Peloton falls short of expectations in latest financial report and blames Apple

In a nutshell: Peloton pointed the finger at Apple for the fitness company’s disappointing results for the first quarter of fiscal 2022, in which it fell short of expectations and reported a net loss of $ 376 million.

In the first quarter of fiscal year 2022, Peloton reported Revenues were $ 805.2 million, which fell short of expectations of $ 810.7 million, although in line with its own forecast of $ 800 million. The reported loss per share of US $ 1.25 also exceeds the expected loss of US $ 1.07 per share, representing a total net loss of US $ 376 million. Fitness product sales also fell 17%.

In comparison, Peloton reported a net profit of $ 69.3 million a year earlier, a figure that was boosted by the pandemic and orders for couch potatoes.

One good news is that Peloton’s connected fitness subscribers grew 87% YoY to 2.49 million, while paid digital subscriptions rose 74% to 887,000. Meanwhile, the total membership rose to over than 6.2 million people.

Talking to investors about income (via Bloomberg), Peloton said some of the blame for not meeting financial targets could be blamed on Apple and its new Ad Tracking Transparency (ATT) policy, which appeared in iOS 14.5. This change gives users control over the collection of their data, allowing them to grant or deny permission for apps to track their activity for targeted advertising.

Facebook has long been an adversary to ATT, warning advertisers last year of an ad disaster. The social network has calculated that this will lead to a 50 percent drop in revenue from the Audience Network platform.

ATT reportedly pushed advertisers towards Android, and we recently learned that it cost social media platforms including Snap, YouTube and Twitter nearly $ 10 billion.

“We expected fiscal 2022 to be very challenging to predict, given the unusual year-on-year comparisons, demand uncertainty amid the economic recovery, and the highly publicized supply chain constraints and pressure on commodities,” Peloton wrote. “While we are downgrading our near-term outlook, our confidence and commitment to our strategy remains unchanged.”