Peloton(US:PTON)2026-02-05 21:19Financial Performance - Total revenue for the three months ended December 31, 2025, was $656.5 million, a decrease of 2.0% compared to $673.9 million for the same period in 2024[19] - Connected Fitness Products revenue was $243.9 million, down 3.5% from $253.4 million year-over-year, while Subscription revenue decreased by 1.9% to $412.6 million from $420.6 million[19] - Gross profit for the six months ended December 31, 2025, was $615.1 million, slightly down from $622.1 million in the prior year, reflecting a gross margin of approximately 51.0%[19] - Net loss for the three months ended December 31, 2025, was $38.8 million, compared to a net loss of $92.0 million in the same quarter of 2024, indicating a significant improvement[19] - Total revenue for the three months ended December 31, 2025, was $656.5 million, a decrease from $673.9 million in the same period of 2024, representing a decline of approximately 3.5%[43] - The company reported a net loss of $38.8 million for the six months ended December 31, 2025, compared to a net loss of $92.0 million for the same period in 2024[43] - The company’s revenue for the six months ended December 31, 2025, was $1,207.3 million, down from $1,259.9 million in the same period of 2024, reflecting a decrease of approximately 4.2%[43] - Adjusted EBITDA for the quarter was $81.4 million, compared to $58.4 million in the prior year[153] - Adjusted EBITDA for the six months ended December 31, 2025, was $199.7 million, compared to $174.2 million for the same period in 2024, reflecting a year-over-year increase of 14.7%[216] Cash and Assets - Cash and cash equivalents increased to $1,179.6 million as of December 31, 2025, up from $1,039.5 million at the end of June 2025[18] - Total current assets rose to $1,556.2 million, an increase of 8.3% from $1,437.6 million in June 2025[18] - Total liabilities decreased to $2,491.3 million as of December 31, 2025, down from $2,539.1 million in June 2025[18] - The company’s stockholders' deficit improved to $(326.7) million as of December 31, 2025, compared to $(413.8) million in June 2025[18] - The balance of accumulated deficit as of December 31, 2025, was $(5,627.4) million, an increase from $(5,576.5) million as of December 31, 2024[24] - The company’s total stockholders' deficit as of December 31, 2025, was $(326.7) million, compared to $(497.2) million as of December 31, 2024[24] Revenue Segmentation - Revenue from North America for the three months ended December 31, 2025, was $591.7 million, accounting for 86% of total revenue, compared to $616.7 million and 88% in the same period of 2024[43] - The company’s revenue from international markets for the three months ended December 31, 2025, was $64.8 million, up from $57.3 million in the same period of 2024[43] - Revenue for the Connected Fitness Products segment was $243.9 million for the three months ended December 31, 2025, down from $253.4 million in the same period of 2024, reflecting a decrease of approximately 3.5%[131] - The Subscription segment generated revenue of $412.6 million for the three months ended December 31, 2025, compared to $420.6 million in the same period of 2024, representing a decline of about 1.9%[131] Expenses and Cost Management - Operating expenses for the three months ended December 31, 2025, totaled $345.6 million, a decrease from $364.3 million in the same period last year[19] - Total cost of revenue for the three months ended December 31, 2025, was $325.2 million, down 8.5% from $355.6 million in 2024[181] - Sales and marketing expenses decreased by $0.6 million (0.4%) for Q4 2025 compared to Q4 2024, and by $15.7 million (6.7%) for the first half of 2025 compared to the first half of 2024[191][192] - General and administrative expenses decreased by $28.4 million (21.6%) for Q4 2025 and by $47.1 million (18.8%) for the first half of 2025 compared to the same periods in 2024, primarily due to reduced personnel-related expenses[193][194] - Research and development expenses increased by $4.7 million (7.8%) for Q4 2025 and by $8.3 million (7.0%) for the first half of 2025 compared to the same periods in 2024, driven by higher personnel-related costs[195][196] - Impairment expenses rose by $6.2 million (37.3%) for Q4 2025 and by $9.7 million (44.8%) for the first half of 2025 compared to the same periods in 2024, mainly due to asset write-downs related to corporate office footprint adjustments[197][198] Debt and Financing - The Company issued $350.0 million of 5.50% Convertible Senior Notes due 2029, with net proceeds of approximately $342.3 million after discounts and commissions[67] - The effective interest rate upon issuance of the 2029 Notes was 5.97% as of December 31, 2025[77] - The Company repurchased $801.0 million of the 2026 Notes for $724.9 million in cash, recording a $69.8 million gain on early extinguishment of debt[87] - 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[90] - As of December 31, 2025, the Company had total outstanding borrowings of $985.0 million under the Third Amended and Restated Credit Agreement[98] - Future minimum payments for the Company's debt instruments total $1,534.0 million as of December 31, 2025, with $204.0 million due in the remaining fiscal year 2026[104] Restructuring and Operational Changes - The Company expects to incur additional cash restructuring charges of approximately $25.0 million related to the 2025 Restructuring Plan[55] - The 2025 Restructuring Plan is expected to incur additional cash restructuring charges of approximately $25.0 million and non-cash charges of about $5.0 million[141] - The company launched the Cross Training Series in October 2025, which includes new products such as the Cross Training Bike, Bike+, Tread, Tread+, and Row+[28] - Peloton announced a voluntary recall of approximately 833,000 units of the Original Series Bike+ in the U.S. and 44,800 units in Canada, with an accrued cost of $7.5 million for replacements[145][146] Membership and Subscriber Metrics - As of December 31, 2025, Peloton has approximately 5.8 million Members across multiple countries, including the U.S., U.K., Canada, Germany, Australia, and Austria[135] - Ending Paid Connected Fitness Subscriptions decreased to 2.661 million from 2.875 million year-over-year, with an Average Net Monthly Paid Connected Fitness Subscription Churn of 1.9%, up from 1.4%[153] - 99% of Connected Fitness Subscription and 76% of Paid App Subscription bases were paying on a month-to-month basis[159]