The connected fitness company returned to profitability in its fiscal third quarter, even as its paying subscriber base contracted for the seventh consecutive quarter.
Peloton Interactive reported net income of $26 million for the quarter ended March 31, 2026, its first positive GAAP result in years, as lower costs and stronger earnings offset a continued drop in subscribers.
Revenue rose 1% year over year to $631 million, edging past the company’s guidance range. The increase was driven by equipment sales across the Peloton and Precor brands. Paid connected fitness subscriptions fell to 2.662 million, down 218,000, or 7.6%, from a year earlier. Paid app subscriptions also declined, to 522,000. Adjusted EBITDA climbed 41% to $126 million, in line with guidance. Gross margin improved to 51.9%, up 90 basis points year over year, but came in 210 basis points below guidance, which the company attributed to opportunistic promotions.
| Peloton Interactive — Q3 FY2026 Financial Summary | |||
| Quarter ended March 31 (€ millions)* | |||
| Q3 FY26 | Q3 FY25 | YoY | |
| REVENUE | |||
| Subscription Revenue | 393 | 384 | +2.3% |
| Connected Fitness Products Revenue | 186 | 189 | -1.3% |
| Total Revenue | 579 | 572 | +1.1% |
| PROFITABILITY | |||
| Gross Profit | 300 | 292 | +2.9% |
| Gross Margin | 51.9% | 51.0% | +90 bps |
| Adjusted EBITDA | 116 | 82 | +41.2% |
| Net Income / (Loss)² | 24 | (44) | – |
| CASH & DEBT | |||
| Free Cash Flow | 138 | 87 | +58.9% |
| Net Debt | 159 | 537 | -70.4% |
| USER METRICS (millions) | |||
| Paid Connected Fitness Subscriptions | 2.662 | 2.880 | -7.6% |
| Paid App Subscriptions | 0.522 | 0.573 | -8.9% |
Source: Peloton Interactive Q3 FY2026 earnings release, May 7, 2026. All financial figures in € millions unless stated.
* Converted from USD at €1 = $1.09. Verify rate at publication date.
² Net Income / (Loss) change shown as – (not meaningful): result swung from a net loss of €44m in Q3 FY25 to net income of €24m in Q3 FY26.
The company also highlighted growth in its commercial push, including the launch of Commercial Series versions of its Tread and Bike for hotels, corporate wellness facilities and fitness clubs. Commercial Business Unit revenue rose 14% in the quarter.
In April, Peloton said it struck a content licensing partnership with Spotify to distribute Peloton workout content to Spotify Premium members in most markets. It also introduced AI-dubbed fitness programs in German and Spanish.
For the fiscal year ending June 30, 2026, Peloton raised its revenue outlook to $2.42–2.44 billion, implying a 2% decline at the midpoint. It forecast adjusted EBITDA of $470–480 million, up 18% at the midpoint.
