EQUITY RESEARCH

QUARTERLY UPDATE
November 5, 2021 INTERNET

Stock Rating:
Peloton Interactive
OUTPERFORM
12-18 mo. Price Target $85.00
Weaker Bike Demand and Tread "Recall Hangover"
PTON - NASDAQ $60.11 Drive Lower Sub Outlook
SUMMARY
3-5 Yr. EPS Gr. Rate NA
52-Wk Range $171.09-$80.48 Lowering target to $85 (was $140), but maintaining Outperform as PTON maintains
leadership position in an emerging industry. While FY22 subscriber guidance was
Shares Outstanding 301.0M
reduced 6% on weaker bike demand and tread "recall hangover," revenue guidance
Float 258.3M
was reduced 14%, exacerbated by mix-shift to lower priced bike and fewer Treads.
Market Capitalization $26,057.2M Two questions remain: 1) Does PTON need to keep lowering the price of equipment to
Avg. Daily Trading Volume 6,995,179 drive subscription sales; and 2) Can PTON reduce warehousing/logistics/support and
Dividend/Div Yield NA/NM still provide a premium experience. Impact to EBITDA/FCF material in near-term and
Book Value $5.01 investors likely to question risk of dilutive fundraising, but denied by mgmt. New target
Fiscal Year Ends Jun assumes 15x CY22E gross profit, in line with SPOT, with similar growth.
2022E ROE NA
KEY POINTS
LT Debt NA
Preferred NA ■ Connected-Fitness Subs 1% above Opco/Street. F1Q Connected Fitness subs
Common Equity $1,507M +87% y/y, decelerating from F4Q's +114%, yet only one point change on two-year
Convertible Available No average, implying 160K net adds, 10% above Street on lower churn. Digital-Only
Trading range since 9/26/2019 IPO. Subs +13K q/q on better app engagement. Revenue +119% two-year average vs.
Revenue F4Q's +113% (+6% y/y vs. F4Qs +54%), 1% above Opco with Subscription revenue
Q1 Q2 Q3 Q4 Year Mult.
($/mil) +114% two-year average compared to F4Q's +116%.
2020A 228.0 466.3 524.6 607.1 1.8B 9.9x
■ Sub Contribution margin 304bps above Opco, +546bps y/y. F1Q gross profit
2021A 757.9 1.1B 1.3B 936.9 4.0B 4.5x
in line with Opco, 3% below Street on higher raw material/shipping costs, while
2022E 805.1A 1.2B 1.4B 1.3B 4.6B 3.9x
Prior (E) 800.1 1.6B 1.6B 1.4B 5.4B NM
EBITDA was $15M above Street on +177bps on margin. S&M was 9% above Opco
2023E -- -- -- -- 5.6B 3.2x and expected to sequentially increase on holiday marketing spend while G&A was
Gross 3% higher on investments. R&D was essentially in line and expected to stabilize.
Profit Q1 Q2 Q3 Q4 Year Mult. ■ FY22 revenue guidance lowered to +14% y/y from +34% on mix shift to lower-
($/mil)
priced bikes. Updated revenue guidance 14% below Street. Connected-fitness
2020A 105.1 197.1 245.8 288.8 836.8 21.6x
subs guided 6% lower, implying +1M net adds, 22% below Street vs. previous
2021A 328.7 424.8 445.0 253.6 1,452.1 12.5x
2022E 262.9A 450.0 552.0 540.1 1,804.9 10.0x
+1.3M guide. FY22 EBITDA guidance reduced by $125M, implying -10% margins
2023E -- -- -- -- 2,324.0 7.8x or $183M lower than Street on 479bps lower on margins, mostly on bike mix and
EBITDA bloated logistics/support network.
Q1 Q2 Q3 Q4 Year Mult.
($/mil) ■ Business update. Expecting F1Q to represent engagement trough for FY22,
2020A (21.0) (28.4) 23.5 143.6 117.5 NM even with 2.5K new classes. Launched new Tread in US/UK/Canada/Germany,
2021A 118.9 116.9 63.2 (45.1) 153.9 NM
with initial demand lower than anticipated on education/product awareness (recall
2022E (233.7)A (333.6) 36.3 81.2 (452.1) NM
headwinds?). Maintaining optimism on commercial from Precor, yet noting supply
Prior (E) (285.3) (78.9) 7.5 4.2 (352.5) NM
chain headwinds.
2023E -- -- -- -- (97.9) NM
■ Revisions. Lowering FY22/FY23 connected fitness subs by 6% each, to +46%/
+35% y/y, implying 1.1M/1.2M net adds vs. 1.2M in FY21. Decreasing FY22/FY23
revenue 15% each on lower subs, units sold and mix to lower-priced bike. Lowering
FY22/FY23 GP by 19%/17% on higher material/logistics costs. Lowering FY22E
EBITDA by $100M on higher S&M. FY 23 GMs to improve on reduced Opex.
Stock Price Performance Company Description
1 Year Price History for PTON
Peloton Interactive (NASDAQ:PTON) is
180
a pioneer in connected, technology-
160 enabled fitness and the streaming
140 of immersive, instructor-led classes to
Jason Helfstein Brian Nagel, CFA 120 members anytime, anywhere.
212-667-6433 212-667-8381 100
80
Jason.Helfstein@opco.com Brian.Nagel@opco.com
Patrick Josephs Sean Rausch 11/20 02/21 05/21 08/21 11/21

