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No. of Recommendations: 5

(This is at a glance. I plan to dive in and read it all as soon as possible....)

- Connected Fitness Subscriptions grew 137% to over 1.33 million
- Paid Digital Subscriptions grew 382% to over 510,000;
- total Members grew to over 3.6 million

Based on these numbers they have about 1.8M unpaid members? Looking at the website there are only 30-day free trials, but no free tier. Is it possible these are all 30-day free trials??

The only part that makes me sad is that 39% GM. The thesis here is this will improve as they get more members using the same content on the digital side, but still...they have to earn twice as much revenue as some of our other companies to get the same earnings. Hopefully we see the subscription margin climb from 58.5% each quarter. However, the full year forecast for GM is only 41% and this is only the first quarter. I'm calling this a red flag to watch. Another measure of this aspect to watch: Q1 Net Income was $69.3 million off $1 billion. This breaks down to (leaving all caps from copy-and-paste):

- TOTAL OPERATING EXPENSES: $259.8 million 34.3% of revenue
- SALES AND MARKETING: $114.6 million 15.1% of revenue
- GENERAL AND ADMINISTRATIVE: $108.6 million 14.3% of revenue
- RESEARCH AND DEVELOPMENT: $36.6 million 4.8% of revenue
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