Peloton(US:PTON)2025-11-06 22:11Revenue Performance - Total revenue for the three months ended September 30, 2025, was $550.8 million, a decrease of 6.5% compared to $586.0 million for the same period in 2024[18] - Connected Fitness Products revenue was $152.4 million, down from $159.6 million year-over-year, while Subscription revenue decreased from $426.3 million to $398.4 million[18] - Revenue from North America was $494.4 million, representing 89.7% of total revenue, while international revenue was $56.5 million, accounting for 10.3%[41] - The company recognized $75.6 million in revenue from deferred revenue during the three months ended September 30, 2025, compared to $80.6 million in 2024[44] - As of September 30, 2025, deferred revenue was $86.9 million, down from $91.7 million as of June 30, 2025[43] - For the three months ended September 30, 2025, total revenue was $550.8 million, a decrease of 6.0% from $586.0 million in the same period of 2024[119] Profitability - Gross profit for the quarter was $283.7 million, representing a gross margin of approximately 51.5%, compared to $303.8 million in the prior year[18] - Net income for the quarter was $13.9 million, compared to a net loss of $0.9 million in the prior year, marking a significant turnaround[18] - The company reported a basic earnings per share of $0.03 for the quarter, compared to a loss per share in the same period last year[18] - Adjusted gross profit for Connected Fitness Products was $283.7 million, down from $297.9 million year-over-year, reflecting a decrease of 4.5%[119] - Income before income taxes for the three months ended September 30, 2025, was $14.6 million, compared to a loss before income taxes in the same period of 2024[119] Expenses and Cost Management - Operating expenses totaled $242.4 million, a reduction of 16.7% from $291.2 million in the same quarter last year[18] - Total cash restructuring charges for the three months ended September 30, 2025, were $4.7 million, compared to $2.9 million for the same period in 2024, reflecting a 62.1% increase[53] - Non-cash restructuring charges amounted to $7.0 million for the three months ended September 30, 2025, up from $5.1 million in 2024, representing a 37.3% increase[53] - Sales and marketing expenses for the three months ended September 30, 2025, were $(66.8) million, compared to $(81.9) million in the same period of 2024[119] Cash and Liquidity - Cash and cash equivalents increased to $1,149.6 million as of September 30, 2025, up from $772.1 million a year earlier[20] - Cash and cash equivalents as of September 30, 2025, totaled $1,103.6 million, indicating strong liquidity[232] Assets and Liabilities - Total assets as of September 30, 2025, were $2,170.1 million, an increase from $2,125.3 million at the end of June 2025[17] - Total liabilities decreased slightly to $2,517.2 million from $2,539.1 million in the previous quarter[17] - The accumulated deficit as of September 30, 2025, was $(5,588.7) million, an improvement from $(5,602.6) million at the end of June 2025[17] Debt and Financing - The carrying amount of the 2029 Convertible Senior Notes was $343.9 million as of September 30, 2025, with an effective interest rate of 5.97%[71] - The Company issued $350.0 million of 5.50% Convertible Senior Notes due 2029 in May 2024, with net proceeds of approximately $342.3 million after discounts[61] - The Company entered into a Third Amended and Restated Credit Agreement providing for a $1.0 billion term loan facility due on May 30, 2029[84] - The Term Loan has an effective interest rate of 10.7% as of September 30, 2025, down from an initial rate of 12.4%[93] - Total interest expense related to the Term Loan for the three months ended September 30, 2025, was $26.6 million[95] - The Company has total outstanding borrowings of $987.5 million under the Third Amended and Restated Credit Agreement as of September 30, 2025[90] Tax and Regulatory Matters - The effective tax rate for the three months ended September 30, 2025, was 4.79%, compared to an effective tax rate of (2,576.65)% for the same period in 2024[110] - The Company maintains a valuation allowance on the majority of its deferred tax assets, indicating a likelihood that these assets will not be utilized[111] - The One Big Beautiful Bill Act, signed into law on July 4, 2025, made permanent the immediate expensing of domestic research and experimental expenditures for tax years beginning after December 31, 2024[112] Legal Matters - The Company is involved in multiple ongoing legal actions, including the 2023 Securities Litigation and various derivative actions against its officers and directors[106][107][109] - The court granted defendants' motion to dismiss the second amended complaint in the 2023 Securities Litigation with prejudice on September 30, 2024[108] Inventory Management - Total inventories, net as of September 30, 2025, were $237.7 million, an increase from $205.6 million as of June 30, 2025, indicating a 15.6% rise[58] - The Company recorded inventory reserves of $113.2 million as of September 30, 2025, primarily for excess accessories and apparel inventory[60]