PELOTON INTERACTIVE, INC.
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 6, 2025
PTON$5.61-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0001639825-25-000081
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001639825-25-000185
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 218 previous paragraphs and 175 current paragraphs.
83 unchanged; 61 reworded; 27 added; 68 removed; 6 previous and 4 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
Peloton is a leading global fitness and wellness company that empowers its Members to live fit, strong, long, and happy by providing fitness and wellness products and services they can use anytime, anywhere. We have a highly engaged community of nearly 6 million Members as of September 30, 2025, across the United States, United Kingdom, Canada, Germany, Australia, and Austria. As a category innovator at the nexus of fitness and wellness, technology, and media, we deliver experiences through our world-renowned Instructors, premium hardware and innovative software, personalization, and extensive modalities and content formats. Founded in 2012 and headquartered in New York City, Peloton aims to scale across the markets in which it operates.
Current report
During the three months ended September 30, 2025, our Connected Fitness Products portfolio included our Original Series Peloton Bike, Bike+, Tread, Tread+, Row, Guide (discontinued as of July 2025), and various Precor products. In October 2025, we launched a refreshed portfolio of Connected Fitness Products called the Cross Training Series, including the Cross Training Bike, Bike+, Tread, Tread+, and Row+. We continue to sell our refurbished Original Series Peloton Bike and Bike+. Additionally, we launched the Peloton Pro Series, a refresh of our portfolio of commercial-certified Peloton-branded products, which now include the Bike+ Pro, Tread+ Pro, and Row+ Pro.
Current report
In August 2025, the Company announced a new restructuring plan (the “2025 Restructuring Plan”), which includes a reduction in global headcount and is intended to continue to improve the Company’s cost structure, operating efficiency, and profitability, while providing us the opportunity to return to growth by reinvesting expected savings into our differentiating capabilities. The Company expects the 2025 Restructuring Plan to be substantially implemented by the end of fiscal year 2026, which is subject to change.
Current report
In connection with the 2025 Restructuring Plan, we estimate that we will incur additional cash restructuring charges of approximately $40.0 million, primarily comprised of location strategy costs, lease termination costs, and other exit costs. Additionally, we expect to recognize additional non-cash restructuring charges of approximately $5.0 million, primarily comprised of asset write-downs and write-offs, in connection with the continued exit of the Company’s retail and other leased locations. We expect these charges to be substantially incurred by the end of fiscal year 2026, which is subject to change.
Current report
Upon full implementation, we expect the 2025 Restructuring Plan to achieve at least $100 million of run-rate savings by the end of fiscal year 2026.
Current report
Voluntary Recall
Current report
On November 6, 2025, in collaboration with the U.S. Consumer Product Safety Commission and Health Canada, we announced a voluntary recall of about 833,000 units in the U.S. and 44,800 units in Canada of the Original Series Bike+ (not Cross-Training Bike+) – manufactured from December 2019 to July 2022 and sold beginning in 2020 to April 2025. As previously disclosed, we have received a small number of reports that an Original Series Bike+ seat post broke during use. Specifically, as of today, November 6, 2025, the Company is aware of three reports each from users weighing more than 250 lbs in which the seat post has broken during use. Of these reports, two included reports of injuries, including a sprained knee and head bruise. It is possible that additional reports, including those involving users with different characteristics or injuries, may be made in the future. We are offering Members a free replacement seat post as the approved remedy.
Current report
As of September 30, 2025, we have accrued $16.5 million for the cost to replace the Original Series Bike+ seat posts, of which $13.5 million was accrued for in the fiscal quarter ended September 30, 2025. This accrual is based on an amount that we deem probable and estimable and is reflected in Connected Fitness Products Cost of revenue in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). We previously accrued for and recognized a $3 million charge in the fiscal quarter ended June 30, 2025.
Current report
We may continue to incur additional costs beyond what we have currently estimated to be probable and reasonably estimable, including in connection with the voluntary recall and if the number of reported incidents materially increases, and such additional costs may be material. See“Risk Factors — Risks Related to Our Connected Fitness Products and Members — Our products and services may be affected from time to time by design and manufacturing defects or product safety issues, real or perceived, that could adversely affect our business and result in harm to our reputation” in our Form 10-K.
Current report
Ending Paid App Subscriptions includes all subscriptions to our Peloton Apps for which we are currently receiving payment. Starting in fiscal 2026, we no longer report on Average Monthly Paid App Subscription Churn.
Current report
Connected Fitness Products
Current report
Subscription
Current report
Beginning in the first quarter of fiscal 2026, we now assign executive compensation and other corporate overhead costs associated with our corporate facilities, which were historically included in General and administrative expense, to the various expense captions that these costs relate to, including Cost of revenue, Sales and marketing, General and administrative, and Research and development.
Current report
Connected Fitness Products
Current report
Subscription
Current report
Total other expense, net
Current report
Income tax expense
Current report
Connected Fitness Products Cost of revenue decreased $3.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This decrease was primarily driven by fewer Connected Fitness product deliveries, resulting from lower demand, partially offset by the expense incurred related to the Bike+ Seat Post Recall, and higher Precor sales.
Current report
General and administrative expense decreased $18.7 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was mainly driven by an $8.7 million decrease in personnel-related expenses, inclusive of stock-based compensation expense, and a $3.8 million decrease in rent and occupancy charges, both primarily due to the assignment of executive compensation and other corporate overhead costs to the various expense captions those costs relate to beginning in fiscal 2026, and a $2.9 million decrease in professional services fees.
