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news
Peloton ad (via YouTube)Peloton shares plummet again after firm reports mounting losses
Peloton’s share price dropped around 10 per cent this week after the firm reported growing losses and projected lower-than-expected revenue for the next financial quarter. The firm says it expects to become profitable by 2023.
Late last year, Peloton’s Christmas ad resulted in $1bn being knocked off the indoor bike and treadmill business’s market value in 48 hours.
The advert, in which a man buys his wife a Peloton for Christmas, was widely mocked and criticised for sexism and reinforcing body stereotypes. Some described the woman’s expression as akin to that of someone in a hostage situation – an element that inspired a piss-taking ad for Ryan Reynolds’ gin featuring the same actress.
The firm’s shares subsequently recovered, but after the latest drop are now trading fractionally below the firm’s $29 initial public offering price.
CNBC reports that Peloton this week reported a widening of net losses to $55.4m from $55.1m a year earlier. And while revenue grew 77 per cent to $466.3m from $262.9m a year earlier, this represented a slowdown compared to the previous quarter, where revenue had more than doubled year on year.
Peloton is predicting revenue of $470-480m for the third quarter, and $1.53bn to $1.55bn total revenue for 2020.
“At Peloton, we believe we can achieve both growth and profitability over time,” said Peloton CFO Jill Woodworth. “We’re prioritising our subscriber growth over profitability.”
The firm now has more than 712,000 subscribers, up 96 per cent from about 362,000 a year ago.
Alex has written for more cricket publications than the rest of the road.cc team combined. Despite the apparent evidence of this picture, he doesn't especially like cake.
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21 comments
I'm all for a bit of Peloton bashing.. why should 'we' like or encourage that company. Y'know the one that tried to sue people for using the term 'peloton' which they now apparently think they own.. frankly the fact that their own actions and marketing are so pretentious and for me in juxtaposition to actually riding a bike and the enjoyment from riding a bike.
It's a spin bike and quite a nice one, it also offers aerobic classes of various description. I have a friend who uses it and loves it, I'm sure it's very good at what it does. But if anyone asks me about getting one (and they have), I will tell them to by a wattbike and watch classes/sessions on youtube, mainly because of the residual sale value on a wattbike. I don't know many people for whom getting their arses felt by Peloton would be something they could easily shake off.
I don't really think Peloton is that different to Zwift etc.
If they can get their bikes into gyms on a large enough scale then they'll probably make a lot of money.
Gym owners can use peloton bikes to replace spin classes, the gym owner saves money, Peloton makes money.
The tabloid style negative reporting is a bit tedious as others have said.
Reading the coverage is optional of course.
That aside, I have ridden plenty of gym bikes and done plenty of spin classes in my time and (great workout though they can be) they are pretty far removed from riding my actual bike outside.
Riding my own bike on Zwift attached to a smart trainer is (obviously) not exactly the same as riding outside, but it is a much much closer experience ... I am on my own bike, set up the way I want it, wearing the same shoes clipped to the same pedals and making the same gear changes. It lacks the feel of actually going up and down hill (although there is now equipment for that) and the head wind but, having got into the Turbo/Zwift combo there is no way you can drag me kicking and screaming back onto a gym or spin bike.
Plus you can get into Zwift (other training software is available but I haven't tried them), on a full smart trainer for £200 plus <£160 a year.
Maybe getting bikes into gyms is the one way Peloton could guarantee future profitability, but the people I know who do spin classes regularly value the input of the live trainer and the discussions they can have with them before/after the class and would be unlikely to stick with their gym if that was dumped in favour of the Peloton model.
I meant that Zwift and Peloton are similar companies, in that they are trying to replicate a type of exercise using a computer program.
I also think you can get set up on Peloton pretty cheaply if you already own a spin bike. Just download the app.
Your friends may not be willing to exchange a real spin class for a virtual one but the growing user base of Peloton suggest that many people are.
You also could have the advantage of spin classes running 24/7 and starting every few minutes, a big advantage over the usual arrangement.
