Peloton Earnings Report

• Revenue: $524.6 million

• Earnings per share: A loss of 20 cents

Peloton (PTON) reported a 66% increase in its sales from a year ago to $524.6 million. The company is one of the beneficiaries of the Covid-19 pandemic as gyms are temporarily closed and many people are looking to work out. The company also said that it held its largest class ever of over 23,000 people streaming, last month.

During its fiscal third quarter, Peloton’s revenue jumped 66% as more people purchased its fitness equipment and subscribed to its online live workout classes to keep in shape during the coronavirus lockdown.

This move not only increased the company’s online classes active subscribers but also, boosted the company’s sales outlook for the rest of the year. Peloton said there has been an increased demand for its bikes, and it would likely extend into the fourth quarter. It also said that there have been new customers lately, especially those that never considered buying any of its bikes before.

During a post-earnings call, Founder and CEO John Foley told analysts that the coronavirus pandemic is going to affect customers’ exercise routines for quite a long time. Following its Q3 earnings report on Wednesday, Peloton shares were up 8% by Thursday morning.

Shares of Peloton hit an all-time intraday high of $39,26 on Wednesday. By Wednesday’s market close, the company’s stock was up more than 31% this year. The company currently has a market cap of about $10.7 billion.

Though Peloton’s total revenue grew 66% to $524.6 million from $316.7 million a year ago, its net loss widened during the third quarter to $55.6 million, or 20 cents per share, from $38.6 million, or $1.76 a share, a year ago. The company said that the loss was primarily a result of expenses for nonrecurring litigation and settlement.

Wall Street analysts had estimated an adjusted loss of 17 cents, on revenue of $487.7 million in the third quarter, based on a Refinitiv poll.

Its connected fitness products such as its bikes generated total sales of $420.2 million, up 61% from a year ago, representing 80% of total revenue. While subscription revenue generated $98.2 million, up 92% year-over-year, making up 19% of total revenue.

For the full fiscal year 2020, Peloton has called for total revenue to range between $1.72 billion and $1.74 billion, representing a year-over-year increase of 89% at the midpoint of the range. The company previously forecasted a range of $1.53 billion to $1.55 billion.

The company has also raised its 2020 outlook for connected fitness subscribers from 1.04 million to 1.05 million, from a prior range of 920,000 to 930,000.

In addition to purchasing their own equipment, Peloton’s customers/members pay a monthly subscription fee of $39 to access the company’s live-streaming classes, which also boosts the company’s followings across its social media platforms.

Peloton may be a beneficiary of the Covid-19, however, it has also had its own fair share of the coronavirus impact. In March, the company closed its 97 retail stores to the public, due to the coronavirus pandemic. The company intends to keep the majority of its showrooms closed over the next several weeks. It has since stuck to producing live content from its instructors’ homes.