Peloton on the Rebound: Q2 FY2025 Results Show Signs of Progress
Krissy Vann | Host, All Things Fitness and Wellness
Peloton has reported stronger-than-expected results for its second fiscal quarter of 2025, signaling progress toward financial stability and growth. The company delivered $673.9 million in total revenue, exceeding the high end of its guidance by $13.9 million. This included $253.4 million from Connected Fitness Products and $420.6 million from subscription services. Gross margin reached 47.2%, supported by higher-margin product sales and reduced costs.
Adjusted EBITDA came in at $58.4 million, a year-over-year improvement of $140.1 million, while free cash flow totaled $106.0 million for the quarter. The company also reduced total debt by $190.1 million, with net debt decreasing by 30% compared to the same period last year. Operating expenses declined 25% as part of ongoing cost optimization efforts.
Peloton also reported improvements in member engagement and satisfaction. Net Promoter Scores for core products such as the Bike and Tread surpassed 70. Member Support Satisfaction rose from 3.1 to 4.3 out of 5. Engagement in strength training increased, with over 2 million members completing strength workouts for a total of 735 million minutes. Men accounted for 42% of new connected fitness subscriptions, a rise of 280 basis points from the previous quarter and 240 basis points year-over-year.
Product innovation played a role in this performance. Strength+, an app designed for gym-based workouts, reached over 220,000 monthly active users. Pace Targets, a personalized running feature, is now used by nearly 60% of Tread members. A seasonal partnership with Costco led to strong Bike+ sales, making it the quarter's best-performing third-party retail channel.
In a recent LinkedIn post, Peloton’s CEO Peter Stern said, "Peloton Interactive released its Q2 FY25 financial results. I’m so proud of Team Peloton for the progress they’ve made the last few quarters, outperforming on our key metrics and putting us on sound financial footing. After one month of official duties at Peloton, I’ve had the opportunity to reflect on the power of Peloton, how we show up for our Members, and what it will take to propel the brand forward. Everything we now do is rooted in our new purpose: empowering people to live fit, strong, long, and happy."
Community-focused initiatives have also driven engagement. The Teams feature, launched last fall, has resulted in 70,000 teams being created. Members who join these teams demonstrate greater workout consistency. Over 50,000 members participated live in the Thanksgiving Day Turkey Burn, which featured Peloton’s largest-ever live strength class.
Peloton has raised its fiscal 2025 guidance based on this performance. Adjusted EBITDA is now projected at $300 to $350 million, up from a prior range of $240 to $290 million. The company also increased its free cash flow target to at least $200 million.
While challenges remain, including maintaining hardware sales momentum, Peloton continues to focus on expanding its product offerings, improving member engagement, and enhancing operational efficiency to support sustainable growth.
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