PTON

Peloton’s second quarter results were met with a negative market reaction as flat revenue growth and a decline in connected fitness subscribers weighed on sentiment. Management attributed the mixed performance to both operational improvements and strategic investments in new product categories, while also acknowledging the impact of involuntary churn following an algorithm change. CEO Peter Stern emphasized, “We made material improvements in our financial and operational foundation,” citing advancements in product innovation and cost structure as key drivers for the quarter. Is now the time to buy PTON? Find out in our full research report (it’s free). Revenue: $607.7 million vs analyst estimates of $595.7 million (flat year on year, 2% beat) Adjusted EPS: $0.13 vs analyst estimates of $0.11 (16.3% beat) Adjusted EBITDA: $142.3 million vs analyst estimates of $150.5 million (23.4% margin, 5.4% miss) Revenue Guidance for Q3 CY2026 is $555 million at the midpoint, below analyst estimates of $566 million EBITDA guidance for the upcoming financial year 2027 is $500 million at the midpoint, below analyst estimates of $506.7 million Operating Margin: 13.3%, up from 4.9% in the same quarter last year Connected Fitness Subscribers: down 247,000 year on year Market Capitalization: $2.38 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Simeon Siegel (Guggenheim Securities) asked about the scope and timing of new product introductions. CEO Peter Stern clarified that commercial hardware will launch by year-end, with new consumer categories debuting the following fall, and emphasized these would broaden Peloton’s market. Shweta Khajuria (Wolfe Research) pressed for details on the size and timing of revenue contributions from new products. Stern explained that equipment sales would be front-loaded, with subscription revenue growth accumulating more gradually as new categories launch. Arpine Kocharyan (UBS) inquired about churn normalization and capital allocation strategy. CFO Sid Thacker indicated churn should moderate as pricing anniversary effects fade, and outlined a focus on refinancing and disciplined capital deployment. Douglas Anmuth (JPMorgan) asked about the impact of Peloton IQ and commercial unit growth on engagement and margins. Stern highlighted strong initial engagement with AI-driven features and noted higher margins in the commercial unit due to premium equipment pricing. Eric Sheridan (Goldman Sachs) questioned hardware go-to-market priorities given retail and partnership evolution. Stern responded that increased product accessibility and diversified retail channels are key to expanding reach, especially as new product categories are introduced. Looking ahead, the StockStory team will monitor (1) the impact of new equipment launches on both commercial and consumer sales, (2) signs of stabilization or improvement in subscriber churn and engagement, and (3) the ability of Peloton IQ and content partnerships to drive higher retention. Progress on capital structure optimization and margin delivery will also be closely tracked. Peloton currently trades at $5.42, down from $6.52 just before the earnings. Is there an opportunity in the stock? Find out in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Aug. 6, 2026 at 8:30 a.m. ET Senior Vice President of Investor Relations - James Marsh Chief Executive Officer and President - Peter Stern Chief Financial Officer - Siddharth Thacker Operator: Good day, and welcome to Peloton's Fourth Quarter and Fiscal Year 2026 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. James Marsh, Senior Vice President of Investor Relations. Please go ahead. James Marsh: Thank you, operator. Good morning, and welcome to Peloton's Fourth Quarter and Fiscal Year 2026 Conference Call. Joining today's call are Peloton's Chief Executive Officer and President, Peter Stern; and our new Chief Financial Officer, Sid Thacker. Our comments and responses to your questions reflect management's views as of today only and will include forward-looking statements related to our business under federal securities law. Actual results may differ materially from those contained in or implied by these forward-looking statements due to risks and uncertainties associated with our business. Please refer to our SEC filings, today's press releases and our earnings presentation, all of which can be found on our Investor Relations website for a discussion of material risks and other important factors that could impact our results. All results discussed today are on an as-reported basis, which include our previously mentioned cost reassignments that began in the beginning of fiscal '26. Please refer to our investor presentation for reconciliations of the impacts of these cost assignments. During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures and definitions for our user metrics are also provided in today's press release. Now I'll turn it over to Peter. Peter Stern: Thanks, James, and good morning, everyone. As my first full fiscal year comes to a close, we entered the new year with a strong financial and operational foundation. FY '26 was filled with product innovations, exciting additions to our leadership and instructor teams, a new company strategy and more ways than ever to help our members live fit, strong, long and happy. We've also made meaningful progress on our journey to evolve from a connected fitness company to a connected wellness ecosystem. This ambition defines the future of Peloton and positions us to participate in a $7 trillion global market centered on longevity and health span. Our magic formula of premium hardware, intuitive software, world-class coaching and supportive community powers our beloved brand and gives us permission to gradually and systematically capture share in the broader wellness market in the years ahead. Our strategy is built on 4 pillars: One, improving member outcomes; two, meeting members everywhere; three, making members for life; and four, business excellence. I'm proud to report that we continue to make substantial strides across each of these pillars. Starting with improving member outcomes, which is where we focus on human impact; improving our members' fitness, strength, longevity and happiness. The more we help our members achieve these outcomes, the more we fuel retention. A key driver of this is our product innovation. In FY '26, we introduced the Cross-Training Series, a refresh of our products across Bike, Tread and Row, and we launched Peloton IQ, a huge step forward in our use of AI to deliver a more personalized experience to our members. In Q4, more than 50% of monthly active users engaged with personalized guidance powered by Peloton IQ. Our product innovation engine is now firing on all cylinders. And during this calendar year, we will launch additional new equipment in an existing category, while delivering much more customized, personalized guidance to help our members achieve their individual goals. We also continue to innovate on our programming. For example, by expanding our specialized content with offerings like the Pace Your Race: Marathon training program and HiLit+, a very popular high-intensity, low-impact cross-training program. These class and programming additions directly reflect the engagement trends we're seeing from our members. Speaking of engagement, in Q4, Pilates workout and workout time were up year-over-year by 44% and 53%, respectively. Given this rapidly growing member demand, in Q4, we executed the acquisition of Scope, an early innovator in connected Pilates with foundational technologies and deep expertise. This move will enhance our R&D efforts and enable us to deliver even more distinctive experiences in this category. The second pillar of our strategy is to meet members everywhere. We know Peloton members are deeply connected to their community, instructors and class programs, and we are committed to bringing our experiences to them wherever they are. Formed just a year ago, our commercial business unit has become central to this strategy by increasing our reach outside the home and in more hotels and gyms across our key markets. Our CBU delivered double-digit year-over-year revenue growth in fiscal 2026, with growth across all