Chapter 1: What is the main topic discussed in this episode?
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You certainly ask interesting questions.
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Podcasts, radio, news. It's time now for the stock of the hour, and it is Peloton. The shares are falling after the company announced an overhaul of its hardware, as well as raising prices. This is Peloton's first major attempt under new leadership to lift the company out of a multi-year slump.
So perhaps there's no better timing than to bring in the CEO, Peter Stern, who is behind this product's revamp. And of course, Bloomberg Tech co-host Caroline Hyde also joins us now. Peter, welcome to Bloomberg. Thank you for speaking with us. Big hardware line, a big AI platform, Peloton IQ coming out today, long anticipated, but the market appears underwhelmed.
And I know that you don't follow the stock move on a day-to-day, minute-by-minute basis, but what might investors not fully appreciate about this announcement?
First of all, Scarlett, thanks for having me here. And I leave the day-to-day gyrations of the stock to the experts, the traders, the analysts, folks like yourselves. That being said... If you take a long view, let's look back a year. Our stock has almost doubled. Look back a month, way up.
So I wouldn't focus on day-to-day, but I would focus on the news that we announced today, because it's pretty amazing what we just announced. Completely new lineup of equipment, Peloton IQ, our AI-powered personal trainer, big moves into total wellness. So it'll play out over time as people see the value and they start to embrace these things.
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Chapter 2: What major changes is Peloton implementing under CEO Peter Stern?
We are now including a new acquisition that we did, a company called Breathwork, because we know the power of breathing and how it can help people with stress and anxiety and depression and improve heart rate variability and improve blood pressure. So everyone's getting that.
Major partnerships, for example, one with the hospital for special surgery to focus on injury prevention and rehabilitation. All of these things happen for existing members. But if you're not an existing member, there has never been a better time to become one with the launch of this all new equipment lineup, the cross training series.
Now we're delivering the benefits of both cardio and strength because we know that adults should be doing cardio. A couple of hours at least a week of cardio and two days of strength training every week. You can do that now all with one piece of equipment that makes it super easy.
It's almost in many ways like cross training is the way that which you're sort of identifying it. But if I look at the analyst notes and maybe the reaction from the stock is because a lot of this has been baked in. You've already given us full year forecasts that in many ways talk about what churn you're expecting, but what subscriber growth?
What do you think this will spare in terms of subscriber growth?
So we knew, of course, as we went into this year, what we were going to be launching. And we were able, as you point out, Caroline, to bake all of that into our guidance for the year. But we also included in our guidance that as the year progresses, we will be inflecting back toward growth. And that's a big, big step for us as a company. We had a couple of years where we've been down as we have...
regrouped after the pandemic, and we are now in such a good place where you see us having reignited our innovation engine. Of course, our customer love has never left us. Customers really just appreciate what Peloton does for them, and in particular, have that deep connection with our instructors.
So we're building on that foundation and now feel even more confident about our future than ever before.
I like what you said earlier about how existing members will have the benefits of the new software, but will you continue to support the existing hardware and software if customers don't upgrade to the new equipment? Because down the road, at some point, you want to get everyone to the new model of Peloton equipment, don't you?
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Chapter 3: How does Peloton's new product lineup aim to attract existing and new members?
We're able to give you feedback. We're able to suggest when you should be upping your weights. Then we get to things like mental well-being. We talk about breath work, our meditations, the work that we do with yoga. All these things help.
So, I mean, and I can see that. The strength, Halle Berry, perimenopausal. You're thinking about a wellness trajectory. Very briefly, Peter, five years from now, how do you see yourself in the fitness landscape?
Yeah, so we intend to be your essential partner in the journey to feeling better about yourself and living your best life. And that means not just focusing on the quantity of years that you have on this planet, but the quality of those years. And we know that there are choices that we can make behavioral choices that we can make that make a difference in the quality of those years.
Those are, am I doing cardio? Am I doing strength? Am I taking care of my mental well-being? Am I eating right? If I need supplements, am I taking the right supplements? Am I sleeping right? We can make a difference in every one of those areas, and we intend to.
Peter Stern, a pleasure. Thank you so much for joining us today. CEO of Peloton, Peter Stern, joining us along with Bloomberg Tech co-host, Caroline Hyde.
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