PELOTON INTERACTIVE, INC.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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, 2026 · Filed Nov 5, 2026
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 2026-03-31; filed 2026-05-07.
0001639825-26-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001639825-26-000048
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 197 previous paragraphs and 180 current paragraphs.
112 unchanged; 51 reworded; 15 added; 34 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 18 previous and 17 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 (15)
Current report
Our revenue is generated primarily from recurring Subscription Revenue and the sale of our Connected Fitness Products. The Company’s portfolio of Connected Fitness Products primarily consists of Peloton-branded Connected Fitness Products and related accessories, Precor-branded fitness and wellness products, delivery and installation services, extended warranty and other service agreements, and Peloton-branded apparel.
Current report
In September 2026, we announced a refresh of our consumer treadmill portfolio with the upcoming launch of the Peloton Tread Flex—our first folding treadmill—along with the Peloton Tread Vision and Peloton Tread+ Vision. Additionally, we began accepting orders for the Commercial Series Tread and Bike, our first Peloton-branded Bike and Tread designed for high-traffic gym environments.
Current report
On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"). U.S. Customs and Border Protection (“CBP”) subsequently launched the Consolidated Administration and Processing of Entries (“CAPE”) process to permit importers to seek refunds on previously paid IEEPA tariffs. The Company submitted refund claims in CAPE in June and October 2026 for IEEPA tariffs previously paid by the Company.
Current report
During the three months ended September 30, 2026, the Company received refund payments for substantially all of the IEEPA tariffs previously paid, which we recognized as a reduction of Connected Fitness Products Cost of revenue in the Condensed Consolidated Statements of Operations and Comprehensive Income, in accordance with ASC 450-30. Any interest on amounts received was recognized within Interest income in the Condensed Consolidated Statements of Operations and Comprehensive Income. We continue to closely monitor updates from CBP and will continue to recognize any IEEPA tariff refunds or related receivables when they are realized or realizable.
Current report
Following the ruling on IEEPA tariffs, we were subject to Section 122 tariffs of 10%, which expired on July 23, 2026. Concurrently, effective July 24, 2026, the U.S. government imposed new tariffs of 10.0% to 12.5% on goods from approximately 60 economies under Section 301 of the Trade Act of 1974, including from economies where we have significant operations or commercial presence, such as Taiwan and China.
Current report
Our Connected Fitness Products Gross margin increased to 33.4% for the three months ended September 30, 2026, compared to 6.9% for the three months ended September 30, 2025. This increase was primarily driven by refunds received during the three months ended September 30, 2026 for IEEPA tariffs previously paid and expensed, and the year-over-year benefit related to the expense incurred for the Original Series Bike+ seat post recall during the three months ended September 30, 2025.
Current report
Sales and marketing expense increased $9.9 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily driven by an increase in acquisition and brand marketing spend.
Current report
•Foreign exchange losses of $3.8 million; and
Current report
•Other expense, net of $0.3 million.
Current report
(1) Primarily consists of Interest expense of $30.4 million and $32.3 million, Interest income of $(10.7) million and $(9.8) million, and foreign exchange (gains) losses of $(1.1) million and $3.8 million, for the three months ended September 30, 2026 and 2025, respectively.
Current report
Net cash used in investing activities of $6.3 million for the three months ended September 30, 2026 was due to $4.0 million used for business combinations and other investing activities and $2.3 million used for capital expenditures.
Current report
Income Taxes
Current report
The Company utilizes the asset and liability method for computing its income tax provision, which consists primarily of income taxes related to state and international taxes for jurisdictions in which the Company conducts business. Deferred tax assets and liabilities reflect the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities as well as operating loss, capital loss, and tax credit carryforwards, using enacted tax rates. Management makes estimates, assumptions, and judgments to determine the Company’s provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent the Company believes recovery of its deferred tax assets is not more-likely-than-not, a valuation allowance is established.
Current report
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement.
