Peloton Beats Q1 Revenue Estimates but Subscriber Declines Continue

Peloton $PTON reported fiscal first-quarter 2027 revenue of $559 million, slightly above the $554 million consensus estimate and up 2% year over year. Earnings reached $0.19 per share, missing expectations of $0.21.
Profitability improved despite continued pressure on the customer base. Gross margin rose 975 basis points to 61.3%, adjusted EBITDA increased 42% to $167.8 million, and free cash flow more than doubled to $143 million. However, paid connected fitness subscriptions fell 9% to 2.475 million, while total membership declined 11% to 5.3 million.
Peloton reaffirmed its full-year revenue guidance of $2.30 billion to $2.40 billion, alongside adjusted EBITDA of $475 million to $525 million and free cash flow of at least $350 million. The company also repaid $280 million of term debt, leaving approximately $1 billion in gross debt.
New initiatives include the foldable Tread Flex treadmill, additional Peloton IQ features and an expanded commercial equipment lineup. The results highlight stronger margins and cash generation, although stabilizing subscriptions remains a key challenge.