How iFit is taking on Peloton

It wasn’t that long ago that iFit was a bigger company, but Peloton has out-pedaled its older rival in recent years. Peloton’s worldwide revenue doubled in each of the past three fiscal years.

IFit broke out only three years of revenue in its IPO filing. But historic filings show how the company’s revenue has seesawed over the decades. Revenue for the year ended May 2019 was about $700 million—well below the net sales reported by Icon Health & Fitness (the company’s old name) in annual filings for the year ended May 2004 ($1.1 billion) and below its net sales from 25 years ago ($748 million in the year ended May 1996).

Revenue for iFit and Peloton surged during the early months of the coronavirus pandemic amid lockdowns and gym closings, but post-pandemic growth prospects are uncertain.

IFit’s IPO filing reads: “Demand for at-home health and fitness solutions has increased as a result of gyms and fitness studio closures. While the adoption of at-home connected fitness has been accelerated by the pandemic, it is possible that increased demand levels could decline … as economies eventually normalize due to vaccine distribution and consumers spending less time at home.”

Peloton’s latest annual filing cautioned that its “revenue growth rate is likely to slow as our business matures,” adding: “Our historical revenue growth should not be considered indicative of our future performance.”

Peloton this summer cut the price of its original bike by $400 to $1,495 to help drive demand after reporting slowing revenue growth in the quarter ended June 30. The company in August forecast revenue growth of just 6% in the quarter ended September 2021. That’s down from the 232% growth reported by Peloton in the same quarter a year ago. For the year ending June 2022, Peloton forecast revenue of $5.4 billion, up 34%.

IFit’s revenue growth in the quarter ended Aug. 31 versus a year earlier was in the range of 21% to 28%, according to its preliminary results, down from the 112% growth recorded in the same quarter a year earlier.

IFit declined to comment for this story, citing Securities and Exchange Commission guidelines for the quiet period around an IPO. Peloton’s press team didn’t respond to a request for comment.

Both companies are heavily reliant on the U.S. (89% of revenue for Peloton and 84% for iFit in the most recent year).

Both marketers generate the bulk of revenue from product sales, but they are betting heavily on recurring revenue from subscriptions offering access to live and on-demand classes and content.

Subscriptions accounted for 22% of revenue at Peloton and 13% of revenue at iFit in the most recent year.