Peloton Interactive ended fiscal 2026 with its first full year of GAAP profitability while reducing net debt by 80%, giving the company greater financial flexibility as it expands beyond connected cycling into a broader connected wellness platform.
Peloton’s net debt declined by $367 million year-over-year to $93 million. Total debt stood at approximately $1.3 billion at fiscal year-end.
The company generated $63 million of GAAP net income for fiscal 2026, marking the first full year of positive net income and operating income in Peloton’s history. Adjusted EBITDA increased 16% to $468 million.
Free cash flow increased 17% to $378 million from the prior year, while GAAP operating cash flow reached $388 million. Peloton also exceeded its plan to generate more than $100 million of run-rate cost savings by the end of fiscal 2026.
The improved financial foundation is supporting Peloton’s push into connected wellness beyond its traditional bike and treadmill products. The company completed the acquisition of Skōp, an early innovator in Connected Pilates, which Peloton plans to use to develop differentiated products and experiences in strength and Pilates.
Peloton also expanded its global digital reach through a strategic partnership with Spotify. And its Commercial Business Unit generated double-digit revenue growth during fiscal 2026.
The company is experimenting with a smaller physical retail format as well. Peloton said its microstores exceeded internal sales goals and plans to double its microstore fleet during fiscal 2027.
Engagement with newer fitness programming has also been significant. Peloton’s Pace Your Race Marathon Training Program and Live Spring Cross-Training Plan generated more than 850,000 completed workouts during Q4.
Despite the financial turnaround, subscriber levels continue to decline. Peloton ended Q4 with 2.553 million Paid Connected Fitness Subscriptions, down approximately 9% year-over-year, while Paid App Subscriptions declined 9% to 503,000. Subscription revenue nevertheless increased 7% to $436.6 million, and subscription gross margin expanded to 73.6%.
For fiscal 2027, Peloton expects $475 million to $525 million of Adjusted EBITDA and at least $350 million of free cash flow. Revenue is projected between $2.3 billion and $2.4 billion.
KEY QUOTES:
“Fiscal 2026 was a defining milestone as Peloton delivered its first full year of net profitability driven by our improved revenue trajectory and substantial improvements in our cost structure.”
“Our financial discipline has fundamentally reshaped our business and grants us greater flexibility to invest in our core strengths of premium hardware, intelligent software, and human connection.”
Peter Stern, CEO and President of Peloton
