Core Viewpoint - Peloton has launched a new marketplace called Repowered for reselling used equipment, aiming to leverage the growing number of unused bikes and treadmills in homes [1][3]. Group 1: Marketplace Features - The Repowered platform allows members to list their used Peloton equipment and set prices with assistance from a generative AI tool [1][2]. - Sellers retain 70% of the sales price, while the remainder is shared between Peloton and its platform provider, Archive [2]. - Buyers will benefit from a reduced activation fee for used products, dropping from $95 to $45 [2]. Group 2: Market Opportunity - The resale market for used Peloton equipment is expanding, and the company aims to streamline the sales process while providing a safe buying experience [3]. - Peloton has observed a 16% year-over-year increase in paid connected fitness subscribers who purchased hardware from secondary markets, indicating a potential for lower churn rates among these users [4]. Group 3: Competitive Landscape - Repowered is positioned as a competitor to platforms like Facebook Marketplace and the startup Trade My Stuff, which specializes in used Peloton equipment [6]. - The platform is initially launching in beta in New York City, Boston, and Washington, D.C., with plans for a nationwide rollout [7].

Core Viewpoint - Peloton Interactive, Inc. will have its CEO Peter Stern participate in a fireside chat at the Bank of America Global Technology Conference on June 4, 2025 [1]. Company Overview - Peloton provides members with high-quality fitness equipment, innovative software, expert instruction, and a supportive fitness community [2]. - Founded in 2012 and headquartered in New York City, Peloton has millions of members across various countries including the US, UK, Canada, Germany, Australia, and Austria [2].

Core Viewpoint - Peloton Interactive's stock has significantly declined, trading 96% below its peak in January 2021, despite a 120% increase over the past year, raising questions about its potential for long-term wealth generation for investors [1]. Financial Performance - Peloton's net loss reached $2.8 billion in fiscal 2022, indicating struggles with profitability [3]. - In Q3 2025, Peloton reported a net loss of $48 million, a reduction from $167 million in the same quarter the previous year, and is on track to achieve $200 million in annual cost savings [4]. - The company's net debt decreased by 35% year-over-year to $585 million as of March 31 [5]. Demand Challenges - Peloton is facing a significant decline in demand post-pandemic, with Q3 revenue at $624 million, down 13% year-over-year and half of the revenue from the same period four years ago [9]. - The number of connected-fitness subscribers and paid digital app subscribers has also decreased compared to Q3 2024 [9]. Market Valuation - Peloton's price-to-sales ratio is currently at 1.1, indicating market pessimism about its business outlook, and is 94% below its peak valuation from January 2021 [11]. - The current market capitalization of Peloton is $2.9 billion, a stark contrast to its previous valuation of $49.3 billion [12]. Investment Outlook - Despite the low valuation, Peloton is viewed as a potential value trap, with limited chances of turning investors into millionaires over the next decade [13].

