What to Expect From Peloton’s Q3 Earnings

After a disastrous Q2 earlier this year, can Peloton shake off a poor last quarter to deliver a solid earnings report this time around?

Nov. 3, 2021

After a devastating Q2 earnings call, Peloton (NASDAQ: PTON) will be hoping to show signs of life as it reports its earnings for the third quarter of 2021. The world reopening following the COVID-19 pandemic led to a huge drop in revenue growth for the fitness technology company. Global supply chain issues have also caused concern for investors, with shipment delays punctuating a very different year for Peloton than what it was used to throughout the pandemic.

Down almost 40% this year to date, the stock has struggled to match the expectations put on it following a remarkable rise of over 400% during 2020. Investors will be looking for some positives to take from the call, with particular interest sure to be paid to how a lowered price of the company’s flagship exercise bike has impacted sales figures.

When is Peloton’s earnings date?

Peloton reports earnings for the September quarter of 2021 on Thursday, November 4 at 5:00 PM Eastern Time. 

How can I listen to Peloton’s earnings call?

Peloton’s earnings call will be streamed live on the companies website. You can access the call here. To access the call transcript, as well as the shareholder’s letter and the financial statements for the quarter, all you need to do is go to Peloton’s investor relation page.

What to expect from Peloton’s earnings?

Following its sub-par earnings call last quarter, Peloton made the decision to significantly lower the price of its flagship exercise bike. The bike will now set you back $1,495. As CEO John Foley put it, “today, we announced our latest step on the journey to broaden the accessibility of our products.” Investors will be intrigued to see whether or not this drastic price change can increase revenue. At the very least, they will be hoping the lower price point can entice more people to become part of the company’s monthly subscriber base.

Speaking of which, investors will be eager to see if Peloton has continued to attract subscriptions to its online suite of fitness classes. In the last earnings call, the company reported a 132% year-over-year (YoY) increase in subscription revenue to $281.6 million. Recent expansions into areas such as hotel and resort fitness suites and corporate wellness will hopefully bode well for the company’s finances and investors will undoubtedly be hoping to be rewarded for holding the stock following a tumultuous last quarter.

Safety issues made headlines for all the wrong reasons earlier in the year as the company was forced to recall its Tread and Tread+ products in April. Despite re-entering the market in August, investors will still want a full update on just how badly this highly publicized misdeed affected the company. The company was heavily criticized for how it handled the ordeal, with the CEO stating that “Peloton made a mistake in our initial response to the Consumer Product Safety Commission’s request that we recall the Tread+. We should have engaged more productively with them from the outset.” Investors will be seeking assurances that issues like this won’t happen again and that the company is better equipped to deal with any that do.

Despite a rocky start to trading in a post-pandemic world, Peloton still maintains a lot of the desirable underlying factors that made it such an attractive investment to begin with. A pull-back was always likely following a lockdown fueled price explosion, but investors should still see Peloton as a stock they can buy and hold long-term.

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