regions and across all major product categories. We estimate that we're approaching 4% of the commercial fitness equipment market segment, leaving enormous headroom for growth, and we are encouraged by the increasing demand for our products. In the next few months, we will launch the Peloton Commercial series, the first Peloton Bike and Treadmill built to accommodate the duty cycle of high-traffic commercial gyms. We anticipate that with the benefit of this new equipment, alongside additional investment in our CBU sales team and product development, we will see accelerating growth from the CBU in fiscal '27 and beyond. Another way we meet members everywhere is through our retail stores. We ended the year with a highly capital-efficient footprint of 10 micro stores, which consistently outperform our historical fleet of legacy showrooms. Based on this success, over the past few weeks, we have launched 3 additional micro stores, and we plan to add an additional 7 micro stores in time for the holidays, which would result in a doubling of our micro store footprint this year. We are also meeting members everywhere through our strategic partnership with Spotify. We are now delivering our nonequipment based classes such as strength, Pilates, Barre, yoga, meditation and outdoor running and walking to hundreds of millions of premium Spotify subscribers around the world. Partnerships like the one with Spotify enable us to build our brand and test demand in new geographies. For example, recently, Mexico became the most engaged country outside the U.S. with our content on Spotify. Lastly, meeting members everywhere also includes meeting members in real-life events and activations. This year, our instructors represented Peloton in more than 160 events worldwide, a more than threefold increase year-over-year, including major marathons in New York, Berlin and Sydney as well as premier wellness festivals and run clubs. Our third pillar, members for life focuses on maximizing lifetime value and keeping our members active and engaged. 316,000 of our members now own multiple connected fitness products, up more than 20,000 year-over-year, and these members churn at significantly lower rates than those who own just one. As a result, not only are new products meant to attract new members, but they also keep our existing ones with us for longer. We're also driving member loyalty through Club Peloton, which our members have deeply embraced since its October launch. Club Peloton rewards were applied to 70% of apparel sales on our site in June. We continue to evolve this program. And in Q4, we launched new milestones and weekly streak badges to celebrate our most committed members. We remain proud of our strong member retention. While we saw an uptick in Q4 churn driven in part by onetime events, we expect our year-over-year churn rate to moderate over the course of FY '27. On a full year basis, we expect churn to be roughly flat versus FY '26. Last but not least, is business excellence. When I started at Peloton, I explained we'd see consistent progress from the bottom of the P&L up. This past year, we made material improvements in our financial and operational foundation, and I'm pleased to share that we have delivered Peloton's first full year of both positive net income and positive operating income at $63 million and $161 million, respectively. In addition, we delivered $468 million of adjusted EBITDA, an increase of $65 million or 16% year-over-year and $378 million of free cash flow, an increase of $54 million or 17% year-over-year. This profitability growth reflects the significant progress we've made in improving our cost structure. We committed to a $100 million run rate cost savings initiative in FY '26, and I can report that we exceeded this goal. Moving further up the P&L., we're pleased to have achieved our second consecutive quarter of year-over-year revenue growth in Q4. Turning to FY '27. Our core business trends continue to improve, and our business is the healthiest it has ever been as we're projecting the highest total gross margin, adjusted EBITDA and net income in the company's history. And looking beyond FY '27, I'm excited about our multiyear product road map of both consumer and commercial products. This road map includes groundbreaking offerings in entirely new categories that broaden our total addressable market. The first of these new consumer product categories will launch in the fall of 2027, followed by more thereafter. We expect investments in these categories will result in an acceleration of our year-over-year revenue trajectory. Delivering breakthrough product innovation takes time, especially hardware like ours, but we are investing with discipline in areas where we have confidence in the turns. I'm proud of our progress over the last 18 months in filling the product pipeline. This work makes me deeply optimistic about Peloton's future and our team's ability to execute on our next chapter. This is what a successful multiyear business transformation looks like, and I want to share my gratitude to Peloton's team members, partners, shareholders and members for taking this journey with us. With that, I'm pleased to introduce our wonderful new Chief Financial Officer, Sid Thacker, who will share more details with you. Siddharth Thacker: Thanks, Peter. Before I begin, I wanted to share how thrilled I am to be on this journey here at Peloton. The company has many strategic advantages, it's iconic brand, industry-leading instructors and its deeply loyal community, and I'm looking forward to working with our team members to build an even stronger Peloton. Before joining, I knew we had real work to do to improve our growth trajectory and that getting this business back to sustained growth wouldn't be immediate. But since I started, 2 things have become very clear to me. The first is that the underlying strength of this business and brand are real. We benefit from enviable churn, providing a high-margin recurring revenue stream, which provides the foundation for our free cash flow generation. Our brand remains exceptionally strong with all of our cross-training series products measured having an NPS score above 70 on a scale from negative 100 to 100. The second is that our teams have a solid strategy, along with an excellent grasp on the work ahead and how it will drive value. I've been thoroughly impressed by the quality and maturity of the company's innovation pipeline. As Peter mentioned, we have high potential products in the works that target a much expanded addressable market, giving us real tangible growth engine for the future. Additionally, I see a sizable and immediate opportunity with our commercial business units to drive profitable growth. In terms of our capital allocation strategy, I see significant cash generation at Peloton in the years ahead, giving us the resources to invest in future growth while also deploying capital to benefit shareholders. In the near term, we are already working towards a refinancing of our balance sheet and have begun the process with our bankers. We'll have more to report back in the coming weeks, recognizing that August is a slow month for capital markets activity. Ultimately, we find ourselves in an excellent position to capitalize on the growing fitness and wellness market. Our best-in-class innovation pipeline paired with an improved financial position and our highly talented collaborative team makes the path forward clear. We know the work ahead of us, we know how to execute and we are moving quickly. Diving into our Q4 financial results, we ended the quarter with 2.553 million ending paid Connected Fitness subscriptions within our guidance range. Q4 net churn of 2.2% reflects an increase of 37 basis points year-over-year. 17 basis points or roughly half of this headwind are the result of onetime factors, most notably, a change to our payment reactivation algorithm that we made in Q3 that had an unanticipated adverse impact of reactivations from involuntary churn in Q4. We addressed that change last month and have since observed the normalization of our involuntary churn. Looking ahead to fiscal 2027, we expect churn to be roughly flat year-over-year on a full year basis. Total revenue was $608 