#1U April 2022 BW BLACKWELLS CAPITAL A FURTHER CALL TO ACTION MAXIMIZING VALUE FOR PELOTON SHAREHOLDERS 60.74 76.62 "95.14 On 92168.34.61 PRESENTED BY BLACKWELLS CAPITAL 28.78 98.19 42.96 53.73 42.92 38.86 2nd 8 92.14 2.70 98.78 93.1 TAX Peloton Interactive, Inc. (NASDAQ: PTON)#2DISCLAIMER The views expressed in this presentation (the "Presentation") represent the opinions of Blackwells Capital LLC and/or certain of its affiliates ("Blackwells") and the investment funds it manages that hold shares in Peloton Interactive, Inc. (the "Company", "Peloton", or "PTON"). The Presentation is for informational purposes only, and it does not have regard to the specific investment objective, financial situation, suitability or particular need of any specific person who may receive the Presentation, and should not be taken as advice on the merits of any investment decision. The views expressed in the Presentation represent the opinions of Blackwells, and are based on publicly available information and Blackwells' analyses. Certain financial information and data used in the Presentation have been derived or obtained from filings made with the Securities and Exchange Commission ("SEC") by the Company or other companies that Blackwells considers comparable, as well as from third party sources. Blackwells has not sought or obtained consent from any third party to use any statements or information indicated in the Presentation as having been obtained or derived from a third party. Any such statements or information should not be viewed as indicating the support of such third party for the views expressed in the Presentation. Information contained in the Presentation has not been independently verified by Blackwells. Blackwells disclaims any obligation to correct or update the Presentation or to otherwise provide any additional materials. Blackwells recognizes that the Company may possess confidential information that could lead it to disagree with Blackwells' views and/or conclusions. Blackwells currently beneficially owns, and/or has an economic interest in, shares of the Company. Blackwells is in the business of trading-buying and selling-securities. Blackwells may buy or sell or otherwise change the form or substance of any of its investments in any manner permitted by law and expressly disclaims any obligation to notify any recipient of the Presentation of any such changes. There may be developments in the future that cause Blackwells to engage in transactions that change its beneficial ownership and/or economic interest in the Company. BW BLACKWELLS CAPITAL The securities or investment ideas listed are not presented in order to suggest or show profitability of any or all transactions. There should be no assumption that any specific portfolio securities identified and described in the Presentation were or will be profitable. Under no circumstances is the Presentation to be used or considered as an offer to sell or a solicitation of an offer to buy any security. This document is the property of Blackwells and may not be published or distributed without the express written consent of Blackwells. All registered or unregistered service marks, trademarks and trade names referred to in the Presentation are the property of their respective owners, and Blackwells' use herein does not imply an affiliation with, or endorsement by, the owners of these service marks, trademarks and trade names. The information herein contains "forward-looking statements." Specific forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "projects," "targets," "forecasts," "seeks," "could," "should" or the negative of such terms or other variations on such terms or comparable terminology. Similarly, statements that describe our objectives, plans or goals are forward-looking. Forward-looking statements are subject to various risks and uncertainties and assumptions. There can be no assurance that any idea or assumption herein is, or will be proven, correct. If one or more of the risks or uncertainties materialize, or if Blackwells' underlying assumptions prove to be incorrect, the actual results may vary materially from outcomes indicated by these statements. Accordingly, forward-looking statements should not be regarded as a representation by Blackwells that the future plans, estimates or expectations contemplated will ever be achieved. 2#3BW II = III IV V VI VII Executive Summary Corporate Governance and Misalignment of Interests. Review of McCarthy's First 60 Days at Peloton Peloton Reimagined The Best Option is to Sell Peloton Conclusion TABLE OF CONTENTS Appendix BLACKWELLS CAPITAL LO 5 11 21 34 47 64 67 3#4BW BW BLACKWELLS CAPITAL Two months since Peloton hired one of the highest paid CEOs in all of corporate America, nothing has fundamentally changed. BLACKWELLS CAPITAL Peloton's powerful brand, proprietary technology, engaging instructors, and fiercely loyal subscriber base can be shaped into a much more attractive business. But this cannot happen effectively in the public markets, especially with the current leadership in place. 4#5BW BLACKWELLS CAPITAL PELOTON INTERACTIVE, INC. Executive Summary#6New management team failed to make meaningful changes Blackwells will hold the Board accountable to maximize value for all shareholders Under Executive Chair John Foley and a new CEO, there have been no meaningful changes at Peloton. Issues related to cost structure, capital allocation, inventory management and quality control continue to plague the Company. Shareholders have lost nearly $2 billion of value since Mr. McCarthy became CEO BW BLACKWELLS CAPITAL EXECUTIVE SUMMARY Poor governance structure limits accountability Peloton's poor governance structure limits accountability to shareholders. Furthermore, its Board, which is comprised of interconnected, underqualified legacy directors, fails to provide adequate oversight Peloton is a strategically valuable asset Peloton is a strategically valuable asset that is attractive to many potential acquirers. An insightful and capable operator would be willing to pay a premium beyond conventional cost and revenue synergies for the opportunity to "Reimagine Peloton" as a dramatically different business than it is today Selling Peloton today is worth substantially more to investors Given the complexity, time, and risk associated with a turnaround in the public markets, Blackwells believes selling Peloton today is worth substantially more to investors than the standalone company could be worth years from now 6#7■ ■ ■ ® PELOTON Peloton is an interactive fitness platform with millions of members, offering connected, technology-enabled fitness classes that utilize its proprietary hardware The Company's Connected Fitness products include the Peloton Bike, Bike+, Tread, Tread+ and Guide Peloton generates strong recurring revenue from its Members, who pay subscription fees to access Peloton's app or Connected Fitness products LTM Revenue by Source 28% The Company has been challenged by a series of execution errors and strategic missteps; as a result, Peloton's share price has declined 84% since the beginning of 2021 72% Connected Fitness ■Subscription OVERVIEW OF PELOTON BW BLACKWELLS CAPITAL EXECUTIVE SUMMARY Total Revenue ($M) $1,262 $937 $805 $1,134 F3Q 21 F4Q 21 F1Q 22 F2Q 22 20% 0% -20% -40% -60% -80% -100% Peloton Total Shareholder Returns Since the Beginning of 2021 men Jan-21 Emman Eur Apr-21 Nasdaq Enterprise Value ($M) Market Cap ($M) LTM Revenue ($M) LTM Adj. EBITDA ($M) EV/LTM Revenue Employees (as of June 30, 2021)¹ LTM Revenue/Employee Jul-21 тил Source: FactSet and Company filings. Note: Market data as of April 8, 2022 unless specified otherwise; financial data as of fiscal quarter ending December 31, 2021. (1) Note: Employee count excludes recently announced headcount reductions. Oct-21 Jan-22 - 84% Apr-22 $7,877 $7,139 $4,138 ($482) 1.9x 8,976 $461,052 7#8$40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 January 2022 February 4: The Wall Street Journal reported that Amazon and other potential acquirers were evaluating Peloton January 24: Blackwells sent a letter to the Board of Directors of Peloton outlining its serious concerns about the direction and performance of the Company and calling on the Board to remove current CEO John Foley EXECUTIVE SUMMARY PELOTON STOCK PRICE YEAR TO DATE February 4: Financial Times reported that Amazon and Nike were evaluating separate bids to buy Peloton BW BLACKWELLS CAPITAL February 7: Blackwells sent the Peloton Board of Directors a comprehensive presentation outlining the need for immediate change in leadership and a strategic alternatives process to maximize value for the benefit of all shareholders Source: FactSet. Data as of April 8, 2022. February 2022 February 8: Following Blackwells' initial letter and presentation, Peloton announced that CEO John Foley would become Executive Chair; the Company announces the appointment of Barry McCarthy as CEO and also discloses an $800 million expense reduction plan February 8: Blackwells issued a press release continuing to call for urgent action at Peloton and disclosing that it had exercised its rights to review the books and records of Peloton pursuant to section 220 of the Delaware General Corporation Law February 28: Peloton Executive Chair John Foley sells $50 million worth of Peloton stock to Michael Dell's MSD Partners in a private transaction March 2022 April 5: Peloton Launches Peloton Guide, strengt training system based on antiquated, undifferentiated technology that costs $295, to mixed reviews March 10: Peloton hired Andrew Rendich - formerly a service and operations executive at Netflix - as its new Chief Supply Chain Officer. Mr. Rendich has been Peloton's only senior- level management appointment since Mr. McCarthy's tenure began April 2022 -34% 8#9BW 1 EXECUTIVE SUMMARY PELOTON'S CURRENT PLAN IS INADEQUATE Insiders Remain in Control Despite Value Destruction Despite having destroyed more than $40 billion in shareholder value while having only a modest economic interest in the Company, a close-knit group of insiders including John Foley and Director Jay Hoag effectively control Peloton Blackwells believes Peloton's governance limits accountability