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Today, , the maker of pricey in-home bicycles and treadmills paired with on-demand fitness classes, , detailing plans for its long-awaited public offering.

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In June, we covered how the company had confidentially filed to go public. So, as we reported at that time, this news is not shocking. In February, Alex detailed the New York-based company鈥檚 funding history in advance of the big day. Since it was founded in 2012, Peloton has raised . Its most recent raise was that was announced last August at . Backers include many heavyweight investors such as , and among many others.

Since its first outside financing, raised through a which nabbed (less Kickstarter鈥檚 marketplace fee) back in July 2013, Peloton raised in private-market financing.

In terms of growth, the company cited over 1.4 million members to date, inspiring more than 58 million Peloton workouts in fiscal year 2019. Its current product portfolio is made up of its bikes, Treadmill, and fitness and wellness subscription services, which can hover around $39 a month. Digital subscribers pay $19.49 a month just to access Peloton content on their smartphones.

Interestingly, the company noted that it grew its 鈥淐onnected Fitness Subscribers鈥� from 35,135 as of June 30, 2016, to 511,202 as of June 30, 2019, representing annualized growth of approximately 144.1 percent.

Metrics disclosed in the company鈥檚 S-1 indicate that Peloton users are becoming more engaged with the connected subscription service as well. In the fiscal year ending June 30, 2019, Peloton subscribers logged an average of 11.5 workouts per month, compared to an average of 7.5 workouts per month in the year ending June 30, 2017. This could indicate that Peloton鈥檚 investments in cultivating a network of fitness instructors, and the content they create, has paid off.

The company鈥檚 fastest growing demographic is 鈥渃onsumers under 35 years old and those with household incomes under $75,000,鈥� it says .

Peloton, which is looking to be listed on the Nasdaq under the ticker symbol “PTON,” has seen explosive growth over the years–and it counts that as a risk factor. The company noted in its filing that it grew from 443 employees in June 2017 to 1,950 employees in June 2019.

Inside The Gears Of Peloton鈥檚 Business

In its filing, the company revealed some impressive revenue figures. For fiscal 2019, Peloton reported revenue of $915 million, up 110 percent compared to $435 million in fiscal 2018. That鈥檚 more than four times the $218.6 million in revenue it saw in fiscal 2017. (Peloton鈥檚 fiscal year ends June 30 of each calendar year.)

However, its net losses also increased over the same timeframe. According to the filing,

Peloton posted a net loss of $195.6 million in fiscal 2019, way up from a net loss of $47.9 million in fiscal 2018 and one of $71.1 million in fiscal 2017.

While it is common for companies growing quickly to run deficits, a four-fold increase in net losses is not attractive. The company鈥檚 sales and marketing costs appear to blame, growing from $151.4 million in its fiscal 2018 to $324 million in its fiscal 2019. That鈥檚 more than double; Peloton鈥檚 sales and marketing costs also roughly doubled from its fiscal 2017 to its fiscal 2018.

Peloton鈥檚 growth has not come cheaply.

Indeed, the company has gone from generating cash from its operations to sharply negative operating cash flow. In its fiscal 2018, Peloton鈥檚 operating activities generated $49.7 million in cash. In its fiscal 2019, that number swung to negative $108.6 million.

Coupled to the company鈥檚 increasingly negative investing cash flow (negative $10.2 million, negative $56.7 million, and negative $297.5 million in its fiscal 2017, 2018, and 2019), Peloton is probably going public to further pad its accounts. The firm did report $162.1 million in cash and equivalents along with $216 million in marketable securities at the end of its fiscal 2019. That will last for a good while, but not forever at the company鈥檚 current pace of cash consumption.

Margins

A key question going into the company鈥檚 S-1 filing dealt with the company鈥檚 margins. Namely, what was its blended margin result of its aggregate revenue, and what sort of margin could it derive from its hardware revenues and software incomes, respectively.

Looking at its fiscal 2019, Peloton鈥檚 blended gross margin was about 42 percent. That鈥檚 not bad at all, given the company鈥檚 quick revenue growth. Hardware (鈥淐onnected Fitness Products鈥�) had gross margins of 43 percent in the fiscal year, better than we anticipated.

However, the company鈥檚 recurring digital classes revenue (鈥淪ubscription鈥�) had margins of roughly 43 percent as well. That is lower than we anticipated. Happily for Peloton, selling bikes is a better business than expected, more than making up for its more-expensive-than-expected subscription incomes.

Who Owns What

Finally, let鈥檚 get into the facts and figures relating to ownership. In other words, which venture capital fund is celebrating its bet.

On page 132 of , the breakdown of investors can be found.

The CEO of Peloton, , received 15,169,568 Class B shares, or 6.2% of total shares. William Lynch, the president of the company, received half of that — 7,502,716 Class B shares, or 3.1% of shares.

There were three executive women listed in this portion of Peloton鈥檚 S-1: Jill Woodworth, Karen Boone, and Pamela Thomas-Graham. Woodworth, the company鈥檚 CFO, received 3,500,000 shares, while Boone and Thomas-Graham got 600,000 each.

鈥� got 28,369,274 shares, and got 46,721,427 shares, more than any other investor or executive listed on the S-1.

Peloton brought on Goldman Sachs, J.P. Morgan, Bank of America Merrill Lynch and others as underwriters for the IPO.

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