Peloton
Peloton’s turnaround hit another snag.
What’s happening: The connected fitness company announced the departure of CEO Barry McCarthy, installing board members Karen Boone and Chris Bruzzo as interim co-CEOs.
The move was announced ahead of Peloton’s Q3FY24 earnings, in which it also announced a restructuring plan that will reduce its workforce by 15%, or 400 jobs.
Shakeup. It’s been just over two years since ex-Netflix and Spotify executive McCarthy took the reins from founder John Foley, tasked with stabilizing the company in a post-pandemic market.
Attributed to his rebrand emphasizing content over hardware, Peloton reported positive free cash flow for the first time in 13 quarters.
But, as McCarthy stated in his outgoing letter, turnarounds are a “full contact sport” — and returning the company to growth will fall to his successors.
In pursuit. Along with cash flow, subscription gross profit, and operating expenses improved, but its long-term plan to upgrade software and content remains a challenge.
- Aiming to save $200M through restructuring, it will shutter additional showrooms while evaluating its presence in international markets.
- After altering pricing and eliminating its free tier, Peloton expects a 27% drop in paid app subscriptions next quarter.
- The churn rate for its rental bike program continues to be higher than buyouts.
Pulling more levers, it added its Tread and Row to Amazon, struck a hospitality partnership with Hyatt, and leveraged its partnership with New York Road Runners to launch marathon content.
Takeaway: Barry McCarthy’s unfinished business must be tempered by the hand he was given, as right-sizing a connected fitness company remains anyone’s guess.
