01:01 PM EDT, 05/08/2025 (MT Newswires) -- Peloton Interactive ( PTON ) on Thursday tightened its full-year revenue guidance as the fitness company's fiscal third-quarter loss narrowed less than projected.

The exercise-equipment maker now anticipates revenue of $2.46 billion to $2.47 billion for fiscal 2025, compared with its previous outlook range of $2.43 billion to $2.48 billion. The current consensus on FactSet is for sales of $2.46 billion. The revised guidance reflects an increase of $7.5 million at the midpoint and an expectation for "favorable" subscription revenue primarily driven by higher paid connected fitness subscriptions, Chief Executive Peter Stern said in a shareholder letter.

For its fiscal third quarter, Peloton reported a net loss of $0.12 per share versus a $0.45 loss a year earlier. Wall Street was looking a $0.07 loss. Revenue declined to $624 million from $717.7 million, but just shaded the average analyst estimate on FactSet for $623.6 million.

Connected fitness products' revenue dropped 27% to $205.5 million amid lower sales and deliveries across all categories, while subscription revenue decreased 4% to $418.5 million. Connected fitness subscribers fell to 2.88 million from 3.05 million a year earlier.

Peloton shares were down 4.8% in Thursday afternoon trade. The stock has fallen 22% so far in 2025.

Paid connected fitness subscriptions are now pegged at between 2.77 million and 2.79 million in 2025, reflecting a higher low end from the prior guidance of 2.75 million. "This increase incorporates the outperformance in (the third quarter) and our expectations for seasonally higher net churn in (the fourth quarter) as we enter the warmer months of spring and summer," Stern said.

The company sees full-year free cash flow "in the vicinity of" $250 million, factoring in its expectations for a roughly $5 million headwind in the fourth quarter from the impact of tariffs, Chief Financial Officer Elizabeth Coddington said on an earnings conference call, according to a FactSet transcript.

Peloton and Precor-branded equipment are currently subject to a 25% tariff on their aluminum content, while Precor and apparel products sourced from China are subject to additional duties, according to Coddington.

Last month, US President Donald Trump declared a 90-day pause on certain tariffs for non-retaliating countries. Washington and China have been in a deadlock over tariffs, though officials from both sides are due to meet in Switzerland this weekend to discuss economic and trade matters.

"We continue to track ahead of our $200 million cost-restructuring plan, which is driving meaningful improvement in profitability and helping us to deleverage our balance sheet at a swift pace," Stern said on the call. "We see further opportunities to reduce our costs."

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