Peloton Interactive (PTON) 1 Feb 232023 Q2 Earnings call transcript

Company Profile

Participants

Peter Stabler	executive
W. McCarthy	executive
Douglas Anmuth	analyst
Justin Post	analyst
Liz Coddington	executive
Eric Sheridan	analyst
Shweta Khajuria	analyst
Ronald Josey	analyst
Brian Nagel	analyst
Youssef Squali	analyst
Edward Yruma	analyst
Aneesha Sherman	analyst
Kaumil Gajrawala	analyst
Nathaniel Feather	analyst

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Peloton Interactive's Second Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Peter Stabler, Head of Investor Relations. Please go ahead.

Peter Stabler

to second welcome conference and morning, Peloton's quarter fiscal call. Good

McCarthy; call Liz are today's and CEO, Joining Barry CFO, Coddington.

to with will Our forward-looking risks comments as statements forward-looking and views materially federal may these securities those reflect question our that law. uncertainties related statements and include Actual under and responses by of contained to to today in statements your implied our business. due are business associated differ results management's from only or

and today's risks Investor our can material important both the factors to impact of discussion on Relations a which could other results, our that For our of found be SEC shareholder refer website. please filings and letter,

financial shareholder During discuss financial GAAP this A non-GAAP letter. we provided and both will ] in is measures [ to today's reconciliation call, non-GAAP measures. of GAAP

to I'll turn call now the Barry. over

W. McCarthy

mine I of by out good call, it when as done you member little all want indulge off And instructors golden best about platinum. as the Peloton, ordinary of Gail a do possible and A makes think, team today's to she to kick give summarized brand what's if that community content named and bit the our me. who special Tifford once something just what incredible described by life. is work the I the friend the

just to Hainsby, platform with Leanne this today And start to on And platform. of and her of the our because London happens earnings once of cancer-free, announcement that, coincide class again her after cancer that welcome the I today back start call. is with recent she's one battle name the of the coincidentally the of want and back in particular, disclosing in by to her instructors who

all welcome, So and thank for you do us. you for Leanne,

operator with we'll back the that, the take to turn first and our question. call And

Operator

Our Anmuth JPMorgan. Instructions] from Doug the of with question line first comes [Operator

Douglas Anmuth

XX% just go-to-market in Barry, you that think and the to retail the progress and these rentals XX most drove initiatives new And could months. talk was you of volume forward? expect hoping impactful quarter. which to the going in wrote next across the will over the partnerships be you changes about more of I drive how about CFU growth how overall initiatives you do

W. McCarthy

quarter-to-date, Well, quarter. last will and on is to by very think quarter's FaaS to it's contractual are on make quarter based large continuing quarter-over-quarter the not -- grow performance percentage, to confidence incremental XX%, they be doubled don't They slightly household platform. and come have the would commitment higher the FaaS pre-owned before. basis, -- the I most XX% And business quarter tend the business. to but I way rapidly to a be have last a who a significant think, has with this example, for fact of to and on the income

-- Now one.

Two, third-party enough would don't outperform did confident we incrementality, but It own the no But with be had course, expectations revenue of incremental, the of we our into our we what for the going we about that quarter. retail? that third have platform partnered but have know data on fact that It the much we in parties. less whether quarter. sold is how meaning has to history

know to difficult it's how So exactly CPO us FaaS to it. for forecast as with and

although during optimistic. to invested be more the we'll the uncertain progresses. continue the as are it. And we in continuing pleased performance We're we quite know to year incrementality, So about with grow quarter, the

Douglas Anmuth

is the to your focus potential is marketing the up. know I that of follow and in consumers? big among go-to-market new be new the going you I awareness CMO. Leslie could Or efforts? just joining there's like Do and advertising feel If as strong initiatives a strategy

W. McCarthy

to make focus? going is awareness low -- not particularly. No, Well, it's it but Are a we still, new. it's

the about would It occasions will of be think about less for is the to bike. be I It anywhere. going all anytime, anyone, use be focus and inclusiveness.

