-Gross Margin - Before, their gross profit per bike was around $1000. Now, it's $300. This is because costs went up, and the price went down.

What happened to Peloton's profits

-Peloton is a one-product company because its Tread was a flop and its digital subscription was no better than free workout classes on YouTube.

-Price - The initial price of the Bike+ was $2245. Due to a lack of features and demand, the price has now dropped to $1495.

-Peloton's bike concept is no longer new and competition is bound to catch up.

-Peloton is overly reliant on hardware success.

Peloton's profitability wasn't sustainable as it was driven by a short-term reduction in OPEX.

-Cost - Treadmill recalls have increased per-unit cost by around 10%.

-Operating Expenses - Peloton's short-term profitability during COVID was driven by a temporary decrease in OPEX. Now that OPEX is back to 59% of revenue, it creates a large decline in net profit.