Q4 2026 Peloton Interactive Inc Earnings Call

August 6, 2026

Operator: Good day and welcome to Peloton's Q4 and FY2026 Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. James Marsh, Senior Vice President of Investor Relations. Please go ahead.

Speaker #2: to PELOTON's fourth quarter and fiscal year 2026 conference call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question-and-answer session.

Speaker #2: telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 11 again. Please be advised that today's conference is being recorded. to your speaker, Mr. James Marsh, Senior Vice President of Investor Relations.

Speaker #2: recorded. I would now like to hand the conference over ahead.

Speaker #3: Thank you, operator. Good morning and welcome to PELOTON's fourth quarter and fiscal year 2026 conference call. Joining today's call are PELOTON Chief Executive Officer and President, Peter Stern, and our new Chief Financial Officer, Sid Pecker.

James Marsh: Thank you, operator. Good morning and welcome to Peloton's Q4 and FY2026 Conference Call. Joining today's call are Peloton's Chief Executive Officer and President, Peter Stern, and our new Chief Financial Officer, Sid Thacker. Our comments and responses to your questions reflect management's views as of today only and will include forward-looking statements related to our business under federal securities law. Actual results may differ materially from those contained in or implied by these forward-looking statements due to risks and uncertainties associated with our business. Please refer to our SEC filings, today's press releases, and our earnings presentation, all of which can be found on our investor relations website for a discussion of material risks and other important factors that could impact our results.

Speaker #3: Our comments and responses to your questions reflect management's views as of today only and will include forward-looking statements related to our business under federal securities law.

Speaker #3: Actual results may differ materially from those contained in or implied by these forward-looking statements, due to risks and uncertainties associated with our business. Please refer to our SEC filings; today's press releases; and our earnings presentation.

Speaker #3: All of which can be found on our investor relations website for a discussion of material risks and other important factors that could impact our results.

Speaker #3: All results discussed today are on an as-reported basis. Which include our previously mentioned cost reassignments that began in the beginning of fiscal 26. Please refer to our investor presentation for reconciliations of the impacts of these cost assignments.

James Marsh: All results discussed today are on an as-reported basis, which include our previously mentioned cost reassignments that began in the beginning of FY2026. Please refer to our investor presentation for reconciliations of the impacts of these cost assignments. During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures and definitions for our user metrics are also provided in today's press release. I'll now turn it over to Peter.

Speaker #3: During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures and definitions for our user metrics are also provided in today's press release.

Speaker #3: I'll now turn it over to

Speaker #4: Thanks, James. And good morning, everyone. As my first full fiscal year comes to a close, we enter the new year with a strong financial and operational foundation.

Peter Stern: Thanks, James, and good morning, everyone. As my first full fiscal year comes to a close, we enter the new year with a strong financial and operational foundation. FY2026 was filled with product innovations, exciting additions to our leadership and instructor teams, a new company strategy, and more ways than ever to help our members live fit, strong, long, and happy. We've also made meaningful progress on our journey to evolve from a connected fitness company to a connected wellness ecosystem. This ambition defines the future of Peloton and positions us to participate in a $7 trillion global market centered on longevity and health span. Our magic formula of premium hardware, intuitive software, world-class coaching, and supportive community powers our beloved brand and gives us permission to gradually and systematically capture share in the broader wellness market in the years ahead. Our strategy is built on four pillars.

Speaker #4: FY 26 was filled with product innovations, exciting additions to our leadership and instructor teams, a new company strategy, and more ways than ever to help our members live fit, strong, long, and happy.

Speaker #4: We've also made meaningful progress on our journey to evolve from a connected fitness company to a connected wellness ecosystem. This ambition defines the future of PELOTON and positions us to participate in a $7 trillion global market centered on longevity and health span.

Speaker #4: Our magic formula of premium hardware, intuitive software, world-class coaching, and supportive community powers our beloved brand and gives us permission to gradually and systematically capture share in the broader wellness market in the years ahead.

Speaker #4: Our strategy is built on four pillars: 1) improving member outcomes; 2) meeting members everywhere; 3) making members for life; and 4) business excellence. I'm proud to report that we continue to make substantial strides across each of these pillars.

Peter Stern: One, improving member outcomes. Two, meeting members everywhere. Three, making members for life. Four, business excellence. I'm proud to report that we continue to make substantial strides across each of these pillars. Starting with improving member outcomes, which is where we focus on human impact, improving our members' fitness, strength, longevity, and happiness. The more we help our members achieve these outcomes, the more we fuel retention. A key driver of this is our product innovation. In FY2026, we introduced the Cross-Training Series, a refresh of our products across Bike, Tread, and Row. We launched Peloton IQ, a huge step forward in our use of AI to deliver a more personalized experience to our members. In Q4, more than 50% of monthly active users engaged with personalized guidance powered by Peloton IQ.

Speaker #4: Starting with improving member outcomes, which is where we focus on human impact. Improving our members' fitness, strength, longevity, and happiness. The more we help our members achieve these outcomes, the more we fuel retention.

Speaker #4: A key driver of this is our product innovation. In FY 26, we introduced the cross-training series: a refresh of our products across bike, tread, and row, and we launched PELOTON IQ, a huge step forward in our use of AI to deliver a more personalized experience to our members.

Speaker #4: In Q4, more than 50% of monthly active users engaged with personalized guidance powered by PELOTON IQ. Our product innovation engine is now firing on all cylinders, and during this calendar year, we will launch additional new equipment in an existing category, while delivering much more customized, personalized guidance to help our members achieve their individual goals.

Peter Stern: Our product innovation engine is now firing on all cylinders. During this calendar year, we will launch additional new equipment in an existing category while delivering much more customized, personalized guidance to help our members achieve their individual goals. We also continue to innovate on our programming. For example, by expanding our specialized content with offerings like the Pace Your Race marathon training program and HiLit+, a very popular high-intensity, low-impact cross-training program. These class and programming additions directly reflect the engagement trends we're seeing from our members. Speaking of engagement, in Q4, Pilates workouts and workout time were up year-over-year by 44% and 53% respectively. Given this rapidly growing member demand, in Q4, we executed the acquisition of Skōp, an early innovator in connected Pilates with foundational technologies and deep expertise.

Speaker #4: We also continue to innovate on our programming. For example, by expanding our specialized content with offerings like the Pace Your Race Marathon training program, and highlight plus, a very popular high-intensity, low-impact cross-training program.

Speaker #4: These class and programming additions directly reflect the engagement trends we're seeing from our members. Speaking of engagement, in Q4, Pilates workouts and workout time were up year over year by 44% and 53%, respectively. Given this rapidly growing member engagement, we executed the acquisition of Scope, an early innovator in connected Pilates with foundational technologies and deep expertise.

Speaker #4: This move will enhance our R&D efforts and enable us to deliver even more distinctive experiences in this category. The second pillar of our strategy is to meet members everywhere.

Peter Stern: This move will enhance our R&D efforts and enable us to deliver even more distinctive experiences in this category. The second pillar of our strategy is to meet members everywhere. We know Peloton members are deeply connected to their community, instructors, and class programs. We're committed to bringing our experiences to them wherever they are. Formed just a year ago, our commercial business unit has become central to this strategy by increasing our reach outside the home and in more hotels and gyms across our key markets. Our CBU delivered double-digit year-over-year revenue growth in fiscal 2026, with growth across all regions and across all major product categories. We estimate that we're approaching 4% of the commercial fitness equipment market segment, leaving enormous headroom for growth. We're encouraged by the increasing demand for our products.

Speaker #4: We know PELOTON members are deeply connected to their community, instructors, and class programs, and we're committed to bringing our experiences to them wherever they are.

Speaker #4: Forms just a year ago, our commercial business unit has become central to this strategy, by increasing our reach outside the home, and in more hotels and gyms across our key markets.

Speaker #4: Our CBU delivered double-digit year-over-year revenue growth in fiscal 2026, with growth across all regions and across all major product categories. We estimate that we're approaching 4% of the commercial fitness equipment market segment, leaving enormous headroom for growth.

Speaker #4: And we're encouraged by the increasing demand for our products. In the next few months, we will launch the PELOTON Commercial series, the first PELOTON bike and treadmill built to accommodate the duty cycle of high-traffic commercial gyms.

Peter Stern: In the next few months, we will launch the Peloton Commercial Series, the first Peloton Bike and Treadmill built to accommodate the duty cycle of high-traffic commercial gyms. We anticipate that with the benefit of this new equipment, alongside additional investment in our CBU sales team and product development, we will see accelerating growth from the CBU in fiscal 2017 and beyond. Another way we meet members everywhere is through our retail stores. We ended the year with a highly capital-efficient footprint of 10 micro stores, which consistently outperform our historical fleet of legacy showrooms. Based on this success, over the past few weeks, we have launched three additional micro stores. We plan to add an additional seven micro stores in time for the holidays, which would result in a doubling of our micro store footprint this year.

Speaker #4: We anticipate that with the benefit of this new equipment, alongside additional investment in our CBU sales team and product development, we will see accelerating growth from the CBU in fiscal 27 and beyond.

Speaker #4: Another way we meet members everywhere is through our retail stores. We ended the year with a highly capital-efficient footprint of 10 microstores, which consistently outperform our historical fleet of legacy showrooms.

Speaker #4: Based on this success, over the past few weeks, we have launched three additional micro stores and we plan to add an additional 7 micro stores in time for the holidays.

