Peloton Interactive Inc. reported its fiscal second quarter earnings for 2025, surpassing revenue expectations with $673.9 million against an estimated $651.77 million. However, the company's earnings per share of -$0.24 fell short of the anticipated -$0.20. Despite a year-over-year revenue decline of 6.2%, Peloton raised its full-year adjusted EBITDA guidance to a range of $300 million to $350 million, up from the previous $240 million to $290 million. The company also increased its free cash flow target for the fiscal year to at least $200 million, from $125 million previously. For the third quarter, Peloton forecasts revenue between $605 million and $625 million, which is below the analyst consensus of $652.5 million. The company's full-year revenue guidance of $2.43 billion to $2.48 billion aligns with the analyst estimate of $2.47 billion. Peloton's efforts to cut costs have led to a 25% reduction in operating expenses year-over-year, and the company generated over $100 million in both GAAP net cash from operating activities and non-GAAP free cash flow. The company's balance sheet showed improvement with total debt decreasing by $190.1 million and net debt dropping by $281.4 million, or 30%, compared to the same period last year. Peloton's stock surged 7.5% following the announcement, reflecting investor confidence in the company's profitability outlook despite the revenue shortfall. The company's seasonal partnership with Costco contributed to increased Bike+ sales during the holiday quarter. Peloton also announced Peter Stern as its new CEO and president, effective January 1, following Barry McCarthy's departure. The connected fitness gross margin reached 12.9%, the first time in over three years it hit double digits. Marketing costs were reduced by 34% year-over-year. The reported GAAP net loss for the quarter was $92 million, an improvement from the $195 million loss in the same quarter last year. Subscription revenue, a key focus for the company, stood at $420.6 million, down 1% year-over-year.