This morning, Peloton announced their fiscal year 4th quarter 2025 results – as well as provided some hints where they plan to go throughout the next year.
One direction Peloton will continue to go is re-expanding their retail presence. They hope to have 10 micro stores by the end of the calendar year (the first of which opened in Nashville). This will let them have a bigger presence for this upcoming holiday season. Peloton also plan expand with other third-party physical retail partners (like they’ve done in the past with Costco & DICK’s sporting goods).
They also plan to make adjustments to their prices in order to increase their profitability. Peloton says this it to reflect their true costs – including “shipping, returns, tariffs, and other fees we pay” as well as to better reflect “the value we provide to our Members.” Peloton did not announce what those specific price changes are at this point.
One way they plan to do this is by adding assembly fee. Historically, assembly has been completely free for people buying directly from Peloton. Peloton will be expanding the self-assembly option to both the Row & Tread – so now when people purchase from Peloton, they will have the choice of free self-assembly, or paying Peloton (or their contractors) to do the assembly for them.
While Peloton plans to increase prices – they also stated that their expenses remain too high. As a result of this, Peloton has announced another restructuring plan that aims to save the company $100 million by the end of the next fiscal year. This comes a little over a year after Peloton laid off another 400 people to save $200 million.
This new restructuring plan again involves laying off a portion of the Peloton team – approximately 6% of Peloton employees. The investor letter states how they will be “reducing the size of our global team, paring back indirect spend, and relocating some of our work.”
While Peloton plans to increase prices – they are expecting a drop in both sales & subscribers over the next fiscal year. Their forecast calls for a 2% revenue decrease from the previous year because of their expectations for “a continued decrease in Peloton hardware sales and Ending Paid Connected Fitness Subscriptions year-over-year, partly offset by sales growth in Precor product”
Peloton will also be laying the groundwork for future international expansion. They state that they “plan to deliver local, in-language experiences using a mix of native instruction, AI dubbing, and more flexible approaches to music for thousands of classes.” They specifically noted that this will let them launch “full Peloton offering” in new countries this next year.
Peloton’s revenue for the quarter was $607 million, while analysts had been expected $580 million. Their earnings per share was a gain of 5 cents per share, while analysts had been expecting a loss of 6 cents per share. Peloton ended the quarter with 2.90 million paid connected fitness subscribers.
Looking forward to 2026, Peloton is forecasting total revenue from $2.4 – $2.5 billion – a 2% decrease due to the expected drop in sales. This will see Peloton with ~51% gross margins. They are also expecting total paid connected fitness subscribers to drop to 2.72 – 2.73 million for the year – again, due to lower hardware sales.
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