HONEYCOMB ASSET MANAGEMENT LP

HONEYCOMB ASSET MANAGEMENT LP Potential Opportunity: BUY Peloton PELOTON Price Target (June 2020): $38 / +60% Price Target (June 2021): $53 / +126% Purchase Price: $23.58 March 7, 2019 HONEYCOMB ASSET MANAGEMENT STRICTLY CONFIDENTIAL. NOT FOR DISTAIOVRON EFTA00807328 IMPORTANT LEGAL DISCLOSURE HONEYCOMB ASSET MANAGEMENT The case study presented herein regarding a potential investment in Patton Interactive. Inc. ("Peloton") has been provided to you for informational purposes only, is based on your expression of interest in participating in the investment and is not an advertisement. The case study is confidential. intended only for the person to whom it has been presented and under no circumstance may a copy be shown, copied. transmitted. or otherwise given to any person other than the authorized recipient without the prior written consent of Honeycomb Asset Management LP (the "Investment Manager"). The case study is not intended to provide any certainty of the profitability of the PeMon investment. There can be no guarantee that the PePolon investment will be consummated or. even if consummated, that you will be permitted to participate in the investment or participate in the amount you indicate to the Investment Manager. Much of the information contained herein is subjective and/or reflects the Investment Manager's beliefs, estimates or lorecasts, or has been provided by third parties. Such information is not a prediction or guarantee of any particular outcome (including positive investment performance) as such beliefs, estimates and forecasts are based on assumptions. information or claims that could prove to be incorrect. In particular. target return information is provided as general guidance only and there can be no guarantee that such returns will be achieved or that the Peloton investment will be profitable. The information contained herein is as of the date hereof except as otherwise specifically stated. No representation or warranty is made, whether expressed or implied, by the Investment Manager or any of their partners. employees, members. or agents as to the completeness or accuracy of the iNormation provided herein. This document may be amended at any time. There is no express or copied obligation to update you of any changes to the information set forth herein. The information contained herein should not be relied upon as the basis of any investment decision. You should instead conduct your own independent legal, tax and investment due diligence. This document is not intended to be. nor should it be construed or used as an offer to sell, or a solicitation of any otter to buy. interests or shares in any fund managed or advised by the Investment Manager (collectively. the "Funds"), including the Fund through which the Peloton investment will be made. No otter or solicitation may be made prior to the delivery of complete offering materials for the Funds (the 'Offering Materials"). which will contain additional information about the Funds. including disclosures relating to risk factors. conflicts of interest. lees and expenses to be home by investors, and other important information. The information contained herein does not take into account the particular investment objectives or financial circumstances of any specific person who may receive it and is qualified in its entirety by the Offering Materials. In the event of any discrepancies between the information contained herein and the Offering Materials. the Offering Materials will control. The information herein is not intended to provide. and should not be relied upon for, accounting, legal or tax advice or investment recommendations. Each recipient of this document should make an independent investigation as to all matters concerning an investment in the Funds. inducing