million in Q4, which outperformed the high end of our implied guidance range by $6 million and reflects slight but nonetheless positive year-over-year growth. Outperformance relative to guidance was driven by higher Connected Fitness equipment sales across Peloton and Precor brands. Total gross profit was $344 million in Q4, an increase of $16 million or 5% year-over-year. Total gross margin was 56.7% in Q4, an increase of 260 basis points year-over-year and roughly in line with our Q4 implied guidance. Please refer to our investor presentation for the segment level breakdowns for revenue and gross margin. Total adjusted operating expenses, which exclude restructuring and impairment expenses, were $257 million in Q4. Excluding the impact of $24 million of nonrecurring accrued legal contingencies related to patent litigation, adjusted operating expenses decreased $29 million or 11% year-over-year, reflecting the continued progress we've made in rightsizing our cost structure. We remain focused on managing dilution through a disciplined approach to equity compensation, which includes changes in our program design and tying more stock-based compensation to financial performance. Our stock-based compensation expense was $43 million and decreased $10 million or 19% year-over-year in Q4. This represents the lowest stock-based compensation we've had in many years. As Peter noted, we exceeded our goal to achieve at least $100 million of run rate cost savings by the end of fiscal 2026. Adjusted EBITDA for Q4 was $142 million or 23% of total revenue. Excluding the $24 million impact from accrued legal contingencies related to patent litigation, adjusted EBITDA would have been $166 million, an increase of $26 million or 19% year-over-year and $12 million above the high end of our guidance range. Q4 free cash flow of $89 million represented a decrease of $24 million or 21% year-over-year, primarily related to net working capital timing. On a full year basis, we generated $378 million of free cash flow in fiscal year '26, an increase of $54 million or 17% year-over-year. Turning to our balance sheet. We ended the quarter with a strong cash position of $1.21 billion, an increase of $167 million year-over-year after paying down $200 million of debt in Q3. We currently have $93 million of net debt, which decreased $367 million or 80% year-over-year. Our gross and net leverage ratios have improved meaningfully to 2.8x and 0.3x, respectively. Next, I'd like to share context for our financial outlook. For full fiscal year 2027 and on a quarterly basis, we are providing guidance for total revenue, total gross margin and adjusted EBITDA. We will also continue to provide an annual target for minimum free cash flow and a quarterly guidance range for ending paid Connected Fitness subscription. Our full fiscal year 2027 total revenue outlook of $2.3 billion to $2.4 billion reflects a 3.9% revenue decrease year-over-year at the midpoint. Let me put this in context. If we normalize last year's subscription price increase, which drove a onetime benefit in our year-over-year revenue trends, our year-over-year trajectory is actually improving in fiscal year '27. We are expecting an improving trend of both equipment unit sales and revenue, driven by new product introductions before the end of the calendar year, which also contributes to a continued flattening of the curve on Connected Fitness subscription gross additions. We believe the product introductions in fiscal 2027, combined with the entry into new categories in fiscal 2028 and beyond, provides the foundation for revenue acceleration. Q1 total revenue is expected to be $545 million to $565 million and reflects an increase of 1% year-over-year at the midpoint as a result of higher subscription revenue due to pricing changes made in Q2 of last year. Similar to fiscal 2026, we expect Q1 to be a seasonally low quarter for equipment sales. Full year fiscal 2027 total gross margin is expected to be roughly 54%, reflecting an increase of approximately 140 basis points year-over-year, primarily driven by higher expected Connected Fitness gross margins. Our Q1 fiscal 2027 total gross margin outlook is roughly 57%. This reflects our expectation for a higher mix of subscription revenue relative to full year fiscal '27, which has a higher segment gross margin. Our full year fiscal 2027 adjusted EBITDA guidance of $475 million to $525 million reflects an increase of $32 million or 7% year-over-year at the midpoint, primarily driven by operating expense savings connected to rightsizing our cost structure and the nonrecurring accrued legal contingency related to patent litigation we booked in Q4 of fiscal 2026. Q1 adjusted EBITDA is expected to be within the range of $135 million to $145 million, reflecting an increase of $22 million or 18% year-over-year at the midpoint, primarily driven by higher revenue from subscription pricing, costs related to our Bike+ seat post recall last year and lower operating expenses. Q1 Connected Fitness subscription guidance of 2.455 million to 2.475 million reflects a year-over-year decrease of 9.8% at the midpoint, reflecting the tougher comparison to Q1 of last year, which was the final quarter before the price increase. While we expect Q1 net churn to be higher than Q1 of last year, we expect year-over-year net churn trends to moderate over the course of fiscal 2027 as we lap last year's price increase and to end the year roughly flat on a full year basis. We remain committed to generating meaningful free cash flow and consistent with prior years, are sharing a minimum free cash flow target. For fiscal 2027, our minimum target is at least $350 million. In conclusion, fiscal year '27 represents a pivotal year where we expect to launch the first in a series of important product innovations designed to return Peloton to growth. I'll now turn it over to James, who will kick off the Q&A with questions from our retail investors. James Marsh: First question comes from David in Germany. David asks, are there any plans to introduce technical equipment for strength training like Tonal and the Speediance Gym Monster? There seems to be a huge market for Peloton with the power of Peloton's classes, trainers and community. Maybe, Peter, you can handle this one. Peter Stern: David, thanks so much for the question. Really glad you asked about strength training because after cardio, it's the most important thing that I think our members can do to promote their health. I'm often asked actually what people -- what I recommend people should do. And my suggestion is 70 minutes -- 75 minutes a week of vigorous cardio or 150 minutes a week of moderate intensity cardio exercise and 2 days a week of strength training. And I talked in the past about how roughly 2 million of our members engage with our strength programming in any quarter. Adding to that, we talked earlier about the growth in Pilates engagement on our platform. So we see a lot of opportunity in the strength category. An earnings call is not the time for us to make major product announcements. But what I will tell you is that if you're interested in dumbbell strength training, the cross-training series Plus line that we launched last October is a great way for you to improve your strength. That equipment has industry-leading features for things like form feedback, rep counting, recommendations when it's time to go up or down in weights, all using our advanced camera vision technology. So I hope that keeps you really busy and building your strength while you wait for us to talk about some really cool stuff that we have in the works. I can't wait to share more about that in the future. James Marsh: Great. Thanks, Peter. Next question comes from Vikas in Los Angeles, leaderboard named VIK83. Vikas asked two questions. First, do we expect to receive a tariff refund? And second, relates to a recent jury verdict in Delaware in favor of NEC for $20.5 million. What is the ongoing impact, if any, on margins and EBITDA from that? Maybe Sid, you can handle those two. Siddharth Thacker: Great. Thanks, James, and thanks, Vikas. Let me tackle tariffs first. Year-to-date, we've received $3 million of tariff refunds from the federal government. We do anticipate receiving