Blackwells Capital Activist Presentation Deck
I
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Peloton is saddled with inefficient operations -
the result of a misguided attempt at "blitzscaling"
during the pandemic
■
COST-CUTTING PLAN DOES NOT GO FAR ENOUGH
The Company's expense growth has outstripped demand
to the point where significant restructuring is necessary
Peloton announced an $800 million expense reduction
plan in February 2022, but it is unclear how "enacting a
work force reduction" and "reducing owned and operated
warehouses and delivery teams" will generate hundreds of
millions in run-rate savings
The cost-cutting plan also does not seem to go far
enough. Even if Peloton's proposed $800 million expense
reduction is allocated solely and equally to G&A and
selling & marketing expenses, the Company's cost
structure would still be lopsided
Blackwells believes that Peloton has ample room to further
rationalize the business without compromising revenue
growth
BW BLACKWELLS CAPITAL
LTM Revenue / Employee ($M)¹
$2.63
NETFLIX
$1.73
6%
$1.17
int
$1.56
Peer Median
LTM G&A / Revenue¹
$0.92
22%
((Siriusxm))) match Roku 3
Peloton
Peer
Median:
$1.56
$0.48
PELOTON
12%
Peloton Post-Cost
Reduction Plan
Selling & Marketing / Revenue¹
35%
26%
bi
13%
13%
2019
12%
2020
Peer Median
18%
26%
12%
■PTON Peer Median
2021
Peloton
LTM Selling & Marketing / Revenue¹
26%
12%
LTM
16%
Peloton Post-Cost
Reduction Plan
(1) Source: FactSet. Data as of April 8, 2022.
Note: "Peloton Post-Cost Reduction Plan" assumes $400 million is subtracted from both LTM G&A expenses and LTM selling and marketing expenses, with revenue remaining constant. Peers include Match, Netflix, Roku, Sirius XM and Spotify.
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