Peloton stock climbs 25% as the company speeds into subscriptions

Spinning up changes… Peloton stock spiked yesterday like your heart rate during a Backstreet Boys ride. Shares of the embattled spin-bike maker popped as much as 25% yesterday after it beat earnings expectations and announced a new CEO, though it did give a muted holiday forecast. Peter Stern, the president of Ford’s subscription unit and a cofounder of Apple Fitness+, is set to take the helm at Peloton in January.

• Worked out: Though the company’s quarterly results weren’t great, investors sent the stock soaring after hearing about the new boss and a shrinking loss.

• The stats: Peloton’s revenue fell from the previous quarter and was also down year over year, though its net loss shrank significantly to $1M.

• Peloton’s stock is still down 95% from its pandemic peak, in early 2021, when gyms were closed and stimulus-flush folks were scooping up bikes to sweat on at home.

Hard pivot… Peloton’s hopeful that Stern can spin it in the right direction as the fitness-tech company leans into subs over hardware. Its subscription revenue is now more than double its sales from fitness equipment. In 2022, Peloton announced it would stop making its own hardware and outsource to a Taiwanese manufacturer to save money on pricey US production. By that point, it had over $1B worth of unsold bikes and treads sitting in storage as pandemic demand dropped off. Its pivot to subscription revenue (think: classes with energetic instructors) has helped it shrink losses, though its subs fell last quarter to 6.2M.