TLDR
- Peloton shares plunged 9.3% Thursday after reporting a 9-cent per share loss, missing the 5-cent loss estimate
- Q2 revenue fell 3% to $656.5 million, below the $675.6 million forecast and $8 million under company guidance
- Subscriber count dropped 7% year-over-year following an October 2025 price increase on subscription services
- Full-year revenue outlook lowered to $2.4-$2.44 billion versus Wall Street’s $2.48 billion expectation
- Adjusted EBITDA guidance raised to $450-$500 million, which would be the highest since the 2019 IPO
Peloton shares fell hard Thursday after the company delivered disappointing fiscal second-quarter results. The stock dropped 9.3% in premarket trading following the earnings release.
Peloton Interactive, Inc., PTON
The connected-fitness company reported a loss of 9 cents per share. Analysts had expected a smaller loss of just 5 cents. While that beat the 24-cent loss from the same quarter last year, it still missed current estimates.
Revenue totaled $656.5 million for the quarter. That represented a 3% decline from the prior year. Wall Street had been expecting $675.6 million. The company also missed its own internal guidance by $8 million.
Peloton blamed the revenue miss on weaker product sales to existing members. But the real issue appears to be member retention.
Subscription Losses Continue
Paid subscribers fell 7% compared to the same period last year. This continues a troubling pattern for the company. Net subscriber additions dropped after Peloton raised prices on its subscription service in October 2025.
The pandemic boom days are definitely over. Peloton saw massive growth when people were stuck at home buying exercise equipment. Sales have now fallen every fiscal year since 2022. The company is heading for its third consecutive year of declining subscribers.
A product refresh launched last fall failed to reverse the trend or excite investors.
Lowered Revenue Guidance
The company’s updated outlook didn’t help matters. For fiscal Q3 2026, Peloton expects revenue between $605 million and $625 million. Analysts were forecasting $637.8 million.
The company projects ending paid connected fitness subscriptions will range from 2.65 million to 2.675 million. Total gross margin should come in around 54%. Adjusted EBITDA is expected between $120 million and $135 million.
Full-year revenue guidance was cut to $2.4-$2.44 billion. That’s down from Wall Street’s $2.48 billion estimate. Total gross margin for the year should be approximately 53%. The company maintained its free cash flow target of at least $275 million.
One Positive Note
There was one bright spot in the report. Peloton raised its adjusted EBITDA forecast for fiscal 2026. The new range of $450 million to $500 million is up from the previous $425 million to $475 million estimate.
If Peloton hits that target, it would mark the highest adjusted EBITDA since the company went public in 2019.
The stock has struggled recently. Shares are down 30% over the past year and fell 4% year-to-date before Thursday’s drop.
Wall Street maintains a Moderate Buy rating based on four Buy and eight Hold ratings. The average price target of $9.28 suggests 57% upside potential.