Current report
Restructuring expense increased $1.5 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to an increase in exit and disposal costs and professional fees in connection with the Restructuring Plans.
Current report
•Other expense, net of $0.3 million.
Current report
•Foreign exchange gains of $14.8 million; and
Current report
(1) Primarily consists of Interest expense of $32.3 million and $35.4 million, foreign exchange losses (gains) of $3.8 million and $(14.8) million, and Interest income of $(9.8) million and $(8.1) million, for the three months ended September 30, 2025 and 2024, respectively.
Current report
Net cash used in investing activities of $6.7 million for the three months ended September 30, 2025 was due to $4.5 million used for capital expenditures and $2.2 million used for the Breathwrk acquisition.
Current report
Net cash provided by financing activities of $4.8 million for the three months ended September 30, 2024 was primarily related to proceeds from employee stock plans of $6.5 million, partially offset by $2.5 million in principal repayments on the Term Loan.
Current report
Debt Obligations
Current report
Contractual Obligations and Commitments
Removed paragraphs (68)
Previous report
Third Quarter Fiscal 2025 Update and Recent Developments
Previous report
In the three months ended March 31, 2025, we continued to execute on our fiscal year 2025 operating goals. Operating expenses decreased 23% year-over-year, we generated over $90 million of GAAP Net Cash Provided by Operating Activities and non-GAAP Free Cash Flow, and our balance sheet is deleveraging quickly.
Previous report
Improve Member Outcomes
Previous report
Member happiness continued to improve in the three months ended March 31, 2025, as measured by Net Promoter Score (“NPS”) and Member Satisfaction Scores (“MSAT”). We achieved an NPS above 70 for all of our Cardio hardware products and above 80 for the Tread. Member Support MSAT was 4.3 in the three months ended March 31, 2025, reflecting an improvement of 1% quarter-over-quarter and 20% year-over-year, while Service & Repair MSAT was 4.5, an improvement of 5% quarter-over-quarter and 7% year-over-year.
Previous report
We see an opportunity to be a more holistic wellness provider by offering solutions to our Members that address strength, mental well-being, sleep & recovery, and more. The mix of Member engagement in these categories is increasing, so we’re responding by creating even more experiences to serve these needs. Additionally, with so many classes to choose from, we want to help our Members reach their goals more easily by recommending the best workouts for them. In January, we launched Personalized Plans, which uses artificial intelligence and machine learning to enable Members to create workout plans tailored to their goals and preferences. Nearly half a million Members started a Personalized Plan in the three months ended March 31, 2025, and we’re pleased with the repeat engagement from Members using them.
Previous report
Meet Members Everywhere
Previous report
We recently launched a pilot program with Precor to bring a collection of Peloton Instructor-led tread classes to select Precor treadmills. Given the unique demands of gym operators and the duty cycles imposed on gym equipment, we've also engaged Precor to provide installation and maintenance support for Peloton equipment in gyms. Also in the three months ended March 31, 2025, we met nearly 1,000 first-time Peloton users in our recently launched Peloton workout space at the University of Texas at Austin, and we launched a new collection of on-demand Peloton workouts for Hilton’s Connected Room Experience across 2,400 Hilton hotels.
Previous report
Retail presence in owned and third-party locations provides critical in-person touchpoints for prospective Members to try our hardware products. Our microstore test in Nashville, Tennessee, which has approximately one tenth the square footage and a much more flexible lease commitment, exceeded our average North American retail showroom’s in-store engagement and revenue during the three months ended March 31, 2025. Additionally, third-party retail enables us to capture incremental hardware sales by meeting Members where they already shop. Amazon’s seasonal sales events are a great example. We observed year-over-year growth in hardware sales from the Amazon Big Spring Sale in the U.S. in the three months ended March 31, 2025.
Previous report
Meeting Members everywhere includes growing in our international markets, where we grew Paid Connected Fitness Subscriptions for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. We’ve taken a disciplined approach to right-sizing costs in our international business while deploying localized marketing strategies, including our Member Stories campaigns featuring popular TV personalities in the U.K. and Germany. A prerequisite to scaling internationally is cost-effectively translating our programming, especially given our enormous output – 3,300 new classes in the three months ended March 31, 2025 alone. In March, we launched AI-powered subtitles, starting with our existing languages of English, Spanish, and German, and we are now translating roughly 100 classes per day.
Previous report
Create Members for Life
Previous report
We are committed to delivering elevated experiences at each stage of the Member lifecycle, by optimizing the journey from point of purchase to delivery, installation, onboarding, and beyond. This quarter, we worked with our repair partners to pilot dedicated vans stocked with Peloton spare parts to increase first-visit repair resolution, and we are now extending that pilot to additional locations. We also introduced AI into our call centers, providing our agents with a powerful intelligent agent while still delivering the human interactions our Members expect.
Previous report
We also expanded our Teams features in the three months ended March 31, 2025, launching Team Feed and Community Teams. Team Feed allows Members who have joined a team to share workout activity and react to activity from teammates. Community Teams are public, discoverable and recommended groups of up to 50,000 Members. Members have created nearly 100,000 teams and we’re seeing higher engagement from Members within the first month of joining a Team.
Previous report
Operate with Business Excellence
Previous report
We are focusing on operating more efficiently, which includes both lowering our operating expenses and optimizing our pricing and promotional strategy to improve our unit economics and expand gross margins. We have made significant progress in reducing costs and we continue to track ahead of our target to achieve $200 million of run-rate cost savings by the end of fiscal year 2025.
