Peloton Interactive Inc - Class A
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +6.73%.
Did PTON Beat Earnings? Q3 2025 Results
Peloton posted a mixed fiscal third quarter, delivering a narrow revenue beat while falling well short on the bottom line as the connected fitness company continues its drawn-out turnaround under new CEO Peter Stern. Revenue came in at $624.00 million, edging past the $621.27 million consensus by 0.44%, though the figure still represented a 13.1% decline from a year ago as Connected Fitness Products revenue tumbled 27% year-over-year on softer hardware demand. The earnings picture was more troubling, with a loss of $0.12 per share missing the $-0.057 consensus estimate by 110.53%, weighed in part by $21.00 million in executive departure costs. The brighter story was margin expansion, with gross margin widening 780 basis points to 51.0% on a favorable mix shift toward higher-margin subscriptions, helping Adjusted EBITDA reach $89.40 million for a fifth consecutive positive quarter. Stern, who outlined a four-pillar strategic framework centered on member outcomes and operational discipline, responded by lifting full-year Adjusted EBITDA guidance to $330.00 million to $350.00 million and affirming Free Cash Flow of roughly $250.00 million.
- Revenue mix shift toward higher-margin Subscription segment (67% of Q3 revenue)
- Connected Fitness Products gross margin improved 1,010 bps YoY to 14.3% from lower inventory write-downs, higher-margin product mix, and lower warehousing/transportation costs
- Operating expenses decreased 23% YoY reflecting cost structure right-sizing
- Advertising and marketing spend decreased 46% YoY while hardware revenue declined at a comparatively lower 27% rate
- Fifth consecutive quarter of positive Adjusted EBITDA and Free Cash Flow
- Average net monthly churn held at 1.2%, stable YoY and improving 20 bps QoQ
“In Q3, we delivered at the high end of or exceeded guidance on our key financial metrics while also continuing to execute on our FY25 operating goals. We delivered our fifth consecutive quarter of positive Adjusted EBITDA and Free Cash Flow due to improving hardware unit economics and right-sizing our overall cost structure.”
Peloton CEO, on the earnings call
Forward Guidance & Outlook
Peloton raised the midpoint of its full-year FY25 guidance across key metrics. Total Revenue is now expected at $2.455–$2.470 billion (up $7.5M at midpoint, down ~9% YoY). Ending Paid Connected Fitness Subscriptions guidance raised to 2.77–2.79 million (down ~7% YoY). Ending Paid App Subscriptions lowered to 540–550 thousand (down ~12% YoY) due to limited media spend. Total Gross Margin maintained at 50.0% with minimal tariff impact expected in FY25. Adjusted EBITDA guidance raised to $330–$350 million (up $15M at midpoint). Free Cash Flow expected in the vicinity of $250 million, incorporating roughly $5 million Q4 headwind from tariffs on aluminum content and China-sourced Precor/apparel products. The company continues tracking ahead of its $200 million annualized run-rate cost savings target by end of FY25 and is formalizing a company-wide continuous cost improvement program.
PTON YoY Financials
PTON Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.