Earnings call transcript Q4 2023

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Operator

Good day, and thank you for standing by. Welcome to the Peloton Interactive 4Q '23 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised today's conference being recorded.

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

Peter Stabler

Thank you, morning fiscal Ken. Good year-end quarter Peloton's conference and fourth call. and welcome to

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

Our securities of only our law. as business comments management's are forward-looking related include today and questions and to reflect responses statements views statements that will to your under federal

with materially by risks may differ from business. associated these and statements results in implied those Actual or to forward-looking due uncertainties our contained

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

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

now for the operator I'll our first over the call turn to question.

Operator

Citi. Josey Thank comes from you. Ron Our question [Operator first with Instructions]

Your line is open.

Ron Josey

taking question. Barry Thanks Great. to two things. -- about talk the for I want

the seasonality little the being the a last be this you I think brand And result new or back? this? back half cash spend the letter, in in of in And positive, in the also you maybe free is just about understand to weeks. to driving letter, uptick an talked in coming flow think want Is I expected more 'XX. eight sales of what bit about talked you

Thank will drivers confidence about that us that the in to talk Just and you. to cash metric? positive the lead free that flow

Barry McCarthy

to some a just at I insight into answer know line play. Ron, (ph). to macro imagine the slope which know for question, did, either it the to to what holding wish to leverage don't I seems it seasonality and I long be could There's into there's I don't you If answer the at did. some how don't be, answer. the we We I it. forces lean of -- give play. the now have cause the thoughtful in and try first But did and trend effect enough are the that

half two As flow our of it relates the cities. the tale forecast cash year, -- really is a of in we to back

of We the the that growth order we're have growth bit assumptions very The a the my in different to we achieve financial second than looks performance be first year need quite to forecasting. generate the don't half in able view, but half. to forecasting we're aggressive

those in pretty It's free of EBITDA, last it's things, we particular XX% growth, If be metrics are plus to at revenue kind quarters stellar. performance least It's the achieve ability, gross to in double-digit about all it. flow, the we'd it's quarter do our year, recent margins. of growth cash positive in financial Fitness reasonably the adjusted sales. in subs relative been the forecasting ecstatic and Connected we We've at that can if our good unit performance forecast positive

initiatives them land number the we that any associated upside and confident we on. And built a a into that and those new -- I'm towards than one the of And think letter, hard think because there's the the in And it's bias close reasons, to say. that are of with mention make there of more the will -- now. things we're I haven't is I not, handful, forecast of I but the upward working in the plan

haven't them. We landed

But talk it we of the about on them we and there's certainty do. even year. if adds until back the still I So can't uncertainty half do, more

Liz Coddington

inventory are we last we much thing free than add one to position the were more getting a which have going I than letter, cash flow, in additional just normalized was about Barry did I we year. think which the mention is, into been

to our in have Bike we build the more so advance buying holiday up season. we're some of particularly for for that going to of holiday are Tread inventory spend And inventory, And and to product.

those our year front have rather year. back spend. half also the than in the marketing put the pressure more seasonality our of And things two a bit the of flow half We cash on

Just those. the timing of

in relation to hardware want I So our sales.

wanted to So call out as I that well.

Ron Josey

Thank you, Barry.

Barry McCarthy

comment, could. more of the not unwelcome closer how so to that know sorry unanticipated to I'm many to seems We there example, of the but Ron. settlement example. the One to be story business. if and helpful certainly latest our are of be being surprises we end being another our than fair and those to we post the at long the getting in are surprises have more I it had DISH don’t Seat of I all winded, me share future, have beginning. them

Ron Josey

Understood. Thanks, guys.

Operator

before question. moment our next One

Our comes from of Doug next question JPMorgan. Anmuth

open. Your line is

Doug Anmuth

Thanks you've fiscal talk that head you're so the more come has and towards about this your how the also for though just as could the hoping the of marketing much in questions. seasonally three brand progress you about into period. seen lighter the could half taking year was I evolve Barry, know I you months Thanks. relaunch, here, a first during holidays.