Previous report
In February 2022, we announced and began implementing a restructuring plan to realign our operational focus to support our multi-year growth, scale the business, and improve costs (the “2022 Restructuring Plan”). In April 2024, our Board of Directors approved a new restructuring plan to expand upon the 2022 Restructuring Plan (as expanded, the “2024 Restructuring Plan”, collectively, the “Restructuring Plans”) in an effort to position us for sustained, positive free cash flow, while enabling us to continue to invest in software, hardware and content innovation, improvements to our Member support experience, and optimizations to marketing efforts to scale the business.
Previous report
We’ve made progress in implementing the Restructuring Plans and achieving the goals outlined in Note 4 - Restructuring. In fiscal year 2024, we completed the sale of the Peloton Output Park building and a portion of the corresponding land and received net proceeds of approximately $31.9 million, successfully exited our owned-manufacturing operations, and reduced our global retail showroom footprint. In September 2024, we completed the sale of the remaining Peloton Output Park land parcel and received net proceeds of $4.2 million. We expect substantial further improvements in the goals outlined in Note 4 - Restructuring as well as a number of other measures by which we measure the success of our restructuring initiatives and expect to continue optimizing our showroom footprint over the remainder of fiscal year 2025.
Previous report
Refer to Note 4 - Restructuring in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for discussion around charges incurred to date and future expected charges under the Restructuring Plans. We expect the plan to result in reduced annual run-rate expenses by more than $200 million by the end of fiscal year 2025.
Previous report
Other Developments
Previous report
We have received a small number of reports that a Bike+ seat post broke during use. We are planning to offer certain Bike+ Members our newest seat post. We do not currently expect that the expenses associated with this plan will be material to our financial position. In the event we incur material expenses or face other challenges relating to the Bike+ seat post, including the implementation of other measures resulting from our engagement with governmental authorities on this matter, our results of operations, financial condition and reputation could be adversely affected.
Previous report
Ending Paid App Subscriptions include all App One, App+, and Strength+ subscriptions for which we are currently receiving payment.
Previous report
When a Subscriber to App One, App+, or Strength+ cancels their membership (a churn event) and resubscribes in a subsequent period, the resubscription is considered a new subscription (rather than a reactivation that is counted as a reduction in our churn count). Average Paid App Subscription Churn is calculated as follows: Paid App Subscription cancellations in the quarter, divided by the average number of beginning Paid App Subscriptions each month, divided by three months.
Previous report
Additionally, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset group to future undiscounted net cash flows expected to be generated by the assets. If the carrying amount of an asset group exceeds its estimated undiscounted net future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value.
Previous report
Other (expense) income, net
Previous report
Income tax provision
Previous report
Subscription Revenue decreased $11.8 million for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024, primarily due to decreases in Paid Connected Fitness and App Subscriptions. This decrease was partially offset by an increase in content licensing revenue and incremental Used Equipment Activation Fee revenue, which was introduced during the first quarter of fiscal 2025.
Previous report
Connected Fitness Products Cost of revenue decreased $92.1 million, or 34.3%, during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily driven by fewer deliveries across all Connected Fitness product categories, resulting from lower demand during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, as well as lower freight and warehousing costs and lower inventory write-downs.
Previous report
Connected Fitness Products Cost of revenue for the nine months ended March 31, 2025 decreased $206.7 million, or 27.6%, compared to the nine months ended March 31, 2024. This decrease was primarily driven by fewer Connected Fitness product deliveries, resulting from lower demand during the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024, as well as lower freight and warehousing costs. The decrease was partially offset by increased Tread+ deliveries during the nine months ended March 31, 2025, which resumed during the third quarter of fiscal 2024.
Previous report
Our Connected Fitness Products Gross Margin increased to 12.4% for the nine months ended March 31, 2025 compared to 4.0% for the nine months ended March 31, 2024. This increase was primarily driven a mix shift towards higher margin products, as well as lower inventory write-downs and lower warehousing and transportation costs during the nine months ended March 31, 2025 when compared to the nine months ended March 31, 2024. These improvements were partially offset by changes in our warranty reserves.
Previous report
Subscription Cost of revenue decreased $12.0 million, or 2.9% during the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024, primarily attributable to lower costs associated with content production and music royalties, a reduction in depreciation and amortization expense, and lower personnel-related expenses, inclusive of stock-based compensation expense, due to decreased average headcount.
Previous report
Subscription Gross Margin remained consistent for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024.
Previous report
General and administrative expense decreased $1.6 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, mainly driven by a decrease of $4.9 million in settlement costs and professional services fees (comprised of legal, accounting, and consulting fees), a decrease of $1.9 million in software and IT costs, and a decrease of $1.8 million in depreciation and amortization costs. These decreases were partially offset by a net increase of $7.0 million in personnel-related expenses, inclusive of stock-based compensation expense, for the three months ended March 31, 2025, primarily driven by $21.0 million of executive departure costs mainly due to acceleration of stock-based compensation and severance expense under our exits of individuals covered by the Change in Control Plan (the “Severance Plan”). Excluding the impact of these executive departures, general and administrative expense decreased $22.7 million or 14.8% year-over-year.
Previous report
General and administrative expense decreased $62.7 million for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024, mainly driven by a decrease of $32.8 million in settlement costs and professional services fees (comprised of legal, accounting, and consulting fees), a net decrease of $16.7 million in personnel-related expenses, inclusive of stock-based compensation and severance expense, primarily due to decreased average headcount, and a decrease of $5.0 million in software and IT costs for the nine months ended March 31, 2025.
