Peter. Thanks,
profitability. are improving we continued make exceeded our as second metrics quarter with We guidance economics key on unit our progress pleased to meaningful results and and
LTV favorable year-over-year made with a progress the connected million and our by This end net the also on Tread subscriptions. net decrease to the improving our subscription We CAC growth fitness Outperformance XX,XXX X.XX in elevating offset quarter by partially reflecting churn range exceeded ended by lower high paid by of objectives was with XX,XXX quarter. additions. audiences. target We of driven guidance
paid subscription churn was positively exceeding impacted QX. pauses internal an X.X%. higher factors. and offset lower Reactivation reflects by by for in performance points was as net XX QX efforts monthly lower lower-than-expected main higher impacted increase subscription point a of Connected seasonally churn by improvement was expectations Fitness also was positively churn benefit targeting quarter-over-quarter, net the subscriptions. Net basis X subscription reflects reactivation. basis This from churned Average reactivation cancellations, of X.X% marketing year-over-year XX churn
a [ as shift had a onetime benefit cause QX length fewer options. ] fiscal result we in a net shorter towards of First, XXXX, pauses from
activations purchase lower additions market, a and [ slightly products, QX. mix profile by subscription units to see shift result ] hardware subscription offset sales, mix higher has which to our lot our churn lower us partners. until Favorable due lead gross than a Tread have lower slight hardware the attachment towards delayed Tread+ continue Second, we from subscriptions new churn unit subscription partially higher times which of a directly their as sales, to secondary portfolio was churn Bike a that that channel rates of headwind for or of than
app ended result was a gross were revenue, or the segments. Total revenue million of from million inclusive guidance subscriptions million This revenue year-over-year. represented midpoint of million $XXX X% of internal quarter. our expectations million the decrease X,XXX $XXX Strength+ quarter in reflecting the the to or net of our million $X guidance by total product paid activations $XXX of year-over-year additions and decrease $XXX revenue range to the market revenue, both range line a higher-than-expected in and subscription Secondary exceeded decrease XX% million million quarter. XXX,XXX of million the quarter, $XX with in due We comprising with $XXX of was of second of above X,XXX. subscription, second Total $XX end roughly in a high $XX
critical Fitness hardware fitness period third revenue from slight underperformance higher-than-expected times, delivery in that and holiday by exceeded X% led priced as some for sales, the Tread+, products has products to unit deliveries expectation connected quarter. revenue Connected historically offset inventory Due sales. predominantly associated and hardware revenue recognition partly Connected we QX constraints sales. The to premium longer is faced Fitness season Tread represented higher-than-expected temporarily to Tread+ of annual delaying overall Tread+ product a unit sales,
our higher-than-expected We for low-priced sales refurbished also bike. observed
Subscription subscriptions. Bike+ the Connected Offsetting second Seasonally from of was our higher quarter of channel paid higher ] in Bike. sales third-party the as and were we higher Tread sales lower QX, a Fitness lower products sales believe XX% we price original of which point, observed discounts retail result offer to compared reflected From perspective, revenue XX% higher partly hardware Connected revenue expected in revenue mix a and to margins. accordance Fitness in sales the midrange [ decision Bike the in specifically products, expected hardware last than due subscription year the revenue. was lower our than on to with effort increase we sales our to original promotional the
basis ] products year-over-year. Our quarter-over-quarter [ and ]. a basis This JJ and continued our November, evolving sports. made we've [ increase men XXX and well launched given XXX holiday addition strategy. Power targeted progress reflects Find T.J. in increase marketing Watt campaign on In Strength subscription with live featuring we growth the with performance campaign media Tread Your This rated points and the highlighted our man resonated campaign, point
In full offerings. addition value education demonstrating our focused of through towards efforts on to marketing better Peloton also the of extensive membership the advertising were more our men,
to modalities Among noncycling exposed in and audiences female Latina holiday yoga the lift interval awareness like our ] we and [ a high-intensity of observed walking, campaign, training. running, core
introducing that We reaching which we on leading of future measure we Alongside continue an discipline, intent of our also our improving using is to which and to increased saw efficiency additional from LTV. audience indicator marketing consider purchase. make we a progress Peloton lens this a
least to remains Xx to and in year-over-year X to made ideally of LTV range Xx, closer reach have target progress at our Xx. to CAC our toward we the While
XX% Our CAC higher LTV than fiscal QX was QX roughly to XXXX.
