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Dec 31, 2024
Peloton Q2 2025 Earnings Report
Peloton's Q2 2025 performance exceeded guidance on key metrics, with improved member happiness and significant deleveraging.
Key Takeaways
Peloton's Q2 FY2025 results exceeded expectations, with paid connected fitness subscriptions, total revenue, gross margin, and adjusted EBITDA surpassing guidance. Member happiness improved, operating expenses decreased, and the company generated substantial cash flow. The balance sheet deleveraged, and full-year guidance was raised.
Exceeded guidance on key metrics, including Paid Connected Fitness Subscriptions, Total Revenue, Total Gross Margin and Adjusted EBITDA.
Operating expenses were down 25% Y/Y, and generated over $100 million of both GAAP Net Cash Provided by Operating Activities and non-GAAP Free Cash Flow.
Achieved meaningful improvements in Member happiness, with improved Net Promoter Scores (NPS) and Member support satisfaction (MSAT).
Balance sheet is deleveraging substantially, with Total Debt decreasing $190.1 million Y/Y and Net Debt decreasing $281.4 million or 30% Y/Y.
Peloton
Peloton
Peloton Revenue by Segment
Revenue by Segment
Connected Fitness Products Revenue
CapyFin.comSubscription Revenue
CapyFin.com Forward Guidance
Peloton is raising its full year FY25 guidance range for Adjusted EBITDA by $60 million to $300 - $350 million from $240 - $290 million and its Free Cash Flow target to at least $200 million from $125 million.
Positive Outlook
- Raising full year FY25 guidance range for Adjusted EBITDA by $60 million to $300 - $350 million.
- Raising FY25 Free Cash Flow target to at least $200 million.
- Expectations for lower net churn due to continued favorability across subscription cancellations, pauses and reactivations.
- Expectations for favorable Subscription Revenue from higher Paid Connected Fitness Subscriptions.
- Expectations for favorable Connected Fitness Products Revenue from higher Tread portfolio sales.
Challenges Ahead
- Expectations for lower gross additions, due to softer hardware sales.
- Expectations for mix shift into Tread products, which have lower new subscription attachment rates than Bike products.
- Q3 Revenue guidance of $605 million to $625 million reflects expectations for seasonally lower hardware sales compared to Q2.
- Guidance for Q3 FY25 Ending Paid Connected Fitness Subscriptions of 2.85 to 2.87 million reflects expectations for seasonally lower hardware sales trends following the holiday season.
- Average Net Monthly Paid Connected Fitness Subscription Churn Rate to remain relatively in-line with Q2.
Revenue & Expenses
Visualization of income flow from segment revenue to net income