The Peloton story: everything you need to know

Peloton announced the launch of Strength Plus, a new standalone, audio-based strength training app. The app was introduced in a limited beta program earlier in September, but is now officially available.

The Strength Plus app allows users to generate custom workouts by choosing workout length, equipment, experience level, and which muscle groups they want to focus on. It also includes multi-week programs curated by Peloton’s strength coaches, though workouts can be done at a user’s own pace. Strength Plus includes audio cues and tips from instructors, as well as a library of instructional videos demonstrating exercises and equipment setup. It’s more like a strength training playlist than Peloton’s typical classes, which have you follow an instructor as they do the workout in real time. It works with the Apple Watch and users can log weights and reps within the app. And, instead of being stuck with instructor-curated workout music, users can listen to their own music, audio books, or podcasts.

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Peloton’s got a new head honcho. The company announced that Ford executive Peter Stern will take over as CEO and President starting January 1st. Stern previously worked at Apple and Time Warner Cable.

“As a cofounder and driving force behind Apple Fitness Plus, Peter led his growth to millions of members, and is responsible for successfully scaling over a dozen other subscription services ranging from Ford BlueCruise to Apple iCloud to Time Warner Cable Home Security,” said Karen Boone, Peloton’s interim CEO, on today’s Q1 2025 earnings call. “Importantly, Peter has also been a passionate member of the Peloton community since 2016.”

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Peloton’s CEO Barry McCarthy is stepping down after announcing yet another round of layoffs, this time affecting about 15 percent of its remaining workforce, or roughly 400 global team members. It’s the fifth round of layoffs to hit the pandemic darling and comes after McCarthy said on its Q1 2023 earnings call that the company was done with layoffs and that the “ship was turning.”

“Hard as the decision has been to make additional headcount cuts, Peloton simply had no other way to bring its spending in line with its revenue,” said McCarthy in his outgoing message, noting that it’s a crucial step as the company seeks to refinance its debt. The layoffs are part of a 12-month restructuring program meant to reduce annual expenses by more than $200 million.

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Update, Thursday, February 15th, 2024, 1:07PM ET: Now Peloton says it’s heard the feedback “loud and clear” and has canceled its plan to drop GymKit support. The title of this post has been updated to reflect that the original article continues below.

In an email sent to users Monday evening, Peloton revealed that starting February 27th, it will start transitioning Apple Watch users from GymKit to Peloton One-Tap tracking.

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Just like all gadgets, even tablets solely devoted to fitness will eventually meet their software demise. That time is rapidly approaching for Peloton’s first-gen bike tablets, known as Quartz. Peloton sold these first-gen bikes between 2013 and 2016. The company already cut off software updates for the early touchscreens back in 2019. But now, as reported by Pelo Buddy, the hammer is coming down, and Peloton will completely cease support for the tablets in June 2024. If you don’t make a move by then, you won’t be able to access classes anymore, leaving “Just Workout” as the only feature that will still work.

So what’s a budget-conscious Peloton devotee to do? Well, there are a couple of options to choose from. Affected customers can take advantage of an exclusive $500 discount on the modern Bike Plus. If that’s way outside the scope of what you’re willing to pay, Peloton is also offering a much more modest $50 off a replacement 22-inch touchscreen tablet, which would bring that price to $325.

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Peloton is opening up its app to third-party treadmills for running, walking, or Tread Bootcamp classes. Pelo Buddy spotted a new support page on Peloton’s site announcing that the app can now record and display metrics on any treadmill that uses Bluetooth FTMS. The offer is only open to subscribers of the company’s most expensive subscription workout plan, Peloton App Plus.

To pair, you’ll start a Tread class in the Peloton app, then tap the “Connect a Bluetooth Device” option. Pick your treadmill from the list, and a green check mark lets you know when it’s connected.

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Many Peloton users were unable to get into Thursday’s Thanksgiving ride, prompting the company’s CEO to apologize. At 10AM ET Peloton kicked off its 10th annual “Turkey Burn” event, with the goal of breaking the Guiness World Record for “largest live cycling class.” But the company struggled with the demand, and many users were unable to participate at all. “We let you down,” CEO Barry McCarthy said in a statement.

According to McCarthy, over 37,000 people were able to participate, while it’s unclear how many couldn’t get in. “The number of members trying to join the ride overwhelmed our technical infrastructure and we were unable to support all those attempting to participate in the class,” he said. The Peloton status page notes “elevated errors with live classes” for about an hour starting just a few minutes after the class kicked off, and resolving at 11:07AM ET. Some users who got into the event also noted technical issues while it was live. At the time of writing everything seems to be operational.

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Tom Cortese, Peloton co-founder and chief product officer, is stepping down from his role. In a press release shared on Tuesday, Peloton says it will replace Cortese with former Twitter executive Nick Caldwell.

“After nearly 12 years of pouring myself into Peloton and serving our Members, I have decided it is time to move on and create space for new perspectives,” Cortese says. “I’m eager for new growth for Peloton and for me personally, but I’m also excited to support and watch this next phase of Peloton’s evolution.”

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In its latest earnings call, Peloton reported a net loss of $242 million for the quarter. It also lost 29,000 subscribers from last quarter and had a higher-than-anticipated monthly churn of 1.4 percent. While some of that was attributed to summer doldrums, Peloton noted that costs for a recent bike seat post-recall “substantially exceeded” initial expectations to the tune of $40 million. An estimated 15 to 20 thousand members also chose to pause their subscriptions ahead of receiving replacement seats.

