Peloton Interactive, Inc.

Q4 total revenue was $608 million, slightly positive year over year and above the high end of implied guidance by $6 million. Q4 gross profit was $344 million, up $16 million or 5% year over year, and gross margin was 56.7%, up 260 basis points year over year. Q4 adjusted EBITDA was $142 million, or $166 million excluding a $24 million legal contingency accrual, and Q4 free cash flow was $89 million, down $24 million or 21% year over year due mainly to working-capital timing. Full-year FY26 results included $63 million of positive net income, $161 million of operating income, $468 million of adjusted EBITDA, and $378 million of free cash flow; adjusted EBITDA rose $65 million or 16% and free cash flow rose $54 million or 17% year over year. For FY27, management guided revenue to $2.3 billion-$2.4 billion, gross margin to roughly 54% (about 140 basis points higher year over year), adjusted EBITDA to $475 million-$525 million, Q1 revenue to $545 million-$565 million, Q1 gross margin to roughly 57%, Q1 adjusted EBITDA to $135 million-$145 million, ending Connected Fitness subscriptions to 2.455 million-2.475 million in Q1, and minimum free cash flow of at least $350 million.

Peter Stern framed FY26 as a year of strategic transformation, highlighting progress from connected fitness toward a broader connected wellness ecosystem. He emphasized product innovation, including the Cross-Training Series, Peloton IQ, and the Scope acquisition, plus commercial expansion, micro stores, Spotify distribution, and wearables partnerships. His tone was optimistic and forward-looking, repeatedly stressing that Peloton is building a product pipeline that could expand total addressable market and support revenue acceleration in FY28 and beyond.

Sid Thacker focused on the financial strengthening of the business, emphasizing strong churn economics, high-margin recurring revenue, and free cash flow generation. He cited Q4 revenue of $608 million, gross margin of 56.7%, adjusted EBITDA of $142 million, SBC of $43 million, and cash of $1.21 billion, with net debt down to $93 million and leverage at 2.8x gross / 0.3x net. He also noted $3 million of tariff refunds received year to date, the $23.8 million legal contingency accrual tied to the NEC patent issue, and the start of a refinancing process aimed at lowering cost of capital and improving flexibility.

Analysts pressed on the size and timing of new product launches, whether revenue growth should become a more important metric, the involuntary churn spike, tariff refunds, capital allocation, and the legal verdict/licensing impact. Management said new consumer-category products will arrive in fall 2027 (FY28), with commercial products launching sooner, and that revenue should be front-loaded on equipment sales before subscriptions build over time. On churn, management said the Q4 increase was about half due to one-time payment reactivation issues and half due to the lingering price increase effect, and that involuntary churn has begun normalizing after reversing the algorithm change. On capital allocation, management said refinancing comes first, then decisions on buybacks, M&A, or other uses of excess cash based on long-term shareholder value.