Speaker #4: Which would result in a doubling of our micro store footprint this year. We're also meeting members everywhere through our strategic partnership with Spotify, we are now delivering our non-equipment-based classes, such as strength, Pilates, bar, yoga, meditation, and outdoor running and walking, to hundreds of millions of premium Spotify subscribers around the world.

Peter Stern: We are also meeting members everywhere through our strategic partnership with Spotify. We are now delivering our non-equipment-based classes, such as strength, Pilates, barre, yoga, meditation, and outdoor running and walking to hundreds of millions of premium Spotify subscribers around the world. Partnerships like the one with Spotify enable us to build our brand and test demand in new geographies. For example, recently Mexico became the most engaged country outside the US with our content on Spotify. Lastly, meeting members everywhere also includes meeting members in real-life events and activations. This year, our instructors represented Peloton in more than 160 events worldwide. A more than threefold increase year over year, including major marathons in New York, Berlin, and Sydney, as well as premier wellness festivals and run clubs. Our third pillar, Members for Life, focuses on maximizing lifetime value and keeping our members active and engaged.

Speaker #4: Partnerships like the one with Spotify enable us to build our brand and test demand in new geographies. For example, recently, Mexico became the most engaged country outside the US with our content on Spotify.

Speaker #4: Lastly, meeting members everywhere also includes meeting members in real-life events and activations. This year, our instructors represented PELOTON in more than 160 events worldwide, a more than threefold increase year over year, including major marathons in New York, Berlin, and Sydney, as well as premier wellness festivals and run clubs.

Speaker #4: Our third pillar: members for life, focuses on maximizing lifetime value and keeping our members active and engaged. 316,000 of our members now own multiple connected fitness products, up more than 20,000 year over year, and these members churn as significantly lower rates than those who own just one.

Peter Stern: 316,000 of our members now own multiple connected fitness products, up more than 20,000 year over year. These members churn at significantly lower rates than those who own just one. As a result, not only are new products meant to attract new members, but they also keep our existing ones with us for longer. We are also driving member loyalty through Club Peloton, which our members have deeply embraced since its October launch. Club Peloton rewards were applied to 70% of apparel sales on our site in June. We continue to evolve this program, and in Q4, we launched new milestones and weekly streak badges to celebrate our most committed members. We remain proud of our strong member retention. While we saw an uptick in Q4 churn, driven in part by one-time events, we expect our year-over-year churn rate to moderate over the course of FY27.

Speaker #4: As a result, not only are new products meant to attract new members, but they also keep our existing ones with us for longer. We're also driving member loyalty through Club PELOTON.

Speaker #4: Which our members have deeply embraced since its October launch. Club PELOTON rewards were applied to 70% of apparel sales on our site in June.

Speaker #4: We continue to evolve this program, and in Q4, we launched new milestones and weekly streak badges to celebrate our most committed members. We remain proud of our strong member retention.

Speaker #4: While we saw an uptick in Q4 churn, driven in part by one-time events, we expect our year-over-year churn rate to moderate over the course of FY27.

Speaker #4: On a full-year basis, we expect churn to be roughly flat versus FY26. Last but not least is business excellence. When I started at Peloton, I explained we’d see consistent progress from the bottom of the P&L up.

Peter Stern: On a full year basis, we expect churn to be roughly flat versus FY26. Last but not least is business excellence. When I started at Peloton, I explained we would see consistent progress from the bottom of the P&L up. This past year, we made material improvements in our financial and operational foundation, and I am pleased to share that we have delivered Peloton's first full year of both +net income and +operating income at $63 million and $161 million, respectively. In addition, we delivered $468 million of adjusted EBITDA, an increase of $65 million or 16% year over year, and $378 million of free cash flow, an increase of $54 million or 17% year over year. This profitability growth reflects the significant progress we have made in improving our cost structure.

Speaker #4: This past year, we made material improvements in our financial and operational foundation, and I'm pleased to share that we have delivered PELOTON's first full year of both positive net income and positive operating income, at $63 million and $161 million respectively.

Speaker #4: In addition, we delivered $468 million of adjusted EBITDA, an increase of 65 million dollars or 16% year over year, and $378 million of free cash flow, an increase of 54 million dollars or 17% year over year.

Speaker #4: This profitability growth reflects the significant progress we've made in improving our cost structure. We committed to a 100 million dollar run rate cost savings initiative in FY26, and I can report that we exceeded this goal.

Peter Stern: We committed to a $100 million run rate cost savings initiative in FY26. I can report that we exceeded this goal. Moving further up the P&L, we are pleased to have achieved our second consecutive quarter of year-over-year revenue growth in Q4. Turning to FY27, our core business trends continue to improve, and our business is the healthiest it has ever been as we are projecting the highest total gross margin, adjusted EBITDA, and net income in the company's history. Looking beyond FY27, I am excited about our multiyear product roadmap of both consumer and commercial products. This roadmap includes groundbreaking offerings in entirely new categories that broaden our total addressable market. The first of these new consumer product categories will launch in the fall of 2027, followed by more thereafter. We expect investments in these categories will result in an acceleration of our year-over-year revenue trajectory.

Speaker #4: Moving further up the P&L, we're pleased to have achieved our second consecutive quarter of year-over-year revenue growth in Q4. Turning to FY27, our core business trends continue to improve, and our business is the healthiest it has ever been as we're projecting the highest total gross margin, adjusted EBITDA, and net income in the company's history.

Speaker #4: And looking beyond FY27, I'm excited about our multi-year product roadmap of both consumer and commercial products. This roadmap includes groundbreaking offerings in entirely new categories that broaden our total addressable market.

Speaker #4: The first of these new consumer product categories will launch in the fall of 2027, followed by more thereafter. We expect investments in these categories will result in an acceleration of our year-over-year revenue trajectory.

Speaker #4: Delivering breakthrough product innovation takes time. Especially hardware like ours. But we're investing with discipline in areas where we have confidence in the returns. I'm proud of our progress over the last 18 months in filling the product pipeline.

Peter Stern: Delivering breakthrough product innovation takes time, especially hardware like ours. We're investing with discipline in areas where we have confidence in the returns. I'm proud of our progress over the last 18 months in filling the product pipeline. This work makes me deeply optimistic about Peloton's future and our team's ability to execute on our next chapter. This is what a successful multiyear business transformation looks like, and I want to share my gratitude to Peloton team members, partners, shareholders, and members for taking this journey with us. With that, I'm pleased to introduce our wonderful new Chief Financial Officer, Sid Thakur, who will share more details with you.

Speaker #4: This work makes me deeply optimistic about Peloton's future and our team's ability to execute on our next chapter. This is what a successful multi-year business transformation looks like.

Speaker #4: And I want to share my gratitude to PELOTON's team members, partners, shareholders, and members for taking this journey with us. With that, I'm pleased to introduce our wonderful new Chief Financial Officer, Ted Thacker, who will share more details with you.

Speaker #2: Thanks, Peter. Before I begin, I wanted to share how thrilled I am to be on this journey here at PELOTON. The company has many strategic advantages.

Sid Thacker: Thanks, Peter. Before I begin, I wanted to share how thrilled I am to be on this journey here at Peloton. The company has many strategic advantages, its iconic brand, industry-leading instructors, and its deeply loyal community. I'm looking forward to working with our team members to build an even stronger Peloton. Before joining, I knew we had real work to do to improve our growth trajectory, and that getting this business back to sustained growth wouldn't be immediate. Since I started, two things have become very clear to me. The first is that the underlying strength of this business and brand are real. We benefit from enviable churn, providing a high margin, recurring revenue stream, which provides the foundation for our free cash flow generation.

Speaker #2: Its iconic brand, industry-leading instructors, and its deeply loyal community. And I'm looking forward to working with our team members to build an even stronger PELOTON.

Speaker #2: Before joining, I knew we had real work to do to improve our growth trajectory. And that getting this business back to sustained growth wouldn't be immediate.

Speaker #2: But since I started, two things have become very clear to me. The first is that the underlying strength of this business and brand are real.

Speaker #2: We benefit from enviable churn, providing a high margin recurring revenue stream which provides the foundation for our free cash flow generation. Our brand remains exceptionally strong, with all of our cross-training series products measured having an NPS score above 70 on a scale from negative 100 to 100.

Sid Thacker: Our brand remains exceptionally strong with all of our Cross Training Series products measured having an NPS score above 70 on a scale from -100 to 100. The second is that our teams have a solid strategy, along with an excellent grasp on the work ahead and how it will drive value. I've been thoroughly impressed by the quality and maturity of the company's innovation pipeline. As Peter mentioned, we have high potential products in the works that target a much expanded addressable market, giving us real, tangible growth engines for the future. Additionally, I see a sizable and immediate opportunity with our commercial business unit to drive profitable growth. In terms of a capital allocation strategy, I see significant cash generation at Peloton in the years ahead, giving us the resources to invest in future growth while also deploying capital to benefit shareholders.

Speaker #2: The second is that our teams have a solid strategy along with an excellent graph on the work ahead and how it will drive value.

Speaker #2: I've been thoroughly impressed by the quality and maturity of the company's innovation pipeline. As Peter mentioned, we have high-potential products in the works that target a much-expanded addressable market, giving us real, tangible growth engines for the future.

Speaker #2: Additionally, I see a sizable and immediate opportunity with our commercial business units to drive profitable growth. In terms of our capital allocation strategy, I see significant cash generation at PELOTON in the years ahead.