Previous report
Impairment expense increased $5.6 million for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024, primarily due to $32.2 million in asset write-downs and write-offs related to plans to right-size portions of our corporate office footprint during the nine months ended March 31, 2025. This increase was partially offset by a $16.7 million decrease due to impairments related to Peloton Output Park during the nine months ended March 31, 2024, and a $7.5 million decrease in impairment expense related to the exit of retail showroom locations during the nine months ended March 31, 2025.
Previous report
Restructuring expense decreased $35.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to a decrease of $33.4 million in cash severance and other personnel costs due to charges incurred during the three months ended March 31, 2024 in connection with the 2024 Restructuring Plan. For the nine months ended March 31, 2025, Restructuring expense decreased $60.2 million compared to the nine months ended March 31, 2024, primarily due to a $48.7 million decrease in personnel-related expenses, inclusive of severance and stock-based compensation expense during the nine months ended March 31, 2025, as well as decreases in exit and disposal costs, including non-cash charges of $3.8 million relating to the loss on sale of a manufacturing subsidiary in Taiwan during the nine months ended March 31, 2024.
Previous report
*NM - not meaningful
Previous report
*NM - not meaningful
Previous report
•Foreign exchange gains of $10.3 million and $6.6 million, respectively; and
Previous report
•Foreign exchange losses of $2.1 million and $0.2 million, respectively; and
Previous report
•Other income, net of zero and $0.5 million, respectively.
Previous report
•Adjusted EBITDA does not reflect the impact of purchase accounting adjustments to inventory related to the Precor acquisition;
Showing the first 40 of 68 passages. Open the source sections for the rest.
Reworded paragraphs (61)
Previous wording
Peloton is a leading global fitness company with a highly engaged community of 6.1 million Members as of March 31, 2025. A category innovator at the nexus of fitness, technology, and media, Peloton's first-of-its-kind subscription platform seamlessly combines innovative hardware, distinctive software, and exclusive content. Its world-renowned instructors coach and motivate Members to be the best version of themselves anytime, anywhere. We define a “Member” as any individual who has a Peloton account through a paid Connected Fitness Subscription or a paid App Subscription, inclusive of the Peloton App One and App+ Memberships and the Strength+ App Membership, and completes one or more workouts in the trailing 12 month period. We define a completed workout as either completing (i) at least 50% of an instructor-led class, scenic ride, scenic run, or coach-led Strength+ program, (ii) ten or more minutes of “Just Ride”, “Just Run”, “Just Row”, or (iii) a custom Strength+ workout.
Current wording
We define a “Member” as any individual who has a Peloton account through a Paid Connected Fitness Subscription or a Paid App Subscription, inclusive of the Peloton App+, App One, Strength+, and Breathwrk Memberships (our “Peloton Apps”), and engages in one or more workouts in the trailing 12-month period. We define workout engagement as either (i) completing the lesser of 50% or 10 minutes of Instructor-led classes, Scenic, and Lanebreak workouts; (ii) at least 10 minutes of any activity tracking workout (such as “Just Ride”, “Just Run”, or “Just Row”) or Entertainment workout; (iii)at least 5 minutes of any Strength+ workout with 80% of sets marked complete; or (iv) completing a Breathwrk class.
Previous wording
Our Connected Fitness Products portfolio includes the Peloton Bike, Bike+, Tread, Tread+, Guide, Row and various Precor products. Access to the Peloton App is available with an All Access or Guide Membership for Members who have Connected Fitness Products or through a standalone App Membership with multiple Membership tiers. Access to the Strength+ App is available with an All Access, Guide, or App+ Membership or through a standalone Strength+ subscription. Our revenue is generated primarily from recurring Subscription revenue and the sale of our Connected Fitness Products. We define a “Connected Fitness Subscription” as a person, household, or commercial property, such as a hotel or residential building, who has paid for a subscription to a Connected Fitness Product (a Connected Fitness Subscription with a successful credit card billing or with prepaid subscription credits or waivers).
Current wording
Access to all of the Peloton Apps is available with an All-Access Membership for Members who have Connected Fitness Products or through a standalone App+ Membership. Our revenue is generated primarily from recurring Subscription revenue and the sale of our Connected Fitness Products. We define a “Paid Connected Fitness Subscription” as a person, household, or commercial property, such as a hotel or residential building, that has paid for a subscription to a Connected Fitness Product (a Connected Fitness Subscription with a successful credit card billing or with prepaid subscription credits or waivers). “Paid App Subscriptions” include all subscriptions to our Peloton Apps for which we currently receive payment.
Previous wording
We do not believe these cost-saving measures will impair our ability to conduct any of our key business functions. However, we may not be able to realize the cost savings and benefits initially anticipated as a result of the Restructuring Plans, 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.
Current wording
We may not be able to realize the cost savings and benefits initially anticipated as a result of the Restructuring Plans, and implementation and transition 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.
Previous wording
(1) Beginning January 1, 2025, the Company migrated its subscription data model for reporting Ending Paid Connected Fitness Subscriptions, Average Net Monthly Paid Connected Fitness Subscription Churn, Ending Paid App Subscriptions, and Average Monthly Paid App Subscription Churn to a new data model that provides greater visibility to changes to a subscription's payment status when they occur. The new model gives the Company more precise and timely data on subscription pause and churn behavior. Prior period information has been revised to conform with current period presentation. The impact of this change in the model on Ending Paid Connected Fitness Subscriptions, Average Net Monthly Paid Connected Fitness Subscription Churn, Ending Paid App Subscriptions and Average Monthly Paid App Subscription Churn for the three months ended March 31, 2025 and 2024 is immaterial.
