PTON · Peloton Interactive, Inc.

Peloton's Q3 FY2026 results showed a return to GAAP profitability with net income of $26 million, compared to a net loss of $47.7 million in the same quarter last year. Revenue of $631 million grew 1% year-over-year, slightly above the high end of guidance, driven by outperformance in Connected Fitness equipment sales across both Peloton and Precor brands. Total gross margin expanded 90 bps to 51.9%, though below guidance due to opportunistic promotional activity. Subscription revenue grew 2% to $428 million, with subscription gross margin improving 210 bps to 71.1%. Adjusted EBITDA increased 41% to $126 million, within guidance. The company highlighted progress in deepening member relationships, expanding globally, and diversifying revenue streams, including the launch of the Peloton Commercial Series and a content licensing partnership with Spotify. Management raised full-year FY2026 revenue guidance to $2.42-$2.44 billion and free cash flow expectation to approximately $350 million, while maintaining Adjusted EBITDA guidance of $470-$480 million. Net debt was reduced 70% year-over-year to $173 million, reflecting strong cash generation. However, paid connected fitness subscriptions continued to decline, down 7.6% year-over-year to 2.662 million, with full-year guidance implying further declines. The results signal improving operational efficiency and financial health, though subscriber trends remain a key risk.