212-667-7137 212-667-5890
Patrick.Josephs@opco.com Sean.Rausch@opco.com For analyst certification and important disclosures, see the Disclosure
Disseminated: November 5, 2021 04:36 EDT; Produced: November 5, 2021 Appendix.
04:36 EDT

Oppenheimer & Co Inc. 85 Broad Street, New York, NY 10004 Tel: 800-221-5588 Fax: 212-667-8229
Jason Helfste
 Peloton Interactive PTON (OUTPERFORM) - $85.00

5-YEAR PRICE PERFORMANCE INVESTMENT THESIS

200 We believe Peloton is redefining fitness, based on its

convenience and relative value vs. other premium offerings.
150 As the company continues to quickly grow its subscriber base,
we forecast subscription contribution margin will exceed 70%,
100
with churn remaining minimal. We believe the secular trend of
50
connected fitness wearables and health and wellness industry
spending support Peloton further penetrating into its TAM
0
PTON (currently 3% share).
Jan-20 Jan-21

Source: Bloomberg
BASE CASE ASSUMPTION CATALYSTS
■ Connected Fitness subscribers, EOP grow from 246K to 6.4M by ■ Additional product verticals (either new or lower priced options) or
2024E. the release of a leasing model.
■ '18–'24E revenue CAGR of 71%. ■ Expansion to additional territories.
■ '18–'24E subscription gross profit CAGR of 95%.
■ '18–'24E subscription contribution CAGR of 93%.

UPSIDE SCENARIO DOWNSIDE SCENARIO

■ Recent home trial program yields elevated levels of Connected
Fitness product and subscription sales.
■ International market penetration is faster than forecasted.
■ COVID-19 causes extended recession, reducing consumer
spending.
■ Consumers shift to lower-priced connected fitness devices.
■ Bikes/treads are unable to scale outside of current and announced
markets.

PRICE TARGET CALCULATION

Our $85 (was $140) price target assumes 15.0x our C2022E EV/GP, a 14% discount to peers (ROKU, NFLX, MTCH, SPOT, and WIX). We
believe PTON should trade in line with SPOT as we estimate PTON to grow CY20-CY22E GP at 21% vs. SPOT's +22% estimate.

KEY RISKS TO PRICE TARGET

If new markets are less receptive to higher-priced connected fitness home products and shift to discounted competitors, inability for the
bikes/treads to scale outside of announced and current operating territories or extended economic weakness from COVID-19.

ESG CONSIDERATIONS *
ESG Rating D
ESG Rating Environment D-
ESG Rating Social D+
ESG Rating Governance D+

*Environmental/Social/Governance (ESG) scores are courtesy of Refinitiv's ESG product which are designed to transparently and objectively measure a company's relative
ESG performance, commitment and effectiveness, based on company-reported data. Refinitiv's ESG ratings are independent of Oppenheimer's stock ratings and are not
taken into consideration when assigning a rating. For full details about Refinitiv's ESG scores, please click here

2
PTON (OUTPERFORM) - $85.00 Peloton Interactive

Exhibit 1: Operating Metrics Actual vs. Expected ($ millions, except Subscribers)

F4Q:21A F1Q:21E F1Q:21A vs. Est
Connected Fitness Subscribers, EOP 2,330 2,471 2,490 1%
Y/Y 114% 85% 87%
Q/Q 12% 6% 7%
Gross Adds 297 202 219 8%
Y/Y 35% -24% -18%
Q/Q -31% -32% -26%
Churn Rate 0.73% 0.85% 0.82% -3bps
Y/Y bps 21bps 20bps 17bps
Q/Q bps 42bps 12bps 9bps
Net Adds 249 141 160 13%
Y/Y 22% -42% -34%
Q/Q -40% -43% -36%
Digital Subscribers, EOP 874 893 887 -1%
Y/Y 176% 75% 74%
Q/Q -2% 2% 1%
Connected Fitness Product Revenue $655 $514 $501 -3%
Y/Y 35% -14% -17%
Q/Q -36% -22% -24%
Subscription Revenue $282 $286 $304 6%
Y/Y 132% 83% 94%
Q/Q 18% 1% 8%
Total Revenue $937 $800 $805 1%
Y/Y 54% 6% 6%
Q/Q -26% -15% -14%
Source: Company Reports and Oppenheimer & Co. Inc. Estimates

3
 Peloton Interactive PTON (OUTPERFORM) - $85.00

Exhibit 2: Income Statement Actual vs. Expected ($ millions, except Subscribers & EPS)

