糖心视频

Morning Markets: Peloton is lining up banks for an IPO. Let’s remind ourselves what we know about its performance as it heads towards a flotation.

, maker of expensive in-home bikes married to streaming spin classes, is looking to secure banks for an eventual IPO,聽. The news isn’t surprising from the richly-valued Peloton; the 聽last year that his company would debut in 2019, for example.

If Peloton does manage an IPO this year, it will have demonstrated that at least one low-tech device can, in fact, be made successfully “smart” through the inclusion of high-tech items into a traditionally analog device. Peloton riders, who buy their hardware and subscribe to workout content, are as yuppies always are, but the company that their sweat powers could be a capitalist workhorse.

It will depend on margins, I think.

Peloton has posted material revenue and strong top-line growth in recent years. The subscription exercise shop during聽2017 and is on in its current fiscal year. That’s the sort of growth that investors love from venture-backed companies like Peloton.

But unlike software companies which purely rent their code to other companies, Peloton has two businesses: hardware (selling bikes and, recently, ), and subscription content (a monthly $39 fee). If you had to guess which of the two will sport a higher gross margin, which would you pick?

The easy answer is the subscription content, and I think that that’s right, but I wonder if the hardware margins are as low as I initially thought, or the content as high-margin as investors likely hope. In short, I can’t get a great read on how high-quality Peloton revenue is from what we know externally.

That makes Peloton’s eventual S-1 filing all the more exciting a prospect; if the company has strong margins, its 75 percent year-over-year revenue growth is killer. At lower margins the results become merely good.1 We’ll see.

But there’s a lot of money wagered on Peloton’s side. I asked our own to list out Peloton’s funding for us, which looks like this:

That’s a total of $994.7 million in raised capital, most . No pressure, Peloton.

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