- What is Peloton, and how does Peloton work?
- How does Peloton make money?
- Connected Fitness Products
- Subscriptions (Peloton Membership)
- Peloton’s Subsidiaries, Acquisitions, and Exits
- Peloton’s profit and revenue
- What is the Peloton business and revenue model?
- Peloton’s funding and market cap
How does Peloton make money? Here is a full, in-depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Peloton business model, their year-over-year revenue, and how Peloton works.
What is Peloton, and how does Peloton work?
Peloton is an exercise equipment and media company that enables its stationary bike and treadmill products to connect workouts from home via live streaming.
How Peloton works is: Once a customer purchases a Peloton BIKE or TREAD, they can subscribe to a monthly membership for access to online classes taught by Peloton instructors.
Some of Peloton’s competitors include Bowflex, Echelon, Nordictrack, and other exercise equipment and media companies.
How does Peloton make money?
According to page 27 of Peloton’s 2021 Form 10-Q, Peloton has more than 5.4 million members. So how does Peloton make money off of all those members?
Below is a breakdown of how much money Peloton makes and its revenue model. Including all revenue streams and how much they charge for their services.
Here are the 2 ways of how Peloton makes money (in 2021):
Peloton has a revenue model that makes money in two (2) ways – connected fitness products and subscriptions.
#1. Connected Fitness Products
Peloton makes its money by selling fitness products like cardio bikes and treadmills as well as workout accessories and apparel. In fact, $1.46 billion or 79.8% of Peloton’s total revenue of $1.83 billion came from selling fitness products in 2020.
On page 84 of Peloton’s 2020 Form 10-K, Peloton describes Connected Fitness Products’ revenue coming from “sale of the Bike, Tread and related accessories, delivery and installation services, branded apparel, and extended warranty agreements.”
Products range from $10 to $4,245+ depending on the type of product. For example, a Peloton BIKE and TREAD go for $1,895 to $4,245+ while Peloton accessories can cost anywhere between $10 to $750.
Note: 79.8% of Peloton’s total revenue came from selling fitness products in 2020.
#2. Subscriptions (Peloton Membership)
Peloton also makes money through subscription memberships.
There are over 5.4 million members paying for one of their two memberships, Connected Fitness or Peloton Digital subscription. Which brought in a total of $363.7 million in subscription revenue for Peloton in 2020.
The way a Peloton subscription works is: Once a customer purchases a Peloton BIKE or TREAD product, they choose between two (2) monthly memberships types that will give them access to the online classes taught by Peloton instructors.
Peloton Subscription Cost:
- Digital Membership: $12.99 per month
- All-Access Membership: $39 per month
Note: Only customers who purchase a Peloton BIKE or TREAD product can access Peloton classes. This is an example of a cross-selling or upselling business model by Peloton offering subscriptions only for customers who have a Peloton fitness product.
Peloton’s Subsidiaries, Acquisitions, and Exits
To date, Peloton Interactive, Inc. has made a total of 6 acquisitions and 1 investment.
Peloton’s profit and revenue
In 2020, Peloton reported $1.83 billion in revenue.
Note: Because Peloton Interactive, Inc. is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Peloton’s publicly released financial reports, including annual reports, through Peloton’s investor section on their website.
What is the Peloton business and revenue model?
Peloton makes money through a few revenue models that they combine within their company, they are:
- Transaction based business model
- Subscription based business model
- Cross selling business model
- B2B2C (partnerships) business model
- Mergers & acquisitions (M&A) business model
Peloton’s funding and market cap
According to Peloton’s Crunchbase profile, Peloton raised $1.9 billion over 9 rounds with a market cap of $36.25 billion as of July 2021.