(Reuters) -Peloton Interactive ( PTON ) forecast 2026 revenue above estimates and said it would cut 6% of its global workforce to boost cost savings under an ongoing turnaround effort, sending the exercise-bike maker's shares up nearly 23% premarket.

The company also posted a surprise profit for the fourth quarter. The layoffs, along with plans to slash indirect costs and relocate some offices, are expected to help save an additional $100 million by the end of its next fiscal year, it said on Thursday.

CEO Peter Stern, who joined the company in January from Ford Motor ( F ), had kicked off the turnaround effort to address a slump in sales of Peloton's high-end stationary bikes and treadmills following a boom during the COVID lockdowns, when people were looking to work out at home.

In a sign the cost push was bearing fruit, operating expenses fell 20% in the fourth quarter, while general and administrative expenses were down 33% from last year.

Gross margin from its connected fitness products such as technology-enabled home exercise machines rose 900 basis points to 17.3% from a year ago. Gross profit in the segment rose 96% to $34.4 million.

Peloton posted quarterly profit of 5 cents per share, compared with Wall Street estimates for a loss of 6 cents per share.

The company forecast 2026 revenue in the range of $2.4 billion to $2.5 billion, higher than analysts' estimate of $2.41 billion, according to data compiled by LSEG.

The fitness company expects tariffs to dent its 2026 free cash flow expectations by $65 million, and said it will adjust prices to offset the impact of the extra costs.

Total revenue for the quarter ended June was $606.9 million. Analysts, on average, were expecting revenue of $579.80 million in the fourth quarter.

(Reporting by Aishwarya Jain in Bengaluru; Editing by Devika Syamnath)