Peloton Interactive reported a net loss of $38.8 million, or $0.09 per share, in its fiscal second quarter, a modest improvement from the $92 million loss a year earlier but wider than analyst forecasts of $0.06 per share. Revenue declined roughly 3% year-over-year to $656.5 million, falling short of the $674 million consensus. Connected-fitness subscriptions dropped to a four-year low, driving membership revenue down to $413 million versus expectations of $424 million. Hardware sales also underperformed, generating $244 million compared with the $253 million analysts anticipated.

During the crucial holiday period ended December 31, Peloton missed both Wall Street’s top- and bottom-line estimates, reflecting weak demand for its AI-enhanced bike and treadmill models. The company now forecasts first-quarter revenue between $605 million and $625 million, below the $638 million analysts projected. Management cited sluggish consumer response to higher hardware pricing and premium subscription tiers, signaling that the revamped product lineup has not yet spurred the expected acceleration in unit sales.

Despite top-line pressure, Peloton demonstrated progress on profitability, delivering $81 million in adjusted EBITDA for the holiday quarter, outpacing the $73 million consensus. The company’s operational discipline allowed it to reduce net debt by 52% year-over-year and achieve 39% growth in adjusted EBITDA. Peloton has raised its full-year adjusted EBITDA guidance to a range of $450 million to $500 million, up from $425 million to $475 million, and expects first-quarter adjusted EBITDA of $120 million to $135 million, above the $119 million analysts had forecast.

Chief Financial Officer Liz Coddington will depart Peloton in March to pursue an opportunity outside the industry. Coddington, who joined during Peloton’s turnaround, leaves after strengthening the balance sheet and instituting financial controls that underpinned the recent profitability gains. The company has launched a comprehensive search for her successor, with CEO Peter Stern praising Coddington’s role in positioning Peloton to expand beyond connected fitness into broader wellness offerings.