additional refunds, but we have not incorporated them into our forecast for the quarter or year just given the uncertainties around tariffs. On the second question, as you may have read in the press, last week, a jury found that the standard third-party media players that we use to stream content infringed the patent. So while we're considering our legal options, in the meantime, we booked a $23.8 million legal contingency accrual in Q4 of fiscal '26, which represents our estimate of the all-in cost if we were to pay the full amount today. We've also incorporated that same estimate into our minimum free cash flow target for fiscal 2027. In terms of go-forward impact, we, at this point, do not expect the go-forward impact of potential ongoing royalties to be material. James Marsh: Operator, could we have a question from the field, please? Operator: [Operator Instructions] And our first question will come from the line of Simeon Siegel with Guggenheim Securities. Simeon Siegel: Peter, maybe can you -- I'm going to tack on to Dave's comment or I don't remember his name. But can you elaborate on that, the new product introductions that you guys mentioned? Just any thoughts to what you can share? And maybe it sounds like we should be considering something from a revenue contribution perspective in the future that sounds pretty exciting. So anything you could help us think through just to contextualize how big of a comment that was? And then also, can you guys elaborate on the involuntary churn comment that you had mentioned? I'm curious, were you able to reactivate those who were involuntary churn post the fix? Peter Stern: Thanks a lot, Simeon. This is Peter. I'll start with the first part of your questions relating to product introductions, and then Sid will address the involuntary churn question. This is what I can tell you. By the end of this calendar year and recognizing that it's August, there aren't that many months left in the calendar year. We plan to, first of all, launch the Peloton commercial series. We've talked about that pretty specifically in the past and demonstrated those products. That's both a bike and a treadmill designed very specifically for the extremely high duty cycle of commercial fitness locations. We also plan to introduce some meaningful product innovations on the consumer side of the business focused on areas where we already offer experiences to our members. Starting in the fall of FY '27, so Simeon, I'm getting specific about timing again. In the fall of FY '27, we will introduce the first products in new categories for the company. And then we have basically a march of progress thereafter. Those products open up new total addressable market opportunities for us as a company and will begin to create the potential for meaningful revenue acceleration from that point looking forward. Sid, why don't you address the question about involuntary churn? Siddharth Thacker: Okay. Let me just give you a little bit of color on the involuntary churn issue. As we mentioned in the prepared remarks, about 50% of the change in Q4 year-over-year in churn was caused by these onetime factors. So specifically, what happened was we made a change to our reactivation algorithm in Q3 that had an unanticipated adverse impact on reactivations from involuntary churn in Q4. To get a bit more precise, what happened is we used to send with a certain timing and frequency e-mails to members after payment failure. And when we changed the algorithm, we changed the frequency and timing of those e-mails. And what we've done since then is reverted back to the previous payment recapture flow, and we've seen the involuntary churn start to normalize now. Separately, since that point in time, we've also reached out to affected members and have had some success in reactivating members that left because of these payment issues. Peter Stern: I just want to clarify one thing that I said earlier. The new product introductions, new categories, those will be the fall of calendar '27. So just to make sure we're all clear on that, that's in fiscal '28. Operator: One moment for our next question. And that will come from the line of Shweta Khajuria with Wolfe Research. Shweta Khajuria: Could I please follow up on the first part of the last question, which is on the new product revenue expectations. Peter, if you were to contextualize the opportunity across the new products and new revenue sources, how would you help us frame the size of the opportunity across the new products and how revenue could trend? Where do you see the largest opportunity? How do you think the timing of realization of that would work against the visibility that those revenue sources provide you? And second is, should we going forward be looking more at revenue as a key metric historically? Of course, it's been focused on subscription and subscriber growth, but is that a change going forward? Peter Stern: Shweta, thanks for the questions. So we're not providing guidance beyond the FY '27 period for any of our metrics, inclusive of revenue. But let me at least try to provide a bit of framing in how we look at these things. So what you'll see this year from our commercial launches is what we believe the foundation for accelerating growth in our commercial business unit. The way to look at that is that we already delivered double-digit growth from the commercial business unit in FY '26, basically on the back of just the Precor portfolio. With the introduction of the Peloton Commercial series, we now turbocharged the growth rate of the commercial business unit by providing a dual brand strategy and the power of Peloton, which we know many gyms have requested. That will manifest principally in our Connected Fitness sales and therefore, in revenue, although the Peloton equipment does have a subscription attached to it. And so you will also see some subscription revenue. But note that this -- the realization of the equipment sales tends to be front-loaded and then the impact of subscriber growth in a new category like that is cumulative. In terms of the launches on the consumer side this year, not being terribly specific about that, but that should behave much like our existing consumer business. So you'll see it spread across CF sales. And to the extent the sales are to new members as opposed to existing members, you will see that also manifest in our subscription revenue. As we get to FY '28 and the introduction of products in new categories that grow our total addressable market, you'll see, again, a front-loaded impact on the CF sales line because the hardware revenue is recognized immediately upon the sale and delivery of those units. And then you will hopefully see the beginnings or the accumulation of the subscriber impacts, both in terms of our gross adds, the bending of the curve we expect on net adds and of course, the improved trajectory on subscriber revenue. It's too soon for us to say what that will result in with any level of specificity. These are new products in new categories for us. But our expectation is that by growing our market in this way, this is how we move Peloton into the next phase of our transformation. And to very specifically answer your question then, what I think you should expect is revenue growth should precede a change in -- towards subscriber growth, both because of the combination of the CBU, which is heavily weighted toward equipment sales and because the impact on subscriber revenues lags the impact -- and on numbers of subscribers lags the impact on CF sales. Operator: One moment for our next question. And that will come from the line of Arpine Kocharyan with UBS. Arpine Kocharyan: Sid, welcome to the call. You talked about flat churn year-over-year for 2027 fiscal year, which I think would have been good news for everyone, but now that base for 2026 is slightly higher. But it seems like you were suggesting that you've seen some normalization in churn since that change was introduced. First, could you talk a little bit more about what exactly you've seen, what rate of normalization you've seen since the change was made? And then does that mean that there is a chance that the current guide could actually be a little bit better year-over-year if we see that rate of