Peloton’s Shares Surge as Apple Fitness+ Co-Founder is Named New CEO
Peloton Interactive Inc.’s stock surged by 24% following its fiscal 2025 first-quarter results, surpassing expectations and introducing a new leader from the hardware/software industry. Peter Stern, the co-founder of Apple Fitness+ and with previous experience at Ford Motor Co. and Time Warner Cable, will assume the role of chief executive starting January 1.
Stern, currently the president of Ford Integrated Services and a former executive at Apple and Time Warner Cable, brings over two decades of expertise in hardware, software, services, and content integration. Peloton co-CEO Karen Boone praised Stern’s leadership and strategic acumen, highlighting his success in scaling subscription services, including Apple Fitness+.
In the quarter ending September 30, New York-based Peloton reported a breakeven per-share result, a significant improvement from the previous year’s loss. Despite a slight revenue decline, the company outperformed analyst expectations in both revenue and profitability metrics.
The company faced challenges as the initial surge in demand during the pandemic waned, compounded by supply chain disruptions and product recalls. To address these issues, Peloton is restructuring its operations to achieve over $200 million in cost savings by the end of fiscal 2025.
Peloton is focused on enhancing its customer acquisition strategy by boosting connected fitness gross margins and adjusting product pricing in international markets. The company has already seen positive results in Germany following operational changes, indicating a potential model for expansion into other global markets.
In North America, Peloton raised prices for certain products, reduced hardware promotions, and optimized marketing spend. The company plans to test new retail concepts and attract a more diverse customer base, aiming to capitalize on its strong subscriber growth and robust revenue projections for the upcoming quarters.
Looking ahead, Peloton anticipates second-quarter revenue to be between $640 million and $660 million, with full-year revenue expected to range from $2.4 billion to $2.5 billion. The company remains committed to its subscriber growth targets, despite adjustments in paid app subscriptions guidance.
Peloton’s stock performance has been positive year-to-date, although it lags behind the broader market index. As the company navigates market challenges and implements strategic initiatives, investors will closely monitor its progress and financial performance in the competitive fitness technology sector.