So as a roadie I'm meant to dislike peloton, correct?
Or should I dislike them because they've made some dodgy calls over the years?
Why is every article on roadcc about peloton so negative?
Seeing the adverts where a bloke in a singlet tells me I'm smashing it is enough for me to know I don't need to try it but clearly it's attractive to some, why don't roadcc review it?
At the end of the day it's a bunch of people's jobs and a bunch of presumably happy customers who would lose out if it went belly up.
the articles have been negative because the things that Peloton has done that are newsworthy are negative. suing youtubers for using the word 'peloton'. making awful adverts. losing enormous sums of money. that kind of thing.
Like Specialized, https://www.cyclingweekly.com/news/specialized-withdraws-action-against-...
Not seeing the same hate directed toward them.
Maybe you need to look a little harder?
https://road.cc/content/news/100388-specialized-slammed-over-legal-threa...
Even that article doesn't really dig at Specialized, in fact it's quite balanced and may even veer toward sympathizing with them.
Show me an article that factually reports something good about Peleton on roadcc without some condescending banter about them being dumb in some way.
Where's the x/10 review about Peleton like there is about the latest Specialized Roubaix bike.
roadcc has always been a bit daily mail which is fine, we all like a bit of opinion so we can nod our heads or be outraged, just think it's a bit unbalanced and childish.
If you say so. doesn't read that way to me.
The one that we're commenting on here? what 'banter'? where are they being called 'dumb'?
we don't have infinite resource to review stuff, and the peloton bike isn't really aimed at our core market. it is in the cycling sphere though, so it does pop up on the news radar from time to time.
I think it's because Peloton is the complete opposite of buying a cheap bike and then enjoying the outdoors (though of course that leads onto buying an expensive bike and enjoying the outdoors). Peloton reminds me of that Black Mirror episode but instead of earning money by pedalling, you spend money to pedal. I think there's a certain fascination with watching a company perform a slow-motion train crash and Peloton seems to be that train.
The outdoors thing may have been relevant a few years ago but not now with zwift, sufferfest...
roadcc have just reviewed a dedicated full indoor trainer bike fro tacx and others from wahoo and other manufacturers are on the way/already availlable, the indoor market is big and getting bigger
Your final point has probably hit the nail on the head though
That is not how i remeber that BM episode, they clearly EARNT credits cycling. Were you pelotoning while watching?
Feel free to re-read my previous comment if you have trouble with comprehension.
"we'll turn a profit soon, honest".
I fear the shareholders may not be willing to wait too much longer.
That revenue projection means they aim to ciphon 2100USD from each of their users - every year. Thats a sh$t ton! You could get a brand new steed with possibly carbon frame and lovely new 105 on it EVERY year for that moolah! I prefer to feel the real wind in my face when pedalling so maybe I am biased.
You may be biased. I don't know any Peloton customers, however I do know about 3/4 of the folk in my Spin class at the gym rarely or never ride outdoors & most don't even own bikes. & that's in Bracknell, quite possibly the best place in the country for riding bicycles (yeah, really - great infrastructure, can get practically anywhere without sharing with cars, some of the best offroad in the south-east in Swinley Forest on our doorstep, & beautiful nearly traffic-free lanes when the tarmac itch needs scratching). My suspicion is a lot of Peloton customers would assume 105 is an artisan gin.
They're mad of course but hey! it's their choice. So I'm with you on this, tho given the choice I prefer the wind on my back...
Living in NL i find the wind comes from every which way if I start and finish in the same place...
Chapeau in Bracky pal.
I'd like to ban Peloton news from all cycling websites. It's not cycling, it's an indoor virtual spin class which is an entirely different thing. I don't mean that in a snobby way - it's a great form of exercise for people into it...but reporting it here just gets the same comments over and over.
Why are they playing with a round ball!?!?!?! Its much better with an oval one THE FOOLS HAHAHAHAHAHA!!!!
etc etc...
Your figure is correct only at current subscriber levels, which isn't the number that's been used to calculate the revenue projection.
So its all BS then? You point is a little pedantic.