Peloton's Mobile Revenue is (Finally) Growing Again

For Peloton, the last few years have been a mega rollercoaster ride. Demand for their workout bikes exploded when lockdowns sent everyone to work from home, but eventually the craze ended and Peloton had to pivot a bit.

That pivot involved shifting to monetizing its fitness classes and workout videos through a paid subscription in its app.

And it worked pretty well for a while.

Looking back all the way to Q1 of 2020, when things were simpler, Peloton's app earned $1.4M in net revenue, according to our estimates. Not bad considering the app was mainly an extension of its hardware and the in-app purchases available through the app were for integrations and minimal content.

Even so, revenue grew as more people got hooked on Peloton's high-end (aka expensive) workout bikes, rising to nearly $7M by Q1 of 2021. And it didn't stop there.

By the beginning of 2022, Peloton figured out its app is a revenue channel and shifted its strategy. As a result, the app received a ton of new content in the form of a variety workout classes that didn't require owning a bike.

And the new strategy worked! According to our App Intelligence, Peloton hit a new all-time high in Q1 of 2022 with $11M of net revenue and its first quarter in the double digits. And this is all net, meaning what Peloton is keeping after Apple and Google took their fees.

But things went downhill from there... Shifting to content meant there's a loooot of competition, and the rise in demand for workout at home apps "thanks" to lockdowns didn't help either.

Our estimates show revenue dropped for the first time to $9M in Q3, then $8M in Q4, and then bounced back a tiny bit up to $9M to start 2023. Revenue inched up slowly in 2023, but things seem to have really kicked in this year.

Peloton ended Q1 of 2024 with $15M of net revenue thanks to a surge in demand in January. That's to be expected for the category, but for Peloton, revenue didn't drop back to where it started. According to our estimates, daily revenue is still 50% higher than the end of last year.

And there's more to grow. While this is a big number, there are quite a few apps in the Health & Fitness category that earn more than Peloton. The difference between those apps and Peloton is that it lacks discovery.

If you know about Peloton's app you might get it, but if you come into the App Store or Google Playing looking for a fitness app you simply won't. See for yourself. That's a mistake I hope to see Peloton correct.