Speaker #2: Giving us the resources to invest in future growth, while also deploying capital to benefit shareholders. In the near term, we are already working toward a refinancing of our balance sheet and have begun the process with our bankers.

Sid Thacker: In the near term, we are already working toward a refinancing of our balance sheet and have begun the process with our bankers. We'll have more to report back in the coming weeks, recognizing that August is a slow month for capital markets activity. Ultimately, we find ourselves in an excellent position to capitalize on the growing fitness and wellness market. Our best-in-class innovation pipeline, paired with an improved financial position and our highly talented collaborative team, makes the path forward clear. We know the work ahead of us, we know how to execute, and we are moving quickly. Diving into our Q4 financial results, we ended the quarter with 2.553 million ending paid connected fitness subscriptions within our guidance range. Q4 net churn of 2.2% reflects an increase of 37 basis points year over year.

Speaker #2: We'll have more to report back in the coming weeks, recognizing that August is a slow month for capital markets activity. Ultimately, we find ourselves in an excellent position to capitalize on the growing fitness and wellness market.

Speaker #2: Our best-in-class innovation pipeline paired with an improved financial position and a highly talented collaborative team makes the path forward clear. We know the work ahead of us.

Speaker #2: We know how to execute, and we are moving quickly. Diving into our Q4 financial results, we ended the quarter with 2.553 million ending paid connected fitness subscriptions, within our guidance range.

Speaker #2: Q4 net churn of 2.2% reflects an increase of 37 basis points year over year. 17 basis points or roughly half of this headwind, other results of one-time factors, most notably a change to our payment reactivation algorithm that we made in Q3 that had an unanticipated adverse impact on reactivations from involuntary churn in Q4.

Sid Thacker: 17 basis points, or roughly half of this headwind, are the result of one-time factors, most notably a change to our payment reactivation algorithm that we made in Q3 that had an unanticipated adverse impact on reactivations from involuntary churn in Q4. We addressed that change last month and have since observed the normalization of our involuntary churn. Looking ahead to fiscal 2027, we expect churn to be roughly flat year over year on a full year basis. Total revenue was $608 million in Q4, which outperformed at the high end of our implied guidance range by $6 million and reflects slight but nonetheless positive year over year growth. Outperformance relative to guidance was driven by higher connected fitness equipment sales across Peloton and Precor brands. Total gross profit was $344 million in Q4, an increase of $16 million or 5% year over year.

Speaker #2: We addressed that change last month and have since observed a normalization of our involuntary churn. Looking ahead to fiscal 2027, we expect churn to be roughly flat year over year on a full-year basis.

Speaker #2: Total revenue, with 608 million dollars in Q4, which outperformed the high end of our implied guidance range by 6 million dollars, and reflects slight but nonetheless positive year-over-year growth.

Speaker #2: Outperformance relative to guidance was driven by higher connected fitness equipment sales across PELOTON and pre-core brands. Total gross profit was 344 million dollars in Q4, an increase of 16 million dollars or 5% year over year.

Speaker #2: Total gross margin was 56.7% in Q4, an increase of 260 basis points year over year and roughly in line with our Q4 implied guidance.

Sid Thacker: Total gross margin was 56.7% in Q4, an increase of 260 basis points year over year, and roughly in line with our Q4 implied guidance. Please refer to our investor presentation for the segment level breakdowns for revenue and gross margin. Total adjusted operating expenses, which exclude restructuring and impairment expenses, were $257 million in Q4. Excluding the impact of $24 million of non-recurring accrued legal contingencies related to patent litigation, adjusted operating expenses decreased $29 million or 11% year over year, reflecting the continued progress we've made in right-sizing our cost structure. We remain focused on managing dilution through a disciplined approach to equity compensation, which includes changes in our program design and tying more stock-based compensation to financial performance. Our stock-based compensation expense was $43 million and decreased $10 million or 19% year over year in Q4. This represents the lowest stock-based compensation we've had in many years.

Speaker #2: Please refer to our investor presentation for this segment-level breakdowns for revenue and gross margin. Total adjusted operating expenses, which exclude restructuring and impairment expenses, was 257 million dollars in Q4.

Speaker #2: Excluding the impact of $24 million of non-recurring accrued legal contingencies related to patent litigation, adjusted operating expenses decreased $29 million, or 11% year over year, reflecting the continued progress we've made in rightsizing our cost structure.

Speaker #2: We remain focused on managing dilution through a disciplined approach to equity compensation. Which includes changes in our program design and tying more stock-based compensation to financial performance.

Speaker #2: Our stock-based compensation expense was 43 million dollars and decreased 10 million dollars or 19% year over year in Q4. This represents the lowest stock-based compensation we've had in many years.

Speaker #2: As Peter noted, we exceeded our goal to achieve at least 100 million dollars of run rate cost savings at the end of fiscal 2026.

Sid Thacker: As Peter noted, we exceeded our goal to achieve at least $100 million of run rate cost saving by the end of fiscal 2026. Adjusted EBITDA for Q4 was $142 million, or 23% of total revenue. Excluding the $24 million impact from accrued legal contingencies related to patent litigation, Adjusted EBITDA would have been $166 million, an increase of $26 million or 19% year over year, and $12 million above the high end of our guidance range. Q4 free cash flow of $89 million represented a decrease of $24 million or 21% year over year, primarily related to net working capital timing. On a full year basis, we generated $378 million of free cash flow in fiscal year 2026, an increase of $54 million or 17% year over year.

Speaker #2: Adjusted EBITDA for Q4 was 142 million dollars or 23% of total revenue. Excluding the 24 million dollar impact from accrued legal contingencies, related to patent litigation, adjusted EBITDA would have been 166 million dollars and increased of 26 million dollars or 19% year over year and 12 million dollars above the high end of our guidance range.

Speaker #2: Q4 free cash flow of 89 million dollars represented a decrease of 24 million dollars or 21% year over year, primarily related to net working capital timing.

Speaker #2: On a full-year basis, we generated $378 million of free cash flow in fiscal year '26, an increase of $54 million, or 17%, year over year.

Speaker #2: Turning to our balance sheet, we ended the quarter with a strong cash position of 1.21 billion dollars and increased of 167 million dollars year over year after paying down 200 million dollars of debt in Q3.

Sid Thacker: Turning to our balance sheet, we ended the quarter with a strong cash position of $1.21 billion, an increase of $167 million year over year after paying down $200 million of debt in Q3. We currently have $93 million of net debt, which decreased $367 million or 80% year over year. Our gross and net leverage ratios have improved meaningfully to 2.8 times and 0.3 times respectively. Next, I'd like to share context for our financial outlook. For full fiscal year 2027 and on a quarterly basis, we are providing guidance for total revenue, total growth margin, and Adjusted EBITDA. We will also continue to provide an annual target for minimum free cash flow and a quarterly guidance range for ending paid connected fitness subscriptions. Our whole fiscal year 2027 total revenue outlook of $2.3 to $2.4 billion reflects a 3.9% revenue decrease year over year at the midpoint.

Speaker #2: We currently have 93 million dollars of net debt, which decreased 367 million dollars or 80% year over year. Our gross and net leverage ratios have improved meaningfully, to 2.8 times and 0.3 times respectively.

Speaker #2: Next, I'd like to share context for our financial outlook. For full fiscal year 2027 and on a quarterly basis, we are providing guidance for total revenue, total gross margin, and adjusted EBITDA.

Speaker #2: We will also continue to provide an annual target for minimum free cash flow and a quarterly guidance range for ending paid connected fitness subscriptions.

Speaker #2: Our full fiscal year 2027 total revenue outlook of $2.3 to $2.4 billion reflects a 3.9% revenue decrease year over year at the midpoint.

Speaker #2: Let me put this in context. If we normalize last year's subscription price increase which drove a one-time benefit in our year-over-year revenue trend, our year-over-year trajectory is actually improving in fiscal year 27.

Sid Thacker: Let me put this in context. If we normalize last year's subscription price increase, which drove a one-time benefit in our year-over-year revenue trend, our year-over-year trajectory is actually improving in fiscal year 2027. We are expecting an improving trend of both equipment unit sales and revenue driven by new product introductions before the end of the calendar year, which also contributes to a continued flattening of the curve on Connected Fitness subscription growth additions. We believe the product introductions in fiscal 2027, combined with the entry into new categories in fiscal 2028 and beyond, provides the foundation for revenue acceleration. Q1 total revenue is expected to be $545 to $565 million and reflects an increase of 1% year-over-year at the midpoint as a result of higher subscription revenue due to pricing changes made in Q2 of last year.

Speaker #2: We are expecting an improving trend of both equipment unit sale and revenue driven by new product introductions before the end of the calendar year, which also contributes to a continued flattening of the curve on connected fitness subscription gross additions.

Speaker #2: We believe the product introductions in fiscal 2027, combined with the entry into new categories, in fiscal 2028 and beyond, provides the foundation for revenue acceleration.

Speaker #2: Q1 total revenue is expected to be 545 to 565 million dollars and reflects an increase of 1% year over year at the midpoint as a result of higher subscription revenue due to pricing changes made in Q2 of last year.

Speaker #2: Similar to fiscal 2026, we expect Q1 to be a seasonally low quarter for equipment sales. Full-year fiscal 2027 total gross margin is expected to be roughly 54%.

