Peloton Interactive, Inc. (PTON): Business Model Canvas [Dec-2025 Updated]

You're looking at Peloton Interactive, Inc. right now, and honestly, the story isn't just about the shiny hardware anymore; it's about survival and a sharp pivot. After years of aggressive growth, the focus for the fiscal year ending in 2025 has clearly shifted to making the subscription model stick while aggressively cutting costs-they slashed operating expenses by 25% year-over-year in FY25. With 2.88 million connected fitness subscribers and a cash pile of $1,040 million at Q4 FY25, the question is whether this multi-channel strategy, pushing through partners like Costco and Amazon, can finally deliver sustainable profit. Dive in below to see the nine building blocks of the new Peloton Interactive, Inc. business model, mapped against their latest numbers.

Peloton Interactive, Inc. (PTON) - Canvas Business Model: Key Partnerships

You're looking at the partnerships Peloton Interactive, Inc. (PTON) relied on to navigate the fiscal year (FY) ending in 2025. These alliances were critical as the company worked to stabilize its hardware sales, which saw revenue drop to $817.1 million, a 17.6% year-over-year decrease, even as total revenue settled at $2.49 billion for FY2025.

Retail Distribution with Costco, Amazon, and Dick's Sporting Goods

Peloton Interactive, Inc. continued to lean on third-party retail to get its hardware in front of more eyes, especially as it works to grow beyond its direct-to-consumer model. This strategy is key when you consider the company ended FY2025 with 2.8 million Connected Fitness subscriptions, down from 3.0 million the prior year.

The seasonal retail push with Costco was a notable event, offering an exclusive bundle for Costco members. The All-Access Membership, which is required for content access, remained at $44 USD/month.

Here's a quick look at the specific pricing and scope for the Costco partnership, which ran from November 1, 2024, through February 15, 2025:

Also, the relationship with Dick's Sporting Goods remains a core part of this strategy, with Peloton hardware-including the original Bike, Bike+, Tread, and Guide-available in branded fitness shops inside more than 100 DICK'S U.S. retail locations and on dicks.com. Amazon is also part of this broader retail expansion, though specific 2025 sales metrics weren't immediately clear.

Manufacturing and Supply Chain Partners like Precor and Tonic Fitness Technology

The foundation of Peloton Interactive, Inc.'s hardware production relies heavily on its acquisitions, which provide domestic capacity and global reach. The acquisition of Precor brought significant U.S. manufacturing muscle, adding 625,000 square feet of capacity across facilities in North Carolina and Washington. This helps control the process from design to ship.

Tonic Fitness Technology plants, acquired earlier, remain key, operating out of Taiwan. The improved Connected Fitness Products Gross Margin of 13.6% in FY25 shows that managing these supply chain partnerships, alongside a 17.6% drop in that product line's revenue, is a tight balancing act.

Truemed for HSA/FSA Eligibility, Broadening Payment Options for Equipment

To counteract the hardware sales decline, the partnership with Truemed became a vital tool for accessibility. This alliance lets qualified U.S. customers use pre-tax Health Savings Account (HSA) or Flexible Spending Account (FSA) dollars for applicable equipment, including the Bike, Bike+, Tread, Tread+, and Row. Honestly, this can translate to savings of up to 40% on the purchase price for the consumer.

This move directly addresses the cost barrier for entry. The process involves selecting a "pay with HSA/FSA funds" option at checkout and redirecting to the Truemed site to secure a Letter of Medical Necessity (LMN) if required.

Content Collaborations, like the recent Hyrox Branded Classes

To boost engagement-which saw average monthly workout time per Paid Connected Fitness Subscription increase 4% year-over-year in Q4 FY2025-Peloton Interactive, Inc. deepened its content alliances. The partnership with HYROX, announced in July 2025, positioned Peloton as its "Official Digital Training Partner."

This collaboration immediately resulted in a curated content offering:

• The initial Peloton x Hyrox Collection launched with 43 on-demand classes.
• The collection covers training for all race formats: Open, Pro, Doubles, and Relay.
• It includes modalities like interval runs, rowing workouts, and strength classes targeting race-specific movements.
• Instructors like Robin Arzón, Andy Speer, Logan Aldridge, and Marcel Maurer are involved in delivering this performance-focused content.

