Is Peloton going out of business, or is the company finally finding stability after years of financial turbulence? This question has been at the forefront for investors, customers, and fitness enthusiasts who have witnessed the brand’s dramatic rise and fall since its pandemic-fuelled boom.
During Covid-19, Peloton became one of the most recognisable names in connected fitness. Its sleek stationary bikes and treadmills, combined with engaging live-streamed classes, attracted millions of subscribers worldwide. But as society reopened, demand for expensive at-home fitness equipment collapsed. Peloton, which had expanded rapidly during the boom years, was suddenly left grappling with plummeting revenue, growing debt, and mounting speculation that it might not survive.
As of 2025, however, Peloton is not going out of business. Instead, the company is in the midst of a painful but deliberate transformation. Management has implemented aggressive cost-cutting measures, restructured debt, and shifted its focus away from hardware towards subscription-based services. While risks remain, analysts now argue that Peloton is no longer at imminent risk of bankruptcy. The more pressing question is whether it can reinvent itself successfully in an increasingly competitive fitness landscape.
Why Did Peloton’s Business Struggle After the Pandemic?
Peloton’s problems were not caused by a lack of demand during the pandemic but by the unsustainable surge it created. With gyms closed and millions confined to their homes, sales of Peloton’s bikes and treadmills skyrocketed. Investors poured money into the company, believing it would reshape the future of fitness.
The challenge arose once restrictions eased. Consumers flocked back to gyms, studios, and outdoor exercise routines. The need for expensive home equipment diminished, leaving Peloton with an inflated cost base and warehouses full of unsold inventory. The sudden reversal led to falling sales, rising losses, and significant investor scepticism.
This post-pandemic slump highlighted the risks of building a business around a short-term surge in demand. It also underscored the need for Peloton to find a model that could thrive in both extraordinary and ordinary market conditions.
How Has Peloton Reduced Its Costs to Stay Afloat?
One of Peloton’s most urgent priorities has been to bring its expenses under control. Years of rapid expansion left the company with an oversized workforce and a costly global presence.
By fiscal year 2025, Peloton reduced operating expenses by 26% compared with the previous year. This was achieved through multiple rounds of layoffs, which collectively cut global headcount by about 15%. Showrooms, once opened in prime retail locations to showcase bikes and treadmills, were also reduced to save on overheads.
These steps were not just about slashing costs but about re-focusing on efficiency. Management has made it clear that Peloton cannot afford to operate like a high-growth start-up anymore. Instead, the goal is to run as a leaner, more disciplined company with an emphasis on sustainable profitability.
Has Peloton Managed to Stabilise Its Finances?
Stability has been elusive, but Peloton is making progress. The company has relied on debt refinancing to improve short-term liquidity, extending repayment deadlines and easing immediate financial pressure. This provided breathing space to manage day-to-day operations and implement restructuring plans.
However, refinancing came with trade-offs. Higher interest expenses are now a permanent fixture in Peloton’s financials, meaning that while bankruptcy fears have eased, profitability remains difficult to achieve. Positive free cash flow is now management’s stated goal, and cost savings combined with subscription growth are central to this ambition.
The latest reports suggest that losses have narrowed compared with 2022 and 2023, signalling that Peloton may be moving in the right direction. Yet, investors continue to watch carefully, wary of whether these improvements can be sustained long-term.
Why Is Peloton Shifting Away from Hardware and Towards Subscriptions?
At the heart of Peloton’s turnaround strategy is a fundamental change in its business model. Historically, the company relied heavily on one-off sales of high-priced bikes and treadmills. But these products are costly to produce, difficult to scale, and vulnerable to changing consumer trends.
Recognising this vulnerability, CEO Barry McCarthy has steered Peloton towards prioritising content and subscription revenue. Instead of banking on households investing in expensive equipment, Peloton is focusing on building a fitness ecosystem where monthly subscriptions drive growth. This includes live and on-demand classes, app-based workouts, and a broader mix of training options such as strength, yoga, and meditation.