normalization continue because it's given -- basically, you're guiding flat on the current base. Siddharth Thacker: Yes, sure. Thanks for the question. I think the way to think about this is if you look at Q4, you look at the roughly 37 basis points year-over-year change in churn, about half of that was related to this involuntary churn issue or the onetime factors and about half of it, we still think is a result of the lingering impact of the price increase we took in October. So if you think about our guidance for flat churn year-over-year, what we would expect to see is in Q1, we still expect higher churn year-over-year because we're still comparing against the period that didn't have the impact of the price increase. And then as we start to anniversary the price increase, we should start to see more favorable churn trends and a moderation of churn trends. I think the only other thing to keep in mind as you think about the quarterly cadence of churn is we actually experienced a relatively favorable year-over-year churn rate in the third quarter because a bunch of people that paused as a result of the price increase came back in Q3. So that's the only thing to keep in mind. But other than that, we should start to see much improved churn trends relative to Q1 once we start to anniversary the price increase. But we factored in the normalization of the involuntary churn in our expectation that churn will be flat year-over-year for the full year. Arpine Kocharyan: Okay. Okay. That's helpful. And then a quick follow-up. Thinking about your capital allocation priorities as it relates to growth and how you think about buybacks versus investing back in the business to drive growth and where it makes sense maybe to deploy capital inorganically versus buyback stock, if you could comment on that. Siddharth Thacker: Yes. So let me just start by saying, before we do anything, the first thing we have to do is we need to get our refinancing done. That refinancing, we expect, will deliver on both our previously stated goals of lowering our cost of capital as well as providing greater flexibility. So we've begun the refinancing process with our bankers. We'll have more to report as we conclude that process. But you're right. I mean what we've said publicly in the past is we think a gross debt-to-EBITDA ratio of somewhere in the 2 to 4x range is a sustainable level of gross debt. So what that will imply is we have a substantial amount of excess cash on the balance sheet today. And when we're thinking about deploying that cash, I think we're going to do what's in the best long-term interest of shareholders. I mean I will say that I've been an investor for many years, and I do understand very deeply the impact of deploying our capital wisely can have. So when we think about decisions like M&A or buybacks, what we're thinking about is, number one, how do we improve this business? How do we maximize shareholder value? We examine the expected returns from any capital allocation decisions, not only against our cost of capital, but also against all other available options. And we're also thinking about not only just the expected returns, but also the risks inherent in any decision we make. And we want to make sure that we operate with a sufficient margin of safety. So we'll have more to report soon on the capital allocation front. Operator: One moment for our next question, and that will come from the line of Doug Anmuth with JPMorgan. Douglas Anmuth: I have two. Just first, Peter, on Peloton IQ. Can you just talk more about how members are interacting here with your AI-driven tools and what impact you're seeing in terms of engagement and retention there? And then secondly, just as you launch the Peloton Commercial series and CBU becomes a little bigger part of the mix, can you talk about any impact on revenue per hardware unit and then also on margins? Peter Stern: Of course, Doug. So let's start with Peloton IQ. I love that question because it's just such a positive way for us to take advantage of the revolution that's happening around AI on behalf of our members. And we do that by delivering personalized insights and recommendations. It turns out that based on our research, Peloton IQ has now become the #1 feature of interest from our potential customers. And so that shows what a big competitive differentiator this can be. The things that people are using across the board, our members are starting to engage with what we call Peloton IQ insights. So we're providing somewhere between 3 to 5 insights for our members every week about ways that they can enhance their workout program. And we've got more than 50% of our monthly active users now engaging with that. For the relatively smaller percentage of customers that have already switched over to the Plus side of the Cross-Training Series, that's where we see people getting the most benefit from what Peloton IQ can do because those are the people who are using it for things like form feedback and rep tracking and even more adaptive coaching. Let me give a sneak peek of what to expect looking forward. So our next frontier for Peloton IQ is moving to much deeper personalization, and that's things like enabling a much wider array or even an infinite number of open-ended goals and being able to adjust programs much more dynamically based on what we're observing over time and even in the moment from our members. We're also working on integrating even more wearables data because there's obviously a revolution taking place around the adoption and use of wearables, and we want to support as many of them as we possibly can. So we're already excited about Peloton IQ. It's making a difference in differentiating our product. People are using it extensively, and we have much more to come on that. Now second question was about the impact of the CBU for hardware units and our margins. Our FY '27 guidance does incorporate the impact of accelerating growth from the CBU. And as I mentioned earlier in response to Arpine's question, that's principally manifested on the revenue side in terms of CF sales, although there is a component of subscriptions that will start to lay in. The way to think about this category is it's evolved differently from the home fitness space in that it has historically been one in which there is not a tail of subscriptions, right? The market is based on the sale of equipment only. And so there are typically higher margins and higher prices associated with that equipment. There also is a higher price associated with that equipment. In that, the equipment needs to be manufactured for an extraordinarily high level of usage and also typically -- at least in our case, given our tremendous commitment to quality on the Precor side, comes bundled with a longer standard warranty than you would find on the consumer or the residential side of the business. So what you see from the CBU is higher revenue per sale, you also see higher margins. And the CF margins that we publish represent a blend of the higher gross margins from the CBU and the lower relative gross margins on the consumer side. Operator: One moment for our next question that will come from the line of Youssef Squali with Truist. Unknown Analyst: This is Robert on for Youssef. On the planned new upcoming launches, do you expect that revenue acceleration to come more from cross-sell opportunities to new -- to existing users? Or do you view it as a way to broaden your reach at lower ASPs? And then I'm curious on the planned CAC and margin impact over the first year or 2 from those planned new launches? Peter Stern: So let me focus on this year, which is what we have built into our guidance and which we are prepared to provide a little bit more specificity on. So we historically do see in our existing categories a blend of sales to both existing and new users. And we anticipate that we will see the same thing on the consumer or the residential side this year. So again, just the roughest estimate I can give you is think about something in the vicinity of kind of 50-50 between existing members and new members for the sales of the consumer equipment this year. As we look forward to what we're doing in FY '28 on the consumer side, that's certainly too soon to speculate