Current report
Based on management’s assessment of historical results and forecasts, management is continuously monitoring the weight of both positive and negative evidence. Based on these trends, it is reasonably possible that within the next 12 months, management may conclude that it is more likely than not that a substantial portion of these deferred tax assets will be realized. If such a determination is made, it would result in the recognition of net deferred tax assets on the Company’s Condensed Consolidated Balance Sheets and a corresponding benefit recorded within the income tax provision in the period of release. However, management’s judgment regarding future earnings and the exact timing and amount of any valuation allowance release are subject to change due to many factors, including but not limited to, future market conditions and the ability to successfully execute the Company’s business plans. The Company will continue to maintain a valuation allowance against deferred tax assets where we believe that it is more likely than not that they will not be realized.
Removed paragraphs (34)
Previous report
In October 2025, we launched the Cross Training Series, a refreshed portfolio of Connected Fitness Products, which includes the Cross Training Bike, Bike+, Tread, Tread+, and Row+. We also launched the Peloton Pro Series, a refresh of our portfolio of commercial-certified Peloton-branded products, which now includes the Bike+ Pro, Tread+ Pro, and Row+ Pro. In connection with the Cross Training Series launch, we discontinued the sale of our original series (the “Original Series”) Tread, Tread+, and Row; however we continue to sell the refurbished Original Series Bike and Bike+, as well as our Precor products (collectively with the Cross Training Series and the Peloton Pro Series, the "Connected Fitness Products").
Previous report
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 report
Our financial profile has been characterized by strong retention, recurring revenue, and efficient customer acquisition. We believe that our low Average Net Monthly Paid Connected Fitness Subscription Churn, together with our high Subscription Gross Profit and Subscription Contribution Margin, yields an attractive lifetime value (“LTV”) for our Connected Fitness Subscriptions well in excess of our customer acquisition costs (“CAC”). Maintainingan attractive LTV/CAC ratio is a primary goal of our customer acquisition strategy.
Previous report
Restructuring
Previous report
In August 2025, we announced a restructuring plan (the “2025 Restructuring Plan”), which includes a reduction in global headcount and is intended to continue to improve our cost structure, operating efficiency, and profitability, while providing us the opportunity to return to growth by reinvesting expected savings into our differentiating capabilities. We expect the 2025 Restructuring Plan to be substantially implemented by the end of fiscal year 2026, which is subject to change.
Previous report
In connection with the 2025 Restructuring Plan, we estimate that we will incur additional cash restructuring charges of approximately $15.0 million, primarily comprising 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 comprising asset write-downs and write-offs in connection with the continued exit of our 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.
Previous report
Upon full implementation, we expect the 2025 Restructuring Plan to achieve at least $100.0 million of run-rate savings by the end of fiscal year 2026.
Previous report
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 the Form 10-K.
Previous report
On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Power Act ("IEEPA"). We are closely monitoring updates from U.S. Customs and Border Protection (“CBP”), and are positioned to submit our IEEPA tariff refund claim as soon as CBP is ready to accept such refund claims. We will continue to evaluate new information and will recognize any IEEPA tariff refunds or related receivables when they are realized or realizable.
Previous report
As of March 31, 2026, we have accrued $7.2 million to replace Original Series Bike+ seat posts, which is a reduction from our accrual of $16.5 million as of September 30, 2025. This reduction is primarily driven by the utilization of our previously established accrual. We have not established any incremental accruals since 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).
Previous 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 involving the Original Series Bike+ seat post materially increases, 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 the Form 10-K.
Previous 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.
Previous report
Supplier settlements
Previous report
Supplier settlements are payments made to third-party suppliers to terminate certain future inventory purchase commitments or settle disputes with suppliers about and to terminate certain alleged past and future commitments.
Previous report
Connected Fitness Products Revenue decreased $19.2 million for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, primarily attributable to lower sales of certain Connected Fitness products, partially offset by improvements in Precor revenue during the nine months ended March 31, 2026.
Previous report
Subscription Revenue decreased $26.5 million for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, primarily due to decreases in Paid Connected Fitness and App Subscriptions and decreases in content licensing revenue, partially offset by the subscription price increases that became effective during the three months ended December 31, 2025.
Previous report
Connected Fitness Products Cost of revenue increased $3.8 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. This increase was primarily driven by higher sales of Precor-branded fitness products, and an increase in import tariff charges, partially offset by lower sales of certain Connected Fitness products, and lower warranty expense.
