Peloton (PTON) Q2 2025 earnings

Peloton told investors Thursday it still has a “steep hill to climb” to achieve profitable growth under its new CEO and won’t be ready to focus on boosting sales until it fixes its balance sheet.

The bike maker posted mixed fiscal second-quarter results, as it topped Wall Street’s sales estimates but lost more than expected as it continued its efforts to make its costly hardware business more profitable.

The company also cut costs in three key areas that it has faced criticism for spending too much on – marketing, administrative costs, and research and development – leading it to blow away analyst expectations for adjusted EBITDA. 

In his first earnings call as Peloton’s CEO, Peter Stern said that work is only going to grow.

“While we are working on our long-term growth strategy for fiscal 26 and beyond, our financial goals for fiscal 25 and continued discipline toward improving gross margins, reducing operating costs and deleveraging our balance sheets are and will remain top priorities for me,” said Stern.

Peloton shares closed more than 12% higher Thursday.

Here’s how Peloton performed in its fiscal 2025 second quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Loss per share: 24 cents vs. 18 cents expected
• Revenue: $674 million vs. $654 million expected

The company’s reported net loss for the three-month period that ended Dec. 31 was $92 million, or 24 cents per share, compared with $195 million, or 54 cents per share, a year earlier. 

Sales dropped to $674 million, down more than 9% from $744 million a year earlier.

Peloton issued mixed guidance that indicated sales growth is still a ways out, but may stabilize by the end of the year, as it lasers in on growing free cash flow and adjusted earnings. It’s projecting sales in the current quarter to be worse-than-expected at a range between $605 million and $625 million, compared to the $652 million analysts had expected, according to LSEG.

However, it anticipates adjusted EBITDA will be between $70 million and $85 million, far better than the $50.4 million Wall Street expected, according to StreetAccount.

Peloton anticipates fiscal 2025 revenue to be roughly in line with expectations. It’s forecasting sales to be between $2.43 billion and $2.48 billion, compared with estimates of $2.47 billion, according to LSEG. 

Peloton in recent years has tried to reclaim the supercharged growth that it saw during the pandemic, but now the company is moving away from that strategy in favor of profitability. Sales of its connected fitness products are still falling, and exercise buffs are back in the gym and no longer see as much use for at-home equipment.

However, it draws about $1.7 billion in recurring, high-margin subscription revenue and more than $1.1 billion in gross profit from that side of the business. If it can reduce costs, investors see potential in Peloton’s strategy.

In October, Peloton announced that Stern, a former Ford executive and co-founder of Apple…