F4Q:21A F1Q:21E F1Q:21A vs. Est

Revenue $937 $800 $805 1%
Y/Y 54% 6% 6%
Q/Q -26% -15% -14%
Connected Fitness Products Cost of Revenue ($580) ($437) ($441) 1%
Y/Y 118% 20% 21%
Q/Q -21% -25% -24%
Subscription Cost of Revenue ($104) ($100) ($101) 1%
Y/Y 98% 54% 56%
Q/Q 22% -3% -2%
Cost of revenue ($683) ($537) ($542) 1%
Y/Y 115% 25% 26%
% of revenue 73% 67% 67%
Connected Fitness Products, Gross Profit $76 $77 $60 -22%
% of Connected Fitness Product Revenue 12% 15% 12% -302bps
Y/Y bps -3376bps -2444bps -2747bps
Q/Q bps -1687bps 348bps 45bps
Subscription, Gross Profit $178 $186 $203 9%
% of Subscription Revenue 63% 65% 67% 166bps
Y/Y bps 648bps 653bps 819bps
Q/Q bps -133bps 175bps 341bps
Consolidated Gross Profit $254 $263 $263 0%
% of Total Revenue 27% 33% 33% -23bps
Y/Y bps -2050bps -1051bps -1074bps
Q/Q bps -819bps 579bps 556bps
Operating Expenses:
Research & development ($94) ($97) ($98) 1%
% of Total Revenue 10% 12% 12% 1bps
Y/Y 231% 165% 167%
Q/Q 35% 3% 4%
Selling & marketing ($229) ($260) ($284) 9%
% of Total Revenue 24% 33% 35% 280bps
Y/Y 172% 127% 148%
Q/Q 10% 13% 24%
General & administrative ($232) ($233) ($240) 3%
% of Total Revenue 25% 29% 30% 66bps
Y/Y 169% 115% 121%
Q/Q 29% 1% 4%
Total Operating Expenses ($555) ($591) ($622) 5%
% of Total Revenue 59% 74% 77% 347bps
Y/Y 179% 127% 140%
Q/Q 21% 6% 12%
Operating Income/Loss ($302) ($328) ($360) 10%
Operating Income Margin -32% -41% -45% -370bps
Y/Y bps -4703bps -5005bps -5376bps
Q/Q bps -3112bps -876bps -1246bps
Stock Based Compensation ($85) ($30) ($53) 79%
Depreciation and amortization ($25) ($13) ($28) NM
Income tax expense ($10) ($10) ($14)
Adjusted EBITDA ($45) ($285) ($234) $52
Margin (5%) (36%) (29%) 664bps
Y/Y bps -2847bps -5135bps -4472bps
Q/Q bps -982bps -3085bps -2421bps
Subscription Contribution Profit $195 $190 $212 11%
Subscription Contribution Margin 69% 67% 70% 304bps
Y/Y bps 529bps 242bps 546bps
Q/Q bps 90bps -68bps 236bps
Net Income (loss) ($313) ($339) ($376) 11%
GAAP EPS ($1.05) ($1.11) ($1.25) $0.14
Basic Shares 299 305 301 -1%
Non-GAAP Diluted Share Count 299 305 301 -1%
Tax Rate 1% 0% 0% 0bps
Source: Company Reports and Oppenheimer & Co. Inc. Estimates

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PTON (OUTPERFORM) - $85.00 Peloton Interactive

Exhibit 3: Actual vs. Expected ($ millions, except Subscribers & EPS)

Actual vs. Actual vs. Actual vs.

F1Q:22 Guidance Actual Opco Consensus
Opco Consensus Guidance
Revenue $800 - $800 $805 $800 $809 1% 0% 1%
Y/Y 6% - 6% 6% 6% 7% 66bps -46bps 67bps
Gross Profit $264 - $264 $263 $263 $271 0% -3% 0%
Gross Profit Y/Y -20% - -20% -20% -20% -18% 0 bps -249bps -40bps
Adjusted EBITDA ($285) - ($285) ($234) ($285) ($249) $52 $15 -18%
Margin -36% - -36% -29% -36% -31% 664 bps 177 bps 660bps
GAAP EPS NA - NA ($1.25) ($1.11) ($1.10) ($0.14) ($0.15) NA
Connected Fitness Subscribers, EOP 2,470 - 2,470 2,490 2,471 2,476 1% 1% 1%
Net Adds 140 - 140 160 141 145 13% 10% 14%

Source: Company Reports and Oppenheimer & Co. Inc. Estimates

Exhibit 4: Guidance vs. Expectations ($ millions, except Subscribers & EPS)

Guidance vs. Guidance vs. Opco vs.

F2Q:22E Guidance Prior Opco Consensus
Opco Consensus Consensus

Revenue $1,100 - $1,200 $1,550 $1,497 -26% -23% 4%

Y/Y 3% - 13% 46% 41% -1 bps -1 bps 506bps
Gross Profit $264 - $288 $450 $459 -39% -40% -2%
Gross Profit Y/Y -38% - -32% 6% 8% -7 bps -5 bps -206bps
Adjusted EBITDA ($325) - ($350) ($79) ($90) ($259) ($247) $11
Margin -30% - -29% -5% -6% 5 bps 4 bps 94bps
GAAP EPS NA - NA ($0.56) ($0.63) NA NA $0.07
Connected Fitness Subscribers, EOP 2,800 - 2,850 2,875 2,884 -2% -2% 0%
Net Adds 310 - 310 545 554 -43% -44% -2%

Guidance vs. Guidance vs. Opco vs.