Sid Thacker: Similar to fiscal 2026, we expect Q1 to be a seasonally low quarter for equipment sales. Full year fiscal 2027 total gross margin is expected to be roughly 54%, reflecting an increase of approximately 140 basis points year-over-year, primarily driven by higher expected Connected Fitness gross margins. Our Q1 fiscal 2027 total gross margin outlook is roughly 57%. This reflects our expectation for a higher mix of subscription revenue relative to full year fiscal 2027, which has a higher segment gross margin. Our full year fiscal 2027 Adjusted EBITDA guidance of $475 to $525 million reflects an increase of $32 million, or 7% year-over-year at the midpoint, primarily driven by operating expense savings connected to rightsizing our cost structure and the non-recurring accrued legal contingency related to patent litigation we booked in Q4 of fiscal 2026.

Speaker #2: Reflecting an increase of approximately 140 basis points year over year primarily driven by higher expected connected fitness gross margins. Our Q1 fiscal 2027 total gross margin outlook is roughly 57%.

Speaker #2: This reflects our expectation for a higher mixed subscription revenue relative to full-year fiscal 27, which has a higher segment gross margin. Our full-year fiscal 2027 adjusted EBITDA guidance of 475 to 525 million dollars reflects an increase of 32 million dollars or 7% year over year at the midpoint, primarily driven by operating expense savings connected to rightsizing our cost structure and the non-recurring accrued legal contingency related to patent litigation we booked in Q4 of fiscal 2026.

Speaker #2: Q1 adjusted EBITDA is expected to be within the range of 135 million dollars to 145 million dollars reflecting an increase of 22 million dollars or 18% year over year at the midpoint.

Sid Thacker: Q1 Adjusted EBITDA is expected to be within the range of $135 million to $145 million, reflecting an increase of $22 million or 18% year-over-year at the midpoint, primarily driven by higher revenue from subscription pricing, costs related to our Peloton Bike+ seatpost recall last year, and lower operating expenses. Q1 Connected Fitness subscriptions guidance of 2.455 to 2.475 million reflects a year-over-year decrease of 9.8% at the midpoint, reflecting the tougher comparison to Q1 of last year, which was the final quarter before the price increase. While we expect Q1 net churn to be higher than Q1 of last year, we expect year-over-year net churn trends to moderate over the course of fiscal 2027 as we lap last year's price increase, and to end the year roughly flat on a full-year basis.

Speaker #2: Primarily driven by higher revenue from subscription pricing, costs related to our bike plus seat post recall last year, and lower operating expenses. Q1 connected fitness subscriptions guidance of 2.455 to 2.475 million reflects a year-over-year decrease of 9.8% at the midpoint, reflecting the tougher comparison to Q1 of last year, which was the final quarter before the price increase.

Speaker #2: While we expect Q1 net churn to be higher than Q1 of last year, we expect year-over-year net churn trend to moderate over the course of fiscal 2027 as we lap last year's price increase and to end the year roughly flat on a full-year basis.

Speaker #2: We remain committed to generating meaningful free cash flow and consistent with prior years are sharing a minimum free cash flow target, for fiscal 2027 our minimum target is at least 350 million dollars.

Sid Thacker: We remain committed to generating meaningful free cash flow and consistent with prior years are sharing a minimum free cash flow target. For fiscal 2027, our minimum target is at least $350 million. In conclusion, fiscal year 2027 represents a pivotal year where we expect to launch the first in a series of important product innovations designed to return Peloton to growth. I'll now turn it over to James, who will kick off the Q&A with questions from our retail investors.

Speaker #2: In conclusion, fiscal year 27 represents a pivotal year where we expect to launch the first in a series of important product innovations designed to return PELOTON to growth.

Speaker #2: I'll now turn it over to James who will kick off the Q&A with questions from our retail investors.

James Marsh: Okay. Thank you. First question comes from David in Germany. David asks: Are there any plans to introduce technical equipment for strength training, like Tonal or Speediance Gym Monster? There seems to be a huge market for Peloton with the power of Peloton's classes, trainers, and community. Maybe Peter, you can handle this one.

Speaker #1: Great. Thank you. First question comes from David in Germany. David asks, "Are there any plans to introduce technical equipment for strength training like tonal or speediance gym monster?

Speaker #1: There seems to be a huge market for PELOTON with the power of PELOTON's classes, trainers, and community. Maybe Peter, you can handle this one.

Speaker #3: Yeah. David, thanks so much for the question. I'm really glad you asked about strength training because after cardio it's the most important thing that I think our members can do to promote their health.

Peter Stern: Yeah, David, thanks so much for the question. I'm really glad you asked about strength training because, after cardio, it's the most important thing that I think our members can do to promote their health. I'm often asked, actually, what I recommend people should do. My suggestion is 75 minutes a week of vigorous cardio or 150 minutes a week of moderate intensity cardio exercise, and two days a week of strength training. I've talked in the past about how roughly two million of our members engage with our strength programming in any quarter. Adding to that, we talked earlier about the growth in Pilates engagement on our platform. We see a lot of opportunity in the strength category. An earnings call is not the time for us to make major product announcements.

Speaker #3: I'm often asked actually what people you know, what I recommend people should do and my suggestion is 70 minutes 75 minutes a week of vigorous cardio or 150 minutes a week of moderate intensity cardio exercise and two days a week of strength training.

Speaker #3: And I've talked in the past about how roughly 2 million of our members engage with our strength programming in any quarter adding to that we talked earlier about the growth in Pilates engagement on our platform.

Speaker #3: So we see a lot of opportunity in the strength category. And earnings Paul is not the time for us to make major product announcements but what I will tell you is that if you're interested in dumbbell strength training the cross training series plus line that we launched last October is a great way for you to improve your your strength.

Peter Stern: What I will tell you is that, if you're interested in dumbbell strength training, the Peloton Cross Training Series line that we launched last October, is a great way for you to improve your strength. That equipment has industry-leading features for things like form feedback, rep counting, recommendations when it's time to go up or down in weights, all using our advanced camera vision technology. I hope that keeps you really busy and building your strength, while you wait for us to talk about some really cool stuff that we have in the works. I can't wait to share more about that in the future.

Speaker #3: That equipment has industry-leading features for things like form feedback, rep counting, and recommendations for when it's time to go up or down in weights, all using our advanced camera vision technology.

Speaker #3: So I hope that keeps you really busy and building your strength while you wait for us to talk about some really cool stuff that we have in the works.

Speaker #3: I can't wait to share more about that in the future.

Speaker #1: Great. Thanks, Peter. Next question comes from Vikas in Los Angeles, Leaderboard name Vic83. Vic asks two questions. First, do we expect to receive a tariff refund?

James Marsh: Great. Thanks, Peter. Our next question comes from Vikas in Los Angeles, Leaderboard name Vic 83. Vic asks two questions. First, do we expect to receive a tariff refund? Second, relates to a recent jury verdict in Delaware in favor of NEC for $20.5 million. What is the ongoing impact, if any, on margins and EBITDA from that? Maybe, Sid, you can handle those two.

Speaker #1: And second, relates to a recent jury verdict in Delaware in favor of NEC for 20.5 million. What is the ongoing impact if any on margins and EBITDA from that?

Speaker #1: Maybe Sid you can handle those two.

Speaker #4: Great. Thanks James and thanks Vikas. Let me tackle tariffs first. Year to date we've received $3 3 million of tariff refunds from the federal government.

Sid Thacker: Great. Thanks, James, and thanks, Vikas. Let me tackle tariff first. Year to date, we've received $3 million of tariff refunds from the federal government. We do anticipate receiving additional refunds, we have not incorporated them into our forecast for the quarter or year, just given the uncertainties around tariffs. On the second question, as you may have read in the press, last week, a jury found that the standard third-party media players that we use to stream content infringed a patent. While we're considering our legal options in the meantime, we've booked a $23.8 million legal contingency accrual in Q4 of fiscal 2026, which represents our estimate of the all-in cost if we were to pay the full amount today. We've also incorporated that same estimate into our minimum free cash flow target for fiscal 2027.

Speaker #4: We do anticipate receiving additional refunds but we have not incorporated them into our forecast for the quarter a year just given the uncertainties around tariffs.

Speaker #4: On the second question, as you may have read in the press last week a jury found that the standard third-party media players that we use to stream content infringed a patent.

Speaker #4: So while we're considering our legal options in the meantime we've booked a 23.8 million dollars legal contingency accrual in Q4 of fiscal 26 which represents our estimate of the all-in cost if we were to pay the full amount today.

Speaker #4: We've also incorporated that same estimate into our minimum free cash flow target for fiscal 2027. In terms of go forward impact we at this point do not expect the go forward impact of potential ongoing royalties to be material.

Sid Thacker: In terms of go-forward impact, we, at this point, do not expect the go-forward impact of potential ongoing royalties to be material.

Speaker #1: Operator, can we have a question from the field please?

James Marsh: Operator, can we have a question from the field, please?

Speaker #5: Thank you. As a reminder to ask a question please press star 11 on your telephone and wait for your name to be announced. To withdraw your question press star 11 again.

Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star one one again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question will come from the line of Simeon Siegel with Guggenheim Securities. Your line is open.

Speaker #5: Due to time restraints we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster.

Speaker #5: And our first question will come from the line of Simeon Siegel with Guggenheim Securities. Your line is open.

Speaker #6: Thanks. Hey everyone. Morning. Hope you're having a nice summer. Peter maybe can you I'm going to tap on to Dave's comment or what I don't remember his name but can you elaborate on that the new product introductions that you guys mentioned?

