# PELOTON INTERACTIVE, INC. (PTON) Informational only - not investment advice. CIK: 0001639825 SIC: 3949 Sporting & Athletic Goods, NEC SIC breadcrumb: [Manufacturing](/division/D/) > [SIC Major Group 39](/major-group/39/) > [SIC 3949 Sporting & Athletic Goods, NEC](/industry/3949/) Latest 10-K filed: 2025-08-07 SEC page: https://www.sec.gov/edgar/browse/?CIK=1639825 Filing source: https://www.sec.gov/Archives/edgar/data/1639825/000163982525000138/pton-20250630.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 2490800000 | USD | 2025 | 2025-08-07 | | Net income | -118900000 | USD | 2025 | 2025-08-07 | | Assets | 2125300000 | USD | 2025 | 2025-08-07 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-08-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001639825.json. Derived margins are computed from the extracted annual SEC facts. | Metric | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | 435,000,000 | 915,000,000 | 1,825,900,000 | 4,021,800,000 | 3,582,100,000 | 2,800,200,000 | 2,700,500,000 | 2,490,800,000 | | Net income | | -47,900,000 | -195,600,000 | -71,600,000 | -189,000,000 | -2,827,700,000 | -1,261,700,000 | -551,900,000 | -118,900,000 | | Operating income | | -47,500,000 | -202,300,000 | -80,700,000 | -187,800,000 | -2,734,000,000 | -1,197,100,000 | -529,000,000 | -36,200,000 | | Gross profit | | 189,600,000 | 383,600,000 | 837,700,000 | 1,454,400,000 | 698,400,000 | 923,500,000 | 1,206,500,000 | 1,268,300,000 | | Diluted EPS | | | -10.72 | -0.32 | -0.64 | -8.77 | -3.64 | -1.51 | -0.30 | | Assets | | | 864,500,000 | 2,981,800,000 | 4,485,600,000 | 4,028,500,000 | 2,769,100,000 | 2,185,200,000 | 2,125,300,000 | | Liabilities | | | 462,000,000 | 1,303,800,000 | 2,731,500,000 | 3,435,600,000 | 3,064,200,000 | 2,704,300,000 | 2,539,100,000 | | Stockholders' equity | -281,600,000 | -315,600,000 | -538,600,000 | 1,678,000,000 | 1,754,100,000 | 592,900,000 | -295,100,000 | -519,100,000 | -413,800,000 | | Cash and cash equivalents | | | 162,100,000 | 1,035,500,000 | 1,134,800,000 | 1,253,900,000 | 813,900,000 | 697,600,000 | 1,039,500,000 | | Net margin | | -11.01% | -21.38% | -3.92% | -4.70% | -78.94% | -45.06% | -20.44% | -4.77% | | Operating margin | | -10.92% | -22.11% | -4.42% | -4.67% | -76.32% | -42.75% | -19.59% | -1.45% | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001639825.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2023-Q1 | 2022-09-30 | | | -1.20 | reported discrete quarter | | 2023-Q2 | 2022-12-31 | | | -0.98 | reported discrete quarter | | 2023-Q3 | 2023-03-31 | | | -0.79 | reported discrete quarter | | 2023-Q4 | 2023-06-30 | 642,100,000 | -241,800,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2023-09-30 | 595,500,000 | -159,300,000 | -0.44 | reported discrete quarter | | 2024-Q2 | 2023-12-31 | 743,600,000 | -194,900,000 | -0.54 | reported discrete quarter | | 2024-Q3 | 2024-03-31 | 717,700,000 | -167,300,000 | -0.45 | reported discrete quarter | | 2024-Q4 | 2024-06-30 | 643,600,000 | -30,500,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2024-09-30 | 586,000,000 | -900,000 | 0.00 | reported discrete quarter | | 2025-Q2 | 2024-12-31 | 673,900,000 | -92,000,000 | -0.24 | reported discrete quarter | | 2025-Q3 | 2025-03-31 | 624,000,000 | -47,700,000 | -0.12 | reported discrete quarter | | 2025-Q4 | 2025-06-30 | 606,900,000 | 21,600,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2025-09-30 | 550,800,000 | 13,900,000 | 0.03 | reported discrete quarter | | 2026-Q2 | 2025-12-31 | 656,500,000 | -38,800,000 | -0.09 | reported discrete quarter | | 2026-Q3 | 2026-03-31 | 630,900,000 | 26,400,000 | 0.06 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1639825/000163982526000022/pton-20260331.htm Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high Filing date: 2026-05-07 Report date: 2026-03-31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the SEC on August 7, 2025 (“Form 10-K”). As discussed in the section titled "Special Note Regarding Forward-Looking Statements," the following discussion and analysis contains forward looking statements that involve risks, uncertainties, assumptions, and other important factors that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I, Item 1A of the Form 10-K. Overview Peloton is a leading global fitness and wellness company that empowers its Members (as defined below) to live fit, strong, long, and happy by providing fitness and wellness products and services they can use anytime, anywhere. We have a highly engaged community of nearly 5.8 million Members as of March 31, 2026, across the United States, United Kingdom, Canada, Germany, Australia, and Austria. As a category innovator at the nexus of fitness and wellness, technology, and media, we deliver experiences through our world-renowned Instructors, premium hardware and innovative software, personalization, and extensive modalities and content formats. Founded in 2012 and headquartered in New York City, Peloton aims to scale across the markets in which it operates. We define a “Member” as any individual who has a Peloton account through a Paid Connected Fitness Subscription or a Paid App Subscription, inclusive of the Peloton App+, App One, Strength+, and Breathwrk Memberships (our “Peloton Apps”), and engages in one or more workouts in the trailing 12-month period. We define workout engagement as either (i) completing the lesser of 50% or 10 minutes of Instructor-led classes, Scenic, and Lanebreak workouts; (ii) at least 10 minutes of any activity tracking workout (such as “Just Ride”, “Just Run”, or “Just Row”) or Entertainment workout; (iii) at least 5 minutes of any Strength+ workout with 80% of sets marked complete; or (iv) completing a Breathwrk class. In October 2025, we launched the Cross Training Series, a refreshed portfolio of Connected Fitness Products, which includes the Cross Training Bike, Bike+, Tread, Tread+, and Row+. We also launched the Peloton Pro Series, a refresh of our portfolio of commercial-certified Peloton-branded products, which now includes the Bike+ Pro, Tread+ Pro, and Row+ Pro. In connection with the Cross Training Series launch, we discontinued the sale of our original series (the “Original Series”) Tread, Tread+, and Row; however we continue to sell the refurbished Original Series Bike and Bike+, as well as our Precor products (collectively with the Cross Training Series and the Peloton Pro Series, the "Connected Fitness Products"). Access to all of the Peloton Apps is available with an All-Access Membership for Members who have Connected Fitness Products or through a standalone App+ Membership. Our revenue is generated primarily from recurring Subscription Revenue and the sale of our Connected Fitness Products. We define a “Paid Connected Fitness Subscription” as a person, household, or commercial property, such as a hotel or residential building, that has paid for a subscription to a Connected Fitness Product (a Connected Fitness Subscription with a successful credit card billing or with prepaid subscription credits or waivers). “Paid App Subscriptions” include all subscriptions to our Peloton Apps for which we currently receive payment. Our financial profile has been characterized by strong retention, recurring revenue, and efficient customer acquisition. We believe that our low Average Net Monthly Paid Connected Fitness Subscription Churn, together with our high Subscription Gross Profit and Subscription Contribution Margin, yields an attractive lifetime value (“LTV”) for our Connected Fitness Subscriptions well in excess of our customer acquisition costs (“CAC”). Maintaining an attractive LTV/CAC ratio is a primary goal of our customer acquisition strategy. Restructuring In August 2025, we announced a restructuring plan (the “2025 Restructuring Plan”), which includes a reduction in global headcount and is intended to continue to improve our cost structure, operating efficiency, and profitability, while providing us the opportunity to return to growth by reinvesting expected savings into our differentiating capabilities. We expect the 2025 Restructuring Plan to be substantially implemented by the end of fiscal year 2026, which is subject to change. In connection with the 2025 Restructuring Plan, we estimate that we will incur additional cash restructuring charges of approximately $15.0 million, primarily comprising location strategy costs, lease termination costs, and other exit costs. Additionally, we expect to recognize additional non-cash restructuring charges of approximately $5.0 million, primarily comprising asset write-downs and write-offs in connection with the continued exit of our retail and other leased locations. We expect these charges to be substantially incurred by the end of fiscal year 2026, which is subject to change. Upon full implementation, we expect the 2025 Restructuring Plan to achieve at least $100.0 million of run-rate savings by the end of fiscal year 2026. We may not be able to realize the cost savings and benefits initially anticipated as a result of the Restructuring Plans, and implementation and transition costs may be greater than expected. See “Risk Factors — Risks Related to Our Business — We may not successfully execute or achieve the expected benefits of our restructuring initiatives and other cost-saving measures we may take in the future, and our efforts may result in further actions and/or additional asset impairment charges and adversely affect our business” in the Form 10-K. 22 Table of Contents Global Trade Policies and Tariffs We continue to closely monitor changes in international trade policies, relations, legislation and regulations, including those related to tariffs, which could adversely impact the global economy and our business, financial condition, and operating results. The impact of any tariffs will depend on various factors, including whether certain tariffs are ultimately implemented, the timing of implementation, and the amount, scope and nature of the tariffs. On February 20, 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Power Act ("IEEPA"). We are closely monitoring updates from U.S. Customs and Border Protection (“CBP”), and are positioned to submit our IEEPA tariff refund claim as soon as CBP is ready to accept such refund claims. We will continue to evaluate new information and will recognize any IEEPA tariff refunds or related receivables when they are realized or realizable. While IEEPA tariffs are no longer effective, we are now currently subject to Section 122 tariffs of 10%. Additionally, on April 2, 2026, President Trump issued a presidential proclamation modifying the application of Section 232 tariffs on steel, aluminum, and their derivative products, which, among other things, removed fitness equipment from the scope of those tariffs. As a result, as of April 6, 2026, the steel and aluminum content in our Connected Fitness Products is no longer subject to Section 232 tariffs of 50%. Voluntary Recall As previously disclosed, on November 6, 2025, in collaboration with the U.S. Consumer Product Safety Commission and Health Canada, we announced a voluntary recall of about 833,000 units in the U.S. and 44,800 units in Canada of the Original Series Bike+ (not Cross Training Bike+). We are offering Members a free replacement seat post as the approved remedy. As of March 31, 2026, we have accrued $7.2 million to replace Original Series Bike+ seat posts, which is a reduction from our accrual of $16.5 million as of September 30, 2025. This reduction is primarily driven by the utilization of our previously established accrual. We have not established any incremental accruals since September 30, 2025. This accrual is based on an amount that we deem probable and estimable and is reflected in Connected Fitness Products Cost of revenue in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). We