Operator

America. Our of comes of next Post from Justin question with Bank the line

Justin Post

talk were margins there? about What some those model, think like model in about And puts when quarter? to you as to and upfront take hardware about breakeven? willing to how think takes a now gross your the are hardware to the you much of going you take to And the lose What subscribers? you working Can the subscriber? you get sales-producing get think is cost or do is

W. McCarthy

I will and this. Liz team tag

her Let me on do the high-level shift specifics. to the back and stuff

through managed take say making and calculations, and in hardware we with the the the both subscription stream revenue those And it. view with So associated of let LTV the to we associated CAC. me holistic a expenses

be deciding not is think enterprise add the And LTV because we new to subscriber increase a So And part, acquisition. customer were hardware relative at profitable cost I which care it model, the business, life. framework recent margin we're operating we their care each basis, or the to about value in the the care value using the don't to particularly I we and of working. time the whether margin. X.X:X for my customer the or that's subscription about aggregate I lifetime CAC, net relationship the model that between in on means particularly the over will of about the an I that about

Liz Coddington

Yes. mentioned, add And gross impact we hardware our ratio. a an that, more course, our of manage detail because promotion, Barry did bit holiday what to LTV-to-CAC we To margin. on has enrich just little our did to

and CAC. but So it X.X out we in of ratio resulted that to LTV may more have spent promotion, in balanced

our outperform a means of becomes is Connected to that we lower subscription. hardware the margin gross -- margin our overall Fitness, when also it of on what higher want to sort a relative comment that penetration I has

with that the bit, that the that so subscription happy will time margin a we them. And the get subscribers we're depress over because with but overall and revenue comes

obsolescence we number of higher excess worth think, impacted here had reserves. margin that We is that and I did thing, this gross a pointing our cost of -- on other were revenue take out by reserves. the cost The quarter, some is

period, got for So Guide a example, realized more we that that. holiday and we through looked at reserve had took and inventory against after needed our than we we the

We very that we had no on longer specific that and inventory also returned plan hand had some refurbish we sell. to

So for we then took continue reserve we with associated have that. reserves And Tonic a inventory manufacturing our some from to facility.

Fitness roughly a gross had million those of about all in quarter. impact margin our the on So Connected $XX

margin are Barry question continuing said, I to guidance any are when optimizing Connected But And hardware we're and was the of is you is turn that the think go timing. we there as on giving Fitness CAC. of a to going our our to we that. gross think LTV positive, levers as that focus of part not about Financing mentioned, some promotions about if factor that, margin that. part into on --

equation. is Third-party that of channel part strategy

of All in things have lower our form media drag lower spending. gross of get those and those on marketing created margin, expenses and by the a sales offset

to not you on So look, said, Barry the as and have at whole margin. focus just gross micro thing

W. McCarthy

of the flow. impact one the everyone to business that clear fueled the marketing and spending additional the the pace that has -- between hand on trade-offs One are and spending of of sales marketing rate free and there cash that remind growth is by comment, on

expense But destiny. can objective, so would it on the free spent we and control have we our more on we flow the cash faster. have our free is a to own business could grown if of sustained at move marketing, to which come So flow overarching cash basis

manage growth. to within is priority the free flow manage first our for cash and then So business to framework for that

Operator

question line Our comes of Eric next from Sheridan with Goldman the Sachs.

Eric Sheridan

sort therefore, could sort pandemic, you pandemic. of I a pull Are the and normalization ask through this business? now back normal firm normalized of back leaning in trends sort a you end with and to could Obviously, of understand where if lot there executing demand we seasonal was marketing, you promotion dynamic some of Maybe number in cadence post That's demand mode of through are forward sort we in or of went on on X-parter. you're the think to the ground in with respect And one. and leaning a the be out the category?

