What’s Going On Here?After Peloton announced better-than-expected quarterly results late last week, the exercise equipment maker might be hoping you keep digging deep through these lockdowns forever and ever and ever… What Does This Mean?With so many gym-banished fitness buffs working up a sweat in their own homes, demand for Peloton's services last quarter was pretty extraordinary. The company grew its sales by 232%, and posted a profit of almost $70 million – all the more impressive when you realize it lost $50 million in the same period last year. Still, maybe it needs to spend a bit more time on its own treadmill: the company said it can’t keep up with all the orders, and admitted there’d be shipping delays for the foreseeable future. C’mon, Peloton, you got this! Why Should I Care?For markets: Keep ‘em busy.
Analysts are keen to know if Peloton can build a sustainable business, so they’ve been paying close attention to how well it holds on to subscribers. But if – as Peloton itself has said – subscriber retention depends on keeping them engaged, there might be trouble ahead: subscribers only did 20.7 workouts a month on average last quarter – a big drop from the 24.7 of the quarter before. Peloton reckons that’s just because people exercise outdoors in the summer, but investors will be waiting to see if the colder months will get subscribers back on their bikes.
The bigger picture: Ready… set... grow!
Peloton’s investors particularly like the recurring revenue the company makes from its subscription service, which provides a more stable income than its equipment does. So they might be pleased to know it grew 133% versus the same time last year, meaning subscriptions now represent a fifth of Peloton’s sales. Subscriber growth accelerated from the previous quarter too – something even subscription-business veteran Netflix couldn’t do. Then again, Peloton does have more room to grow: the equipment maker only has 1.3 million subscribers to Netflix’s 195 million, and fewer big-name competitors too. | 