to shareholders BLACKWELLS CAPITAL 2 Peloton Continues to Make Only Incremental Changes In February 2022, Peloton announced a "significant transformation" of its operating model to much fanfare. To date, these changes have consisted of minor changes to the management team, a cost reduction plan that lacks transparency and an underwhelming product launch In our view, Peloton's changes are not nearly enough to address its challenges 3 Company Remains Independent Immediately after his appointment as CEO, Barry McCarthy asserted that a sale of Peloton was unlikely in the "foreseeable future," despite the Company's well-documented challenges Blackwells believes Peloton will continue to face challenges as a standalone company in a niche market, and that a sale is the best outcome for shareholders Blackwells believes Peloton's claimed transformation is largely illusory and requires work beyond what the current Peloton team is capable of doing 9#101 Enhance Governance Peloton's dual-class share structure, classified Board and plurality voting system ensure that insiders retain control while shareholders have virtually no ability to effect governance changes or hold management and the Board accountable Blackwells urges the Company to embrace governance best practices and abolish the dual-class share ownership structure BW BLACKWELLS CAPITAL EXECUTIVE SUMMARY BLACKWELLS' PLAN FOR PELOTON - 2 Optimize the Business Model Blackwells believes that Peloton can be reimagined to become a high growth, high margin and asset-light fitness and health platform. In our view, a "Reimagined Peloton" would have more and better opportunities for value creation However, Blackwells does not believe that the business can be optimized in the public markets, especially under a Board and management team that have failed shareholders for years 3 Conduct a Sales Process Peloton has a powerful brand, proprietary technology and an engaged and loyal user base that could be shaped into a more attractive business, and the Company would be a valuable asset for many strategic and financial acquirers If Peloton does not commit to taking responsive action, Blackwells will pursue all avenues available - including litigation to hold the Company and individual Board members accountable on behalf of shareholders Given the complexity, time and risk associated with turning the business around, Blackwells believes selling Peloton today is the best path for shareholders 10#11BW BLACKWELLS CAPITAL PELOTON INTERACTIVE, INC. Corporate Governance & Misalignment of Interests#12A Peloton's Board has created a culture of poor corporate governance that limits accountability to shareholders B C D BW CORPORATE GOVERNANCE AND MISALIGNMENT OF INTERESTS Insiders continue to retain control through dual-class share structure Executive Chairman John Foley is a distraction and continues to wield excessive influence Blackwells believes the Company's CEO search process was flawed, and we question whether Mr. McCarthy is the right leader The Board continues to be comprised of interconnected, unqualified legacy directors BLACKWELLS CAPITAL ■ Structure ens ▪ These insiders have a relatively small economic interest Substantial insider selling and pledging exacerbates misalignment with other shareholders ■ res that a small group of insiders continue to maintain voting control ▪ Mr. Foley appears to have significant personal financial issues that are a distraction (and create misalignment) even as he remains in the Company's highest leadership role and has outsized influence ▪ Mr. McCarthy's connection to Peloton directors calls into question his selection for this difficult role ▪ The timing of his appointment leads us to doubt the Board's claim that it conducted a thorough search ▪ Mr. McCarthy received a massive sign-on award that was not commensurate with the job or company ▪ On an ongoing basis, Mr. McCarthy will be one of the highest-paid executives in the country ■ Peloton's Board still has too many interconnected legacy directors ▪ The Board appears to lack critical skills and attributes 12#13■ ■ A DUAL-CLASS STRUCTURE LIMITS ACCOUNTABILITY TO SHAREHOLDERS The voting power of Peloton's insiders is vastly disproportionate to their economic interest in the Company Peloton maintains a dual-class voting structure, under which Class A shares represent one vote while Class B shares, which are controlled by insiders, represent twenty votes each As a result, Peloton insiders control more than 75% of the voting power, despite only having an economic interest in Peloton of approximately 12% Only 8% of companies in the S&P 500 have dual-class share structures with unequal voting Blackwells believes Mr. Foley's recent stock sales (possibly made under financial duress) may be creating a greater imbalance between insider voting power and economic interest ▪ This structure will continue to impair accountability to shareholders as long as it remains in place BW BLACKWELLS CAPITAL Economic Interest Voting Power Voting Power of Insiders vs. Economic Interest¹ 8% 0% 12% S&P 500 25% % of Companies with Dual-Class Shares with Unequal Voting² 12% 50% Nasdaq 100 75% 78% 13% Russell 1000 (1) Source: ISS Report, Peloton Interactive, Inc., November 23, 2021. "Insiders" based on ISS' definition of "Strategic Shareholders," which include John Foley, William Lynch, Thomas Cortese, Hisao Kushi and Jill Woodworth. (2) Source: FactSet. Data as of April 8, 2022. 100% 13#14A FOLEY AND HOAG (TWO INSIDERS) RETAIN EFFECTIVE CONTROL John Foley and Jay Hoag continue to maintain effective control over the Company, and their close alignment on issues like a sale of the Company raises serious concerns ▪ As of September 30, 2021, Mr. Foley and Mr. Hoag held shares representing approximately 75% of Peloton's total voting power ▪ CEO Barry McCarthy also appeared to acknowledge that the decision on whether to sell Peloton effectively rests with John Foley and Jay Hoag² BW ▪ Mr. McCarthy suggested that Mr. Foley and Mr. Hoag have their minds made-up about a sale, stating that he is confident that "a large percentage of the votes will be cast in favor of my leadership of the business" as a public company² BLACKWELLS CAPITAL "...[E]veryone, hopefully, loves you like I love you... I think, Jay, that you are one of the five great investors of all time."1 - John Foley, to Jay Hoag "I congratulate you on your success to date, but I know you're only getting started."1 - Jay Hoag, to John Foley (1) Source: Growth Journeys: A TCV Podcast. "Ride the Mountaintop: How Peloton Re-Invented the Fitness Industry with a Revolutionary Business Model," July 15, 2020. (2) Source: Patrick McGee, "New Peloton chief dismisses suggestions company will be sold," Financial Times, February 14, 2022. 14#15B MR. FOLEY APPEARS TO BE SELLING ASSETS UNDER FINANCIAL DURESS I "Foley, who stepped down as Peloton CEO in February, is under pressure to put up more collateral BUSINESS for the loans as Peloton's stock price has cratered by more than 80% in the past twelve months..." 1 INSIDER As of September 30, 2021, John Foley had pledged approximately 65% of his economic interest in Peloton Recent reports suggest that Mr. Foley may be facing personal liquidity issues due to margin calls associated with these pledging arrangements ▪ On February 28, 2022, John Foley sold approximately $50 million in Peloton stock (at a 12% discount) to MSD Partners, an investment firm backed by Michael Dell In our view, this transaction and the Company's lack of transparency is troubling and raises several important questions: BW Was Mr. Foley's latest sale the result of a margin call on his pledged shares? Mr. McCarthy has a previous business relationship with MSD through his role as a director of MSD's SPAC; what was his role in facilitating this transaction? Why did MSD appear to get preferential treatment (i.e., a discounted price)? Did MSD offer concessions, such as an agreement to vote those shares in accordance with Mr. Foley's recommendations? BLACKWELLS CAPITAL Peloton ex-CEO John Foley sells $50 million in stock to Michael Dell's investment firm PUBLISHED THU, MAR 3 2022.6:56 AM EST UPDATED THU, MAR 3 2022.8:18 AM EST Lauren Thomas @LAURENTHOMAS SHARE in ✔ maze JENNIFER GOULD GIMME SHELTER Back peddling Down-on-his-luck Peloton founder lists $55M Hamptons retreat at a loss John and Jill Foley's oceanfront estate one of the priciest East End sales of the year before the brand spun out of control. Sources (from top to bottom): (1) Dakin Campbell and Becky Peterson, "Goldman Sachs is turning up the heat on Peloton founder John Foley because of personal loans backed by the company's crushed stock," Business Insider, March 10, 2022. (2) Lauren Thomas, "Peloton ex-CEO John Foley sells $50 million in stock to Michael Dell's investment firm," CNBC, March 3, 2022. (3) Jennifer Gould, "Down-on-his-luck Peloton founder lists $55M Hamptons mansion at a loss," New York Post, March 3, 2022. 15#16■ C WE BELIEVE PELOTON'S SEARCH PROCESS WAS RUSHED AND DRIVEN BY INSIDERS "McCarthy jumped to the top of the headhunters' list when he was introduced to the board by TCV, one of the company's earliest investors." 1 Barry McCarthy, Peloton's new CEO, is a long-time business associate of Peloton director Jay Hoag, having served as an executive at Netflix (where Mr. Hoag has served as a director for more than two decades) and as an advisor to Mr. Hoag's venture capital firm "Today's leadership changes are the culmination of a succession planning process that the Board and John have worked on together over the last several months. "2 - Karen Boone, Peloton's Lead Independent Director Peloton Press Release, February 8, 2022 BW BLACKWELLS CAPITAL FT FINANCIAL TIMES ▪ While the Company's press release announcing Mr. McCarthy's appointment stated that the Board ran a thorough succession planning process over the last "several months,"1 media reports indicate that Jay Hoag and TCV effectively hand-picked Mr. McCarthy and promoted his appointment from within the Board³ How did you get the job [as Peloton's CEO]? "It was a shotgun marriage. I was retired and just managing private investments and playing a lot of golf... I reached out to TCV and said: 'Hey, Coach, put me in."3 - Barry McCarthy in an interview with Andrew Ross Sorkin (1) Source: Andrew Edgecliffe-Johnson and Patrick McGee, "Inside Peloton's epic run of bungled calls and bad luck," Financial Times, February 17, 2022. (2) Source: Peloton Press Release, February 8, 2022. (3) Source: Andrew Ross Sorkin and Lauren Hirsch, "Peloton's New C.E.O. on the Tough Road Ahead," The New York Times, February 19, 2022. 