Peloton Interactive, Inc. announced its fiscal first quarter 2025 financial results, reporting a net loss of $900,000, effectively breakeven on a per-share basis, a significant improvement from a $159.3 million loss in the prior year. Total sales for the quarter were $586 million, a 1.6% decrease year-over-year. The company achieved $116 million in adjusted EBITDA and generated $11 million in free cash flow.
The company's cost-cutting initiatives were evident, with operating expenses reduced by 30% compared to the previous year. Sales and marketing expenses saw a 44% reduction, contributing to approximately $100 million in annual savings from payroll and staff-based compensation. Peloton is on track to achieve around $200 million in total cost savings by the end of fiscal year 2025.
Peloton also announced the appointment of Peter Stern as its new CEO and President, effective January 1, 2025. Stern, formerly President of Ford Integrated Services and co-founder of Apple Fitness+, brings expertise in scaling technology-oriented platforms and subscription services. Interim co-CEO Karen Boone will serve as sole Interim CEO until year-end, while Chris Bruzzo will step down from the co-CEO role on November 1, 2024.
The company raised its full-year fiscal 2025 adjusted EBITDA guidance to a range of $240 million to $290 million, up from a previous range of $200 million to $250 million. Fiscal 2025 revenue guidance remains between $2.4 billion and $2.5 billion. Connected Fitness gross margin improved to 9.2% in the quarter, an increase of 6 percentage points year-over-year, driven by price adjustments in international markets for Bike and Bike+ and in North America for Row.
For the upcoming holiday quarter (Q2 FY25), Peloton expects revenue between $640 million and $660 million. Adjusted EBITDA for Q2 is projected to be between $20 million and $30 million. The company anticipates having between 560,000 and 580,000 paid app subscribers by the end of the current quarter.
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