Barry McCarthy had a reputation for straight talking when chief financial officer at Spotify, and now he’s Peloton CEO, he’s carrying on in the same vein.
The company’s latest quarterly shareholder letter begins thus: “Turnarounds are hard work. It’s intellectually challenging, emotionally draining, physically exhausting, and all consuming. It’s a full contact sport.”
That’s reflected in the financial results accompanying the letter, with Peloton’s revenues falling by 24% year-on-year to $964.3m in the first quarter of 2022 (its fiscal Q3). That was driven by a sharp fall in sales of exercise bikes and treadmills, which wasn’t made up for by growth in subscription revenues for the fitness service.
Peloton ended March with seven million members, but McCarthy is setting his sights far higher.
“My goal for Peloton is to become a global connected fitness platform with 100 million Members. That’s equivalent to roughly half the world’s global gym memberships. It’s a long, long way from where we sit today,” he wrote.
Getting there will take investment, but with a quarterly net loss of $757.1m, Peloton has some challenges there – something McCarthy announced he is addressing by striking a deal to borrow $750m from JP Morgan and Goldman Sachs.
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