Barry McCarthy

the true to very for not Doug. importance The have than about job follow team, One speak of heard pressure often them. already spectacular. CMO couple high and it and just has the is for going this talent more that's nothing our The amazing create been to exist is of a A spectacular the They marketing the density investors relaunch. more instance, done creative level. has never of with that's me in Hey, have even short thoughts. been team creative more

objectives that are younger business, audience. And is a the set attract the to achieving had the indications just which early that for we're they

with than capturing before. seen example. by people in way tremendous earlier journey their had So Gen we've a in fitness of ever We're Z engagement increase we

Bike also absolutely -- And the to So stationary was traction. the that particularly company. a more anytime, message message people place it's than just landing. is And app, with last launch is the anywhere, remind any and that objective of that finding

the about and going, enthusiastic to reasons one. we're where of lots So be

which very And yesterday, It's significant. Michigan. opportunity the sought (ph) on deals brands, capitalize is regarded we've Peloton and nauseam point one, be very highly want our very and rest regards to I of traffic year talk clear we've other make you'll partner from has the us to been to of the those that with announced, the the that University had, as both in brand already conversations unfolds. two and that highly is world us the that with reference a last after co-branding about as The ad inbound and affords that hearing Liverpool

Doug Anmuth

Barry. you, Thank Great.

Operator

next One more question. before our

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

Your line is open.

Justin Post

the some growth Barry, couple. you've the excited mentioned that about. you're and on call a already, letter in Thanks, initiatives Great.

I something some fitness as that think initiatives would a retail new enthusiastic we've or service already really you're and about out anything the call you the year? for talked about of

XX,XXX inactivations the how they And progress us of you as you'd then receive of and as them, second, back Are the on? the you I on posts Thank guess related seats? say, quantify much get the seat do quarter people people receive this help end quarter, positive maybe at churn. you. seeing Can to the any

Barry McCarthy

and to ago, growth users new component first app part reintroduction of initiatives, ask the and the churn year half make better, Liz question. to strategy. at the of of take good, strategy articulated the a I'll respect best the was Justin, With that I'll increasingly take we accessible a to had to then part, service

fitness started year XX,XXX in mentioned $XX You with ago service. subs, a as million We a revenue. about that

and quarter, grow the current Churn trends I but we'll was in was to likely than it's think back year-over-year that continue. I basis it come by up on the related down. slightly post XX% to a [indiscernible] more if seat the think

Certified as well for side pre-owned has And worked momentum we're that seeing extremely in the of us. business well. good

year, will the which to us. of initiatives. It with way past Canada, objective to be a about we growth the like not In partnerships, losses like UK operating the excited of that $XX enormously tune But was past we us for growth year existing of International did was markets year, launches reduce because and current example. Germany, with in aggressively So the did those this product the like, business, this million. new by like Liverpool leaning into you'll see about opportunity co-branded

co-branding their growth media and will contribute a And be that brand. enormously in of those as will and association that components. will of them growth. a combined, to with benefit members I all When U.S. I deals. we our have couple will be content And exclusive. acceleration way of And content be, in of our think, will well, if then our deals creation multiyear, we execute There replicating collaboration enormously think, those the of by They will characteristics. the brand from you'll from happens result an benefit them creation be see common us co-marketing Components experience. they'll be they'll initiatives, on will social global, be there the

Liz Coddington

Okay. ahead question on take and I'll go the churn.

did we see to -- our the that's as to over trends mentioned summer. consistent in when with we see So in and last model QX, a churn seasonal expect the increase modest that sequential we tend quarter, a

our than was roughly X.X% churn higher basis that had at legacy look about metric, XX we you If QX that for we points expected.

in see our seat May for And about We atypical related did seasonality we June to we post in the and April. did expected And a be -- to then churn relative increase to was it the see what recall X.X%. that bit that's rate us.