Current wording
(1) Beginning January 1, 2025, the Company migrated its subscription data model for reporting Ending Paid Connected Fitness Subscriptions, Average Net Monthly Paid Connected Fitness Subscription Churn, and Ending Paid App Subscriptions to a new data model that provides greater visibility to changes to a subscription's payment status when they occur. The new model gives the Company more precise and timely data on subscription pause and churn behavior. Prior period information has been revised to conform with current period presentation. The impact of this change in the model on Ending Paid Connected Fitness Subscriptions, Average Net Monthly Paid Connected Fitness Subscription Churn, and Ending Paid App Subscriptions for the three months ended September 30, 2025 and 2024 is immaterial. Starting in fiscal 2026, we no longer report on Average Monthly Paid App Subscription Churn.
Previous wording
(3) Please see the section titled “Non-GAAP Financial Measures—Adjusted EBITDA” for a reconciliation of Net loss to Adjusted EBITDA and an explanation of why we consider Adjusted EBITDA to be a helpful measure for investors.
Current wording
(3) Please see the section titled “Non-GAAP Financial Measures—Adjusted EBITDA” for a reconciliation of Net income (loss) to Adjusted EBITDA and an explanation of why we consider Adjusted EBITDA to be a helpful measure for investors.
Previous wording
(4) Please see the section titled “Non-GAAP Financial Measures—Free Cash Flow” for a reconciliation of net cash provided by (used in) operating activities to Free Cash Flow and an explanation of why we consider Free Cash Flow to be a helpful measure for investors.
Current wording
(4) Please see the section titled “Non-GAAP Financial Measures—Free Cash Flow” for a reconciliation of Net cash provided by operating activities to Free Cash Flow and an explanation of why we consider Free Cash Flow to be a helpful measure for investors.
Previous wording
We refer to any cancellation or pausing of a subscription for our All-Access Membership as a churn event. Because we do not receive payment for paused Connected Fitness Subscriptions, a paused Connected Fitness Subscription is treated as a churn event at the time the pause goes into effect, which is the start of the next billing cycle. An unpause event occurs when a pause period elapses without a cancellation and the Connected Fitness Subscription resumes, and is therefore counted as a reduction in our churn count in that period. Our churn count is shown net of reactivations and our new quarterly Average Net Monthly Paid Connected Fitness Subscription Churn metric averages the monthly Connected Fitness churn percentage across the three months of the reported quarter.
Current wording
We refer to any cancellation or pausing of a subscription for our All-Access Membership as a churn event. Because we do not receive payment for paused Connected Fitness Subscriptions, a paused Connected Fitness Subscription is treated as a churn event at the time the pause goes into effect, which is the start of the next billing cycle. An unpause event occurs when a pause period elapses without a cancellation and the Connected Fitness Subscription resumes, and is therefore counted as a reduction in our churn count in that period. Our churn count is shown net of reactivations and our quarterly Average Net Monthly Paid Connected Fitness Subscription Churn metric averages the monthly Connected Fitness churn percentage across the three months of the reported quarter.
Previous wording
Connected Fitness Products Revenue consists of sales of our portfolio of Connected Fitness Products and related accessories, as well as Precor branded fitness products, delivery and installation services, Bike rental products, extended warranty agreements, branded apparel, and commercial service contracts. Connected Fitness Products Revenue is recognized at the time of delivery, except for extended warranty revenue that is recognized over the warranty period and service revenue that is recognized over the term, and is recorded net of sales returns and concessions, discounts and allowances, and third-party financing program fees, when applicable.
Current wording
Connected Fitness Products Revenue primarily consists of sales of our portfolio of Connected Fitness Products and related accessories, as well as Precor-branded fitness products, delivery and installation services, Peloton Bike portfolio rental products, extended warranty agreements, branded apparel, and commercial service contracts. Connected Fitness Products Revenue is recognized at the time of delivery, except for extended warranty revenue that is recognized over the warranty period and service revenue that is recognized over the term, and is recorded net of sales returns and concessions, discounts and allowances, and third-party financing program fees, when applicable.
Previous wording
As of March 31, 2025, 99% and 83% of our Connected Fitness Subscription and Paid App Subscription bases, respectively, were paying month-to-month.
Current wording
As of September 30, 2025, 99% and 81% of our Connected Fitness Subscription and Paid App Subscription bases, respectively, were paying month-to-month.
Previous wording
If a Connected Fitness Subscription owns multiple, different Peloton Connected Fitness Products (such as a Peloton Bike and Peloton Tread) in the same household, the price of the Subscription remains $44 monthly. As of March 31, 2025, approximately 12% of our Connected Fitness Subscriptions owned multiple, different Connected Fitness Products.
Current wording
A single Connected Fitness Subscription provides access to multiple, different Peloton Connected Fitness Products (such as a Peloton Bike and Peloton Tread) in the same household. As of September 30, 2025, approximately 13% of our Connected Fitness Subscriptions owned multiple, different Connected Fitness Products.
