Peloton (PTON) Stock Drops 9% After Missing Q2 Revenue and Earnings Estimates

TLDR

• Peloton reported a Q2 loss of 9 cents per share, worse than the expected 5-cent loss, though better than last year’s 24-cent loss
• Revenue dropped 3% year-over-year to $656.5 million, missing Wall Street’s $675.6 million estimate and the company’s own guidance by $8 million
• Paid subscribers fell 7% compared to the prior year, continuing a troubling trend of member losses
• The company lowered its full-year revenue guidance to $2.4-$2.44 billion from previous expectations of $2.48 billion
• PTON stock dropped 9.3% in premarket trading Thursday and is down 30% over the past year

Peloton stock took a hard fall Thursday morning after the fitness equipment maker delivered earnings results that fell short on multiple fronts. The stock dropped 9.3% in premarket trading.

The company posted a loss of 9 cents per share for its fiscal second quarter. That was worse than the 5-cent loss analysts had projected. Revenue came in at $656.5 million, missing the Street’s estimate of $675.6 million.

The revenue figure represented a 3% decline from the same period last year. It also missed Peloton’s own guidance by $8 million. The company blamed lower-than-expected product sales to existing members for the shortfall.

Peloton Interactive, Inc., PTON

But the bigger problem might be what’s happening with subscriptions. Paid subscribers dropped 7% compared to the prior year. That continues a pattern that’s been playing out for years now.

Peloton saw explosive growth during the pandemic when people snapped up exercise bikes and treadmills. Those days are long gone. Sales have declined every fiscal year since 2022.

The company is now on track for its third straight annual decline in subscribers.

Price Increase Backfires

Peloton noted that subscriber net additions dropped after it raised prices on its subscription service in October 2025. That’s a tough spot for any company – needing to increase prices but watching customers walk away when you do.

The company provided updated guidance that didn’t inspire much confidence either. For fiscal Q3 2026, Peloton expects revenue between $605 million and $625 million. Wall Street had been looking for $637.8 million.

Ending paid connected fitness subscriptions are projected to range from 2.65 million to 2.675 million. Total gross margin should hit roughly 54%. Adjusted EBITDA is expected between $120 million and $135 million.

For the full fiscal 2026, the outlook got a trim too. Total revenue is now expected between $2.4 billion and $2.44 billion. That’s down from analysts’ estimate of $2.48 billion.

One Bright Spot

The company does have one thing working in its favor. Peloton raised its adjusted EBITDA guidance for fiscal 2026 to $450 million to $500 million. That’s up from the previous forecast of $425 million to $475 million.

If achieved, that range would mark the highest adjusted EBITDA for Peloton since going public in 2019. The company also maintained its free cash flow target of at least $275 million.

Total gross margin for the full year is expected to be about 53%.

The stock has been under pressure for a while now. Shares fell 4.06% year-to-date before Thursday’s drop. Over the past 12 months, PTON is down 30%.

A product refresh last fall failed to generate much excitement among investors.

Despite the poor performance, Wall Street analysts maintain a Moderate Buy rating on the stock. That’s based on four Buy ratings and eight Hold ratings. The average price target sits at $9.28, which would represent a 57% upside from current levels.

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