Peloton remains confident about its business despite potential tariff pressures, highlighting its focus on subscriptions. In its Q3 2025 earnings call, the company emphasized that subscriptions, which generate the majority of its revenue, remain strong amid macroeconomic uncertainties.
Peloton CFO Liz Coddington noted that, even during the 2008–2009 recession, the fitness industry continued to grow, with consumer spending on fitness remaining resilient. “Data shows fitness isn’t the first place consumers cut back during tough times,” Coddington explained, reinforcing the company’s belief in the stability of its subscription model. “Our subscriber base is loyal, and that’s what drives our business.”
While tariffs are impacting Peloton’s hardware, which is subject to a 25% tariff due to aluminum use, and its apparel, subject to tariffs from China, the company has remained focused on its subscription-driven revenue stream. In its Q4 forecast, Peloton expects a $5 million hit to its free cash flow due to these tariffs.
Despite this challenge, Peloton’s product pricing remains a key area of attention. Coddington pointed out that Peloton offers zero-interest financing, bike rentals, and lower-priced refurbished models to make its products more accessible. CEO Peter Stern also revealed that Peloton has piloted a van service stocked with spare parts for repairs, enhancing customer satisfaction. Additionally, the company recently appointed Charles Kirol as Chief Operating Officer to improve supply chain logistics and cost management.
Regarding pricing strategy, Stern acknowledged that Peloton is reassessing its prices, particularly in light of tariffs, but declined to provide further details on any potential price hikes for its subscription services. It’s been almost three years since Peloton last raised subscription fees.
AI-Driven Innovation to Boost Efficiency and Customer Satisfaction
While the company faces challenges, Peloton is looking toward innovation to drive future growth. Stern highlighted how Peloton is using artificial intelligence (AI) to improve customer service and overall efficiency. AI-powered customer support tools now assist Peloton staff by taking notes on calls, and AI translations are being used for subtitles in classes. In Q3, Peloton subtitled 3,300 classes and aims to translate 100 classes daily with AI.
Peloton is also leveraging AI to offer more personalized training experiences. Stern discussed the launch of AI-powered personalized fitness plans, which integrate human instructors’ expertise to deliver individualized workout programs. Since its introduction, Peloton has set up half a million personalized plans.
“AI will help give our team ‘superpowers,’” Stern said, emphasizing how this technology will elevate both customer experience and operational efficiency. Peloton is also rolling out Google Gemini to its team, allowing them to leverage AI for creative and innovative thinking.
Financials: Losses Despite Subscription Growth
Despite growth in its subscription base, Peloton faced challenges in hardware sales, with a 27% decline in year-over-year sales. Subscription revenue also dropped by 4% during the same period. However, the company raised its financial outlook slightly, from $247.6 million to $247.7 million.
Looking ahead, Peloton remains focused on building its subscription business, enhancing customer satisfaction through new innovations, and embracing AI to stay competitive in a challenging market