may continue to incur additional costs beyond what we have currently estimated to be probable and reasonably estimable, including in connection with the voluntary recall, and if the number of reported incidents involving the Original Series Bike+ seat post materially increases, such additional costs may be material. See “Risk Factors — Risks Related to Our Connected Fitness Products and Members — Our products and services may be affected from time to time by design and manufacturing defects or product safety issues, real or perceived, that could adversely affect our business and result in harm to our reputation” in the Form 10-K. Key Operational and Business Metrics In addition to the measures presented in our interim condensed consolidated financial statements, we use the following key operational and business metrics to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions. Three Months Ended March 31, 2026 2025 Ending Paid Connected Fitness Subscriptions (in millions) 2.662  2.880  Average Net Monthly Paid Connected Fitness Subscription Churn 1.2  % 1.2  % Ending Paid App Subscriptions (in millions) 0.522  0.573  Subscription Gross Profit (in millions) $ 304.3  $ 288.8  Subscription Contribution (in millions)(1) $ 318.3  $ 304.9  Subscription Gross Margin 71.1  % 69.0  % Subscription Contribution Margin(1) 74.4  % 72.9  % Net income (loss) (in millions) $ 26.4  $ (47.7) Adjusted EBITDA (in millions)(2) $ 126.2  $ 89.4  Net cash provided by operating activities (in millions) $ 152.7  $ 96.7  Free Cash Flow (in millions)(3) $ 150.5  $ 94.7  ______________________________ (1) Please see the section titled “Non-GAAP Financial Measures—Subscription Contribution and Subscription Contribution Margin” for a reconciliation of Subscription Gross Profit to Subscription Contribution and an explanation of why we consider Subscription Contribution and Subscription Contribution Margin to be helpful measures for investors. (2) Please see the section titled “Non-GAAP Financial Measures—Adjusted EBITDA” for a reconciliation of Net income (loss) to Adjusted EBITDA and an explanation of why we consider Adjusted EBITDA to be a helpful measure for investors. (3) Please see the section titled “Non-GAAP Financial Measures—Free Cash Flow” for a reconciliation of Net cash provided by operating activities to Free Cash Flow and an explanation of why we consider Free Cash Flow to be a helpful measure for investors. 23 Table of Contents Ending Paid Connected Fitness Subscriptions Ending Paid Connected Fitness Subscriptions includes all Connected Fitness Subscriptions for which we are currently receiving payment (a successful credit card billing or prepaid subscription credit or waiver). We do not include paused Connected Fitness Subscriptions in our Ending Paid Connected Fitness Subscription count. Average Net Monthly Paid Connected Fitness Subscription Churn To align with the defi [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. As discussed in the section titled "Special Note Regarding Forward Looking Statements," the following discussion and analysis contains forward looking statements that involve risks, uncertainties, assumptions, and other important factors that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled "Risk Factors" in Part I, Item 1A of this Annual Report on Form 10-K. A discussion of our results of operations for our fiscal year ended June 30, 2024 compared to the year ended June 30, 2023 is included our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on August 22, 2024 (File No. 001-39058) under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Overview Peloton is a leading global fitness and wellness company that empowers its Members to live fit, strong, long, and happy by providing fitness and wellness products and services they can use anytime, anywhere. We have a highly engaged community of approximately 6 million Members as of June 30, 2025, across the United States, United Kingdom, Canada, Germany, Australia, and Austria. As a category innovator at the nexus of fitness and wellness, technology, and media, we deliver experiences through our world-renowned Instructors, premium hardware and innovative software, personalization, and extensive modalities and content formats. Founded in 2012 and headquartered in New York City, Peloton aims to scale across the markets in which it operates. We define a “Member” as any individual who has a Peloton account through a paid Connected Fitness Subscription or a paid App Subscription, inclusive of the Peloton App+, App One and Strength+ Memberships (our “Peloton Apps”), and engages in one or more workouts in the trailing 12-month period. We define workout engagement as either (i) completing the lesser of 50% or 10 minutes of Instructor-led classes, Scenic, and Lanebreak workouts; (ii) at least 10 minutes of any activity tracking workout (such as “Just Ride,” “Just Run,” or “Just Row”) or Entertainment workout; or (iii) at least 5 minutes of any Strength+ workout with 80% of sets marked complete. Our Connected Fitness Products portfolio includes the Peloton Bike, Bike+, Tread, Tread+, Guide, Row and various Precor products. Access to the Peloton Apps is available with an All-Access or Guide Membership for Members who have Connected Fitness Products or through a standalone App Membership (App+, App One, or Strength+). Access to the Strength+ App is available with an All-Access, Guide, or App+ Membership or through a standalone Strength+ subscription. Our revenue is generated primarily from recurring Subscription revenue and the sale of our Connected Fitness Products. We define a “Paid Connected Fitness Subscription” as a person, household, or commercial property, such as a hotel or residential building, that has paid for a subscription to a Connected Fitness Product (a Connected Fitness Subscription with a successful credit card billing or with prepaid subscription credits or waivers). “Paid App Subscriptions” include all subscriptions to our Peloton Apps for which we currently receive payment. Our financial profile has been characterized by strong retention, recurring revenue, and efficient customer acquisition. We believe that our low Average Net Monthly Paid Connected Fitness Subscription Churn, together with our high Subscription Gross Profit and Subscription Contribution Margin, yields an attractive lifetime value (“LTV”) for our Connected Fitness Subscriptions well in excess of our customer acquisition costs (“CAC”). Maintaining an attractive LTV/CAC ratio is a primary goal of our customer acquisition strategy. Restructuring In August 2025, the Company announced a new restructuring plan (the “2025 Restructuring Plan”), which includes a reduction in global headcount and is intended to improve the Company’s cost structure, operating efficiency, and profitability, while providing us the opportunity to return to growth by reinvesting expected savings into our differentiating capabilities. The Company expects the 2025 Restructuring Plan to be substantially implemented by the end of fiscal year 2026, which is subject to change. As of June 30, 2025, actions pursuant to our 2024 Restructuring Plan, which includes any remaining restructuring activity under the original 2022 Restructuring Plan, have been substantially completed. As such, any remaining charges under these plans are included within the 2025 Restructuring Plan. In connection with the 2025 Restructuring Plan, we estimate that we will incur additional cash restructuring charges of approximately $50.0 million, primarily comprised of location strategy costs, lease termination costs, and other exit costs. Additionally, we expect to recognize additional non-cash restructuring charges of approximately $10.0 million, primarily comprised of asset write-downs and write-offs, in connection with the continued exit of the Company’s retail and other leased locations. We expect these charges to be substantially incurred by the end of fiscal year 2026, which is subject to change. Upon full implementation, we expect the 2025 Restructuring Plan to achieve at least $100 million of run-rate savings by the end of fiscal year 2026. We may not be able to realize the cost savings and benefits initially anticipated as a result of the Restructuring Plans, and implementation and transition costs may be greater than expected. See “Risk Factors—Risks Related to Our Business—We may not successfully execute or achieve the expected benefits of our restructuring initiatives and other cost-saving measures we may take in the future, and our efforts may result in further actions and/or additional asset impairment charges and adversely affect our business” in Part I, Item 1A of this Annual Report on Form 10-K. 43 Global Trade Policies and Tariffs We continue to closely monitor changes in international trade policies, relations, legislation and regulations, including those related to tariffs, which could adversely impact the global economy and our business, financial condition, and operating results. The impact of any tariffs will depend on various factors, including whether the tariffs are ultimately implemented, the timing of implementation, and the amount, scope and nature of the tariffs. Other Developments We have received a small number of reports that a Bike+ seat post broke during use. We are planning to offer certain Bike+ Members our newest seat post as a replacement for their existing seat post. We do not currently expect that the expenses associated with this plan will be material to our financial position. In the event we incur material expenses or face other challenges relating to the Bike+ seat post, including the implementation of other measures resulting from our engagement with governmental authorities on this matter, our results of operations, financial condition and reputation could be adversely affected. Key Operational and Business Metrics In addition to the measures presented in our consolidated financial statements, we use the following key operational and business metrics to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions. Fiscal Year Ended June 30, 2025 2024 2023 Ending Paid Connected Fitness Subscriptions(1)(2) 2,799,943  2,976,265  2,997,928  Average Net Monthly Paid Connected Fitness Subscription Churn(1)(2) 1.6  % 1.4  % 1.3  % Ending Paid App Subscriptions(1) 552,451  621,432  831,065  Average Monthly Paid App Subscription Churn(1)(3) 7.0  % 7.7  % — Subscription Gross Profit (in millions) $ 1,157.1  $ 1,157.7  $ 1,122.1  Subscription Contribution (in millions)(4) $ 1,222.0  $ 1,231.6  $ 1,201.8  Subscription Gross Margin 69.1  % 67.8  % 67.2  % Subscription Contribution Margin(4) 73.0  % 72.1  % 72.0  % Net loss (in millions) $ (118.9) $ (551.9) $ (1,261.7) Adjusted EBITDA (in millions)(5) $ 403.6  $ 3.5  $ (208.5) Net cash provided by (used in) operating activities (in millions) $ 333.0  $ (66.1) $ (387.6) Free Cash Flow (in millions)(6) $ 323.7  $ (85.8) $ (470.0) ______________________________ (1) Beginning January 1, 2025, the Company migrated its subscription data model for reporting Ending Paid Connected Fitness Subscriptions, Average Net Monthly Paid Connected Fitness Subscription Churn, Ending Paid App Subscriptions, and Average Monthly Paid App Subscription Churn to a new data model that provides greater visibility to changes to a subscription's payment status when they occur. The new model gives the Company more precise and timely data on subscription pause and churn behavior. Prior period information has been revised to conform with current period presentation. The impact of this change in the model on Ending Paid Connected Fitness Subscriptions, Average Net Monthly Paid Connected Fitness Subscription Churn, Ending Paid App Subscriptions and Average Monthly Paid App Subscription Churn for the fiscal years ended