Simeon Siegel: Thanks. Hey, everyone. Morning. Hope you're having a nice summer. Peter, maybe I'm going to tap onto David's comment or what, I don't remember his name. Can you elaborate on that, the new product introductions that you guys mentioned? Just any thoughts to what you can share, and maybe it sounds like we should be considering something from a revenue contribution perspective in the future. That sounds pretty exciting. Anything you could help us think through just to contextualize how big of a comment that was. Also, can you guys elaborate on the involuntary churn comment that you had mentioned? I'm curious, were you able to reactivate those who were involuntary churned post the fix? Thank you.

Speaker #6: Just any thoughts to what you can share and maybe it sounds like we should be considering something from a revenue contribution perspective in the future that that sounds pretty exciting.

Speaker #6: So, anything you could help us think through just to contextualize how big of a comment that was. And then also, can you guys elaborate on the involuntary churn comment that you had mentioned?

Speaker #6: I'm curious were you able to reactivate those who were involuntary churned post the fix? Thank you.

Speaker #1: Thanks a lot Simeon. This is Peter. I'll start with the first part of your questions relating to product introductions and then Sid will address the involuntary churn question.

Peter Stern: Thanks a lot, Simeon. This is Peter. I'll start with the first part of your questions relating to product introductions, and then Sid will address the involuntary churn question. This is what I can tell you. By the end of this calendar year, and recognizing that it's August, there aren't that many months left in the calendar year. We plan to, first of all, launch the Peloton Commercial Series. We've talked about that pretty specifically in the past and demonstrated those products. That's both a bike and a treadmill designed very specifically for the extremely high duty cycle of commercial fitness locations. We also plan to introduce some meaningful product innovations on the consumer side of the business, focused on areas where we already offer experiences to our members. Starting in the fall of FY27, Simeon, I'm getting specific about timing again.

Speaker #1: This is what I can tell you. By the end of this calendar year, and recognizing that it's August—there aren't that many months left in the calendar year—we plan to, first of all, launch the PELOTON commercial series.

Speaker #1: We've talked about that pretty specifically in the past and demonstrated those products. That's both a bike and a treadmill designed very specifically for the extremely high duty cycle of commercial fitness locations.

Speaker #1: We also plan to introduce some meaningful product innovations on the consumer side of the business focused on areas where we already offer experiences to our members.

Speaker #1: Starting in the fall of FY27 so Simeon I'm getting specific about timing again. In the fall of FY27 we will introduce the first product in new categories for the company and then we have a basically a March of progress thereafter those products open up new total addressable market opportunities for us as a company and we'll begin to create the potential for meaningful revenue acceleration from that point looking forward.

Peter Stern: In the fall of FY27, we will introduce the first product in new categories for the company. We have basically a march of progress thereafter. Those products open up new total addressable market opportunities for us as a company and will begin to create the potential for meaningful revenue acceleration from that point looking forward. Sid, why don't you address the question about involuntary churn?

Speaker #1: Sid why don't you address the question about involuntary churn?

Speaker #4: Okay. Let me just give you a little bit of color on the involuntary churn issue as we mentioned on the in the prepared remarks about 50% of the change in Q4 year over year in churn was caused by this these one-time factors.

Sid Thacker: Okay. Let me just give you a little bit of color on the involuntary churn issue. As we mentioned in the prepared remarks, about 50% of the change in Q4 year-over-year in churn was caused by these one-time factors. Specifically, what happened was we made a change to our reactivation algorithm in Q3 that had an unanticipated adverse impact on reactivations from involuntary churn in Q4. To get a bit more precise, what happened is we used to send, with a certain timing and frequency, emails to members after payment failure. When we changed the algorithm, we changed the frequency and timing of those emails. What we've done since then is reverted back the previous payment recapture flow, and we've seen the involuntary churn start to normalize now.

Speaker #4: So specifically what happened was we made a change to our reactivation algorithm in Q3 that had an unanticipated adverse impact on reactivations from involuntary churn in Q4.

Speaker #4: So to get a bit more precise what happened is we used to send with a certain timing and frequency emails to members after payment failure and when we changed the algorithm we changed the frequency and timing of those emails.

Speaker #4: And what we've done since then is reverted back the previous payment recapture flow and we've seen the involuntary churn start to normalize now. Separately since that point in time we've also reached out to affected members and have had some success in reactivating members that you know left because of these payment issues.

Sid Thacker: Separately, since that point in time, we've also reached out to affected members and have had some success in reactivating members that left because of these payment issues.

Speaker #1: Okay I just want to clarify one thing that I said earlier. The new product introductions new categories those will be the fall of calendar 27.

Peter Stern: Okay. I just want to clarify one thing that I said earlier. The new product introductions, new categories, those will be the fall of calendar 2027. Just to make sure we're all clear on that's in fiscal 2028.

Speaker #1: So just to just to make sure we're all clear on that that's in fiscal 28. Great.

Simeon Siegel: Great. Thanks, Peter.

Speaker #6: Thanks Peter. Operator next question please. Thanks guys.

James Marsh: Operator, next question, please.

Simeon Siegel: Thanks, guys.

Speaker #5: Thank you. One moment for our next question. And that will come from the line of Shweta Khajuria with Wolf Research. Your line is open.

Operator: Thank you. One moment for our next question. That will come from the line of Shweta Khajuria with Wolfe Research. Your line is open.

Speaker #7: Thank you for taking my question. Could I please follow up on the first part of the last question which is on the new product revenue expectations.

Shweta Khajuria: Thank you for taking my question. Could I please follow up on the first part of the last question, which is on the new product revenue expectations? Peter, if you were to contextualize the opportunity across the new products and new revenue sources, how would you help us frame the size of the opportunity across the new products and how revenue could trend? Where do you see the largest opportunity? How do you think the timing of realization of that would work against the visibility that those revenue sources provide you? Second is, should we be, going forward, be looking more at revenue as a key metric historically? Of course, it's been focused on subscription and subscriber growth, but is that a change going forward? Thank you.

Speaker #7: Peter if you were to contextualize you know the opportunity across the new product and new revenue sources how would you help us frame the size of the opportunity across the you know new products and how revenue could trend.

Speaker #7: Where do you see the largest opportunity how do you think the timing of realization of that would work against the visibility that those revenue sources provide you.

Speaker #7: And second is should we be going forward be looking more at revenue as a key metric historically of course we've been focused on subscription and subscriber growth but is that a change going forward.

Speaker #7: Thank you.

Speaker #1: Hi Shweta. Thanks for the questions. So we're not providing guidance beyond the FY27 period for any of our metrics inclusive of revenue. But let me at least try to provide a bit of framing in how we look at these things.

Peter Stern: Hi, Shweta. Thanks for the questions. We're not providing guidance beyond the FY2027 period for any of our metrics, inclusive of revenue. Let me at least try to provide a bit of framing in how we look at these things. What you'll see this year from our commercial launches is what we believe the foundation for accelerating growth in our commercial business unit. The way to look at that is that we already delivered double-digit growth from the commercial business unit in FY2026, basically on the back of just the Precor portfolio. With the introduction of the Peloton Commercial Series, we now turbocharge the growth rate of the commercial business unit by providing a dual brand strategy and the power of Peloton, which we know many gyms have requested. That will manifest principally in our connected fitness sales, and therefore in revenue.

Speaker #1: So you know what you'll see this year from our commercial launches is what we believe the foundation for accelerating growth in our commercial business unit.

Speaker #1: The way to look at that is that we already delivered double digit growth from the commercial business unit in FY26 basically on the back of just the pre-core portfolio with the introduction of the PELOTON commercial series we now turbocharge the growth rate of the commercial business unit by providing a dual brand strategy and the power of PELOTON which we know many gyms have requested.

Speaker #1: That will manifest principally in our connected fitness sales and therefore in revenue although the PELOTON equipment does have a subscription attached to it and so you will also see some subscription revenue and but note that the realization of the equipment sales tends to be front loaded and then the impact of subscriber growth in a new category like that is cumulative.

Peter Stern: Although the Peloton equipment does have a subscription attached to it, you will also see some subscription revenue. Note that the realization of the equipment sales tends to be front-loaded, the impact of subscriber growth in a new category like that is cumulative. In terms of the launches on the consumer side this year, not being terribly specific about that should behave much like our existing consumer business. You'll see it spread across CF sales, and to the extent the sales are to new members as opposed to existing members, you will see that also manifest in our subscription revenue.

Speaker #1: In terms of the launches on the consumer side this year, not being terribly specific about that, but that should behave, you know, much like our existing consumer business.

Speaker #1: So you'll see it spread across CF sales, and to the extent the sales are to new members as opposed to existing members, you will see that also manifest in our subscription revenue.

Speaker #1: As we get to FY28 and the introduction of products in new categories that grow our total addressable market you'll see again a front loaded impact on the CF sales line because the hardware revenue is recognized immediately upon the sale and delivery of those units and then you will hopefully see the beginnings or the subscriber impacts both in terms of our gross ads the bending of the curve we expect on net ads and of course the improved trajectory on subscriber revenue.

Peter Stern: As we get to FY28 and the introduction of products in new categories that grow our total addressable market, you'll see, again, a front-loaded impact on the CF sales line because the hardware revenue is recognized immediately upon the sale and delivery of those units. You will hopefully see the beginnings or the accumulation of the subscriber impacts, both in terms of our growth adds, the bending of the curve we expect on net adds, and of course, the improved trajectory on subscriber revenue. It's too soon for us to say what that will result in with any level of specificity. These are new products in new categories for us. Our expectation is that by growing our market in this way, this is how we move Peloton into the next phase of our transformation.