Previous report
Our Connected Fitness Products Gross margin decreased to 11.3% for the three months ended March 31, 2026, compared to 14.3% for the three months ended March 31, 2025. This decrease was primarily driven by higher promotional discounts, a product mix shift towards lower-margin products, and an increase in import tariff charges, partially offset by lower warranty expense.
Previous report
Our Connected Fitness Products Gross margin decreased to 11.3% for the nine months ended March 31, 2026, compared to 12.4% for the nine months ended March 31, 2025. This decrease was primarily driven by the $13.5 million expense incurred related to the Original Series Bike+ seat post recall, higher promotional discounts, a product mix shift towards lower-margin products, and an increase in import tariff charges, partially offset by lower warranty expense.
Previous report
Subscription Cost of revenue decreased $37.9 million for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, primarily due to lower music royalties costs and related reserves, and a reduction in depreciation and amortization expense.
Previous report
Subscription Gross margin increased to 70.6% for the nine months ended March 31, 2026, compared to 68.2% for the nine months ended March 31, 2025. This increase was primarily driven by the subscription price increases that became effective during the three months ended December 31, 2025, and lower music royalties costs and related reserves, partially offset by decreases in Paid Connected Fitness and App Subscriptions and content licensing revenue.
Previous report
Sales and marketing expense decreased $24.2 million for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, primarily driven by a $22.1 million decrease in acquisition and brand marketing charges, and a $3.2 million decrease in rent and occupancy charges due to the exit of certain retail showroom locations.
Previous report
Three and Nine Months Ended March 31, 2026 and 2025
Previous report
General and administrative expense decreased $41.0 million and $88.1 million for the three and nine months ended March 31, 2026, respectively, compared to the three and nine months ended March 31, 2025. The decrease was mainly driven by a decrease of $32.0 million and $60.6 million in personnel-related expenses, inclusive of stock-based compensation expense, respectively, primarily due to decreased average headcount and the assignment of executive compensation to the various expense captions beginning in fiscal 2026, and a decrease of $4.0 million and $12.2 million in rent and occupancy charges, respectively, primarily due to the assignment of other corporate overhead costs to the various expense captions beginning in fiscal 2026.
Previous report
Three and Nine Months Ended March 31, 2026 and 2025
Previous report
Impairment expense decreased $17.6 million for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, mainly driven by a $9.3 million decrease in asset write-downs and write-offs related to plans to right-size portions of our corporate office footprint, and a $6.1 million decrease in impairment expense related to the exit of retail showroom locations.
Previous report
Restructuring expense increased $1.7 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to an increase in severance and other personnel costs in connection with the Restructuring Plans.
Previous report
Supplier settlements
Previous report
Supplier settlements decreased $23.5 million for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, due to the settlement of disputes with a third-party supplier about certain alleged past and future commitments during the nine months ended March 31, 2025.
Previous report
•Foreign exchange losses of $4.3 million and $10.6 million, respectively; and
Previous report
•Other expense, net of zero and $0.3 million, respectively.
Previous report
(1) Primarily consists of Interest expense of $30.0 million and $93.8 million, Interest income of $(8.7) million and $(27.6) million, and foreign exchange losses of $4.3 million and $10.6 million, for the three and nine months ended March 31, 2026, respectively. Primarily consists of Interest expense of $32.6 million and $102.6 million, foreign exchange gains of $(10.3) million and $(6.6) million, and Interest income of $(7.9) million and $(23.7) million, for the three and nine months ended March 31, 2025, respectively.
Previous report
(3)Represents accrual for the nine months ended March 31, 2025 related to settlement of disputes with a third-party supplier about certain alleged past and future commitments, which occurred due to part of an unusual, one-time effort to adjust our forecasted inventory during its fiscal years 2022 and 2023. With this settlement, we have substantially settled our purchase commitments related disputes with our suppliers that were linked to our one-time effort to evaluate and adjust our forecasted inventory needs with our suppliers during fiscal years 2022 and 2023. As such, we currently do not expect to add back any additional supplier settlements related to that effort.
Previous report
Net cash used in investing activities of $0.4 million for the nine months ended March 31, 2025 was due to $4.6 million used for capital expenditures, partially offset by $4.2 million in proceeds from the sale of the remaining Peloton Output Park land parcel.
