Peloton Q1 2026 earnings: profit and cash flow improve despite fewer subscribers
Peloton swung to a small profit and grew cash flow and adjusted EBITDA, even as revenue and subscribers kept shrinking; the company raised its full-year profit and cash-flow targets.
| Q1 2026 | Reported |
|---|---|
| EPS | $0.03 |
| Revenue | $550.8M |
Figures as reported by the company to the SEC for the quarter ended September 30, 2025. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Peloton returned to a quarterly profit, a turnaround from a small loss a year earlier, even though revenue declined as the company continues shedding hardware and subscriber customers. Cost discipline, not sales growth, drove the improvement.
- Paid Connected Fitness subscriptions fell to about 2.73 million, down 6% from a year ago, continuing a long-running decline in Peloton’s subscriber base. A bright spot: the monthly cancellation rate (churn) improved slightly to 1.6%, a touch better than a year ago.
- Adjusted EBITDA, a measure of underlying operating profitability before certain non-cash costs, rose 2% to $118 million even as gross profit fell, reflecting continued cost-cutting across the business.
- Free cash flow — cash generated after running the business and buying equipment — jumped to $67 million, up $57 million from a year ago, showing the company is generating more cash even with a shrinking top line.
- Peloton raised its full-year profitability outlook, lifting its adjusted EBITDA guidance range to $425–$475 million (up $25 million at both ends) and increasing its minimum free cash flow target by $50 million to at least $250 million.
- For the current (holiday) quarter, Peloton guided to revenue of $665–$685 million but expects subscriber numbers to keep falling, projecting 2.64–2.67 million subscriptions, down 8% year over year, with churn likely rising after price changes took effect October 1.
- CEO Peter Stern said the quarter reflected “disciplined execution and focus” ahead of a new equipment lineup and an AI-powered feature called Peloton IQ, framing recent cost and profit gains as groundwork for future revenue growth.
- Over the trailing twelve months, Peloton’s net profit margin remains thin (under 1%) and its return on equity is deeply negative, a reflection of the large accumulated losses built up in prior years rather than this quarter’s results alone.
Q1 2026 in context
| Metric | Sep 2025 | Sep 2024 | Change |
|---|---|---|---|
| Revenue | $551M | $586M | -6.0% |
| Net income | $14M | -$900,000 | +1644.4% |
| Free cash flow | $67M | $11M | +529.9% |
| Diluted EPS | $0.03 | $0.00 | — |
| Gross margin | 51.5% | 51.8% | -0.3 pts |
| Operating margin | 7.5% | 2.1% | +5.4 pts |
| Net margin | 2.5% | -0.2% | +2.7 pts |
Figures for the quarter ended Sep 2025 and the quarter ended Sep 2024, as reported to the SEC.
How the stock took it
Peloton Interactive Inc closed at $7.13 on Nov 5, 2025, the last session before the report, and at $7.66 on Nov 7, 2025, the first session after it — +7.4% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · earnings call