The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Arpine Kocharyan - UBS AG - Analyst
: Thank you for taking my question. I was wondering if you could go over what's baked into your revenue assumptions for the year. You provided
some good context in terms of sort of current strategy of why all you're doing could increase sort of higher engagement and that can lead to better
churn and outcomes and ultimately, hopefully, stabilization in subs.
But -- and I know it may be challenging to get into pricing given there is no -- there was no profit increase announcement from Peloton in the
release. But maybe you could go over the key inputs of how you get to your revenue numbers for the year? And then I have a quick follow up for
Liz.
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AUGUST 07, 2025 / 12:30PM, PTON.OQ - Q4 2025 Peloton Interactive Inc Earnings Call
Question: Arpine Kocharyan - UBS AG - Analyst
: Thank you. That's very helpful. And then maybe this one is for you as well. Would it be possible to go over the cadence of that $100 million of Costa?
And you alluded to where they're coming from? Outside of headcount where else you see opportunities?
There's always that concern that incremental cost cutting is always more difficult when the low-hanging fruit has been harvested, but if you could
help us sort of break down the cadence of those cost saves throughout the year, it would be helpful.
Question: Arpine Kocharyan - UBS AG - Analyst
: That's very helpful. Thank you.
Question: Youssef Squali - Truist Securities - Analyst
: Congrats on that solid quarter. Maybe just a follow up to the prior question about growth. And just to be clear, so it's great to see you guys going
from having shrunk for the last several years to look in at a pivot in revenue growth starting hopefully in Q2 through the rest of the year.
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AUGUST 07, 2025 / 12:30PM, PTON.OQ - Q4 2025 Peloton Interactive Inc Earnings Call
But as we look at the business maybe longer term and maybe beyond the price adjustments that may get you there near term, can you maybe just
talk about your expectations for kind of the secular growth in this business. Is this business still at a holistic level still flat to maybe declining from
an overall market standpoint? Or do you see that having maybe improved? And then I have a quick gross margin question for Liz after that.
Question: Youssef Squali - Truist Securities - Analyst
: That's awesome. That's really helpful. And then maybe, Liz, could you please double click on your expectations for gross margin for 2026, particularly
across both subscription and hardware, I think you guys have done a really good job improving margins on the hardware business. How does that
progress throughout the year as maybe you could gain maybe some headwinds to that top line.
Question: Youssef Squali - Truist Securities - Analyst
: Super helpful. Thanks, Liz. Thanks, Peter.
Question: Curtis Nagle - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Yeah, great. Maybe just switching gears a little bit. We touched on this a bit on the call, but just thinking about capital allocation and potential refi
that you guys have demonstrated very strong EBITDA and cash flow. How are you thinking about that, I guess, in relation to the term loan?
Question: Curtis Nagle - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. Got it. Then maybe just Peter, a quick one for you, just in terms of sizing commercial opportunity. You have a new working group dedicated
to that. So in terms of how material that could be to revenue and results this year, just any thoughts there?
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AUGUST 07, 2025 / 12:30PM, PTON.OQ - Q4 2025 Peloton Interactive Inc Earnings Call
Question: Curtis Nagle - Bofa Merrill Lynch Asset Holdings Inc - Analyst
: Okay. Thank you.
Question: Brian Nagel - Oppenheimer & Co Inc - Analyst
: Thanks for taking my questions. So I want to -- I apologize, I think this will be a little repetitive, but I do want to bounce back to the revenue guidance
for the year. The question I want to ask is, as you've laid it out here in fiscal Q1, revenue is expected for your guidance to be down high-single digits
that improved through the year. So what are -- to help us understand better that guidance or the achievability of that guidance.
Can you point to anything you're seeing in the business now that gives you that confidence? And then I guess with that, how should we think
about the split, if you will, between -- any changes you plan to make on subscription pricing versus new member acquisition within that guidance.
Question: Brian Nagel - Oppenheimer & Co Inc - Analyst
: Great. I appreciate all the color. I'll leave it there. Thank you.
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