Speaker #1: It's too soon for us to say what that will result in with any level of specificity. These are new products in new categories for us but our expectation is that by growing our market in this way this is how we move PELOTON into the next phase of our transformation.

Speaker #1: And to very specifically answer your question then what I think you should expect is revenue growth should be proceed a change in toward subscriber growth both because of the combination of the CBU which is heavily weighted toward equipment sales and because the impact on subscriber revenues lags the impact and on numbers of subscribers lags the impact on CF sales.

Peter Stern: To very specifically answer your question, what I think you should expect is revenue growth should precede a change towards subscriber growth, both because of the combination of the CBU, which is heavily weighted toward equipment sales, and because the impact on subscriber revenues lags the impact, and on numbers of subscribers, lags the impact on CF sales.

Shweta Khajuria: Thanks, Peter.

Speaker #1: Thank you.

Speaker #5: One moment for our next question. And that will come from the line of our fine coach Orion with UBS. Your line is open.

Operator: One moment for our next question. That will come from the line of Arpine Kocharyan with UBS. Your line is open.

Arpine Kocharyan: Hi. Good morning. Thanks for taking my question. Sid, welcome to the call. You talked about flat churn year over year for 2027 fiscal year, which I think would have been good news for everyone. Now that base for 2026 is slightly higher. It seems like you were suggesting that you've seen some normalization in churn since that change was introduced. First, could you talk a little bit more about what exactly you've seen, what rate of normalization you've seen since the change was made? Then does that mean that there is a chance that the current guide could actually be a little bit better year over year if we see that rate of normalization continue? It's given basically you're guiding flat on the current base.

Arpiné Kocharyan: Hi. Good morning. Thanks for taking my question. Sid, welcome to the call. You talked about flat churn year over year for 2027 fiscal year, which I think would have been good news for everyone. Now that base for 2026 is slightly higher. It seems like you were suggesting that you've seen some normalization in churn since that change was introduced. First, could you talk a little bit more about what exactly you've seen, what rate of normalization you've seen since the change was made? Then does that mean that there is a chance that the current guide could actually be a little bit better year over year if we see that rate of normalization continue? It's given basically you're guiding flat on the current base.

Speaker #8: Hi good morning. Thanks for taking my question and Sid welcome to the call. You talked about flat churn year over year for 2027 fiscal year.

Speaker #8: Which I think we have been good news for everyone. But now that base for 2026 is slightly higher but it seems like you were suggesting that you've seen some normalization in churn.

Speaker #8: Does that change was introduced? First could you talk a little bit more about what exactly you've seen what rate of normalization you've seen since the change was made and then does that mean that there is a chance that the current guide could actually be a little bit better year over year if we see that rate of normalization continue because it's given basically your guiding flat on the current base?

Speaker #1: Yeah sure. Thanks for the question. I think the way to think about this is if you look at Q4 you look at the roughly 37 basis points year over year change in churn about half of that was related to this involuntary churn issue or the one time factors and about half of it we still think is a result of the lingering impact of the price increase we took in October.

Sid Thacker: Yeah, sure. Thanks for the question. I think the way to think about this is if you look at Q4, you look at the roughly 37 basis point year over year change in churn. About half of that was related to this involuntary churn issue of the one-time factors, and about half of it, we still think is a result of the lingering impact of the price increase we took in October. If you think about our guidance for flat churn year over year, what we would expect to see is in Q1, we still expect higher churn year over year because we're still comparing against a period that didn't have the impact of the price increase. Then as we start to anniversary the price increase, we should start to see more favorable churn trends and a moderation of churn trends.

Speaker #1: So if you think about you know our guidance for flat churn year over year what we would expect to see is in Q1 we still expect higher churn year over year because we're still comparing against a period that didn't have the impact of the price increase and then as we start to anniversary the price increase we should start to see more favorable churn trends and a moderation of churn trends.

Speaker #1: I think the only other thing to keep in mind as you think about the quarterly cadence of churn is we actually experienced a relatively favorable year over year churn rate in the third quarter because a bunch of people that paused as a result of the price increase came back in Q3.

Sid Thacker: I think the only other thing to keep in mind as you think about the quarterly cadence of churn is we actually experienced a relatively favorable year over year churn rate in Q3 because a bunch of people that paused as a result of the price increase came back in Q3. That's the only thing to keep in mind. Other than that, we should start to see much improved churn trends, relative to Q1, once we start to anniversary the price increase. We factored in the normalization of the involuntary churn in our expectation that churn will be flat year over year for the full year.

Speaker #1: So that's the only thing to keep in mind but other than that we should start to see much improved churn trends relative to Q1 once we start to anniversary the price increase.

Speaker #1: But we factored in the normalization of the involuntary churn in our expectation that churn will be flat year over year for the full year.

Speaker #8: Okay okay that's helpful. Thank you. And then a quick follow up. You know thinking about your capital allocation priorities as it relates to growth and how you think about buybacks versus investing back in the business to drive growth and where it makes sense maybe to deploy capital in organically versus buyback stock if you could comment on that.

Arpine Kocharyan: Okay. That's helpful. Thank you. Then a quick follow-up. Thinking about your capital allocation priorities as it relates to growth and how you think about buybacks versus investing back in the business to drive growth, and where it makes sense maybe to deploy capital inorganically versus buyback stock, if you could comment on that.

Arpiné Kocharyan: Okay. That's helpful. Thank you. Then a quick follow-up. Thinking about your capital allocation priorities as it relates to growth and how you think about buybacks versus investing back in the business to drive growth, and where it makes sense maybe to deploy capital inorganically versus buyback stock, if you could comment on that.

Speaker #1: Yeah so let me just start by saying you know before we do anything the first thing we have to do is we need to get our refinancing done.

Peter Stern: Yeah. Let me just start by saying, before we do anything, the first thing we have to do is we need to get our refinancing done. That refinancing, we expect, will deliver on both our previously set goals of lowering our cost of capital as well as providing greater flexibility. We've begun the refinancing process with our bankers. We'll have more to report as we conclude that process. You're right. What we've said publicly in the past is we think a growth debt-to-EBITDA ratio of somewhere in the two to fourx range is a sustainable level of growth debt. What that will imply is we have a substantial amount of excess cash on the balance sheet today. When we're thinking about deploying that cash, I think we're going to do what's in the best long-term interest of shareholders.

Speaker #1: That refinancing, we expect, will, you know, deliver on both our previously stated goals of lowering our cost of capital as well as providing greater flexibility.

Speaker #1: So we've begun the refinancing process with our bankers. We'll have more to report as we conclude that process. But you're right. I mean what we've said publicly in the past is we think a growth debt to EBITDA ratio of somewhere in the two to four x range is a sustainable level of growth debt.

Speaker #1: So what that will imply is you know we have a substantial amount of excess cash on the balance sheet today. And when we're thinking about deploying that cash I think we're going to do what's in the best long term interest of shareholders.

Speaker #1: I mean, I will say that I've been an investor for many years, and I do understand very deeply the impact that deploying capital wisely can have.

Peter Stern: I will say that I've been an investor for many years, and I do understand very deeply the impact of deploying capital wisely can have. When we think about decisions like M&A or buybacks, what we're thinking about is, number one, how do we improve this business? How do we maximize shareholder value? We examine the expected returns from any capital allocation decision, not only against our cost of capital, but also against all other available options. We're also thinking about not only just the expected returns, but also the risks inherent in any decisions we make. We want to make sure that we operate with a sufficient margin of safety. We'll have more to report soon on the capital allocation process.

Speaker #1: So when we think about decisions like M&A or buybacks what we're thinking about is number one you know how do we improve this business.

Speaker #1: How do we maximize shareholder value. We examine the expected returns from any capital allocation decisions not only against our cost of capital but also against all other available options.

Speaker #1: And we're also thinking about not only just the expected returns but also the risks inherent in any decision we make. And we want to make sure that we operate with a sufficient margin of safety.

Speaker #1: So we'll have more to report soon on the capital allocation front.

Speaker #8: Thank you very much.

Arpine Kocharyan: Thank you very much.

Arpiné Kocharyan: Thank you very much.

Speaker #5: Thank you. One moment for our next question. And that will come from the line of Doug Anmuse with JP Morgan. Your line is open.

Operator: Thank you. One moment for our next question, that will come from the line of Doug Anmuth with J.P. Morgan. Your line is open.

Speaker #9: Thanks so much for doing the questions. I have two just first Peter on PELOTON IQ. Can you just talk more about how members are interacting here with your AI driven tools and what impact you're seeing in terms of engagement and retention there.

Doug Anmuth: Thanks so much for taking the questions. I have two. First, Peter, on Peloton IQ, can you just talk more about how members are interacting here with your AI-driven tools and what impact you're seeing in terms of engagement and retention there? Secondly, just as you launch the Peloton Commercial Series and CBU becomes a little bit of a part of the mix, can you talk about any impact on revenue per hardware unit and also on margins? Thanks.

Speaker #9: And then secondly just as you launch the PELOTON commercial series and CBU becomes a little bit of a part of the mix. Can you talk about any impact on revenue you know per hardware unit and then also on margins?

Speaker #9: Thanks.

