Peloton has received $3 million in tariff refunds from the federal government so far, and expects more to come.
The figure came from CFO Sid Thacker on Peloton’s Q4 fiscal year 2026 earnings call, in response to one of two pre-submitted questions the company took after opening remarks. The question had asked whether Peloton expected to receive a tariff refund.
That prompted Thacker to say:
“Let me tackle tariffs first. Year-to-date, we’ve received $3 million of tariff refunds from the federal government. We do anticipate receiving additional refunds, but we have not incorporated them into our forecast for the quarter or year, just given the uncertainties around tariffs.”
This means any additional refunds would be incremental to Peloton’s current forecast, all else being equal. None of the $3 million received so far is reflected in the fiscal 2026 results reported on August 6. Peloton’s annual report says refund payments began arriving after June 30, the day its fiscal year closed, and that the company will recognize IEEPA tariff refunds or related receivables when they are “realized or realizable.”
The refunds trace back to a Supreme Court decision on February 20, 2026 that invalidated tariffs imposed under the International Emergency Economic Powers Act. Customs and Border Protection then set up a process for importers to claim back IEEPA tariffs they had already paid, and Peloton filed their claims in June. Companies across the country are going through the same process.
Peloton had already moved to protect their position. In January Peloton sued Customs and Border Protection in the U.S. Court of International Trade, jointly with their commercial subsidiary Precor, asking the court to declare the IEEPA tariffs unlawful and order a full refund with interest. At the time, Peloton was among dozens of companies filing similar complaints, including Costco, Revlon, and fitness equipment maker iFit. Thousands of companies have since filed similar lawsuits in the Court of International Trade seeking to recover IEEPA tariffs. The concern at the time was that a favorable Supreme Court ruling would not automatically guarantee anyone their money back.
Peloton also disclosed a few other items related to tariffs in their annual report:
- Fitness equipment was removed from the scope of Section 232 steel and aluminum tariffs by a presidential proclamation on April 2. As of April 6, the steel and aluminum content in Peloton’s hardware is no longer subject to those 50% tariffs.
- Section 122 tariffs of 10%, which Peloton became subject to after IEEPA was struck down, expired on July 23.
- New Section 301 tariffs of 10.0% to 12.5% took effect on July 24, covering roughly 60 economies. Peloton specifically names Taiwan and China, where the company has significant operations or commercial presence.
A large number of Peloton’s contract manufacturers have their primary facilities in Taiwan, China, and Thailand.
Peloton’s Connected Fitness Products gross margin fell from 13.6% in fiscal 2025 to 11.7% in fiscal 2026, and the annual report cites higher import tariff charges as one of the primary drivers, alongside the Original Series Bike+ seat post recall, heavier promotional discounting, and a shift toward lower-margin products. For comparison, last year’s annual report did not mention tariffs in the margin discussion at all. Peloton has not disclosed how much it paid specifically in IEEPA tariffs, or the total value of the refund claims it filed. The company has put broader numbers around their tariff exposure, however. On the Q3 earnings call in May, Peloton estimated tariffs would represent roughly $30 million of free cash flow exposure in fiscal 2026, down from the $45 million estimate given the prior quarter. That fiscal year closed on June 30, before the new Section 301 tariffs took effect, and Peloton has not given a comparable figure for fiscal 2027.
While Peloton did raise subscription prices last October, it doesn’t appear those were directly tied to any tariffs.
It is possible that additional tariffs on the countries where Peloton builds their equipment may be added. The U.S. Trade Representative has an investigation into structural excess manufacturing capacity in 16 economies including Taiwan, China, and Thailand. That could result in new tariffs, similar to the Section 301 tariffs that took effect in July following a separate USTR investigation into whether 60 economies failed to prohibit and effectively enforce bans on imports produced with forced labor.
We will share further updates as they become available.
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