Peloton (PTON) Q4 2024 earnings summary

Executive summary

• CEO search is progressing, with a focus on finding the right leader for the next chapter.

• Strategic priorities include cost alignment, profitability, and innovation in software, hardware, and content.

• Recent refinancing reduced debt by $200 million and extended maturities to 2029.

• Second consecutive quarter of positive free cash flow and adjusted EBITDA, a first in several years.

• Focused on optimizing business model and cautious marketing spend amid macro uncertainty.

Financial highlights

• Q4 revenue was $644 million, up 0.2% year-over-year and above guidance.

• Gross profit reached $312 million with a gross margin of 48.5%, exceeding guidance.

• Adjusted EBITDA was $70 million, a $105 million improvement year-over-year.

• Free cash flow was $26 million, marking the second consecutive positive quarter.

• Ended Q4 with $698 million in unrestricted cash and access to a $100 million undrawn credit facility.

Outlook and guidance

• Fiscal 2025 guidance expects hardware sales to decline year-over-year and churn to increase modestly.

• Full-year Adjusted EBITDA guidance is $200–$250 million, with at least $75 million in free cash flow.

• Q1 free cash flow expected to be negative due to inventory build for the holiday season.

• No subscriber growth from new initiatives assumed in fiscal 2025 outlook.