FY:22E Guidance Prior Opco Consensus
Opco Consensus Consensus

Revenue $4,400 - $4,800 $5,403 $5,357 -15% -14% 1%

Y/Y 9% - 19% 34% 33% -1 bps -1 bps 116bps
Gross Profit $1,408 - $1,408 $1,805 $1,850 -18% -20% -2%
Gross Profit Y/Y -3% - -3% 24% 27% -1 bps -1 bps -313bps
Adjusted EBITDA ($425) - ($475) ($353) ($267) ($97) ($183) ($85)
Margin -10% - -10% -7% -5% -325bps -479bps -153bps
GAAP EPS NA - NA ($2.19) ($2.19) NA NA ($0.00)
Connected Fitness Subscribers, EOP 3,350 - 3,450 3,635 3,645 -6% -7% 0%
Net Adds 1020 - 1120 1,305 1,315 -22% -22% -1%

Source: Company Reports and Oppenheimer & Co. Inc. Estimates

5
 Peloton Interactive PTON (OUTPERFORM) - $85.00

Exhibit 5: Estimate Revisions ($ millions, except Subscribers & EPS)

F2Q:22E F3Q:22E F4Q:22E
Old New Delta Old New Delta Old New Delta
Connected Fitness Subscribers, EOP 2,875 2,820 -2% 3,310 3,123 -6% 3,635 3,401 -6%
Net Adds 404 330 -18% 435 303 -30% 325 278 -15%
Digital Subscribers, EOP 1,094 1,125 3% 1,247 1,426 14% 1,224 1,311 7%
Connected Fitness Product Revenue $1,171 $811 -31% $1,210 $995 -18% $964 $834 -13%
Subscription Revenue $380 $342 -10% $434 $396 -9% $444 $423 -5%
Total Revenue $1,550 $1,153 -26% $1,645 $1,390 -15% $1,408 $1,257 -11%
Consolidated Gross Profit $450 $278 -38% $552 $438 -21% $540 $479 -11%
Adj. EBITDA ($79) ($336) ($257) $7 $36 $29 $4 $81 $77
Subscription Contribution Profit $244 $212 -13% $278 $281 1% $284 $307 8%
Subscription Contribution Margin 64% 62% -234bps 64% 71% 700bps 64% 73% 859bps
Basic EPS ($0.56) ($1.44) ($0.88) ($0.26) ($0.30) ($0.05) ($0.26) ($0.14) $0.13

FY22E FY23E
Old New Delta Old New Delta
Connected Fitness Subscribers, EOP 3,635 3,401 -6% 4,907 4,591 -6%
Net Adds 1,305 1,071 -18% 1,272 1,190 -6%
Digital Subscribers, EOP 1,224 1,311 7% 1,689 1,940 15%
Connected Fitness Product Revenue $3,860 $3,141 -19% $4,413 $3,611 -18%
Subscription Revenue $1,544 $1,464 -5% $2,199 $2,018 -8%
Total Revenue $5,403 $4,606 -15% $6,612 $5,629 -15%
Y/Y 34% 15% -1984bps 22% 22% -14bps
Consolidated Gross Profit $1,805 $1,458 -19% $2,805 $2,324 -17%
Adj. EBITDA ($353) ($452) ($100) $145 ($98) ($243)
Subscription Contribution Profit $997 $1,012 1% $1,503 $1,440 -4%
Subscription Contribution Margin 65% 69% 451bps 68% 71% 300bps
Basic EPS ($2.19) ($3.11) ($0.92) ($0.49) ($1.43) ($0.95)
Source: Oppenheimer & Co. Inc. Estimates

Exhibit 6: Comparable Valuation ($ millions, except price per share)

Fully Total PF Net Pro Forma GP
Company Price Diluted Equity Cash/ Adjusted (millions) EV/GP '20 - '22E
Symbol 11/4/2021 Shares Mkt Value (Debt) Enterprise 2020 2021E 2022E 2021E 2022E Growth
Netflix, Inc. NFLX $668.40 455 $304,072 ($10,480) $314,552 $9,720 $12,589 $14,853 25.0x 21.2x 24%
Match Group, Inc. MTCH $156.98 311 $48,834 ($3,597) $52,431 $1,758 $2,176 $2,625 24.1x 20.0x 22%
Roku ROKU $289.39 128 $36,992 $1,620 $35,372 $808 $1,418 $1,954 24.9x 18.1x 55%
Spotify Technology S.A. SPOT $293.48 195 $57,097 $1,639 $55,458 $2,421 $2,953 $3,608 18.8x 15.4x 22%
Wix.com WIX $197.08 65 $12,800 $273 $12,527 $682 $791 $948 15.8x 13.2x 18%
Average 21.7x 17.6x 28%

Peloton - Current PTON $60.10 301 $18,100 $1,607 $16,493 $1,288 $1,240 $1,891 13.3x 8.7x 21%
Delta to Comparable Companies -39% -50% -25%

Peloton - Price Target PTON $85.00 341 $29,016 $342 $28,674 $1,288 $1,240 $1,891 23.1x 15.2x 21%
Delta to Comparable Companies 6% -14% -25%

Upside 41%

Source: Oppenheimer & Co. Inc. Estimates, *Consensus estimates for ROKU, NFLX, MTCH, SPOT & WIX

6
 PTON (OUTPERFORM) - $85.00 Peloton Interactive

Peloton Revenue Drivers (millions, except ARPU)