consulting with its own tax. legal, accounting or other advisors. In making an investment decision. investors must rely teen their own independent due diligence and the terms of the ollering. including the merits and risks involved. An investment in the Funds is not suitable for all investors. An investment in the Funds will be suitable only for certain financially sophisticated investors who meet certain eligibility requirements. have no need for liquidity in their investment, can bear significant investment losses, and can bear the risk of an investment in the Funds for an extended period of time. No guarantee or representation is made that and Fund's investment program, including. without limitation. its investment objectives. diversification strategies, or risk monitoring goals. will be successful. Investment results may vary substantialy over time, and substantial losses may occur. Nothing herein is intended to imply that any Fund's investment methodology may be considered "conservative". "safe". 'risk tree' or 'risk averse'. Economic, market and other conditions could also cause the Funds to alter their investment objectives. guidelines and restrictions. Certain information contained in this document constitutes "lawarchlooking statements". which can be identified by the use of forwarchlooking terminology such as "may'. "will'. 'should". "expect". 'anticipate'. "larger. "project". "estimate". intend". 'continue' or believe' or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties and assumptions made by the Investment Manager. actual events or results may differ materially from those reflected or contemplated in such lorwarcflooking statements. Past perlonnance is not indicative nor a guarantee of future returns. STRICTLY CONFIDENTIAL. NOT FOR DISTRI0VRON EFTA00807329 KEY INVESTMENT POINTS We see potential for Peloton to become the Apple + Netflix of Fitness WHY INVEST IN PELOTON? HONEYCOMB ASSET MANAGEMENT • Offering: With a leading hardware, software, and media-integrated offering, we believe Peloton can be a disruptor in the $1006 global fitness market We see Peloton as multiple companies in one which widens the competitive moat NETFLIX 0 SPotifY Media Software Equipment S salesforce servicenow A ATLASS IAN • Growth: We forecast a >60% revenue CAGR through 2022, supported by the signature cycling product, new product roll-outs, and international expansion We believe Wellness is a long-term secular trend and see Peloton using technology to connect the world through fitness • Attractive Return: We see potential +126% upside to our June 2021 PT and a potential 42% gross IRR, with high growth and a low-churn subscription component driving value creation Peloton has indicated plans to go public in 2019' Source: WSJ 'Peloton Interviews Banks for IPO' (Feb 11, 2019); WSJ "Take a Ride With Peloton CEO John Foley (Nov 5, 2018) STRICTLY CONFIDENTIAL. NOT FOR OISTRSUTION EFTA00807330 PELOTON OVERVIEW: COMPANY BACKGROUND Disruptive hardware. software. and media-integrated fitness offering Backaround • Founded in 2012 by CEO John Foley and headquartered in NYC • 1,200+ employees and growing, including a >200 person software engineering team • Over $800M of revenue. growing 100% YN (per CEO Yahoo Finance interview) 0 HONEYCOMB ASSET MANAGEMENT Product Offering • Peloton started with its signature Bike product (>300K sold) and recently launched a Treadmill • Peloton offers monthly subscriptions, both with the physical products and as a standalone app. Peloton has -300K subscribers and -1M members. with multiple members of a household able to share a subscription Engagement • Over 2.5M rides taken monthly by the Peloton community (as of Apr. 2018). The average rider uses Peloton 12-13 times per month • Peloton riders rode 165M miles in the year ended August 2018. with 600M+ calories burned per month • Net churn for the subscription business is <1% per month, and 96% of Peloton Bikes and Treadmills sold have active memberships attached Media • Up to 14 daily live Bike rides, with instructors who gain 'celebrity status. Average of -500 riders per class • Library of >10K on-demand classes across major fitness verticals. 