Reworded paragraphs (51)
Previous wording
Peloton is a leading global fitness and wellness company that empowers its Members (as defined below) 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 5.8 million Members as of March 31, 2026, 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 wording
Peloton is a leading global fitness and wellness company that empowers people to live fit, strong, long, and happy, by bringing integrated fitness and wellness experiences to Members (as defined below) anytime, anywhere. Founded in 2012 and headquartered in New York City, we offer a breadth of fitness and wellness solutions to consumers worldwide, including our highly engaged community of approximately 5.3 million Members as of September 30, 2026, across the United States, United Kingdom, Canada, Germany, Australia, and Austria, and Commercial Business Unit customers inover 60 countries. As a category innovator at the nexus of fitness, wellness, technology, and media, we deliver integrated experiences through our world-renowned instructors (“Instructors”), premium hardware and innovative software, personalization, extensive modalities and an expansive content library.
Previous 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.
Current wording
We define a “Member” as any individual who has a Peloton account through a Paid Connected Fitness Subscription (as defined below) 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 (guided, time, and distance-based routes filmed in locations around the world), and Lanebreak workouts (our game-inspired workout experience); (ii) at least 10 minutes of any activity tracking workout (such as “Just Ride”, “Just Run”, or “Just Row”), or Peloton Entertainment workout (video streaming); (iii)at least 5 minutes of any Strength+ workout with 80% of sets marked complete; or (iv) at least 10 minutes of any Breathwrk class.
Previous wording
While IEEPA tariffs are no longer effective, we are now currently subject to Section 122 tariffs of 10%. Additionally, on April 2, 2026, President Trump issued a presidential proclamation modifying the application of Section 232 tariffs on steel, aluminum, and their derivative products, which, among other things, removed fitness equipment from the scope of those tariffs. As a result, as of April 6, 2026, the steel and aluminum content in our Connected Fitness Products is no longer subject to Section 232 tariffs of 50%.
Current wording
Additionally, on April 2, 2026, President Trump issued a presidential proclamation modifying the application of Section 232 tariffs on steel, aluminum, and their derivative products, which, among other things, removed fitness equipment from the scope of those tariffs. As a result, as of April 6, 2026, the steel and aluminum content in our Connected Fitness Products is no longer subject to Section 232 tariffs of 50%.
Previous wording
We continue to closely monitor changes in international trade policies, relations, legislation and regulations, including those related to tariffs, which could adversely impact the global economy and our business, financial condition, and operating results. The impact of any tariffs will depend on various factors, including whether certain tariffs are ultimately implemented, the timing of implementation, and the amount, scope and nature of the tariffs.
Current wording
We will continue to closely monitor changes in international trade policies, relations, legislation and regulations, including those related to tariffs, which could adversely impact the global economy and our business, financial condition, and operating results. The impact of any tariffs will depend on various factors, including whether certain tariffs are ultimately implemented, the timing of implementation, any nullification or repeal, and the amount, scope and nature of the tariffs.
Previous wording
As previously disclosed, 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+). We are offering Members a free replacement seat post as the approved remedy.
Current wording
As previously disclosed, in November 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+, providing customers with a free replacement seat post. Our financial results reflect our current estimate of the remaining costs to replace Original Series Bike+ seat posts, which have been accrued as of September 30, 2026.
Previous wording
(2) 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.
Current wording
(2) Please see the section titled “Non-GAAP Financial Measures—Adjusted EBITDA” for a reconciliation of Net income to Adjusted EBITDA and an explanation of why we consider Adjusted EBITDA to be a helpful measure for investors.
Previous wording
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 wording
Ending Paid App Subscriptions includes all subscriptions to our Peloton Apps for which we are currently receiving payment (a successful credit card billing or prepaid with subscription credits or waivers).
Previous wording
Connected Fitness Products Revenue primarily consists of sales of our portfolio of Connected Fitness Products and related accessories, including 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.
Current wording
Connected Fitness Products Revenue primarily consists of sales of our portfolio of Peloton-branded Connected Fitness Products and related accessories, 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
Subscription Revenue primarily consists of revenue generated from our Paid Connected Fitness Subscriptions and Paid Peloton App Subscriptions, which are offered on a month-to-month or prepaid basis, and revenue generated from content licensing arrangements.