to related post recall. believe do that, we the So was seat that

just referring expect XX,XXX had we you're QX the POS people took that uptick to quantify increase, go in as we've Now And to more can believe the considered and when and to our that it's those the related consider hard and XX,XXX us a see time recall. referring that seasonally membership. X.X% the churn. subscribers around because XX,XXX, the seat to folks of you rate outsized to when subscribers. to POS the people now exactly, did when But up pause to about subscribers a metric, are churn of the churn it's you're their XX,XXX post bit to POS seasonality at typically those We range in more new do from we

new forecasting an a that guiding like really we we We I did shared we we're kind expect Now to will in not do in from expect that think don't huge POS in metric, pause. decrease of QX, but the churn see it's subscribers in to decrease, because really that, of X.X% down important on We to QX. X.X% letter. substantially anchor we're level some in see come that increase we likely because this

people of frame. for months, up of reason can end -- that time of kind pause to the June part For three started pausing May, in subscribers June the

of virtue important really a know of immediately will better We'll by well. people subscriber September. to un-pause also their understand seat that seat it just POS all little expect to receive that. churn see X.X% their seasonality like clarifies. And increase, people some to they should little and perhaps the should we by moment know our down But even the that them post. range still come more as get But Hopefully that They that don't is base bit post. not also are having that from benefit the end awaiting of we bit a than that

Justin Post

you. Thank

Operator

moment One before next question. our

Our from with Eric Sachs. next Goldman Sheridan question comes

is line Your open.

Eric Sheridan

of I so of about should terms to sort if learnings building on get drive you What of around much want wonder, make the Thanks be growth position some subscriber strategy. updated your thinking app? some for against are thoughts base more of and Digital continue I some to investments the how your Thanks. taking that to we question. of the app the your key as could goals longer-term the you in Digital strategy

Barry McCarthy

those Well, to the are excess platform. look, about to the in roughly XXX,XXX app download people date we've about slightly and new of XXX,XXX of had

we and So percentage the With is into to which creating a thing. of to paid to lean had app, seeing we a users need than App+ continue respect good we're awareness driving anticipated, trial. higher

the continue to units spend How do Fitness do app? or the to to it. spending there's we Connected success towards it we allocate constant We the tension, app we to the on a allocate And do in year see continue slices marketing how to find with of need need this as unfolds portion develop and the larger of pie plan. the business of the to our spending relative

to it right? for continues an CFU originally and Secondly, Edge-on that membership, we make it interface So be to a and to access freestanding compelling in need app engaging ways not to ensure that designed was as members, the to a easy app. evolve

the design evolve So we to continue interaction. and

Lastly, personalization, we and our for continue current both Connected Fitness to consoles the on app need investment unit. for in

satisfied, facing that user enjoy only So at that will it challenge engaging be exists user the growth success. knew will the experience that the we that members playbook we are personalization will create will lower stack the discoverable be the the LTV, churn experience higher lower they have same great challenge the the content we're is the Spotify (ph) by that’s who better the Netflix-based, so organic that more members will the be, be would we'll more the if stickier the have for

Operator

One moment question. our you. for Thank next

Our with comes Boone next question from JMP Andrew Securities.

line Your open. is

Andrew Boone

taking thanks gross my that margins profit margin questions. near XQ guidance breakeven. to seems Fitness and for morning, 'XX Good Connected are The very to imply

you Tread the think breakeven gross right think guys strategically? in you price pricing managing or about way the how As guys about do bringing the down to the think is and profit row, this hardware of about margins

Barry McCarthy

that? take you don't why Liz,

Liz Coddington

Sure. Yeah.

gross Fitness right economics have our the margin When gross to doesn't we -- you're that will territory. keep in about economics cost based a things unit we positive and to like you're it from neutral of all contribution kind guide at include activity a do -- actually show the some our unit means, continue that promotional our that what aside And a that's ability it implies structure. the QX, Connected variable business, we look we have for But margin margin. of. for So which on of roughly have

Otherwise, us of -- But we have have we we it have costs certain some volume. have requires to level it cover. that to also -- a also fixed do

a have the is volume bit to gross scales, gross of that we'll volume quarter. the So [indiscernible] that to QX, -- as guidance expecting challenged sales But in have we're margin have -- the growth our terms positive be and our in Fitness hardware our in we ability gross do achieve weak margin. margin and impacting Connected

to thing key our really we're really do evaluate base our the framework. continue is ways to subscriber that, work LTV we'll going grow to hardware to our on But note and CAC goal through here the and is to margin to

think it multiple focus at we in before, activity, is reducing spend. trade-off efficient CAC. said you driving LTV to we've promotion said QX, going of subscriber we're of beyond and to the price those things the LTV look As on growth relation or through have offering we efficient times, which to marketing sorts if our that lens And reduce

so, strategy And those to for is in quarter the best trade-offs continue us. each we'll make evaluate what