10% of classes are taken live versus 90% on-demand • Peloton is spending $45M to develop a new digital media studio in NY. with an additional studio planned in Europe Distribution • Peloton operates its own retail stores (70+ currently) and its own logistics network Source: Honeycomb, Company website, CEO interviews (WSJ, Strategy Business Interview, Yahoo Finance, CNBC) STRICTLY CONFIDENTIAL. NOT FOR OISTRBUTION. EFTA00807331 PELOTON OVERVIEW: PRICING OPTIONS Equipment packages (incl financing options), plus membership subscriptions O HONEYCOMB ASSET MANAGEMENT • Base price of $2,245 for the Peloton Bike, including delivery, setup, and a 1 year warranty. Additional packages include accessories Option to finance the purchase at 0% APR for $58/month for the base Bike package • Subscriptions for both bikes and treadmills are $39/month through the Peloton equipment or $19.49/month through Peloton's digital app Choose your Bike experience Get that ytit feed to scan trainng. whether its rust the %IMO., BAR A arrant), and Membership, welch gets yOu Wended access to PetotOfiClaSSeS or accessories to erat.To yOU arc yriK fanny )4 4th Oil elcirl! Mitt, PACKA011 MCP mom Ma *Om tWlit Mow lad Its hrctri e.e .r, re Sets Ls: 0 tssilitemirs PaCknell MSS heeme Ste INCHEII• /MORASS 'tt.1.•"-Mt ATM", 1 Yr imutee ormanty :miry arc Sr-re Er. 0 Caney ant Seim aastl 0 Sums ash Sestet(IPeel AIM'S I" Wir WMWS 0110 "ttOTMet ' >ir neNIPPOnell it Der) NMI 1,Mt WT401 itUNFAMILY PACKAGE includes I Yr LI-•'Ha 0.3trar:, Oefrary axi sea list I 0 Vett (2 Peril Welts (/ Mee) e•e `'• WW Settle" MI PELOTON MEMBERSHIP %ccess all classes via the Peg,' &Ice. Ttead and app Sniffle thapuless MOW MP a bye% teee,10 SHOP tan,. sh Unlimited Pelelon Seem on MO Bea Tread to on the pa I 20 Me Owes doily inacrrei 10000 onKlema ,r • Una/Piled use plat A varlets el class types including erring. Prolcaralt irsaaa 04M001 WI mole I Potwar. Nadal tIorberillip Oporto on KIS, Andros:I and Web) • InttrUCter (Waled Man.; programs or tinworkout nacirKs prolsalong Mt-MCC heart lab. Me ue4 Wxe • Deleiled.oilicut perionnamy o ye Ott and ersolemiosel cans I. Kul. Source: Company website as of March 2019 STRICTLY CONFIDENTIAL. NOT FOR OISTRBUTION. EFTA00807332 PELOTON OVERVIEW: PRICING OPTIONS Equipment packages (incl. financing options). plus membership subscriptions HONEYCOMB ASSET MANAGEMENT • Base price of $4,295 for the Peloton Treadmill, including delivery, setup, and a 1 year warranty. Additional packages include accessories Option to finance the purchase at 0% APR for $179/month for the base Tread package • Subscriptions for both bikes and treadmills are $39/month through the Peloton equipment or $19.49/month through Peloton's digital app Choose your Tread experience Sr. este to: ^Ng t: 5! VI .5: :C• '•"! 42 Win Pil EASELS PACKAGE SHOP HOW MASS NIRO, 'Boo 1 V. Nita»: eitrrte :ghee rt.:Sego Er 0 ESSENTIALS PACKAGE . 1.4 14 1:1I ‘ M=IIEMIE EMMY PACKAGE T OC )C SHOP HOW :Al.or, rc Sr.: Er 0 aartsactE•-•cp I $e ifet Z AV, LWOW V1! SHOP ROW IncluMIS :444,417filiA I V, na:WA analli :ant" an* Saba Er, 0 Eters-ea War :• Fee hers 4 :oar Ewes* Mr. Sass Cale Boma SHOP HOW lacludm PELOTON MEMBERSHIP t•CeeSS all classes via the Pe r Bike, 'need and app $39/mo atoetteg Pe101et NA* a Tier: SHOP EOM rtiet.7 lionalled Inalolon claim on Me GA. Bead owl en the go • 20. Mt classes dolly Ina Orel 19000 on-demon, • unlimited out Nobles I A valet, a flats topes including [-Khoo ,,,,,, MalcamP. Oen *Mop and MOO e ▪ Includes oigitai magertship Omni on 00.S. Android and Web) • InStrUCtOr waled tresemg moments ✓ lave woetout mem. acluang altugge tee oftilgettanc• • DOIMMI mlitkOul perlamacOn I I ova tee tat Clettland(imi I ',CI. Source: Company website as of March 2019 STRICTLY CONFIDENTIAL. NOT FOR OISTRSUTION EFTA00807333 INVESTMENT HIGHLIGHTS: LARGE TOTAL ADDRESSABLE MARKET (TAM) OHONEYCOMB ...