Belton Delivered A Cleaner, More Resilient Quarter, Underscored by Positive Eps, Stronger Unit Economics, and Disciplined Cost Control, Even As Management Flagged to Softer Near -Term Revenue Outlook and Seasonal Cash Headwinds.
The Company posted Q4 Revenue of $ 607 Million, Split Between $ 199 Million in Connected Fitness Products and $ 408 Million in Subscripts, While Total Gross Profit Rose To $ 328 Million With Gross Margin Expanding 560bps Year Over Year to 54.1%—a key marker of opening of Operating Leverage Leverage and Lower Cost-to-Serve.
Adjusted ebitda rear $ 140 million in Q4, UP 99% Year Year, reflecting Broad-Based Expense Redense and Improved Mix.
Across Fiscal 2025, Peloton Generated $ 324 Million of Free Cash Flow – Well Ahead of Internal Targets – And Reduced Net Debt by $ 343 million, or 43% Year Over Year, Materially De -Risking The Balance Sheet; Quarter-End Cash and Equivals Stood at Roughly $ 1.0– $ 1.4 Billion, UP $ 125 Million Sequentially.
The Company Also Continued To Streamline Operations, Shrinking its Retail Footprint To 13 Showrooms and Announuncing a New Restructuring Targeting An Additional $ 100 Million in Run-Rate Savings by The End of Fy26 Through Indirect Spend Optimization and A Smaller Workforce.
Engagement and retention remample stable relative to seasonal norms: average net monthly connected fitness churn was 1.8% in Q4, 10bps Better Year Over Year, Though Paid Connected Fitness Subscripts Fell By A Net 80,000 Sequentially Amid Lower Lower Hardware Sales and Typical Summer Patterns.
Management guide q1 fy26 Free cash flow to be slightly negative due to inventory build and restructuring costs, and indicated fy26 revenue of $ 2.4– $ 2.5 billion with a return to growth after q1 as new production and brib. Sleep, Nutrition) Scale.
RISKS REMAIN, INCUSTUDING AN estimated ~ $ 65 MILLION TARIFF EXPOSURE IN FY26 AND A FORASED 2% REVENUE DECINE AT THE MIDPOINT FOR THE YEAR, BUT BUTTON’S MARGIN GAINS, CASH Generation, and DEBT Reduction Improction Flexibility to Execute on Product Expansion and Cost Discipline.
Investors Will Will for Sustaned Subscription Stability, Hardware Sell-Through, and Delivery on The $ 100 Million Cost-Saving Plan to Validate Durability of the Turnound Trajectory.