A A A A A A A A A E E E E E
FY18A FY19 FY20 Sep-20 Dec-20 Mar-21 Jun-21 FY21 Sep-21 Dec-21 Mar-22 Jun-22 FY22E FY23E
2018 2019 2020 1Q:21 2Q:21 3Q:21 4Q:21 2021 1Q:22 2Q:22E 3Q:22E 4Q:22E 2022E 2023E
Connected Fitness Subscribers, BOP 108 246 511 1,091 1,334 1,667 2,081 1,091 2,330 2,490 2,820 3,123 2,330 3,401
Gross Adds 151 294 635 267 367 431 297 1,362 219 398 379 361 1,360 1,766
Y/Y 95% 116% 303% 125% 133% 35% 115% -18% 8% -12% 21% 0% 30%
Q/Q 21% 38% 17% -31% -26% 81% -5% -5%
Churn Rate 0.64% 0.65% 0.62% 0.65% 0.76% 0.31% 0.73% 0.66% 0.82% 0.85% 0.85% 0.85% 0.84% 1.20%
Y/Y bps 1 bps -3 bps -25 bps 2 bps -15 bps 21 bps 4 bps 17 bps 9 bps 54 bps 12 bps 18 bps 36 bps
Q/Q bps 13 bps 11 bps -45 bps 42 bps 9 bps 3 bps 0 bps 0 bps
Churn Subs (9) (17) (7) (10) (5) (15) (38) (19) (21) (24) (27) (20) (41)
Y/Y 90% 54% 143% 58% 230% 126% 169% 109% 364% 75% -48% 108%
Q/Q 54% 43% -49% 194% 26% 11% 13% 11%
Net Adds 138 266 580 243 333 414 249 1,239 160 330 303 278 1,071 1,190
Y/Y 92% 118% 371% 123% 138% 22% 114% -34% -1% -27% 11% -14% 11%
2 Yr Stack 218% 99% 111% 150% 168% 61% 55% 16%
Q/Q 18% 37% 24% -40% -36% 106% -8% -8%
Seasonality

Connected Fitness Subscribers, EOP 246 511 1,091 1,334 1,667 2,081 2,330 2,330 2,490 2,820 3,123 3,401 3,401 4,591
Y/Y 108% 113% 137% 134% 135% 114% 114% 87% 69% 50% 109% 46% 35%
Q/Q 22% 25% 25% 12% 7% 13% 11% 9%
Digital Subscribers, BOP 22.2 45.4 102.0 316.8 510.0 625.0 891.0 316.8 874.0 887.0 1,125.0 1,425.6 874.0 1311.0
Net Adds 23.3 56.6 214.8 193.2 115.0 266.0 (17.0) 557.2 13.0 238.0 300.6 (114.6) 437.0 629.3
Y/Y NM 143% 280% 4910% 3341% 295% 112% 159% -93% 107% 13% -574% -22% 44%
Q/Q -38% 40% -131% 106% 176% -1731% -26% 138%
Digital Subscribers, EOP 45.4 102.0 316.8 510.0 625.0 891.0 874.0 874.0 887.0 1,125.0 1,425.6 1,311.0 1,311.0 1,940.3
Y/Y 105% 125% 211% 382% 472% 405% 176% 176% 74% 80% 60% 50% 50% 48%
2 Year Growth 252% 276% 234% 193% 228% 276% 232% 113%
Q/Q 61% 23% 43% -2% 1% 27% 27% -8%

Total Workouts 17,857 52,152 164,488 77,767 98,075 149,541 154,000 479,383 156,230 158,905 162,115 165,968 643,218 848,011
Y/Y 112,336 58,596 73,730 105,386 77,183 314,895 78,463 60,830 12,574 11,968 163,835 204,793
Average monthly workouts per Connected Sub 20.70 21.10 26.00 19.90 16.60
Connected Fitness Product Revenue $348.5 $733.8 $1,462.2 $601.4 $870.1 $1,022.9 $655.3 $3,149.7 $501.0 $811.2 $994.6 $834.4 $3,141.3 $3,611.5
% of revenue 80% 80% 80% 79% 82% 81% 70% 78% 62% 70% 72% 66% 68% 64%
Y/Y NM 111% 99% 274% 124% 140% 35% 115% -17% -7% -3% 27% 0% 15%
2-ear Avg. 105% 187% 98% 100% 117% 107% 129% 58% 69% 31% 58% 7%
Q/Q 24% 45% 18% -36% -24% 62% 23% -16%
Seasonality 19% 28% 32% 21% 16% 26% 32% 26%

Subscription Revenue $80.3 $181.1 $363.7 $156.5 $194.7 $239.4 $281.6 $872.2 $304.1 $342.1 $395.5 $422.6 $1,464.3 $2,017.9
% of revenue 18% 20% 20% 21% 18% 19% 30% 22% 38% 30% 28% 34% 32% 36%
Y/Y 147% 126% 101% 133% 153% 144% 132% 140% 94% 76% 65% 50% 68% 38%
Q/Q 29% 24% 23% 18% 8% 12% 16% 7%
Seasonality 18% 22% 27% 32% 35% 39% 45% 48%
Total Revenue $435.0 $914.9 $1,825.9 $757.9 $1,064.8 $1,262.3 $936.9 $4,021.9 $805.1 $1,153.3 $1,390.1 $1,257.0 $4,605.6 $5,629.4
Y/Y 99% 110% 100% 232% 128% 141% 54% 120% 6% 8% 10% 34% 15% 22%
Q/Q 25% 40% 19% -26% -14% 43% 21% -10%
Seasonality 19% 26% 31% 23% 17% 25% 30% 27%
Source: Oppenheimer & Co. Inc., Company Reports

