Peloton on Tuesday slashed its financial outlook for the full year after the company announced CEO John Foley will be stepping down, as part of a broader restructuring of the business.
It now sees fiscal 2022 revenue within a range of $3.7 billion to $3.8 billion, down from a prior range of $4.4 billion to $4.8 billion.
The company said it expects to end the year with about 3 million connected fitness subscribers, versus previous estimates of 3.35 million to 3.45 million.
“We are taking steps to best position Peloton for sustainable growth, while also establishing a clear path to consistent profitability,” Foley wrote in a letter to shareholders.
For the three-month period ended Dec. 31, Peloton reported a net loss of $439.4 million, or $1.39 per share, compared with net income of $63.6 million, or 18 cents a share, a year earlier.
Total sales grew about 6% to $1.13 billion from $1.06 billion a year earlier. Peloton had reported preliminary second-quarter sales figures in late January.
Revenue in Peloton’s connected fitness segment, which includes contributions from its manufacturing business Precor, fell 8% from year-ago levels to $796.4 million. This division makes up about 70% of Peloton’s total revenue.
Subscription revenue grew a whopping 73% to $337.5 million, making up the other 30% of total sales.
Peloton ended the quarter with 2.77 million connected fitness subscribers. These are people who own a Peloton product and also pay a monthly fee to access the company’s digital workout content.
For its third quarter, Peloton anticipates sales between $950 million and $1 billion. It expects to end the period with 2.93 million connected fitness subscribers.
Peloton shares climbed around 9% in early trading, bringing the company’s market cap to about $10.7 billion.
Read the full quarterly earnings press release from Peloton here.