• Loading stock data...
Tuesday, July 15, 2025

Peloton Earnings Beat Expectations As It Still Loses Subscribers

  • Peloton reported it has 6.2 million members, a 3% drop from the previous quarter.
  • The company has been in cost-cutting mode for several quarters.
Peloton Bike
Credit: Peloton

Peloton has been on a cost-cutting mission and it looks to be working—sort of. 

The connected fitness company reported revenue for fiscal first-quarter 2025 of $586 million Thursday, lower than the previous quarter ($643.6 million) and the year-ago period ($595.5 million). Still, revenue came in slightly ahead of consensus estimates of $573 million.

But the company, which sells stationary bikes and treadmills with subscriptions to classes, said its operating expenses this quarter decreased $126 million or 30% year over year, and it reached $11 million of free cash flow. Margins were more impressive, with gross margin rising to 51.8%, which beat the consensus estimate “entirely driven by better hardware margins than expected,” Bernstein analysts noted.

Peloton also announced it hired Peter Stern, former Ford executive and cofounder of Apple Fitness+, to be its next CEO, effective Jan. 1, 2025. The company said Stern, who is the son of a fitness instructor, has “grown over a dozen different subscription businesses,” including Apple iCloud and Ford’s hands-free highway-driving technology.

“We had a strong Q1 FY25 and performed above our guidance on all of our key metrics,” the company said in a statement. “We are focused on optimizing costs across our business and it shows in our [profit and loss] and cash flow.” Peloton (PTON) shares were up nearly 20% in premarket trading Thursday.

Membership churn is still a challenge. It reported it has more than 6.2 million members—a 3% drop from the previous quarter and the year-ago period. Average monthly paid-app subscription churn was at 7% for Q1, a lower churn rate than Q4 2024.

“Growth remains elusive with the subscriber base continuing to shrink,” Bernstein analyst Aneesha Sherman wrote in a note following the earnings release. Peloton said it expects to continue to lose paid-app subscribers, lowering its outlook for the fiscal second quarter down by 20,000 subscribers.

The company pointed to its efforts to expand its third-party retail channels ahead of the holiday season, including selling $2,000 bikes at Costco. (The bikes typically cost around $2,500.)

In its fiscal Q4 earnings reported in August, Peloton managed a slight sales increase (0.2%) for the first time in nine quarters as it slashed its overall losses. CEO Barry McCarthy resigned in May, and the company laid off 15% of staff as part of a broader cost-cutting effort amid a period of rising costs and waning demand. 

Peloton saw a big boost in sales and subscribers during the 2020 pandemic as home-bound consumers bought its bikes, while gyms and fitness studios shut down along with the broader economy. The convenience and quality of the fitness platform kept demand high. But subscription numbers plunged in 2023 as consumers pulled back and a bike recall dented demand.

Despite its recent challenges, some on Wall Street are optimistic about Peloton’s future success.

A recent note by Morgan Stanley expressed optimism about Peloton’s outlook, noting improved sentiment around the brand—“the highest we have seen since early 2022”—as the company implemented cost-cutting measures “with clear upside to subscriber and revenue guidance.”

Linkedin
Whatsapp
Copy Link
Link Copied
Link Copied

What to Read

Joy Taylor

Joy Taylor Out As FS1 Armageddon Ends Three Shows

All three shows were struggling to attract audiences.
Phillies

Replacements Have MLB at Whopping 80 All-Stars

Players have criticized the replacement process as a popularity contest. 
NBC Sports
exclusive

NBC Hiring Ex-Hawks Exec Grant Liffmann As NBA Front Office Insider

Liffmann spent the last three years with Atlanta after covering the Warriors.

Featured Today

May 31, 2025; Philadelphia, PA, USA; Sydney McLaughin-Levrone (USA) reacts before the women's 100m hurdles during the Grand Slam Track Philadelphia at Franklin Field
exclusive

Track’s New Money Is Running Into Old Problems

The sport’s big-money era has hit some speed bumps in 2025.
Bobbleheads are seen at Vintage Indy Sports, Tuesday, April 29, 2025 in Speedway. The local sports memorabilia store opened recently.
July 12, 2025

Baseball’s Bobbleheads Are the Center of the Collectibles Universe

Baseball’s most important keepsake drives long lines—and big business.
Rimouski, QC - JUNE 1: Final Game of the 2025 Memorial Cup between the Medicine Hats Tigers and the London Knights on June 1, 2025, at the Colisée Financière Sun Life in Rimouski, Qc.
July 11, 2025

CHL Is Facing a ‘Pandora’s Box’ of Questions Amid NCAA Talent Departure

As players defect to college, the Canadian Hockey League won’t cede ground.
Jun 28, 2025; Arlington, Texas, USA; Seattle Mariners catcher Cal Raleigh (29) bats during the game between the Texas Rangers and the Seattle Mariners at Globe Life Field.
July 9, 2025

The Torpedo Bat Business Is Still Going Strong: ‘Here to Stay’

Demand for the oddly shaped bats has stayed strong across the sport.
Sponsored

Win. Advance. Repeat: The Professional Fighters League’s Rise to Prominence 

As of 2025, PFL has introduced a World Tournament format, where every fighter must battle through a high-stakes bracket to reach a championship.
Sponsored

How On Location is Redefining the Olympic Winter Games Hospitality Experience

As the Olympic Winter Games Milano Cortina 2026 approaches, On Location—the Official Hospitality Provider—is redefining luxury hospitality.
The 2018 Ragin' Crossfit Games are held at Blackham Coliseum in Lafayette.
March 14, 2025

CrossFit for Sale After Years of Drama and Attrition

The intense fitness workout got popular in the early 2000s.
Sponsored

Game On: Portfolio Players Stories, Brought to You by E*TRADE from Morgan Stanley

Dealmaker Jeffrey Kaplan maps the evolution of sports as an asset class
Sponsored

How On Location is Redefining the Olympic Winter Games Hospitality Experience

As the Olympic Winter Games Milano Cortina 2026 approaches, On Location—the Official Hospitality Provider—is redefining luxury hospitality.
Sponsored

The Surprising Ingredient That Can Improve Your VO2 Max

In the high-stakes world of sports, VO2 max—or maximum oxygen consumption—has emerged as a critical marker of endurance and performance.
September 4, 2024

Under Armour Sells MapMyFitness Back to Founders 11 Years Later

The founders sold the tracking app to the apparel giant in 2013.
A view of a Nike retail store in New York City.
August 15, 2024

Nike Shares Surge As Bill Ackman Invests, Igniting Turnaround Hopes

The billionaire hedge-fund executive holds significant influence in the market.