Barry McCarthy

here the a a add -- when I Let number could, And perspective, give had. tools walked me was the jump about or only different price in the me, When business. months, seems order XX about if door, the promotion thing and in limited I take. I in slightly to in Andrew. to I've we grow toolbox been And it had we of

very growth. the derogatory mean to things perspective, was we just cost business different commercial a promotions be and today. We fix to than related. it needed tool have in as that like business, That's sits from else, everything had needed a a but to a I don't re-architected had drive we price way. Peloton -- It we where

and this about excited of partnerships and business out optimistic. around that disconnect stock the We the to from it's is I the price start all a I enormous was there one tools the the completely I've never lot when are about not building the mean, things I'm sound toolbox. those cooking. $X and I have and don't it been door in XX%, got I lot the the of the have on, in stock hanging mean We're more was walked of co-development of the like of this CEOs fire. the in because and price irons call. of at But between it disconnected future lost energy a is

went about should hardware price in we right explanation. So dependent and which long-winded promotions then growth, on to are, fact, positive for I'm less in I order if that is drive margins, that that have implications through why

Andrew Boone

marketing the For much. what side ask sales really corporate for there? my happen so Thank on to Do else the second everything you question, that's needs and any able included to support or wanted need about else investments to to make for growth be hospitality that to I to drive guys opportunity. you

Barry McCarthy

Super there, We to Exec capability who help Greg led a to team to good just commercial Express, in question. Hybl and commercial drive out build growth on the added from partnerships corporate sales American our Senior the side strategic wellness.

some be a But impact there'll it macro from yes, investment. be basis, So big a margin. won't on

Operator

Thank you. moment for… One

Liz Coddington

just going point. I add to one more

to growth commercially are Another our there. the Is working soon should in opportunities to thing for businesses that's for going and that give we coming and help hardware we're drive on more excited launching their settings. that and Bike+ that be our have really Row will about that our business

be we're able So when soon. will great that to it offer

Barry McCarthy

it's once yeah. so well, in the reintroduced Tread+ And as market

Operator

question. our One moment for next

Our next Shweta question from with Evercore ISI. comes Khajuria

is Your open. line

Shweta Khajuria

my you corporate include Okay. where all confidence then flow got have uncertainty? Thank half product taking in Barry where a marketing couple. of I've I and there's level say next three to questions. highest the forecast. your you of greater spend, think your your positive level of a and that international expansion, for of cash you would getting growth things, question initiatives And year, a the back initiatives partnerships, of free on do

the feel was In how confident time, than your time level different of visibility your time? it you. and methodology last terms perhaps different guidance of this Thank quarter this method in your current how of and was do your first uncertainties? forecast, is in terms -- your you given So how

Barry McCarthy

the second do you part want to Liz, question? take the of

Liz Coddington

Sure.

in the odd is do. of are thing quarters that quarter One different that is often other versus than QX guiding we later little a an it's question. -- a about little So we much bit

less we're to a But to. FaaS to wasn't to subscribers, regard no the change guidance. an confidence -- added just so subscribers of change methodology higher our excluding I that additional there's subscribers. the app Connected and methodology. of guess our I is provide guidance in There quarter other in be range really with our mean the otherwise, Fitness left our because guidance there's And change we subscribers. app our to would guiding then really guidance

Barry McCarthy

can't think it's for half year? perceive growth And risk the is, was answer short the I the related how the in pretty the -- to it's do business me look, is, in second And I of the upside mean, much question doing? much. and a pretty not we I we're that haven't the consumed -- upside are deliver of the kind So that and we the at we moment, then And all heck process. if what low bar. bar, in we're against announced with it, potential

So with optimism. at filled the moment, I'm

wayside. Now a the today, by be feeling of fall different saying bunch pretty a those it good. tune, in but I'd things I'm

Shweta Khajuria

Liz. Barry. Thanks, Thanks, Okay.

