PELOTON INTERACTIVE INC

April 2024 Restructuring Plan; Asset Impairments

We are reporting the following information in lieu of reporting on a Current Report on Form 8-K under Item 2.05 Costs Associated with Exit or Disposal Activities and under Item 2.06 Material Impairments.

On April 22, 2024, in connection with previously disclosed market factors impacting the business of Peloton Interactive Inc. (the “Company”), the Company’s Board of Directors approved a new restructuring plan to expand upon its 2022 restructuring plan (as expanded, the “2024 Restructuring Plan”). The 2024 Restructuring Plan will position Peloton for sustained, positive free cash flow, while enabling the company to continue to invest in software, hardware and content innovation, improvements to its member support experience, and optimizations to marketing efforts to scale the business. The 2024 Restructuring Plan includes: (i) a reduction in global headcount by approximately 15%, which impacts roughly 400 Peloton team members; and (ii) continued closures of our retail locations. The Company expects the 2024 Restructuring Plan to be substantially implemented by the end of fiscal 2025.

In connection with the 2024 Restructuring Plan, the Company recognized charges of $45.0 million during the third quarter of fiscal 2024, consisting of cash charges totaling $32.5 million for severance and other personnel costs, and non-cash charges of $10.8 million related to asset write-downs and write-offs and $1.7 million for stock-based compensation. In connection with the 2024 Restructuring Plan, which includes any remaining restructuring activity under the original 2022 restructuring plan, the Company estimates that it will incur additional cash charges of approximately $45.0 million, primarily composed of lease termination and other exit costs, which are expected to be substantially incurred by the end of fiscal year 2025. Additionally, the Company expects to recognize additional non-cash charges of approximately $20.0 million, primarily composed of non-inventory asset impairment charges in connection with the 2024 Restructuring Plan, which are expected to be substantially incurred by the end of fiscal year 2025.

Upon full implementation, the company expects the plan to result in reduced annual run-rate expenses by more than $200 million by the end of its 2025 fiscal year. We do not believe these cost-saving measures will impair our ability to conduct any of our key business functions. We may not be able to realize the cost savings and benefits initially anticipated as a result of the 2024 Restructuring Plan, and costs may be greater than expected. See“Risk Factors—Risks Related to Our Business—We may not successfully execute or achieve the expected benefits of our restructuring initiatives and other cost-saving measures we may take in the future, and our efforts may result in further actions and/or additional asset impairment charges and adversely affect our business” in our Form 10-K.

Rule 10b5-1 Trading Plans

During the three months ended March 31, 2024, none of our directors or officers (as defined in Item 408 of Regulation S-K of the Exchange Act)adopted orterminated Rule 10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K of the Exchange Act).