Peloton spins in a surprising new direction as stock plummets

Peloton has had a tough year. 

In 2025, the company revealed it would overhaul its equipment for the AI era. One of the core components of the plan involved existing Peloton owners attaching cameras to their bikes and treadmills that would allow them to integrate with the new software updates. 

But in the lead-up to the release, the company realized its plan would involve too many alterations to the legacy machines, making it impractical to include them in the plan.

So instead, Peloton released a slew of five new machines with major price increases. 

Customers and investors weren’t impressed with the new machines or the failed plans to include legacy products, and, according to Bloomberg, the company’s stock has plummeted by 60% since the October announcement. 

Now, the company is spinning off in a new direction in hopes of turning its fortunes around.

Peloton is entering the commercial market

Up until this point, Peloton (PTON) had largely made its machines for the home gym. But earlier this month, the company announced it would be pivoting into the commercial space.

“I’ve had the chance of speaking with the CEOs of a number of gyms, gym operators or big-box operators over the last year,” Peloton CEO Peter Stern told CNBC.

“The one brand their members asked for, and therefore that they are asking for it, ‘Find a way to get me Peloton equipment.’”

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Peloton does have an existing commercial unit, which it launched in 2025 after acquiring equipment maker Percor. However, the bikes, treadmills, and rowing machines made by that unit have thus far only been placed in hotel chains including Hilton and Hyatt. 

With this new move, Peloton is positioning itself to appear in gym chains across the country. Through its partnership with Percor, the company has access to a massive commercial distribution network that spans nearly 60 countries.

Stern did not provide additional details about the expansion, such as which gyms are interested in purchasing the equipment or what price points these heavy-duty versions would land at. He did, however, tell CNBC that he expects them to be priced “competitively.” 

Peloton plans to pivot into the commercial space.

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Peloton has been facing declining revenues

During the company’s Q2 FY2026 earnings call in February, Peloton reported a 3% decline in total revenues year over year. A portion of that decline was explained by fewer equipment sales to existing members and delayed deliveries. 

Revenues weren’t Peloton’s only challenge over the past few months. Other notable changes include the following.

A 7% year-over-year decline in paid memberships at the end of Q2 FY2026An average monthly paid Connected Fitness subscription churn of 1.9%, up 0.5% year over yearA 4% drop, or $9 million decrease, in year-over-year Connected Fitness products revenueSubscription revenue declines of 2% or $8 million, year over yearA drop in full-year revenue expectations to $2.4 billion
Source: Peloton

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And in yet another sign that the company has hit some speed bumps, Peloton laid off 11% of its workforce in January 2026.

“As part of our previously announced $100 million cost savings plan, we shared that we’d be optimizing indirect spend, reshaping our teams and, in some cases, the locations where we work,” a company spokesperson said in a statement.

“Our recent actions evolve our operational footprint and create efficiencies that enable us to continue investing in areas that support our return to growth.”

Gym memberships are on the rise

Peloton’s movement into the commercial space may not be a bad gamble.

According to the Health & Fitness Association’s 2025 US Health & Fitness Consumer Report, gyms, studios, and other fitness facilities served a record 96 million customers in 2024. Of those regular gymgoers, some 43.4% of members reported the treadmill was their most-used piece of equipment, making it the most popular modality used in these spaces.

While Peloton may face some resistance from gyms that would prefer to promote their own, in-house classes and programs, Stern told CNBC he isn’t all that worried about it.

“I need to leave how gyms react to that up to them,” he told the outlet. “But if you look at a typical gym floor, they’ve got Bikes, Treads and lots of other equipment that’s out there. We’re just now giving them a better experience for customers on those Bikes and on those Treads.”

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