The shift is designed to emulate successful subscription-first models in other industries. Just as Netflix turned recurring payments into a global business, Peloton aims to become a digital-first fitness provider with hardware serving as an optional gateway rather than the core business.
How Is Peloton Dealing with Competition?
Competition in the fitness industry is fiercer than ever. Tech giants such as Apple, with Apple Fitness+, have tapped into their existing ecosystems to provide seamless and affordable digital fitness experiences. Traditional gyms, having recovered strongly since the pandemic, now offer hybrid memberships that combine physical attendance with digital content, giving consumers more flexible choices.
Meanwhile, start-ups such as Echelon and Hydrow continue to chip away at niche areas of the connected fitness market with lower-cost alternatives or specialised offerings. Unlike during the pandemic, Peloton no longer dominates by default. Instead, it must convince customers that its premium price tag is worth paying.
The challenge is not only about winning new users but also about retaining existing subscribers in an environment where cheaper or more flexible options are abundant.
Are Analysts Still Predicting Bankruptcy for Peloton?
During the height of Peloton’s financial troubles in 2022 and 2023, speculation about bankruptcy was widespread. Analysts questioned whether the company could withstand declining revenue, spiralling losses, and a shrinking customer base.
By 2025, the outlook has shifted. Thanks to aggressive cost-cutting and debt refinancing, Peloton is no longer seen as being at risk of near-term bankruptcy. Instead, analysts now describe it as a company in recovery mode—financially fragile but strategically repositioning itself.
Investor sentiment remains cautious. Some see potential in Peloton’s growing subscription base and cost discipline, while others are wary of its debt burden and the fierce competition it faces. Bankruptcy is not the immediate concern anymore; the bigger question is whether Peloton can build a sustainable long-term model.
What Does Peloton’s Transformation Mean for Customers?
For customers, Peloton’s transformation raises understandable concerns about reliability and service continuity. However, the company continues to support its products and platform. Bikes and treadmills remain fully functional, software updates are ongoing, and live classes are delivered as scheduled.
The focus on subscriptions could even benefit customers, as it expands the range of content available and reduces the company’s dependency on expensive hardware sales. That said, uncertainty about the long-term future lingers, especially for potential buyers who may hesitate to commit to costly equipment.
Existing customers can remain confident in the short term, but Peloton must continue to demonstrate that it can sustain its services if it wants to secure loyalty in the years ahead.
Conclusion: Is Peloton Going Out of Business?
Peloton is not going out of business in 2025. The company has endured one of the sharpest rises and falls in recent corporate history, but it is not disappearing. Instead, it is undergoing a fundamental transformation, shifting from an equipment-centric brand to a subscription-first fitness platform.
The journey is far from over. Debt, competition, and consumer scepticism remain serious challenges. But with leaner operations, a more disciplined financial strategy, and a focus on digital content, Peloton has bought itself time.
Whether it thrives will depend on its ability to adapt and convince both customers and investors that its place in the fitness industry is secure. For now, Peloton’s story is not about closure but about survival and reinvention.
FAQs
Why did Peloton’s business decline after the pandemic?
Because the demand for at-home equipment collapsed once gyms reopened, leaving Peloton with high costs and unsold inventory.
What actions has Peloton taken to cut costs?
It has reduced operating expenses by 26%, cut its global workforce by 15%, and closed several retail showrooms.
Has Peloton avoided bankruptcy?
Yes. While financial challenges remain, cost-cutting and debt refinancing mean the company is no longer at risk of near-term bankruptcy.
Why is Peloton focusing more on subscriptions than equipment?
Subscriptions provide recurring, predictable income, while hardware sales are one-off and vulnerable to shifts in demand.
Is Peloton profitable in 2025?
Not yet, but the company has narrowed its losses compared with previous years and is aiming for positive free cash flow.
What does the future look like for Peloton customers?
Services remain reliable, products are supported, and content offerings are expanding. However, uncertainty about the company’s long-term path remains.
Should people still buy Peloton equipment in 2025?
It depends on personal preferences. For those who value premium classes and community features, Peloton is still appealing, but buyers should be aware of the company’s ongoing transition.