„ASSET MANAGEMENT The Global Fitness market is large and ripe for disruption • We see a $100B Global Fitness industry, with nearly $90B in Health Club revenue (per IHRSA) and over $10B in Fitness Equipment sales annually (per Zion Market Research) • The US Health Club industry is only -1/3° of the global total 4 International is a 2x larger opportunity • US health clubs have over 60M members, and the Global industry has over 174M members. We believe Peloton can grow their -300K subscriber base by 3x in two years, and Peloton would still represent less than -1% penetration of total fitness memberships • The 200,000+ Global health club locations are also potential customers for Peloton products Traditional Boutique EQUINOX SOULCYCLE * BARRY'S FLYWHEEL At Home PELOTON . Source: International Health, Racquet & Sportsclub Association (IHRSA); Jefferies; Honeycomb estimates STRICTLY CONFIDENTIAL. NOT FOR DISTRIBUTION EFTA00807334 INVESTMENT HIGHLIGHTS: LARGE TOTAL ADDRESSABLE MARKET (TAM) \-z" O0 Leading subscription businesses have very large user basesHONEYCOMB ASSET MANAGEMENT • Leading subscription services across media verticals have achieved subscriber bases in the -100M range or higher, while leading gym companies have member bases numbering in the millions • With -300K subscribers by our estimates, we see a significant growth runway for Peloton as the premier Fitness-as-a-Service company 160 140 120 100 SO 60 40 20 0 For Peloton's app-based offering, we see a potential TAM of 100M+ households globally Global Subscriber Counts - Media (mn) '140 Netflix -100 -96 Amazon Prime Sootily 17 10 — S 6 4 2 0 Global Subscriber Counts -Gyms (mn) -s 1 Planet Fitness LA Fitness Crossfit 24 Hour Fitness Gold's Gym Source: Jefferies, Honeycomb estimates STRICTLY CONFIDENTIAL. NOT FOR DISTRBUTION. EFTA00807335 INVESTMENT HIGHLIGHTS: BRAND RECOGNITION Survey shows high recognition plus runway for adoption HONEYCOMB ASSET MANAGEMENT • According to Jefferies Equity Research in an August 2018 survey, 53% of respondents indicated they are aware of Peloton • Over 60% of surveyed people plan to consume home workouts and 30% have canceled a health club membership o Only 12% of respondents indicated owning a Peloton, but 58% said they were either very likely to buy or considering buying one Chart 14: Which of the following statements are true, select all that apply. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% I am aware of I own a Pdoton Peloton I take or plank, take boutique fitness dasses in the next 6 months I cortsume or I have canceled plan to a health dub consume at membership is borne workouts the last 3 years in the next 6 months 'flue False U I currently attend Planet Fitness as a member Chart 15: How likely are you to purchase a Peloton in the next 12 months? 35% 30% 25% 20% 15% 10% 5% 0% Very lkely I'm considering buying one I'm not interested I don't know Source: Jefferies STRICTLY CONFIDENTIAL. NOT FOR OISTRIBUTION. EFTA00807336 INVESTMENT HIGHLIGHTS: BRAND RECOGNITION Peloton is outpacing peers in Google Trend results ■ HONEYCOMB ASSET MANAGEMENT • Peloton Google search interest in the US continues to accelerate, with higher peaks each year in the seasonally strong 4O, while SoulCycle and Flywheel search trends have flattened out • We believe this demonstrates the significant lead Peloton has over competing brands 100 90 80 70 60 50 40 30 20 10 0 <7' 4' (0 4 N."