Peloton reported its second profitable quarter in a row, driven by strong guidance for the upcoming holiday season and a recently relaunched product lineup.
The connected fitness company posted net income of $13.9 million for the three months ended September 30, reversing a loss of $900,000 a year earlier.
For the current quarter, Peloton expects revenue between $665 million and $685 million, slightly above last year and surpassing Wall Street’s expectation of $665 million.
The company also raised its full-year adjusted EBITDA outlookto $425 million–$475 million, up $25 million on both ends of its prior guidance, ahead of analysts’ forecasts of $400–$450 million. Shares jumped roughly 11% in after-hours trading.
Despite the positive results, Peloton continues to address recall issues from its early product lineup. The company announced a voluntary recall of 833,000 original Bike+ devices after reports that seat posts could break during use.
CEO Peter Stern noted three incidents had been reported, with the recall costing $13.5 million and contributing to a 0.3 percentage point decline in gross margin.
During its first fiscal 2026 quarter, Peloton beat analyst expectations, reporting earnings per share of 3 cents (versus 0 expected) and revenue of $551 million (versus $540 million expected), although revenue declined about 6% from $586 million a year earlier.
Under Stern, who became CEO in January, Peloton has focused on cost reductions, profitable growth, and expanding its offerings beyond cardio fitness into strength, mental wellbeing, nutrition, hydration, sleep, and recovery.
Ahead of the holidays, Peloton relaunched its product lineup, including bikes, rowing machines, and treadmillsfeaturing AI-powered tracking cameras, speakers, 360-degree swivel screens, and hands-free controls.
A commercial equipment line was also introduced, alongside higher subscription and hardware prices. Stern expressed confidence that consumers would invest in the upgraded products as premium gifts, though their market performance remains to be seen, as the fiscal quarter ended just before the new product launch.
Peloton faces a challenging environment for personal electronics, with shoppers becoming more cautious amid economic uncertainty.
The company had previously seen membership churn and costs rise following past recalls, highlighting the ongoing balance between growth and product reliability.
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