Group 1: Performance Overview - A handful of stocks, including Shopify, Zoom Video Communications, and Peloton Interactive, significantly benefited during the pandemic, with substantial gains for investors targeting stay-at-home stocks [1][2] - Shopify has consistently outperformed the S&P 500 over the last year, showcasing its strong position in the market [2] Group 2: Shopify (SHOP) - Shopify's platform gained traction as consumers shifted to online shopping, making it a strong bet among pandemic stocks [3] - The company reported a 27% year-over-year sales growth in its latest earnings, achieving double-digit percentage sales growth for ten consecutive periods [4][7] - Shopify's CFO highlighted a 15% free cash flow margin and eight consecutive quarters of pro forma revenue growth of 25% or more, indicating robust financial health [7] Group 3: Zoom Video Communications (ZM) - Zoom's sales grew modestly by 3% year-over-year, with adjusted EPS of $1.43, reflecting a 6% increase [11] - The company's operating cash flow decreased to $489 million from $588 million year-over-year, and free cash flow fell to $463 million from $569.7 million [11] - There is a need for meaningful sales growth for Zoom to regain investor interest, as it has struggled to achieve this [14] Group 4: Peloton Interactive (PTON) - Peloton's shares have declined over 90% since their all-time highs in January 2021, primarily due to weak quarterly results [15] - The company reported sales of $624 million, a 13% year-over-year decline, with subscription revenue down 4% and Connected Fitness Products revenue decreasing by 27% [16] - Consumer interest in Peloton's products has waned post-pandemic, leading to significant sales and subscription losses [18] Group 5: Conclusion - Among the three companies, Shopify remains the leader in performance and fundamentals, benefiting from the ongoing trend of online shopping [19] - Zoom's stock has stagnated, requiring a strong quarterly release to stimulate growth [20] - Peloton faces a challenging situation with declining sales and consumer interest [20]

Core Insights - Peloton Interactive reported strong Q3 results, surpassing guidance on key metrics and showing progress on profitability [1][5] - The company raised its full-year fiscal 2025 guidance across several key financial measures [6][8] Financial Performance - Q3 revenue reached $624 million, exceeding guidance by $9 million, with $205 million from Connected Fitness products and $419 million from subscriptions [4] - Total gross profit was $318 million, a 3% year-over-year increase [4] - Operating expenses decreased by 23% year over year, contributing to a strong financial position [5] Subscription Metrics - Paid Connected Fitness subscriptions ended the quarter at 2.88 million, a 6% decline year over year, but churn improved to 1.2% from 1.4% in Q2 [3] - Paid App subscriptions totaled 573,000, with a net increase of 12,000 in the quarter [3] Strategic Initiatives - The company is testing new models, including a micro-store in Nashville and collaborations with Amazon, as well as placing Peloton in gyms [4] - CEO Peter Stern emphasized strategic objectives of improving member outcomes, expanding market reach, and enhancing operational efficiency [7] Outlook and Guidance - Paid Connected Fitness subscriptions guidance raised to a range of 2.77 million to 2.79 million [8] - Total revenue guidance increased to $2.455 billion to $2.47 billion, and adjusted EBITDA guidance raised to $330 million to $350 million [8]

Part I. Financial Information [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) Peloton reported total revenue of $1.88 billion for the nine months ended March 31, 2025, with a reduced net loss of $140.5 million and positive operating cash flow of $215.9 million [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Peloton's balance sheet as of March 31, 2025, shows total assets of $2.06 billion and total liabilities of $2.56 billion, with increased cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (as of March 31, 2025 vs. June 30, 2024) | Balance Sheet Item | March 31, 2025 (in millions) | June 30, 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | $914.3 | $697.6 | +$216.7 | | Inventories, net | $213.5 | $329.7 | -$116.2 | | Total current assets | $1,340.3 | $1,266.0 | +$74.3 | | Total assets | $2,064.8 | $2,185.2 | -$120.4 | | **Liabilities & Stockholders' Deficit** | | | | | Total current liabilities | $811.7 | $685.2 | +$126.5 | | Total liabilities | $2,556.2 | $2,704.3 | -$148.1 | | Total stockholders' deficit | ($491.3) | ($519.1) | +$27.8 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q3 FY2025 saw total revenue decline to $624.0 million, but net loss significantly narrowed to $47.7 million due to improved gross profit and cost reductions Statement of Operations Summary (in millions, except per share data) | Metric | Q3 FY2025 | Q3 FY2024 | 9 Months FY2025 | 9 Months FY2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $624.0 | $717.7 | $1,883.9 | $2,056.9 | | Gross Profit | $318.1 | $309.7 | $940.2 | $894.5 | | Loss from Operations | ($32.4) | ($146.2) | ($65.8) | ($465.7) | | Net Loss | ($47.7) | ($167.3) | ($140.5) | ($521.4) | | Net Loss per Share | ($0.12) | ($0.45) | ($0.36) | ($1.44) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow significantly improved to $215.9 million for the nine months ended March 31, 2025, driven by reduced net loss and working capital changes Cash Flow Summary for the Nine Months Ended March 31 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $215.9 | ($98.8) | | Net cash (used in) provided by investing activities | ($0.4) | $33.5 | | Net cash provided by financing activities | $2.1 | $29.0 | | Net change in cash, cash equivalents, and restricted cash | $211.1 | ($36.7) | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the 2024 Restructuring Plan, significant debt refinancing, and segment performance, including improved Connected Fitness gross profit - The company's revenue is primarily generated from recurring **Subscription revenue** and the sale of its **Connected Fitness Products**[28](index=28&type=chunk) - In April 2024, the company approved a new restructuring plan (the "2024 Restructuring Plan") to reduce global headcount and retail locations, aiming for sustained positive free cash flow. The company expects the plan to be substantially complete by the end of fiscal 2025[63](index=63&type=chunk) - The company has two reportable segments: **Connected Fitness Products** and **Subscription**, with the CODM reviewing revenue and gross profit for both[160](index=160&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports progress on FY2025 goals, including a 23% reduction in operating expenses, positive free cash flow, and significant cost savings from restructuring efforts - In Q3 FY2025, operating expenses decreased by **23% year-over-year**, and the company generated over **$90 million** in GAAP Net Cash Provided by Operating Activities and non-GAAP Free Cash Flow[170](index=170&type=chunk) - The company is tracking ahead of its target to achieve **$200 million** of run-rate cost savings by the end of fiscal year 2025 through its restructuring efforts[179](index=179&type=chunk)[182](index=182&type=chunk) Key Operational Metrics (Q3 FY2025 vs Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Ending Paid Connected Fitness Subscriptions | 2,880,176 | 3,051,451 | | Average Net Monthly Paid Connected Fitness Subscription Churn | 1.2% | 1.2% | | Ending Paid App Subscriptions | 572,775 | 675,190 | | Average Monthly Paid App Subscription Churn | 8.1% | 9.0% | | Adjusted EBITDA (in millions) | $89.4 | $5.8 | | Free Cash Flow (in millions) | $94.7 | $8.6 | [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Q3 FY2025 revenue declined 13.1% to $624.0 million, but gross profit increased, and operating expenses significantly decreased, narrowing the loss from operations Revenue by Segment (Q3 FY2025 vs Q3 FY2024) | Segment | Q3 FY2025 (in millions) | Q3 FY2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Connected Fitness Products | $205.5 | $279.9 | (26.6)% | | Subscription | $418.5 | $437.8 | (4.4)% | | **Total Revenue** | **$624.0** | **$717.7** | **(13.1)%** | Gross Profit & Margin by Segment (Q3 FY2025 vs Q3 FY2024) | Segment | Q3 FY2025 Gross Profit (in millions) | Q3 FY2024 Gross Profit (in millions) | Q3 FY2025 Gross Margin | Q3 FY2024 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Connected Fitness Products | $29.3 | $11.6 | 14.3% | 4.2% | | Subscription | $288.8 | $298.1 | 69.0% | 68.1% | - The decrease in Sales and Marketing expense for Q3 FY2025 was primarily driven by a **$51.8 million** reduction in acquisition, brand, and creative marketing spend[233](index=233&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) Peloton held **$914.3 million** in cash as of March 31, 2025, with liquidity supported by recent debt refinancing and sufficient for the next 12 months - As of March 31, 2025, the company had cash and cash equivalents of approximately **$914.3 million**[269](index=269&type=chunk) - In May 2024, the company refinanced its debt by issuing **$350.0 million** of 5.50% Convertible Senior Notes due 2029 and entering into a new **$1.0 billion** term loan facility due 2029, using proceeds to repurchase **$801.0 million** of 0.00% Convertible Senior Notes due 2026[274](index=274&type=chunk)[281](index=281&type=chunk)[284](index=284&type=chunk) Contractual Obligations as of March 31, 2025 (in millions) | Obligation | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | Lease obligations | $636.8 | $94.2 | $153.8 | $109.1 | $279.7 | | Minimum guarantees | $123.2 | $107.5 | $15.5 | $0.3 | — | | Convertible senior notes | $549.0 | $199.0 | — | $350.0 | — | | Term loan | $992.5 | $10.0 | $20.0 | $962.5 | — | | **Total** | **$2,376.5** | **$458.3** | **$215.6** | **$1,422.9** | **$279.7** | [Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Peloton