‘ .y0 'Y0 No.A ) ,*? " 4<bc t ebv>•>\.Google Trends for Premium Cycling Brands Consumers increasingly searching for Peloton —Peloton SoulCycle —Flywheel Source: Google Trends (for searches in the U.S.) STRICTLY CONFIDENTIAL. NOT FOR DISTRIBUTION 9 EFTA00807337 INVESTMENT HIGHLIGHTS: BRAND RECOGNITION Peloton has a passionate social media following 750K+ Facebook / Twitter / Instagram Followers e Peloton has more followers than current subscribers facebook Peloton 0 Peloton 0 Community a 448.198 Geode kme oils s\ 430.628 oeNde bow Ms lw•el, I n31...ng 7.266 1.256 37.9K Lan 9.398 Tweets Tweets & replies Media OO irtstagraws cn ir:pe utc a 0 foo, 203 folloolng Peloton Reinvent ng Owens not & on, derna-4 bo.neye studio dosses on the Pethoon gke, Penton tread & Pecoon Dign> oonopcioton linku.ee/onepekoton See All HONEYCOMB ASSET MANAGEMENT Followers Show a Passion for Peloton O Scott Bell @wmsbell • 3h v If you don't have it get it ride it. and Love it....peloton O trlccla ramos etricoaramos • Feb 28 N., Broke a new record today! Celebrating small wins and enjoying the growth that is happening here alDeanersca ,Deanerzzzz - 1Sh I've committed to 30 Kpuloton rides in March. Who's in?? OThe Peckish Raven @thepeckishraven - Feb 26 v I started this day with a invorkout by Ipeloton jsimsfit that was SO challenging but just what I needed. Never underestimate what you can achieve in just 30 410 KilmbeTty Clow Wood el0rnberlyCWood • Feb 22 @AllymissLove got a ePetoton and you're my favorite- love the energy and encouragement! I never want to disappoint and I fellow all the instructions- I don't even do that for my run coach! 0 'scalene @jacicster_93 • Feb 28 Replying to ra'ericjpride I want the •Peloton bike so badly! Lol! `se Source: Facebook, Twitter, Instagram websites STRICTLY CONFIDENTIAL. NOT FOR OISTRSUTION 10 EFTA00807338 INVESTMENT HIGHLIGHTS: HIGH-MARGIN SUBSCRIPTION MODEL Peloton = Not as expensive as it looks HONEYCOMB ASSET MANAGEMENT • The Peloton bike plus subscription model is different from most premium gyms, which can have lower upfront costs but either high monthly fees or a pay-per•class offering • Unlike gym memberships, the cost of Peloton can be spread across a household (up to 6 memberships per subscription) As shown below, the two-year average monthly cost per rider for Peloton is below competitive premium fitness offerings Fitness Option Avg Monthly Cost Per Rider over 2Yrs Avg Monthly Cost Per Couple over 2Yrs 0 PELOTON (I) $143 $143 Cheaper per month than alternatives SOULCYCLE (2) $412 $824 ErARY'S (2) $400 $800 O FLYWI IELL (2)$252 $504 EQU I NOX (4) $250 $500 the bar method $300 $600 CLASSPASS (3) $160 $320 rangetheory' (3) $280 $560 Source: Company websites (New York prices) (1) Assumes average fully-loaded bike upfront cost of $2.494 + $39/mo subscription: (2) Assumes 12 classes per month (3 per week) at a 10-class pack + 2 single class rate: (3) Assumes most cost effective monthly membership: (4) Assumes global access membership STRICTLY CONFIDENTIAL. NOT FOR DISTRIBUTION 11 EFTA00807339 INVESTMENT HIGHLIGHTS: HIGH-MARGIN SUBSCRIPTION MODEL As the subscription business grows. the margin profile improves HONEYCOMB ASSET MANAGEMENT • Low churn (estimated <1% monthly), supported by a high quality offering, multiple user profiles (like SpotifyThefflix). and in•home convenience We understand 96% of Pebton Bikes and Treads have active memberships attached, and used bikes sell for only a -10% secondary market discount given the high demand for the product High engagement with consumers averaging 12.13 rides per month, up from 7-8 in the earlier days of the company per CEO John Foley in a May '18 interview • Peloton's subscription revenue has the ability to eam very high incremental margins, which will have the effect of driving up total company margins • We believe other