16#17C MR. MCCARTHY'S NEW-HIRE COMPENSATION IS TROUBLINGLY EXCESSIVE ▪ Mr. McCarthy's sign-on award is larger than that of the new CEO of Amazon, a company that is more than 200x the size of Peloton I ▪ Mr. McCarthy is a first-time public company CEO, and yet he is earning approximately 4x as much as his predecessor ▪ Blackwells questions the need for such an outsized sign-on award given the fact that: BW Mr. McCarthy was retired before joining Peloton; and Mr. McCarthy initially reached out to Jay Hoag to inquire about the CEO position - there was no need to entice Mr. McCarthy with a generous sign-on package if he was knocking on the door looking for work BLACKWELLS CAPITAL Market Cap ($B) $273 $12 P PELOTON $213 Highest-Paid Newly Appointed S&P 500 CEOs $179 $1,640 amazon intel. $203 $36 $43 Walgreens Boots Alliance $35 $27 Cerner $24 $50 CENTENE Corporation $22 $51 $22 $13 AIG Citrix $22 $43 $21 $12 L3HARRIS WestRock (1) Source: Bloomberg and company filings. Notes: Analysis of CEO's appointed Since Jan. 1, 2021 (compensation in $M), CEO compensation data uses total CEO compensation data refers to the sum of base salary, annual incentive opportunity, long-term incentive opportunity and any cash or equity new-hire or inducement grants for the year in which the new CEO was appointed. Data excludes moving expenses and other perquisites. Data excludes interim CEOs. Market cap data as of February 9, 2022. Peloton compensation calculated using methodology described on page 18. 17#18C PELOTON'S NEW CEO HAS ONE OF THE COUNTRY'S MOST GENEROUS PAY PACKAGES On the day that Peloton announced that it was terminating approximately 2,800 employees as part of a "comprehensive program to reduce costs," the Company made Barry McCarthy one of the highest- paid executives in the country ▪ On an annualized basis, Mr. McCarthy is making nearly 10x more than he did as CFO of Spotify Blackwells questions whether Mr. McCarthy's generous compensation package is the result of his longstanding and close relationship with the Chair of Peloton's Compensation Committee, Jay Hoag, who appears to have played a key role in his hiring BW BLACKWELLS CAPITAL $68 PELOTON Peloton Estimated Annualized CEO Compensation ($M) vs. Proxy Peers¹ $32 $30 $27 Imi $20 $19 99th $15 vs. Russell 3000 $14 workday splunk> DocuSign RingCentral Roku twilio okta..REALPAGE $12 $10 $8 $8 $6 $4 $4 $3 Percentile Rank of Barry McCarthy's Estimated Annualized Compensation¹ 98th 121 % vs. Russell 1000 zendesk GoDaddy proofpoint. 97th vs. Russell 1000 Growth (1) Source: FactSet, Bloomberg and company filings. "Proxy Peers" are disclosed in the Company's proxy statement filed on October 25, 2021. Note: CEO compensation data uses total CEO compensation from most recently reported fiscal year. For companies with co-CEOs or more than one CEO during the fiscal year, compensation included all CEOs. Peloton compensation represents the annualized Black Scholes value of Mr. McCarthy's 8 million options (which vest over 48 months) as of the grant date of February 9, 2022. plus his $1 million base salary. 18#19D ‒‒‒‒‒ = New Director = TCV Connection McCarthy was a Venture Partner (and then Executive Advisor) at TCV, where Hoag serves as General Partner McCarthy served as CFO of Netflix while Hoag was on the Board TCV NETFLIX Barry McCarthy HIGHLY INTERCONNECTED BOARD LACKS INDEPENDENCE BW BLACKWELLS CAPITAL Jay Hoag airbnb Airbnb, a Jonathan Mildenhall TCV was a Pre-IPO investor in Peloton TCV ‒‒‒‒ Mildenhall served as CMO of TCV portfolio company 2 Zillow Hoag and Callaghan are both VC Investors who serve on the Zillow Board Source: Company filings and publicly available information. John Foley true Ventures Callaghan is managing member of True Ventures which led Peloton's Series C in 2015 Jon Callaghan Lynch was CEO of Barnes & Noble while Foley was President of eCommerce Modern Animal ‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒‒ BARNES &NOBLE Callaghan's VC Fund led the Series A round for Modern Animal, where Karen Boone is a Board member Pamela Thomas- Graham RIVIAN palm Ms. Thomas- Graham and Ms. Boone both currently serve as directors for Rivian Karen Boone William Lynch webOS Lynch was VP of Worldwide eCommerce & Digital Marketing at Palm / webOS, while Mendez was SVP of Global Operations Angel L. Mendez 19#20■ ■ ■ ■ D PELOTON'S BOARD STILL HAS SIGNIFICANT DEFICIENCIES Peloton's Board members appear to lack key skills sets and attributes that Blackwells believes are essential to overseeing a turnaround of the business More than half of the Board is comprised of current or former insiders and venture capitalists, several of whom have deep, longstanding relationships with each other Despite the fact that approximately 75% of the Company's revenue comes from hardware sales, there do not appear to be any directors with deep manufacturing expertise that could help the Company resolve its quality control issues Blackwells is disappointed that the Board only recently appointed its first supply chain professional after experiencing a litany of well-documented inventory issues that led to the Company halting production on bikes and treadmills Additionally, given the nature of Peloton's customer base and male-dominated boardroom, Blackwells believes the Board would benefit from greater gender diversity BW BLACKWELLS CAPITAL Board Member John Foley Barry McCarthy Karen Boone Jon Callaghan Jay Hoag William Lynch Angel Mendez Jonathan Mildenhall Pamela Thomas-Graham TSR During Tenure¹ (9%) (39%) (9%) (9%) (9%) (9%) (37%) (37%) (9%) TSR vs. Russell 1000 Growth Index¹ (77%) (35%) (77%) (77%) (77%) (77%) (34%) (34%) (77%) (1) Source: FactSet and Company filings. Data as of April 8, 2022. Note: TSR data for directors Foley, Boone, Callaghan, Hoag, Lynch and Thomas-Graham measured since the date of Peloton's initial public offering. Start date for Messrs. Mendez and Mildenhall assumed to be February 8, 2022, the "Effective Date" of their tenures as disclosed in the Company's 8-K on February 8, 2022. Start date for Mr. McCarthy assumed to be February 9, 2022, the "CEO Commencement Date" as disclosed in the Company's 8-K on February 8, 2022. 20#21BW BLACKWELLS CAPITAL PELOTON INTERACTIVE, INC. Review of McCarthy's First 60 Days at Peloton#22A B C BW PELOTON HAS NOT ADEQUATELY ADDRESSED ANY OF ITS CHALLENGES The management team is largely the same as it was months ago and appears ill-equipped to resolve the Company's issues The Company continues to make strategic missteps around product roll- outs, cost-cutting and product quality Peloton remains undervalued and lacks credibility with investors BLACKWELLS CAPITAL ■ The "restructuring" that Peloton announced with much fanfare as part of a “leadership transition" in February 2022 has resulted in the hiring of just one new senior executive ▪ This one new hire - Peloton's Chief Supply Chain Officer - does not appear to have the right experience needed to resolve Peloton's extensive inventory and production problems ▪ The Company's CFO has made misleading statements to investors and appears unable to issue accurate guidance ▪ The recent cost-cutting initiative lacks transparency and does not go far enough The launch of Peloton's underwhelming new product, Guide, was seemingly a flop ▪ The Company appears to be facing more quality control issues with its bikes W ▪ Since the leadership transition, Peloton's stock has continued to decline, trailing peers and the relevant indices ▪ Peloton remains undervalued by the market and the analyst community appears skeptical that the Company's turnaround efforts will drive value 22#23A Although Pelton has touted major changes to management, it largely remains identical to the Foley Era Organizational Changes Since Barry McCarthy Became CEO Tom Cortese Co-Founder, CPO Jennifer Cotter Chief Content Officer MANAGEMENT HAS LARGELY REMAINED THE SAME Kevin Cornils Chief Commercial Officer Hisao Kushi Co-Founder, Chief Legal Officer BW BLACKWELLS CAPITAL Shari Eaton Chief People Officer Gwen Riley SVP, Head of Music Yony Feng Co-Founder, CTO Jonathan Ade Chief Supply Chain Officer Jamie Beck SVP, Global Final Mile Jayvee Nava VP, Community Source: Company press releases and LinkedIn. John Foley Chief Executive Officer Executive Chair Barry McCarthy President & Chief Executive Officer Jill Woodworth Chief Financial Officer Justin Kintz SVP, Public Policy Sandeep Oberoi VP, PMO Ken Willis VP, Global Member Support Shobz Ahluwalia CIO Dara Treseder SVP, Head of Marketing Rena Harper VP, Executive Coaching Tom Shannehan Global Sales Officer Dion Camp Sanders Chief Strategy Officer Brad Greenawalt VP, Membership New Management Team Member Since McCarthy Became CEO Andrew Rendich Chief Supply Chain Officer 23#24A PELOTON'S NEW SUPPLY CHAIN EXECUTIVE SEEMS ILL-EQUIPPED I Blackwells does not believe that Peloton's new Chief Supply Chain Officer has the foundational experience necessary to run a complex manufacturing and distribution operation The appointment of Peloton's new Chief Supply Chain Officer raises a number of questions: Peloton's press release announcing Mr. Rendich's appointment noted that he would remain with Grove Collaborative. Is Mr. Rendich's role at Peloton part-time? How will Mr. Rendich balance his responsibilities at Grove with his additional duties as head of Peloton's Distribution, Member Support and Information Technology teams? What aspects of Mr. Rendich's experience at Netflix a company which has virtually no manufacturing complexities - prepared him for this C-suite role at Peloton? BW BLACKWELLS CAPITAL (1) Source: Peloton Press Release, March 10, 2022. "[Andrew Rendich] previously served as Chief Operating Officer at Grove Collaborative... While at Peloton, Rendich will also stay on at Grove in an advisory capacity... 