driven up primarily was XX Total basis segment. shift shift $XXX for Fitness margin ], was XX.X%, year-over-year. favorable inventory Connected QX, in reduction year-over-year. gross Connected guidance mix Connected gross of gross above points products gross by new Total Fitness year-over-year, and gross XXX lower was margin products, partially $XX subscription margin million margin, or X.X% transportation costs was XX basis our up Fitness XX.X%, and due related warehousing points and towards mix a a an [ reserves. basis our higher-margin a gross Subscription in to profit product million points increase X% margin favorable
quarter, $XXX cost reflecting in including expenses, thus rightsizing million made far the impairment a operating structure. restructuring progress Total toward expenses, year-over-year second $XXX million we've or and the reduction XX% were our
market ahead $XX million are savings decrease cost was decrease million, or targets expenses. for $XXX from tracking $XX and of spend and or a of a and year-over-year, by in XX% fiscal and XXXX. marketing primarily in We primarily advertising decrease personnel-related personnel-related was year-over-year, million administrative settlement a fees and services expenses. $XXX expense a our of Sales professional million, XX% lower costs, expense General XX% driven decrease
charges exits. consisted $XXX which restructuring QX, by noncash exit a recognized we retail million other year-over-year $XX high million of in EBITDA costs The relation above development improvement we of or $XX $XX guidance primarily and in million were million of expenses to which end and expenses, write-downs noncash. expenses. million Adjusted impairment of range our and and executing year-over-year. $XX was In -- primarily million driven XX% were The second $X of on asset Research contractor as the million, million quarter, charges was to related showroom $XX and our $XX severance lower was disposal efforts. and cash continue the restructuring
equivalents, quarter, $XXX cash and million flow. quarter quarter-over-quarter of $XXX our the million increase an cash cash positive unrestricted cash quarter-over-quarter. in and ended second of free consecutive year-over-year of quarter of million $XXX We an generated in $XX We fourth and with million flow the million free improvement $XXX
subscription of We high our category. while reflects retention, net maintaining Overall, progress rearchitecting million within Fitness towards XX% as reduced sheet high also leadership make performance balance the continue cost It debt quarter our year-over-year. strength our or reflects our gross to business. second deleveraging Connected progress $XXX position the our margin structure, in our continued
full Next, our provide outlook fiscal year to I'd on and like XXXX. context for the financial third quarter
ending relative to guidance, we our raising along our The EBITDA. are including midpoint in Following connected metrics subscriptions, are these guidance our fitness free total paid fiscal margin adjusted cash with across QX outperformance year full our we revenue, gross metrics, flow. previous prioritizing delivering XXXX total and key
guidance We are million. at Fitness narrower raising Connected our paid XXXX full year XX,XXX subscriptions a range fiscal midpoint the for to by $X.XX of
our our the lower to lower partly reactivation, expectations subscription our subscription continued net lower rates hardware across lower and pauses expectations due products, products. cancellations, for into for This due mix growth sales new churn increase favorability to and than reflects offset Tread Bike additions, by shift have which attachment
for quarter. relatively ending Our season, trends rate million, the remain monthly with seasonally and average for Fitness $X.XX reflects expectations Connected Fitness subscriptions Connected to net hardware guidance XXXX churn holiday our following our the to sales million fiscal paid of in subscription lower line second paid $X.XX for
XXX,XXX to Our full year app for unchanged. fiscal subscriptions XXXX of paid XXX,XXX guidance range remains
to outlook subscriptions Our ending XXX,XXX app XXXX XXX,XXX. third for fiscal paid is quarter
XXXX increase fiscal for Bike $X.XX $X total now from midpoint. Fitness lower paid revenue a of This our billion revenue lower portfolio and products favorable an reflects billion, subscription by at range outlook year reflects to for the offset higher sales. Fitness $X.XX and subscription partly Our Connected from sales, favorable trend portfolio expectations full million Connected revenue of higher
the $XXX seasonally second guidance for million to to hardware compared lower reflects sales our million of expectations revenue QX $XXX quarter.
margin margin subscription from We to gross full basis mix gross subscription favorability as increase year toward slight margin XXXX Product Connected total a prior outlook shift XX% higher are in XXX our Fitness from as fiscal point for segment and increasing our revenue expected segment. a gross reflecting segment well guidance
sequential reflects a basis total expected third an margin margin XXX gross as in of quarter. toward the increase points of quarter in of guidance mix XX% shift result seasonal segment gross the our third Our subscription
due for We expansion profitability, improvements cost million, adjusted are continued margin to which largely operating $XXX raising of a million by for our full in year our guidance to savings. $XXX gross continued fiscal XXXX $XX million, reflects EBITDA range and expectations
increase marketing lower $XX seasonally adjusted to million $XX quarter million to the reflects the season. mainly and guidance due sales third at EBITDA holiday midpoint, of of a Our following million expenses $XX sequential
free million in to operating increase improvement of also of higher following a faster-than-expected season, We cash fiscal net target reduction, This in an holiday inventory-related and least full XXXX from year are reflects capital our confidence $XXX at $XX previous our flow expense degree raising target. hardware performance sales million, the efficiencies. working
XXXX deleveraging fiscal balance beyond. We our expect making in meaningful and continue through to progress sheet
to and like back such I'd optimism Q&A, for open talk special for what so it to we us about Peloton the Peter makes hand gives Before future. to
