Peloton Interactive Q4 Earnings Beat Expectations, Revenue Down 6% YoY

Peloton Interactive reported Q4 EPS of 5 cents, beating the consensus estimate of 6 cents loss. Revenue fell 6% YoY to $606.9 million, but beat the analyst consensus estimate of $580.2 million. The company reported a 6% YoY decrease in Ending Paid Connected Fitness Subscriptions and a 5% YoY decrease in Subscription Revenue. Total Gross Profit increased 5% YoY to $328.1 million, and Adjusted EBITDA improved $69.7 million YoY to $140 million. Peloton expects fiscal 2026 revenue of $2.4-$2.5 billion and Q1 revenue of $525-$545 million. The company aims to generate at least $200 million in free cash flow in fiscal 2026 through cost cuts and restructuring. PTON stock is down 19% YTD.

Peloton Interactive (NASDAQ: PTON) reported its fourth-quarter earnings, with the company posting a quarterly profit despite a decline in revenue. The company's EPS of $0.050 beat the analyst estimate of $-0.050, while revenue of $606.9M fell 6% year-over-year but exceeded the consensus estimate of $580.54M [1]. The company also reported a 6% year-over-year decrease in ending paid connected fitness subscriptions and a 5% decrease in subscription revenue. Despite these declines, Peloton Interactive's total gross profit increased 5% year-over-year to $328.1M, and adjusted EBITDA improved $69.7M year-over-year to $140M [2].

Looking ahead, Peloton Interactive expects fiscal 2026 revenue to range from $2.4B to $2.5B, a 2% decrease from the analyst consensus estimate of $2.46B. The company also expects Q1 2026 revenue to range from $525M to $545M, below the analyst consensus estimate of $555M [1]. To achieve these targets, Peloton Interactive is implementing a cost-cutting plan aimed at generating at least $200M in free cash flow for fiscal 2026. The company plans to reduce operating expenses, cut jobs, and restructure its cost structure to support its turnaround efforts [2].

Peloton Interactive's stock price closed at $7.07, up 14.77% in the last three months and up 137.25% in the last 12 months [1]. Despite the positive earnings report, the company's stock has fallen 19% year-to-date (YTD) [1].

Peloton Interactive's new CEO, Peter Stern, is leading the company's turnaround efforts, focusing on cost-cutting, new product launches, and an infusion of artificial intelligence for personalized workouts. The company is also expanding its microstore lineup and third-party retail availability, as well as creating a unified division for selling its equipment to gyms and pledging an international expansion [3].

References:
[1] https://za.investing.com/news/earnings/peloton-interactive-earnings-beat-by-010-revenue-topped-estimates-3825558
[2] https://seekingalpha.com/news/4481326-cost-discipline-puts-peloton-back-in-the-black-despite-weaker-sales
[3] https://www.bloomberg.com/news/articles/2025-08-07/peloton-projects-sales-decline-and-will-cut-jobs-in-turnaround-bid