But speaking of recalled products, Peloton CEO Barry McCarthy said in its quarterly shareholder letter that the company plans to resume US presales of the Tread Plus this holiday season for a retail price of around $6,000. (For context, the Tread Plus originally cost $4,295.) The Tread Plus was recalled in 2021 after several reports of injuries and the death of a small child. The treadmill was subsequently discontinued, but earlier this year, the company got regulatory approval for a new rear safety guard — which is likely why the company is entertaining bringing the premium treadmill back into its product lineup. The plan is to sell out the existing 10,000 units in inventory with the new rear guard before starting up any new manufacturing.

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Peloton isn’t keen on the fact people mostly think of it as that bike company, which is why CEO Barry McCarthy says the company will “relaunch its brand” later this month so that more people are aware that it does other things, too. Part of that is relaunching the Peloton app with a new tiered subscription structure.

There’s no information on the pricing just yet, but on today’s Q3 2023 earnings call, CFO Liz Coddington said the “app tiers will have different amounts of content variances” depending on the price. Only users who have bought Peloton hardware and pay for All-Access membership will get everything Peloton has to offer.

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Peloton is starting off 2023 with a $19 million fine. According to the US Consumer Product Safety Commission (CPSC), the company has agreed to pay the civil penalty to settle charges that the company knowingly failed to immediately report safety issues with its recalled Tread Plus. The fine will also resolve charges that Peloton continued to sell 38 Tread Plus units after the recall in violation of the Consumer Product Safety Act.

As a refresher, Peloton recalled both of its treadmills — the Tread and Tread Plus — in 2021. While the Tread’s issue was a wobbly screen, the more premium Tread Plus caused multiple reports of injuries and, in one instance, the death of a small child. Because of the Tread Plus’ slatted belt and raised deck, it was easier for children, adults, and pets to get pulled under the 455-pound device. Peloton has since discontinued the Tread Plus, implemented more safety features on its treadmills, and extended the refund period for recalled Tread Plus units.

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The year 2021 wasn’t great for Peloton. Its stock tanked. Its premium treadmill killed a small child, injured several others, and wound up being recalled. Its new, affordable treadmill also ended up being recalled before it ever officially launched. By December, Peloton was the butt of everyone’s jokes after Mr. Big, a major Sex and the City character, died on his Peloton Bike in the first episode of HBO’s sequel And Just Like That.... Peloton tried to clap back with a cheeky commercial. That backfired. The year ended with murmurs about a potential sale.

And yet, somehow, 2022 was worse.

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Peloton is now offering customers the option to assemble their bikes on their own. There are a couple of caveats, though. The option is only available for folks who buy the original Peloton Bike on Amazon, and it doesn’t come with any discounts.

We first heard rumors about self-assembly in August. Peloton confirmed it a few weeks later when it announced its partnership with Amazon. Previously, you had to set up a date and time for a white-glove delivery and allow people into your home for installation. According to a Peloton blog, the company decided to explore self-assembly after members said they wanted to be “involved in the set-up process.”

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This morning’s news that Peloton is cutting 12 percent of its workforce doesn’t immediately read as a promising sign for the beleaguered smart fitness company.

But in a memo sent to employees on Thursday afternoon, CEO Barry McCarthy explains that he thought a background discussion with The Wall Street Journal ahead of announcing the cuts would lead to a headline about Peloton’s potential growth. He’s apparently surprised to learn that the report accentuated the negative and said the CEO “is giving the unprofitable company about another six months to significantly turn itself around and, if that fails, Peloton likely isn’t viable as a stand-alone company.”

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Peloton’s numbers don’t look great. In its Q4 2022 earnings release this morning, the company reported a $1.2 billion operating loss, a 28 percent revenue drop, a membership decline, and a monthly subscriber churn exceeding 1 percent for the first time in a long while. (Perhaps ever?) And that’s just the tip of the iceberg. In a nutshell, losses were greater than both Peloton and investors had anticipated.

And yet, Peloton CEO Barry McCarthy would have you believe the numbers actually paint a picture of “substantial progress” and the true start of Peloton’s comeback story.

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Peloton has announced it will completely out-source the production of its bikes and treadmills to Taiwanese manufacturer Rexon. The fitness company currently builds some of its hardware in-house, but says out-sourcing will allow it to reduce costs and simplify its supply chain.

It’s the latest move by recently-installed CEO Barry McCarthy to right Peloton’s troubled ship. As a fitness firm focused on delivering home workouts, the company was a natural pandemic darling. But founder and former CEO John Foley overestimated demand for its products, and saw sales, subscribers, and stock plunge as the company was left burdened with surplus inventory. Its most recent earnings showed losses of some $757 million.

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Peloton announced in a press release today (via CNBC) that it plans to raise the cost of its all-access subscription for live and on-demand classes from $39 / month to $44 / month starting on June 1st, 2022. However, new, lower prices for Peloton’s exercise equipment are set to go into effect at 6PM ET today, according to CNBC — the Bike will cost $1,445 (including a $250 shipping fee) instead of $1,745, the Bike Plus will go for $1,995 instead of $2,495, while the Tread will drop to $2,695 (including a $350 shipping fee) from $2,845.

The change only applies to customers in the US and Canada and doesn’t affect the $12.99 / month app-only membership. As noted by CNBC, the subscription price in Canada will go from $49 CAD to $55 CAD, but there’s no word on how much the equipment will cost.

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