When you go to buy a Peloton, they give you the payment plan option. As far as I can tell, that’s handled by Affirm. The implication of Affirm reporting 28% of their TTM revenues coming from Peloton in one quarter, and 30% of their TTM revenues the next, is that Peloton-associated revenue growth only slightly outpaced the rest of their business.
According to a summary of Affirm’s S1: https://news.crunchbase.com/news/affirm-s1-ipo/
Affirm reported a net revenue of $509.5 million for the fiscal year that ended on June 30, 2020. That’s up nearly 93 percent from the same period in 2019.
More recently, the company reported net revenue of nearly $174 million for the three months that ended on September 30, 2020, up nearly 98 percent from the $87.9 million in revenue it generated during the same period the year prior.
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In the “Risk Factors” section of its S-1, the company notes that Peloton was its top merchant partner, representing 28 percent of Affirm’s total revenue for the fiscal year ended June 30, 2020 and 30 percent of its total revenue for the three months that ended on Sept. 30, 2020.
So Peloton revenue for Affirm grew a little more than the 98% Affirm grew overall. But we don’t know if the makeup of Peloton buyers has changed such that more or less are using Affirm. I don’t think I can draw any meaningful conclusions from that information, at least not enough to be nearly as important as PTON basically saying they can’t make and ship the devices fast enough. Plus, someone who is still paying off a bike is unlikely to cancel their subscription, so maybe it helps to lock in that subscription revenue.
While it’s not great to have a constant backlog of orders and potentially losing customers, it’s clearly better than sitting on a pile of unsold inventory. A certain car maker has done very well with a continuous stream of unfilled orders. And while some customers may be impatient and just move on to something else, the perceived scarcity could help the brand.