Peloton (PTON) investor relations material

Executive summary

• Q3 FY2026 revenue reached $631 million, up 1% year-over-year and exceeding guidance, driven by strong Connected Fitness equipment sales and strategic shift toward connected wellness.

• Net income was $26.4 million, a turnaround from a net loss of $47.7 million in the prior year, supported by improved operating efficiency and cost controls.

• Adjusted EBITDA rose 41% year-over-year to $126 million, and free cash flow increased 59% to $151 million.

• Commercial business unit revenue grew 14% year-over-year, with new content, equipment, and partnerships, including a major Spotify deal, expanding market reach.

• Net churn improved to 1.2%, aided by retention initiatives and reactivation offers.

Financial highlights

• Q3 gross profit was $327 million, up 3% year-over-year, with gross margin at 51.9%, up 90 basis points.

• Subscription revenue grew 2% year-over-year to $428 million; Connected Fitness Products revenue declined 1% to $202.9 million.

• Subscription gross margin rose to 71.1%; Connected Fitness Products gross margin was 11.3%.

• Adjusted operating expenses fell 16% year-over-year to $267 million; total operating expenses decreased 22% to $274.8 million.

• Stock-based compensation expense decreased 22% year-over-year to $53 million.

Outlook and guidance

• FY2026 revenue outlook is $2.42–$2.44 billion, a 2% year-over-year decrease at midpoint but an increase from prior guidance.

• FY2026 gross margin guidance is approximately 52.5%, up 160 basis points year-over-year.

• Adjusted EBITDA guidance for FY2026 is $470–$480 million, up 18% year-over-year.

• Free cash flow for FY2026 expected to be around $350 million.

• Ending paid Connected Fitness subscriptions for FY2026 expected at 2.55–2.57 million, down 8.6% year-over-year.