667 P PELOTON NETFLIX NETFLIX BUSINESS REPLY MAIL LA Nearest Netflix Shipping Facility Movie Lover 555 Anystreet Anytown, USA PARD Andrew Rendich Chief Supply Chain Officer 24#25■ A Blackwells believes Peloton's CFO, Jill Woodworth, should not be permitted to continue in her role as CFO ■ CFO JILL WOODWORTH HAS SHOCKINGLY REMAINED IN HER ROLE The Company has revised forward-looking guidance downward in each of the last five quarters In November 2021, Peloton announced a $1 billion stock offering just two weeks after Ms. Woodworth dismissed the possibility of a capital raise on the Company's earnings call Blackwells believes that investors have lost confidence in the accuracy of Peloton's projections BW BLACKWELLS CAPITAL "...[W]e don't see the need for any additional capital raise based on our current outlook."2 - Jill Woodworth, two weeks before Peloton announced a $1 billion stock offering (1) Source: FactSet and Company filings. Data as of April 8, 2022. (2) Source: Peloton 1Q 2022 Earnings Call. FY 2021 Guidance $4,075 F2Q 21 Next Fiscal Year Revenue Guidance ($M)¹ F2Q 21 $4,000 F3Q 21 $240 $5,400 F3Q 21 F4Q 21 ($325) FY 2022 Guidance Next Fiscal Year Adjusted EBITDA Guidance ($M)¹ FY 2021 Guidance $300 F4Q 21 $4,600 F1Q 22 FY 2022 Guidance ($450) $3,750 F1Q 22 F2Q 22 ($650) F2Q 22 25#26I B Peloton is saddled with inefficient operations - the result of a misguided attempt at "blitzscaling" during the pandemic ■ COST-CUTTING PLAN DOES NOT GO FAR ENOUGH The Company's expense growth has outstripped demand to the point where significant restructuring is necessary Peloton announced an $800 million expense reduction plan in February 2022, but it is unclear how "enacting a work force reduction" and "reducing owned and operated warehouses and delivery teams" will generate hundreds of millions in run-rate savings The cost-cutting plan also does not seem to go far enough. Even if Peloton's proposed $800 million expense reduction is allocated solely and equally to G&A and selling & marketing expenses, the Company's cost structure would still be lopsided Blackwells believes that Peloton has ample room to further rationalize the business without compromising revenue growth BW BLACKWELLS CAPITAL LTM Revenue / Employee ($M)¹ $2.63 NETFLIX $1.73 6% $1.17 int $1.56 Peer Median LTM G&A / Revenue¹ $0.92 22% ((Siriusxm))) match Roku 3 Peloton Peer Median: $1.56 $0.48 PELOTON 12% Peloton Post-Cost Reduction Plan Selling & Marketing / Revenue¹ 35% 26% bi 13% 13% 2019 12% 2020 Peer Median 18% 26% 12% ■PTON Peer Median 2021 Peloton LTM Selling & Marketing / Revenue¹ 26% 12% LTM 16% Peloton Post-Cost Reduction Plan (1) Source: FactSet. Data as of April 8, 2022. Note: "Peloton Post-Cost Reduction Plan" assumes $400 million is subtracted from both LTM G&A expenses and LTM selling and marketing expenses, with revenue remaining constant. Peers include Match, Netflix, Roku, Sirius XM and Spotify. 26#27B UNDERWHELMING LAUNCH OF PELOTON GUIDE ON APRIL 5TH ■ "2 "It's a little annoying that the Guide hardware makes working out less convenient than just using the Peloton Digital app. The launch of Peloton's latest product, Guide, has been underwhelming ■ Guide has received mixed reviews, with some users questioning whether the product has any competitive advantages in a crowded home strength training market Peloton's stock price has declined approximately -16% since Guide was launched on April 5 While Peloton has claimed Guide's technology is "innovative," it does not appear to meaningfully improve upon a decade-old offering from Microsoft BW BLACKWELLS CAPITAL Undifferentiated from Competition Dated Hardware Confusing User Interface Limited Functionality THE WALL STREET JOURNAL WIRED techradar V THE VERGE WIRED "While there are benefits to Al keeping an eye on you during workouts, other products on the market work as well or better, so unless you're a Peloton die-hard, think carefully before buying." "The camera is powered by Qualcomm's QCS605 system-on-a-chip. This SoC was first introduced back in 2018, so it's ancient by chip standards..."2 "...[A]s with every other Peloton product out there, there's already a lot of data on-screen at any given time... [H]aving all this information at your disposal can be overwhelming."³ "[Guide's] movement tracker doesn't count reps. You don't get specific form feedback."4 (2) Lauren Goode, "With Peloton Guide, the Fitness Company Bets Big on Body (1) Nicole Nguyen, "Peloton Guide Review: The Strength Training Smart Camera Faces Strong Competition," The Wall Street Journal, April 5, 2022. Tracking," WIRED, April 4, 2022. (3) Axel Metz, "Peloton Guide won't reinvent your strength workout - but you'll enjoy feeling the burn," TechRadar, April 5, 2022. (4) Victoria Song, "Peloton Guide Review: A Webcam that Watches You Squat," The Verge, April 5, 2022. 27#28B Microsoft was providing an almost identical service back in 2010 M The Xbox Kinect The Kinect camera connects to home TVs through Xbox and tracks body movement and sound using RGB color VGA video camera, a depth sensor, and a multi-array microphone 1 It was sold as an accessory for the Xbox 360 (2010) and was included in the launch of the Xbox One (2013) Allowed users to exercise with Xbox Fitness, Zumba Fitness and a library of various interactive exercise games and applications XBOX ONE Xbox F BW XBOX 360 REQUIRES KINECT SENSOR S ZUMBA fitness JOIN THE RETREADING OLD IDEAS KINECT MAJESCO BLACKWELLS CAPITAL Side Lunge Stretches Great job! 0:33 1,598 D ★***** Xbox Fitness with Kinect (2010) Precision body movement tracking Instructional workouts from famous trainers X Live classes Personalized recommendations and scheduling Goal planning and progress tracking Workout analysis and feedback Estimated calorie burn Heart rate monitoring Track muscle growth and offer classes by muscle group Social element to compete with friends X Al integration X Weights and mat PELOTON Peloton Guide (Launched April 5, 2022) Precision body movement tracking Instructional workouts from famous trainers Live classes Personalized recommendations and scheduling Goal planning and progress tracking Workout analysis and feedback Estimated calorie burn Heart rate monitoring (additional cost) Track muscle growth and offer classes by muscle group Social element to compete with friends Al integration Weights and mat (additional cost) 28#29B FINANCIAL TIMES Inside Project Tinman': Peloton's plan to conceal rust in its exercise bikes MANAGEMENT ATTEMPTED TO COVER-UP AND DELIVER DEFECTIVE PRODUCTS Company insiders tell the FT that executives hatched a scheme to cover up corrosi avoid a costly recall PELOTON Internal documents seen by the FT show the procedure was for corrosion to be dealt with using a chemical solution that concealed it by reacting with the rust to form a black layer' © Adam Glanzman/Bloomberg BW BLACKWELLS CAPITAL February 22, 2022 "[E]xecutives hatched a plan, dubbed internally as "Project Tinman", to conceal the corrosion and sent the machines to customers who had paid between $1,495 and $2,495 to purchase them... Eight current and former Peloton employees across four US states ... described the plan as a nationwide effort to avoid yet another costly recall just months after the company's most tragic episode - the death of a child due to the design of its treadmill... 'It was the single driving factor in my beginning stages of hatred for the company that I had spent the previous year and a half falling in love with,' said an outbound team lead, who reviews products before they are shipped to customers... This directive alarmed some employees because Peloton had previously disqualified bikes with any rust from becoming a 'refurb' a discounted bike only available to employees and their friends — let alone sold at full price." Source: Patrick McGee, "Inside 'Project Tinman': Peloton's plan to conceal rust in its exercise bikes." Financial Times, February 22, 2022. 29#30C 10% 0% -10% -20% -30% -40% -50% February 2022 BW BLACKWELLS CAPITAL PELOTON HAS CONTINUED TO UNDERPERFORM SINCE CHANGES WERE ANNOUNCED Peloton TSR Since Leadership Transition¹ Peloton March 2022 Nasdaq Subscription Peers Proxy Peers P Proxy Peers: -3% Nasdaq: -3% Subscription i Peers: -12% -37% PELOTON OTON April 2022 (1) Source: FactSet. Note: Data as of April 8, 2022. "Subscription Peers" include Match Group, Netflix, Roku, Sirius XM and Spotify. "Proxy Peers" include DocuSign, GoDaddy, JustEat, Okta, RingCentral, Roku, Splunk, Twilio, Workday, Zendesk, Zillow and Zynga. "Proxy Peers" are disclosed in the Company's proxy statement filed on October 25, 2021. Peer data refers to medians. 30#31C THE MARKET REMAINS SKEPTICAL ABOUT MANAGEMENT'S ABILITY TO EXECUTE BW $151.72 F2Q 21 85% F2Q 21 Since the beginning of 2021, analysts and investors have lost optimism around Peloton's prospects for value creation BLACKWELLS CAPITAL Peloton Stock Price¹ % Analyst Buy / Overweight Ratings¹ $23.56 Current 46% Current (1) Source: FactSet. "Current" data as of April 8, 2022. "F2Q 21" data as of December 31, 2020. $145.92 F2Q 21 7% F2Q 21 Analyst Mean Target Price¹ Short Interest¹ $42.53 Current 14% Current 31#32C ■ The market questions McCarthy's role and credibility given: Foley, as Executive Chair, continues to wield considerable influence Exorbitant renumeration package Lacks significant manufacturing or supply chain expertise Concerning ties to Peloton Board members No plan to turn Peloton around ■ ■ ■ ■ BW ANALYST COMMUNITY RAISES DOUBTS ABOUT MCCARTHY Barry McCarthy's comments as CEO have created concerns about his ability to effectively turn around Peloton and execute BLACKWELLS CAPITAL "You can't possibly know what the TAM [total addressable market] is. You're in the middle of inventing the TAM" 3 - Barry McCarthy OPPENHEIMER "We don't see new CEO Barry McCarthy (age 69 and member of five other boards) as a day-to-day operator" 1 "I don't think Barry is looking to work 100-hour weeks at this company. I think this was a way for CEO John Foley to kind of save face" 2 (1) Oppenheimer Equity Research, February 8, 2022. (2) Brian Sozzi, Interview with Oppenheimer Analyst, "Peloton's new CEO has one not so secret mission: analyst," Yahoo Finance, February 8, 2022. (3) Andrew Ross Sorkin and Lauren Hirsch, "Peloton's New CEO on the Tough Road Ahead," The New York Times, February 19, 2022. 