Technology Partners for Hardware Innovation and AI Integration

While specific names for 2025 AI integration partners weren't detailed in the financial reports, the focus on innovation is clear from the operational expense structure. Research and Development expenses were reduced by 23% in FY2025 as part of a broader restructuring plan targeting at least $100 million in run-rate savings by the end of FY2026. This suggests a strategic streamlining of R&D efforts, likely focusing on leveraging existing tech assets and key external software providers to enhance the platform experience, rather than large, upfront hardware R&D partnerships.

Finance: draft 13-week cash view by Friday.

Peloton Interactive, Inc. (PTON) - Canvas Business Model: Key Activities

You're looking at the core engine driving Peloton Interactive, Inc.'s strategy as of late 2025. This is where the company spends its time and capital to keep the flywheel turning, especially after the major strategic pivot under new leadership. Honestly, the focus has clearly shifted from pure hardware volume to ecosystem value and cost discipline.

Producing high-quality, live and on-demand fitness content daily.

The content engine remains central, but it's expanding its scope beyond just cycling and running. Peloton Interactive is deepening its commitment to whole-person wellness, which means more than just the next ride.

• Average monthly workout time per Paid Connected Fitness Subscription increased by 4% year-over-year in Q4 FY2025.
• Two million members are now actively strength training on the platform as of Q4 2025.
• Key content expansions include integrating offerings from HSS, Respin Health, and HYROX.
• The company acquired Breathwrk to bring guided breathwork sessions to members.

Hardware innovation and product refresh, including Peloton IQ features.

The major Key Activity here is the complete overhaul of the hardware lineup, launched in October 2025, designed to support cross-training and target commercial operators. This refresh is tightly coupled with the rollout of the AI-powered coaching layer.

The new Peloton Cross Training Series refreshes five devices: the Cross Training Bike, Bike+, Tread, Tread+, and Row+. The premium 'plus' models unlock advanced features via Peloton IQ, which uses AI and computer vision.

The new Pro Series lineup-Tread+ Pro, Bike+ Pro, and Row+ Pro-is almost exclusively aimed at commercial use, such as hotels and corporate gyms. This is a significant shift in distribution focus.

Optimizing the global supply chain and logistics to reduce costs.

Cost management has been a top priority, directly impacting profitability and cash flow. The company is aggressively rightsizing its cost structure, which includes supply chain efficiencies and indirect spend renegotiations.

Here's the quick math on the cost discipline:

• Total operating expenses in Q4 FY2025 were $299 million, a 20% decrease year-over-year.
• The company exceeded its target to achieve at least $200 million of run-rate cost savings by the end of FY2025.
• Connected Fitness Products Gross Margin improved by 900 basis points to 17.3% in Q4 FY2025.
• Net Debt decreased by 43% year-over-year to $459 million as of Q4 FY2025.
• A new cost restructuring plan aims to achieve at least another $100 million in run-rate savings by the end of FY2026.

Managing the digital platform and cloud infrastructure for 24/7 service.

Keeping the digital platform stable and growing the subscription base is crucial, as Subscription Revenue was $408.3 million in Q4 FY2025. The high-margin nature of this segment drives much of the recent profitability.

• Ending Paid App Subscriptions for Q4 FY2025 stood at 552 thousand.
• Subscription Gross Margin was reported at 71.9% in Q4 FY2025 (or 69.2% excluding a one-time benefit).
• The company generated $328.1 million in Total Gross Profit in Q4, with a Total Gross Margin of 54.1%.

Refining the multi-channel distribution strategy and retail footprint.

The distribution strategy is actively being refined to focus on smaller, more efficient physical touchpoints and expanding the preowned equipment marketplace. This is a direct action taken to align the cost structure with current business size.

The retail footprint has seen a significant reduction in large-format stores:

• The larger retail showroom portfolio was reduced from 37 to 13 by the end of Q4 FY2025.
• The company plans to expand its micro-stores from one to 10 locations.
• The company is also expanding its preowned secondary marketplace.

Finance: draft 13-week cash view by Friday.

Peloton Interactive, Inc. (PTON) - Canvas Business Model: Key Resources

The Key Resources for Peloton Interactive, Inc. as of late 2025 center on its integrated hardware, software, and content ecosystem.

The physical assets include the proprietary connected fitness equipment lineup:

• Peloton Bike
• Peloton Bike+
• Peloton Tread
• Peloton Tread+
• Peloton Guide
• Peloton Row

The financial strength supporting these resources included Cash and Cash Equivalents of $1,040 million as of the end of Q4 FY25.