Speaker #1: Of course Doug. So let's start with PELOTON IQ. Love that question because it's just such a positive way for us to take advantage of the revolution that's happening around AI on behalf of our members.

Peter Stern: Of course, Doug. Let's start with Peloton IQ. Love that question because it's just such a positive way for us to take advantage of the revolution that's happening around AI on behalf of our members. We do that by delivering personalized insights and recommendations. It turns out that based on our research, Peloton IQ has now become the number one feature of interest from our potential customers. That shows what a big competitive differentiator this can be. The things that people are using across the board, our members are starting to engage with what we call Peloton IQ Insights. We're providing somewhere between three to five insights for our members every week about ways that they can enhance their workout program. We've got more than 50% of our monthly active users now engaging with that.

Speaker #1: And we do that by delivering personalized insights and recommendations the it turns out that based on our research PELOTON IQ has now become the number one feature of interest.

Speaker #1: From our potential customers and so that shows what a big competitive differentiator this can be. The things that people are using across the board our members are starting to engage with what we call PELOTON IQ insights.

Speaker #1: So we're providing somewhere between three to five insights for our members every week about ways that they can enhance their workout program and we've got more than 50 percent of our monthly active users now engaging with that.

Speaker #1: For the relatively smaller percentage of customers that have already switched over to the plus side of the cross training series that's where we see people getting the most benefit from what PELOTON IQ can do because those are the people who are using it for things like form feedback and rep tracking and even more The let me give a sneak peek of what to expect looking forward.

Peter Stern: For the relatively smaller percentage of customers that have already switched over to the plus side of the Cross Training Series, that's where we see people getting the most benefit from what Peloton IQ can do, because those are the people who are using it for things like form feedback and rep tracking and even more adaptive coaching. Let me give a sneak peek of what to expect looking forward. Our next frontier for Peloton IQ is moving to much deeper personalization, that's things like enabling a much wider array or even an infinite number of open-ended goals and being able to adjust programs much more dynamically based on what we're observing over time and even in the moment from our members.

Speaker #1: So our next frontier for PELOTON IQ is moving to much deeper personalization and that's things like enabling a much wider array or even an infinite number of open ended goals and being able to adjust programs much more dynamically based on what we're observing over time and even in the moment.

Speaker #1: From our members. We're also working on integrating even more wearables data because there's obviously a revolution taking place around the adoption use of wearables and we want to support as many of them as we possibly can.

Peter Stern: We're also working on integrating even more wearables data because there's obviously a revolution taking place around the adoption use of wearables, and we want to support as many of them as we possibly can. We're already excited about Peloton IQ. It's making a difference in differentiating our product. People are using it extensively, and we have much more to come on that. Second question was about the impact of the CBU for hardware units and our margins. Our FY27 guidance does incorporate the impact of accelerating growth from the CBU. As I mentioned earlier in response to Arpine's question, that's principally manifested on the revenue side in terms of CF sales, although there is a component of subscriptions that will start to lay in.

Speaker #1: So we're already excited about PELOTON IQ. It's making a difference in differentiating our product. People are using it extensively, and we have much more to come on that.

Speaker #1: Now second question was about the impact of the CBU for hardware units and our margins. Our FY27 guidance does incorporate the impact of accelerating growth from the CBU and as I mentioned earlier in response to Arpina's question that's principally manifested on the revenue side in terms of CF sales although there is a component of subscriptions that will start to lay in.

Peter Stern: The way to think about this category is it's evolved differently from the home fitness space in that it has historically been one in which there is not a tail of subscriptions, right? The market is based on the sale of equipment only. There are typically higher margins and higher prices associated with that equipment. There also is a higher price associated with that equipment in that the equipment needs to be manufactured for an extraordinarily high level of usage, and also typically, at least in our case, given our tremendous commitment to quality on the Precor side, comes bundled with a longer standard warranty than you would find on the consumer or the residential side of the business.

Speaker #1: The way to think about this category is it's evolved differently from the home fitness space, in that it has historically been one in which there is not a tail of subscriptions.

Speaker #1: Right. The market is based on the sale of equipment only. And so there are typically higher margins and higher prices associated with that equipment.

Speaker #1: There also is a higher price associated with that equipment in that the equipment needs to be manufactured for an extraordinarily high level of usage and also typically in at least in our case given our tremendous commitment to quality on the precourse side comes bundled with a longer standard warranty than you would find on the consumer or the residential side of the business.

Speaker #1: So what you see in from the CBU is higher revenue per sale you also see higher margins and the CF margins that we publish represent a blend of the higher gross margins from the CBU and the lower relative gross margins on the consumer side.

Peter Stern: What you see from the CBU is higher revenue per sale. You also see higher margins, and the CF margins that we publish represent a blend of the higher gross margins from the CBU and the lower relative gross margins on the consumer side.

Speaker #2: Next question operator.

James Marsh: Next question, operator.

Speaker #5: Thank you. One moment for our next question. That will come from the line of Youssef Squali with Truist. Your line is open.

Operator: Thank you. One moment for our next question. That will come from the line of Youssef Squali with Truist. Your line is open.

Speaker #9: Great. Thanks for taking the question. Hi this is Robert on for Youssef. I'm the planned new upcoming launches do you expect that revenue acceleration to come more from cross sale opportunities to new to existing users or do you view it as a way to broaden your reach at lower ASPs and then I'm curious on the planned CAC and margin impact over the first year or two.

[Analyst] (Truist): Great. Thanks for taking the question. Hi, this is Robert on for Youssef. On the planned new upcoming launches, do you expect that revenue acceleration to come more from cross-sell opportunities to existing users, or do you view it as a way to broaden your reach at lower ASPs? Then I am curious on the planned CAC and margin impact over the first year or two from those planned new launches. Thanks.

Speaker #9: From those new planned new launches. Thanks.

Speaker #1: So let me focus on this year which is what we have built into our guidance and which we're prepared to provide a little bit more specificity on.

Peter Stern: Let me focus on this year, which is what we have built into our guidance and which we're prepared to provide a little bit more specificity on. We historically do see in our existing categories a blend of sales to both existing and new users, and we anticipate that we will see the same thing on the consumer or the residential side this year. Again, just the roughest estimate I can give you is think about something in the vicinity of 50/50 between existing members and new members for the sales of the consumer equipment this year. As we look forward to what we're doing in FY 2028 on the consumer side, that's certainly too soon to speculate on the blend between existing members and new members.

Speaker #1: So we historically do see in our existing categories a blend of sales to both existing and new users. And we anticipate that we will see the same thing on the consumer or the residential side this year.

Speaker #1: So again just the roughest estimate I can give you is you know think about something in the vicinity of kind of 50/50. Between existing members and new members for the sales of the consumer equipment this year.

Speaker #1: As we look forward to what we're doing in FY28 on the consumer side that's certainly too soon to speculate on the blend between existing members and new members but what I will say is that you know if to the extent we offer those types of products to existing members they will receive a substantial discount to reflect their loyalty and the value that they provide us from their already existing primary subscription.

Peter Stern: What I will say is that, to the extent we offer those types of products to existing members, they will receive a substantial discount to reflect their loyalty and the value that they provide us from their already existing primary subscription. All of that is being built into our financial models, and we'll have more to share about that as we get closer.

Speaker #1: So all of that is being built into our financial models and we'll have more to share about that as we get closer.

Speaker #9: Okay. Thanks.

[Analyst] (Truist): Okay, thanks.

Speaker #5: One moment for our next question. And that will come from the line of line is open.

Operator: One moment for our next question. That will come from the line of Nathan Feather with Morgan Stanley. Your line is open.

Nathan Feather: Hey, everyone. Thanks for taking the question. A little bit more on the wearable space here. Certainly seen a lot of growth in this market with some of the new capabilities that have been released. I guess I'm interested to think about how you're approaching the space from a partnership versus ownership perspective. Is this an area you'd potentially consider getting into, especially given there's already a deep connection that you have with your vendors? Thank you.

Speaker #10: Hey everyone thanks for taking the question. Just a little bit more on the wearables space here. Certainly seen a lot of growth at this market with some of the new capabilities that have been released.

Speaker #10: I guess you need to think about how your approaching the space from a partnership versus ownership perspective and is this an area you'd potentially consider getting into especially given there's already kind of deep connection that you have with your vendors.

Speaker #10: Thank you.

Speaker #1: Yeah. Nathan. It's something that we've thought about in the past and we've decided that given that there are so many compelling wearable options available to our members in many cases offered by a range of extremely powerful and large companies to some also very innovative startups in that space.

Peter Stern: Yeah, Nathan, it's something that we've thought about in the past. We've decided that given that there are so many compelling wearable options available to our members, in many cases offered by a range of extremely powerful and large companies to some also very innovative startups in that space. Rather than us attempting to compete with the players in those markets, the best way for us to work with the wearables industry is essentially to play Switzerland here, and for us to integrate with as many of them as possible and build partnerships that range from both ingesting data that, again, based on our members' opt-in permission and subject to privacy requirements. Providing our data back to those wearable companies so that they can provide the best possible insights to their members. Also working with select members of the players in those industries to do things like co-marketing.

Speaker #1: Rather than us attempting to compete with the players in those markets the best way for us to work with the wearables industry is essentially to sort of play Switzerland here.

Speaker #1: And for us to integrate with as many of them as possible and build partnerships that range from both ingesting data that again based on our members opt in permission and subject to privacy requirements providing our data back to those wearable companies so that they can provide the best possible insights to their members and also working with select members of the players in those industries to do things like co-marketing.

