Peloton(PTON) - 2025 Q2 - Quarterly Report

Revenue Performance - Total revenue for the three months ended December 31, 2024, was $673.9 million, a decrease of 9.3$743.6 million for the same period in 2023[20]. - Connected Fitness Products revenue decreased to $253.4 million, down 20.6$319.1 million year-over-year[20]. - Subscription revenue remained relatively stable at $420.6 million, compared to$424.5 million in the prior year, indicating a slight decrease of 0.9%[20]. - Revenue from North America for the three months ended December 31, 2024, was $616.7 million, down from$686.3 million in 2023, accounting for 88% of total revenue[56]. - The company recognized $89.1 million in revenue from deferred revenue for the six months ended December 31, 2024, compared to$92.5 million in 2023[59]. - The company introduced a Used Equipment Activation Fee revenue stream during the first quarter of fiscal 2025, contributing to improvements in subscription revenue[213]. Profitability and Loss - Gross profit for the six months ended December 31, 2024, was $622.1 million, an increase of 6.4$584.8 million in the same period of 2023[20]. - Net loss for the three months ended December 31, 2024, was $92.0 million, compared to a net loss of$194.9 million for the same period in 2023[20]. - The net loss for the six months ended December 31, 2024, was $(92.0) million compared to$(354.1) million for the same period in 2023, indicating a significant reduction in losses[25]. - Adjusted EBITDA turned positive at $58.4 million compared to a loss of$81.7 million in the previous year[187]. Operating Expenses - Operating expenses totaled $364.3 million for the three months ended December 31, 2024, down 25.1$486.5 million in the prior year[20]. - The company expects to achieve reduced annual run-rate expenses by more than $200 million by the end of fiscal year 2025 due to restructuring efforts[175]. Cash and Liabilities - Cash and cash equivalents increased to$829.0 million as of December 31, 2024, up from $697.6 million as of June 30, 2024[19]. - Total liabilities decreased to$2,607.0 million as of December 31, 2024, from $2,704.3 million as of June 30, 2024[19]. - The company reported a net cash provided by operating activities of$119.2 million for the six months ended December 31, 2024, compared to a net cash used of $110.4 million in the same period of 2023[23]. Inventory and Restructuring - As of December 31, 2024, total inventories, net amounted to$257.8 million, a decrease of 21.7% from $329.7 million as of June 30, 2024[75]. - The company recorded inventory reserves of$172.4 million as of December 31, 2024, down from $187.7 million as of June 30, 2024, indicating a reduction in excess and obsolete inventory[76]. - The company incurred total cash restructuring charges of$3.3 million for the three months ended December 31, 2024, compared to $9.6 million in 2023[67]. Stock and Equity - The weighted-average shares of Class A and Class B common stock outstanding increased to 385,591,039 for the three months ended December 31, 2024, from 362,334,326 in the prior year[20]. - The balance of additional paid-in capital increased to$5,060.3 million as of December 31, 2024, up from $4,767.1 million as of December 31, 2023[25]. - The total number of restricted stock units outstanding as of December 31, 2024, was 70,062,501, with a weighted-average grant date fair value of$5.86[140]. Membership and Engagement - As of December 31, 2024, the company reported a total of 6.2 million Members, indicating a strong community engagement[162]. - Ending Paid Connected Fitness Subscriptions decreased to 2,879,404 from 3,004,413 year-over-year, reflecting a decline of approximately 4.1%[187]. - The Strength+ app reached over 220,000 monthly active users, primarily from existing All-Access Members, enhancing member engagement[167]. Legal and Compliance - The Company faced multiple derivative actions alleging breaches of fiduciary duties and violations of the Exchange Act, with settlements pending[125][127][129]. - The company is currently evaluating the impact of several recently issued accounting standards, including ASU 2023-07 and ASU 2023-09, which may affect future financial reporting[36][37].