Peloton's Q3 2025: Unpacking Contradictions in Member Retention, AI Strategy, and Global Expansion

Member churn and retention strategy, AI integration and strategy, hardware and subscription pricing strategy, international expansion strategy, marketing strategy and customer acquisition costs are the key contradictions discussed in Peloton's latest 2025Q3 earnings call.



Member Growth and Retention:
- Peloton reported a slight increase in Paid Connected Fitness subscriptions, reaching 2.88 million, marking a net increase of 5,000 in the quarter.
- The growth was driven by seasonally higher gross additions and lower churn, supported by marketing efforts and improved member support.

Cost Reduction and Profitability:
- Peloton's total operating expenses decreased by 23% year-over-year, driven by a $105 million reduction in restructuring and impairment expenses.
- The reduction in costs is part of a $200 million annualized run rate cost savings plan, enhancing profitability.

AI Integration and Member Engagement:
- Peloton launched AI-powered subtitles in English, Spanish, and German, translating 100 classes per day, expanding its content accessibility.
- The integration of AI is enhancing member engagement, with a 5% year-over-year growth in running and 11% in walking workouts.

International Expansion and Cost Efficiency:
- The company grew Paid Connected Fitness subscriptions year-over-year in international markets, with a focus on cost-effective content translation.
- An AI-powered translation system is set to streamline content production and distribution, supporting international growth.

Strategic Leadership Changes:
- Peloton appointed Charles Kirol as COO and designated Dion Sanders as Chief Commercial Officer to drive operational efficiency and expand brand presence.
- These changes are part of a strategy to improve supply chain agility and accelerate growth in gyms, retail, and other channels.