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Peloton sells internet-connected exercise bikes and treadmills plus a monthly subscription to live and on-demand workout classes.
Peloton makes fancy exercise bikes and treadmills with big screens attached, and sells a monthly subscription that lets you take live and recorded fitness classes from your living room. The idea is that you never have to drag yourself to a gym or sit in a boring spin class — you get the energy of a studio class while sweating alone in your own home.
Here's how the money works. You pay a few thousand dollars upfront for the hardware, then a monthly fee for the content. The hardware is a low-margin grind — expensive to build, ship, and fix — while the subscription is the happy part, since software costs little to deliver. So Peloton's real bet is that once someone buys the bike, they'll keep paying the monthly fee for years. It built a cult following and, during the pandemic, went temporarily insane: stuck-at-home people bought bikes as fast as Peloton could make them, the stock soared, and the company spent big on factories and expansion. Then the gyms reopened, the demand vanished, and the party ended badly. Peloton posted huge losses, replaced its founder as CEO, and laid off thousands of people in repeated rounds to stop the bleeding. The business today is smaller and humbler: it still sells bikes and subscriptions, but now it also sells some hardware on Amazon and via other partners, offers a rental option, and counts on its app subscription to reach people who don't want a pricey machine. It faces fierce competition from Apple Fitness+, rival equipment makers, and the plain reality that many people get bored and stop using the bike.
A few things matter for whether the company turns around. One is churn — how many subscribers cancel each month — because the whole model depends on keeping them paying. Another is cash: Peloton burned through money for years and its balance sheet is a work in progress, so watch whether it can stay profitable or break even now that costs are cut. The stock is a rollercoaster that shows how quickly a beloved consumer fad can turn into a cautionary tale.
Saved answer · last researched 5 Nov 2026