32#33C BW THE MARKET REMAINS SKEPTICAL OF A STANDALONE PELOTON BMO "Our first take of the call is that, unfortunately, it didn't feel like much was different. John Foley as Executive Chairman appeared to hold as much court on the call as John Foley CEO.... Chasing the goal of growth while just beginning to restructure appears potentially counter-productive." BMO Equity Research, February 8, 2022 41 Morgan Stanley "We lack visibility and thus conviction in the medium-term outlook as we await more detail around new CEO Barry McCarthy's go forward strategy, including equipment pricing changes, subscription pricing, and the evolution of the content platform..." Morgan Stanley Equity Research, March 14, 2022 BLACKWELLS CAPITAL Note: Permission to use quotes neither sought nor obtained. Emphasis added. WEDBUSH "If Peloton tries to go alone ahead, not sell, there are cautionary tales of troubled consumer products in cost cutting mode that have been down this path with Fitbit and GoPro coming to mind in darker stories." Wedbush Equity Research, February 8, 2022 COWEN "Uncertainty exists given Peloton's hardware price increase, reduced marketing budget for FY2H22, and staffing reorganization while we note consumer demand has yet to stabilize." Cowen Equity Research, February 8, 2022 33#34BW BLACKWELLS CAPITAL PELOTON INTERACTIVE, INC. Peloton Reimagined#35SIGNIFICANT VALUE CREATION OPPORTUNITIES FOR ACQUIRER BW A potential acquirer could realize substantial value beyond conventional revenue and cost synergies by reimagining Peloton as a comprehensive fitness and health platform Legacy Peloton Hardware-Focused Revenue Model Bikes, Treadmills and Strength Equipment Closed Platform That Requires Peloton Equipment App Experience is Limited to Content Delivery BLACKWELLS CAPITAL "Peloton Reimagined" Fitness-as-a-Service ("FaaS") Model "One-Stop Shop" for a Suite of Fitness and Health Solutions "Powered By Peloton," Open Platform Approach Social Network and Immersive Experiences 35#36SPORTS TRAINING, CLUBS & PHYSICAL THERAPY NTC NY RR NEW YORK ROAD RUNNERS BW R ROTHMAN ORTHOPAEDICS US YOUTH SOCCER BLACKWELLS CAPITAL TELEHEALTH OTHER FITNESS BRANDS ECHELON Fitness+ SOULCYCLE NAUTILUS #fitbit ★ PA ★ RUSH PRIDE & PASSION Inc FITNESS-AS-A-SERVICE PELOTON ECOSYSTEM "BIG DATA" Collect - Analyze - Share - Enable PELOTON "FaaS" SOCIAL, NETWORK & GAMING prime gaming & TikTok Meta PELOTON BRANDED PRODUCTS K ⒸONE O FITNESS CLUBS CRONACH NUTRITION & COOKING Weight Watchers noom seniornutrition Nutrisystem* н network LA FITNESS LIFETIME EQUINOX FITNESS 36#37BW P FITNESS-AS-A-SERVICE OPPORTUNITY TO CREATE A CATEGORY WITH A REIMAGINED PELOTON Beyond home fitness products into a cloud-based Fitness-as-a-Service ("FaaS") platform PELOTON отом "FaaS" BLACKWELLS CAPITAL A B C D Asset-Light, Software Focused Business Outsource all manufacturing and focus critical resources on developing Peloton into a software-centric organization as the cornerstone to becoming the unequivocal leader in Fitness-as-a-Service ("FaaS") Fully Integrated Fitness Product Portfolio Become the central technology platform and one-stop shop for integrating all aspects of physical and mental wellness. Peloton's subscribers would gain access to Peloton's expanding fitness products/programs as well as products and services not proprietary to Peloton - such as other fitness equipment, popular nutrition programs, telehealth, sport-specific training programs, pre- and post-natal care, etc. Social Health & Wellbeing Leader Become the leading fitness-focused social network in the world with services ranging from at-home or on-the-road engaging workouts with highly regarded Peloton instructors to metaverse interconnected fitness programs linking like-minded friends wherever and whenever desired "Big Data" Driven Leverage valuable data collected from Peloton-proprietary and complementary technologies (such as wearable technologies) to offer an expanding array of personalized health and wellness products and services to consumers. Use proprietary data to accurately determine market-driven and demographic-based pricing models and help determine the optimal portfolio of Peloton product/service offerings 37#38A I ■ ASSET-LIGHT, SOFTWARE FOCUSED BUSINESS: THE CORNERSTONE OF FITNESS-AS-A-SERVICE Peloton should outsource all manufacturing and focus critical resources on developing Peloton into a software- centric organization as the cornerstone to becoming the unequivocal leader in Fitness-as-a-Service ("FaaS") Blackwells believes the future of Peloton is as an asset-light, software-focused Company As Peloton continues to derive more of its revenue and earnings from its subscription and software offering, Blackwells believes the Company should sunset in-house manufacturing over the next few years Outsourcing manufacturing and shifting Peloton to an asset-light model increases the Company's focus and frees up incremental capital for: Developing mission-critical software powering health, wellness and fitness Producing best-in-class content Allocating more towards software-focused initiatives Results in a more attractive business model: Highly predictable, subscription-based high margin income statement Much higher ROI business model Asset-light with low maintenance and working capital requirements BW BLACKWELLS CAPITAL ALDS ARGANT Wednesday 45/17@9:30 AM 45 min Rhythm Ride ALEX TOURSANT Munday 4/3/17 9:30 AM 30 min HIIT Ride ALEX TOUSSANT Thunday 3/30/17@11:30 AM FEATURED W WI ALEX TOUSSAINT Tuesday 4/4/17 @ 8:30 PM ON- 45 min New Tracks Ride ALEX TOUSSAINT Saturday 4/1/17 @ 5:00 PM 45 min Metrics Ride ALEX TOUSSAINT Thursday 3/30/17@6 ALEX TOUSSAINT Monday 4/3/17 @ 6:30 PM 45 min Metrics Ride ALEX TOUSSAINT Saturday 4/1/17 @ 12:45 PM 45 min 90s Hip Hop Ride ALEX TOUSSAINT Wednesday 3/29/17@8:00 AM 38#39A ■ ■ ■ ■ BW As a software-focused company, Peloton should work to partner with all fitness equipment manufacturers integrating Peloton's software with new, and potentially existing, equipment across the world ASSET-LIGHT, SOFTWARE FOCUSED BUSINESS: FITNESS HARDWARE "POWERED BY PELOTON" Shifting to an asset-light model will allow Peloton to focus on creating software that utilizes its superior brand and content offering to create a universal fitness platform "Powered by Peloton" Integrating Peloton software with any new fitness equipment, regardless of manufacturer, would allow the company to expand to several markets including: Gyms Hotels Offices Schools & Universities - BLACKWELLS CAPITAL Existing fitness equipment Hospitals & medical centers A partnership with Peloton would give manufacturers a differentiated selling point while also exposing Peloton to millions of new potential subscribers In 2020 the global treadmill market generated over $3.2 billion and is expected to grow to nearly $6 billion per year by 2030 The potential to integrate Peloton into all treadmill manufacturers, let alone all fitness equipment, creates a significantly larger avenue to gain potential subscribers for the Company's software (1) Source: GlobeNewswire "Global Treadmill Market to Reach $5.93 billion by 2030: Allied Market Research," July 6,2021. PELOTON PELOTON PELOTON PELOTON Peloton software on legacy (non-Peloton) equipment and integrated into every aspect of the gym, home, and outdoor fitness experience P 39#40B BW Becoming the central technology platform and one-stop shop for integrating all aspects of wellness FULLY INTEGRATED FITNESS PRODUCT PORTFOLIO: PELOTON AS A COMPREHENSIVE FITNESS PLATFORM As a complete health and wellness platform, Peloton and its Fitness-as-a-Service offering will have several opportunities to generate outsized value for shareholders through strategic partnerships, data collection, social media, gaming, and much more ▪ Partnerships could include gyms powered by Peloton software, telemedicine networks using data collected around individuals' fitness habits, nutritional programs with leading health food grocers and restaurants, video game designers for fitness-themed games or any number of potential wellness- or lifestyle-focused product or service LIFE TIME Powered by P Fitness + Health + Nutrition/Wellness + Mindfulness + Community + Experiences PELOTON BLACKWELLS CAPITAL CHOPT WHOLE FOODS MARKET sweetgreen PELOTON 11:59 P Social 40#41B BW As both a one-stop connected fitness content shop and the software provider powering gyms and equipment, Blackwells envisions a future with Peloton as the first fully integrated fitness experience in the world ■ FULLY INTEGRATED FITNESS PRODUCT PORTFOLIO: INTEGRATED WORLDWIDE FITNESS EXPERIENCE The Total Addressable Market for potential Peloton subscribers as the world's go-to fitness solution represents an incredible opportunity for Peloton According to the World Health Organization (WHO) in high-income countries globally, 74% of men and 65% of women meet the global recommended levels of physical activity representing a total population of roughly 809 million physically active adults BLACKWELLS CAPITAL PELOTON Connected World Fitness Source: World Health Organization, Physical Activity Factsheet. Source: Worldpopulation review.com, "High Income Countries 2022." Note: Current Peloton subscribers based on Connected Fitness subscribers only. If Peloton's Fitness-as-a-Service, comprehensive health and wellness offering can penetrate even 2% of the already physically active adults in high-income countries, the Company could add approximately 16 million additional users, increasing its current subscriber base by nearly 6x 41#42■ B Providing a comprehensive offering with a one-stop fitness content shop should increase lifetime value of the customer ■ FULLY INTEGRATED FITNESS PRODUCT PORTFOLIO: CENTR FITNESS CASE STUDY Recently acquired fitness app Centr was touted as "your physical trainer, dietician, chef, and wellness coach" as the app offered more than just workouts Providing not only workout classes but integrating diet, wellness, mindfulness and planning creates significant value for the consumer and increases stickiness Centr was acquired in March 2022 by