faces market risks from interest rate fluctuations, foreign currency exposure in international operations, and inflationary pressures on supply chain and labor costs - The company is exposed to interest rate changes primarily through its **Third Amended and Restated Credit Agreement**[316](index=316&type=chunk) - Foreign currency risk exists as international sales are denominated in foreign currencies, and some manufacturing costs are tied to the **Taiwanese dollar**, with potential use of derivative instruments for hedging[317](index=317&type=chunk)[318](index=318&type=chunk) - Inflationary conditions are causing pressure on supply chain, logistics, materials, and labor costs, potentially impacting the company's results of operations and gross margins[320](index=320&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2025, disclosure controls and procedures were deemed ineffective due to material weaknesses in inventory and Precor's control environment - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were **not effective** as of March 31, 2025[322](index=322&type=chunk) - The ineffectiveness is due to two material weaknesses: one related to controls around **inventory** and another related to the business process control environment at the **Precor subsidiary**[323](index=323&type=chunk)[326](index=326&type=chunk) - Management is actively executing remediation plans for both material weaknesses, including enhancing inventory count processes and improving controls at Precor, but these efforts are still ongoing[324](index=324&type=chunk)[329](index=329&type=chunk)[330](index=330&type=chunk) Part II. Other Information [Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal and regulatory proceedings, with detailed information available in Note 8 of the financial statements - This section directs readers to **Note 8, "Commitments and Contingencies,"** for a detailed discussion of ongoing legal proceedings[335](index=335&type=chunk) [Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) No material changes have been made to the risk factors previously disclosed in the company's most recent Form 10-K - No material changes have been made to the risk factors disclosed in the company's most recent Form 10-K[336](index=336&type=chunk) [Other Information](index=61&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the three months ended March 31, 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the quarter[341](index=341&type=chunk) [Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including required certifications from the CEO and CFO, and Inline XBRL documents - Lists required filings, including CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and XBRL data files[342](index=342&type=chunk)

Group 1 - Peloton Interactive Inc reported a fiscal third-quarter loss of 12 cents per share, which was wider than the expected loss of 7 cents per share, but still represents a 73% improvement year-over-year [1] - The company's revenue for the quarter was $624 million, exceeding expectations but showing a decline compared to the previous year [1] - Peloton has raised its outlook for 2025, indicating a positive long-term perspective despite current challenges [1] Group 2 - Following the earnings report, Peloton's stock dropped 13.8% to $6.02, with the stock having averaged a 19% post-earnings swing over the past two years [2] - Year-to-date, Peloton's equity is down 29.4%, and the stock has faced resistance at the $7 level, which aligns with its 80-day moving average [2] - The 14-Day Relative Strength Index (RSI) for Peloton was noted at 80, indicating it was deep in "oversold" territory prior to the drop [2] Group 3 - There is a notable interest in options trading for Peloton, with 65,000 calls exchanged compared to 8,302 puts, resulting in an overall options volume that is 2.5 times the average daily amount [3] - The most popular options are the weekly 5/9 6-strike call and the June 8 call, suggesting bullish sentiment among options traders [3] Group 4 - Over the past two weeks, there has been a significant call bias in Peloton's options trading, with 24,255 calls traded against just 4,447 puts [4]

Core Insights - Peloton reported $624 million in revenue for the quarter ended March 2025, reflecting a year-over-year decline of 13.1% and an EPS of -$0.12 compared to -$0.45 a year ago, with a revenue surprise of +0.69% against the Zacks Consensus Estimate of $619.71 million [1] Financial Performance - The company experienced a significant decline in revenue from Connected Fitness Products, reporting $205.50 million, which is a -26.6% change year-over-year, while Subscription revenues were $418.50 million, down -4.4% year-over-year [4] - Ending Connected Fitness Subscriptions were reported at 2,880, slightly above the average estimate of 2,862, while Paid App Subscriptions reached 573,000, exceeding the average estimate of 569,348 [4] - Average Net Monthly Connected Fitness