During Peloton’s Q2 2026 earnings call last week, the company revealed that revenue came in below expectations, largely due to lower than anticipated demand for their new Cross Training equipment from existing members.
In Peloton’s latest earning report and call, it came to light that revenue missed expectations as Cross Training sales were lower than expected. Moreover, fewer current members chose to upgrade their existing equipment than the company had forecasted. That shortfall was a key reason Q2 revenue missed guidance.
In his opening remarks, CEO Peter Stern addressed the issue directly, noting that equipment sales to existing members did not meet expectations. He stated:
“Revenue for Q2 came in below guidance, primarily due to fewer than expected equipment sales of the cross-training series to existing members. However, we were encouraged by the mix of existing members who purchased a new category of equipment, as more than 70% of cross-training series equipment sales to existing bike owners were tread and row products.”
In other words, Peloton is encouraged by who is upgrading. Bike owners adding Tread and Row products to their home gym set-up indicates strong interest in expanding into new workout categories rather than simply replacing existing Bikes.
Later in the call, Stern explained that Peloton likely overestimated how quickly existing members would want to replace equipment they already own. He explained:
“We simply overestimated the rate with which existing members would want to upgrade their existing equipment to new equipment. The only historical data point we had was when we launched Bike+, which was a fundamental reinvention of the bike frame.”
Stern tried to frame the slower upgrade cycle as reflecting high satisfaction with Peloton’s existing hardware, which continues to perform well years after purchase. He added:
“I think that just speaks to the quality and durability of the existing equipment that our members have and the satisfaction with that equipment.”
Importantly, Stern clarified that while slower upgrades from existing members affected revenue, it did not hurt subscriber numbers.
“The consequence of that is that our subscriber performance was strong,” he said, noting that Peloton exceeded its subscriber guidance midpoint by approximately 6,000 subscriptions.
While existing member upgrades lagged, Peloton said sales of Cross Training equipment to new members met expectations for the quarter.
Stern stated:
“In contrast, with sales to new members coming roughly in line with our expectations for the quarter, we remain confident that our product lineup featuring the new cross-training series will continue to attract new members.”
Stern also highlighted that many customers are opting for higher-end models, particularly the Bike+, suggesting that premium features are resonating with buyers. Peloton’s current marketing focus is centered on product education, helping both new and existing members better understand what the Cross Training series offers.
It is worth noting that Peloton members have been vocal on social media about hesitation to upgrade due to the lack of a tablet-only upgrade option. Many members have said they would be more inclined to upgrade if they could simply swap out their screens rather than purchase an entirely new device – a question Peloton leadership acknowledged has come up frequently.
Chief Financial Officer Liz Coddington, who recently announced her departure from the company, echoed Stern’s comments, confirming that Q2 revenue landed $8 million below guidance. In addition to weaker equipment sales to existing members, longer delivery times delayed roughly $4 million in revenue recognition into Q3. As a result, Peloton lowered its full-year fiscal 2026 revenue outlook by $30 million. Coddington stated:
“The decrease relative to prior guidance is primarily driven by lower equipment sales to existing members observed in Q2.”
Peloton now expects full-year revenue between $2.4 billion and $2.44 billion, representing a 3% year-over-year decline at the midpoint. Q3 revenue is expected to decline sequentially due to seasonally lower equipment sales, partially offset by higher subscription pricing being recognized across the full quarter.
While the revenue miss highlights challenges in driving hardware upgrades among Peloton’s existing member base, leadership framed the issue as a byproduct of durable equipment and high satisfaction, rather than a lack of interest in the Cross Training lineup itself. Peloton now appears focused on adjusting expectations rather than changing course.
Stern did also express confidence that Peloton could have even more new hardware products to announce in 12-18 months during the same earnings call.
For all the various news from Peloton’s latest earnings report and call, check out our site.
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