Current wording
Subscription Revenue primarily consists of revenue generated from our Paid Connected Fitness Subscriptions and Paid Peloton App Subscriptions, which are offered on a month-to-month or annual prepaid basis, and revenue generated from content licensing arrangements.
Previous wording
As of March 31, 2026, 99% and 77% of our Connected Fitness Subscription and Paid App Subscription bases, respectively, were paying month-to-month.
Current wording
As of September 30, 2026, 99% and 76% of our Connected Fitness Subscription and Paid App Subscription bases, respectively, were paying month-to-month.
Previous 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 March 31, 2026, 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-branded Connected Fitness Products (such as a Peloton Bike and Peloton Tread) in the same household. As of September 30, 2026, approximately 13% of our Connected Fitness Subscriptions owned multiple, different Connected Fitness Products.
Previous 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.
Current wording
Connected Fitness Products Cost of revenue primarily consists of our portfolio of Peloton-branded Connected Fitness Products and related accessories, Precor 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, 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 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.
Current wording
Subscription Cost of revenue primarily consists of costs associated with content creation and costs to stream content to our Members. Fixed costs primarily include Instructor, content, production, and management personnel-related expenses, including stock-based compensation expense, as well as certain costs related to facilities, including depreciation of property and equipment, studio rent and occupancy, and other studio overhead. Variable costs primarily include music royalty fees, third-party platform streaming costs, and payment processing fees for our monthly subscription billings.
Previous 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.
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.
Previous wording
Comparison of the Three and Nine Months Ended March 31, 2026 and 2025
Current wording
Comparison of the Three Months Ended September 30, 2026 and 2025
Previous wording
Connected Fitness Products Revenue decreased $2.6 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to lower sales of certain Connected Fitness products, partially offset by improvements in Precor revenue during the three months ended March 31, 2026.
Current wording
Connected Fitness Products Revenue decreased $4.0 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily attributable to lower sales of certain Peloton-branded Connected Fitness Products, partially offset by higher sales of Precor-branded fitness products during the three months ended September 30, 2026.
Previous wording
Subscription Revenue increased $9.4 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to the subscription price increases that became effective during the three months ended December 31, 2025, partially offset by decreases in Paid Connected Fitness and App Subscriptions and decreases in content licensing revenue during the three months ended March 31, 2026.
Current wording
Subscription Revenue increased $12.3 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to the subscription price increases that became effective during the three months ended December 31, 2025, and increases in content licensing revenue, partially offset by decreases in Paid Connected Fitness and App Subscriptions.
Previous wording
Connected Fitness Products Cost of revenue decreased $9.9 million for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025. This decrease was primarily driven by lower sales of certain Connected Fitness Products, and lower warranty expense, partially offset by the $13.5 million expense incurred related to the Original Series Bike+ seat post recall, higher sales of Precor-branded fitness products, and an increase in import tariff charges.
Current wording
Connected Fitness Products Cost of revenue decreased $43.0 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. This decrease was primarily driven by refunds received during the three months ended September 30, 2026 for IEEPA tariffs previously paid, a year-over-year benefit related to the expense incurred for the Original Series Bike+ seat post recall during the three months ended September 30, 2025, and lower sales of certain Peloton-branded Connected Fitness Products, partially offset by higher sales of Precor-branded fitness products.
Previous wording
Subscription Cost of revenue decreased $6.1 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to lower music royalties costs and related reserves, and a reduction in depreciation and amortization expense.
Current wording
Subscription Cost of revenue decreased $7.5 million for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily attributable to a decrease in personnel-related expenses, inclusive of stock-based compensation expense, driven by reduced average headcount, and a reduction in depreciation and amortization expense.
Previous wording
Subscription Gross margin increased to 71.1% for the three months ended March 31, 2026, compared to 69.0% for the three months ended March 31, 2025. This increase was primarily driven by the subscription price increases that became effective during the three months ended December 31, 2025, and lower music royalties costs and related reserves, partially offset by decreases in Paid Connected Fitness and App Subscriptions and content licensing revenue.
Current wording
Subscription Gross margin increased to 71.3% for the three months ended September 30, 2026, compared to 68.6% for the three months ended September 30, 2025. This increase was primarily driven by the subscription price increases that became effective during the three months ended December 31, 2025, and a decrease in personnel-related expenses, inclusive of stock-based compensation expense, partially offset by decreases in Paid Connected Fitness and App Subscriptions.
