Peloton (PTON) Q2 2026 Earnings

Peloton It posted a worse-than-expected holiday quarter on Thursday after shoppers failed to pay for its new AI-driven product line and turned away from higher subscription prices.

The connected fitness company missed Wall Street estimates on top and bottom line results and failed to meet its own internal sales targets in the three months ended Dec. 31 — typically the strongest for Peloton’s hardware revenue.

The company said it expects sales to continue to slow in the current quarter. Peloton expects revenue between $605 million and $625 million, below expectations of $638 million, according to LSEG.

The weak results, coupled with soft guidance, are investors’ first clues that Peloton’s product overhaul may not be the sales driver the company had hoped it would be. Peloton stock fell as much as 13% in pre-market trading following the results.

The revamped range, which comes equipped with AI tracking cameras, speakers, 360-degree rotating displays and hands-free control, is designed to increase sales and attract new customers. But Peloton’s results show demand has been sluggish.

While Peloton’s top line may be disappointing to investors, the company is still making gains in improving its profitability. During the holiday quarter, the company generated $81 million in adjusted earnings before interest, taxes, depreciation and amortization, better than the $73 million analysts expected, according to StreetAccount.

After announcing plans to lay off 11% of its employees last week, the company expects to generate between $120 million and $135 million in adjusted EBITDA in the current quarter, better than the $119 million analysts expected, according to StreetAccount.

It raised its revised full-year EBITDA guidance to between $450 million and $500 million, compared to the previous range of $425 million to $475 million.

This is welcome news for investors because it shows that Peloton has been able to innovate its product line without sapping profitability.

Also on Thursday, the company announced that CFO Liz Coddington is leaving Peloton to “pursue an opportunity outside the industry.” She will remain in her position until March while the company searches for its next CFO.

Here’s what Peloton did in its fiscal second quarter compared to what Wall Street expected, based on a poll of analysts conducted by LSEG:

• Loss per share: 9 cents vs. 6 cents expected
• Revenue: $657 million vs. $674 million expected

The company’s net loss for the quarter was $38.8 million, or 9 cents per share, a significant improvement from the $92 million, or 24 cents per share, it lost in the same period last year.

Sales fell to $656.5 million, down about 3% from $673.9 million the previous year.

Since taking over as CEO of Peloton, Peter Stern has worked to generate new revenue streams and build on the progress the company has made in improving its profitability.

The redesigned product lineup was one of his biggest moments as CEO and included new pricing for both subscriptions and devices. Despite the higher prices, hardware and subscription revenues were lower than expected, indicating weak unit sales.

Hardware sales generated revenue of $244 million during the quarter, while subscriptions saw sales of $413 million, both below expectations of $253 million and $424 million, respectively, according to StreetAccount.

In a statement, Stern focused on the company’s profitability improvements and said he sees “positive momentum” across the business.

“Our second quarter represents the most significant period of innovation at Peloton since our founding. At the same time, our financial performance demonstrated our continued operational discipline, resulting in 39% year-over-year growth in adjusted EBITDA and a 52% year-over-year reduction in net debt, proving that we can innovate and increase our profitability at the same time,” Stern said. “Our subscription base is very committed, our integrated business unit is growing and well-positioned to continue to do so, and member engagement with Peloton IQ is encouraging.”