Churn was reported at 8.1%, significantly higher than the estimated 1.4% [4] Market Performance - Peloton's shares have returned +18.9% over the past month, outperforming the Zacks S&P 500 composite's +11.3% change, and the stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Financial Data and Key Metrics Changes - The company reported total revenue of $624 million in Q3, exceeding guidance by $9 million, with Connected Fitness products revenue at $205 million and subscription revenue at $419 million [26][32] - Paid Connected Fitness subscriptions increased by 5,000 in the quarter, totaling 2,880,000, but represented a 6% decline year over year [23][24] - Adjusted EBITDA was $89 million, surpassing guidance by $4 million and showing an $84 million improvement year over year [30][32] - Free cash flow for the quarter was $95 million, a decrease of $11 million quarter over quarter but an increase of $86 million year over year [31][32] Business Line Data and Key Metrics Changes - Connected Fitness products revenue decreased by $74 million or 27% year over year, driven by lower sales across all product categories [26] - Subscription revenue decreased by $19 million or 4% year over year, attributed to lower paid Connected Fitness and app subscriptions [26] - The company saw a 5% year over year growth in running workouts and an 11% growth in walking workouts, indicating increased engagement with cardio products [9] Market Data and Key Metrics Changes - The company experienced year over year growth in paid Connected Fitness subscriptions in international markets during Q3 [15] - The US market saw a positive impact from Amazon's seasonal sales events, contributing to hardware sales growth [15] Company Strategy and Development Direction - The company aims to improve member outcomes by enhancing equipment, software, and instruction, focusing on delivering better cardio experiences and a holistic wellness ecosystem [6][8] - The strategy includes meeting members in various locations, including retail stores and gyms, and expanding internationally [12][15] - The company is committed to operating with business excellence, optimizing pricing, and reducing costs to enhance competitiveness [7][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting progress in unit economics and profitability, with a focus on long-term shareholder value [5][6] - The company acknowledged macroeconomic uncertainties but noted resilience in the subscription business, which remains a significant revenue driver [65][68] Other Important Information - The company is on track to achieve $200 million in annualized cost savings by the end of fiscal year 2025, contributing to improved profitability [21][29] - The management team has undergone changes to enhance innovation and operational efficiency, including the appointment of a new COO and CCO [20][21] Q&A Session Summary Question: How is AI being incorporated into Peloton's future? - Management highlighted the use of AI to enhance member support and improve translation capabilities, allowing for personalized coaching and better member engagement [38][41] Question: When will Peloton expand into new markets? - The company is focused on growing its presence in existing international markets before considering further expansion, with plans to explore adjacent markets starting next year [43][45] Question: What impact is the broader consumer slowdown having on the business? - Management noted some softness in sales but emphasized the resilience of the subscription business and the availability of lower-priced entry options for price-sensitive customers [65][68] Question: What are the plans for improving the marketing strategy? - The company is taking a holistic approach to marketing, focusing on customer lifecycle management and optimizing marketing spend to drive subscriber acquisition and retention [79][80] Question: What is the outlook for fiscal year 2026 free cash flow? - Management indicated that while they expect meaningful positive free cash flow in fiscal year 2026, they are not providing specific guidance at this time [84]

分组1 - Peloton reported a quarterly loss of $0.12 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.06, and an improvement from a loss of $0.45 per share a year ago, indicating a surprise of -100% [1] - The company posted revenues of $624 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.69%, but down from $717.7 million year-over-year [2] - Peloton shares have declined approximately 19.8% since the beginning of the year, contrasting with the S&P 500's decline of -4.3% [3] 分组2 - The earnings outlook for Peloton is mixed, with the current consensus EPS estimate for the coming quarter at -$0.03 on revenues of $579.12 million, and -$0.36 on revenues of $2.46 billion for the current fiscal year [7] - The Leisure and Recreation Products industry, to which Peloton belongs, is currently ranked in the bottom 28% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]