Hardware's gross margin was depressed because of the costs associated with recalling the Tread+, but this discrepancy highlights why Peloton's subscription revenue is much more valuable to this business in the long term. Moving down the income statement, Peloton's gross margin for the fourth quarter was 27.1%, with hardware coming in at 11.6% and subscriptions coming in at 63.3%. Subscription revenue grew at a much faster pace than hardware, up 132% year over year in the period to $282 million. Connected fitness products revenue (equipment) grew 35% year over year to $655 million in the period, which included inorganic growth from its acquisition of Precor. Revenue was up 54% to $937 million in the quarter, which is even more impressive since it was lapping the middle of the lockdowns last year that gave the company a boost in demand. In its fourth-quarter and full-year 2021 report, which covers the periods ending in June of this year, Peloton put up some solid results. As I'll outline in the sections below, it is vital for Peloton's business model that customer churn stays low because of how important the connected fitness subscriptions are to this business. Second, in its fourth-quarter and fiscal year 2021 report, Peloton said its monthly churn rate elevated from 0.52% in the fourth quarter of 2020 to 0.73% in the fourth quarter of 2021.
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