potential services like Advertising and Commerce would also be very high-margin revenue streams to leverage Peloton's fixed cost base (we do not underwrite these additional business opportunities. but see them as upside optionality) • By FY June 2024 on Honeycomb estimates, we believe over 50% of Peloton's gross profits will be from their Subscription business 47.0% 46.0% 45.0% 44.E 43.0% 42.0% 41.0% 40.0% 39.0% 38.0% 37.0% Peloton Total Gross Margin Efficiencies of scale & subscription mix shift New product launch Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 100% 80% 60% 40% 20% 0% Peloton Gross Margin Mix 1 1 1 1 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Jun-24 ■ Equipment %GP ■ Subscription % GP Source: Honeycomb estimates, CEO interview (The Clip Out Podcast interview with John Foley, May 2018) STRICTLY CONFIDENTIAL. NOT FOR DISTRIBUTION 12 EFTA00807340 INVESTMENT HIGHLIGHTS: GROWTH PIPELINE New products, new markets. and app offering support growth • New Products, Starting with Tread: Bike customers that buy a Tread have no additional monthly subscription cost Treadmill pre-sales were 3x management's estimates over the first six months We see opportunities for lower priced models and a potential 3rd product • New Markets: We see international expansion as a meaningful growth opportunity • App Offering With talented instructors and loyal customers, we see Peloton as a leader in app-based fitness subscriptions Peloton content can be leveraged on the 17M treadmills in American homes today 0 Additional Monetization Opportunities Media strategy could evolve to include targeted Advertising and e•Commerce • • gum« • 1000AM 45min Metrics Ride WON AftiON HONEYCOMB ASSET MANAGEMENT (0. AM *JOAN rxw,w mr Source: Honeycomb, Company website, CEO interview (Yahoo Finance) STRICTLY CONFIDENTIAL. NOT FOR OISTRBUTION. 13 EFTA00807341 INVESTMENT HIGHLIGHTS: COMMERCIAL PARTNERSHIPS Expanding past residential opens new markets and further builds the brand • We see growth potential from expanding commercial partnerships such as those with hotels, apartment buildings, and corporate offices • As an example, Westin Hotels has a partnership in place with Peloton, with bikes in Westin fitness centers and select guest rooms at 50+ locations across the US We think this is a win•win partnership, with travelers looking for fitness options and Peloton obtaining new users According to a survey by Studylogic, 83% of travelers said access to wellness programs while traveling is at least somewhat important when choosing a hotel In particular, Millennials, those in their 20s and 30s who are starting to travel more, largely said they intend to exercise on the road. Nearly 40% of them specifically planned to cycle PELOTON Stay Nlotivated On The Go HONEYCOMB ASSET MANAGEMENT Itise & Ride With Westin Peloton Source: Honeycomb; Westin website; USA Today article: Workout amenity: Peloton bikes in hotel rooms' STRICTLY CONFIDENTIAL. NOT FOR OISTRIBUTION EFTA00807342 VALUATION AND COMPS • We forecast a 3-year revenue and gross profit CAGR of >60%, with EBITDA profitability by FY June 2022 • We see +60% potential upside to our June 2020 Price Target with a potential 43% gross IRR • We see +126% potential upside to our June 2021 Price Target with a potential 42% gross IRR Stock Puce $23.58 FOS 0/6 Martel Cap 6,762 Debt 0 g27± TEV 6,312 June 2020Price Target lune 2021 Price Target June 2021 Gross Profit 1.109 lune 2022 Gross Profit 1,628 EV I Gross Profit multiple 10.0x EV/Gross Profit multiple 100' TEV 11.094 TEV 16,284 Debt 0 Oebt 0 Cash Cash Market Cap 11.667 Market Cap 16,785 EDS 0/S 309 FOS 0/S 315 Price Target $37.79 Price Target $53.35 % gross return 603% %gross return 126.3% Gross IRR 43.1% Gross IRR 42.3% Source: Honeycomb estimates STRICTLY CONFIDENTIAL. NOT FOR OiSTRIBuTb3N. HONEYCOMB