Shares of Peloton Interactive (PTON 25.72%) plunged on Thursday after the exercise bike and treadmill maker's quarterly results fell short of investors' expectations.
By the close of trading, Peloton's stock price was down more than 25%.
Image source: Peloton Interactive.
Sluggish sales
Peloton's revenue fell by $17 million to $657 million in its fiscal 2026 second quarter, which ended on Dec. 31. That was $8 million below management's forecast.
Membership price increases contributed to a 7% year-over-year decline in Peloton's paid connected fitness subscriptions to 2.66 million. Sales of the company's new artificial intelligence (AI)-powered -- yet also more expensive -- equipment failed to offset these revenue declines.
NASDAQ: PTON
Key Data Points
Peloton has been relying on price hikes and cost cuts to boost profitability. The company reportedly laid off 11% of its workforce in late January, according to Bloomberg.
Peloton's expense-reduction initiatives helped its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improve to $81 million, up from $58 million in the year-ago period.
Still, Peloton produced a net loss of $39 million, or $0.09 per share, based on generally accepted accounting principles (GAAP). Wall Street had expected a loss of just $0.06 per share.
A lackluster forecast
For its fiscal third quarter, Peloton expects its paid connected fitness subscriptions to decline by roughly 8% year-over-year to between 2.650 million to 2.675 million.
Management also guided for revenue to decrease by about 1% to $605 million to $625 million. That was below Wall Street's estimates of $638 million.
