Peloton has announced a recall of 833,000 original Bike+ units (model PL02) that were manufactured between December 2019 and July 2022 and sold from January 2020 through April 2025. The recall follows three reports of the seat‑post assembly breaking during use, two of which resulted in injuries from falls. The company is offering a free replacement seat post that customers can install at home. This recall is the fifth Peloton safety action since the company’s founding and follows a 2023 voluntary pullback of more than 2 million original Bike units (model PL01) for a similar seat‑post defect.
Peloton’s Q3 2025 financial results provide context for the recall’s potential impact. Revenue for the quarter was $624 million, a 13% decline year‑over‑year, driven by a 27% drop in Connected Fitness Products revenue and a 4% decline in Subscription revenue. Gross margin expanded to 51.0%, up 780 basis points, reflecting a favorable shift toward higher‑margin subscription services. Adjusted EBITDA rose to $89.4 million from $5.8 million in Q3 2024, and free cash flow reached $94.7 million. Earnings per share were –$0.12, missing the consensus estimate of –$0.07, largely because weaker hardware sales and cost inflation offset the margin gains.
Management emphasized the seriousness of the recall and the company’s commitment to safety. CEO Peter Stern said Peloton’s “integrity of its products and member safety are the top priorities.” CFO Liz Coddington noted that the company was pleased with the quarter’s results and highlighted the improvement in unit economics. Peloton raised its full‑year FY25 guidance, projecting total revenue of $2.455 billion to $2.470 billion (up from the prior $2.14 billion range) and paid‑connected‑fitness subscriptions of 2.77 million to 2.79 million (up from 2.60 million to 2.70 million). The guidance lift signals confidence in the subscription‑centric strategy and the effectiveness of recent cost‑cutting measures.
The recall triggered a sharp market reaction, with Peloton’s shares falling roughly 6% in the days following the announcement. The decline is part of an 18% year‑to‑date slide, reflecting investor concerns about recurring safety issues, the ongoing decline in hardware sales, and the potential cost burden of the recall. The Q3 2025 earnings miss also contributed to the negative sentiment, as the company’s EPS fell short of expectations despite improved margins and cash flow.
Peloton’s recurring seat‑post problems underscore a broader challenge: rebuilding consumer trust while transitioning to a subscription‑driven business. The company’s $200 million restructuring initiative and focus on cost discipline have improved profitability metrics, but the safety recalls add a significant headwind. The firm’s ability to maintain high‑margin subscription growth, control costs, and implement robust quality‑assurance processes will determine whether it can sustain its long‑term trajectory in a competitive fitness market.
Peloton’s recall adds a new operational risk to an already challenging environment. While the company’s financials show resilience in cash flow and margin expansion, the safety issue highlights the need for stronger manufacturing oversight. Peloton’s continued focus on subscription growth, cost discipline, and product safety will be critical to restoring confidence among members and investors alike.
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