Previous wording
Sales and marketing expense decreased $8.4 million for the three and nine months ended March 31, 2026, respectively, compared to the three and nine months ended March 31, 2025, primarily driven by a decrease in acquisition marketing spend.
Current wording
General and administrative expense decreased $8.4 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily driven by a decrease in personnel-related expenses, inclusive of stock-based compensation expense, due to decreased average headcount.
Previous wording
Research and development expense remained mostly consistent for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Research and development expense increased $7.5 million for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, mainly driven by a $7.2 million increase in personnel-related expenses, inclusive of stock-based compensation expense, and a $4.6 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 $2.7 million decrease in product development costs, primarily due to a reduction in contractor spend.
Current wording
Research and development expense decreased $5.2 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, mainly driven by a $4.2 million decrease in personnel-related expenses, inclusive of stock-based compensation expense, due to decreased average headcount, and a $2.2 million decrease in product development costs, driven by a reduction in contractor spend, partially offset by a $1.1 million increase in software platform expenses.
Previous wording
Impairment expense decreased $27.3 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, mainly driven by a $32.2 million decrease in asset write-downs and write-offs related to plans to right-size portions of our corporate office footprint, partially offset by a $7.9 million increase in impairment expense related to the exit of retail showroom locations.
Current wording
Impairment expense decreased $7.4 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, mainly driven by a decrease in impairment expense related to the exit of retail showroom locations.
Previous wording
Restructuring expense increased $2.6 million for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, primarily due to an increase in exit and disposal costs and professional fees, and an increase in stock-based compensation expense, in connection with the Restructuring Plans.
Current wording
Restructuring expense decreased $5.0 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to a decrease in exit and disposal costs and professional fees in connection with the Restructuring Plans.
Previous wording
Total other expense, net comprised the following for the three and nine months ended March 31, 2026:
Current wording
Total other expense, net comprised the following for the three months ended September 30, 2026:
Previous wording
•Interest expense primarily related to our Term Loan and convertible notes of $30.0 million and $93.8 million, respectively;
Current wording
•Interest expense primarily related to our Term Loan and convertible notes of $30.4 million;
Previous wording
•Interest income from cash, cash equivalents, and short-term investments of $8.7 million and $27.6 million, respectively;
Current wording
•Interest income from cash, cash equivalents, and short-term investments of $10.7 million;
Previous wording
•Foreign exchange gains of $10.3 million and $6.6 million, respectively; and
Current wording
•Foreign exchange gains of $1.1 million; and
Previous wording
•Other expense, net of $0.1 million and zero, respectively.
Current wording
•Other income, net of $0.1 million.
Previous wording
Total other expense, net comprised the following for the three and nine months ended March 31, 2025:
Current wording
Total other expense, net comprised the following for the three months ended September 30, 2025:
Previous wording
•Interest expense primarily related to our Term Loan and convertible notes of $32.6 million and $102.6 million, respectively;
Current wording
•Interest expense primarily related to our Term Loan and convertible notes 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
Income tax expense for the three and nine months ended March 31, 2026 of $0.4 million and $0.9 million, respectively, was primarily due to state and international taxes. 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.
Current wording
Income tax expense for the three months ended September 30, 2026 and 2025 of $1.5 million and $0.7 million, respectively, was primarily due to state and international taxes.
Previous 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.
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; certain 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 costs associated with the Restructuring Plans;
Current wording
•Adjusted EBITDA does not reflect costs associated with the Restructuring Plans and similar initiatives;
Previous wording
•Adjusted EBITDA does not reflect supplier settlements that are outside of the ordinary course of business and are nonrecurring, infrequent or unusual based on factors such as the nature of the settlements, as well as our frequency and past practice of performing refinancing activities; and
Current wording
•Adjusted EBITDA does not reflect supplier settlements that are outside of the ordinary course of business and are nonrecurring, infrequent or unusual based on factors such as the nature of the settlements; and
Previous wording
The following table presents a reconciliation of Adjusted EBITDA to Net income (loss), the most directly comparable financial measure prepared in accordance with GAAP, for each of the periods indicated:
Current wording
The following table presents a reconciliation of Adjusted EBITDA to Net income, the most directly comparable financial measure prepared in accordance with GAAP, for each of the periods indicated:
Previous wording
Our operations have been funded primarily through net proceeds from the sales of our equity and convertible debt securities, our Term Loan, as well as cash flows from operating activities. As of March 31, 2026, we had Cash and cash equivalents of approximately $1,126.3 million.