on the blend between existing members and new members. But what I will say is that to the extent we offer those types of products to existing members, they will receive a substantial discount to reflect their loyalty and the value that they provide us from their already existing primary subscription. So all of that is being built into our financial models, and we'll have more to share about that as we get closer. Operator: One moment for our next question. And that will come from the line of Nathan Feather with Morgan Stanley. Nathaniel Feather: Just a little bit more on the wearable space here. Certainly seen a lot of growth in this market with some of the new capabilities that have been released. I guess you need to think about how you're approaching the space from a partnership versus ownership perspective? And is this an area you'd potentially consider getting into, especially given the already kind of deep connection that you have with your vendors? Peter Stern: Yes, Nathan, it's something that we've thought about in the past. And we've decided that given that there are so many compelling wearable options available to our members, in many cases, offered by a range of extremely powerful and large companies to some also very innovative start-ups in that space. Rather than us attempting to compete with the players in those markets, the best way for us to work with the wearables industry is essentially to sort of play Switzerland here. And for us to integrate with as many of them as possible and build partnerships that range from both ingesting data that -- again, based on our members' opt-in permission and subject to privacy requirements, providing our data back to those wearable companies so that they can provide the best possible insights to their members and also working with select members of the players in those industries to do things like co-marketing. So by not competing with them in that space, we have the most potential to be able to serve our members across every type of wearable that's out there and also to be able to use that as a way to grow our subscribers. To date, we've integrated with Apple, with Google, with Garmin. We've got a couple more big ones on the way. We'll have more to talk about that in the not-too-distant future. So I think we're approaching this in the way that is the absolutely most member-friendly way we can and recognizing our unique strengths and what we can contribute while not overextending ourselves into places where we may have difficulty differentiating our company. Operator: We do have time for one last question, and that will come from the line of Eric Sheridan with Goldman Sachs. Eric Sheridan: The hardware strategy and distributing hardware. You've been on a journey over the last couple of years in terms of go-to-market and retail and different partnerships approaches. What have been some of the key learnings as that go-to-market strategy has evolved? And when you think about where you want to take the product set forward over the next 2 to 3 years, how should we be thinking about the key priorities to make sure the products match up with the go-to-market and are aligned with some of those key learnings over the last couple of years in terms of how the mix might evolve? Peter Stern: Yes. Eric, that's a deep question. So let me try to approach it from a couple of different angles. The first one I'm going to -- first way I'll approach that is looking back up the supply chain. So when I joined, Peloton was practically single sourced in terms of our hardware business, which creates a great deal of dependency on a single provider, some risk and relatively limited negotiating leverage. While we feel great about our close partnership that we've enjoyed in that space, I think it's really important and our COO, Charlie Kirol, has done a great job at this in ensuring that we have more flexibility and a better ability to compete and over time, offer products at more compelling price points. Now I raised that because one of the key learnings that we've discovered in the hardware space is that there is a pretty high level of price elasticity around consumer fitness equipment. And so it's important that we'd be able to offer products at price points that are accessible to our members. Another sort of takeaway from that is that we've learned to become, I think, really creative in finding ways to make our products accessible and affordable to the largest number of potential members. And what I mean by that is if you look up and down the line at what we've done, for example, in the bike category, where there's a robust secondary market with products available for a few hundred dollars, to refurb that we've been able to take advantage of, to rental models all the way up to our Plus line, which is a premium offering that delivers really remarkable capabilities for helping people get fit. We've been able to introduce -- I hate the way these words sound, but I'm just going to be a pure economist with you for a moment. We've been able to price discriminate, I think, very effectively in the bike market. With regard to some of the other categories, we have less ability to do that. And so we'll be focusing on expanding our portfolio as well as the ways that our products can be accessed by our members in the coming years. Another thing that I think we've learned about hardware in this category is that people want to try it. And especially if it's something that is new to them. And that has driven not just the work that we've done on our first-party micro stores, where we have, as I mentioned earlier, launched 13 micro stores in the last -- just over a year. And actually, I think we're slated to launch 2 more by the end of today. So we're really, really excited about where we're going there, but also to significantly expand our third-party retail presence, whether it's through companies like DICK'S Sporting Goods or the work that we've done with Johnson Fitness & Wellness. We've also got some exciting initiatives taking place in Canada, big new relaunch with John Lewis in the U.K. All of these are ways that we can give our members a chance to touch and feel and try our equipment. The reason I raised that is because as we start to introduce products in new categories, that's when we're -- fundamentally new categories, that's where that retail distribution is going to become even more important. So you can see us building the foundation for new types of hardware based on the insights that we've had to date. Operator: I would now like to turn the call back over to Mr. Peter Stern for any closing remarks. Peter Stern: So recognizing that many, if not most of our investors are also members. Before we close, I want to highlight a couple of programs that we have out there. One of them is Rebecca Kennedy's highly popular HiLit+ program. I mentioned that earlier, but I just want to give you a sense of the magnitude of these things so that if you're motivated by FOMO, it gets you trying it. We've had more than 200,000 members taking over 1.2 million classes so far in HiLit+. So it's enormously successful. We also launched a new Sculpt 30 program. That has classes available every Monday, and I highly recommend those. And then for those of you who haven't tried our Breathwork app, we introduced a new 7-day program. It's called Breathe into Better Sleep. It counts towards your Peloton streaks. It counts toward Club Peloton. And after a day of earnings calls and investor meetings, I plan on using that tonight. So with that, I look forward to seeing all of you on the leaderboard, and I want to thank everyone for the questions and for listening in. Operator: This concludes today's program. Thank you all for participating. