In February 2022, the Company announced and began implementing a restructuring plan to realign the Company’s operational focus to support its multi-year growth, scale the business, and improve costs (the “2022 Restructuring Plan”). The 2022 Restructuring Plan originally included: (i) reducing the Company’s headcount; (ii) closing several assembly and manufacturing plants, including the completion and subsequent sale of the shell facility for the Company’s previously planned Peloton Output Park; (iii) closing and consolidating several distribution facilities; and (iv) shifting to third-party logistics providers in certain locations.

Throughout fiscal year 2023 and 2024, the Company continued to take actions to implement the 2022 Restructuring Plan and announced that it was (i) exiting all owned-manufacturing operations and fully transitioning its North American Field Operations to third-party providers, including the significant reduction of its delivery workforce teams; (ii) eliminating a significant number of roles on the North America Member support team and exiting its real-estate footprints in its Plano and Tempe locations; and (iii) reducing its retail showroom presence.

In April 2024, the Company’s Board of Directors approved a new restructuring plan to expand upon its 2022 Restructuring Plan (as expanded, the “2024 Restructuring Plan”, collectively, the “Restructuring Plans”). The Company believes the 2024 Restructuring Plan will position Peloton for sustained, positive free cash flow, while enabling the Company to continue to invest in software, hardware and content innovation, improvements to its Member support experience, and optimizations to marketing efforts to scale the business. The 2024 Restructuring Plan includes: (i) a reduction in global headcount; and (ii) continued closures of the Company’s retail locations. The Company expects the majority of the 2024 Restructuring Plan to be implemented by the end of fiscal 2025.

As a result of these restructuring initiatives, the Company incurred the charges shown in the following table. Asset write-downs and write-offs are included within Impairment expense, and Write-offs of inventory related to restructuring activities are included within Connected Fitness

Products Cost of revenue, in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The remaining charges incurred are included within Restructuring expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss:


	Three Months Ended September 30,
	2024		2023
Cash restructuring charges:(1)	(in millions)
Severance and other personnel costs	$	(0.5)	$	6.1
Exit and disposal costs and professional fees	3.4		4.5
Total cash restructuring charges	2.9		10.6

Non-cash restructuring charges:(1)
Asset write-downs and write-offs	$	5.1	$	22.8
Stock-based compensation expense	—		7.2
Write-offs of inventory related to restructuring activities(2)	—		0.5

Total non-cash restructuring charges	5.1		30.5

Total	$	8.1	$	41.2

(1) All cash and non-cash restructuring charges for the three months ended September 30, 2024 related to the 2024 Restructuring Plan. All cash and non-cash restructuring charges for the three months ended September 30, 2023 related to the 2022 Restructuring Plan. These amounts are included within Impairment expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Due to the actions taken pursuant to the Restructuring Plans, the Company tested certain long-lived assets (asset groups) for recoverability by comparing the carrying values of the asset group to estimates of their future undiscounted cash flows, which were generally the liquidation value, or for operating lease right-of-use assets, income from a sublease arrangement. Based on the results of the recoverability tests, the Company determined that during the three months ended September 30, 2024 and 2023, the undiscounted cash flows of certain assets (asset groups) were below their carrying values, indicating impairment. The assets were written down to their estimated fair values, which were determined based on their estimated liquidation or sales value, or for operating lease right-of-use assets, discounted cash flows of a sublease arrangement.

The following table presents a roll-forward of cash restructuring-related liabilities, which is included within Accounts payable and accrued expenses in the Condensed Consolidated Balance Sheets:


	Severance and other personnel costs		Exit and disposal costs and professional fees		Total
	(in millions)
Balance as of June 30, 2023	$	13.6	$	0.3	$	13.9
Cash restructuring charges(1)	6.1		4.5		10.6
Cash payments	(13.8)		(4.2)		(18.0)
Balance as of September 30, 2023	$	5.9	$	0.6	$	6.5

Balance as of June 30, 2024	$	12.7	$	4.3	$	17.0
Cash restructuring charges(1)	(0.5)		3.4		2.9
Cash payments	(10.4)		(4.7)		(15.1)
Balance as of September 30, 2024	$	1.8	$	3.1	$	4.8

(1) All cash restructuring-related liabilities for the three months ended September 30, 2024 related to the 2024 Restructuring Plan. All cash restructuring-related liabilities for the three months ended September 30, 2023 related to the 2022 Restructuring Plan.

In connection with the 2024 Restructuring Plan, which includes any remaining restructuring activity under the original 2022 Restructuring Plan, the Company estimates that it will incur additional cash restructuring charges of approximately $30.0 million, primarily composed of lease termination and other exit costs, the majority of which are expected to be incurred by the end of fiscal year 2025. Additionally, the Company expects to recognize additional non-cash restructuring charges of approximately $15.0 million, primarily composed of asset impairment charges on retail showrooms in connection with the 2024 Restructuring Plan, the majority of which are expected to be incurred by the end of fiscal year 2025.