Peloton Interactive reported fiscal second‑quarter 2026 results on February 5 2026, with total revenue of $657 million—a 3% year‑over‑year decline from $674 million in the same quarter a year earlier. Net loss widened to $39 million, or $0.09 per share, missing the consensus estimate of a $0.05 loss. The miss reflects a combination of weaker hardware sales, higher operating costs, and a modest increase in subscription churn that offset the benefit of a recent price increase.
Connected Fitness Products revenue fell 4% to $244 million, while subscription revenue slipped 2% to $413 million. Paid Connected Fitness subscriptions dropped to 2.66 million, a 7% decline from 2.875 million a year ago, and average monthly churn rose to 1.9%, up 50 basis points from the prior year. The decline is driven by a price hike in October 2025, a competitive shift toward at‑home and hybrid fitness solutions, and the limited traction of a major product overhaul launched in the prior quarter.
Adjusted EBITDA rose 39% to $81 million, exceeding the $73 million consensus estimate. The improvement is largely due to a higher mix of subscription revenue, which carries a higher margin, and disciplined cost controls that offset the decline in hardware sales. Gross margin expanded to 50.5% year‑over‑year, driven by a one‑time reduction in music royalties and a stronger subscription gross margin.
Management guided third‑quarter revenue to $605–$625 million, below the $638 million consensus, and adjusted EBITDA to $120–$135 million, slightly above the $119 million consensus. Full‑year revenue guidance was lowered to $2.40–$2.44 billion from $2.48–$2.53 billion, reflecting concerns about continued softness in hardware demand. In contrast, full‑year adjusted EBITDA guidance was raised to $450–$500 million from $425–$475 million, signaling confidence that cost controls and a higher‑margin product mix will sustain profitability.
CEO Peter Stern emphasized that the quarter represented “the most substantial period of innovation” while maintaining operational discipline. He highlighted the success of the new Cross Training Series, the growth of the Commercial Business Unit, and increased member engagement with Peloton IQ. The company also announced a workforce reduction of 11%, underscoring its focus on cost efficiency.
Investor reaction was negative, with the stock falling 9.5% in pre‑market trading. The decline was driven by the revenue miss, the wider‑than‑expected loss, the lowered full‑year revenue outlook, and the ongoing subscriber decline, all of which raised concerns about Peloton’s ability to sustain top‑line growth in a competitive market.
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