Doug's maybe from following two, on question number And earlier. up

never how better strategy Fitness Just conversion can as the increasing the and might subscriber the still mobile Or the to operate viewing goals? who an can this view folks hardware? product help app come stand-alone Connected Are it fits for you funnel? broadly of there as a into you understand strategy is around a for us potential sort maybe that feeder

W. McCarthy

our forecasting, many bad We business jump to as highly some the there's that evolved even our understood both. or different the to continued it it not news -- made we is be hand will ability forecasts outperformed. first is made -- outperform model behavior it and forecast in because over the because -- to updated model in we I news the of quarter. be. given news business outperformed in our is in historically? because and maybe of the I'll bad consumer than the the is changes reason the as have The to of good we've then particularly changes The quarter. yet that Is is accuracy is think the it's good in news and Liz. we we the our the the I And think

-- handle around consumer don't we quite so our And behavior. our arms have

your question to no, quite not If normal feel there's is, I normal we is, it like back I yet. don't one. that's the we're So answer what and some happening, think to new grasp

for among we're seasonal is seeing holidays. spike of -- didn't continued in does with instance, its the Wasn't as should point I answering if respect have holidays not characteristics of Minor rest to has that didn't things at about mentioned all, business. that the -- Doug's march it been that question exhibiting the FaaS we FaaS didn't happen. just during seasonality. not the It's the expect

it use the hardware in to give home user I that we'll instructors I our able strategy to lastly, to then that not to of our core its to by it use on expand outside, outside the content it's the business it use to it to or rowing, care. And The TAM endgame. it's and or think content treadmill, goal all strength, app, the that to really which yoga consumers competitive maybe own and it's not, is a gym you. as All-Access a see have whether respect whether to base access and the hardware is experience in enable the for what on life of the it historically and maybe subscription, or reaching with it's we've use with strength end do to don't that or running user And and been

And things. the Liz, it's home. a to I land do But it's today, app, it's it's tread, And to least the add those want I anything? bike, promised And path your the at we're a trying it. the in you think, it's to that's tomorrow, that's other pursue. is how row, conceptualized all opportunity a

Liz Coddington

I cadence. the question year about from think I that was explained going is quite you a to Barry. in most a still actually we closely of that there comment Eric's want I well, that The resemble add expect 'XX. in to there perspective, is only that say it our thing will for seasonal fiscal just modeling And revenue

W. McCarthy

point, But as me the to have the going today, not end many hype of just quarter. read this we're to the at much call. subs forecasting as home Let into too have drive we're we

the particularly rush. end We have of the of seen at seasonal plenty historically, churn

could whatever that We're the it But we forecasting going growth get to be forecasting clear. rate. not the math, out. form the find back we're It's so we spike churn And be churn. be in in could We're a of just incremental it wrong. will right, to have,

Operator

from next ISI. Shweta Khajuria the question Our comes line Evercore with of

Shweta Khajuria

I on quick flow. guess cash I free have a question

supplier-related offsetting we impact. You flow cash in each key to you've but made an drawdown should So renegotiated free flow year quarter, about of magnitude inventory contracts think drivers the the an cash this impact, fiscal some 'XX? got have you've have has the impact, to about supplier cost of also cuts specifically, positive talking an I'm getting of positive of excluding the free How costs.

So could terms of free trajectory you help what cash positive will us be flow? the of sustainable in driving

Liz Coddington

Sure.

going is fiscal So free what flow cash drive into Shweta's question like sustainable is really about XXXX. to

inventory. fiscal a you So be us mentioned in for continue to will 'XX. tailwind Inventory

growth. we very sure a being is then OpEx are really be acquiring conscious making and benefit. we doing that LTV-to-CAC as make are So -- subscribers measure our and that about efficient that about about that And And sure it's all we can it's efficiently. analysis as then possibly to then

business we've the of our that it how lot so a We figure inflow expenses have continue that over have already. net and to hand cover the have the cash fact time, already bought to to inventory of out to grow of a we enough on lot operating

operating And business figuring maintain about or out free just really flow is really an in cash it's the break-even And free positive ideally. higher So flow is us how continue the grow that well. key gross to business. efficient to app cash the to a part way we yes, by as as the that the for grow of is good business, over that business the time margin way,