HighPost for over $200 million or $10,000 per subscriber With over 2.8 million subscribers at Peloton, an acquisition valuing each subscriber at $10,000 would result in a takeout price of $83 per share BW BLACKWELLS CAPITAL Quick Links: Commodities Stocks Rates & Bonds Currencies Futures Economics Fixed Income ETFs Sectors Watchlist Wealth Crypto Centr Fitness App Bought by Mark Bezos's HighPost ■ Digital platform to merge with equipment maker Inspire Fitness ■ Combined company valued at over $200 million including debt Sources: Bloomberg.com, "Chris Hemsworth's Centr Fitness App Bought by Mark Bezos's HighPost", March 31, 2022. Company website. Note: Current Peloton subscribers based on Connected Fitness subscribers only. 4:25 4 WARM-UP WORKOUT WORKOUT Bloomberg START WORKOUT FUNCTIONAL TRAINING: TAKE NO PRISONERS By Da Rulk INTERMEDIATE COOL-DOWN FINISH WORKOUT 36 MINS Before you start, make sure you visit the Essential Guide to learn how to nail the nine key movements of Raw Functional Training 4:25 ← FISH BURGER WITH YOGURT TARTAR SAUCE PREP 15 MIN COOK 6 MIN INGREDIENTS SERVINGS 2 14 oz white fish fillets RECIPE ADD TO SHOPPING LIST 42#43There is a significant untapped opportunity for Peloton to gain users through a fitness-focused social media platform ■ C ■ Peloton has already built a remarkable social media following with 1.8 million followers on Instagram and 466,000 Peloton users on the Company's Official Peloton Member Facebook page Other fitness-focused social media platforms such as Strava (over 100 million members¹) have amassed incredible followings, demonstrating the desire for avid fitness users to share their workouts and experiences BW BLACKWELLS CAPITAL SOCIAL HEALTH & WELLBEING LEADER: SOCIAL MEDIA 9:26 Following Feed Cassandra Ling Oh 15m Strava App¹ Clubs Post Run Recovery with Tiffany Cruikshank 900 9:26 Following The Chores Micke Westburg trained with The Sufferfest 14.6 m Oft THE SUFFONFEST Feed Jodi Anthony You Oh 58m ol ANMER Clubs La mare @ *** Strava, one of the most popular fitness apps, allows users to record, analyze, and share workouts on its social media platform Strava has approximately 100 million users¹ (1) Source: Bloomberg.com, "Strava's Hardcore Fitness Following Is Powering Through the Pandemic", January 5, 2022. Images from company website. (2) Source: Facebook.com and Instagram.com. Official Peloton Member Page Private group Shortcuts Daily UX Writing HubSpot Academy HubSpot Academy 20+ The Cook's Cook 20- UX Writers Collectiv.. 1 Instagram THE AUTOKE The Output 17 Peloton Social Media² 0 About this group OFFICIAL PELOTON MEMBER PAGE + Join group Share YourS... Description Welcome to the Official Peloton Member Page! In this group, you can connect with fellow Peloton Bike, Tread, and Digital Members and stay up to date on Peloton announcements and features. For support info and FAQs please go t... See more POSTS Private Only members can see who's in the group and what they post Visible Anyone can find this group Q Search More onepeloton • 4,353 posts Safety Noti... GUIDES Join this group to see the discussion, post and comment. Bracket Follow REELS www HISTORY 1.8m followers 56 following Peloton Inspire, empower, unite. Together we go far. #OnePeloton like2b.uy/onepeloton Instructors to Group created on 19 February 2015 Name last changed on 13 April 2018 VIDEOS See more GROUP BY P Peloton 560,470 people like this Shop Now Peloton Ap TAGGED Log In 0 Sign Up MyPoloton... 43#44■ C A Peloton social media platform has the potential to generate hundreds of millions in incremental revenue ■ SOCIAL HEALTH & WELLBEING LEADER: SOCIAL MEDIA CASE STUDY Given the cult-like following that Peloton has amassed, a social media platform for the community of Peloton users should gain significant traction If a social media app was able to scale to even 1% of Strava, Peloton would gain approximately 1 million new users If each new users subscribed to the Peloton Digital offering the company would generate over $155 million in incremental subscription revenue per year¹ Peloton could offer services ranging from at-home or on-the-road engaging workouts with award-winning Peloton instructors to metaverse interconnected fitness programs linking like-minded friends wherever and whenever desired BW BLACKWELLS CAPITAL CAN BUSINESS Peloton created a cult around home fitness. Analysis by Allison Morrow, CNN Business Updated 12:42 PM ET, Tue November 9, 2021 Source: CNN Business, "Peloton created a cult around home fitness. Now it desperately needs a new play", November 9, 2021. (1) Note: Assumes 1 million subscribers paying $12.99 per month or $155.88 per year. 44#45As Peloton expands into increasingly more facets of the fitness space, its access to an increased variety and quantity of data will allow the Company to better customize its offering to improve the health of each user - D In Blackwells' vision of Peloton as a one-stop shop, fully integrated fitness offering, the Company would be able to leverage valuable data to offer an expanding array of personalized health and wellness products and services including: - - Workouts Heart rate Tone of voice Reps Form VO2 max "BIG DATA" DRIVEN: IMPROVING DATA TRACKING & HEALTH OF MEMBERS Glucose levels Fertility BW BLACKWELLS CAPITAL - Body sculpting Skin temperature Blood oxygen levels Sleep quality Stress levels Steps Floors climbed Sun exposure Source: Whoop and Oura company websites. - - - I Diet Nutrition Wellness Calorie count Blood pressure Location Distance traveled Blood Alcohol levels 9:20 0 OVERVIEW RECOVERY Most of these days were more intense than what your body may have been W prepared for. This will promote fitness gain in the short-term but may not be sustainable in the long-term. Dedicate extra time to rest while Strain build is high. O Ⓡ The 20 DAY STRAIN 10.3-141- 10.1- RESTING HEART RATE 48 bpm HRV BALANCE Examples of Existing Health Monitors BODY TEMPERATURE +0.2°F RESTING HEART RATE APR 29 MAY S BODY TEMPERATURE RECOVERY INDEX NIGHT SLEEP BALANCE Ⓒ READINESSRESTING HR 2 Mon Readiness contributors READINESS SLEEP 86 optimal www 100% HEART RATE VARIABILITY 80 ms 66% RECOVERY RESPIRATORY RATE 15.2 / min Optimal Pay attention score 83 Good 9:20 OVERVIEW W 16 14 DAY STRAIN During this 7-day period, your average Day Strain (20.4) was above your average at the time (18.5). 20.4 TOTAL SLEEP EFFICIENCY TOTAL SLEEP TIME 8h 16m RESTFULNESS APR 29 MAY S SLEEP EFFICIENCY 88% REM SLEEP STRAIN LEP SLEEP LATENCY 85 Whoop TODAY Mon AWAKEREM LIGHT DEEP SLEEP 83 Good CALORIES 4,522 RESTING HEART RATE 48 bpm TIME IN BED 9h 25m Sleep contributors Oura I^I 88% Pay attention 1h 6m, 13% 1h 40m, 20% 9:20 W 100% RECOVERY 49% Over this 7-day period, your average Recovery (49%) was lower than its recent average (70%) STAY ACTIVE GOAL PROGRESS 173/ 400 Cal APR 29 MAY S WALKING EQUIVALENCY 2.8 mi MOVE EVERY HOUR MEET DAILY GOALS 76 TRAINING VOLUME RECOVERY TIME RECOVERY TRAINING FREQUENCY 94 LOW MEDIUM HIGH THR 53 ACTIVITY 98 Activity contributors SLEEP Optimal RESPIRATORY TOTAL BURN 1,562 Cal 17.9rpm STEPS 4,692 Oh 48m inactivity O alerts Optimal Optimal Optimal Optimal 45#46■ Peloton's access to proprietary data can be utilized to accurately determine market-driven and demographic- based pricing models and help determine the optimal portfolio of Peloton product/service offerings ■ ■ D ■ "BIG DATA" DRIVEN: OPTIMIZE PRICING AND PRODUCT OFFERING Management at Peloton has seemingly been far behind the curve in utilizing data for pricing and product optimization Blackwells' market research indicates that Peloton could raise subscription prices substantially Nearly 80% of existing Peloton owners surveyed indicated that they would continue paying their Connected Fitness subscription no matter the price Of those that indicated price sensitivity, the average price at which they would consider canceling was 33% higher than the current Connected Fitness subscription price BW BLACKWELLS CAPITAL "We love the $39 price point. We did no research on it. I picked the number..." - John Foley What is the most you would be willing to pay for a subscription? I would continue paying no matter what the price is 79% 15% If you would cancel at a specific price, what is the most you would be willing to pay for a subscription? نان $30-$39 Source: Bespoke Market Intelligence April 2022 and December 2021 Peloton Surveys. (1) Source: CEO John Foley at Barclays Global Technology, Media, and Communications Investor Conference, December 11, 2019. 46% $40-$49 28% $50-$59 3% $60-$69 I would cancel at a specific price point 21% 2% $70-$79 1% $80-$89 Average: $52 5% $100+ 46#47BW BLACKWELLS CAPITAL PELOTON INTERACTIVE, INC. The Best Option is to Sell Peloton#48■ THE BOARD SHOULD EXAMINE A SALE IN ORDER TO MAXIMIZE VALUE Poor governance makes Peloton a less appealing investment for many investors ■ Poor governance structure limits accountability Insiders retain an outsized voting influence despite their modest economic interest The Board remains comprised of interconnected legacy directors whose experience is no longer relevant to address the Company's ongoing challenges BW BLACKWELLS CAPITAL Pelton has been mismanaged Current management lacks the talent needed to fix the Company ■ The Company has still not settled on a consistent pricing strategy and appears not to understand its own customer base ■ Peloton continues to suffer from self-inflicted supply chain and quality control issues, with no apparent plan for improvement Recent changes are largely illusory Old challenges remain ■ A perfunctory leadership transition has not brought about any meaningful changes to the Company's operations A turnaround involves significant operational risk A turnaround will take years for a strong management team to execute ■ After witnessing $30 billion in shareholder value destruction in the last year, Blackwells does not believe investors have the patience or confidence in the Board's ability to effectively execute a multi-year business-wide transformation strategy Peloton is a strategically valuable asset Peloton would be attractive to many potential acquirers ■ The Company possesses an engaged, loyal and premium subscriber base that would offer significant value to the right owner 48#4910- Very Good Value 9 PELOTON NordicTrack BOWFLEX ECHELON SCHWINN → PRO-FORM 1 0 - Very Bad Value Other How Good is the Value of Peloton Content? N WAGS N86 7 6 5 4 3 Peloton has the hallmarks of a valuable business with strong customer loyalty and retention 0.6% 0.7% 2.7% 2.2% 6.3% 6.0% 4.7% 4.1% BW BLACKWELLS CAPITAL 4.4% PELOTON IS A STRATEGICALLY VALUABLE ASSET 6.9% Which Brand of Treadmill are You Looking to Buy? 10.6% 10.4% 9.3% 18.1% 14.0% 28.2% 34.1% 36.7% Source: Bespoke Market Intelligence December 2021 and April 2022 Peloton Surveys. How Often Do You Expect to Use Your Peloton in the Coming Years? 