Anyone who owns a Peloton knows how addicting the classes are and how almost cult-like the community is. Even though customers recognize that this healthy addiction comes at a hefty price, most loyal followers continue to love every minute of it.
For those who don't get it, there are a few reasons for the madness.
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First, the instructors are incredibly personable, making any workout class that much more fun. Some have even reached celebrity status, like Cody Rigsby, who has over 1.3 million Instagram followers and is known for the Britney Spears-inspired playlists accompanying his challenging classes.
Second, the classes are conducted in a virtual group setting where the community can interact with each other by sending high-fives and using fun usernames based on their interests. This also helps keep people accountable and motivated to reach their fitness goals through healthy competition with others since the leaderboard is displayed for everyone to see each other's rankings and stats.
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Third, Peloton has a massive library full of live and on-demand workout classes for any fitness level, workout style, music taste, instructor preference, and more.
In summary, Peloton is a fitness equipment and media company that started by selling indoor cycling bikes with virtual workout packages at local neighborhood malls whose fitness empire has expanded to treadmills, rowers, and no-equipment fitness classes.
Peloton reports mixed results, but stock soars
Although demand for Peloton's business model boomed during Covid lockdowns, it's been a struggle since 2021.
The company's growth has suffered as gyms reopened, and Peloton's stock price fell below $3 in August, down from $160 in 2021.
On Thursday, Peloton published its first-quarter earnings report for 2025, and the results might be a sign that what was once considered one of the most efficient recent fitness empires might be regaining some of its mojo.
The company reported earnings per share (EPS) of $0.00, beating analysts' expectations by $0.15.
Peloton's total revenues of $586 million reflect a 9% decline quarter over quarter. However, year-over-year sales declined by just 2%. Subscription revenue grew 2.7% from one year ago, while connected Fitness products dropped by 12%.
Although revenue was down, it beat analysts' total expectations of $574.8 million for the quarter, raising investors' hopes, as Peloton's (PTON) stock skyrocketed to over 28% on October 31.
Peloton has expanded its third-party retail channels and lowered product prices to restore its fitness equipment sales to profitability.
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As part of its effort, Peloton recently announced it would partner with Costco for the holiday season to sell its Bike+ at a reduced price in 300 Costco locations and via its online store.
The company has been searching for a new CEO since May, when its former CEO, Barry McCarthy, left after a two-year reign. During its earnings call, Peloton announced the role was no longer open as it appointed Peter Stern as its new CEO starting Jan. 1.
Peloton reveals a mixed outlook
Peloton revealed its upcoming quarter and full-year guidance for 2025, with predictions just as shaky as how Peloton riders' legs feel after a high-intensity cycle class.
Although Peloton reported a decline in total revenues, it expects revenues to increase by 11% in the fourth quarter (its fiscal second quarter), driven mainly by equipment sales.
However, the company wasn't as positive regarding subscriptions next quarter as it expects Connected Fitness subscriptions to fall by 2%, with a slight improvement in its average churn rate. Paid app subscriptions are also predicted to decrease by 2% due to media spending cuts to reduce costs.
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For the entirety of fiscal 2025, Peloton expects equipment sales to decline but for Connected Fitness subscriptions to increase, which it plans to achieve through changes in pricing and promotional strategies.
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