Speaker #1: So we don't by not competing with them in that space we have the most potential to be able to serve our members across every type of wearable that's out there and also to be able to use that as a way to grow our subscribers.

Peter Stern: By not competing with them in that space, we have the most potential to be able to serve our members across every type of wearable that's out there, and also to be able to use that as a way to grow our subscribers. To date, we've integrated with Apple, Google, and Garmin. We've got a couple more big ones on the way. We'll have more to talk about that in the not too distant future. I think we're approaching this in the way that is the absolutely most member-friendly way we can, and recognizing our unique strengths and what we can contribute while not overextending ourselves into places where we may have difficulty differentiating our company.

Speaker #1: To date we've integrated with Apple with Google with Garmin. We've got a couple more big ones on the way. We'll have more to talk about that in the not too distant future.

Speaker #1: So I think we're doing approaching this in the way that is the absolutely most member friendly way we can and recognizing our unique strengths and what we can contribute while not overextending ourselves into places where we may have difficulty differentiating our company.

Speaker #2: Great helpful. Thank you. Next question please.

Nathan Feather: Okay, helpful. Thank you.

Speaker #5: Thank you. We do have time for one last question and that will come from the line of Eric Sheridan with Goldman Sachs. Your line is open.

Peter Stern: Thanks.

Operator: Thank you.

James Marsh: Next question, please.

Operator: We do have time for one last question, That will come from the line of Eric with Goldman Sachs. Your line is open.

Speaker #11: Thanks so much for taking the question. What do you think is the hardware strategy and distributing hardware? You've been on a journey over the last couple of years in terms of go-to-market and retail and different partnerships approaches.

Eric Sheridan: Thanks so much for taking the question. When you think the hardware strategy and distributing hardware, you've been on a journey over the last couple of years in terms of go-to-market and retail and different partnerships approaches. What have been some of the key learnings as that go-to-market strategy has evolved? When you think about where you want to take the product set forward over the next two to three years, how should we be thinking about the key priorities to make sure the products match up with the go-to-market and are aligned with some of those key learnings over the last couple of years in terms of how the mix might evolve? Thanks so much.

Speaker #11: What have been some of the key learnings as that go-to-market strategy has evolved and when you think about where you want to take the product set forward over the next two to three years how should we be thinking about the key priorities to make sure the products match up with the go-to-market and are aligned with some of those key learnings over the last couple of years in terms of how the mix might evolve.

Speaker #11: Thanks so much.

Speaker #1: Yeah. Eric that's a deep question. So let me try to approach it from a couple of different angles. The first one I'm going to first way I'll approach that is looking back up the supply chain.

Peter Stern: Yeah, Eric, that's a deep question. Let me try to approach it from a couple of different angles. The first way I'll approach that is looking back up the supply chain. When I joined, Peloton was practically single-sourced in terms of our hardware business, which creates a great deal of dependency on a single provider, some risk, and relatively limited negotiating leverage. While we feel great about our close partnership that we've enjoyed in that space, I think it's really important, and our COO, Charles Kirol, has done a great job at this, in ensuring that we have more flexibility and a better ability to compete, and over time, offer products at more compelling price points. Now, I raise that because one of the key learnings that we've discovered in the hardware space is that there is a pretty high level of price elasticity around consumer fitness equipment.

Speaker #1: So when I joined Peloton was practically single sourced in terms of our hardware business which creates a great deal of dependency on a single provider some risk and relatively limited negotiating leverage.

Speaker #1: While we feel great about our close partnership that we've enjoyed in that space I think it's really important and our COO Charlie Cyril has done a great job at this in ensuring that we have more flexibility and a better ability to compete and over time offer products at more compelling price points.

Speaker #1: Now I raise that because one of the key learnings that we've discovered in the hardware space is that there is pretty high level of price elasticity around consumer fitness equipment.

Speaker #1: And so it's important that we be able to offer products at price points that are accessible to our members. Another sort of takeaway from that is that we've learned to become I think really creative in finding ways to make our products accessible and affordable to the largest number of potential members.

Peter Stern: It's important that we be able to offer products at price points that are accessible to our members. Another takeaway from that is that we've learned to become, I think, really creative in finding ways to make our products accessible and affordable to the largest number of potential members. What I mean by that is if you look up and down the line at what we've done, for example, in the bike category, where there's a robust secondary market with products available for a few hundred dollars to refurb that we've been able to take advantage of, to rental models, all the way up to our Plus line, which is a premium offering that delivers really remarkable capabilities for helping people get fit.

Speaker #1: And what I mean by that is if you look up and down the line at what we've done for example in the bike category where there's a robust secondary market with products available for a few hundred dollars to refurb that we've been able to take advantage of to rental models all the way up to our Plus line which is a premium offering that delivers really remarkable capabilities for helping people get fit we've been able to introduce I hate the way these words sound but I'm just going to be a pure economist with you for a moment we've been able to price discriminate I think very effectively in the bike market.

Peter Stern: We've been able to introduce. I hate the way these words sound, but I'm just going to be a pure economist with you for a moment. We've been able to price discriminate, I think, very effectively in the bike market. With regard to some of the other categories, we have less ability to do that. We'll be focusing on expanding our portfolio as well as the ways that our products can be accessed by our members in the coming years. Another thing that I think we've learned about hardware in this category is that people want to try it, especially if it's something that is new to them. That has driven not just the work that we've done on our first-party micro stores, where we have, as I mentioned earlier, launched 13 micro stores in the last just over a year.

Speaker #1: With regard to some of the other categories we have less ability to do that and so we'll be focusing on expanding our portfolio as well as the ways that our products can be accessed by our members.

Speaker #1: In the coming years. Another thing that I think we've learned about hardware in this category is that people want to try it. And especially if it's something that is new to them and that has driven not just the work that we've done on our first party micro stores where we have as I mentioned earlier launched 13 micro stores in the last just over a year and actually I think we're slated to launch two more by the end of today.

Peter Stern: Actually, I think we're slated to launch two more by the end of today. We're really excited about where we're going there. Also to significantly expand our third-party retail presence, whether it's through companies like DICK'S Sporting Goods or the work that we've done with Johnson Fitness & Wellness. We've also got some exciting initiatives taking place in Canada. Big new relaunch with John Lewis in the UK. All of these are ways that we can give our members a chance to touch and feel and try our equipment. The reason I raise that is because as we start to introduce products in fundamentally new categories, that's where that retail distribution is going to become even more important. You can see us building the foundation for new types of hardware based on the insights that we've had to date.

Speaker #1: So, we're really excited about where we're going there, but also to significantly expand our third-party retail presence, whether it's through companies like Dick's Sporting Goods or the work that we've done with Johnson Fitness and Wellness.

Speaker #1: We've also got some exciting initiatives taking place in Canada big new relaunch with John Lewis in the UK all of these are ways that we can give our members a chance to touch and feel and try our equipment.

Speaker #1: The reason I raise that is because as we start to introduce products in new categories that's when we're fundamentally new categories that's where that retail distribution is going to become even more important.

Speaker #1: So you can see us building the foundation for new types of hardware based on the insights that we've had to date.

Speaker #2: Great. Thanks.

James Marsh: Great. Thanks.

Speaker #11: That's really helpful. Thank you.

Eric Sheridan: That's really helpful. Thank you.

Speaker #5: Thank you. I would now like to turn the call back over to Mr. Peter Stern for any closing remarks.

Operator: Thank you. I would now like to turn the call back over to Mr. Peter Stern for any closing remarks.

Speaker #1: So recognizing that many if not most of our investors are also members before we close I want to highlight a couple of programs that we have out there one of them is Rebecca Kennedy's highly popular HiLit Plus program.

Peter Stern: Recognizing that many, if not most of our investors are also members. Before we close, I want to highlight a couple of programs that we have out there. One of them is Rebecca Kennedy's highly popular HiLit+ program. I mentioned that earlier, but I just want to give you a sense of the magnitude of these things, so that if you're motivated by FOMO, it gets you trying it. We've had more than 200,000 members taking over 1.2 million classes so far in HiLit+, so it's enormously successful. We also launched a new Sculpt 30 program. That has classes available every Monday, and I highly recommend those. For those of you who haven't tried our breathwork app, we introduced a new seven-day program. It's called Breathe Into Better Sleep. It counts towards your Peloton streaks. It counts toward Club Peloton.

Speaker #1: I mentioned that earlier but I just want to give you a sense of the magnitude of these things so that if you're motivated by FOMO it gets you trying it.

Speaker #1: We've had more than 200,000 members taking over 1.2 million classes so far in HiLit Plus. So it's enormously successful. We also launched a new Sculpt 30 program that has classes available every Monday and I highly recommend those.

Speaker #1: And then for those of you who haven't tried our Breathwork app we introduced a new seven day program. It's called Breathe Into Better Sleep.

Speaker #1: It counts toward your Peloton streaks. It counts toward Club Peloton. And after a day of earnings calls and investor meetings I plan on using that tonight.

Peter Stern: After a day of earnings calls and investor meetings, I plan on using that tonight. With that, I look forward to seeing all of you on the leaderboard, and I want to thank everyone for the questions and for listening in.

Speaker #1: So, with that, I look forward to seeing all of you on the leaderboard, and I want to thank everyone for the questions and for listening in.

Operator: This concludes today's program. Thank you all for participating. You may now disconnect.

Q4 2026 Peloton Interactive Inc Earnings Call

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