Previous wording
Connected Fitness Products Cost of revenue consists of our portfolio of Connected Fitness Products, related accessories, Precor branded fitness products, and branded apparel product costs, including third party manufacturing costs, duties and other applicable importing costs, shipping and handling costs, packaging, warranty replacement and service costs, fulfillment costs, warehousing costs, costs related to our commercial business, depreciation of property and equipment, and certain costs related to management, facilities, and personnel-related expenses associated with supply chain logistics. Inventory write-downs and related obsolescence reserve expense are also included within Connected Fitness Products Cost of revenue.
Current wording
Connected Fitness Products Cost of revenue primarily consists of our portfolio of Connected Fitness Products, related accessories, Precor-branded fitness products, and branded apparel product costs, including third party manufacturing costs, duties and other applicable importing costs, shipping and handling costs, packaging, warranty replacement and service costs, fulfillment costs, warehousing costs, costs related to our commercial business, depreciation of property and equipment, and certain costs related to management, facilities, and personnel-related expenses, including stock-based compensation expense, and expense associated with supply chain logistics. Inventory write-downs and related obsolescence reserve expense are also included within Connected Fitness Products Cost of revenue.
Previous wording
Subscription Cost of revenue includes costs associated with content creation and costs to stream content to our Members. These costs consist of both fixed costs, including studio rent and occupancy, other studio overhead, Instructor and production personnel-related expenses, depreciation of property and equipment as well as variable costs, including music royalty fees, third-party platform streaming costs, and payment processing fees for our monthly subscription billings.
Current wording
Subscription Cost of revenue primarily consists of costs associated with content creation and costs to stream content to our Members. These costs consist of both fixed costs, including Instructor, content, and production personnel-related expenses, including stock-based compensation expense, depreciation of property and equipment, studio rent and occupancy, and other studio overhead, as well as variable costs, including music royalty fees, third-party platform streaming costs, and payment processing fees for our monthly subscription billings.
Previous wording
Sales and marketing expense consists of performance marketing media spend, asset creation, and other brand creative, costs to operate our retail showrooms including rent and occupancy charges, payment processing fees incurred in connection with the sale of our Connected Fitness Products, sales and marketing personnel-related expenses, expenses related to the Peloton App and Strength+ App, and depreciation of property and equipment.
Current wording
Sales and marketing expense primarily consists of performance marketing media spend, asset creation, and other brand creative, sales and marketing personnel-related expenses, including stock-based compensation expense, costs to operate our retail showrooms including rent and occupancy charges, payment processing fees incurred in connection with the sale of our Connected Fitness Products, expenses related to the Peloton Apps, and depreciation of property and equipment.
Previous wording
General and administrative expense includes personnel-related expenses and facilities-related costs primarily for our executive, finance, accounting, legal, human resources, IT functions and Member support team. General and administrative expense also includes fees for professional services principally comprised of legal, audit, tax and accounting services, depreciation of property and equipment, and insurance, as well as litigation settlement costs.
Current wording
General and administrative expense primarily consists of personnel-related expenses, including stock-based compensation expense, and facilities-related costs, primarily for our executive, finance, accounting, legal, human resources, IT functions and Member support team. General and administrative expense also includes software and IT costs, fees for professional services principally comprising legal, audit, tax and accounting services, depreciation of property and equipment, insurance, and litigation settlement costs.
Previous wording
Research and development expense primarily consists of personnel and facilities-related expenses, consulting and contractor expenses, tooling and prototype materials, software platform expenses, and depreciation of property and equipment. We capitalize certain qualified costs incurred in connection with the development of internal-use software that may also cause research and development expenses to vary from period to period.
Current wording
Research and development expense primarily consists of personnel-related expenses, including stock-based compensation expense, and facilities-related expenses, consulting and contractor expenses, tooling and prototype materials, software platform expenses, and depreciation of property and equipment. We capitalize certain qualified costs incurred in connection with the development of internal-use software that may also cause research and development expenses to vary from period to period.
Previous wording
Impairment expense consists of non-cash impairment charges relating to long-lived assets. Impairments are determined using management’s judgment about our anticipated ability to continue to use fixed assets in-service and under development, current economic and market conditions and their effects based on information available as of the date of these condensed consolidated financial statements. Management disposes of fixed assets during the regular course of business due to damage, obsolescence, strategic shifts, and loss.
Current wording
Impairment expense primarily consists of non-cash impairment charges relating to long-lived assets. Impairments are determined using management’s judgment about our anticipated ability to continue to use fixed assets in-service and under development, current economic and market conditions and their effects based on information available as of the date of these condensed consolidated financial statements. Additionally, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Management disposes of fixed assets during the regular course of business due to damage, obsolescence, strategic shifts, and loss.
Previous wording
Other (expense) income, net consists of interest (expense) income, unrealized and realized gains (losses) on investments, and foreign exchange gains (losses).
Current wording
Total other expense, net primarily consists of interest (expense) income, unrealized and realized (losses) gains on investments, net gains relating to our refinancing activities, and foreign exchange (losses) gains.
Previous wording
The provision for income taxes consists primarily of income taxes related to state and international taxes for jurisdictions in which we conduct business. We maintain a valuation allowance on the majority of our deferred tax assets as we have concluded that it is more likely than not that the deferred assets will not be utilized.
Current wording
The provision for income taxes primarily consists of income taxes related to state and international taxes for jurisdictions in which we conduct business. We maintain a valuation allowance on the majority of our deferred tax assets as we have concluded that it is more likely than not that the deferred assets will not be utilized.
