Revenue Performance: Q1 2025 revenue was reported at $586 million, down 1.6% YoY and down 8.95% QoQ. A substantial share of revenue comes from the subscription model, which accounted for $426 million, marking a 3.0% YoY growth driven by content licensing. However, Connected Fitness product revenue fell by 12% YoY mostly due to declining hardware demand, constituting only $160 million of total revenue.
Profitability: Peloton achieved a gross profit of $303.8 million, translating to a gross margin of 51.8%. This marks an improvement from previous periods, facilitated by operational cost efficiencies and advancements in subscription model profitability. The EBITDA was reported at $60.2 million, with an adjusted EBITDA of $116 million, exceeding guidance by $56 million.
Operating Income and Costs: Notably, Peloton reported a GAAP operating income of $13 million for the first time in several quarters, driven largely by a 30% reduction in total operating expenses compared to the previous year. Management highlighted a rigorous cost restructuring strategy aimed at aligning operational costs with business size and capabilities.
Balance Sheet Health: With $772 million in cash and cash equivalents, Peloton holds a robust liquidity position, essential for driving strategic initiatives and navigating market conditions. However, the company’s total liabilities exceed total assets, reflecting long-term debt concerns that the new management will address.