2026 2025 2024 2023 2022 Never P PELOTON NordicTrack BOWFLEX SOULCYCLE SCHWINN → ECHELON Other myxfitness Which Brand of Spin Bike are You Looking to Buy? 3.1% 0.8% 9.2% 8.5% 7.6% 13.9% 3.95 17.4% 4.01 4.03 4.07 3.99 Very Often 39.7% 49#50$80 $70 $60 $50 $40 $30 $20 $10 $0 Peloton can garner a takeout price today that would take years to achieve as a standalone company Valuation Bridge to $75 per Share as Standalone Company $19 Current Hardware Value OBTAIN FUTURE VALUE TODAY THROUGH A SALE $9 BW BLACKWELLS CAPITAL Current Subscriber Value (Digital + Connected Fitness) $47 Value Needed from New Connected Fitness Subscribers $75 Total Value 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Cumulative Subscribers (in millions) Given current customer acquisition pace 15.9 m subscribers would take -14 years to acquire 362k 712k 168k CY 2017 CY 2018 CY 2019 1.7m 2.8m CY 2020 CY 2021 15.8m Subs Needed 18.6m Total Subs At current valuation levels Peloton would need to more than double last-twelve-months (LTM) revenue and grow connected fitness subscribers from 2.8 million 18.6 million to organically grow to the $75/ share that Peloton is worth in a sale Note: Assumes 1) Zero growth on new added LTM connected fitness (~1.1 million new subscribers per year); 2) No changes to in-place connected fitness pricing plan ($39.00 per month or $468.00 per year); 3) Hardware revenue remains constant (LTM hardware revenue = $2.98 billion); 4) No growth to digital subscriber base (862,000 subscribers); 5) Valuation of current subscriber and current hardware based on EV / FY2022E Revenue multiple. 50#51■ Amazon becomes the category leader in digital health & wellness Immediate ability to bundle with 200 million Prime Members Gains significant customer data edge to use for future consumer targeting across Amazon ecosystem - Through its preexisting health, wellness, content, and lifestyle segments, Amazon has a robust opportunity to cross-sell and bundle content and offerings such as: - POTENTIAL STRATEGIC ACQUIRERS AMAZON Amazon would gain significant presence in digital health & wellness globally and obtain further data about its customers to monetize in a variety of ways Prime Gaming: Creating games and game-like content for workouts (like controlling characters and scoring points by using your Tread) Amazon Fresh: Integrated meal plans, diets, and nutrition goals Prime Video: New exercise content combined with ability to watch Prime Video content and MGM content on the bike amazon pharmacy Strategically Defensive: Prevents other big tech / health and wellness competitors from gaining trophy subscription fitness asset WHOLE FOODS MARKET BW BLACKWELLS CAPITAL twitch halo prime video prime gaming amazon care fresh Company Overview¹ Market Cap ($M) Enterprise Value ($M) LTM Revenue ($M) Cash and Short-Term Investments ($M) Net Debt/LTM EBITDA amazon Economic Benefits to Amazon² 2.5% 5.0% 10.0% Number of Members: 200 million Value Creation at Various Member Penetration Rates: $27.8 billion $55.7 billion $111.4 billion (1) Source: CapIQ Pro and Company filings. All data as of April 8, 2022 unless specified otherwise. (2) Source: Company filings and publicly available data. Note: Assumes PTON incremental margin of 60%, below managements guidance of 70%, on current subscription prices. Accretion based on 2022E EBITDA multiples per Capital IQ. $1,571,245 $1,614,635 $469,822 $96,049 0.73x 51#52E ■ Amazon Halo - Fitness Tracker and Wearable ■ - POTENTIAL STRATEGIC ACQUIRERS AMAZON CASE STUDY Amazon has been making a significant push into digital health & wellness In December 2021, Amazon launched the Amazon Halo Halo tracks physical activity (e.g., heart rate, steps, activity score and blood oxygen levels), sleep time and assessment, body composition and tone of voice Halo is also partnered with Whole Foods for 450+ recipes and has daily meditations Would allow for easy integration with Peloton and could become exclusive wearable of Peloton Acquiring Peloton would be a logical expansion of Amazon's existing health and fitness strategy BW BLACKWELLS CAPITAL Peloton's ecosystem would provide another distribution channel for Amazon's products (e.g., video, music, Audible and Kindle) Continues to enhances value proposition for all Prime Members Source: Company filings and publicly available data. ~t 12 14 Halo View Touch color display with live Halo health metrics On-demand blood oxygen levels Move reminders, text notifications, and timers Includes 12-months of Halo membership amazon 20 Halo Band Distraction free sleep & activity tracking On-device Tone analysis Up to 7-day battery life, swim proof up to 50 meters Includes 6-months of Halo membership 52#53■ Apple becomes the category leader in digital health & wellness Immediate ability to bundle with 100 million Apple watch users Gains significant customer data edge to use for applicability across the Apple ecosystem ▪ Through its preexisting health, wellness, content and lifestyle segments, Apple has a robust opportunity to cross-sell and bundle content offerings such as: ■ ■ ■ POTENTIAL STRATEGIC ACQUIRERS APPLE Apple would position itself as the global leader in digital health & wellness Apple Fitness+: Full integration of all Apple's preexisting health features and classes Apple Music: Integrated apple music to create workout playlist and content (i.e., sort music by BPM or workout time) Apple TV+: New exercise content combined with ability to watch Apple TV+ content Leading brand and high quality of Peloton offering fits well with Apple's ethos of premium products BW Strategically Defensive Asset: Prevents other big tech / health and wellness competitors from gaining a trophy subscription fitness asset *Fitness+ Music BLACKWELLS CAPITAL WATCH tv+ Company Overview¹ Market Cap ($M) Enterprise Value ($M) LTM Revenue ($M) Cash and Short-Term Investments ($M) Net Debt/LTM EBITDA Economic Benefits to Apple² Number of Users: $2,775,774 $2,834,659 $378,323 $63,913 0.46x (1) Source: CapIQ Pro and Company filings. All data as of April 8, 2022 unless specified otherwise. (2) Source: Company filings and publicly available data. Note: Assumes PTON incremental margin of 60%, below managements guidance of 70%, on current subscription prices. Accretion based on 2022E EBITDA multiples per Capital IQ. 100 million Value Creation at Various User Penetration Rates: $15.5 billion 2.5% 5.0% $31.0 billion 10.0% $62.1 billion 53#54€ ■ ▪ Apple's original health app was announced in June 2014 Following the popularity of the Apple Watch, Apple developed new health and wellness functionality and features: Tracking health data and storing clinical medical records Electrocardiogram (ECG) measurements and heart rate variability Steps, walking and running distances, stairs climbed Sleep analysis, nutrition, and weight ▪ In March 2015, Apple launched Apple Fitness+, a fully integrated fitness service powered by the Apple Watch with 11 workout types, audio- guided walks and runs and real-time metric tracking Available on the Apple Watch, iPhone, iPad, and Apple TV Offers cycling, running, rowing, HIIT, strength, yoga, pilates and dance classes BW - - - BLACKWELLS CAPITAL POTENTIAL STRATEGIC ACQUIRERS APPLE CASE STUDY Apple + Peloton = health and fitness market leader Source: Company filings and publicly available data. 10:09 MONDAY, JUNE 22 Summary Activity Move 227/450 CAL Exercise 20/30MIN Stand 4/12HRS Workouts ← Core Training 78CAL Surfing 308CAL Dance 235CAL Trends Ⓒ Summary 05:270 136 45 CAL Show More Friday > 6/12/20 > Show More S Activity 10:09 O WATCH *Fitness+ Ť 05:27.07 136BPM 45 ACTIVE 54 CAL 10:09 TOTAL 54#55I I Google would position itself as a leading player in health and wellness Plug-and-play ability to bundle with 31 million weekly Fitbit users Robust opportunity to cross-sell and bundle content and offerings such as: Fitbit / Wear OS: Fitbit and Wear OS (a version of Google's android operating system designed for smartwatches and wearables) provide a significant opportunity to bundle content and link the systems to Peloton equipment POTENTIAL STRATEGIC ACQUIRERS GOOGLE Google Fit: Google's activity tracker Google Fit is an app for iPhone and Android which tracks runs, workouts, exercise and sleep and also links to Apple and Samsung watches Google Home / Chromecast: Google Home and Chromecast are the starting points of Google's smart home products that could incorporate Peloton into the ecosystem for a more integrated smart home experience YouTube: Google, through its ownership of YouTube, can provide new content and streaming services for the Peloton devices Strategically Defensive Asset: Prevents other big tech / health and wellness competitors from gaining trophy subscription fitness asset Google Fit BW BLACKWELLS CAPITAL fitbit ► YouTube Premium Market Cap ($M) Enterprise Value ($M) LTM Revenue ($M) Cash and Short-Term Investments ($M) Net Debt/LTM EBITDA Company Overview¹ Number of Users: Google Economic Benefits to Google² (1) Source: CapIQ Pro and Company filings. All data as of April 8, 2022 unless specified otherwise. (2) Source: Company filings and publicly available data. Note: Assumes PTON incremental margin of 60%, below managements guidance of 70%, on current subscription prices. Accretion based on 2022E EBITDA multiples per Capital IQ. $1,761,984 $1,650,219 $257,637 $139,649 Value Creation at Various User Penetration Rates: $3.0 billion 2.5% 5.0% $6.1 billion 10.0% $12.1 billion NM 31 million 55#56€ 1 ■ Google's existing presence in the connected fitness, health and wellness, and streaming content would augment these market positions Google Fit platform and FitBit wearables could seamlessly integrate with Peloton products and software POTENTIAL STRATEGIC ACQUIRERS GOOGLE CASE STUDY Peloton already runs on Google's Android operating system Google Play, Google Play Store, YouTube, and Google Podcasts bring a large collection of movies, TV shows, podcasts and original content to the Peloton ecosystem BW BLACKWELLS CAPITAL Gain significant customer data to use for future targeting across Google ecosystem; significant opportunity to collect data on the fitness, health, nutrition and habits of its users YouTube Source: Company filings and publicly available data. fitbit. 