Senior Product Manager

Peloton posts first annual profit, but subscriber declines continue. Peloton has restored profitability and strengthened cash flow. Now comes the harder part: stabilizing a subscriber base that continues to shrink. Peloton has reached a major milestone in its turnaround. For the first time, the company has posted a full fiscal year of GAAP net profitability. That's a meaningful achievement for a business that has spent the past several years cutting costs and working its way back from the pandemic-era boom. But there's another side to the results. Peloton is profitable again, while its core subscriber base is still getting smaller. For the fiscal fourth quarter ended June 30, Peloton reported revenue of $607.7 million, essentially flat from $606.9 million a year earlier. Net income rose to $61.6 million, or $0.13 per share, from $21.6 million, or $0.05 per share, a year earlier. For the full fiscal year, Peloton generated approximately $63 million in net income and $378 million in free cash flow, marking a major change from the losses that followed its pandemic-era boom. The subscriber numbers are where things get more interesting for subscription operators. Peloton ended fiscal 2026 with approximately 2.55 million Paid Connected Fitness subscriptions, down about 247,000, or 8.8%, year over year. And the company expects that decline to continue. For the first quarter of fiscal 2027, Peloton forecasts approximately 2.46 million to 2.49 million Paid Connected Fitness subscriptions, a decline of about 9.8% at the midpoint compared with the prior-year period. Peloton had already signaled that subscriber losses were coming. Three months earlier, the company forecast that fiscal 2026 would end with between 2.55 million and 2.57 million Paid Connected Fitness subscriptions. So the question has shifted. What will get Peloton growing again? A healthier business, but still a smaller one. Peloton has made real progress on the financial side of its turnaround. Margins have improved. The company is generating more cash and has reduced debt, even as equipment sales and subscriptions have come under pressure. Peloton expects those improvements to continue in fiscal 2027. The company is forecasting a total gross margin of approximately 54%, adjusted EBITDA of $475 million to $525 million, and at least $350 million in free cash flow. Revenue is another story. Peloton expects fiscal 2027 revenue of $2.3 billion to $2.4 billion, a decline of approximately 3.9% at the midpoint. If that forecast holds, it would be Peloton's sixth straight fiscal year of declining sales since its pandemic-era peak. Investors weren't convinced that profitability was enough. Peloton shares fell sharply after the results were released. Finding new paths to growth. Peloton is looking beyond the formula that originally built the company. CEO Peter Stern told investors that Peloton expects to introduce new products before the end of the calendar year, with the goal of improving equipment sales and revenue trends. The company also sees future product categories as part of its longer-term growth plans. Peloton has already been expanding its commercial business and looking for more ways to get its products and content in front of customers. That's important because the company can't assume its existing Connected Fitness subscriber base will return to growth on its own. A falling subscriber count can come from several places. Existing customers may leave, new subscriber additions may slow, or the business may simply fail to bring in enough new customers to replace those who cancel. The subscriber total alone doesn't tell Subscription Insider which pressure matters most. For Peloton, that distinction matters. So does the company's ability to find new sources of subscriber growth as its existing base gets smaller. Insider take. Peloton's turnaround is worth watching for a reason that goes beyond one company's earnings. The business is getting healthier while its subscriber base is getting smaller. Peloton has cut costs, improved margins and returned to profitability. At the same time, Paid Connected Fitness subscriptions continue to fall. There's an interesting tension in the numbers. In the third quarter, Subscription Revenue increased 2% year over year to $428 million, even though Paid Connected Fitness subscriptions declined 7.6% to 2.662 million. For subscription operators, that's worth paying attention to. A growing subscriber count has long been one of the easiest ways to judge the momentum of a subscription business. Peloton is a reminder that the picture gets more complicated as a business matures. Pricing can support revenue. Better margins can improve the economics of the business. A company can become more profitable with fewer subscribers. But eventually, the subscriber trend matters. Peloton has answered one big question: Can the company become profitable again? Now the question is whether that stronger financial foundation can support a return to recurring revenue growth. Peloton won't be the only subscription business facing that test. Sources. Reported by: Subscription Insider Editorial Team News, market data, and regulatory updates to stay current on the companies, regulations, technology, and market shifts shaping subscription, memberships, and recurring revenue. Your Weekly Briefing Join over 10,000 subscription professionals who get the Subscription Signals newsletter each week. One clear market signal, the news behind it, and what to watch next. Explore a Subscription Insider Membership Make better subscription business decisions with operational guidance, tools, and resources.

