Peloton Sales Down in UK, But Subscription Revenue Grows
The connected fitness company is continuing to add members across the pond, which bodes well for its international expansion plans
Peloton’s U.K. sales have slowed, but the connected fitness giant with a devoted following shows promise with its subscription model across the pond.
According to a recent Companies House filing, hardware sales in Peloton’s U.K. arm have decreased by 13% in its last financial year ending June 30, 2022. The filing cites the slowing hardware sales due to the impact of Covid.
However, Peloton reported that its subscription revenue in the U.K. increased 89% over the prior year, with connected fitness company continuing to add members and reporting low churn rates.
The financial statement also reveals Peloton’s U.K. operating losses more than doubled in FY22, with a loss of £210.4m in the year to June 2022, compared to a £81.4m loss in the year prior.
The connected fitness company recently opened a permanent Peloton Studio London at Floral Street, Covent Garden. The studio features three dedicated Peloton studios with classes for Bike, Tread and Strength and serves as a recording facility for Peloton’s live and on-demand content library.
The subscription revenue increase underscores Peloton’s recent pivot to its app, with the connected fitness company reminding consumers that it’s more than just at-home fitness equipment; it has a breadth of digital content at its disposal.
As Peloton’s CEO Barry McCarthy told investors earlier this year, he firmly believes the path to the promised land is through Peloton’s app.
International growth plans
At a recent tech and media conference hosted by J.P. Morgan, McCarthy identified international as a growth area, revealing that Peloton would discuss additional information in the coming quarters. While the connected fitness brand has launched in Germany, Australia, and Canada, Peloton plans to add new markets in Western Europe, which McCarthy says is fueled by the relaunch of its app.
“International markets continue to be a focus and area of growth for Peloton,” a Peloton spokesperson tells Athletech News. “The work of FY22 has been about bringing costs in line with revenue globally and on a market-by-market basis as we pursue our top priority of becoming free cash flow positive globally.”
Peloton describes FY22 as a “transformational year” for the company as it began to restructure operations, reduce headcount and outsource manufacturing of connected fitness units.
“This update reflects the changes Peloton has made in creating a sustainable structure that allows us to focus on growth and continue to deliver an amazing Member experience,” the Peloton spokesperson said.
As Peloton continues its transition and rebrand, McCarthy confidently predicts that the connected fitness company will have much to celebrate in the future. When asked at the conference to define what wins Peloton will be able to emphasize in the next year or two, McCarthy responded:
“We are talking about the successful growth of the commercial business. We are talking about growth (internationally). We are talking about the app.”
