Final fall, new Peloton CEO Peter Stern made a wager. The corporate introduced a complete refresh of its entire hardware lineup, full with swivel screens and AI-powered options. Right now, the preliminary outcomes of Stern’s wager are in. In its Q2 2026 earnings name, Stern famous that the {hardware} refresh hasn’t landed with current Peloton customers, leading to weaker-than-expected vacation gross sales throughout what’s normally Peloton’s strongest quarter. Consequently, Peloton shares fell roughly 20 percent this morning.
Peloton additionally introduced that chief monetary officer Liz Coddington can be leaving on the finish of March. Final week, the corporate introduced yet another round of layoffs, chopping 11 p.c of its workers from its engineering and enterprise efforts.
The Cross Coaching collection launched in October and included a brand new Bike, Bike Plus, Tread, Tread Plus, and Row Plus that added swivel screens, cameras for AI-powered energy coaching suggestions, followers, and cushier seats. The brand new Peloton IQ options additionally included real-time kind correction, evaluation, and AI-generated exercise routines. Nonetheless, Peloton additionally raised costs of the brand new {hardware} with the Tread Plus reaching a whopping $6,695. The corporate additionally hiked up subscription costs.
“Our put in base of apparatus is sort of sturdy and member satisfaction is extraordinarily excessive,” Stern stated on the decision. “We imagine these elements contribute to an extended improve cycle than we had anticipated.”
Stern went on to notice that gross sales to new Peloton customers met expectations. He additionally careworn that current Peloton customers did purchase new classes of {hardware} from the Cross Coaching collection (e.g., Bike house owners shopping for a treadmill or rower). He additionally famous that the corporate views Peloton IQ as successful, saying 46 p.c of customers have engaged with the options since rollout.
Though Peloton customers are loyal, many had been displeased with the Cross Coaching collection rollout. A number of reached out to The Verge to say they had been upset the corporate provided no trade-in program to improve their current tools. That was additional exacerbated when users found instructions for swapping out outdated screens within the self-install package for the Cross Coaching collection and some users felt this was the corporate squeezing them for extra money.
It wasn’t all dangerous information, nevertheless. Regardless of the rise in subscription value and a few preliminary cancellations, Peloton stated that churn was decrease than anticipated for the interval. That stated, whole income fell 3 p.c 12 months over 12 months at $657 million, with each {hardware} and subscription gross sales falling wanting anticipated targets.
Even so, Stern spent the earnings name decided to color Peloton’s enhancements in operational prices and prioritizing future profitability. In that vein, Stern emphasised that Peloton isn’t a health firm anymore however a wellness one. Meaning doubling down on partnerships with way of life manufacturers like Respin, specializing in menopause-related wellness content material, in addition to increasing energy coaching efforts. Relating to the latter, Stern recognized heightened demand for energy coaching as dovetailing with elevated adoption of GLP-1 drugs, that are identified to trigger muscle loss.
“Health and wellness isn’t a quarterly aim for our members, and it shouldn’t be for our enterprise both,” Stern stated. He ended the decision urging analysts and buyers to strive Pilates and kettlebell courses.