W. McCarthy

some that Let in of terms with year jump of add -- maybe me the changes the in year ahead talk in and compared savings. the let's about past

call go-forward clear savings won't. commensurate basis? it Will count reduction is with on me call. significant see to and employees who with that that. all our made of we're a saw as a of we No, as that more that concerned, count we So head in listening head are in on the we reaffirm reductions, done that year I past previous far let in the and

by in resulted But next have management business, in mile. the of They're have storage to all X I last lots in order years. expense or They're has year. for realize a we in limiting lot We a operating inventory, in storage lot just savings the in those of be significant ERP, the past processes. our positions, still which inventory we in those They're we we costs. as we down realized have mile. opportunities systems expect as middle have use, and additional of system, reduction and And we costs in that of pay work substantial warehouse, the will we X manual money additional

to important offsets, between flow only in trade-off mind, and the cash is growth So savings. bear the and

example, lose profit over and if into Spotify. with by grow of faster, time. money. way lean But We'll the you net as true CAC we'll international more money. true new we only Netflix. LTV going to true with back It's Peloton. if to subscribers, lose you growth So add grow we're shows It's It's with

just so is. figure artfully need out balance appropriate what we what And the to --

Operator

Our line Citi. with comes next Josey of the Ron question from

Ronald Josey

given understood up your comments new benefits quarters have wanted full and bit for think maybe you real churn into this FaaS the around members holiday. quarter Maybe, to now and and we for these added on churn any just program that hike do is, call Barry, think this I a follow that on in the the seasonality price brought subscribers. insights maybe and down But X.X% X you just no maybe normal we're little there's change, higher the the churn might now on churn some churn on I FaaS to subscribers? shoes have it,

be helpful any So there would on insights churn.

through -- more P&L. XP the think that from we're about FaaS it's and because Liz, guidance FaaS distribution greater I than then, flows how talk I rolls think us to And a perspective, and assuming CPO, sales,

W. McCarthy

Let's talk about the overall churn number.

FaaS. talk about Let me

to cohorts, the if look question the we ourselves look you what the you running alarm time, The X.X%, quite So higher should churn rate X.X%. does answer is here's why. base individual churn the that you, All-Access for need and were typical It's customer. not for That still curve, than like. to shape about is and a retention curve FaaS And young. the over of has at sub

And what X%? turn and going is the -- course, -- to is or average down. rate asymptotic? come it X% it ages, So it it which as Is at what be X.X%, of asymptotic? question base will The will the to does where be what's -- churn the going rate, sub represents, does come is turn X.X%

understanding and payback to XX-month XX our we as hope think reengineer a of hoped. the the used could a years, date, for the receive customers worst would we go back possibly thought, a on payback. be XX numbers a need it'd best behavior which I for as case, then XX new bike good better outcome. X consumer FaaS months, is to to to is be about receive get who And customers we months we who for Based to is bike and

is initially, way, we're with, be front So identify shouldn't the better of us, all program credit the looks kind by doing end experience. of which customers at to would doing And any working. to least like not check verification the still and business contribute a to on lifetime

still about about optimistic we're initially, we're seeing learning customers so to only XX,XXX operate think But on total, be there's So in how program. we're and the reason to it. the churn FaaS talking least roughly behavior at far, I based

it's for Now hardware -- front. have cash from consequences not cash you're because flow negative up selling it adverse flow is -- some a perspective,

you're recouping So as consequence. capital are investment quickly, growth working not seeing as in faster we that but a

successful, have capital is have. So have core then we're I if different should really if out to to pretty attractive currently it, But then just fast to in it be working to challenge. have ability we it paybacks, because attributes to so strategy the everybody, what with we confident than lucky our I'm figure going business figure is really And remind out. a program want it to we have financing for will the be growing going also that

talk Liz, churn? about want do you to

Liz Coddington

QX. about closer QX. And for just to to one add Yes. Sure. we for wanted that FaaS the QX, end at XX,XXX it the in we thing that were the number I quarter, subscribers double actually was of had

So great great for really growth, FaaS. really,

W. McCarthy

the numbers. The doesn't know CEO

that, folks. about Sorry

Liz Coddington

little -- let's talk a bit Well but about churn.

have right aside now, do from current pleased potential significant we're at our seasonal Connected churn to impact overall we that our fact small FaaS changes levels we from quarter-to-quarter. Fitness on any minimal variations the very don't a this expect And flat quarter-over-quarter, very our with churn, levels has overall. So churn point. and

about bit little churn. a that's So

think I that like can a was that. of Ron, your was give Peloton little flow asking our some. Barry part and through P&L, about and perspective FaaS refurbish how our I there a on of XP, question already program gave bit

fact growth we less a do get product becoming us revenue driver So buys we we've FaaS before. bigger a FaaS for from the pay the also Fitness hardware membership. in Connected margin talked who a the for is than they because they delivery means then do somebody about and of that that FaaS fee that new from and a That just their the impacts gross member, our become that cost month member $XXX

drag a time, near-term is but also over as near-term margin. revenue, on that a So on recoup just It's drag -- that. we

talked that as from because For them. bit third us, revenue there of XP, we've that our do about little is well a extract to a an impact parties margin from

