Peloton Beats Revenue Estimates on Subscription Price Hike

Peloton topped Wall Street revenue expectations in its fiscal third quarter, CNBC reported Thursday, with the connected fitness company crediting stronger equipment sales and a recent Peloton subscription price increase for the outperformance.

Q3 Numbers Show a Narrow But Meaningful Beat

Revenue for the quarter ending March 31 came in at $630.9 million, clearing analyst forecasts of $617.6 million. Net income reached $26.4 million, or 6 cents per share. That compared with a loss of $47.7 million a year earlier. Earnings per share fell one cent short of the 7 cents analysts had projected. Free cash flow surged nearly 60% from the prior year. CEO Peter Stern told CNBC the quarter reflected solid strategic progress. “The first order of business in earnings is reporting how you did financially, and we feel like that was a pretty good quarter,” Stern said.

Subscription Revenue Climbs Despite Shrinking Subscriber Base

Subscription revenue grew 2% year over year to $428 million, beating estimates. Revenue from connected fitness subscriptions came in at $202.9 million, also ahead of forecasts, though slightly below the year-ago figure. The paid connected fitness subscriber count fell to 2.66 million from the prior year. Stern defended the pricing decision, noting Peloton had not adjusted subscription costs in three to four years despite significantly expanding its content library. He acknowledged consumer financial stress but argued the price move was overdue and value-justified.

A Turnaround Years in the Making

Peloton’s recent quarters have been marked by sluggish hardware sales and shrinking membership. The company had previously flagged that weak trends would extend into this period. Management responded with a product refresh, new pricing across both equipment and subscriptions, and a push into commercial gym settings. In March, Peloton launched its first bike and treadmill units designed for high-traffic gym floors, opening an entirely new distribution channel.

Partnerships and Full-Year Guidance Raised

A content partnership with Spotify announced last month makes more than 1,400 Peloton classes available to Spotify Premium subscribers globally. Stern described it as a high-margin revenue stream already baked into guidance. Peloton does not count Spotify users as subscribers. For the full fiscal year, the company lifted the lower end of its revenue guidance range, now projecting between $2.42 billion and $2.44 billion.

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