Peloton Produced Positive Free Cash Flow, but the Devil Is in the Details
Along with slight revenue growth and a greatly reduced net loss, troubled connected fitness company (NASDAQ: PTON) managed to produce positive free cash flow in the fourth quarter of fiscal 2024. Free cash flow came in at $26 million, a $100 million swing from the prior-year period.
While having a balance sheet that's no longer bleeding cash is inarguably a good thing, free cash flow is a metric that often comes with some dirty secrets.
Free cash flow, cash generated from operations minus any capital expenditures, can be a useful metric. However, it's important to remember that it's often not a great measure of profitability. Free cash flow can be volatile, impacted by the timing of payments both in and out. Other items can provide a short-term benefit that can't go on forever, and a heavy use of stock-based compensation muddles the numbers.
Source Fool.com
Peloton Interactive Inc. Stock
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