In a nutshell: Peloton has pointed the finger of blame in the direction of Apple for the fitness company’s disappointing fiscal Q1 2022 results in which it missed expectations and reported a net loss of $376 million.
For the first quarter of the financial year 2022, Peloton reported $805.2 million in revenue, missing expectations of $810.7 million, though it did meet its own $800 million forecast. The reported loss per share of $1.25 is also higher than the expected $1.07 loss per share, making for total net losses of $376 million. Sales of its fitness products were also down, by 17%.
For comparison, Peloton reported $69.3 million in net income a year earlier, a figure that was boosted by the pandemic and stay-at-home orders.
One bit of good news is that the number of Peloton’s connected fitness subscribers was up 87% YoY to 2.49 million, and paid digital subscriptions grew 74% to 887,000. Total members, meanwhile, grew to over 6.2 million.
In an earnings call with investors (via Bloomberg), Peloton said some of the blame for missing financial targets could be laid at the feet of Apple and its new Ad Tracking Transparency policy (ATT) that arrived in iOS 14.5. The change gives users control over how their data is collected by allowing them to grant or deny apps permission to track their activity for targeted advertising purposes.
Facebook has long been an opponent of ATT, having warned advertisers last year of an advertising catastrophe. The social network estimated it would cause a 50-percent drop in revenue from its Audience Network platform.
ATT has reportedly been driving advertisers to Android, and we recently heard that is has cost social media platforms, including Snap, YouTube, and Twitter, nearly $10 billion.
“We anticipated fiscal 2022 would be a very challenging year to forecast, given unusual year-ago comparisons, demand uncertainty amidst re-opening economies, and widely-reported supply chain constraints and commodity cost pressures,” Peloton wrote. “While we are reducing our near-term forecast, our confidence in and commitment to our strategy is unchanged.”