June 30, 2025, 2024, and 2023 is immaterial. (2) New reporting metrics, effective as of the beginning of fiscal year 2024, Ending Paid Connected Fitness Subscriptions replaced Ending Connected Fitness Subscriptions, and Average Net Monthly Paid Connected Fitness Subscription Churn replaced Average Net Monthly Connected Fitness Churn. See definitions below. (3) This metric, effective as of the beginning of fiscal year 2024, is reported on a go-forward basis as it includes App One and App+ subscriptions that were not available during the fiscal year ended June 30, 2023. (4) Please see the section titled “Non-GAAP Financial Measures—Subscription Contribution and Subscription Contribution Margin” for a reconciliation of Subscription Gross Profit to Subscription Contribution and an explanation of why we consider Subscription Contribution and Subscription Contribution Margin to be helpful measures for investors. (5) Please see the section titled “Non-GAAP Financial Measures—Adjusted EBITDA” for a reconciliation of Net loss to Adjusted EBITDA and an explanation of why we consider Adjusted EBITDA to be a helpful measure for investors. (6) Please see the section titled “Non-GAAP Financial Measures—Free Cash Flow” for a reconciliation of net cash provided by (used in) operating activities to Free Cash Flow and an explanation of why we consider Free Cash Flow to be a helpful measure for investors. Ending Paid Connected Fitness Subscriptions Ending Paid Connected Fitness Subscriptions includes all Connected Fitness Subscriptions for which we are currently receiving payment (a successful credit card billing or prepaid subscription credit or waiver). Prior to fiscal year 2024, we included a Connected Fitness Subscription that is paused for up to three months as a Connected Fitness Subscription. Because there is no payment on a paused subscription, effective as of the beginning of fiscal year 2024, we do not include paused Connected Fitness Subscriptions in our Ending Paid Connected Fitness Subscription count. Average Net Monthly Paid Connected Fitness Subscription Churn To align with the definition of Ending Paid Connected Fitness Subscriptions above, our quarterly Average Net Monthly Paid Connected Fitness Subscription Churn is calculated as follows: Paid Connected Fitness Subscriber “churn count” in the quarter, divided by the average number of beginning Paid Connected Fitness Subscribers each month, divided by three months. “Churn count” is defined as quarterly Connected Fitness Subscription churn events minus Connected Fitness Subscription unpause events minus Connected Fitness Subscription reactivations. Our 44 annual Average Net Monthly Paid Connected Fitness Subscription Churn for each of the fiscal years ended June 30, 2025, 2024, and 2023 is calculated in the same manner, divided by twelve months, during each respective fiscal year. We refer to any cancellation or pausing of a subscription for our All-Access Membership as a churn event. Because we do not receive payment for paused Connected Fitness Subscriptions, a paused Connected Fitness Subscription is now treated as a churn event at the time the pause goes into effect, which is the start of the next billing cycle. An unpause event occurs when a pause period elapses without a cancellation and the Connected Fitness Subscription resumes, and is therefore counted as a reduction in our churn count in that period. Consistent with our previous practice, our churn count is shown net of reactivations and our new quarterly Average Net Monthly Paid Connected Fitness Subscription Churn metric averages the monthly Connected Fitness churn percentage across the three months of the reported quarter. Prior to fiscal year 2024, we reported Average Net Monthly Connected Fitness Churn, which is defined as Connected Fitness Subscription cancellations, net of reactivations, in the quarter, divided by the average number of beginning Connected Fitness Subscriptions in each month, divided by three months. This metric does not treat a pause of a Connected Fitness Subscription as a churn event. When a Connected Fitness Subscription payment method fails, we communicate with our Members to update their payment method and make multiple attempts over several days to charge the payment method on file and reactivate the subscription. We cancel a Member's Connected Fitness Subscription when it remains unpaid for two days after their billing cycle date. Furthermore, we have reported our Average Net Monthly Connected Fitness Churn metric net of reactivations. Under this metric, a Connected Fitness Subscriber that cancels their membership (a churn event) and resubscribes in a subsequent period is considered a reactivation and is counted as a reduction in our churn count in the period during which the Subscriber resubscribes. These metrics do not include data related to Subscribers to our Peloton Apps. Ending Paid App Subscriptions Ending Paid App Subscriptions include all subscriptions to our Peloton Apps for which we are currently receiving payment. Average Monthly Paid App Subscription Churn When a Subscriber to our Peloton Apps cancels their membership (a churn event) and resubscribes in a subsequent period, the resubscription is considered a new subscription (rather than a reactivation that is counted as a reduction in our churn count). Our quarterly Average Paid App Subscription Churn is calculated as follows: Paid App Subscription cancellations in the quarter, divided by the average number of beginning Paid App Subscriptions each month, divided by three months. Our annual Average Monthly Paid App Subscription Churn for each of the fiscal years ended June 30, 2025, 2024, and 2023 is calculated in the same manner, divided by twelve months, during each respective fiscal year. Components of our Results of Operations Revenue Connected Fitness Products Connected Fitness Products Revenue primarily consists of sales of our portfolio of Connected Fitness Products and related accessories, as well as Precor-branded fitness products, delivery and installation services, Peloton Bike portfolio rental products, extended warranty agreements, branded apparel, and commercial service contracts. Connected Fitness Products Revenue is recognized at the time of delivery, except for extended warranty revenue that is recognized over the warranty period and service revenue that is recognized over the term, and is recorded net of sales returns and concessions, discounts and allowances, and third-party financing program fees, when applicable. Subscription Subscription Revenue primarily consists of revenue generated from our Paid Connected Fitness Subscriptions and Paid Peloton App Subscriptions, inclusive of the Strength+ App, which are offered on a month-to-month or prepaid basis. As of June 30, 2025, 99% and 82% of our Connected Fitness Subscription and Paid App Subscription bases, respectively, were paying month-to-month. If a Connected Fitness Subscription owns multiple, different Peloton Connected Fitness Products (such as a Peloton Bike and Peloton Tread) in the same household, the price of the Subscription remains $44 monthly. As of June 30, 2025, approximately 12% of our Connected Fitness Subscriptions owned multiple, different Connected Fitness Products. Cost of revenue Connected Fitness Products Connected Fitness Products Cost of revenue primarily consists of our portfolio of Connected Fitness Products, related accessories, Precor-branded fitness products, and branded apparel product costs, including third party manufacturing costs, duties and other applicable importing costs, shipping and handling costs, packaging, warranty replacement and service costs, fulfillment costs, warehousing costs, costs related to our commercial business, depreciation of property and equipment, and certain costs related to management, facilities, and personnel-related expenses, including stock-based compensation expense, and expense associated with supply chain logistics. Inventory write-downs and related obsolescence reserve expense are also included within Connected Fitness Products Cost of revenue. 45 Subscription Subscription Cost of revenue primarily consists of costs associated with content creation and costs to stream content to our Members. These costs consist of both fixed costs, including Instructor, content, and production personnel-related expenses, including stock-based compensation expense, depreciation of property and equipment, studio rent and occupancy, and other studio overhead, as well as variable costs, including music royalty fees, third-party platform streaming costs, and payment processing fees for our monthly subscription billings. Operating expenses Sales and marketing Sales and marketing expense primarily consists of performance marketing media spend, asset creation, and other brand creative, sales and marketing personnel-related expenses, including stock-based compensation expense, costs to operate our retail showrooms including rent and occupancy charges, payment processing fees incurred in connection with the sale of our Connected Fitness Products, expenses related to the Peloton Apps, and depreciation of property and equipment. General and administrative General and administrative expense primarily consists of personnel-related expenses, including stock-based compensation expense, and facilities-related costs, primarily for our executive, finance, accounting, legal, human resources, IT functions and Member support team. General and administrative expense also includes software and IT costs, fees for professional services principally comprising legal, audit, tax and accounting services, depreciation of property and equipment, insurance, and litigation settlement costs. Research and development Research and development expense primarily consists of personnel-related expenses, including stock-based compensation expense, and facilities-related expenses, consulting and contractor expenses, tooling and prototype materials, software platform expenses, and depreciation of property and equipment. We capitalize certain qualified costs incurred in connection with the development of internal-use software that may also cause research and development expenses to vary from period to period. Impairment expense Impairment expense primarily consists of non-cash impairment charges relating to long-lived assets. Impairments are determined using management’s judgment about our anticipated ability to continue to use fixed assets in-service and under development, current economic and market conditions and their effects based on information available as of the date of these consolidated financial statements. Additionally, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Management disposes of fixed assets during the regular course of business due to damage, obsolescence, strategic shifts, and loss. Restructuring expense Restructuring expense consists of severance and other personnel costs, including stock-based compensation expense, professional services, facility closures and other costs associated with exit and disposal activities. Supplier settlements Supplier settlements are payments made to third-party suppliers to terminate certain future inventory purchase commitments or settle disputes with suppliers about and to terminate certain alleged past and future commitments. Non-operating income and expenses Total other expense, net Total other expense, net primarily consists of interest (expense) income, unrealized and realized (losses) gains on investments, net gains relating to our refinancing activities, and foreign exchange gains (losses). Income tax expense (benefit) The provision for income taxes primarily consists of income taxes related to state and international taxes for jurisdictions in which we conduct business. We maintain a valuation allowance on the majority of our deferred tax assets as we have concluded that it is more likely than not that the deferred assets will not be utilized. 