Peloton Reports Q2 Profit Beat, Forecasts Full-Year Revenue Above Expectations

Peloton Interactive reported a mixed but overall positive financial performance in its second quarter of fiscal year 2025, posting earnings of $0.05 per share which surpassed analyst expectations despite a 5.7% year-over-year revenue decline to $606.9 million. The company exceeded full-year revenue guidance and projected an EBITDA for fiscal year 2026 above estimates, though its Q3 revenue guidance fell slightly short of expectations. Cost-cutting initiatives, including a 6% workforce reduction and reductions in operating expenses, have significantly improved profitability and cash flow, with operating margins turning positive and free cash flow margin rising to 18.5%. Peloton's connected fitness subscriber base declined by 6%, continuing a trend of subscriber churn, yet engagement metrics such as average monthly workout time per subscriber showed modest growth. New CEO Peter Stern is driving a transformation plan aimed at diversifying beyond cardio into broader wellness areas like strength, mobility, mental wellbeing, and nutrition. Despite recent stock underperformance relative to the market, Peloton's improved earnings and strategic outlook have made it an interesting prospect for investors tracking the evolving home fitness sector.