Peloton Interactive, Inc. (NASDAQ: PTON) delivered better-than-expected fiscal Q2 2025 results, sending its stock soaring in pre-market trading. Despite a 9% year-over-year revenue decline, the company outperformed Wall Street estimates, reporting $673.9 million in revenue compared to the expected $652.7 million.
Peloton’s positive outlook was further boosted by an expanded partnership with Costco, which contributed to record-breaking sales of its Bike+ through third-party retail channels.
Key Takeaways from Peloton’s Q2 Earnings Report:
✔ Profitability on the Rise: Gross margins hit 12.9%, marking the first time in three years they’ve reached double digits.
✔ Upgraded Guidance: The company raised its full-year adjusted EBITDA forecast to $300-$350 million, up from the previous $240-$290 million projection.
✔ Stronger Cash Flow: Peloton now expects at least $200 million in free cash flow, significantly higher than its previous target of $125 million.
Challenges Still Exist
While Peloton made financial strides, membership declined by 4% to 6.2 million over the past year, and paid app subscriptions dropped by 19%. These figures indicate the company still faces hurdles in maintaining long-term engagement.
Stock Market Reaction: PTON Soars Over 15%
Following the earnings announcement, Peloton’s stock (NASDAQ: PTON) price surged 15.1% to $8.73. The stock opened at $8.90, up from its previous close of $7.58, with trading fluctuations between $8.44 and $9.75.
This sharp rise reflects growing investor confidence in Peloton’s improving profitability, strategic partnerships, and long-term growth potential under new CEO Peter Stern. With a stronger financial position and a renewed retail strategy, Peloton appears to be gaining momentum on its path to sustainable success.
