. The trend, the company says, is for gross margins to increase because subscription gross margins significantly exceed hardware gross margins. If this trend continues, it is said to represent a structural shift towards improving gross margins in the business.
Connected fitness product sales fell 52% to $381 million in Q2, and subscription revenue grew 22% to $411.3 million. During the quarter, the company added 275,000 networked fitness subscribers. PTON ended the quarter with 3.033 million connected fitness subscriptions compared with 2.767 million a year ago. The average monthly net-connected fitness abandonment rate for the quarter was 1.1%, in line with expectations. The reactivation of Canadian Member accounts that actively left at the end of Fiscal Year 22 had no significant impact on the reported churn rate for the quarter.
Peloton interactions (PTON) reported an operating loss of $335.4 million for the quarter compared with last year’s loss of $439 million.
Gross profit margin is 29.7% of sales compared to the guideline of 36.0%. The margin shortfall was due to a richer-than-expected mix of connected fitness revenue as a percentage of total company revenue, as well as connected fitness gross margin. connection is lower than expected.
Adjusted EBITDA was $122 million for the quarter versus $267 million a year ago.
Free cash flow was $-94.4 million, and PTON ended the quarter with $871 million in unrestricted cash and cash equivalents. PTON also has a $500 million revolving credit facility, which has yet to be disbursed.
Coming soon, Peloton Interactive (PTON) saw FQ3 revenue fall between $690 million and $715 million against consensus of $694.5 million and adjusted EBITDA loss of $-50 million to $-35 million dollars.
PTON stock rose 2.09% premarket up to $13.20 later mixed income statement.
