Peloton has had a dramatic year, but its financing options are valued by the banking industry for their stability.
Peloton contracts with the lender Affirm to offer interest-free loans for its connected bikes and other fitness equipment, which are then often packaged and sold to financial institutions in search of a safe bet.
- Peloton, Affirm’s largest customer, generated around 20% of the lender’s earnings of $ 870.5 million for the business year ending June 30th
- Unsecured loans to Peloton customers made up the bulk of the $ 845 million Affirm has made money packing interest-free loans since 2020. The interest on these loan packages starts at just over 1%.
- In August, the home fitness giant cut the price of its signature bike from $ 1,895 to $ 1,495. The treadmill is priced at $ 2,495. After a costly recall, it resumed treadmill sales on August 30th.
The company recently launched its own line of clothing and is probably working on a rowing machine.
While Peloton’s revenue related to product sales declined in the second quarter, subscriptions to its training service steadily increased.
The company more than doubled its affiliate fitness subscribers to 2.3 million for the fiscal year ended June 30, bringing in $ 541.7 million from that segment.