46 Results of Operations The following tables set forth our consolidated results of operations in dollars and as a percentage of total revenue for the periods presented. The period-to-period comparisons of our historical results are not necessarily indicative of the results that may be expected in the future. Fiscal Year Ended June 30, 2025 2024 2023 (in millions) Consolidated Statement of Operations Data: Revenue Connected Fitness Products $ 817.1  $ 991.7  $ 1,130.2  Subscription 1,673.7  1,708.7  1,670.1  Total revenue 2,490.8  2,700.5  2,800.2  Cost of revenue(1)(2) Connected Fitness Products 705.9  943.0  1,328.8  Subscription 516.6  551.0  547.9  Total cost of revenue 1,222.5  1,494.0  1,876.7  Gross profit 1,268.3  1,206.5  923.5  Operating expenses Sales and marketing(1)(2) 421.6  658.9  648.2  General and administrative(1)(2) 527.3  651.0  798.1  Research and development(1)(2) 234.2  304.8  318.4  Impairment expense 64.1  57.3  144.5  Restructuring expense(1) 33.8  66.1  189.4  Supplier settlements 23.5  (2.6) 22.0    Total operating expenses 1,304.5  1,735.5  2,120.6  Loss from operations (36.2) (529.0) (1,197.1) Other expense, net: Interest expense (134.5) (112.5) (97.1) Interest income 32.7  35.1  26.4  Foreign exchange gain (loss) 22.4  —  7.0  Other income, net 0.1  0.7  2.9  Net gain on debt refinancing —  53.6  —  Total other expense, net (79.3) (23.2) (60.9) Loss before income taxes (115.6) (552.1) (1,258.0) Income tax expense (benefit) 3.4  (0.2) 3.7  Net loss $ (118.9) $ (551.9) $ (1,261.7) ____________________ 47 (1) Includes stock-based compensation expense as follows: Fiscal Year Ended June 30, 2025 2024 2023 (in millions) Cost of revenue Connected Fitness Products $ 9.3  $ 10.1  $ 14.3  Subscription 36.3  39.3  42.8  Total cost of revenue 45.7  49.5  57.1  Sales and marketing 16.4  19.7  28.9  General and administrative 121.9  177.1  167.2  Research and development 44.8  58.8  66.7  Restructuring expense 0.8  6.6  85.0    Total stock-based compensation expense $ 229.6  $ 311.7  $ 405.0  During the fiscal year ended June 30, 2024, in connection with the CEO transition, we recognized stock-based compensation expense of $41.9 million for one year of accelerated vesting of stock options, which had an exercise price of $38.77 per share and a grant date fair value of approximately $167.6 million. In addition, we recognized incremental stock-based compensation expense of $5.4 million for the modification of stock option awards related to extension of the exercise window through December 31, 2027. These expenses were recognized within General and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss. ____________________ (2) Includes depreciation and amortization expense as follows: Fiscal Year Ended June 30, 2025 2024 2023 (in millions) Cost of revenue Connected Fitness Products $ 16.3  $ 16.5  $ 18.7  Subscription 28.5  34.6  36.9  Total cost of revenue 44.9  51.0  55.5  Sales and marketing 17.4  23.4  31.1  General and administrative 17.6  23.7  26.3  Research and development 9.7  10.7  11.4    Total depreciation and amortization expense $ 89.7  $ 108.8  $ 124.3  Comparison of the fiscal years ended June 30, 2025 and 2024 Revenue Fiscal Year Ended June 30, 2025 2024 % Change (dollars in millions) Revenue: Connected Fitness Products $ 817.1  $ 991.7  (17.6)% Subscription 1,673.7  1,708.7  (2.1) Total revenue $ 2,490.8  $ 2,700.5  (7.8)% Percentage of revenue Connected Fitness Products 32.8  % 36.7  % Subscription 67.2  63.3  Total 100.0  % 100.0  % Fiscal Years Ended June 30, 2025 and 2024 Connected Fitness Products Revenue decreased $174.6 million for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. This decrease was primarily attributable to fewer Connected Fitness product deliveries driven by lower demand during the fiscal year ended June 30, 2025, partially offset by improvements in Precor revenue and more Tread+ deliveries during the fiscal year ended June 30, 2025. 48 Subscription Revenue decreased $35.0 million for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. This decrease was primarily due to decreases in Paid Connected Fitness and App Subscriptions, partially offset by an increase in content licensing revenue and incremental Used Equipment Activation Fee revenue, which was introduced during the first quarter of fiscal 2025. Cost of Revenue, Gross Profit, and Gross Margin Fiscal Year Ended June 30, 2025 2024 % Change (dollars in millions) Cost of Revenue: Connected Fitness Products $ 705.9  $ 943.0  (25.1)% Subscription 516.6  551.0  (6.2) Total cost of revenue $ 1,222.5  $ 1,494.0  (18.2)% Gross Profit: Connected Fitness Products $ 111.2  $ 48.8  128.1% Subscription 1,157.1  1,157.7  (0.1) Total Gross profit $ 1,268.3  $ 1,206.5  5.1% Gross Margin: Connected Fitness Products 13.6  % 4.9  % Subscription 69.1  % 67.8  % Fiscal Years Ended June 30, 2025 and 2024 Connected Fitness Products Cost of revenue for the fiscal year ended June 30, 2025 decreased $237.1 million, or 25.1%, compared to the fiscal year ended June 30, 2024. This decrease was primarily driven by fewer Connected Fitness product deliveries, resulting from lower demand during the fiscal year ended June 30, 2025, as well as lower freight and warehousing costs. This decrease was partially offset by higher Precor sales and more Tread+ deliveries during the fiscal year ended June 30, 2025. Our Connected Fitness Products Gross Margin increased to 13.6% for the fiscal year ended June 30, 2025 compared to 4.9% for the fiscal year ended June 30, 2024, primarily driven a mix shift towards higher margin products, as well as lower inventory write-downs and lower warehousing and transportation costs during the fiscal year ended June 30, 2025 when compared to the fiscal year ended June 30, 2024. These improvements were partially offset by changes in our warranty reserves. Subscription Cost of revenue for the fiscal year ended June 30, 2025 decreased $34.4 million, or 6.2%, compared to the fiscal year ended June 30, 2024. This decrease was primarily attributable to lower costs associated with content production and music royalties, lower personnel-related expenses, inclusive of stock-based compensation expense, due to decreased average headcount, and a reduction in depreciation and amortization expense. Subscription Gross Margin increased modestly for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. Operating Expenses Sales and Marketing Fiscal Year Ended June 30, 2025 2024 % Change (dollars in millions) Sales and marketing $ 421.6  $ 658.9  (36.0)% As a percentage of total revenue 16.9  % 24.4  % Fiscal Years Ended June 30, 2025 and 2024 Sales and marketing expense decreased $237.3 million, or 36.0% for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. The decrease was primarily due to a decrease in acquisition, brand, and creative marketing spend of $188.7 million, a decrease of $19.7 million in personnel-related expenses, inclusive of stock-based compensation expense, mainly due to decreased average headcount, and a decrease of $14.3 million in rent and occupancy and other retail related costs, primarily driven by a reduction in our retail showroom presence. 49 General and Administrative Fiscal Year Ended June 30, 2025 2024 % Change (dollars in millions) General and administrative $ 527.3  $ 651.0  (19.0)% As a percentage of total revenue 21.2  % 24.1  % Fiscal Years Ended June 30, 2025 and 2024 General and administrative expense decreased $123.7 million, or 19.0% for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. The decrease was driven by a decrease of $70.3 million in personnel-related expenses, inclusive of stock-based compensation expense, primarily related to stock-based compensation expense recognized in connection with the CEO transition during the fiscal year ended June 30, 2024 and decreased average headcount, a reduction of $29.2 million in settlement costs and professional services fees (comprised of legal, accounting, and consulting fees), and a reduction of $6.1 million in depreciation and amortization expense. Research and Development Fiscal Year Ended June 30, 2025 2024 % Change (dollars in millions) Research and development $ 234.2  $ 304.8  (23.2)% As a percentage of total revenue 9.4  % 11.3  % Fiscal Years Ended June 30, 2025 and 2024 Research and development expense decreased $70.6 million, or 23.2% for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. The decrease was primarily due to a decrease of $49.5 million in personnel-related expenses, inclusive of stock-based compensation expense, primarily due to decreased average headcount, and a decrease of $15.7 million in product development costs, primarily due to a reduction in contractor spend. Impairment expense Fiscal Year Ended June 30, 2025 2024 % Change (dollars in millions) Impairment expense $ 64.1  $ 57.3  11.9% Fiscal Years Ended June 30, 2025 and 2024 Impairment expense increased $6.8 million, or 11.9% for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. This increase was primarily driven by an increase of $31.4 million in asset write-downs and write-offs related to plans to right-size portions of our corporate office footprint and an increase of $11.4 million in impairment expense related to other manufacturing assets, partially offset by a $16.7 million impairment charge related to Peloton Output Park during the fiscal year ended June 30, 2024, a $13.6 million decrease in impairment expense related to Connected Fitness assets, and a $6.9 million decrease in impairment expense related to the exit of retail showroom locations. Restructuring expense Fiscal Year Ended June 30, 2025 2024 % Change (dollars in millions) Restructuring expense $ 33.8  $ 66.1  (48.8)% Fiscal Years Ended June 30, 2025 and 2024 Restructuring expense decreased $32.2 million, or 48.8% for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024, primarily due to an $18.9 million decrease in personnel-related expenses, inclusive of severance and stock-based compensation expense, as well as decreases in exit and disposal costs, including non-cash charges of $3.8 million relating to the loss on sale of a manufacturing subsidiary in Taiwan during the fiscal year ended June 30, 2024. 50 Supplier settlements Fiscal Year Ended June 30, 2025 2024 % Change (dollars in millions) Supplier settlements $ 23.5  $ (2.6) *NM ___________________________ *NM - not meaningful Fiscal Years Ended June 30, 2025 and 2024 Supplier settlements increased $26.1 million for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024 due to the settlement of disputes with a third-party supplier about certain alleged past and future commitments. Total other expense, net and Income tax expense (benefit) Fiscal Year Ended June 30, 2025 2024 % Change (dollars in millions) Interest expense $ (134.5) $ (112.5) 19.6% Interest income 32.7  35.1  (6.7)% Foreign exchange gain (loss) 22.4  —  *NM Other income, net 0.1  0.7  (90.8)% Net gain on debt refinancing —  53.6  *NM Income tax expense (benefit) 3.4  (0.2) *NM ___________________________ *NM - not meaningful Fiscal Years Ended June 30, 2025 and 2024 Total other expense, net, was comprised of the following for the fiscal year ended June 30, 2025: •Interest expense primarily related to our Term Loan (as defined below) and convertible notes, and deferred financing costs of $134.5 million; •Interest income from cash, cash equivalents, and short-term investments of $32.7 million; •Foreign exchange gains of $22.4 million; •Other income, net of $0.1 million; and Total other expense, net, was comprised of the following for the fiscal year ended June 30, 2024: •Interest expense primarily related to our Term Loan and convertible notes, and deferred financing costs of $112.5 million; •Interest income from cash, cash equivalents, and short-term investments of $35.1 million; •Foreign exchange losses were minimal; •Other income, net of $0.7 million; and •Net gain on debt refinancing of $53.6 million, related to the 2026 Notes gain on extinguishment of debt of $69.8 million, partially offset by the Term Loan loss on extinguishment of $7.5 million and modification of debt of $8.7 million. Income tax expense (benefit) for the fiscal year ended June 30, 2025 and 2024 of $3.4 million and $(0.2) million, respectively, was primarily due to state and international taxes. Non-GAAP Financial Measures In addition to our results determined in accordance with accounting principles generally accepted in the United States, or GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance. Adjusted EBITDA We calculate Adjusted EBITDA as net (loss) income adjusted to exclude: other expense (income), net; net (gains) losses on debt refinancing; income tax expense (benefit); depreciation and amortization expense; stock-based compensation expense; impairment expense; restructuring expense; product recall related matters; certain litigation and settlement expenses; supplier settlements; and other adjustment items that arise outside the ordinary course of our business. 