Peloton Interactive, Inc. (NASDAQ:PTON) stock tumbled after the company posted a wider-than-expected quarterly loss and revenue that fell short of Wall Street forecasts.

The results overshadowed margin expansion and improved profitability metrics, while softer guidance and a CFO transition added to investor concerns.

Quarterly Metrics

The company reported a second-quarter loss per share of nine cents, missing the Street view of a five-cent loss. Quarterly sales of $656.50 million (down 3% year over year) missed the analyst consensus estimate of $672.22 million.

Total gross margin was 50.5%, up 320 basis points year over year. Adjusted EBITDA was $81 million, an increase of 39% year over year.

“Our financial performance demonstrated our continued operational discipline, resulting in 39% year-over-year growth in Adjusted EBITDA and reducing Net Debt by 52% year-over-year, proving we can simultaneously innovate and increase our profitability,” said CEO Peter Stern. 

In the quarter under review, ending paid Connected Fitness subscriptions totaled 2.661 million, down 214,000, or 7%, from a year earlier but 6,000 above the midpoint of guidance. Churn held up better than expected after the Oct. 1 price increases, though gross additions were softer.

Peloton exited the quarter with cash and equivalents worth $1.179 billion.

CFO Transition

Peloton said Chief Financial Officer Liz Coddington will leave the company to pursue an opportunity outside the industry.

She will remain with Peloton through March as the company conducts a search for its next CFO.

CEO Peter Stern credited Coddington with helping drive Peloton’s financial turnaround, strengthening the balance sheet and instilling greater financial discipline.

Coddington said she is proud of the progress made over the past four years and expects the company’s best days are ahead.

Outlook

Peloton forecast third-quarter sales of $605.0 million to $625.0 million, below analysts’ estimates of $639.4 million.

PTON Price Action: Peloton Interactive shares were down 23.21% at $4.53 at the time of publication on Thursday. The stock is trading at a new 52-week low, according to Benzinga Pro data.

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