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Peloton Interactive. The Motley Fool has a disclosure policy. Peloton (PTON) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Transitioning from a connected fitness company to a connected wellness ecosystem to capture share in the $7 trillion global longevity and health span market. Achieved first full year of positive net income and operating income by exceeding the $100 million run rate cost savings goal and rightsizing the cost structure. Performance attribution for Q4 revenue outperformance was driven by higher Connected Fitness equipment sales across both Peloton and Precor brands. Strategic focus on 'Peloton IQ' AI integration, which saw over 50% of monthly active users engaging with personalized guidance in Q4. Expanding the Commercial Business Unit (CBU) to reach members outside the home, achieving double-digit year-over-year revenue growth in fiscal 2026. Acquired Scope to enhance R&D in the connected Pilates category, responding to a 53% year-over-year increase in Pilates workout time. Optimizing retail footprint by shifting from legacy showrooms to highly capital-efficient micro stores, with plans to double the footprint this year. Anticipate revenue acceleration starting in fiscal 2028 driven by the launch of groundbreaking products in entirely new consumer categories. Fiscal 2027 guidance assumes a 3.9% revenue decrease at the midpoint, primarily due to lapping a one-time subscription price increase benefit. Expect accelerating growth from the Commercial Business Unit in fiscal 2027 following the launch of the Peloton Commercial series for high-traffic gyms. Full-year churn is projected to be roughly flat versus fiscal 2026 as year-over-year trends moderate following the anniversary of price increases. Minimum free cash flow target for fiscal 2027 set at $350 million, supported by high-margin recurring revenue and disciplined capital allocation. Booked a $23.8 million legal contingency accrual in Q4 related to a patent litigation verdict regarding third-party media players. Q4 churn was negatively impacted by approximately 17 basis points due to an unanticipated adverse effect from a payment reactivation algorithm change. Management is actively working with bankers to refinance the balance sheet to lower the cost of capital and increase financial flexibility. Supply chain strategy is shifting away from single-sourcing to improve flexibility, negotiating leverage, and price accessibility for members. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Revenue growth is expected to precede subscriber growth because hardware revenue is recognized immediately while subscriber impact is cumulative. New category launches in fall of calendar 2027 (FY28) are designed to broaden the total addressable market and drive meaningful revenue acceleration. Existing members will likely receive substantial loyalty discounts on new category hardware to maintain the primary subscription value. Management reverted to the previous payment recapture flow after a Q3 algorithm change reduced the frequency of reactivation emails. Involuntary churn has begun to normalize, and the company is successfully reactivating members affected by the previous payment issues. The fix is factored into the guidance for flat year-over-year churn despite the Q4 headwind. Peloton will 'play Switzerland' by integrating with existing wearables (Apple, Google, Garmin) rather than launching its own competing hardware. Strategy focuses on ingesting member data to provide AI-driven insights and co-marketing with established wearable leaders. This approach avoids overextending into a crowded market where differentiation is difficult for a fitness-first brand. CBU sales typically generate higher revenue per unit and higher gross margins compared to residential consumer equipment. Commercial products are built for higher duty cycles and include longer standard warranties, justifying the premium pricing. The CBU currently holds about 4% of the commercial fitness market, representing significant headroom for growth.

Interested in Peloton Interactive, Inc.? Here are five stocks we like better. Peloton completed fiscal 2026 profitably, reporting its first full year of positive net income and operating income. Net income was $63 million, operating income was $161 million, adjusted EBITDA rose 16% to $468 million, and free cash flow increased 17% to $378 million. Fourth-quarter revenue reached $608 million, with gross margin expanding to 56.7%, though subscription churn increased to 2.2%. Management said churn is beginning to normalize after reversing a payment-recapture change. Peloton expects fiscal 2027 revenue to decline about 4% at the midpoint to $2.3 billion-$2.4 billion, but projects adjusted EBITDA growth to $475 million-$525 million. The company is also investing in new consumer products, commercial equipment, micro stores and AI-powered personalization to support longer-term growth. Peloton Stock Gives Back Gains After Upbeat Earnings Report Peloton Interactive (NASDAQ:PTON) said it completed fiscal 2026 with its first full year of positive net income and operating income, while outlining new consumer and commercial product launches intended to support future growth. Chief Executive Officer and President Peter Stern said the company generated fiscal-year net income of $63 million and operating income of $161 million. Adjusted EBITDA rose 16% year over year to $468 million, while free cash flow increased 17% to $378 million. Stern said the results reflected progress in reducing costs, including exceeding the company’s target of $100 million in run-rate savings during fiscal 2026. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Peloton Stock Is Rallying, But Can It Deliver Another 70% Upside? The company also reported its second consecutive quarter of year-over-year revenue growth in the fourth quarter, although its fiscal 2027 outlook calls for lower revenue at the midpoint than in fiscal 2026. Chief Financial Officer Sid Thacker said fourth-quarter revenue totaled $608 million, exceeding the high end of Peloton’s implied guidance range by $6 million and posting slight year-over-year growth. The outperformance was driven by higher connected-fitness equipment sales across both the Peloton and Precor brands. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Peloton Moves Toward Profitability, But Can the Turnaround Last? Total gross profit increased 5% from a year earlier to $344 million, and total gross margin expanded 260 basis points to 56.7%. Adjusted operating expenses were $257 million. Excluding $24 million of non-recurring accrued legal contingencies tied to patent litigation, adjusted operating expenses declined 11% year over year. Fourth-quarter adjusted EBITDA was $142 million, or 23% of revenue. Excluding the legal contingency, adjusted EBITDA would have been $166 million, up 19% from the prior year and $12 million above the high end of the company’s guidance range, Thacker said. → Ulta's Growth Is Real, But So Are the Risks Free cash flow in the quarter was $89 million, down 21% year over year, primarily because of net working-capital timing. Peloton ended the quarter with $1.21 billion in cash, up $167 million from a year earlier, after repaying $200 million of debt in the third quarter. Net debt stood at $93 million, down 80% year over year. Ending paid connected-fitness subscriptions were 2.553 million, within the company’s guidance range. Fourth-quarter net churn was 2.2%, up 37 basis points year over year. Thacker said roughly half of that increase was tied to one-time factors, including a change to the company’s payment-reactivation algorithm that reduced reactivations after involuntary churn. Peloton reverted to its prior payment-recapture process and has seen involuntary churn begin to normalize, Thacker said. The company also contacted affected members and said it has had some success reactivating subscribers. Management expects full-year churn in fiscal 2027 to be roughly flat compared with fiscal 2026. Stern said Peloton is pursuing a strategy centered on improving member outcomes, expanding access to its offerings, building longer-term member relationships and improving business operations. During fiscal 2026, the company introduced its Cross Training Series across its bike, tread and row products and launched Peloton IQ, an artificial-intelligence-based personalized guidance feature. More than 50% of monthly active users engaged with personalized guidance powered by Peloton IQ during the fourth quarter, Stern said. The company plans to further develop the feature through more personalized goal-setting, adaptive programming and additional wearable-device integrations. Peloton said it will introduce additional