Peloton
Peloton went public in 2019, seven years after its founding. It was valued at $8.1 billion at the time of its IPO.
Although Peloton’s CEO John Foley has repeatedly stated that his fitness company is profitable, the numbers revealed in its IPO filing tell a different story.
Why Peloton Isn’t Profitable
When luxury exercise bike maker Peloton filed to go public in August 2019, it was revealed that the company had lost $450 million over the past three years and has never made a profit, CBS News reported.
“We have incurred operating losses each year since our inception in 2012 … and we expect to continue to incur net losses for the foreseeable future,” the company stated in the filing.
Revenues have been increasing, but the company has been burning through cash at a faster rate. Although Peloton expects to be profitable by 2023, some experts are unsure that this will be the case.
“Peloton’s business is getting less efficient as it grows — indicating that it lacks a scalable business model,” wrote Forbes contributor Peter Cohan. “Rather than making itself efficient before pouring gasoline — in the form of private capital — to grow quickly, Peloton decided to delay worrying about making its business more efficient with scale. Therefore, in order for Peloton to make money, it will need to re-engineer its business model.”
