Peloton Interactive (PTON  ) reported its quarterly results on Thursday. The company reported earnings per share of five cents in the fiscal fourth quarter of 2025, beating the analyst consensus estimate of six cents loss.

Quarterly sales of the fitness-equipment maker reached $606.90 million (down 6% year-over-year), beating the Street view of $580.24 million.

Connected Fitness Products Revenue decreased d $13.5 million, or 6% Y/Y, driven by lower sales and deliveries, partially offset by a mix shift toward higher-priced products. The company reported quarterly Ending Paid Connected Fitness Subscriptions of $2.80 million, down by 6% Y/Y.

Subscription Revenue decreased $23.2 million, or 5% Y/Y driven by lower Paid Connected Fitness Subscriptions and lower Paid App Subscriptions, partly offset by Used Equipment Activation Fee Revenue.

Total Gross Profit was $328.1 million in the quarter, an increase of 5% Y/Y. Total Gross Margin was 54.1%, an increase of 560 bps Y/Y. Connected Fitness Products gross margin rose 900 bps to 17.3% due to prior-year inventory writedowns, a shift to higher-margin products, and lower service, warehousing and transportation costs. Subscription gross margin expanded 370 bps to 71.9% as music royalties, personnel costs, and depreciation and amortization declined.

Adjusted EBITDA was $140 million in the quarter, which was a $69.7 million improvement Y/Y.

The firm ended the quarter with $1.04 billion in unrestricted cash and equivalents. Net debt reduced $343 million or 43% Y/Y.

Outlook: Peloton Interactive expects fiscal 2026 revenue of $2.4 billion-$2.5 billion versus analyst consensus estimate of $2.460 billion.

Peloton Interactive expects first-quarter revenue of $525 million-$545 million versus $561.09 million analyst consensus estimate. It expects a quarterly Ending Paid Connected Fitness Subscriptions guidance of 2.72 million-2.73 million.

Peloton aims to generate at least $200 million in free cash flow in fiscal 2026 by cutting costs and improving monetization. The company expects $100 million in run-rate cost savings from its new restructuring plan, despite headwinds from tariff exposure, reduced net working capital benefits, and one-time restructuring charges. Improved gross margin and lower operating expenses are expected to help offset these pressures.

Peloton Interactive stock plunged 19% year-to-date as it missed at least two EPS estimates out of the last four quarters.

PTON Price Action: Peloton Interactive shares are trading lower by 0.40% to $7.04 at publication on Thursday.