51 We use Adjusted EBITDA as a measure of operating performance and the operating leverage in our business. We believe that this non-GAAP financial measure is useful to investors for period-to-period comparisons of our business and in understanding and evaluating our operating results for the following reasons: •Adjusted EBITDA is widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as stock-based compensation expense, depreciation and amortization expense, other expense (income), net, and provision for income taxes that can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired; •Our management uses Adjusted EBITDA in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance; and •Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of our core operating results, and may also facilitate comparisons with other peer companies, many of which use a similar non-GAAP financial measure to supplement their GAAP results. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are, or may in the future be, as follows: •Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; •Adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy; •Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) interest and other income (expense), or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us; or (3) income taxes, which may represent a reduction in cash available to us; •Adjusted EBITDA does not reflect gains (losses) associated with refinancing efforts that we have determined are outside of the ordinary course of business and are nonrecurring, infrequent or unusual based on factors such as the nature and strategy of the refinancing, as well as our frequency and past practice of performing refinancing activities; •Adjusted EBITDA does not reflect certain litigation expenses, consisting of legal settlements and related fees for specific proceedings that we have determined arise outside of the ordinary course of business and are nonrecurring, infrequent or unusual based on the following considerations which we assess regularly: (1) the frequency of similar cases that have been brought to date, or are expected to be brought within two years; (2) the complexity of the case; (3) the nature of the remedy(ies) sought, including the size of any monetary damages sought; (4) offensive versus defensive posture of us; (5) the counterparty involved; and (6) our overall litigation strategy. Following a change in practice beginning during the fiscal year ended June 30, 2022, we no longer adjust Adjusted EBITDA for costs from new patent litigation or consumer arbitration claims, unless we consider the matter to be nonrecurring, infrequent or unusual. We continue to adjust Adjusted EBITDA for historical patent infringement and consumer arbitration claims that were determined, prior to our change in practice, to be nonrecurring, infrequent, or unusual; •Adjusted EBITDA does not reflect acquisition-related costs, including transaction and integration costs; •Adjusted EBITDA does not reflect impairment charges and gains (losses) on disposals of fixed assets; •Adjusted EBITDA does not reflect costs associated with certain product recall related matters including adjustments to the return reserves, inventory write-downs, logistics costs associated with Member requests, the cost to move the recalled product for those that elect the option, subscription waiver costs of service, and recall-related hardware development and repair costs. We make adjustments for product recall related matters that we have determined arise outside of the ordinary course of business and are nonrecurring, infrequent or unusual based on factors including the nature of the product recall, our experience with similar product recalls at the time of such assessment, the impacts on us of the recall remedy and associated logistics, supply chain, and other externalities, as well as the expected consumer demand for such a remedy, and operational complexities in the design, regulatory approval and deployment of a remedy; •Adjusted EBITDA does not reflect costs associated with restructuring plans; •Adjusted EBITDA does not reflect supplier settlements that are outside of the ordinary course of business and are nonrecurring, infrequent or unusual based on factors such as the nature of the settlements, as well as our frequency and past practice of performing refinancing activities; and •The expenses and other items that we exclude in our calculation of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from Adjusted EBITDA when they report their operating results and we may, in the future, exclude other significant, unusual expenses or other items from this financial measure. Because companies in our industry may calculate this measure differently than we do, its usefulness as a comparative measure can be limited. Because of these limitations, Adjusted EBITDA should be considered along with other operating and financial performance measures presented in accordance with GAAP. 52 The following table presents a reconciliation of Adjusted EBITDA to Net loss, the most directly comparable financial measure prepared in accordance with GAAP, for each of the periods indicated: Fiscal Year Ended June 30, 2025 2024 2023 (in millions) Net loss $ (118.9) $ (551.9) $ (1,261.7) Adjusted to exclude the following: Total other expense, net(1) 79.3  76.8  60.9  Net gain on debt refinancing(2) —  (53.6) —  Income tax expense (benefit) 3.4  (0.2) 3.7  Depreciation and amortization expense 89.7  108.8  124.3  Stock-based compensation expense 228.8  305.2  319.9  Impairment expense 64.1  57.3  144.5  Restructuring expense(3) 33.8  67.1  193.0  Supplier settlements(4) 23.5  (2.6) 22.0  Product recall related matters(5) —  (14.0) 80.9  Litigation and settlement expenses(6) —  10.8  102.8  Other adjustment items —  —  1.0  Adjusted EBITDA $ 403.6  $ 3.5  $ (208.5) ______________________ (1) Primarily consists of Interest expense of $134.5 million, $112.5 million, $97.1 million, Interest income of $(32.7) million, $(35.1) million, $(26.4) million, and foreign exchange (gain) loss of $(22.4) million, zero, and $(7.0) million, for the fiscal years ended June 30, 2025, 2024, and 2023, respectively. (2) Represents the net charge resulting from our May 2024 refinancing efforts. The Company has not demonstrated a past practice of refinancing its previously issued and secured debt obligations, and considers these charges incurred in order to perform this refinancing to be nonrecurring, infrequent, unusual, and outside the ordinary of business. (3) Represents charges incurred in connection with the Restructuring Plans, refer to Note 4, Restructuring in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. (4) Represents accruals related to settlement of disputes with various third-party suppliers about certain alleged past and future commitments, which occurred due to part of an unusual, one-time effort to adjust the Company’s forecasted inventory during its fiscal years 2022 and 2023. With this settlement during the fiscal year ended June 30, 2025, we have substantially settled our purchase commitments related disputes with our suppliers that were linked to our one-time effort to evaluate and adjust the Company’s forecasted inventory needs with its suppliers during fiscal years 2022 and 2023. As such, we currently do not expect to add-back in the future any additional supplier settlements related to that effort. (5) Represents adjustments and charges primarily associated with our Tread+ and Bike Seat Post product recall related matters, as well as accrual adjustments. These include recorded (benefits) costs in Connected Fitness Products Cost of revenue associated with recall related matters of $(9.5) million and $64.1 million, adjustments to Connected Fitness Products Revenue for actual and estimated future returns of $(4.5) million and $14.6 million, and operating expenses of zero and $2.3 million associated with recall-related hardware development costs, in each case for the fiscal years ended June 30, 2024 and 2023, respectively. (6) Includes litigation-related expenses for certain patent infringement litigation, consumer arbitration, and product recalls for the fiscal years ended June 30, 2024 and 2023, that arise outside of the ordinary course of business and are nonrecurring, infrequent, or unusual. Includes Dish settlement accrual of $75.0 million, for the fiscal year ended June 30, 2023, which was considered significantly more complex than routine intellectual property claims and, in addition to seeking monetary damages or other more typical remedies from a district court, also sought an order from the International Trade Commission to broadly prohibit the Company from the sale, distribution, marketing, transferring, or advertising in the United States of products that had the infringing functionality installed on them, and the importation of products unless they were deemed non-infringing by the International Trade Commission and/or U.S. Customs and Border Protection. Also includes other litigation-related expenses and settlements for certain patent infringement litigation, securities litigation, and consumer arbitration for the fiscal year ended June 30, 2023, that arose outside of the ordinary course of business and were nonrecurring, infrequent, or unusual. Subscription Contribution and Subscription Contribution Margin We define “Subscription Contribution” as Subscription Revenue less Subscription Cost of revenue, adjusted to exclude depreciation and amortization and stock-based compensation expenses included within Subscription Cost of revenue. Subscription Contribution Margin is calculated by dividing Subscription Contribution by Subscription Revenue. We use Subscription Contribution and Subscription Contribution Margin to measure our ability to scale and leverage the costs of our Connected Fitness Subscriptions. We believe that these non-GAAP financial measures are useful to investors for period-to-period comparisons of our business and in understanding and evaluating our operating results because our management uses Subscription Contribution and Subscription Contribution Margin in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance. The use of Subscription Contribution and Subscription Contribution Margin as analytical tools has limitations, and you should not consider these in isolation or as substitutes for analysis of our financial results as reported under GAAP. Some of these limitations are as follows: •Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Subscription Contribution and Subscription Contribution Margin do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; and 53 •Subscription Contribution and Subscription Contribution Margin exclude stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy. Because of these limitations, Subscription Contribution and Subscription Contribution Margin should be considered along with other operating and financial performance measures presented in accordance with GAAP. The following table presents a reconciliation of Subscription Contribution and Subscription Contribution Margin to Subscription Gross Profit and Subscription Gross Margin, respectively, which are the most directly comparable financial measures prepared in accordance with GAAP, for each of the periods indicated: Fiscal Year Ended June 30, 2025 2024 2023 (dollars in millions) Subscription Revenue $ 1,673.7  $ 1,708.7  $ 1,670.1  Less: Subscription Cost of revenue 516.6  551.0  547.9  Subscription Gross Profit $ 1,157.1  $ 1,157.7  $ 1,122.1  Subscription Gross Margin 69.1  % 67.8  % 67.2  % Add back: Depreciation and amortization expense $ 28.5  $ 34.6  $ 36.9  Stock-based compensation expense 36.3  39.3  42.8  Subscription Contribution $ 1,222.0  $ 1,231.6  $ 1,201.8  Subscription Contribution Margin 73.0  % 72.1  % 72.0  % Free Cash Flow We define Free Cash Flow as Net cash provided by (used in) operating activities less Capital expenditures. Free Cash Flow reflects an additional way of viewing our liquidity that, we believe, when viewed with our GAAP results, provides management, investors, and other users of our financial information with a more complete understanding of factors and trends affecting our cash flows. The use of Free Cash Flow as an analytical tool has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. For example, Free Cash Flow does not incorporate payments made for purchases of marketable securities or principal repayments on our debt, which reduces cash available to us. Because of these limitations, Free Cash Flow should be considered along with other operating and financial performance measures presented in accordance with GAAP. The following table presents a reconciliation of Free Cash Flow to Net cash provided by (used in) operating activities, the most directly comparable financial measure prepared in accordance with GAAP, for each of the periods indicated: Fiscal Year Ended June 30, 2025 2024 2023 (in millions) Net cash provided by (used in) operating activities $ 333.0  $ (66.1) $ (387.6) Capital expenditures (9.3) (19.7) (82.4) Free Cash Flow $ 323.7  $ (85.8) $ (470.0) Liquidity and Capital Resources Our operations have been funded primarily through net proceeds from the sales of our equity and convertible debt securities, and our Term Loan (as defined below), as well as cash flows from operating activities. As of June 30, 2025, we had Cash and cash equivalents of approximately $1,039.5 million. We anticipate capital expenditures over the next 12 months to include investments in product development, content and our studios, systems implementation, and IT infrastructure. 54 We believe our existing cash and cash equivalent balances and cash flow from operations will be sufficient to meet our working capital and capital expenditure needs for the next 12 months and beyond. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, timing to adjust our supply chain and cost structures in response to material fluctuations in product demand, timing and amount of spending related to acquisitions, the timing and amount of spending on research and development and manufacturing initiatives, the timing and financial impact of product recalls, sales and marketing activities, the timing of new product introductions, market acceptance of our Connected Fitness Products, timing and investments needed for international expansion, and overall economic conditions. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in further dilution to our stockholders. The incurrence of debt financing would result in increased debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. The inability to raise capital would adversely affect our ability to achieve our business objectives. Restructuring In February 2022, we announced and began implementing the 2022 Restructuring Plan and in April 2024, our Board of Directors approved a restructuring plan to expand upon the 2022 Restructuring Plan (as expanded and collectively with the 2022 Restructuring Plan, the “2024 Restructuring Plan”). As of June 30, 2025, the actions pursuant to these plans have been substantially completed. In August 2025, the Company announced a new restructuring plan (the “2025 Restructuring Plan”), which includes a reduction in global headcount and is intended to improve the Company’s cost structure, operating efficiency, and profitability, while providing us the opportunity to return to growth by reinvesting expected savings into our differentiating capabilities. We’ve made progress in implementing these restructuring plans and achieving the goals outlined in Note 4, Restructuring in the Notes to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. In fiscal year 2024, we completed the sale of the Peloton Output Park building and a portion of the corresponding land and received net proceeds of approximately $31.9 million, successfully exited our owned-manufacturing operations, and reduced our global retail showroom footprint. In September 2024, we completed the sale of the remaining Peloton Output Park land parcel and received net proceeds of $4.2 million. We expect substantial further improvements in the goals outlined in Note 4, Restructuring as well as a number of other measures by which we measure the success of our restructuring initiatives and expect to continue optimizing our retail footprint over fiscal year 2026. Refer to Note 4, Restructuring in the Notes to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for discussion around charges incurred to date and future expected charges under the Restructuring Plans. The 2022 and 2024 Restructuring Plans resulted in reduced annual run-rate expenses of more than $200 million as of the end of fiscal year 2025. Upon full implementation, we expect the 2025 Restructuring Plan to achieve at least $100 million of run-rate savings by the end of fiscal year 2026. We may not be able to realize the cost savings and benefits initially anticipated as a result of the Restructuring Plans, and implementation and transition costs may be greater than expected. See “Risk Factors—Risks Related to Our Business—We may not successfully execute or achieve the expected benefits of our restructuring initiatives and other cost-saving measures we may take in the future, and our efforts may result in further actions and/or additional asset impairment charges and adversely affect our business.” 2029 and 2026 Convertible Notes In May 2024, we issued $350.0 million aggregate principal amount of 5.50% Convertible Senior Notes due 2029 (the “2029 Notes”) in a private offering, including the exercise in full of the option granted to the initial purchasers to purchase $50.0 million of the 2029 Notes. The 2029 Notes were issued pursuant to an Indenture (the “2029 Notes Indenture”) between us and U.S. Bank Trust Company, National Association, as trustee. The 2029 Notes bear interest at a rate of 5.50% per annum, payable semi-annually in arrears on June 1 and December 1 of each year, beginning on December 1, 2024. The net proceeds from this offering of 2029 Notes were approximately $342.3 million, after deducting the initial purchasers' discounts and commissions. The net proceeds of the offering were used, together with proceeds from the Term Loan (as defined below) and cash on hand, to repurchase approximately $801.0 million aggregate principal amount of our outstanding 0.00% Convertible Senior Notes due 2026 (the “2026 Notes”) described below. The effective interest rate upon issuance of the 2029 Notes was 5.97%, which is the effective interest rate as of June 30, 2025. The 2029 Notes will mature on December 1, 2029, unless earlier converted, redeemed, or repurchased. The 2029 Notes will be convertible at the option of the holders at certain times and upon the occurrence of certain events. A holder may convert its 2029 Notes during any calendar quarter if the last reported sale price per share of the Class A common stock exceeds 130% of the conversion price for each of at least 20 trading days (whether or not consecutive) during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter. The last reported sale price of the Class A common stock exceeded 130% of the conversion price of the 2029 Notes for more than 20 trading days during the 30 consecutive trading days, including the last trading day, ended June 30, 2025. Accordingly, as of July 1, 2025, the 2029 Notes may be converted at the option of the applicable holder through September 30, 2025. On or after September 1, 2029, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2029 Notes, in multiples of $1,000 principal amount, at the option of the applicable holder. The Company may satisfy any conversion obligation under the 2029 Notes by paying and/or delivering, as the case may be, cash, shares of the Class A common stock or a combination of cash and shares of the Class A common stock, at the Company’s election, in the manner and subject to the terms and conditions provided in the 2029 Notes Indenture. If all of the 2029 Notes were to be converted prior to September 30, 2025, the Company’s current intention would be to settle such conversion in shares of the Class A common stock. 55 In February 2021, we issued $1.0 billion aggregate principal amount of the 2026 Notes in a private offering, including the exercise in full of the option granted to the initial purchasers to purchase $125.0 million of the 2026 Notes. The 2026 Notes were issued pursuant to an Indenture (the “2026 Notes Indenture”) between us and U.S. Bank National Association, as trustee. The net proceeds from the offering were approximately $977.2 million, after deducting the initial purchasers’ discounts and commissions and our offering expenses. The effective interest rate upon issuance of the 2026 Notes was 0.45%, which is the effective interest rate as of June 30, 2025. Repurchase of a Portion of the 2026 Convertible Notes In May 2024, we entered into separate, privately negotiated transactions with certain holders of the 2026 Notes to repurchase $801.0 million of aggregate principal amount of the 2026 Notes for an aggregate of $724.9 million of cash. We accounted for this repurchase of the 2026 Notes as a debt extinguishment under ASC 470-50, Debt – Modifications and Extinguishments (“ASC 470-50”). We recorded a $69.8 million gain on early extinguishment of debt during the fiscal year ending June 30, 2024, which included the write-off of previously deferred debt issuance costs of $6.3 million, which was included within Net gain on debt refinancing on the Consolidated Statements of Operations and Comprehensive Loss for the fiscal year ended June 30, 2024. Termination of Capped Call Transactions In connection with the offering of the 2026 Notes, we entered into privately negotiated capped call transactions with certain counterparties (the “Capped Call Transactions”). In the last quarter of fiscal year 2024, we terminated the Capped Call Transactions in their entirety pursuant to negotiated termination agreements with each such counterparty. Third Amended and Restated Credit Agreement On May 30, 2024, we entered into a Third Amended and Restated Credit Agreement (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Third Amended and Restated Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent, and certain banks and financial institutions party thereto as lenders