Operator

We'll for move question. our next

Our Lu comes next from Barclays. with Mario question

Your line is open.

Mario Lu

for the Thanks taking Great. questions.

one share over free either Spotify? access rev free all free note, but on is only there three first is any separate regards app. I eventually to early to with opportunity app to paid to data or time? an the similar a The on converting then the it's And know points months, add been for these users members

Barry McCarthy

me do the question do ask first Let to second part Liz of part. the and the

order business. requires resource to player the very takeaways, with advertisers for viable a I code automation need that you required a I'm and familiar lot two bit and lot writing engineers, we from Spotify. ran your have other one a scale complexity of tools buy and of means business, of which to lot time. my it don't is it the the measurement sell to at It for of in One scale the since secondly, have little reach, that that order requires I intensive. experience. a account be And in in So it And a a at and business long properly have ad with ad is

for to Netflix So be we to to that, of of have. our the the sort would model. only that able participate, in have members user if which be be lot think, -- did the we way the And not it I to we is matter all a aspire would it, experience would would I think practical outsource

a as the ad practical Any version. Liz, the in And matter. future, so, question I don't the scenario foreseeable we're which in I think was under base. foresee a

Liz Coddington

Yes.

app people regarding was So early Data to Points, question getting the free convert the and to paid. about

are of mentioned, the have been users Barry new over as downloads Peloton. those had to app. related we So of Over have XXX,XXX XXX,XXX to that

monthly the about app. users have million of active (ph) We X.XX of

certainly journeys. We that is there engagement. believe earlier these opportunity to further more of So a are people fitness drive lot their in

a as had really decided focused Peloton the growth. things And started for we've lot how on key important of work have App+. these make to that's engagement. and get to to drive are a paid app awareness that's get and of the to them do people really We're number on and good better haven't APPX we believe is of that free upgrade because new and large to But to that that that them easier tier yet But people a on, membership. they it a long-term downloads. or engage to Barry building very driving We to do working mentioned, convert been for to base one we're

Mario Lu

Great. on That's question fixed second then cost. helpful. And is

items this You by reduced OpEx fixed XX% to quarter. XX% your year-on-year

can fiscal provide 'XX? cost much any In further expect terms improvements Thanks. can in how curious there's reductions. terms of we if see Just the color fixed to in you of

Liz Coddington

Yeah.

about talk I'll So I’m general. more wondering, -- of our OpEx I'll in kind about just talk

the specific the of our So over but are course any cost we to aren't offering fixed we optimize base continue targets, year. going to

out full basis, have G&A, of over a staff we've optimize legal don't benefit in expense But costs reductions worth sight line fiscal calling expenses For in in year spending, $XXX augmentation, million we versus to we we did onetime a like ‘XX. continue in to QX, repeat. our on expect and going legal out that service. that we're customer to areas to reduce have called It's

continue R&D to like expenditures expect our invest ‘XX be areas as in platform. we similar For R&D, to we to our FY

is mentioned improvements and are Barry just costs. I R&D think improving we app. mentioning has it focus change do also But such making a worth our briefly on that With software our as think how personalization we a in that very about primary being

be So we we letter software. capitalizing mentioned majority for internal R&D that longer substantial not any a it, it’s will of in our the shareholder use

will roughly $XX you as estimating QX our a P&L the impact may Hopefully, R&D so more capitalized. be see rather And million about expensed that of than R&D to about in that It’s helps. costs expense.

did I last want to one mention thing.

thing. just mention last me Let one

Just on sales of marketing sales costs, and retail be our footprint. will continue some be marketing, to store our and reducing – we

will we fixed some other of a as more some more be so a see And those and costs much marketing reinvesting come out but those of are sales channels cost, of we’ll into efficient from well. in marketing that

Operator

Edward next One question. for moment question Yruma with you. Thank from comes The next Sandler. Piper our

line open. is Your

Edward Yruma

Good question. Thanks Hey. the for taking morning.

