For the first time in two and a half years, Peloton Interactive Inc.’s quarterly sales went up, and the stock of the connected exercise company was going through the roof on Thursday.
The company made $644 million in the fiscal fourth quarter, which was up 0.2% from the same time last year and more than the $628 million that the FactSet average predicted. Peloton PTON 35.12% said that this was the first time since the second quarter of fiscal 2022 that it had made more money.
But Peloton thinks that quarterly sales could drop again this quarter, as the company expects to make between $560 million and $580 million. That is compared to $596 million in sales during the same time last year. Analysts thought it would be worth $598 million.
Also, Peloton expects a drop in sales for the whole year. It now expects to make $2.4 billion to $2.5 billion, which is less than the $2.7 billion it made in fiscal 2024.
The company said it’s making progress on its profit goals. It had $70 million in adjusted earnings before interest, taxes, depreciation, and amortization, up from $35 million in losses in the same period last year. The corrected Ebitda that analysts were looking for was $53 million.
Peloton had a net loss of $30.5 million, or 8 cents per share. This is down from a loss of $241.8 million, or 68 cents per share, in the same time last year. Analysts thought the company would lose 17 cents per share.
At noon on Thursday, Peloton stock was up 28.3%, and it was on track to have its biggest single-day percentage gain ever.
The company wrote in a letter to shareholders, “Our improvement in profitability shows that we are still focused on making sure that our costs are in line with the size of our business.”
There was $26 million in free cash flow for the company. A year ago, there was negative free cash flow of $74 million. In the letter to shareholders, the company said, “We expect to have sustainable positive free cash flow, so we are looking into how to best use the extra cash on our balance sheet as part of an overall capital allocation strategy.”
As Peloton’s Bike+ rental business picked up speed, it said that the secondary market has led to “a steady stream of paid connected fitness subscriber additions.” The company’s main goal is still to grow its Tread business and get more people to sign up for its connected exercise service.