The content and talent form a critical, non-physical resource, driven by world-class, celebrity fitness instructors who fuel member engagement.

The digital platform and technology stack underpin the recurring revenue model, featuring AI-driven personalization capabilities.

The brand equity and community are substantial, evidenced by the active user base metrics as of Q4 FY25:

Engagement levels remain a key indicator of resource value. For instance, the average monthly workout time per Paid Connected Fitness Subscription increased 4% year-over-year in Q4 of FY25.

The subscription segment's profitability highlights the value of the content and platform:

• Subscription Gross Margin in Q4 FY25 was 69.2% (excluding one-time adjustments).
• Total Operating Expenses decreased by 20% year-over-year in Q4 FY25.

The equity structure also represents a resource base, with 391,926,269 shares of Class A common stock outstanding as of July 30, 2025.

Finance: draft 13-week cash view by Friday.

Peloton Interactive, Inc. (PTON) - Canvas Business Model: Value Propositions

You're looking at what keeps members coming back to Peloton Interactive, Inc.'s ecosystem, even as the market shifts. The value proposition centers on delivering a premium, integrated fitness and wellness experience that bridges the gap between home convenience and studio quality. This is what Peloton is selling as of late 2025.

Immersive, studio-quality fitness experience at home is the foundation. This is supported by the engagement metrics showing that members are deeply involved. In the fourth quarter of fiscal year 2025, Peloton ended with 2.80 million Paid Connected Fitness Subscriptions and 552 thousand Ending Paid App Subscriptions. The average monthly workout time per Paid Connected Fitness Subscription actually increased by 4% year-over-year in Q4 2025, showing continued high usage of the core offering.

The content offering remains a core draw, which includes access to a vast library of over 25,000 on-demand classes. This content library is continuously updated, with new content dropping daily across modalities. Furthermore, the company is actively managing this library, with live classes now loading into the on-demand catalog in three distinct batches per day.

The social element drives stickiness. The platform offers a strong social connection via the live Leaderboard and community features. You see this in the launch of features like Team Feed and Community Teams, where members who joined teams showed higher engagement and connected with other members at a faster pace than before joining. This network effect helps keep churn in check; the average net monthly Paid Connected Fitness Subscription churn in Q4 2025 was 1.8%.

Peloton Interactive, Inc. is executing on its total wellness expansion, moving beyond just cardio. This is evidenced by the significant member participation in non-cardio content during Q4 2025:

• 2 million Members engaged in Strength content.
• 1.2 million Members engaged in Sleep & Recovery content.
• 400,000 Members engaged in Mental Wellbeing content.

Finally, the hardware quality is validated by customer sentiment. You can see this in the high-quality hardware with a superior Net Promoter Score (NPS) above 70. Specifically, in Q3 2025, all Cardio hardware products achieved an NPS above 70, with the Tread exceeding an NPS of 80 (on a scale of -100 to 100). This high score is a key differentiator for the premium equipment line, which generated $198.6 million in revenue in Q4 2025.

Here's a quick look at how the subscription value underpins the financial structure as of Q4 2025:

The company is also demonstrating operational discipline that reinforces the long-term value. Peloton generated over $320 million in GAAP Net Cash Provided by Operating Activities for the full fiscal year 2025, and its Net Debt decreased by 43% to $459 million year-over-year. To be fair, the retail footprint has shrunk significantly, down to 13 showrooms from 37 at the end of fiscal 2025, which suggests a strategic shift away from high-cost physical presence toward digital value delivery.

Peloton Interactive, Inc. (PTON) - Canvas Business Model: Customer Relationships

You're looking at how Peloton Interactive, Inc. keeps its members engaged and loyal as of late 2025. It's all about high-touch digital service and community reinforcement.

High-touch, community-driven engagement through live classes remains a core pillar. Over 50 instructors run live classes each week, offering real-time motivation. This community aspect is reinforced through features like the Teams feature, which saw 70,000 teams created as of Q3 FY25. For major events, engagement spikes; over 50,000 members participated live in the Thanksgiving Day Turkey Burn.

Automated, personalized content recommendations are becoming more sophisticated. The Pace Targets feature for the Tread, for instance, is now used by over 80% of Tread members as of Q3 FY25. Furthermore, the Personalized Plans feature, which rolled out in January 2025, was started by nearly 500,000 members by the end of Q3 FY25.

