Peloton Raises Full-Year Outlook, Signaling Turnaround on Track

The company now expects fiscal-year 2026 revenue to total $2.42 billion to $2.44 billion, up from a previously forecast floor of $2.4 billion

(Bloomberg) — Peloton Interactive Inc. raised its guidance for the full year, suggesting that a turnaround fueled by new commercial offerings and upgraded equipment is on track.  

The company now expects fiscal-year 2026 revenue to total $2.42 billion to $2.44 billion, up from a previously forecast floor of $2.4 billion. The midpoint of the new range would represent a 2% decline from a year earlier. 

In the third quarter, sales climbed 1% to $631 million, the New York-based fitness technology company said, well above Wall Street’s estimates for $617 million. That marks the first time revenue has grown on an annual basis since the fiscal fourth quarter of 2024. 

“We’re making real progress on the strategy I’ve laid out,” Peter Stern, chief executive officer of Peloton, said in an interview. He added Peloton performed well in both consumer and commercial sales and that the company’s profitability metrics in the period were “nothing short of stellar.”

Peloton shares gained 3.1% in early trading to $5.36. They’ve fallen nearly 16% this year through Wednesday’s close.

The third quarter is typically strong for Peloton as it overlaps with the New Year’s resolution period, when consumers sometimes snap up exercise equipment and commit to working out. Last fall, the company debuted a slew of AI-powered treadmills, bikes and other new products, marking Peloton’s first significant hardware overhaul in years.

Adjusted earnings before interest, taxes, depreciation and amortization will be $470 million to $480 million for the full fiscal year, up 18% year-over-year, the company said Thursday. Adjusted Ebitda during the third quarter came in at $126.2 million, a 41% improvement from a year earlier. 

Peloton’s commercial business unit grew 14% ahead of the debut of new commercial-grade bikes and treadmills launching for gyms later this year. 

Last month, Peloton announced a content licensing partnership with Spotify Technology SA that will allow access to its workout classes to premium subscribers of the streaming service. Stern said he believes this will have lasting impact on the company’s user growth and “reduce the cost required to build our brand in markets where we don’t currently operate.”

Stern said the company also saw “important green shoots” in areas like Pilates, with almost 50% year-over-year growth in member engagement partly driven by new high-volume, low-intensity offerings.

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 larger priority.

“We’ve got a lot of work going on with R&D, both in existing modalities and new modalities,” Stern said. “The stuff will come in the existing modalities first. We feel great about not just our present, but also the future of the company.”