We have also terms accruals. in

consider contra revenue marketing also our relationships. as expense a those for We adjustment

a those well drag bit of on on are and revenue So drag as too. margin, a a gross

getting And able for a sell just price when is But revenue then less refurbished and that products not refurb, because are cash for as we do a cash would had return on we're with. we point, from to have it bike. because perspective, been great margin a obviously, we lower otherwise getting a it's something

So it's overall great economics.

from that. standpoint, a impact P&L negative Although from the see will you

Operator

question the of next Oppenheimer. Nagel Our with line Brian comes from

Brian Nagel

it I'll couple questions, shove make So maybe just maybe a of one unrelated, simple. into

the distribution to infrastructure develop infrastructure? So now first how insights may you regard that off, further as and with Amazon with any DICK'S, additional expanded there to

initial know governors time one we've way are But to talked market? the that or there bit a look are you dictated basically adjust at allowing you growth right second here. that now to growth by my other? I you FaaS place over just Or that question, the growth could drive in there, then the be about And as

W. McCarthy

the drive or growth up If you down? mean

Brian Nagel

Correct.

W. McCarthy

that Well, the yes. to answer is

cash quarter, slow and any that day and let's we particular we're tax are the that FaaS down day about down. hit, can't from flow, or example. any not bikes just it could the more units particular of by in web a day, more We the or order in concerned say just we take selling Zoomers XXX say, or cash month way Let's week it flow would on so a decide any

The more That expansion. change is, how Secondly, it's implications and don't one is churn as go pace ripe and value factor lever. into make for it implications, the which decide lever or of we in lower lifetime to has faster almost we But another expensive? has course, certainly A can to grow third and prices we growth we just value at why absolutely modulate of international the implications. we it's that a the consequence. CAC which variables mix proposition deciding

Liz Coddington

only infrastructure thing parties. add, first Yes. think, developing any and on around DICK'S as part third with the Amazon was insights The of the question, our to I

through new think terms We only holiday very our now, first I We've these parties. been in partnerships, us. with still look right a quarter if our to our at third DICK'S. you relationship roughly season just with it's of went

well our while about along rest to partner anything to as DICK'S. partnerships want how we to you those to still learning both outperformed for business as we're sales, want make our so And that? and our the with during of add expectations third-party continue our out it to Do sales, Amazon a holiday, figuring win and

Operator

line Our comes from Squali question of Youssef Truist. with next the

Youssef Squali

questions me. for Two

In what imply maybe does in your terms intensity First, can promotional of the kind in the activity? quarter second and half? the speak expectations guide words, of plans and the other you level of for promotional to

clarification, maybe lowest saw seasonality revenue And about what a your quarter the of you're seeing similar fiscal said about revenue. on earlier QX, you XXXX. you just QX in was Liz, the this year to XX% two, at something XXXX, In

know what telegraphing. us you'd So else I that's QX out? yet, turn kind not just guiding assuming how will so to you're maybe I'm maybe directionally. about know like you're of what But

Liz Coddington

question, guidance we QX. not your So on part with that are regard revenue, second to of providing

on think earlier want, comment you specific providing quarter. seasonality my interpret but about I can the how revenue not you So guidance we're

promotional I look our the also levers to is financing of promo you And is us I On quarter, back our one here, of LTV promotional key in CAC for we us. part So equation, opportunity. lot levers, right now, we we to of going come make as it an and we spending, lever a miss right? have in the have are for way between the a that in of think as the as fill to we about whole promotion but media to and Barry, can intensity, trade-offs concept especially anything think that offers inventory and that

And cash in so much comment That's we are reductions, to don't we flow. too balance and strategies. competitive for our about part, but managing reasons, promotional margin across trying inventory

important about All how of those are parts we think about promotional activity.

