The wheels may be coming off Peloton’s comeback.
The latest: The connected fitness brand reported Q2 earnings last week, with CEO Barry McCarthy raising doubts about sustainable growth ahead.
Wrong Lever
Despite beating revenue estimates, McCarthy’s turnaround has yet to materialize.
App. Peloton’s member base shrunk 4% YoY, counting 3M hardware and 718K Paid App users — the remaining subs are riding the newer free tier. Unable to convert premium subscribers, revenue is expected to dip 5% next quarter.
College initiative. Peloton’s college program will end six months after debuting a University of Michigan-branded bike. Despite the football team’s championship, alumni didn’t bite.
Product graveyard. The company’s rower and Guide hardware weren’t mentioned in the report, and updates to its in-club app feature Gym were limited.
Fresh Takes
Moving forward, Peloton is leaning into new opportunities.
In hardware, there’s optimism about demand for its post-recall treadmill, a market that’s “2x larger than stationary bikes.” As its bike rental business grows, Peloton will pilot corporate wellness rentals.
Upping engagement, it plans to deepen its partnership with lululemon, reach new users with exercise snacks on TikTok, and beta-test a high-efficiency ERG mode for Bike+.
Takeaway: Peloton’s search for profitability is ongoing. But while McCarthy argues for aggressively testing new initiatives, Peloton can’t afford much more trial and error.