7
 Peloton Interactive PTON (OUTPERFORM) - $85.00

Peloton Income Statement ($millions) A A A A A A A A A E E E E E

FY18A FY19 FY20 Sep-20 Dec-20 Mar-21 Jun-21 FY21 Sep-21 Dec-21 Mar-22 Jun-22 FY22E FY23E
2018 2019 2020 1Q:21 2Q:21 3Q:21 4Q:21 2021 1Q:22 2Q:22E 3Q:22E 4Q:22E 2022E 2023E
Total Revenue $435.0 $914.9 $1,825.9 $757.9 $1,064.8 $1,262.3 $936.9 $4,021.9 $805.1 $1,153.3 $1,390.1 $1,257.0 $4,605.6 $5,629.4
Y/Y NM 110% 100% 232% 128% 141% 54% 120% 6% 8% 10% 34% 15% 22%
2-year Avg. 105% 168% 103% 103% 113% 110% 119% 68% 75% 44% 67% 18%
Q/Q 25% 40% 19% -26% -14% 43% 21% -10%
Seasonality 19% 26% 31% 23% 17% 25% 30% 27%
Cost of Revenue ($245.4) ($531.4) ($989.1) ($429.2) ($640.0) ($817.3) ($683.3) ($2,569.8) ($542.4) ($875.0) ($952.1) ($777.6) ($3,147.2) ($3,305.3)
% of revenue 56% 58% 54% 57% 60% 65% 73% 64% 67% 76% 68% 62% 68% 59%
Y/Y NM 117% 86% 249% 138% 193% 115% 160% 26% 37% 16% 14% 22% 5%
Connected Fitness Products Cost of Revenue ($195.0) ($427.7) ($833.4) ($364.2) ($562.8) ($732.5) ($579.8) ($2,239.3) ($441.0) ($738.2) ($825.5) ($650.9) ($2,655.6) ($2,708.6)
% of Connected Fitness Product Revenue 56% 58% 57% 61% 65% 72% 88% 71% 88% 91% 83% 78% 85% 75%
Y/Y NM 119% 95% 290% 138% 209% 118% 169% 21% 31% 13% 12% 19% 2%
Connected Fitness Products, Gross Profit $154 $306 $628.8 $237.2 $307.3 $290.4 $75.5 $910 $60.0 $73.0 $169.1 $183.6 $486 $902.9
% of Connected Fitness Product Revenue 44% 42% 43% 39% 35% 28% 12% 29% 12% 9% 17% 22% 15% 25%
Y/Y bps NM -233 bps 129 bps -247 bps -385 bps -1593 bps -3376 bps -1410 bps -2747 bps -2632 bps -1139 bps 1048 bps -1344 bps 954 bps
Subscription Cost of Revenue ($45.5) ($103.7) ($155.7) ($65.0) ($77.2) ($84.8) ($103.5) ($330.5) ($101.4) ($136.8) ($126.6) ($126.8) ($491.6) ($596.7)
% of Subscription Revenue 57% 57% 43% 42% 40% 35% 37% 38% 33% 40% 32% 30% 34% 30%
Y/Y NM 128% 50% 120% 138% 105% 98% 112% 56% 77% 49% 22% 49% 21%
Subscription, Gross Profit $35 $77 $208.0 $91.5 $117.5 $154.6 $178.1 $541.7 $202.7 $205.3 $268.9 $295.8 $972.7 $1,421.2
% of Subscription Revenue 43% 43% 57% 58% 60% 65% 63% 62% 67% 60% 68% 70% 66% 70%
Y/Y bps NM -60 bps 1445 bps 238 bps 237 bps 673 bps 648 bps 492 bps 819 bps -35 bps 342 bps 675 bps 432 bps 400 bps
Consolidated Gross Profit $189.6 $383.5 $836.8 $328.7 $424.8 $445.0 $253.6 $1,452.1 $262.7 $278.3 $438.0 $479.4 $1,458.4 $2,324.0
% of Total Revenue 44% 42% 46% 43% 40% 35% 27% 36% 33% 24% 32% 38% 32% 41%
Y/Y bps NM -167 bps 391 bps -272 bps -238 bps -1160 bps -2050 bps -972 bps -1074 bps -1577 bps -374 bps 1107 bps -444 bps 962 bps
Research & Development ($23.3) ($54.8) ($89.0) ($36.6) ($47.5) ($69.8) ($93.9) ($247.8) ($97.7) ($102.1) ($94.2) ($95.8) ($389.8) ($487.3)
% of Total Revenue 5% 6% 5% 5% 4% 6% 10% 6% 12% 9% 7% 8% 8% 9%
Y/Y NM 135% 62% 110% 129% 210% 231% 178% 167% 115% 35% 2% 57% 25%
Sales & Marketing ($151.3) ($324.0) ($477.1) ($114.6) ($177.4) ($208.2) ($229.3) ($729.5) ($284.3) ($345.9) ($197.8) ($183.4) ($1,011.5) ($1,149.5)
% of Total Revenue 35% 35% 26% 15% 17% 16% 24% 18% 35% 30% 14% 15% 22% 20%
Y/Y 114% 47% 48% 11% 34% 172% 53% 148%1 95%3 -5% -20% 39% 14%
General & Admin ($62.5) ($207.0) ($292.6) ($108.6) ($141.1) ($180.6) ($232.1) ($662.4) ($240.3) ($254.0) ($234.8) ($232.1) ($961.2) ($1,154.4)
% of Total Revenue 14% 23% 16% 14% 13% 14% 25% 16% 30% 22% 17% 18% 21% 21%
Y/Y 231% 41% 90% 97% 133% 169% 126% 121% 80% 30% 0% 45% 20%
Total Operating Expenses ($237.1) ($585.8) ($918.7) ($259.8) ($366.0) ($458.6) ($555.3) ($1,639.7) ($622.3) ($702.0) ($526.8) ($511.3) ($2,362.5) ($2,791.2)
% of Total Revenue 55% 64% 50% 34% 34% 36% 59% 41% 77% 61% 38% 41% 51% 50%
Y/Y NM 147% 57% 67% 41% 51% 179% 78% 140% 92% 15% -8% 44% 18%
Operating Income/Loss ($47.5) ($202.3) ($81.9) $68.9 $58.8 ($13.6) ($301.7) ($187.6) ($359.6) ($423.8) ($88.8) ($31.9) ($904.1) ($467.2)
Operating Income Margin -11% -22% -4% 9% 6% -1% -32% -5% -45% -37% -6% -3% -20% -8%
Y/Y bps NM -1119 bps 1763 bps 3138 bps 1874 bps 1005 bps -4703 bps -18 bps -5376 bps -4227 bps -531 bps 2966 bps -1497 bps 1133 bps
Depreciation & amortization ($6.6) ($21.7) ($40.2) ($11.4) ($12.8) ($14.6) ($25.0) ($63.8) ($28.0) ($34.6) ($55.6) ($50.3) ($168.5) ($70.4)
% of Total Revenue -1.5% -2.4% -2.2% -1.5% -1.2% -1.2% -2.7% -1.6% -3.5% -3.0% -4.0% -4.0% -3.7% -1.3%
Stock based Compensation ($8.5) ($89.5) ($88.8) ($29.7) ($37.5) ($41.7) ($85.2) ($194.1) ($52.9) ($40.4) ($69.5) ($62.9) ($225.6) ($261.7)
% of Total Revenue -2.0% -9.8% -4.9% -3.9% -3.5% -3.3% -9.1% -4.8% -6.6% -3.5% -5.0% -5.0% -4.9% -4.6%

