Peloton Interactive Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Youssef Squali - Truist Securities - Analyst : Thank you very much and good morning, all. So Peter, you've been on the job for five months now. I'd love to get your take on your progress on key initiatives to-date relative to your initial expectations, where are you running ahead, where are you may be trailing a bit, and how that informs your view on returning to revenue growth? And second, on changes to the management team and you've touched on this in your prepared remarks a bit, but can you elaborate a little more on the rationale of these moves now? And the type of executive profiles you're looking for to fill these vacancies? Thanks a lot.

Question: Youssef Squali - Truist Securities - Analyst : Very helpful. Thanks, Peter.

Question: Arpine Kocharian - UBS - Analyst : Hi. Thank you so much for taking my questions and good morning. Peter, would it be possible to give us a sense of what overall impact on your business you're seeing from kind of broader consumer slowdown and macro fears? I guess what kind of macro scenarios are factored in to your Q4 guidance, which is actually going up by about $3 million, by my calculation, in terms of EBITDA from what you're implying before? Have you actually seen any slowdown in any segments? What are you watching as far as kind of broader consumer health? And then I have a quick follow-up.

Question: Arpine Kocharian - UBS - Analyst : That is actually super helpful. Thank you. And then a quick follow-up. Peter, you highlighted pricing and condition of kind of cost discipline in your strategic pillars on how you see returning to growth. Could you maybe expand on that a little bit? It seemed like the initial strategy was sort of super serving the consumer to protect churn and maybe then focus on pricing, while you kind of continue to further reduce OpEx. If you could just elaborate on that a little bit more would be very helpful.

Question: Arpine Kocharian - UBS - Analyst : Thank you very much.

Question: Doug Anmuth - JPMorgan - Analyst : Thanks so much for taking the questions. I have two. First on the brand, the brand has been through a lot of change over the past several years and involved a number of CMO changes as well. I'm just curious how you think about improving the marketing strategy overall. And a few thoughts, I know, obviously, the role you're still trying to fill. And secondly, (technical difficulty) puts and takes around fiscal '26 free cash flow, just following in the big move in '25? Thanks.

Question: Doug Anmuth - JPMorgan - Analyst : Yes, absolutely. Sorry. It's early, but looking for some of the puts and takes around fiscal '26 free cash flow, just from a big move up in '25.

Question: Doug Anmuth - JPMorgan - Analyst : Got it. Meaningful positive free cash flow for fiscal '26. Thank you so much. Appreciate it.

Question: Brian Nagel - Oppenheimer & Co., Inc. - Analyst : Good morning. Thanks for taking my questions. So the first question I want to ask, Peter, I mean, longer-term in nature and looking at your results today and over the last several quarters, you've done a great job of kind of stabilizing the business and controlling cost. But how are you thinking about or how should we think about the return to positive top line trends and the sort of building blocks to get in there?

Question: Brian Nagel - Oppenheimer & Co., Inc. - Analyst : That's very helpful. I appreciate it. And then my just my follow-up question on the balance sheet, again, you're generating sustained free cash flow and we've seen the leverage ratio has come down. So as we think about the balance sheet going forward, do you think there will be more kind of a natural deleveraging or are you expecting to take more aggressive near-term steps?

Question: Brian Nagel - Oppenheimer & Co., Inc. - Analyst : Very helpfu. l appreciate it. Thank you.

Question: Simeon Siegel - BMO Capital Markets - Analyst : Thanks. I was kind of hoping James to introduce me as (inaudible) from New York. But I'll take it. Good morning, everyone. Nice progress on improving the health of the business, Peter. So if I'm looking at this, your members, I think, the total members are declining faster than the cash, the (inaudible) paid subs, those two metrics you gave. Do you think you're seeing less (inaudible) members peeling off and the engagement and strength of the remaining users, I guess, are inherently stronger? And if so, what would the implications be on churn and maybe potential ability to take price, anything else? Just curious if you're ending up with a smaller but stronger user base. And if so, what initiatives that might empower you to implement? And Liz, at the used equipment activation fees, can you quantify that at all? If I'm looking at this correctly, I think that paid CF subs are up slightly quarter-over-quarter, but the sub revenue was down slightly. So just trying to think through what other moving pieces might be in that sub revenue line and maybe into to the app decline, just anything else we should keep in mind? Thanks, guys.

Question: Simeon Siegel - BMO Capital Markets - Analyst : Sounds good. Best of luck for the rest of year.