Peloton (PTON) Q4 2026 earnings summary

Executive summary

• Achieved first full year of net profitability in FY26, with GAAP net income of $63M and adjusted EBITDA of $468M, up 16% YoY, and revenue of $2.446B, slightly above guidance.

• Transitioned strategy to a broader connected wellness ecosystem, targeting a $7T global market, with four strategic pillars and significant product innovation including Peloton IQ and acquisition of Skōp.

• Free cash flow for FY26 was $378M, a 17% increase YoY, and net debt reduced by 80% YoY to $93M.

• Commercial Business Unit delivered double-digit revenue growth and expanded digital reach via a strategic partnership with Spotify.

• Significant deleveraging and cost savings achieved, with over $100M in run-rate cost savings in FY26.

Financial highlights

• Q4 FY26 revenue was $608M, up 0.1% YoY; subscription revenue grew 7% YoY to $437M, while Connected Fitness Products revenue declined 14% YoY to $171M.

• Q4 gross margin was 56.7%, up 260 bps YoY; full year gross margin was 52.6%, up 170 bps.

• Q4 adjusted EBITDA was $142M (+2% YoY); full year adjusted EBITDA was $468M.

• Q4 free cash flow was $89M, down YoY due to working capital timing and a $23.8M legal contingency.

• Ended Q4 with $1.21B cash and net debt of $93M.

Outlook and guidance

• FY27 revenue guidance: $2.3B–$2.4B (3.9% YoY decrease at midpoint); gross margin expected to improve to ~54%; adjusted EBITDA guidance is $475M–$525M (+6.8% YoY at midpoint); free cash flow target of at least $350M.

• Q1 FY27 revenue: $545M–$565M (+0.8% YoY at midpoint); gross margin ~57%; adjusted EBITDA $135M–$145M (+18.4% YoY at midpoint).

• Q1 FY27 connected fitness subscriptions: 2.455M–2.475M (–9.8% YoY at midpoint); churn expected to moderate over FY27.