Peloton Interactive Inc - Class A
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.86%.
Did PTON Beat Earnings? Q4 2025 Results
Peloton delivered a sharper-than-expected turnaround in Q4 FY25, posting earnings per share of $0.05 against a consensus estimate of negative $0.05, a 200.00% beat, while revenue of $606.90 million cleared the $577.93 million consensus by 5.01% despite falling 5.7% year over year. The headline story was profitability: the company recorded its first quarterly GAAP net income of $21.60 million, a dramatic reversal from a $30.50 million net loss in the year-ago period, with adjusted EBITDA reaching $140.00 million and nearly doubling year over year. The outperformance was driven primarily by stronger-than-expected hardware sales and a 560 basis point expansion in total gross margin to 54.1%, as cost discipline pushed operating expenses down 20% year over year. Still, the company announced another round of job cuts targeting 6% of its global workforce as part of a new restructuring plan aimed at delivering at least $100.00 million in run-rate savings by end of FY26. Looking ahead, Peloton guided FY26 revenue of $2.40 to $2.50 billion and adjusted EBITDA of $400.00 to $450.00 million, with management targeting its first-ever positive full-year operating income.
- Connected Fitness Products revenue outperformance driven by higher-than-expected hardware sales of both Peloton and Precor products
- Total gross margin expanded 560 bps YoY to 54.1%, driven by improvements in both segments
- Connected Fitness Products gross margin improved 900 bps YoY to 17.3%
- Subscription gross margin improved 370 bps YoY to 71.9%, aided by $11M one-time music royalty adjustments
- Operating expenses decreased 20% YoY, exceeding $200M run-rate cost savings target
- Average monthly workout time per Paid Connected Fitness Subscription increased 4% YoY in Q4
- Inventory reduction created significant net working capital benefit to Free Cash Flow
“When I started at Peloton, I promised to share our strategy during our fiscal year-end earnings. So here it is–simple and short, with the assurance that we will bring this strategy to life throughout the year, including through a reveal of our innovations before our next earnings call.”
Peloton CEO, on the earnings call
Forward Guidance & Outlook
For Q1 FY26, Peloton guides Total Revenue of $525-$545 million (down ~9% YoY at midpoint), Total Gross Margin of ~52.0%, Adjusted EBITDA of $90-$100 million, and Ending Paid Connected Fitness Subscriptions of 2.72-2.73 million. For Full Year FY26, the company expects Total Revenue of $2.4-$2.5 billion (down ~2% YoY at midpoint), Total Gross Margin of ~51.0%, Adjusted EBITDA of $400-$450 million (up ~5% YoY at midpoint), and targets at least $200 million of Free Cash Flow. Management aims to achieve positive full-year operating income for the first time. Tariff exposure is estimated at roughly $65 million headwind to Free Cash Flow. A new restructuring plan is expected to deliver at least $100 million in run-rate cost savings by end of FY26.
PTON YoY Financials
PTON Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.