The UK arm of Peloton has reported a substantial pre-tax loss of £98.1 million for the 12 months ending June 30, 2023, shedding hundreds of jobs in the process.
This follows a previous pre-tax loss of £173.7 million for the prior financial year, as detailed in newly filed accounts with Companies House.
Financial Performance and Revenue Decline
The results, filed nearly five months late, reveal a significant reduction in revenue from £127.7 million to £93.8 million over the same period. The average number of employees in Peloton’s UK division decreased dramatically from 682 to 441 during the year.
Future Financial Filings
Peloton’s UK financial results for the most recent fiscal year, ending June 30, 2024, are expected to be filed by March 31, 2025.
Hardware Sales and Subscription Revenue
A statement signed off by the board highlighted the mixed performance across different segments.
It said:
“In FY23, subscription revenue contributed over half of the company’s turnover at £55.7 million, an increase of 16 percent over the prior year, as we continue to add members and experience low churn rates. Hardware revenue for FY23 was £36.5 million, a decrease of 47 percent from the previous year.”
The significant drop in hardware revenue was attributed to reduced marketing expenditures aimed at driving more efficient customer acquisition and reducing operating expenses.
Despite the revenue challenges, Peloton reported a significant reduction in its operating loss by £75.6 million, or 43 percent, compared to the previous year. The company also saw a 35 percent decrease in the cost of sales and a 37 percent reduction in administrative expenses. The decrease in administrative costs was primarily driven by reduced marketing spend and lower employee costs.
Restructuring Costs
During the year, Peloton recorded £17.1 million in restructuring costs, down from £36.6 million in the prior year. This reduction is part of the company’s broader strategy to streamline operations and improve financial performance.
Parent Company Performance
On a broader scale, Peloton's parent company, headquarteredin the US, posted a revenue of $1.1 billion for the same financial year, down from $2.1 billion. The group’s pre-tax loss also improved significantly, dropping from $2.8 billion to $1.2 billion.
For the six months ending December 2023, Peloton reported a revenue of $1.3 billion, slightly down from $1.4 billion, and its pre-tax loss was cut from $741.2 million to $355.1 million. The company also posted third-quarter revenue of $717.7 million for the three months ending March 2024, down from $748.9 million, with its pre-tax loss reduced from $275.2 million to $166.7 million.
Industry Context: Wattbike's Performance
Peloton’s UK results come in the context of broader industry challenges.
Wattbike, a static bike brand based in Nottingham, reported anticipating “further losses” due to a slump in turnover, resulting in a “disappointing” year.
Wattbike supplies training bikes to organizations including The British Army, Manchester United, and David Lloyd gyms.
The company’s turnover fell to £13.6 million for the 12 months ending September 30, 2023, down from £20.4 million the previous year.
Despite the decline in sales, it managed to reduce its pre-tax loss to £6.8 million, down from £8.7 million in the previous year. The financial challenges faced by Peloton and Wattbike reflect broader market trends and changing consumer demands.
