Peloton Shares Drop 14% on Wider Q3 Loss Despite Slight Revenue Boost

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Peloton Interactive shares plunged over 14% on Thursday after the fitness firm reported a wider-than-expected loss for the third quarter, reflecting continued struggles in hardware sales and subscriber retention amid a challenging economic climate.

Q3 Financial Highlights:

  • Loss per share: $0.12, missing analyst estimates of $0.06.

  • Revenue: $624 million, slightly above the $621.3 million estimate (LSEG).

  • Connected fitness equipment revenue: Fell 27% to $206 million.

  • Paid memberships: Down to 6.1 million, a decline of roughly 500,000 year-over-year.

Guidance & Strategic Shifts:

  • 2025 revenue guidance raised slightly to $2.46–$2.47 billion, from a previous midpoint of $2.4625 billion.

  • Connected fitness subscription forecast raised to a range of 2.77 to 2.79 million, reflecting a 7% annual decline.

  • App-based subscription outlook lowered to 540,000–550,000, from 570,000 previously — a 30,000 drop at midpoint.

Executive Commentary:

  • New CEO Peter Stern’s first earnings call highlighted Peloton’s efforts to shift away from hardware and focus on digital content and subscriber engagement.

  • CFO Liz Coddington acknowledged macroeconomic pressures like high inflation and tariff-induced uncertainty, stating that larger-ticket items like Peloton hardware are particularly vulnerable.

Despite minor gains in overall revenue and guidance adjustments, the bigger-than-expected losses and soft subscriber trends signal that Peloton’s post-pandemic transition remains bumpy.

Prosus Expects E-Commerce Profit to Surpass $435 Million, Driven by OLX, iFood and Indian Growth

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Dutch technology investment giant Prosus NV announced that its e-commerce business will surpass prior expectations with adjusted EBIT (aEBIT) exceeding $435 million for fiscal year 2025, up from its previous forecast of $400 million.

Key Financial Highlights:

  • E-Commerce Growth: aEBIT has surged from $38 million in FY2024 to over $435 million in FY2025.

  • OLX Group: Classifieds platform OLX posted 20% revenue growth and saw aEBIT rise over 50% to $270 million.

  • iFood in Latin America: aEBIT doubled to more than $200 million, driven by efficiency and market expansion.

  • India Focus: Investments in Swiggy and ride-hailing app Rapido reinforce India’s role as a core growth market. Rapido is reportedly completing over 3 million rides per day and growing at over 100% year-on-year.

CEO Fabricio Bloisi’s Outlook:

  • FY2026 Target: He aims to deliver at least the same level of incremental aEBIT next year.

  • Regional Strategy: Prosus will continue prioritizing India, Brazil, and Southeast Asia, where the company sees strong potential and healthy returns.

  • Indian Investment: Prosus has invested $8.6 billion in India so far and generated significant returns from the Swiggy IPO, which added nearly $2.4 billion to Prosus’ books.

Prosus is set to release its full-year financial results in June.

Apple Seeks to Pause Judge’s Order in Epic Games Case, Cites Irreparable Harm

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Apple has requested that the 9th U.S. Circuit Court of Appeals temporarily halt a federal court ruling that mandates major changes to how it operates its App Store, arguing the company will suffer “irreparable harm” if key provisions are enforced during its legal challenge.

Key Points:

  • Contempt Ruling: The motion follows U.S. District Judge Yvonne Gonzalez Rogers’ April 30 ruling, which found Apple in contempt of a 2021 antitrust injunction originally stemming from Epic Games’ lawsuit. She ordered Apple to end new App Store rules that allegedly circumvented the original order.

  • Apple’s Argument: Apple claims the ruling interferes with core business operations and that the company is being forced to give away access to its ecosystem without proper compensation. It specifically objected to:

    • A ban on Apple’s 27% commission for out-of-app purchases.

    • Restrictions on where developers may place external payment links.

  • Epic’s Response: Epic Games labeled Apple’s motion a “last ditch effort” to avoid competition and maintain what it called “junk fees.” The company said developers have already begun offering better deals and alternative payment methods since the injunction.

Context:

  • The Lawsuit: The legal battle began in 2020 when Epic challenged Apple’s dominance over iOS app distribution and in-app payment systems, claiming anti-competitive practices.

  • 2021 Injunction: A prior order from Judge Gonzalez Rogers required Apple to allow app developers to direct users to alternative payment platforms. Epic argued Apple had not complied in good faith.

  • Criminal Referral: In her recent ruling, the judge accused Apple of misleading the court and referred the company and an executive to federal prosecutors for a possible criminal contempt investigation.

What’s Next:

The appeals court must now decide whether to pause enforcement of the contempt ruling as Apple’s legal challenge proceeds. If denied, Apple would have to immediately comply with the injunction, potentially reshaping the App Store’s fee model and developer guidelines.