Peloton maintains a calm demeanor regarding tariffs, emphasizing its robust subscription business and the resilience of the fitness industry, even during economic downturns. During its Q3 2025 earnings call, CFO Liz Coddington highlighted that consumer spending on fitness continued to grow during the 2008-2009 recession, suggesting that people tend to prioritize their exercise routines even when finances are tight. “Fitness isn't one of the first areas where consumers cut back,” Coddington explained, adding that the company's primary revenue source is its subscriptions and its dedicated subscriber base. In a shareholder letter, Peloton detailed the specific impacts of tariffs on its business. The hardware, which uses aluminum, faces a 25 percent tariff, while its apparel is subject to variable tariffs depending on China’s trade policies. For Q4, the company anticipates approximately $5 million in negative cash flow due to these tariffs. However, despite these costs, Peloton is working to make its products more accessible. CFO Coddington mentioned several initiatives, including zero-interest financing options, a bike rental program, and lower-priced refurbished models. CEO Peter Stern also addressed the company's efforts to enhance customer satisfaction and logistical efficiency. One notable initiative involves collaborating with partners to pilot dedicated vans stocked with Peloton spare parts, aimed at streamlining repair processes. Additionally, the company has appointed Charles Kirol as the new Chief Operating Officer, tasked with optimizing supply chain logistics and managing costs. Stern acknowledged that hardware sales fell by 27 percent year-over-year, and subscription revenue decreased by four percent. Nevertheless, the company revised its financial outlook slightly upward from $247.6 million to $247.7 million. Stern indicated that the company is reassessing its pricing strategy, considering the impact of tariffs, but did not provide specifics on potential changes. A significant portion of the call was dedicated to the company's plans to leverage artificial intelligence (AI). Stern enthusiastically described AI's potential to empower both employees and customers. “We see AI as a tool to give humans superpowers,” Stern said. In practice, this means equipping customer support staff with AI agents to assist with note-taking during calls. This technology aims to improve the accuracy and efficiency of customer interactions. Moreover, Peloton is using AI to enhance its content offerings. AI-powered translations have been implemented to subtitle the company’s fitness classes, a feature that has significantly expanded its global reach. In Q3, the company used AI to subtitle 3,300 classes and has scaled this effort to translate around 100 classes daily. This initiative not only improves accessibility but also enhances user experience by providing real-time, accurate subtitles in multiple languages. Despite facing challenges, including tariff-associated costs and declining hardware and subscription revenue, Peloton remains focused on innovation and customer service. The company believes that its strategic initiatives and the inherent resilience of the fitness industry will help navigate the current economic landscape and continue to attract and retain users.