NEW YORK, September 23 — Peloton Interactive is releasing its cheapest treadmill yet at $2,995, a strategic bet on running as the connected-fitness company seeks a financial turnaround. The new machine undercuts Peloton’s existing lineup. The original Tread launched in 2018 at $4,295, and the Tread+ followed in 2020 at the same $4,295 price.
That makes the new model the lowest-priced treadmill Peloton has offered. The bottom line for investors: this is a volume play, not a margin play.
Peloton is betting that a lower entry price pulls in runners who balked at a four-figure-plus machine, and that the recurring subscription revenue follows.
A recall that still shadows the treadmill business
The Tread+ was recalled in May 2021 after reports of injuries and the death of a child. In 2023, Peloton agreed to pay a $19.065 million civil penalty to settle US Consumer Product Safety Commission charges over that recall. Any treadmill relaunch carries that history with it.
The company’s treadmill push comes as Peloton has struggled financially since its pandemic-era surge. Peloton went public in September 2019 on the Nasdaq under the ticker PTON.
Its stock peaked at an all-time high of $171.09 in January 2021, then fell sharply as demand for at-home fitness waned. In fiscal year 2022, Peloton reported a net loss of $2.8 billion. Cost-cutting followed, including layoffs and leadership changes.
Barry McCarthy became CEO in February 2022, succeeding founder John Foley, and stepped down in May 2024.
By the numbers
Revenue for fiscal year 2024, which ended June 30, 2024, came in at $1.7 billion, down from $2.8 billion in fiscal year 2023. In its fiscal fourth quarter of 2024, Peloton reported a net loss of $30.5 million. The company is scheduled to report its fiscal first quarter 2025 earnings in November 2024.
Its stock closed at $8.47 on October 4, 2024. Peloton was founded in 2012 and is headquartered in New York City.
Its subscription service, which includes access to live and on-demand classes, costs $44 per month for the all-access membership. The company has partnerships with various music labels and celebrities to enhance its content. The global treadmill market was valued at approximately $1.5 billion in 2023 and is projected to grow.
Peloton’s competitors in the connected fitness space include Echelon, NordicTrack, and Hydrow. The new treadmill is expected to begin shipping in early 2025.
Peloton has not announced a specific release date beyond that window. What to watch next: the November 2024 earnings report, and whether a cheaper treadmill moves unit volume enough to matter against a business that lost $30.5 million in its most recent quarter.
