Peloton (PTON) Warns for Q2 But Stock Rallies After-Hours as Worst Case Avoided

Peloton Interactive, Inc. (Nasdaq: PTON) provided a business update today and reported preliminary results for its second quarter Fiscal 2022 ended December 31, 2021.

• Total Revenue of approximately $1.14 billion, versus previously provided guidance of $1.1 billion to $1.2 billion (*** consensus is $1.15 billion)
• Ending Connected Fitness Subscriptions of approximately 2.77 million, versus previously provided guidance of 2.8 million to 2.85 million
• Average Net Monthly Connected Fitness Churn of 0.79%
• Adjusted EBITDA in a range of $(270) million to $(260) million, versus previously provided guidance of $(350) million to $(325) million

"As we discussed last quarter, we are taking significant corrective actions to improve our profitability outlook and optimize our costs across the company. This includes gross margin improvements, moving to a more variable cost structure, and identifying reductions in our operating expenses as we build a more focused Peloton moving forward. This work is still underway and we expect to have more details to share when we report earnings on February 8, 2022," said John Foley, co-founder and CEO.

Second Quarter Fiscal 2022 Conference Call and Webcast The company expects to release its final second quarter Fiscal 2022 results after the U.S. stock market closes on Tuesday, February 8, 2022 and hold a conference call to discuss results at 5:00 p.m. (Eastern Time) that day.

Despite the warning, shares of Peloton rallied 9% after-hours as the warning was not as dire as some had expected given mid-day reports the company is temporarily halting production due to demand issues. Shares well 24% intra-day.

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