Previous wording
Comparison of the Three and Nine Months Ended March 31, 2025 and 2024
Current wording
Comparison of the Three Months Ended September 30, 2025 and 2024
Previous wording
Connected Fitness Products Revenue decreased $74.4 million and $161.1 million for the three and nine months ended March 31, 2025, respectively, compared to the three and nine months ended March 31, 2024. These decreases were primarily attributable to fewer Connected Fitness product deliveries driven by lower demand during the three and nine months ended March 31, 2025 when compared to the three and nine months ended March 31, 2024. The decrease for the nine months ended March 31, 2025 was partially offset by more Tread+ deliveries and improvements in Precor revenue during the nine months ended March 31, 2025.
Current wording
Connected Fitness Products Revenue decreased $7.2 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This decrease was primarily attributable to fewer Connected Fitness product deliveries driven by lower demand, partially offset by improvements in Precor revenue, for the three months ended September 30, 2025.
Previous wording
Subscription Revenue decreased $19.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to decreases in Paid Connected Fitness and App Subscriptions. The decrease was partially offset by an increase in Used Equipment Activation Fee revenue, which was introduced during the first quarter of fiscal 2025.
Current wording
Subscription Revenue decreased $28.0 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to decreases in Paid Connected Fitness and App Subscriptions.
Previous wording
Our Connected Fitness Products Gross Margin increased to 14.3% for the three months ended March 31, 2025 compared to 4.2% for the three months ended March 31, 2024. This increase was primarily driven by lower inventory write-downs, a mix shift towards higher margin products, and lower warehousing and transportation costs during the three months ended March 31, 2025 when compared to the three months ended March 31, 2024. These improvements were partially offset by changes in our warranty reserves.
Current wording
Our Connected Fitness Products Gross margin decreased to 6.9% for the three months ended September 30, 2025 compared to 9.2% for the three months ended September 30, 2024. This decrease was primarily driven by the $13.5 million expense incurred related to the Bike+ Seat Post Recall, which was partially offset by a mix shift towards higher margin products, lower warranty costs, and a decrease in inventory reserves.
Previous wording
Subscription Cost of revenue decreased $10.0 million, or 7.1% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to lower costs associated with music royalties, platform streaming, and content production.
Current wording
Subscription Cost of revenue decreased $12.0 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to lower costs associated with music royalties.
Previous wording
Sales and marketing expense decreased $63.8 million and $205.6 million for the three and nine months ended March 31, 2025, respectively, compared to the three and nine months ended March 31, 2024, primarily driven by decreases of $51.8 million and $167.9 million in acquisition, brand, and creative marketing spend for the three and nine months ended March 31, 2025, respectively, and decreases of $3.8 million and $14.1 million in personnel-related expenses, inclusive of stock-based compensation expense, mainly due to decreased average headcount, for the three and nine months ended March 31, 2025, respectively.
Current wording
Sales and marketing expense decreased $15.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily driven by a $15.2 million decrease in acquisition, brand, and creative marketing charges.
Previous wording
Research and development expense decreased $17.2 million and $57.0 million for the three and nine months ended March 31, 2025 respectively, compared to the three and nine months ended March 31, 2024, mainly driven by a $13.1 million and $41.0 million decrease in personnel-related expenses, inclusive of stock-based compensation expense, primarily due to decreased average headcount, for the three and nine months ended March 31, 2025, respectively, and a $2.6 million and $11.3 million decrease in product development costs, primarily due to a reduction in contractor spend for the three and nine months ended March 31, 2025, respectively.
Current wording
Research and development expense increased $3.6 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, mainly driven by a $3.7 million increase in personnel-related expenses, inclusive of stock-based compensation expense, and a $1.7 million increase in rent and occupancy charges, both primarily due to the assignment of executive compensation and other corporate overhead costs, discussed above, partially offset by a $2.0 million decrease in product development costs, primarily due to a reduction in contractor spend.
Previous wording
Impairment expense increased $11.7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to $32.2 million in asset write-downs and write-offs related to plans to right-size portions of our corporate office footprint during the three months ended March 31, 2025. This increase was partially offset by a $20.4 million decrease in impairment expense related to the exit of retail showroom locations during the three months ended March 31, 2025.
Current wording
Impairment expense increased $3.4 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to asset write-downs and write-offs in connection with the exit of our retail showroom locations.
Previous wording
Supplier settlements were flat for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, and increased $25.9 million for the nine months ended March 31, 2025 compared to the nine months ended March 31, 2024 due to the settlement of disputes with a third-party supplier about certain alleged past and future commitments.
Current wording
Supplier settlements decreased $23.5 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 due to accruals for the three months ended September 30, 2024 related to the settlement of disputes with a third-party supplier about certain alleged past and future commitments.
Previous wording
Total Other Expense, Net and Income Tax Expense (Benefit)
Current wording
Total other expense, net and Income tax expense
Previous wording
Total other expense, net, was composed of the following for the three and nine months ended March 31, 2025:
Current wording
Total other expense, net was comprised of the following for the three months ended September 30, 2025:
Previous wording
•Interest expense primarily related to our term loan and convertible notes, and deferred financing costs of $32.6 million and $102.6 million, respectively;
Current wording
•Interest expense primarily related to our Term Loan, convertible notes, and deferred financing costs of $32.3 million;
Previous wording
•Interest income from cash, cash equivalents, and short-term investments of $7.9 million and $23.7 million, respectively;
Current wording
•Interest income from cash, cash equivalents, and short-term investments of $9.8 million;
Previous wording
Total other expense, net, was composed of the following for the three and nine months ended March 31, 2024:
Current wording
Total other expense, net was comprised of the following for the three months ended September 30, 2024:
Previous wording
•Interest expense primarily related to our term loan and convertible notes, and deferred financing costs of $27.7 million and $82.6 million, respectively;
Current wording
•Interest expense primarily related to our Term Loan, convertible notes, and deferred financing costs of $35.4 million;
Previous wording
•Interest income from cash, cash equivalents, and short-term investments of $9.3 million and $26.2 million, respectively;
Current wording
•Interest income from cash, cash equivalents, and short-term investments of $8.1 million;
Previous wording
•Other expense, net of $0.1 million and zero, respectively.
