Peloton (PTON) Q2 2026 earnings summary

Executive summary

• Achieved significant progress in evolving from connected fitness to connected wellness, focusing on cardio plus strength, global commercial expansion, and AI-driven personalization.

• Profitability improved with Adjusted EBITDA up 39% year-over-year to $81 million and net loss reduced to $38.8 million, despite a 2.6%–3% revenue decline and a 7% drop in subscriptions.

• Launched new products and features, including the Cross Training Series, Pro Series, and Peloton IQ, driving higher member engagement and innovation.

• Announced and implemented a restructuring plan targeting $100 million in run-rate savings by fiscal year-end 2026, including workforce changes and facility exits.

• Subscription business showed resilience with strong member retention and lower-than-expected churn despite a price increase.

Financial highlights

• Q2 total revenue was $657 million, with $244 million from Connected Fitness products and $413 million from subscriptions.

• Gross profit increased 4% year-over-year to $331 million, with gross margin rising to 50.5%, up 320 basis points year-over-year.

• Adjusted EBITDA was $81 million, up 39% year-over-year and $6 million above guidance.

• Free cash flow was $71 million in Q2; unrestricted cash and equivalents ended at $1.18 billion, up $76 million quarter-over-quarter.

• Net debt decreased 52% year-over-year to $319 million.

Outlook and guidance

• Full-year fiscal 2026 revenue outlook is $2.40–$2.44 billion, a 3% year-over-year decline at the midpoint.

• Q3 revenue outlook is $605–$625 million, down 1% year-over-year at the midpoint.

• Raised full-year gross margin guidance to ~53%, up 100 basis points from prior guidance.

• Raised full-year adjusted EBITDA guidance to $450–$500 million, up 18% year-over-year at the midpoint.

• Free cash flow target raised to at least $275 million for fiscal 2026.

• Management believes existing cash and cash equivalents and cash flow from operations will be sufficient to meet working capital and capital expenditure needs for the next 12 months and beyond.