W. McCarthy

just a the remind one; it's the just everybody marketing more would in the three, land the proposition. brand spending. part value I that different to just for you enormously happens form two, be you It more of to do a it, erode P&L, effective of us; proven

you'd use not. I've it wants marketing the the so had or been every for so quarter, decide aggressively In Leslie form that do I basis, It's of of mix years to promotional we've well activity sparingly. to She a And in TBD. to to almost on as it here, how varying some use degrees. part think, go-forward

Operator

Piper next comes the Edward of Sandler. with line question Our Yruma from

Edward Yruma

other Kind than do And new restoring that? to expect goal international in promotional one talked growth you cited earlier you that that what countries? that would do and P&L could from as X. enter cost of you money. your help I growth see the more the do answers, Barry, on level just year takes a in faster puts growth you and the international of about know

W. McCarthy

Western I months. hope like it the know today, But long to to And it. the know in answer. it I short. and new we have we the short I countries, would the much first. X out But questions would Europe doing have Still next don't just how spend those answer story is enter don't to I don't and probably when, figuring long

Operator

of Our the Sherman next Bernstein. line question comes with Aneesha from

Aneesha Sherman

questions, X please. So

your with that baked FaaS to deliveries So already the of QX? for and that suggest million of end does that the is X.XX And the subs have as at some guide higher in demand should lag there faster quarter, been million into January? is X.XX first one

if back lower And it marketing sales. as maybe need marketing of -- versus app on relaunched structurally until second, distribution including on marketing. that field a as is us even of you're the expenses temporary sounds declines, you it is maybe broaden you're then and your leaner team, curious you give percent you've a like structural down less even color footprint some could much digital lower and how as holding I'm

So any be would helpful. color on that

W. McCarthy

marketing sales on couple way of different a things, just is by and The the line item of P&L of a hodgepodge reminder.

marketing it some purely spend So of for core the business. relates to

Some relates wellness commercial the... And business. and what's to it of the

Liz Coddington

Retail.

W. McCarthy

And -- the the of And piece component we've last that the you. Thank of is fairly loss retail. in the we're process with associated shrinking dramatically business.

Netflix, just And by example. CAC attributes constant like fell expense relatively Investor recall, well-run XX% a before. direct subscription should equal, something a Now investors because marketing sales all the expense dramatically It's revenue to hosted sales Spotify business. part as remained listing, Day being XX%, pretty the subscription even things revenue. I gave marketing grows, as way of and of at shrink and tutorial as at that the as percent of a of of I from This all is

acquire marginal to only sub. new You pay the

revenue You total recurring And don't pay recurring percentage grows for you why as the over of the the a reduction. the see time, is revenue. which

your new markets. for out would be, means in expansion. CAC international those will awareness new Well, is in be That it's that presence our countries unaided higher let's quite as Now offsets you will as -- low roll the brand expect. say, us you

be brand something it we and of in and unaided by because as the should revenue, of to to just flow beneficiaries digital highest the anyway, it's that growth was the increased categories in like Because is Score Net the in have And markets product perspective to sure the high. an X% grows, subscription particularly balance if going awareness. and offer, brand the a of word app. so products growth. earnings like we're recurring in all new unaided relatively cash looked, I'm America North or last XXs have But from enormously in new the the of as of not I growth mouth remember it offset we time I mid-XXs, can't low Promoter nail we growth try was awareness it low -- And what today,

figure question, lean marketing is, going out. opportunity, and that into give So time some a to we from where us just door, we're as perspective how heavily answer walked to in the the to that

Aneesha Sherman

Got on it. subs helpful. from demand, the comments and your FaaS Really later any that? on And lag deliveries

Liz Coddington

a particular holidays, particular the over impact is or particular not is calendar holiday this this year. we So -- this to that unique

sell to of Over take Connected the the lot over to holidays, able be does when Friday, Fitness those. a it deliver Cyber Monday, we time us units Black

generally bike rower, we don't and January. actually -- or somebody we have we -- so where have a And ordered they activate deliver they a it may don't Peloton and tread them, to until or situations do but their a subscription

unique not to So year. that's this a phenomenon

that X it's So quarter into something quarter into every from quarter the -- happens holiday X.