Current wording
Our operations have been funded primarily through net proceeds from the sales of our equity and convertible debt securities, our Term Loan, as well as cash flows from operating activities. As of September 30, 2026, we had Cash and cash equivalents of approximately $1,342.2 million.
Previous wording
Net cash provided by operating activities of $215.9 million for the nine months ended March 31, 2025 was primarily related to non-cash adjustments of $339.5 million and a net decrease in operating assets and liabilities of $16.8 million, partially offset by a net loss of $140.5 million. Non-cash adjustments primarily consisted of $176.2 million of stock-based compensation expense, $68.8 million of depreciation and amortization, $52.3 million of impairment expense, and $41.9 million of non-cash operating lease expense. The decrease in operating assets and liabilities was primarily due to a $125.0 million decrease in net inventory levels and a $25.2 million decrease in prepaid expenses and other current assets, partially offset by a $79.5 million decrease in accounts payable and accrued expenses and a $64.1 million decrease in net operating lease liabilities due to lease payments and lease terminations as we continue to reduce our real estate footprint through our 2024 Restructuring Plan efforts.
Current wording
Net cash provided by operating activities of $145.7 million for the three months ended September 30, 2026 was primarily related to net income of $96.2 million, and non-cash adjustments of $64.5 million, partially offset by a net increase in operating assets and liabilities of $15.1 million. Non-cash adjustments primarily consisted of $39.9 million of stock-based compensation expense, $11.3 million of depreciation and amortization, and $11.3 million of non-cash operating lease expense. The net increase in operating assets and liabilities was primarily due to a $21.5 million increase in net inventory levels, a $15.8 million decrease in net operating lease liabilities driven by lease payments, and a $10.0 million decrease in deferred revenue and customer deposits, partially offset by a $26.2 million increase in accounts payable and accrued expenses.
Previous wording
Net cash provided by operating activities of $296.5 million for the nine months ended March 31, 2026 was primarily related to non-cash adjustments of $292.0 million, a net decrease in operating assets and liabilities of $2.9 million and a net income of $1.6 million. Non-cash adjustments primarily consisted of $155.6 million of stock-based compensation expense, $45.7 million of depreciation and amortization, $38.4 million of non-cash operating lease expense, and $34.7 million of impairment expense. The net decrease in operating assets and liabilities was primarily due to a $38.4 million decrease in net inventory levels, a $37.9 million decrease in prepaid expenses and other current assets, and a $22.4 million decrease in accounts receivable, partially offset by a $57.7 million decrease in net operating lease liabilities due to lease payments and lease terminations as we continue to reduce our real estate footprint in connection with the Restructuring Plans, and a $27.6 million decrease in accounts payable and accrued expenses.
Current wording
Net cash provided by operating activities of $71.9 million for the three months ended September 30, 2025 was primarily related to non-cash adjustments of $93.2 million and a net income of $13.9 million, partially offset by a net increase in operating assets and liabilities of $35.2 million. Non-cash adjustments primarily consisted of $47.2 million of stock-based compensation expense, $16.8 million of depreciation and amortization, $14.8 million of non-cash operating lease expense, and $8.3 million of impairment expense. The net increase in operating assets and liabilities was primarily due to a $30.0 million increase in net inventory levels, a $21.1 million decrease in net operating lease liabilities due to lease payments and lease terminations as we continue to reduce our real estate footprint in connection with the Restructuring Plans, a $9.6 million decrease in customer deposits and deferred revenue, and a $9.5 million increase in prepaid expenses and other current assets, partially offset by a $30.7 million decrease in accounts receivable driven by collections.
Showing the first 40 of 51 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
Notes will mature on December 1, 2029, unless earlier converted, redeemed, or repurchased. The 2029 Notes will be convertible at the option of the holders at certain times and upon the occurrence of certain events.