Peloton Interactive, Inc. ( PTON ) shares are trading lower on Thursday, after the company reported earnings per share of 12 cents loss in the third quarter, missing the analyst consensus estimate of 7 cents loss.

Quarterly sales of $624 million (down 13% year-over-year), beating the Street view of $621.32 million.

Connected Fitness Products Revenue decreased 27% year-over-year, driven by lower sales and deliveries across all Connected Fitness Product categories.

Subscription Revenue decreased $19.3 million, or 4% year-over-year.

Also Read: Peloton Faces Subscriber Setbacks, Tariff Troubles Despite Profit Push

Total Gross Profit was $318.1 million in the third quarter, an increase of 3% year over year. Total Gross Margin was 51.0%, an increase of 780 bps year-over-year, driven by a revenue mix shift towards the Subscription segment and favorable Connected Fitness Products Gross Margin.

Adjusted EBITDA was $89.4 million in the quarter, which was an $83.6 million improvement year-over-year.

The firm ended the quarter with $914.3 million in unrestricted cash and equivalents. Net Debt reduced $311.6 million or 35% year-over-year.

The company highlighted that Peloton and Precor-branded equipment are currently subject to a 25% tariff on their aluminum content. Precor and Apparel products sourced from China are subject to additional tariffs.

Outlook: Peloton Interactive ( PTON ) slightly narrowed its FY2025 sales guidance to a range of $2.46 billion to $2.47 billion.

This compares to its prior outlook of $2.43 billion to $2.48 billion and consensus estimate of $2.46 billion.

PTON Price Action: Peloton Interactive ( PTON ) shares are trading lower by 5.52% to $6.60 at publication on Thursday.

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