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Sep 30, 2025
Peloton Q1 2026 Earnings Report
Peloton returned to profitability in Q1 2026, achieving positive net income and strong free cash flow despite a year-over-year decline in revenue.
Key Takeaways
Peloton delivered a profitable Q1 FY2026, with $13.9M in net income and $67.4M in free cash flow. Revenue fell 6% year-over-year, primarily due to softness in both product and subscription segments, though cost discipline improved margins.
Achieved $13.9M in net income compared to a loss in the prior year
Generated $67.4M in free cash flow, a significant increase from Q1 FY2025
Revenue declined 6% YoY to $550.8M, but beat high end of guidance
Adjusted EBITDA reached $118.3M, exceeding internal forecasts
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Peloton expects modest revenue growth in Q2 FY26 with continued positive adjusted EBITDA, but anticipates a decline in paid subscriptions.
Positive Outlook
- Q2 revenue guidance midpoint shows slight YoY growth
- Adjusted EBITDA forecast range exceeds prior year Q2
- Gross margin expected to improve 180bps YoY in Q2
- Full-year FY26 adjusted EBITDA guidance raised by $25M
- Free cash flow target increased to $250M for FY26
Challenges Ahead
- Expected YoY decline of 8% in Connected Fitness subscriptions
- Subscription revenue continues to face pressure
- Bike+ seat post costs impacted gross margin negatively
- Q1 total revenue declined 6% YoY
- Subscription churn and engagement remain areas of focus
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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