Peloton Posts Larger Q3 Loss Amid Declining Demand, Raises Revenue Forecast

Peloton reported a 13% year-over-year revenue decline to $624 million for its fiscal third quarter, slightly exceeding Wall Street estimates, but its loss per share of $0.12 was double expectations, reflecting ongoing challenges amid a post-pandemic slump. Equipment sales fell 27%, and subscription numbers declined, with paid members dropping by about half a million compared to the previous year, signaling reduced consumer demand amid economic uncertainty and tariff impacts. Despite these setbacks, new CEO Peter Stern highlighted progress in strategic planning and reaffirmed full-year revenue guidance of approximately $2.46 to $2.47 billion, with adjusted EBITDA expected between $330 million and $350 million, marking an upward revision from earlier forecasts. Peloton's operating expenses were cut by 23%, primarily through marketing and sales reductions, and the company flagged a $5 million drag on free cash flow due to tariffs on aluminum components and apparel imports from China. While the company aims to pivot toward subscription growth for its live and on-demand workout content, it also lowered its outlook for app-based subscriptions, reflecting a cautious stance amid ongoing economic headwinds. Investors reacted negatively to the earnings and outlook, with shares falling over 5% pre-market and continuing downward in early trading.