Peloton sees FY25 revenue $2.4B-$2.5B, consensus $2.46B

The company said, “Our Full Year FY25 guidance reflects the expectation that hardware sales will decline Y/Y, as well as an expectation that Average Net Monthly Paid Connected Fitness Churn will continue to increase modestly Y/Y and follow our historical seasonal pattern. Our Full Year guidance range for Paid Connected Fitness Subscriptions of 2.68 to 2.75 million remains unchanged and reflects a broad range of outcomes. We will continue to refine our strategy to improve unit economics over the course of FY25, which may include additional changes in pricing, promotional strategy, or other levers available to achieve our financial targets. Any changes in these areas may affect our gross additions for Paid Connected Fitness Subscriptions across the fiscal year. Our Full Year guidance range for Paid App Subscriptions of 550 thousand to 600 thousand, a 20 thousand reduction versus our prior guidance, reflects our decision to limit App media spend as we invest in product development to improve the Member experience. Additionally, as we continue to improve our Member experience, we see clear opportunities to improve engagement, which could result in favorability to churn for both Connected Fitness and App. While we are optimistic we can improve engagement through product and content innovation and evolving our marketing strategy, the timing of when we will start to see meaningful impact from these efforts is uncertain, and therefore not reflected in our guidance. Our primary focus for FY25 is delivering on our key financial results, which include Total Revenue, Total Gross Margin, and Adjusted EBITDA. We are prioritizing these metrics along with achieving our Free Cash Flow target. Our FY25 outlook for Revenue remains unchanged at $2,400 million to $2,500 million, as well as our outlook for Total Gross Margin, which remains unchanged at 49.0%. We are raising our FY25 Adjusted EBITDA guidance by $40 million to $240 million to $290 million, which reflects our continued improvements in profitability, largely due to Y/Y gross margin expansion, the operating cost savings we expect to achieve related to our previously announced cost restructuring plan, and reduced Y/Y media spend. We are also raising our FY25 Free Cash Flow target to $125 million+, up $50 million from our previous guidance, primarily from lower inventory production that we expect to create a greater working capital tailwind, as well as continued operating expense efficiencies. Following our Q1 Free Cash Flow result of $11 million, we do expect to achieve positive Free Cash Flow in all four quarters of the fiscal year. We expect to make meaningful progress in deleveraging our balance sheet throughout FY25 and beyond.”