Peloton's Q2 2025 Earnings Call: Churn, Growth, and International Market Contradictions

These are the key contradictions discussed in Peloton's latest 2025Q2 earnings call, specifically including: Churn Expectations, International Market Expansion, and Market Growth Expectations:



Financial Performance and Profitability:
- Peloton reported total revenue of $674 million in Q2, exceeding expectations due to higherthan-expected sales of premium-priced Tread and Tread+ products.
- The company achieved a 12.9% Connected Fitness Products gross margin, reaching double digits for the first time in over three years.
- The improvement was driven by a favorable mix of premium products and reduced promotional discounts.

Churn and Member Retention:
- Peloton ended the quarter with 2.88 million paid connected fitness subscriptions, with an average net monthly churn rate of 1.4%.
- This low churn rate is attributed to high member satisfaction, effective member support, and improved engagement levels.

Cost Optimization and Financial Discipline:
- Peloton achieved a $140 million improvement in adjusted EBITDA year-over-year and generated $100 million in free cash flow.
- The company succeeded in reducing operating expenses by 25%, aligning with a $200 million run-rate cost savings target.

Marketing Strategy and Efficiency:
- Peloton observed a 280 basis point increase in LTV to CAC year-over-year.
- This improvement was attributed to more efficient marketing efforts, including a focus on brand marketing to increase men's subscription growth and improving media mix modeling.