Investing.com -- Peloton Interactive Inc (NASDAQ: PTON) swung to a net profit of $26.4 million in its fiscal third quarter ended March 31, 2026, compared with a net loss of $47.7 million in the same period a year earlier, the fitness equipment maker said on Thursday.

Shares rose more than 7% in premarket trading.

Revenue for the quarter rose 1% year-over-year to $630.9 million, beating the analyst consensus estimate of $618.74 million. Earnings per share of $0.06 missed the consensus estimate of $0.07.

Adjusted EBITDA rose 41% year-over-year to $126.2 million, up from $89.4 million in Q3 FY2025, and within the company’s guidance range.

Free cash flow was $150.5 million, an increase of $56 million or 59% year-over-year. Net debt fell 70% year-over-year to $173.1 million from $584.9 million.

Total gross margin was 51.9%, an increase of 90 basis points year-over-year, though 210 basis points below guidance, which the company attributed to "opportunistic promotional activity in the quarter."

Ending paid connected fitness subscriptions were 2.662 million, a decrease of 218,000 or 7.6% year-over-year, in line with the midpoint of guidance.

"In Q3 we made great progress on deepening our relationships with our Members, growing our opportunities to reach new Members globally, diversifying our revenue streams, and planting new seeds for future growth," said CEO and President Peter Stern.

For the full fiscal year 2026, Peloton raised its revenue outlook to $2.42 billion to $2.44 billion, representing a decrease of $61 million or 2% year-over-year at the midpoint, and an increase from the midpoint of guidance provided last quarter. The consensus estimate stood at $2.43 billion.

Adjusted EBITDA guidance for the full year was set at $470 million to $480 million, an increase of $71 million or 18% year-over-year at the midpoint. Free cash flow is expected to be approximately $350 million.

In April, Peloton launched a content licensing partnership with Spotify, distributing Peloton content to Spotify Premium members in most countries where Spotify is available. The company also announced its Commercial Series Tread and Bike, describing them as the first Peloton-branded equipment intended for high-use commercial environments. Commercial Business Unit Revenue grew 14% year-over-year in Q3.