Peloton Posts First Full-Year Profitability Amid Subscriber Decline
Peloton Interactive (NASDAQ:PTON) reported its first full-year positive net income in fiscal 2026, driven by cost restructuring and improved revenue performance. The company achieved $63 million in GAAP net income and saw adjusted EBITDA rise to $468 million despite a legal accrual of $23.8 million for patent litigation. Free cash flow increased significantly, allowing Peloton to reduce its net debt by 80% year over year. Despite these financial improvements, the company continues to struggle with subscriber attrition and declining hardware sales. Paid Connected Fitness Subscriptions fell 8.8% year-over-year in Q4, while monthly churn rose from 1.8% to 2.2%. Revenue for connected fitness products dropped by 14%, and gross margins declined before a partial recovery quarter over quarter. Peloton expects further subscriber declines into fiscal 2027 with guidance projecting another 9.8% drop in the first quarter of next year, signaling ongoing challenges despite its profitability turnaround.
Tickers: $PTON
Topics: debt reduction earnings free cash flow revenue growth subscriber trends