ASSET MANAGEMENT lun•19E Am.20E lun•21E Jun-22E /un•23E lun-24E '19-22 r CAGR '19-24 CAGR Equipment Revenue $703 $1421 $1,347 $1,962 $2,691 $4,150 563% 42.8% Subscription Revenue $184 $386 $680 51.096 $1.607 $2,267 81.2% 65.2% Total Revenue $884 61,713 $2,641 $3,787 $5,028 $6,416 62.4% 48.6% % yoy thonge Ices 96.0% 52.4% 414% 32.8% 27.6% $ yoy change 449 849 978 1,146 1,241 1,388 WI Revenue 7.1x 16x 2.4x 1.7x 1.3x 1.04 % total revenue Equipment revenue 79.2% 77.7% 743% 711% 68.0% 64.7% Subscription revenue 208% 22.3% 25.7% 289% 32.0% 35.3% Equipment Gross Profit $266 $450 $674 $916 51.177 51,433 Subscription Gross Profit 5114 $243 $435 $712 $1.061 $1,519 Gross Profit $380 $693 $1,109 $1,628 $2238 $2,952 62.4% 50.7% 96 yoy chonge 85.9% 82.4% 60.036 468% 37.4% 319% % margin 43.0% 40.0% 42.0% 410% 44.5% 46.0% $ yoy change 176 313 426 519 609 714 EV /Gross Profit 16.6x 9.1x 5.7x 3.9x 28x 2.14 % total gross profs Equipment Gross Profit 700% 649% 608% 56.3% 52.6% 485% Subscription Gross Profit 300% 3S1% 39.2% 417% 47.4% 51.5% Operating Expenses (5483) ($869) ($1,181) ($1,476) (51.801) (52,162) 45.2% 35.0% % yoy change 12.0% 800% 36.074 25.0% 22.0% 200% % sales IMO% (501)% (44.7)% (39.0)% (35.81% (33.7)% Yoy change 4268) (386) (313) (295) (325) (360) EBITDA ($102) (175) ($72) $152 $436 $790 nfrn n/m % yoy change 923.5% 71.2% (59.0)% (311.7)% 187.1% 81.1% %margin (11.6)% day% (2.7)% 40% 87% I2.3% yoy change (92) (73) 103 224 284 354 EV/ EMMA (61.7)x (36.0)x (87.9)x 4154 14.5x as 15 EFTA00807343 VALUATION AND COMPS 11M Internet and Software peers trade for 10-12x GP for much slower growth than Peloton Internet Subscription Comps HONEYCOMB ASSET MANAGEMENT Ticker Price Mkt Cap EV Sales Sales Growth EV GP Goss Profit Growth EV 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 Internet Subscription Comm NFLX $356.81 $155,783 $162,348 8.0x 6.5x 5.5x 28% 24% 19% 20.5x 16.1x 13.5x 36% 27% 19% SPOT $141.94 $25,671 $23,865 3.2x 2.6x 2.1x 22% 23% 23% 12.9x 10.0x 7.8x 16% 29% 28% SHOP $188.16 $20,807 $18,838 12.7x 9.6x 7.4x 38% 32% 30% 22.8x 17.2x 13.0x 38% 33% 33% UM H 554.83 $15,267 $16,596 8.3x 7.2x 6.4x 16% 15% 13% 11.0x 9.5x 8.4x 14% 15% 14% SNAP $9.59 $12,669 $11,390 7.4x 5.7x 4.6x 31% 30% 24% 16.6x 10.8x 8.1x 78% 54% 34% WE $17.90 $29,271 $17,786 4.5x 3.3x 2.6x 41% 35% 29% 12.5x 9.2x 7.2x 31% 36% 26% R0KU $72.00 $7.924 $7.574 7.5x 5.6x 4.3x 37% 32% 31% 16.3x 11.8x 8.6x 40% 39% 36% CHGG $39A8 $4.575 $4,390 11.2x 9.2x 7.2x 23% 22% 28% 14.7x a 9.1x 24% 23% 32% Average 7.8x 6.2x 5.0x 29% 27% 25% 15.9x 12.1x 9.5x 35% 32% 28% Median 7.7x 6.1x 5.0x 29% 27% 26% 15.5x 11.3x 8.5x 34% 31% 30% Peloton $23.58 $6.762 $6312 4.4x 2.7x 1.9x 98% 62% 46% 10.8x 6.6x 4.4x 83% 65% 50% Subscription Software Comps EV/Sales Sales Growth EV GP Gross Profit Growth Ticker Price Mkt Cap 2021 2221 2019 2020 2021 2019 2020 2021 2019 2020 2021 Subscription Software ADBE $256.16 $125289 $126,185 11.1x 9.5x 8.4x 23% 17% 14% 12.7x 10.8x 9.5x 23% 18% 14% CRM $156.94 $120,059 $118,893 7.5x 6.3x 5.4x 21% 19% 18% 9.8x 8.2x 6.9x 22% 19% 19% INTU $246.26 $63,799 $63,449 9.3x 8.4x NA 8% 11% NA 11.0x 9.9x NA 8% 11% NA NOW $236.30 $42,652 $41,816 12.2x 9.5x 7.6x 32% 28% 25% 15.0x 11.6x 9.1x 34% 29% 27% WDAY $183.76 $40,060 $39,486 11.3x 9.2x 7.5x 27% 23% 23% 14.9x 12.0x 9.7x 30% 24% 24% ADSK $153.34 $33,583 $34,717 10.8x 8.9x 8.1x 29% 22% 10% 11.8x 9.7x 8.8x 30% 22% 11% TEAM $106.03 $25.394 $24,586 18.1x 14.9x 11.3x 31% 22% 31% 21.1x 17.4x NA 32% 21% NA Average 11.5x 9.5x 8.0x 24% 20% 20% 13.8x 11.4x 8.8x 26% 21% 19% Median 11.1x 9.2x 7.8x 27% 22% 20% 12.7x 10.8x 9.1x 30% 21% 19% Peloton $23.58 $6,762 $6,312 4.4x 2.7x 1.9x 98% 62% 46% 10.8x 6.6x 4.4x 83% 65% 50% Source: Bloomberg consensus estimates; Honeycomb estimates for Peloton (calendarized multiples) STRICTLY CONFIDENTIAL. NOT FOR OISTRSUTION 16 EFTA00807344