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This statistic highlights Peloton Interactive’s Revenue by Segment, split between Connected Fitness Products and Subscription, reported on a quarterly basis from Q1 2019 onwards.
Peloton Interactive has two reportable segments, namely Connected Fitness Products and Subscription. The former segment draws revenue through the sale of not only Connected Fitness Products but also through delivery and installation devices, branded apparel, and other related accessories. The latter segment derives its revenue from the monthly fees like Connected Fitness subscription and Peloton Digital. Peloton’s segments are independent and there are no internal revenue transactions between them.
|Revenue by Segment||Q1 2021||Q4 2021||Q1 2022||Revenue Contribution in Q1 2022|
|Connected Fitness Products||$601.4||$655.3||$501||62.23%|
(All figures are in millions, except percentages)
It is important to note that Peloton’s fiscal year-end is June 30. As we can infer, Peloton’s total revenue growth has been inconsistent through the quarters.
Connected Fitness Products: Under this segment, the company offers a variety of products including Bike, Bike+, Tread, Tread+. In addition to these, this segment also derives its revenue from other accessories, Precor branded fitness products, warranty agreements with an extension, services like installation and delivery, etc. From here, the company recognizes the revenue net of discounts and sales returns only when the customer receives the product.
Connected Fitness Products has consistently been the larger revenue contributing segment. In Q1 2021, the segment recorded a revenue of $601.4 million. It rose by 8.96% in Q4 2021. However, it subsequently declined by 23.5% in Q1 2022 to $501 million. The YoY decrease from Q1 2021 to 2022 was 16.7%. The revenue in Q1 2021 was considerably lower than that in the previous year due to lower bike sales, lowered bike prices, and more importantly, due to the return to seasonality after the global stay-at-home orders in 2020.
Subscription: This particular segment includes mainly two subscription charges—Connected Fitness subscription and Peloton Digital. The former is for $39 and the charge for Peloton Digital is $12.99. Through such a month-to-month basis subscription, they offer unlimited access to their library content.
Subscription’s revenue contribution has gradually increased through the quarters. In Q1 2021, the revenue at $156.5 million which rose by 79.94% in Q4 2021. The highest contribution was in Q1 2022, at $304.1 million (37.77% of the quarterly total). The YoY growth from Q1 2021 to 2022 was a major 94.3%. Q1 2021 revenue was higher in comparison to that of the previous year due to higher Connected Fitness subscriptions from increased sales of the corresponding product.
Peloton’s business is such that seasonal trends are a significant influence on their sales. They usually record higher sales during the November-February period, largely due to the demand created by year-end resolutions, holidays, and extreme weather. Since the company’s products can be categorized as discretionary products—their sales depend upon several factors including customer confidence, economic situation, tax rates, etc. During 2020, their sales surged because of the pandemic-induced shelter-in-place orders. Owing to the global uncertainty caused by situations like the pandemic, consumer spending trends are becoming uncertain, thus, the company cannot predict definitive sales.
About Peloton Interactive, Inc.
Founded in 2012, Peloton is the world’s largest fitness interactive platform. The company headquarters are in New York. They are the pioneers of fitness-enabled technology and the idea of immersive, boutique classes led by instructors. They aim to make fitness an enjoyable, approachable, and effective practice. Their subscription platform is one-of-a-kind where they’ve integrated top equipment with networked software and quality streaming digital fitness content. They have a multi-channel platform that is direct-to-consumers. It is listed on the NASDAQ under the ticker PTON.
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