Thread by @QuisitiveInvest

1/ $PTON Peloton subscriber churn looks to me to be around 20-30% per year. But they reported churn of 0.7%!!
Math with me here.. the reported churn is a 'monthly' churn, calculated as net cancels in the period, divided by 3 months. So 0.7% = 2.1% per quarter, or around 8.4%/yr.

2/ but given the massive growth, of the 500k+ subscribers we get to use in the denominator for churn, we added half those in past 12 months. So we lost 8%+ of the 500K, but that 40-50k really applies to the 250k from last year... BUT... the plot thickens further..

3/ This IPO is exquisitely timed to occur just before lapses can really kick in from the phasing out of the 12-36 month lock-in subscription periods, per p. 67 of the S-1. So some large chunk of the historical "subscriptions" weren't even eligible for cancellation...

4/ So Peloton is now losing subs at a rate of around 40-50k per year on an eligible base that is ALMOST CERTAINLY way smaller than 200k, probably even 150k. Pretty interesting if you ask me. Now push this IPO out the door already and raise that $$$ before the metrics really turn!

5/ Definitions definitions... using that fresh starting monthly sub count each month is one heck of an investor marketing trick. (p 66)

6/ And for the Coup de Grace - let's take the latest quarterly data, a nearly 10% annual churn rate. Let's assume the eligible base is 60% of the subs from a year ago, or 150k (rest of those suckers on 24-36month pre-paid plans). Now we have a churn rate of over 30%

7/ disclaimer: I have no interest or position in peloton, I simply like analyzing investment metrics & statistics. My conclusions are my own assumptions & any/all readers must draw their own conclusions using their own analysis.