Member satisfaction metrics show tangible improvement from prior periods. Member support satisfaction (MSAT) reached 4.3/5 in Q2 FY25, a significant jump from 3.1 in Q2 FY24. Member loyalty, measured by Net Promoter Scores (NPS), is also strong, with all Bike and Tread products exceeding 70 in Q2.

Self-service and peer support are integrated into the platform experience. The digital-only offering remains relevant, with Paid App subscriptions totaling 573,000 at the end of Q3 FY25. New digital offerings, like the Strength+ app, reached over 220,000 monthly active users in Q3.

Loyalty is directly tied to cross-discipline engagement, which is a key lever to reduce churn. Members who engage with two or more workout disciplines per month see churn rates that are 60% lower than those engaging with only one discipline. This focus on variety is evident in usage: over 2 million unique Members completed a Strength workout in Q2 FY25, contributing 735 million minutes of total workout time. The volume of Strength workouts taken in Q2 equaled 75% of the total number of Cycling workouts taken.

Here's a quick look at how key retention and engagement metrics stacked up across recent quarters:

The focus on driving engagement across different modalities is a direct strategy to secure the recurring revenue stream. If onboarding takes 14+ days, churn risk rises, but strong satisfaction scores suggest the existing base is sticky.

Peloton Interactive, Inc. (PTON) - Canvas Business Model: Channels

You're looking at how Peloton Interactive, Inc. gets its products and services into the hands of its members as of late 2025. The strategy is clearly shifting, moving away from a large physical footprint toward a more distributed, capital-light approach. This is all about meeting the customer where they are, whether that's online, in a small boutique, or even at work.

The primary engine remains Direct-to-Consumer (DTC) via the Peloton website and app. This is where the majority of the business is still transacted, especially for subscriptions. For the three months ended September 30, 2025, North America, which is heavily reliant on this direct channel, contributed $494.4 million to total revenue. The e-commerce platform on the desktop and mobile websites provides the core brand experience for hardware sales and subscription management.

The company is actively reshaping its physical presence, moving toward smaller formats. The plan for owned retail showrooms is a story of contraction followed by a targeted, smaller-scale expansion. This is a clear pivot from the past.

Third-party retail partnerships are becoming a more significant part of the hardware distribution mix, helping to broaden geographic reach without the overhead of owned stores. This is a key part of the strategy to 'Meet members anywhere'.

• The brand expanded its reach across 46 states through a new retail partnership with Johnson Fitness & Wellness.
• The company is shifting focus from large, traditional retail stores to smaller boutiques along mall walkways.
• Analyst consensus suggests future growth depends partly on expansion through third-party retailers like Amazon.

The Peloton Repowered marketplace for certified used equipment is a newer, strategic channel designed to capture value from the secondary market and improve subscriber retention. This initiative went national in July 2025.

The B2B segment, encompassing corporate wellness and hospitality partnerships, serves as a channel for both hardware placement and subscription acquisition. This segment is supported by the Precor business line.

• The Corporate Wellness benefit reported high retention, with over 93% of clients renewing year over year (data from 2023, but cited as part of the ongoing B2B structure).
• In the 12 months leading up to August 2023, there were over 7.5 million rides taken on Peloton Bikes in commercial settings globally.
• In hospitality, over 75% of surveyed Peloton Members are more likely to choose a hotel if it features Peloton equipment.
• The commercial segment is gaining momentum in hospitality and residential markets, creating new revenue opportunities.

The company is focused on improving unit economics across all these sales channels to ensure profitable growth. Finance: draft 13-week cash view by Friday.

Peloton Interactive, Inc. (PTON) - Canvas Business Model: Customer Segments

You're looking at the core audience for Peloton Interactive, Inc. as of late 2025. This group is primarily defined by their capacity and desire for premium, at-home fitness solutions.

The base of the Connected Fitness ecosystem is the dedicated user, often characterized as affluent and time-constrained, seeking high-quality, on-demand instruction. The total community size, based on the fiscal year 2025 annual report, hovered around 6 million members across all offerings.

The most critical segment is the paying hardware owner, whose commitment fuels the platform. Here's a snapshot of the subscription base metrics around the end of fiscal year 2025:

The geographic segmentation shows a heavy reliance on the domestic market, though international expansion is a clear strategic focus. For the three months ended September 30, 2025, North America generated $494.4 million in total revenue, while international markets contributed $56.5 million. To be fair, the United States alone represented 86% of total revenue for that same quarter. International revenue for the full fiscal year 2025 was reported at $216.5M.

