Peloton Extends Revenue Growth and Lifts Profit

The Tip Desk · November 11, 2026 · 3 min read

First-quarter revenue was $559 million, 2% above a year earlier, as GAAP net income reached $96 million and adjusted EBITDA rose 42%.

Peloton Interactive (PTON) reported total revenue of $559 million for the quarter ended September 30, 2026, up 2% from a year earlier and $4 million above the midpoint of its guidance range, marking a third consecutive quarter of year-over-year revenue growth after $608 million in the fiscal fourth quarter and $631 million in the fiscal third quarter.

The connected-fitness company said GAAP net income was $96 million, up 591% from $13.9 million a year earlier, and up 56% from $61.6 million in the prior quarter. Adjusted EBITDA was $168 million, up 42% from $118.3 million a year earlier.

Total gross margin expanded to 61.3%, up 975 basis points year-over-year and 460 basis points sequentially from 56.7% in the fiscal fourth quarter, above the company’s 57% guidance. Peloton said the increase was partially driven by nonrecurring benefits. Connected Fitness Products gross margin jumped to 33.4% from 6.9% a year earlier, with products gross profit of $49.6 million versus $10.5 million. Subscription gross margin was 71.3% and subscription contribution margin 73.8%.

The mix shifted further toward subscriptions. Connected Fitness Products revenue fell to $148.5 million from $152.4 million a year earlier, while Subscription revenue rose to $410.7 million from $398.4 million.

Ending Paid Connected Fitness Subscriptions were 2.475 million, down 9% year-over-year and at the top of the company’s guidance range, after 2.553 million in the fiscal fourth quarter and 2.662 million in the fiscal third quarter. Average net monthly paid Connected Fitness Subscription churn was 1.7%, down 40 basis points from 2.2% in the fiscal fourth quarter. Members numbered 5.3 million.

GAAP net cash provided by operating activities was $146 million, up 103% from $71.9 million a year earlier. Free cash flow was $143 million, up 113% from $67.4 million. Cash and cash equivalents were $1.342 billion at September 30.

Commercial Business Unit revenue once again grew double digits year-over-year in the quarter, after double-digit growth in fiscal 2026 and 14% growth in the fiscal third quarter. Peloton announced a new Tread lineup including Tread Flex, new Peloton IQ features for runners, walkers and hikers, and opened ten additional microstores since the start of the quarter, bringing the total number of stores to 19.

Gross principal debt outstanding was reduced by nearly $500 million, or 32%, in calendar year 2026 to $1.048 billion after a $280 million voluntary Term Loan paydown following the close of the quarter, down from $1.534 billion as of December 31, 2025.

For the second quarter of fiscal 2027, Peloton expects total revenue of $625 million to $650 million, a 3% year-over-year decrease at the midpoint, with total gross margin of approximately 50.0% and Adjusted EBITDA of $85 million to $100 million. Ending Paid Connected Fitness Subscriptions are expected at 2.425 million to 2.445 million.

Full-year fiscal 2027 outlook was unchanged from the prior quarter: total revenue of $2.30 billion to $2.40 billion, total gross margin of approximately 54.0%, Adjusted EBITDA of $475 million to $525 million, and free cash flow of at least $350 million.