about in of question So I it your has post but think guess, overall Connected long how Fitness reported with an like I what just that? I seat workouts maybe How been bigger seat and know you subscriber time, engagement light Did curious guess have with within a user trending? you haven't issue picture very in happened base? post, per a the

of to the and price on think had Bike kind of of of cost compares real I about should you of we a I goods the some how you. costs inventory forward, of know the were capitalized legacy just of kind the there And inventory. of inventory. balance how sheet? older going were maybe that on on some then extraordinary guess kind quickly lot layers Thank directionally

Barry McCarthy

I And amongst piece, to in I'll there's that engagement please using our to do. using they take folks first. the that seat stop related take there there didn't, to the and Engagement, paused could their them piece if has we fact of mentioned their Liz, so and say [indiscernible] anything inventory no bike. members you strong. a their engagement add just as Macro And who but Liz who notification Liz remained the Maybe have to notification. were want was account the post, who would kept bike, number

a see just dip to and anything like might correct engagement why in didn't said. you that on we in inventory seat -- comment you do given expected explains post. want perhaps So I or around aggregate the probably think proposal have Liz, I

Liz Coddington

about little but I Nothing talk to a me correct, bit inventory. let will --

an us position But inventory a be for of And from will were hardware. 'XX. We we more fiscal are to we're than more So purchasing last in in we we purchase. a perspective, cash much normalized are continue source already, inventory year. inventory

fact, and inventory Bike this purchasing Tread more quarter. inventory In we're

your talking about cost So of sold come and our I the of think question down. was goods have goods cost sold

the for products have seen down able our of Tread, That's like to we For why goods sold of reasons were the one substantially. come we part of cost reduce price Tread.

freight. freight the So longer inbound for no to the those it's had from inventory rates old we for because is down pay what was expensive it really that

and we -- continuing also also, our We have had down, inventory middle And have the year. as will come down. our storing and we're progress throughout mile as come in logistics well, costs aren't much we as come in even to that in our the past, make storage costs and have

reduced those our of have things goods. all So of overall cost

customers of reduction. back in of case price to the a of those our Tread the in Rower, And reductions to give we decided form and some

more impact Tread as to specifically. to seat haven't perspective. did We I of correct related really Bike XXX post our seen big around an But was subscribers to Barry's from one more want incrementals. to the that that comment XX, XX,XXX thing XX,XXX about to the about

Barry McCarthy

the XX,XXX is think I the aggregate.

Liz Coddington

XX,XXX XX,XXX the XX,XXX Yes. is aggregate, incremental. to

Edward Yruma

Thanks.

Operator

Thank you. for question. our next moment One

Cowen. question next T.D John comes with Blackledge Our from

open. is line Your

John Blackledge

Great. Thanks. Two questions.

of pipeline talk Germany just Germany? then a about program launched on that initiative, but opportunity? curious the And it's for know in, in that weeks opportunity how can you in on rental the second, college the I On see you couple August Thank X. you.

Barry McCarthy

land more would John, accustomed Germany, that in it know, rental order which as It's enthusiasm models to program although fitness a the early to and as reverse service is you why about well. culturally know, too thought there's team really they're In may initially.

that optimistic, program programs with But answer enough So really could I college scale across want you're like we question. to coming the I incredibly have announced some were one the the we're let's and say. that fall the understand other X with to fortunate it. imagine you Division don't from And time. Michigan to pipeline, could where respect in

certainly And true. is that hope I

do all think college on -- the because if thing the if to base. dog co-branded amongst be caught demand to them off, really supply campuses their car wonder, pressure that we're I fan fulfill the it’s takes going chain have the are to enough opportunity I guys then are create going enormous the course, to of I pulling going the that hope rapid bikes problem. enormous. on we’re and And hair out, because to lucky elsewhere be we’re if to

John Blackledge

you. Thank

Operator

question. One moment next for our

next question Sherman comes from with Our Bernstein. Aneesha

Your line is open.

