Peloton posts first full-year net profit, sees subscriber decline

Peloton Interactive reported its first full fiscal year of net income, posting GAAP net income of $63 million for the fiscal year ended June 30, 2026, compared with a net loss of $119 million in the prior year, according to a company press release.

Full-year total revenue was $2.446 billion, a decrease from $2.491 billion in fiscal 2025. Adjusted EBITDA rose 16% year-over-year to $468 million. Free cash flow reached $378 million, up $54 million or 17% from the prior year. Total debt stood at $1.3 billion, with net debt of $93 million, down $367 million or 80% year-over-year.

Ending paid connected fitness subscriptions fell to 2.553 million at the close of the fourth quarter, a decrease of 247,000 or 8.8% year-over-year. Average net monthly paid connected fitness subscription churn was 2.2% in Q4, up 40 basis points year-over-year. Paid app subscriptions also declined 9% year-over-year to 503,000.

Q4 total revenue was $608 million, roughly flat year-over-year. Q4 total gross margin was 56.7%, up 260 basis points year-over-year. Q4 GAAP net income was $62 million, compared with $22 million in Q4 fiscal 2025. Q4 Adjusted EBITDA was $142 million, which was negatively affected by a $23.8 million nonrecurring accrued legal contingency related to patent litigation.

During fiscal 2026, Peloton completed the acquisition of Skōp, a connected Pilates company, and entered a strategic partnership with Spotify. The company said it exceeded a plan to deliver more than $100 million in annualized run-rate cost savings.

For Q1 fiscal 2027, Peloton guided for total revenue of $545 million to $565 million and Adjusted EBITDA of $135 million to $145 million. For full-year fiscal 2027, the company projected total revenue of $2.3 billion to $2.4 billion, representing a midpoint decline of approximately 3.9% year-over-year, with Adjusted EBITDA of $475 million to $525 million and free cash flow of at least $350 million. Paid connected fitness subscriptions for Q1 fiscal 2027 are expected to be between 2.455 million and 2.475 million.

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