Core Insights - Peloton has launched a peer-to-peer resale marketplace named Repowered to tap into the growing resale market for connected fitness equipment and monetize inactive devices in customers' homes [2][6] Group 1: Marketplace Features - Users can list pre-owned Peloton equipment and accessories on the Repowered platform, with pricing assistance from a generative AI tool, while sellers retain control over the final asking price [3] - Upon sale, sellers receive 70% of the final sale price, with the remainder split between Peloton and Archive, the technology provider, and sellers also benefit from discounts on new equipment purchases [4] Group 2: Market Trends - The resale market is experiencing growth, with Peloton noting a 16% year-over-year increase in new subscribers who acquired hardware through secondary channels like Facebook Marketplace, which also showed a lower net churn rate compared to rental subscribers [5] - Economic factors are driving consumers towards secondhand shopping, with an average savings of 30%, as they seek ways to manage spending amid new tariffs [8] Group 3: Launch and Expansion Plans - The Repowered platform is currently in a beta phase available in New York City, Boston, and Washington, D.C., with plans for nationwide expansion in the coming months [7]

Company Overview - Peloton Interactive, Inc. is actively engaging in new initiatives, including the launch of outdoor runs from Peloton Studios in New York, coinciding with Global Running Day [2]. Leadership and Organizational Changes - The new CEO, Peter C. Stern, has acknowledged the strength of the existing team and expressed gratitude towards previous leadership for their recruitment efforts [4]. - A significant organizational change includes the hiring of a new Chief Operating Officer, Charlie Kirol, aimed at improving supply chain operations [5].

Peloton (PTON) 2025 Conference Summary Company Overview - **Company**: Peloton Interactive, Inc. (PTON) - **Event**: 2025 Conference held on June 4, 2025 Key Points Organizational Changes - **New Leadership**: Peter Stern, the new CEO, has made significant organizational changes, including hiring Charlie Kyrill as Chief Operating Officer and Dion Camp Sanders as Chief Commercial Officer [4][6][7] - **Focus on Supply Chain**: Improvements in supply chain management have been noted, with a focus on cost-effectiveness and agility in manufacturing [5][6] Marketing Strategy - **Budget Cuts**: The marketing budget has been reduced by 40% year-over-year, with a focus on achieving a more efficient marketing spend [9] - **LTV to CAC Ratio**: The company reported a lifetime value (LTV) to customer acquisition cost (CAC) ratio exceeding 2, indicating effective member acquisition strategies [11] - **De-Averaging Strategy**: The company plans to analyze marketing effectiveness by channel to optimize subscriber acquisition costs [12] Financial Performance - **Free Cash Flow**: Peloton generated approximately $211 million in free cash flow year-to-date, with expectations to reach around $250 million by the end of the fiscal year [16] - **Adjusted EBITDA**: Adjusted EBITDA improved to approximately $335 million, up by $435 million compared to the previous twelve months [17] Growth Strategy - **Growth Algorithm**: The growth strategy focuses on increasing average revenue per member, the number of members, and member lifetime [20][22][28] - **Retail Presence**: Plans to expand retail presence through micro-stores and partnerships with third-party retailers, including Amazon [23][24] - **International Expansion**: There is significant potential for growth in international markets, with current penetration being low compared to the U.S. [25] Member Retention - **Community Features**: Investment in community features is expected to enhance member retention and reduce churn [29] - **Member Experience**: The company is focusing on improving the member service experience to retain existing members [28] Pricing Strategy - **Potential Price Increases**: The CEO indicated that the company is considering pricing adjustments for subscriptions, as it has been over three years since the last increase [30][31] - **Value Proposition**: Peloton believes it is delivering increasing value to its members, justifying potential price adjustments [31][34] Legislative Opportunities - **FIT Act**: The FIT Act, which would allow consumers to use health spending accounts for fitness subscriptions, is seen as a potential growth driver for Peloton [35][36][38] Resale Market - **Secondhand Market**: Peloton is launching a marketplace for used equipment, which has already shown that 45% of new members come from secondhand purchases [39][40] - **Environmental Impact**: The resale market is viewed as beneficial for both business and environmental sustainability [41][42] Operational Efficiency - **Tech Debt**: The company is addressing tech debt to improve operational efficiency, including inventory management and member support systems [48][49][51] - **Cost Structure Optimization**: Ongoing efforts to optimize operational expenses and vendor spending are expected to yield further cost savings [52] Margin Improvement - **Gross Margins**: Peloton has improved gross margins on equipment by 1000 basis points over the past year, with further improvements anticipated [55] - **Balance Sheet Strength**: The company has a strong balance sheet with leverage under two times and significant free cash flow, allowing for strategic financial decisions [58][60] Conclusion Peloton is undergoing significant organizational changes and strategic shifts aimed at enhancing growth, improving member retention, and optimizing financial performance. The focus on operational efficiency, marketing effectiveness, and potential legislative opportunities positions the company for future success in the competitive fitness market.

Core Insights - Peloton Interactive's stock peaked at $163 in 2021, representing a 460% return for early investors, but has since lost 95% of its peak value, with recovery appearing uncertain [1] - The company experienced a surge in demand for at-home exercise equipment during the COVID-19 pandemic, but failed to adapt as demand declined, leading to significant revenue drops and increased losses [2][3] Revenue Performance - Peloton's annual revenue peaked at $4 billion in fiscal 2021 but has declined each subsequent year, falling to $3.5 billion in fiscal 2022, $2.8 billion in fiscal 2023, and $2.7 billion in fiscal 2024, with a forecast of just under $2.5 billion for fiscal 2025 [6] - The composition of revenue has shifted dramatically; equipment sales accounted for 78% of total revenue in fiscal 2021, but now represent only 33%, with subscriptions making up the majority [7] Business Challenges - Demand for Peloton's exercise machines has significantly decreased since the pandemic, prompting the company to close stores and shift sales to third-party retailers, while also introducing financing and rental options [8][9] - The subscriber base has shrunk by 6% over the past year, now totaling 2.88 million members, which directly impacts connected fitness subscriptions tied to equipment sales [9][10] Cost Management and Financial Health - In fiscal 2022, Peloton faced a GAAP net loss of $2.8 billion due to a cost structure geared toward growth despite declining revenue [11] - Management has since cut operating expenses by nearly half in fiscal 2024 compared to fiscal 2022, with a further 26% reduction in the first three quarters of fiscal 2025 [13] - Peloton reported a net loss of $140 million in fiscal 2025 to date but achieved positive adjusted EBITDA of $70.3 million, indicating improved financial health [14] Future Outlook - Peloton has $914 million in cash but also carries $947 million in long-term debt, limiting its ability to invest aggressively in growth [16] - The company's future remains uncertain; without sustainable sales growth, it risks facing mounting losses again [17][18]

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)