If that still doesn’t help, reboot your home network equipment (e.g. router). Something at your end is stopping your Apple TV and your Companion device from seeing each other on your home network.
This is more or less same issue I have , aTV also on IOS26/ iPhone IOS26 / ZWIFT updated at 1.99 and experienced lots of lagging, each two pedal strokes the group and myself are micro-stopping and go again. very annoying. After your comments Steve I did all you said about reboot but , I am more tan 2 years now on same setup and NO issues, and now need to reboot (unplug) the ATV each time I want to ride , very frustrating. So I decided yesterday to wire the ATV and no lagging on first sight. BUT when I entered my race (TTT) ui had a latency of more than 5 seconds. avatar was always 5 sec later than what I was doing in reality. I finished the race but this was really sh**tty. I want it back how it was before, just put ATV on click on Zwift and ride, not all the hassle that I encounter now !
Respectfully, that’s not the same issue at all as the one in this thread, which is about connecting Companion and the game app. Your problem is that you’re connected ok but have lag, which is a very unusual problem.
Which exact model of ATV do you have? It will tell you this if you go into Settings, General, About.
Steve, thanks for your input. The reboot did not fix this but your comments about something stopping the two items communicating resonated and I switched both connections away from my house Mesh….
Worked straight away, and continues to do. Small downside is switching my phone out of the house system, but I guess that there is a wider issue in my mesh to deal with later.