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Peloton (PTON) Profit first quarter 2025

Platoon is back to generating free cash flow and moving within reach of profitability as the affiliated fitness company reins in costs and improves the unit economics behind its hardware, it said Thursday.

Despite the progress, Peloton expects to lose more members and sell fewer bikes and treadmills than Wall Street analysts expected during the all-important holiday quarter.

Still, the stock rose more than 25% in early trading on Thursday after the quarterly update and the announcement of a new CEO. Shares closed about 28% higher.

Here’s how Peloton did in its first fiscal quarter, compared to what Wall Street expected, based on a survey of analysts by LSEG:

  • Loss per share: zero cents versus 16 cents expected
  • Gain: $586 million versus $574.8 million expected

The company’s reported net loss for the three-month period ending September 30 was $900,000, or effectively breakeven per share, compared to a net loss of $159.3 million, or 44 cents per share, during the same period a year earlier .

Revenue fell to $586 million, down about 1.6% from $596 million a year earlier.

As Peloton prepares for its holiday quarter, which is typically the strongest in terms of hardware sales, the company expects revenue to come in between $640 million and $660 million, below Wall Street expectations of $671.4 million, according to StreetAccount .

It also expects to have fewer paid app subscribers than analysts forecast, due to the decision to shift marketing dollars toward product development and away from the low-priced app — a key focus of former CEO Barry McCarthy.

Peloton announced in May that McCarthy would step down after about two years in the top job. On Thursday, the company announced that Ford CEO Peter Stern would take over.

“He’s the guy who will come in and set the strategy that will get us back to growth,” interim co-CEO Karen Boone said during Peloton’s earnings call Thursday. “Under his leadership, our brand is well positioned to be a long-term player and the absolute leader in this category.”

The company expects to have between 560,000 and 580,000 paying app subscribers by the end of the current quarter, compared to expectations of 608,200, according to StreetAccount.

During Peloton’s first fiscal quarter, it reduced operating expenses by 30% compared to the prior year and posted adjusted EBITDA of nearly $116 million, along with nearly $11 million in free cash flow.

It expects adjusted EBITDA of between $20 million and $30 million for the current quarter, compared to StreetAccount EBITDA estimates of $13.9 million.

For fiscal 2025, Peloton has raised its full-year EBITDA guidance – a key metric investors look to to gauge the company’s future value. The company now expects to generate between $240 million and $290 million in adjusted EBITDA, compared to a previous range of $200 million to $250 million. According to LSEG, the company expects revenue between $2.4 billion and $2.5 billion, similar to analyst expectations of $2.46 billion.

The gains are the result of a previously announced cost-cutting plan and the company’s efforts to improve the unit economics of its hardware, which has long been a money-losing endeavor for the company.

As part of the plan, Peloton has reduced payroll and employee benefits, which the company estimates will result in approximately $100 million in annual savings, according to Chief Financial Officer Liz Coddington. The company also reduced total sales and marketing costs by $64 million, or 44% year over year, thanks to the lowest media spend since fiscal 2020.

“As we look ahead to the holiday season, we are already ramping up media spend to support demand generation ahead of this important time for hardware sales and subscriber additions,” interim co-CEO Chris Bruzzo said during Peloton’s earnings call Thursday.

All told, Coddington said the company is on track to save about $200 million by the end of fiscal year 2025.

During the first fiscal quarter, Peloton increased the recommended retail price for its Bike and Bike+ in its international markets and increased the price of its Row in North America, while also reducing discounts on its hardware portfolio.

These efforts, along with a better mix of revenue streams, boosted connected fitness margins to 9.2% in the most recent quarter – an increase of 6 percentage points compared to the same period a year ago.

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