What you need to know
- Peloton has revised its annual revenue forecast down by $1 billion.
- The company says headwinds created by Apple privacy changes are partly to blame.
Peloton says that privacy changes made by Apple in iOS 14 earlier this year have created some headwinds for the company.
Peloton announced Thursday that it was cutting its annual revenue forecast by $1 billion, and lowered expectations for subscribers and profits because of the impact that emerging from the pandemic had on its business.
Co-founder and CEO John Foley told analysts on an investor call:
Before we recap the quarter and discuss our forecast, I want to spend a moment providing some context for our updated outlook. As you all well know, stay-at-home and work-from-home orders, coupled with commercial gym closures, drove massive awareness gains for Connected Fitness, accelerating an adoption curve that was already well underway. Given the unprecedented circumstances presented by the global pandemic, we said last quarter that modeling the exit from COVID and the massive growth we saw in fiscal 2021 would be a challenging task, and that has certainly proven to be true.
Foley said Peloton was experiencing a steeper-than-expected drop in web traffic and a slower-than-expected uptick in retail traffic. However, the company also hinted at some headwinds caused by privacy changes made to iPhone software by Apple:
As you likely know, there have been some significant changes made by Apple that are leading to some targeting headwinds. Like many other direct-to-consumer marketers, we're seeing some disruptive impact as our teams adjust to the new data landscape.
Peloton is the latest in a string of company including Snap (Snapchat) and Facebook that have warned that Apple's changes, which made tracking across apps and services by third-parties an opt-in feature, could negatively impact their business.
Peloton's shares have fallen more than 32% in pre-market trading Friday.