Peloton Gives Disappointing Outlook in Blow to Comeback Bid

Peloton CEO Peter Stern said that the expected revenue decline is due to churn created by subscription price hikes implemented last year

(Bloomberg) — Peloton Interactive Inc. gave a revenue forecast for the fiscal 2027 year that disappointed investors, marking the latest setback for the fitness technology company.

The company said Thursday that revenue in the new fiscal year will be in the range of $2.3 billion to $2.4 billion, representing a decline of 3.9% at the midpoint. Analysts, on average, were projecting $2.44 billion for the year, according to Bloomberg-compiled estimates, In the current quarter, revenue will be $545 million to $565 million, trailing estimates. 

In an interview, Chief Executive Officer Peter Stern said that the expected revenue decline is due to churn created by subscription price hikes implemented last year. Shares of New York-based Peloton tumbled as much as 15% to $5.56 in New York, their biggest intraday decline since Feb. 5.

Peloton has been promising a comeback for years since the pandemic ended, when more people ditched their in-home workout equipment to exercise outdoors and in groups. Under Stern, who took the reins in 2025, the company has bet on artificial intelligence-powered software and redesigned hardware to drum up demand. It is also striking new partnerships with gyms and earlier this year it announced an integration with Spotify meant to reach new users. But sales of the new equipment got off to a slow start, and some customers have been put off by the price increases.

Read More: Peloton’s New Comeback Bid Counts on GLP-1 Users, More Treadmills

Peloton also said that it expects hardware subscriptions to fall 10% this quarter on an annual basis, while subscriptions fell 9% year-over-year in the prior period. App subscriptions also fell 9% in the fiscal fourth quarter, which ended June 30. Overall Peloton memberships fell 8% in the period to 5.5 million users, down from 6 million members a year earlier.

The company declined in several other key areas in the fourth quarter. That includes the overall number of members falling 8%, hardware revenue dropping 14%, and hardware profit down 33%.

Still, some financials are improving. Fourth-quarter revenue totaled $607.7 million, ahead of the average analyst estimate of $596 million. Net income in the period rose 185% to $61.6 million. Gross profit grew 5% to $344 million. 

Peloton also reported its first full year of net profit. Net cash flow for the year grew 17% in fiscal 2026 to $378 million. Adjusted earnings before interest, taxes, depreciation, and amortization jumped 16% to $468 million over the same period.

Read More: Peloton Debuts a Commercial Bike and Treadmill Designed for Gyms

“This was a landmark year for us and our financial performance,” Stern said in an interview. “We’ve built this really solid foundation for investment in our future. We’re in our strongest position to date as a result.” 

For fiscal year 2027, Peloton sees adjusted Ebitda of $475 million to $525 million. Free cash flow will be at least $350 million. 

Stern expects that the churn rate will be relatively flat throughout 2027 compared with fiscal year 2026. “All of this basically adds up to enabling us to drive our future road map that will help transform us from a connected fitness company to a connected wellness ecosystem,” he said.

Stern added the company will roll out new hardware from its Precor commercial business and new consumer offerings this calendar year. 

Peloton said other expansion plans include doubling its retail fleet inside of malls and continuing to strike new partnerships. Stern also said the company would continue work on improving the underlying business.

Peloton is exploring new product categories, including a deeper push into strength training, and aims to target GLP-1 users and enhance its AI platform through personalized plans based on data from wearables, Bloomberg News has reported. It is also planning to make treadmills a greater priority.

(Updates with additional context in the fourth paragraph.)