Adjusted EBITDA ($30.3) ($71.4) $117.5 $118.9 $116.9 $63.2 ($45.1) $253.9 ($233.7) ($335.9) $36.3 $81.2 ($452.1) ($97.9)
EBITDA Margin % -7.0% -7.8% 6.4% 15.7% 11.0% 5.0% -4.8% 6.3% -29.0% -29.1% 2.6% 6.5% -9.8% -1.7%
Y/Y bps NM -84 bps 1424 bps 2491 bps 1706 bps 52 bps -2847 bps -12 bps -4472 bps -4010 bps -239 bps 1127 bps -1613 bps 808 bps
Subscription Contribution Profit $38.1 $91.8 $232.1 $100.4 $127.2 $163.8 $195.2 $586.6 $211.7 $212.1 $280.8 $306.9 $1,011.5 $1,439.5
Subscription Contribution Margin 47.4% 50.7% 63.8% 64.2% 65.3% 68.4% 69.3% 67.3% 69.6% 62.0% 71.0% 72.6% 69.1% 71.3%
Y/Y bps 324 bps 1312 bps 107 bps 92 bps 487 bps 529 bps 345 bps 546 bps -332 bps 257 bps 332 bps 183 bps 226 bps
Other income/(expense), net ($0.4) $6.5 $12.5 $1.7 $1.8 -$4.0 -$9.9 -$10.4 -$13.9 -$10.4 -$13.9 -$10.4 -$48.6 $9.9
EBT ($47.9) ($195.8) ($69.4) $70.6 $60.6 ($17.6) ($311.6) ($198.0) ($373.5) ($434.2) ($102.7) ($42.3) ($952.7) ($457.2)
Provision for income taxes $0.1 $0.1 ($4.2) ($1.3) $3.0 $9.1 -$1.6 $9.2 ($2.4) $3.0 $9.1 $0.0 $9.7 $0.0
Net Income/Loss ($47.8) ($195.7) ($65.2) $69.3 $63.6 ($8.5) ($313.2) ($188.8) ($375.9) ($431.2) ($93.6) ($42.3) ($943.0) ($457.2)
Basic EPS ($0.30) $0.24 $0.22 ($0.03) ($1.05) ($0.64) ($1.25) ($1.44) ($0.30) ($0.14) ($3.11) ($1.43)
Diluted EPS ($0.26) $0.20 $0.18 ($0.02) ($1.05) ($0.56) ($1.25) ($1.26) ($0.30) ($0.12) ($2.90) ($1.34)

Basic Shares 221 289 292 296 299 294 301 300 307 306 303 319
Diluted Shares 253 342 348 355 299 336 301 343 307 349 325 341
ETR 0% 0% 5% 0% 1% 0% 0% 0% 0% 0% 0% 0%
Source: Oppenheimer & Co. Inc., Company Reports

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PTON (OUTPERFORM) - $85.00 Peloton Interactive

Disclosure Appendix
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investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.
Investors should consider this report as only a single factor in making their investment decision.