equipment in an existing category before the end of calendar 2026. Stern also said the company plans to launch its first products in entirely new consumer categories in fall 2027, which falls in fiscal 2028. He did not provide details on those categories. On the commercial side, Peloton plans to launch the Peloton Commercial Series, including a bike and treadmill designed for high-traffic gyms. The company’s commercial business unit recorded double-digit revenue growth in fiscal 2026 across regions and major product categories, according to Stern. He said commercial equipment typically carries higher prices and higher margins than consumer equipment, while commercial subscription revenue will build over time. The company estimated it is approaching a 4% share of the commercial fitness-equipment market segment. It expects the new commercial equipment, sales-team investments and product development to support faster growth in fiscal 2027 and beyond. Peloton also expanded its micro-store strategy. It ended fiscal 2026 with 10 micro stores, which Stern said have consistently outperformed the company’s former showroom fleet. Peloton recently opened three more micro stores and plans to add another seven before the holidays, which would double its micro-store footprint during the year. The company highlighted demand for strength and Pilates content. Pilates workouts increased 44% year over year in the fourth quarter, while Pilates workout time rose 53%. Peloton acquired Skōp, which Stern described as an early innovator in connected Pilates, to support research and development in that category. Peloton said 316,000 members now own multiple connected-fitness products, an increase of more than 20,000 from a year earlier. Stern said those members churn at significantly lower rates than members who own one product. The company also pointed to its partnership with Spotify, through which it offers non-equipment-based classes including strength, Pilates, barre, yoga, meditation and outdoor running and walking to Spotify premium subscribers. Stern said Mexico recently became the most engaged country outside the U.S. for Peloton content on Spotify. Rather than building its own wearable device, Stern said Peloton intends to integrate with a broad range of wearable providers. The company has already integrated with Apple, Google and Garmin and expects to add more partners. Peloton forecast fiscal 2027 revenue of $2.3 billion to $2.4 billion, representing a 3.9% year-over-year decline at the midpoint. Thacker said the outlook is affected by the comparison with the prior year’s subscription price increase, which created a one-time benefit to revenue trends in fiscal 2026. Fiscal 2027 total gross margin is expected to be about 54%, up approximately 140 basis points year over year. Adjusted EBITDA is projected at $475 million to $525 million, up 7% at the midpoint. Minimum free cash flow is targeted at $350 million. First-quarter revenue is expected to be $545 million to $565 million, up 1% year over year at the midpoint. First-quarter adjusted EBITDA is expected to be $135 million to $145 million. First-quarter ending paid connected-fitness subscriptions are projected at 2.455 million to 2.475 million. Thacker said Peloton has begun working with bankers on a balance-sheet refinancing, with the objectives of lowering its cost of capital and gaining greater flexibility. The company received $3 million in tariff refunds from the federal government year to date and expects additional refunds, though it has not included them in its forecasts because of tariff uncertainty. Peloton recorded a $23.8 million legal contingency accrual in the fourth quarter related to patent litigation. Thacker said the company does not currently expect potential ongoing royalty obligations to have a material impact on results. Peloton Interactive, Inc operates a digital fitness platform that combines connected exercise equipment with live and on-demand workout classes. The company's core products include stationary bikes (Peloton Bike and Bike+), treadmills (Peloton Tread and Tread+), and the Peloton Row. Each device integrates a touchscreen display that streams instructor-led cycling, running, strength, yoga, meditation and other fitness classes. Peloton generates recurring revenue through subscription plans, which grant users access to its growing library of workouts, performance tracking tools and community features. Founded in 2012 by John Foley and headquartered in New York City, Peloton set out to deliver an immersive home-fitness experience by blending hardware, software and content. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Peloton Interactive Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

For the quarter ended June 2026, Peloton (PTON) reported revenue of $607.7 million, up 0.1% over the same period last year. EPS came in at $0.13, compared to $0.05 in the year-ago quarter. The reported revenue represents a surprise of +1.73% over the Zacks Consensus Estimate of $597.35 million. With the consensus EPS estimate being $0.11, the EPS surprise was +18.18%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Peloton performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Ending Paid Connected Fitness Subscriptions: 2.55 million compared to the 2.56 million average estimate based on five analysts. Ending Paid App Subscriptions: 503,000 versus 522,933 estimated by three analysts on average. Average Net Monthly Paid Connected Fitness Subscription Churn: 2.2% versus the three-analyst average estimate of 1.7%. Revenues- Subscription: $436.6 million versus the five-analyst average estimate of $419.11 million. The reported number represents a year-over-year change of +6.9%. Revenues- Connected Fitness Products: $171.1 million compared to the $180.28 million average estimate based on five analysts. The reported number represents a change of -13.9% year over year. Gross profit- Subscription: $321.4 million versus $306.1 million estimated by five analysts on average. Gross profit- Connected Fitness Products: $23 million compared to the $31.55 million average estimate based on five analysts. View all Key Company Metrics for Peloton here>>> Shares of Peloton have returned +12.8% over the past month versus the Zacks S&P 500 composite's +3.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Peloton Interactive, Inc. (PTON) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Peloton (PTON) came out with quarterly earnings of $0.13 per share, beating the Zacks Consensus Estimate of $0.11 per share. This compares to earnings of $0.05 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +18.18%. A quarter ago, it was expected that this exercise bike and treadmill company would post earnings of $0.07 per share when it actually produced earnings of $0.05, delivering a surprise of -28.57%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Peloton, which belongs to the Zacks Leisure and Recreation Products industry, posted revenues of $607.7 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.73%. This compares to year-ago revenues of $606.9 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Peloton shares have added about 5.8% since the beginning of the year versus the S&P 500's gain of 12.8%. While Peloton has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Peloton was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.11 on $568.21 million in revenues for the coming quarter and $0.30 on $2.43 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Leisure and Recreation Products is currently in the top 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Academy Sports and Outdoors, Inc. (ASO), another stock in the same industry, has yet to report results for the quarter ended July 2026. This company is expected to post quarterly earnings of $2.12 per share in its upcoming report, which represents a year-over-year change of +9.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Academy Sports and Outdoors, Inc.'s revenues are expected to be $1.66 billion, up 3.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Peloton Interactive, Inc. (PTON) : Free Stock Analysis Report Academy Sports and Outdoors, Inc. (ASO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research