Peloton (PTON) stock falls 12% after weak revenue outlook overshadows earnings beat. Peloton (PTON) stock fell 12% after the company projected a sixth year of revenue declines despite beating Q4 earnings and revenue estimates. By Trader Edge August 6, 2026 3 Mins Read Tldr. * Peloton stock dropped 12% to $5.76 after projecting a sixth straight year of revenue declines * Fiscal Q4 adjusted EPS of $0.13 beat estimates of $0.12; revenue of $607.7M topped the $596.6M forecast * Fiscal 2027 revenue guidance of $2.3B-$2.4B came in below analyst expectations of $2.44B * Paid subscribers fell 8.8% year-over-year to 2.55 million, with Q1 guidance pointing to further declines * CEO Peter Stern pointed to new product launches before year-end as a catalyst for future revenue growth Peloton stock was down 12% to $5.76 on Thursday, on pace for its biggest single-day drop since February 5, 2026. The sell-off came despite the company beating Wall Street's earnings and revenue expectations for its fiscal fourth quarter. Adjusted EPS came in at $0.13, a penny ahead of the $0.12 analyst consensus. Total revenue for the quarter ending June 30 was $607.7 million, above the $596.6 million Wall Street had expected. Net income rose to $61.6 million from $21.6 million in the same quarter a year ago. But the headline numbers weren't enough to calm investors. Peloton guided fiscal 2027 revenue of $2.3 billion to $2.4 billion. That midpoint represents a 3.9% decline from the prior year and falls short of analyst forecasts of $2.44 billion. It would mark the sixth consecutive fiscal year of declining sales. The company peaked at $4.02 billion in revenue during fiscal 2021. Subscriber losses deepening. Paid subscribers dropped to 2.55 million in the quarter, an 8.8% decline year-over-year. The company lost roughly 247,000 paid fitness subscribers in the period. The decline is expected to continue. Peloton's Q1 guidance calls for 2.46 million to 2.49 million paid subscribers, which at the midpoint represents a 9.8% year-over-year drop. Q1 revenue is expected between $545 million and $565 million, roughly flat at the midpoint versus the prior year period. On the brighter side, gross margins are projected to improve. Full-year gross margins are expected at 54%, up 140 basis points. Q1 gross margins are guided at 57%, a 550 basis point improvement. Adjusted EBITDA for fiscal 2027 is projected between $475 million and $525 million, a 6.8% increase at the midpoint. Free cash flow is targeted at a minimum of $350 million. CEO points to new products. CEO Peter Stern stayed upbeat on the earnings call. He said new product launches before the end of the calendar year would drive improvement in both equipment unit sales and revenue. "The product introductions in fiscal 2027, combined with the entry into new categories in fiscal 2028 and beyond, provide the foundation for revenue acceleration," Stern said. Peloton has been working through a turnaround since Stern took over in October 2024. In October 2025, the company raised prices, overhauled its product lineup, and rolled out AI updates. The stock had rallied 56% from its all-time closing low of $3.71 hit on March 13, suggesting some investor optimism had built up heading into the print. Thursday's drop erased a chunk of those gains. Adjusted EBITDA for Q4 came in at $142.3 million, up from $140 million a year earlier, but below the $150.9 million analyst forecast. Stop guessing and start investing with confidence. KnockoutStocks gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions - all in one powerful platform. Simply use coupon code SPECIAL50 at checkout to claim your exclusive discount. Limited Time Offer Get 3 free stock ebooks. Discover top-performing stocks in AI, Crypto, and Technology with expert analysis. * Top 10 AI Stocks - Leading AI companies * Top 10 Crypto Stocks - Blockchain leaders * Top 10 Tech Stocks - Tech giants