My guess is that if economic indicators prove valid for 2023, and specifically for the cycling industry, Wahoo will be searching hard for capital investment at best and a buyer worst case.
This is a difficult and rather sad time for the industry but capitalism today with short term profits in mind doesn’t look much past the next quarter. Granted, the bubble COVID created is unusual but many companies have managed their inventories and overhead just fine through the pandemic.
The losers in my opinion are the consumers. I love my Wahoo products, have been with them from the beginning, and hate to see what is happening at the moment.
I’ve got a bike, hr monitor, bike computer and a proper Kckr Bike. All still with lots of warranty left , that will obvious be worth a $3 bill if the worst happens.
Though my biggest concern is loss of SYSTM. I do not like the virtual world of Zwift so I would be looking for an alternative should Wahoo completely crash.
I have been through a kickr, two kickr bikes, HRM’s, two headwinds, etc, etc, etc., Their resale value is of no interest to me. I am interested in continued factory support particularly for my bike and fearful of losing that support.
I have had excellent customer service over the years and I know what that is being a retired service manger for a Silicon Valley tech manufacture with product all over the world.
It’s not just the support that I would be saddened to lose but also the products which I believe have had very dedicated people design and support. If we lose the core of Wahoo personnel to some buyer it will just get gutted ime.
Wahoo wasted a ton of money on RGT and then watered down its biggest point of difference with the dropping of the Sufferfest branding for Wahooligan.
Zwift has brand recognition so gets the first dibs of the dollar and unfortunately once someone is locked in on an ecosystem they often do not want to change.
Hambini has done a short Video about this and the gripes with Zwift
Here’s DC Rainmaker’s take. I find myself agreeing with his two major points: WahooX by itself is likely profitable and SYSTM Apple TV app is their best growth play (I guess internal analysis disagrees on that one).
I don’t know anything specific about Wahoo, but I am in SaaS software and have gone through layoffs so my personal take is we (as users) have probably seen the brunt of the impact with the team reductions that have already happened and the resulting slowdown of content & features.
sigh
it is a pity what it could lead to, I’d hate to see the Sufferfest videos be lost to the void., I’d imagine they’d look at selling some parts of the business as well? Doubt they could untangle the sufferfest/Systm but maybe they’d sell Speedplay to generate some cash?
Haven’t they just built a massive new centre? It was featured in a GCN video a short while ago… where Manon was taken on a tour of it with Neal. That must have cost a pretty penny!
Yeah, the sports performance center in Boulder, Colorado.
It’s all speculation on our part, but the issues sounds like cash, rather than profitability. That in itself has resulted in restructuring, which is evident with changes to staff and op so on, but I suspect (hope) that the core at Wahoo is fine. Zwift has had to do several rounds of funding.
If Wahoo gets a settlement from their Zwift lawsuit and stops them from selling their new low-priced trainer, or forces Zwift to restructure their trainer pricing or pay Wahoo a license fee for every trainer sold that would help out their cash situation, as well.
@TTDragon Seems like those are linked. They haven’t been profitable given decreased revenues, increased shipping, warehouse and interest expenses on their floating rate debt and thus are not generating enough cash to service their debt. Seems like the first move is to reorganize the company and restructure the debt to something reasonable that the company can support and then work on better targeting the product line to grow the company. The environment is pretty tough. Many competitors on the software side are going through similar issues and Saris went through issues on the hardware side.
@emacdoug To me that seems like a bit of a Hail Mary situation - even if they win there are a lot of other headwinds to deal with but I guess it would be something. I often wonder how the litigation came about. I read somewhere that the patents were actually collateral for some of the debt and so there may have been a need to bring suit despite the ill will that it would create between the two companies.
Oh dear:
I think it will be very unhealthy for indoor and outdoor cycling if Wahoo disappears. Here’s hoping they find a solution.