Current wording
•Other expense, net of $0.1 million.
Previous wording
Income tax expense for the three and nine months ended March 31, 2025 of $0.8 million and $2.3 million, respectively, was primarily due to state and international taxes. Income tax expense (benefit) for the three and nine months ended March 31, 2024 of $0.6 million and $(0.3) million, respectively, was primarily due to state and international taxes.
Current wording
Income tax expense for the three months ended September 30, 2025 and 2024 of $0.7 million and $0.8 million, respectively, was primarily due to state and international taxes.
Previous wording
We calculate Adjusted EBITDA as net (loss) income adjusted to exclude: other expense (income), net; income tax expense; depreciation and amortization expense; stock-based compensation expense; impairment expense; product recall related matters; certain litigation and settlement expenses; transaction and integration costs; reorganization, severance, exit, disposal and other costs associated with restructuring plans; supplier settlements; and other adjustment items that arise outside the ordinary course of our business.
Current wording
We calculate Adjusted EBITDA as net income (loss) adjusted to exclude: other expense (income), net; net (gains) losses on debt refinancing; income tax expense (benefit); depreciation and amortization expense; stock-based compensation expense; impairment expense; restructuring expense; product recall related matters; certain litigation and settlement expenses; supplier settlements; and other adjustment items that arise outside the ordinary course of our business.
Previous wording
•Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us; or (3) tax payments that may represent a reduction in cash available to us;
Current wording
•Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) interest and other income (expense), or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us; or (3) income taxes, which may represent a reduction in cash available to us;
Previous wording
•Adjusted EBITDA does not reflect transaction and integration costs related to acquisitions;
Current wording
•Adjusted EBITDA does not reflect acquisition-related costs, including transaction and integration costs;
Previous wording
•Adjusted EBITDA does not reflect impairment charges for goodwill and fixed assets, and gains (losses) on disposals for fixed assets;
Current wording
•Adjusted EBITDA does not reflect impairment charges and gains (losses) on disposals of fixed assets;
Showing the first 40 of 61 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
•Foreign exchange losses of $3.8 million; and
Current report — wording carried from elsewhere
•Adjusted EBITDA does not reflect costs associated with the Restructuring Plans;
Current report — wording carried from elsewhere
Net cash provided by operating activities of $12.5 million for the three months ended September 30, 2024 was primarily due to non-cash adjustments of $78.9 million, partially offset by a net increase in operating assets and liabilities of $65.6 million. Non-cash adjustments primarily consisted of $47.2 million of stock-based compensation expense, $24.8 million of depreciation and amortization, and $14.7 million of non-cash operating lease expense, partially offset by $(14.8) million of net foreign currency adjustments. The net increase in operating assets and liabilities was primarily due to a $48.7 million decrease in accounts payable and accrued expenses, a $21.9 million decrease in net operating lease liabilities due to lease payments and lease terminations as we continued to reduce our real estate footprint in connection with the Restructuring Plans, and a $9.4 million decrease in customer deposits and deferred revenue, partially offset by a $12.1 million decrease in prepaid expenses and other current assets.
Current report — wording carried from elsewhere
Refer to Note 7, Debt in the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details regarding our debt obligations.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Average Monthly Paid App Subscription Churn
Previous report — wording carried elsewhere
We do not believe these cost-saving measures will impair our ability to conduct any of our key business functions. However, we may not be able to realize the cost savings and benefits initially anticipated as a result of the Restructuring Plans, 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.
Previous report — wording carried elsewhere
In February 2021, we issued $1.0 billion aggregate principal amount of the 2026 Notes in a private offering, including the exercise in full of the option granted to the initial purchasers to purchase $125.0 million of the 2026 Notes. The 2026 Notes were issued pursuant to an Indenture (the “2026 Notes Indenture”) between us and U.S. Bank National Association, as trustee. The net proceeds from the offering were approximately $977.2 million, after deducting the initial purchasers’ discounts and commissions and our offering expenses.
Previous report — wording carried elsewhere
The Third Amended and Restated Credit Agreement provides for a $1.0 billion term loan facility (the “Term Loan”), which will be due and payable on May 30, 2029. The Term Loan amortizes in quarterly installments of 0.25%, payable at the end of each fiscal quarter and on the maturity date.
Previous report — wording carried elsewhere
The Third Amended and Restated Credit Agreement also provides for a $100.0 million revolving credit facility (the “Revolving Facility”), which will mature on May 30, 2029. We are only required to meet the total liquidity covenant, set at $250.0 million for the last business day of any week, and the subscription revenues covenant, set at $1.2 billion for the four-quarter trailing period, to the extent any revolving loans are borrowed and outstanding.
Previous report — wording carried elsewhere
As of March 31, 2025, we had drawn the full amount of the Term Loan and had not drawn on the Revolving Facility, and we had $992.5 million total outstanding borrowings under the Third Amended and Restated Credit Agreement.