W. McCarthy

kind is this there But into backlog of a quarter... peak coming

Liz Coddington

relative to other quarters. Yes,

W. McCarthy

yes. the to other Relative quarters,

Liz Coddington

But other it's it unique to guidance, this years. our versus in contemplated and a Yes. not -- it's is not year

W. McCarthy

to our they homes delivery folks all the out because we're the to at shout way, of for business. behalf of And for the they By units outperformed in expectations grateful the to the Connected that the Fitness Peloton substantially quarter. to quite of consumers' on the involved -- efforts exerted them

Operator

the Gajrawala line of Suisse. Our next Kaumil question Credit with from comes

Kaumil Gajrawala

you've a those there's various your about the -- detail. or maybe shift initiatives have of the sort laid you just some facility out the impact any talk initiatives you and Precor on maybe outlined? any on decisions in about if assets of may and Ohio some in bit Can for just strategy Can longer keeping you've talk

W. McCarthy

Liz POP, take I'll will take Precor. and

me call with I it is in was my When Precor. to I think earnings look, about with commit Let I Fitness. strategy first and begin -- Connected choice, investors, choice to said, our ourselves is

had if Connected pretty the doing okay, been it. worst-kept you secret crossed that Precor. was exploring to at just doing fit why to willing the I buyer not dropped. willing the dance we And we're some is pay then point begs the the And of the anymore, far mean, And table. path. dramatically and stupid Precor that it's walked the to the we've where you're not does and us. that it point, in got the So that we we well, planet for down it? happened Fitness, where are question, the And away sale not And price line from

into the for Now running own benefit, for business it, sucking of all business. was invest our done have kind good us, for job time of it owned It hardware of a of that we the own the in to And we've including done performance talent detriment. of it its nothing them. our we've some bad reasonable for out to

we're So going to reverse course.

in freestanding subsidiary. understand benefit we great Precor value business. of for the for benefit to be own value add the incremental that the think have to of operating dilute the run I expense of without and strategy would as business, our increase a the those run to disproportionate not how and a some overarching efforts Precor let And

on. they in see And a And or to its we're have increase we path will And value. strategy shift dramatic so point, when shift their a market then we the unless strategy, divest. we we in a at some have product see in look that's would success,

Liz Coddington

question So the I'll about POP. take

taking able just it -- sell that to end us got calendar to It's our that in the hopeful longer. the expected sell just end fiscal facility year able Peloton but of year. are 'XX. it. had confident And we Ohio the we sell are will be to literally -- we Output will the we that we by of by process Park be it's Unfortunately, So delayed,

Now not goal. is guaranteed, end the our but year that of fiscal is

Operator

comes question of Schenk the Morgan line last Our Stanley. Lauren with from

Nathaniel Feather

Rexon Schenk. the rower for coming you how distribution? existing where and initial through just spend production new what then demand Nathan the you demand then Lauren is talk subscribers? for on and Can is Feather got of versus And portion This from and

question, And what then are in is fixed? a just POP? getting And that exactly the follow-up delay causing how last selling you

Liz Coddington

Okay.

and over our like other as season, our demand still base, for our It holiday rower, products, outperformed far as bit. is the we're Peloton building member So the awareness a quite the just product newer the a for that outside us, expectations. rower

members. did the was of So roughly rower to a share the high XX% holiday as point, your go larger It to as period. over sales existing

line The the in Now with since product, more existing moved in existing QX. subs. holidays, the overlap that with the percent XX-ish in purchasing to percent range and our trend be of members is in that's tread it has of more are terms

a that's So little existing. bit rower about and versus new the

right but POP, buyer facility On just right in Ohio. It's the use for that the we a case large facility. for find POP facility for the is to have It's a it, great facility.

taking so able do that. to be the And we're to time

Operator

at showing call currently the I remarks. turn Peter questions like for I'm Stabler sorry. to I'm to And no closing this over would back further time,

Peter Stabler

us joining for talk day. everyone, you, Have quarter. you Thank We'll today. a good next to

Operator

you Thank participation. call. conference for today's concludes This your

now disconnect. may You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.