and issuing banks. The Third Amended and Restated Credit Agreement provides for a $1.0 billion term loan facility (the “Term Loan”), which will be due and payable on May 30, 2029. The Term Loan amortizes in quarterly installments of 0.25%, payable at the end of each fiscal quarter and on the maturity date. The Third Amended and Restated Credit Agreement also provides for a $100.0 million revolving credit facility (the “Revolving Facility”), which will mature on May 30, 2029. We are only required to meet the total liquidity covenant, set at $250.0 million for the last business day of any week, and the subscription revenues covenant, set at $1.2 billion for the four-quarter trailing period, to the extent any revolving loans are borrowed and outstanding. The Revolving Facility, when drawn, bears interest at a rate equal to, at our option, either the Alternate Base Rate (as defined in the Third Amended and Restated Credit Agreement) plus 4.00% per annum or the Term SOFR Rate (as defined in the Third Amended and Restated Credit Agreement) plus 5.00% per annum. We are required to pay an annual commitment fee of 0.500% or 0.375% per annum, depending on whether the First Lien Net Leverage Ratio (as defined in the Third Amended and Restated Credit Agreement) is greater or less than 5.00 to 1.00, on a quarterly basis based on the unused portion of the Revolving Facility. The Term Loan initially bears interest at a rate equal to, at our option, either the Alternate Base Rate (as defined in the Third Amended and Restated Credit Agreement) plus 5.00% per annum or the Term SOFR Rate (as defined in the Third Amended and Restated Credit Agreement) plus 6.00% per annum. The applicable rate for Alternate Base Rate loans or Term SOFR Rate loans is subject to a 0.50% step down, depending on whether the First Lien Net Leverage Ratio is less than 5.00 to 1.00 as measured on a quarterly basis. Any borrowing at the Alternate Base Rate is subject to a 1.00% floor and the Term SOFR Rate is subject to a 0.00% floor. The Third Amended and Restated Credit Agreement contains customary affirmative covenants as well as customary negative covenants that restrict our ability to, among other things, incur additional indebtedness, incur liens or grant negative pledges, make loans and investments, conduct certain transactions with affiliates, sell certain assets, enter into certain swap agreements, guarantee obligations of third parties, declare dividends or make certain distributions, and undergo a merger or consolidation or certain other transactions. The Third Amended and Restated Credit Agreement also contains certain customary events of default. Certain baskets and covenant levels have been adjusted and will apply equally to both the Term Loan and Revolving Facility for so long as the Term Loan is outstanding. The obligations under the Third Amended and Restated Credit Agreement with respect to the Term Loan and the Revolving Facility are secured by substantially all of our assets, with certain exceptions set forth in the Third Amended and Restated Credit Agreement, and are required to be guaranteed by certain material subsidiaries of the Company if, at the end of future financial quarters, certain conditions are not met. During the fiscal years ended June 30, 2025 and 2024, we incurred total commitment fees of $0.5 million and $1.3 million, respectively, which are included in Interest expense in the Consolidated Statements of Operations and Comprehensive Loss. As of June 30, 2025, we had drawn the full amount of the Term Loan and had not drawn on the Revolving Facility, and we had $990.0 million total outstanding borrowings under the Third Amended and Restated Credit Agreement. In connection with the execution of the Third Amended and Restated Credit Agreement, the Term Loan was accounted for as a modification, extinguishment, or new loan for certain lenders in accordance with ASC 470-50. Accordingly, a discount and debt issuance costs of $10.0 million and $2.3 million, respectively, will be amortized to Interest expense using the effective interest method over the term of the Third Amended and Restated Credit Agreement. Furthermore, we expensed $8.7 million of debt issuance costs incurred and wrote-off $7.5 million of previously 56 deferred debt discount and debt issuance costs, which was included within Net gain on debt refinancing on the Consolidated Statements of Operations and Comprehensive Loss for the fiscal year ended June 30, 2024. As of June 30, 2025, we had not drawn any amount under the Revolving Facility and as such did not have to test the financial covenants under the Third Amended and Restated Credit Agreement. We are required to pledge or otherwise restrict a portion of cash and cash equivalents as collateral for standby letters of credit. As of June 30, 2025, we had outstanding letters of credit totaling $46.2 million, which are classified as Restricted cash on the Consolidated Balance Sheets. Upon entering into the Term Loan, the effective interest rate was 12.4% and the current effective interest rate as of June 30, 2025 is 10.9%. Cash Flows Fiscal Year Ended June 30, 2025 2024 2023 (in millions) Net cash provided by (used in) operating activities $ 333.0  $ (66.1) $ (387.6) Net cash (used in) provided by investing activities (5.1) 26.8  (69.9) Net cash provided by (used in) financing activities 1.7  (94.4) 76.8  Operating Activities Net cash provided by operating activities of $333.0 million for the fiscal year ended June 30, 2025 was primarily related to non-cash adjustments of $424.5 million and a net decrease in operating assets and liabilities of $27.4 million, partially offset by a net loss of $118.9 million. Non-cash adjustments primarily consisted of $229.6 million of stock-based compensation expense, $89.7 million of depreciation and amortization, $64.1 million of impairment expense, and $54.5 million of non-cash operating lease expense. The net decrease in operating assets and liabilities was primarily due to a $136.5 million decrease in net inventory levels and a $66.6 million decrease in prepaid expenses and other current assets, partially offset by a $94.0 million decrease in accounts payable and accrued expenses and a $82.3 million decrease in net operating lease liabilities due to lease payments and lease terminations as we continue to reduce our real estate footprint through our 2024 Restructuring Plan efforts. The increase in cash flows from operating activities during the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024, was driven by operating expense reductions following the 2024 Restructuring Plan and gross profit improvements. Investing activities Net cash used in investing activities of $5.1 million for the fiscal year ended June 30, 2025 was primarily related to $9.3 million used for capital expenditures, partially offset by $4.2 million in proceeds from the sale of the remaining Peloton Output Park land parcel. The decrease in cash flows from investing activities during the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024, was primarily due to less cash proceeds from the sale of the remaining Peloton Output Park land parcel during the fiscal year ended June 30, 2025 when compared to the proceeds received from the sale of Peloton Output Park and a manufacturing subsidiary in Taiwan during the fiscal year ended June 30, 2024, partially offset by fewer capital expenditures during the fiscal year ended June 30, 2025. Financing activities Net cash provided by financing activities of $1.7 million for the fiscal year ended June 30, 2025 was primarily related to net proceeds from option exercises under our employee stock plans and purchases under the ESPP of $11.8 million, partially offset by $10.0 million in principal repayments on the Term Loan. The increase in cash flows from financing activities during the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024, was primarily due to less cash used in debt financing activities during the fiscal year ended June 30, 2025, as the fiscal year ended June 30, 2024 included a $742.5 million payment on principal of our previous term loan and revolving credit facility, $724.9 million payment on a portion of the 2026 Notes, $986.9 million net proceeds from the issuance of the Term Loan, and $342.3 million net proceeds from the issuance of the 2029 Notes. This was partially offset by a reduction in proceeds from option exercises under our employee stock plans during the fiscal year ended June 30, 2025. 57 Commitments As of June 30, 2025, our contractual obligations were as follows: Payments due by period Contractual obligations: Total Less than 1-3 years 3-5 years More than 1 year 5 years (in millions) Lease obligations (1) $ 616.0  $ 93.2  $ 148.6  $ 105.6  $ 268.6  Minimum royalty payments (2) 93.2  91.1  1.9  0.3  —  Unused credit facility fee payments (3) 1.6  0.4  0.8  0.4  —  Other purchase obligations (4) 130.9  40.5  55.2  35.2  —  Convertible senior notes (5) 549.0  199.0  —  350.0  —  Term loan (5) 990.0  10.0  20.0  960.0  —  Total $ 2,380.7  $ 434.1  $ 226.5  $ 1,451.5  $ 268.6  ______________________ (1) Lease obligations relate to our office space, warehouses, production studios, retail locations, and equipment. The original lease terms are between one and 21 years, and the majority of the lease agreements are renewable at the end of the lease period. The Company has finance lease obligations of $0.3 million, also included above. (2) We are subject to minimum royalty payments associated with our license agreements for the use of licensed content. See “Risk Factors — Risks Related to Our Business— We depend upon third-party licenses for the use of music in our content. An adverse change to, loss of, or claim that we do not hold necessary licenses may have an adverse effect on our business, operating results, and financial condition.” (3) Pursuant to the Third Amended and Restated Credit Agreement, we are required to pay a commitment fee of 0.500% or 0.375% per annum, depending on whether the First Lien Net Leverage Ratio (as defined in the Third Amended and Restated Credit Agreement) is greater or less than 5.00 to 1.00, on a quarterly basis based on the unused portion of the Revolving Facility. The payments due by period in the table above are reflective of the rate as of June 30, 2025, which is 0.375%. (4) Other purchase obligations include all other non-cancelable contractual obligations. These contracts are primarily related to cloud computing costs. (5) Refer to Note 11, Debt in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for further details regarding our 2026 Notes and 2029 Notes and Term Loan obligations. The commitment amounts in the table above are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. We utilize contract manufacturers to build our products and accessories. These contract manufacturers acquire components and build products based on demand forecast information we supply, which typically covers a rolling 12-month period. Consistent with industry practice, we acquire inventories from such manufacturers through purchase orders against which orders are applied based on projected demand information and availability of goods. Such purchase commitments typically cover our forecasted product and manufacturing requirements for periods that range a number of months. In certain instances, these agreements allow us the option to cancel, reschedule, and/or adjust our requirements based on our business needs for a period of time before the order is due to be fulfilled. While our purchase orders are legally cancellable in many situations, some purchase orders are not cancellable in the event of a demand plan change or other circumstances, such as where the supplier has procured unique, Peloton-specific designs, and/or specific non-cancellable, non-returnable components based on our provided forecasts. As of June 30, 2025, our commitments to contract with third-party manufacturers for their inventory on-hand and component purchase commitments related to the manufacture of our products were estimated to be approximately $96.1 million. See “Risk Factors—Risks Related to Our Business—Our operating results have been, and could in the future be, adversely affected if we are unable to accurately forecast consumer demand for our products and services and adequately manage our inventory.” Off-Balance Sheet Arrangements  We did not have any undisclosed off-balance sheet arrangements as of June 30, 2025. Recent Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K under the heading “Recently Issued Accounting Pronouncements” for a discussion about new accounting pronouncements adopted and not yet adopted as of the date of this Annual Report on Form 10-K. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP. In preparing the consolidated financial statements, we make estimates and judgments that affect the reported amounts of assets, liabilities, stockholders’ equity (deficit), revenue, expenses, and related disclosures. We re-evaluate our estimates on an on-going basis. Our estimates are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Because of the uncertainty inherent in these matters, actual results may differ from these estimates and could differ based upon other assumptions or conditions. The critical accounting policies that reflect our more significant judgments and estimates used in the preparation of our consolidated financial statements include those noted below. 58 Inventory Valuation and Reserves We review our inventory to ensure that its carrying value does not exceed its net realizable value (“NRV”), with NRV based on the estimated selling price of inventory in the ordinary course of business, less estimated costs of completion, disposal and transportation. When our expectations indicate that the carrying value of inventory may exceed its NRV, we calculate the approximate amount by which carrying value is greater than NRV and record a write-down for that difference as a component of Connected Fitness Products Cost of revenue. Once a write-down occurs, a new, lower cost basis is established. These assumptions about future disposition of inventory are inherently uncertain and should our estimates used in these calculations change in the future, such as estimated selling prices or disposal costs, additional and potentially material write-downs may occur. We also regularly monitor inventory quantities on-hand and in-transit and reserve for excess and obsolete inventories using estimates based on historical experience, historical and projected sales trends, specific categories of inventory, and age of on-hand inventory. Inventories presented in the Consolidated Balance Sheets are net of reserves for excess and obsolete inventory. If actual conditions or product demands are less favorable than our assumptions, additional inventory reserves may be required and could potentially be material. For additional information regarding these reserves, refer to Note 6, Inventories, in the Notes to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. Impairment of Long-Lived Assets We review our long-lived asset groups for impairment whenever events or changes in circumstances indicate their carrying value may not be recoverable. Recoverability of our long-lived asset groups are measured by comparing the undiscounted future cash flows expected to be generated from the asset group to the carrying value of the asset group. If the test for recoverability identifies a possible impairment, the asset group’s fair value is measured relying primarily on a discounted cash flow method. An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. For our Connected Fitness Products segment and Subscription segment, we evaluate long-lived tangible assets at the lowest level at which independent cash flows can be identified, which is dependent on the strategy and expected future use of our long-lived assets. We evaluate corporate assets or other long-lived assets that are not segment-specific at the consolidated level. We measure the fair value of an asset group based on market prices (i.e., the amount for which the asset could be sold to a third party) when available. When market prices are not available, we generally estimate the fair value of the asset group using the income approach and/or the market approach. The income approach uses cash flow projections. Inherent in our development of cash flow projections are assumptions and estimates derived from a review of our operating results, business plan forecasts, expected growth rates, and cost of capital, similar to those a market participant would use to assess fair value. We also make certain assumptions about future economic conditions and other data. Significant judgments and estimates are included in the determination of the fair value of our right-of-use assets, including the expected downtime period to the commencement of future subleases, projected sublease income over the remaining lease period, and discount rates that reflect the level of risk associated with the expected future cash flows. Our estimates are subject to uncertainty and may be affected by a number of factors outside our control, including general economic conditions and the competitive environment. Unforeseen events, changes in circumstances and market conditions, and changes in assumptions and estimates of future cash flows could adversely affect the fair value of our long-lived asset groups and could result in future impairment charges. During fiscal 2023, 2024 and 2025, management identified various qualitative factors that collectively indicated that the Company had impairment triggering events, including (i) realignment of cost structure in connection with the restructuring initiatives, (ii) softening demand and (iii) significant decrease in the market price of certain long-lived asset groups. For details regarding the impairment charges recognized as a result of these triggering events, refer to Note 7, Property and Equipment, and Note 10, Leases, in the Notes to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. Loss Contingencies We are, or may become, a party to legal proceedings, claims, and regulatory, tax, and government inquiries and investigations that arise in the ordinary course of business. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. These estimates have been based on our assessment of the facts and circumstances at each balance sheet date and are subject to change based on new information and future events. For the matters we disclose in the accompanying notes to the consolidated financial statements that do not include an estimate of the amount of loss or range of losses, estimating such an amount is not possible or is immaterial. The outcomes of our legal proceedings are inherently unpredictable and subject to significant uncertainties, and until the final resolution of any such matter, there may be exposure to a material loss in excess of the amount recorded. Given that our legal proceedings, claims, and regulatory, tax, and government inquiries and investigations are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our business, results of operations, financial condition or cash flows. For additional information regarding these contingencies, refer to Note 12, Commitments and Contingencies, in the Notes to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K. Product Warranty and Recall Related Provisions Product warranty costs are recognized as a component of Connected Fitness Products Cost of revenue upon the transfer of control of our Connected Fitness Products to our customers. We estimate our product warranty obligation based on factors including historical and current product failure rates, historical service delivery and replacement costs, and warranty policies and business practices. Product warranty obligations are reviewed and adjusted quarterly to ensure that accruals are adequate to meet expected future warranty obligations. 59 We accrue cost of product recalls and other potential corrective actions based on management’s estimate of when it is probable that a liability has been incurred and the amount can be reasonably estimated, which occurs when management commits to either a corrective action plan or quality improvement plan, or when required by regulatory requirements. These costs are recognized in Connected Fitness Products Cost of revenue, which may include the cost of the development of the product being replaced, logistics costs, and other related costs such as product scrap cost, inventory write-down and cancellation of any supplier commitments. The accrued cost is based on management’s estimate of the cost to repair each affected product and the estimated number of products to be repaired based on actions taken by the impacted customers. Estimating future product warranty and recall related provisions is highly subjective and requires significant management judgment. Based on information that is currently available, management believes that the product warranty and recall related provisions are adequate, however it is possible that substantial additional charges may be required in future periods based on new information, changes in facts and circumstances, and actions we may commit to or be required to undertake. Music Royalty Fees To secure the rights to use music in our content, we enter into agreements to obtain licenses from rights holders such as performing rights organizations, record labels, music publishers, collecting societies, artists and songwriters, and other copyright owners (or their agents). Music royalty fees are calculated using negotiated rates in accordance with our license agreements or estimates of those rates where rights holders are not identified, which may involve significant judgment, assumptions, and estimates in addition to a significant volume of data to be processed and analyzed. Certain of our license agreements contain payment guarantees. We rely on estimates to forecast whether guaranteed payments against royalties will be fully recouped against our actual content costs incurred over the term of the license agreement. To the extent that our content costs do not exceed such guaranteed payments, incremental music royalty fees may need to be expensed over the period we determine the guaranteed payment is no longer deemed recoverable. The process of obtaining licenses involves identifying and negotiating with many rights holders, some of whom are unknown, or difficult to identify, or for whom we may have conflicting ownership information, and this can generate a myriad of complex and evolving legal issues across many jurisdictions, including open questions of law as to when and whether particular licenses are needed. As such, we may be required to estimate music royalty fees based on comparable contractual rates and our best estimate of usage of a licensor. These estimates are subject to change based on several factors, including new observable data from license negotiations and the execution of new license agreements. Some of our license agreements also include so-called “most-favored nations” provisions, which require that certain terms (including material financial terms) are no less favorable than those provided to any similarly situated licensor. If agreements are amended or new agreements are entered into on more favorable terms with another licensor, these most-favored nations provisions could cause our payment or other obligations to escalate substantially. If a license agreement contains a most-favored nations provision, a reserve is established based on the “most-favored” rates within the market.