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subject securities, which are reflected in the ratings as well as in the substance of this report. The author certifies that no part
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Important Disclosure Footnotes for Companies Mentioned in this Report that Are Covered by
Oppenheimer & Co. Inc:
Stock Prices as of November 5, 2021
Spotify Technology S.A. (SPOT - NYSE, $293.48, PERFORM)
Wix.com Ltd (WIX - NYSE, $197.08, OUTPERFORM)
Netflix, Inc. (NFLX - NASDAQ, $668.40, OUTPERFORM)
Match Group, Inc. (MTCH - NASDAQ, $156.98, OUTPERFORM)
Roku, Inc. (ROKU - NASDAQ, $289.39, OUTPERFORM)
The Trade Desk, Inc. (TTD - NASDAQ, $72.43, OUTPERFORM)
Rating and Price Target History for: Peloton Interactive (PTON) as of 11-04-2021
10/21/19 12/10/19 05/07/20 05/27/20 09/11/20 11/06/20 01/20/21 05/07/21 08/23/21
I:O:$29 O:$38 O:$46 O:$50 O:$105 O:$140 O:$185 O:$150 O:$140
200

150

100

50

0
2019 2020 2021 2022

Created by: BlueMatrix

All price targets displayed in the chart above are for a 12- to- 18-month period. Prior to March 30, 2004, Oppenheimer & Co.
Inc. used 6-, 12-, 12- to 18-, and 12- to 24-month price targets and ranges. For more information about target price histories,
please write to Oppenheimer & Co. Inc., 85 Broad Street, New York, NY 10004, Attention: Equity Research Department,
Business Manager.

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 Peloton Interactive PTON (OUTPERFORM) - $85.00

Oppenheimer & Co. Inc. Rating System as of January 14th, 2008:

Outperform(O) - Stock expected to outperform the S&P 500 within the next 12-18 months.
Perform (P) - Stock expected to perform in line with the S&P 500 within the next 12-18 months.
Underperform (U) - Stock expected to underperform the S&P 500 within the next 12-18 months.
Not Rated (NR) - Oppenheimer & Co. Inc. does not maintain coverage of the stock or is restricted from doing so due to a
potential conflict of interest.
Oppenheimer & Co. Inc. Rating System prior to January 14th, 2008:
Buy - anticipates appreciation of 10% or more within the next 12 months, and/or a total return of 10% including dividend
payments, and/or the ability of the shares to perform better than the leading stock market averages or stocks within its
particular industry sector.
Neutral - anticipates that the shares will trade at or near their current price and generally in line with the leading market
averages due to a perceived absence of strong dynamics that would cause volatility either to the upside or downside, and/
or will perform less well than higher rated companies within its peer group. Our readers should be aware that when a rating
change occurs to Neutral from Buy, aggressive trading accounts might decide to liquidate their positions to employ the funds
elsewhere.
Sell - anticipates that the shares will depreciate 10% or more in price within the next 12 months, due to fundamental weakness
perceived in the company or for valuation reasons, or are expected to perform significantly worse than equities within the
peer group.

Distribution of Ratings/IB Services Firmwide

IB Serv/Past 12 Mos.

Rating Count Percent Count Percent

OUTPERFORM [O] 477 69.53 266 55.77

PERFORM [P] 208 30.32 82 39.42
UNDERPERFORM [U] 1 0.15 1 100.00

Although the investment recommendations within the three-tiered, relative stock rating system utilized by Oppenheimer & Co.
Inc. do not correlate to buy, hold and sell recommendations, for the purposes of complying with FINRA rules, Oppenheimer
& Co. Inc. has assigned buy ratings to securities rated Outperform, hold ratings to securities rated Perform, and sell ratings
to securities rated Underperform.
Note: Stocks trading under $5 can be considered speculative and appropriate for risk tolerant investors.

Company Specific Disclosures

In the past 12 months Oppenheimer & Co. Inc. has provided investment banking services for PTON.

In the past 12 months Oppenheimer & Co. Inc. has received compensation for investment banking services from PTON.

Oppenheimer & Co. Inc. expects to receive or intends to seek compensation for investment banking services in the next 3
months from MTCH and WIX.

In the past 12 months Oppenheimer & Co. Inc. has provided non-investment banking, securities-related services for WIX.

In the past 12 months Oppenheimer & Co. Inc. or an affiliate has received compensation for non-investment banking services
from WIX.

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PTON (OUTPERFORM) - $85.00 Peloton Interactive

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regarding ESG for our covered companies. ESG ratings do not have any impact on the stock rating.

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 Peloton Interactive PTON (OUTPERFORM) - $85.00

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