Aneesha Sherman

you. Thank

has quarter (ph) historically, and year's QX your to the of more sales. So than been QX QX weakest XX% driven have

you term. to in then to talk a cadence a the seasonality see on expect with impact you more year similar of kind about have into follow through QX? then as QX QX, do So medium a bit And I

to Thank your effectively As And kind new is generally do over do for business of cost lowered the you commitment sharper? expect pricing seasonality for the in just you. base you you get the aligned business? schemes more seasonal then believe your dollar new members now

Liz Coddington

about me the can Let question with take I revenue start -- the seasonality.

that with sort expect and offer year full the not shared I'm our we to past, to the show in revenue So for we've what again going you. the year guidance But revenue. phasing going we're of for

year, back our resemble 'XX. but to it the more 'XX we to most our weighted was expect So be this in Not mentioned. as Barry closely fiscal year of fiscal fiscal it heavily quite than 'XX, the 'XX, heavy fiscal we as but expect half as weighted do to seasonality be heavier revenue

part question was our in that improve also improvements answer to changes? of the improve related also app, of we're that in know But the with going a the some of should will that the to drive things business factors economy to the macro our well. do growth app our part the pricing tougher to it as half that which and because and some go -- along. experience, which there's Now I the also think second is the seasonality we -- of change as question second of we'll -- affects business, will

I be for that else know. know I Barry, the to is described seasonality now, our is, So when answer it. we add? But the kind way think anything expectation the we'll will of

Barry McCarthy

Liz One minor everything said. with agree point. I

we'll will more Fitness unit people a are. the than Fitness workouts at are -- I less I to but anyplace. Connected app because And anywhere, are business anytime, possible be the it's you of with be those wherever that time. the think when travels business seasonal think doors stays designed the it's over the least in outdoors, know you But app done number Connected

yoga outside gym if using between way the – gym, So when strengthening a or Fitness content you’re by or running, example. on Connected in you're of

Aneesha Sherman

Thank you. That’s helpful really color.

Operator

One moment question. for our next

comes Baird. last Jonathan with question Our from Komp

Your is open. line

Jonathan Komp

to I you. just Hi. Barry. wanted up, follow Thank Yeah.

quarterly Precor you. just some mentioned you maybe think then, Thank those Could question. share business quarter. willing little about relative you a or And Are the basis? assumptions? a bit size you growth to I pretty a on modeling of more fourth robust by driving the annual expectations Liz, what's the just talk

Barry McCarthy

is off island to I'm I me certain. the Liz going about more talk if forecast, the vote

answer unsatisfactory. be sure but going my would I'm answer to I I'm -- So it, will

So to linking cadence was the not a two, greatly business. seasonal made we the depends year, seasonal it whether unfold. to referring the about preceding the of not we're It's on to achieve cadence. one. the not point quarter just I'm how is seeing change growth in -- the like it back We're year-over-year projecting and big Point comments or

not suddenly like it's we're So out QX. blowing

that the before. shoulders come the of on stand we So have quarters

Liz Coddington

Yeah. just the from Based well about bring year we’re back revenue as that adding revenue on on to of half mention we I to sell. have when is side, do will a how do second think the market, the perspective. that fact to Tread+ thinking inventory the impact the just worth it we’ll available that growth limited

don’t Now but we in we Precor, that your than business less specifics Precor expected about less really out our it fiscal break is don’t than of be business, ‘XX. to question and provide XX%

there. changes. spot. I restructuring business have want out a call that, in some we in relatively much a that though, should to new be on and are new. expect And And that management progress made better do They’re they’ve in that team put we place business still We making

EBITDA free in closing and closure Carolina. North throughout adjusted a and announced of the the We’ve cash are Precor improving We they’ll facility their be the that, year. of flow course

Jonathan Komp

Thank helpful. you. That’s Okay.

Operator

to any call the to And remarks. Stabler for Peter back I'd over like turn closing

Peter Stabler

quarter. joining today. next for day. to great everyone, Thanks, you us speak We'll Have a

Operator

today's does this gentlemen, and presentation. conclude Ladies

disconnect now may You and have day. a wonderful

Peloton Interactive (PTON) 23 Aug 232023 Q4 Earnings call transcript