Peloton Interactive, Inc. is also targeting growth through non-traditional channels, which includes commercial entities. This segment is being bolstered by the Precor acquisition. You can see this effort in action through specific pilots:

• Pilot program with the YMCA of Metropolitan Chicago included 100 Bike+ and Rows units.
• This pilot spanned 15 locations across the city.

The company's focus on expanding its reach beyond the core home user is evident in these commercial tests. Finance: draft 13-week cash view by Friday.

Peloton Interactive, Inc. (PTON) - Canvas Business Model: Cost Structure

You're looking at the engine room of Peloton Interactive, Inc., and honestly, the costs here show where the big bets are placed. A major component is the high fixed cost tied to talent and content creation. Think about the on-demand library; that requires continuous investment in production studios, equipment, and, critically, the instructors themselves. While Peloton Interactive, Inc. doesn't publish a line item for 'Instructor Salaries,' we know this is a key talent cost. For context, historical reports suggested senior instructors could command salaries approaching $500,000 annually, plus equity awards, and earn between $500 to $750 per live class taught. That's a significant, relatively fixed commitment to maintain the content quality you expect.

Also significant are the costs associated with the physical goods-hardware manufacturing, logistics, and warehousing. These are variable but substantial. We saw the impact of managing this in fiscal year 2025 (FY25), where the cost of revenue for Connected Fitness Products decreased by $237.1 million year-over-year, which helped drive the Connected Fitness Products Gross Margin up to 17.3% in Q4 FY25. This reduction points directly to efforts to streamline the supply chain and inventory management, which are inherently costly areas for a hardware-centric business.

To give you a clearer picture of the operating expense profile as of the end of FY25, here's the breakdown from the fourth quarter:

You'll notice the company made serious headway in trimming the fat across the board. For the full fiscal year 2025, Peloton Interactive, Inc. reported that operating expenses were reduced by 25% year-over-year. This was part of a plan that successfully delivered at least $200 million of annualized run-rate cost savings by the end of FY25. Still, the focus on efficiency continues; the current cost restructuring plan targets achieving at least $100 million of additional run-rate savings by the end of fiscal year 2026 (FY26). This involves reducing the global team, paring back indirect spend, and relocating some work.

The digital platform itself carries its own set of costs, primarily technology development and cloud service fees. While not explicitly itemized separately from the operating expenses table above, the Research and Development (R&D) expense in Q4 FY25 was $55.8 million, a 20% decrease year-over-year. This R&D spend covers the ongoing development of the software, AI features like Peloton IQ, and the infrastructure needed to stream classes globally, which includes significant cloud hosting and data processing fees to support millions of active users.

Peloton Interactive, Inc. (PTON) - Canvas Business Model: Revenue Streams

You're looking at how Peloton Interactive, Inc. actually brings in the money as of late 2025. It's a mix of the recurring stuff and the one-time hardware sales, and they've added a new fee to capture value from the used market.

Here's the quick math on the revenue breakdown for the fourth quarter of fiscal year 2025 (Q4 FY25):

That total revenue for Q4 FY25 of $606.9 million came in above their implied guidance range of $571 million to $586 million, which is a solid beat driven by hardware sales.

For the full fiscal year 2025, the company's guidance for Total Revenue was in the range of $2.43 - $2.48 billion.

The revenue streams are clearly segmented, but you need to watch the nuances in the subscription side:

• Subscription Revenue, which was $408.3 million in Q4 FY25, is the core recurring engine.
• Connected Fitness Products Revenue (hardware sales), which was $198.6 million in Q4 FY25, is the transactional side.

The Used Equipment Activation Fee Revenue is a newer component you need to track. This stream was introduced in Q1 FY25. In Q4 FY25, this new fee revenue partly offset the year-over-year decrease in overall Subscription Revenue.

Peloton Interactive, Inc. also generates revenue from other sources, though specific figures for the full year aren't always broken out separately in the top-line summary. These include:

• Used Equipment Activation Fee Revenue (new stream in FY25).
• Apparel and accessories sales.

The Subscription Revenue in Q4 FY25 decreased year-over-year by 5%, or $23.2 million, due to lower Paid Connected Fitness Subscriptions and lower Paid App Subscriptions, but that Used Equipment Activation Fee Revenue provided a partial offset.

Finance: draft Q1 FY26 revenue projection by next Tuesday.