0 21:24 345 Cal 14 6,321 Heart Pts 3 Steps Your weekly target December 12-19 3/7 Achieved 154 Move min Your daily goals Last 7 days Home 102 of 150 Scoring 150 Heart Points a week can help you live longer, sleep. better, and boost your mood. 4,6 7h 32m Sleep O M TW ♡ B Journal 4870% World Health Organization O + 2 Profile Google Fit 21:24 Your daily goals Last 7 days 3/7 Achieved Bedtime schedule. You met your schedule 4 times in the last 7 days 11:00PM 07:00AM MTW T Sleep duration Last 7 days 7h30m Average OO FO MT WTFS S O Home ▼4870% MTW Last workout. Afternoon run * Sun 12 Dec 4:56PM 41m 00s 40 pts @ Journal S S Google Profile ← 21:24 Duration z Asleep O In bed Schedule 11:00 PM 7:00 AM Je Went to bed A little early O in bed Asleep Efficiency The percentage of time in bed you spent asleep. 85-95% is ideal Woke up A little late 7h 32m Quality il. Sleep stages 4870% I 7h 30m 8h 46m 84% 10:42 PM 7:24 AM O 56#57■ ■ I POTENTIAL STRATEGIC ACQUIRERS WARNER BROS. DISCOVERY / SIRIUSXM/LIBERTY COMPLEX Given the large streaming bases of Warner Brothers Discovery and SiriusXM and the extensive value creation record of John Malone and Greg Maffei, the Liberty complex could offer several strategic combination options Immediate ability to bundle with 74 million HBO Max subscribers and/or 35 million SiriusXM subscribers and 22 million Discovery+ subscribers to drive adoption Compelling value proposition for existing and new subscribers Seamless Content Integration: A Peloton acquisition would significantly widen content available for distribution to HBO Max, Discovery+ and SiriusXM and subscribers, which could attract new connected fitness subs - Increases Engagement: Streaming fitness classes through the HBO Max and Discovery+ platform should widen moat around business and generate incrementally valuable customer data Further Integration with Warner Bros. Discovery Content: Unique opportunity to offer interactive Bike, Tread (and potentially row) class workouts with beloved properties/characters like DC Comics, Lord of the Rings, and Harry Potter Strategically Defensive Asset: Prevents other big tech / streaming competitors from gaining trophy subscription fitness asset Liberty Leadership is Likely Familiar with Peloton: Peloton Board Member Jay Hoag (TCV Founding General Partner) and the Chairman of SiriusXM, Gregory Maffei (Liberty Media CEO), have served on the Board of Directors of Zillow for many years BW BLACKWELLS CAPITAL Warner Bros. Discovery¹ Market Cap ($M) Enterprise Value ($M) Pro forma LTM Revenue ($M) Pro forma Cash and Short-Term Investments ($M) Pro forma Net Debt/LTM EBITDA (1) Source: CapIQ Pro, Company filings, publicly available data and Evercore Equity Research. All data as of April 8, 2022 unless specified otherwise. SiriusXM¹ Market Cap ($M) Enterprise Value ($M) LTM Revenue ($M) Cash and Short-Term Investments ($M) Net Debt/LTM EBITDA LIBERTY $58,608 $112,474 $45,543 $3,905 4.96x $26,501 $35,553 $8,696 $191 3.52x 57#58■ The merger of Discovery and Warner Media created¹: The largest content library with ~200k hours of branded video Leading scripted and unscripted content portfolio ▪ Available in 220+ countries and territories and 50 languages Access to the high-quality production capabilities of Warner Brothers studio ▪ #1 TV studio by revenue and volume Top 2 movie studio by box office 11 of the last 12 years Premium sports rights in U.S., Europe and Latin America including partnerships with NBA, MLB, NHL, professional tennis, college basketball, professional golf, college basketball and Formula One ■ ■ POTENTIAL STRATEGIC ACQUIRERS WARNER BROS. DISCOVERY / SIRIUSXM / LIBERTY CASE STUDY Warner Bros. Discovery could leverage its unique collection and integrate with Peloton offerings ■ Peloton could add to and complement this already impressive portfolio of TV, movies, and sports with its best-in-class fitness content Liberty also owns a significant stake in SiriusXM, another opportunity to integrate other media offerings BW BLACKWELLS CAPITAL Source: Company filings and publicly available data. (1) Source: "Discovery and WarnerMedia to Combine" Merger Deck, May 17, 2021. WB WARNER BROS.DC HBO tbs GOT Sopranos SUCCESSION SEXICITY Harry Potter MATRIX HBB 123 CK SNYDER S RETLINN KING OF THEM RINGS X HBOmax Discovery discovery kids SESAME STREET TLC SCOOBY-DOO! LOONEY TUNES TNT CN CARTOON NETWORK CANN FIXER HGTV MARCH food MADNESS network HBOMAX tvn 90 DAY Fiancé NHL NBA INVIO GARROS PARIS LIBERTY FF (SiriusXm)) Formula 1 GOLD RUSH MYTHOUSTERS OPERTY OTH FOREVER HOME HOPE EUROSPORT us open discovery+ 58#59I ■ POTENTIAL STRATEGIC ACQUIRERS NETFLIX Netflix would extend its global lead as the unrivaled leader in streaming content and would add a new category to drive further subscriber growth and engagement Re-accelerates revenue and profit growth following maturation of its target market Immediate ability to bundle with 222 million Netflix subscribers to drive adoption Compelling value proposition to extend existing "Content People Love" strategy Seamless Content Integration: Peloton's ecosystem currently limits content to Peloton- only content. A Peloton acquisition would significantly widen content available for distribution to Netflix subscribers, which could attract new connected fitness subscribers that are less focused on fitness classes Increases Engagement: Streaming fitness classes through Netflix's platform should widen the moat around its business and generate incrementally valuable customer data Alignment with Increasing Focus on Interactive Content: Expands Netflix's potential in furthering its efforts in the interactive / choose-your-own-adventure content that the company has recently ventured into with the likes of Bandersnatch and Trivia Quest Strategically Defensive Asset: Prevents other big tech / streaming competitors from gaining trophy subscription fitness asset BW BLACKWELLS CAPITAL Netflix Leadership is Familiar with Peloton: Peloton Board Member Jay Hoag is the Lead Director of Netflix; Barry McCarthy previously served as long-time CFO of Netflix Company Overview¹ Market Cap ($M) Enterprise Value ($M) LTM Revenue ($M) Cash and Short-Term Investments ($M) Net Debt/LTM EBITDA NETFLIX Economic Benefits to Netflix² (1) Source: CapIQ Pro and Company filings. All data as of April 8, 2022 unless specified otherwise. (2) Source: Company filings and publicly available data. Note: Assumes PTON incremental margin of 60%, below managements guidance of 70%, on current subscription prices. Accretion based on 2022E EBITDA multiples per Capital IQ. $157,998 $170,086 $29,698 $6,028 1.89x Number of Subscribers: Value Creation at Various Subscriber Penetration Rates: 2.5% $37.0 billion 5.0% $73.9 billion 10.0% $147.8 billion 222 million 59#60€ ■ ■ ■ POTENTIAL STRATEGIC ACQUIRERS NETFLIX CASE STUDY Through its "Content People Love" strategy, Netflix can capitalize on Peloton's top tier content to deliver additional content outside of Peloton's environment Combining Netflix (the largest streaming service in the world) with Peloton (the largest interactive fitness platform in the world) opens up significant value creation opportunities Integrating Netflix's extensive content library with Peloton devices would allow riders, runners (and potentially rowers) to work out to more than only Peloton classes Adding Peloton's workout videos as an additional content category to the Netflix library could also introduce an entirely new and significantly larger user base to the content that millions of Peloton users already love while also differentiating Netflix's offering compared to traditional streaming services Providing access to Netflix content could drive incremental subscriber growth as well as purchases of connected fitness equipment and devices Netflix also has one of the largest content creation platforms, opening the door to many collaboration opportunities BW BLACKWELLS CAPITAL Source: Company filings and publicly available data. NETFLIX Netflix's View: streaming entertainment is replacing linear TV Content People Love People's tastes are very broad, even in a single market. The internet allows us to offer a wide variety, and to have our user interface quickly learn and make recommendations based upon individual users' tastes. Those members who love action blockbusters, Korean soaps, anime, sci-fi, Sundance films, zombie shows, or kids cartoons will find that Netflix fills their homepage with relevant and interesting titles. NETFLIX ORIGINAL STRANGER THINGS 2017 2Seasons [CUS HD St Since 2013, we've been at a scale where we can economically create original content for Netflix and our offering has improved as we grow further and gain greater confidence. With each original, we learn more about what our members want, about how to produce and promote effectively, and about the positive impact of originals on our brand. 95% When a young boy vanishes a small town uncovers a mystery involving secret esperiments, terrifying supernatural forces and one strange little girl Wan Ryde Dodao Mttew Msdie TV Sows TV S& Faye v Shows Popular on Netflix NETFLIX STRANGER THINGS Recently Watched CLUB CUERVOS INVESTORS BUTPLO okja PUNISHER METFLIX GLOW 10 BRIGHT NETFLIX NETFUB CROWN NETFLIX Ph Masker of None NETFLIX N 60#61■ ■ ■ ■ ■ Nike could diversify away from its legacy consumer retail business Immediate ability to bundle with 300 million members of Nike's membership program Gains significant customer data edge for Nike product development and customer targeting Nike has a robust opportunity to integrate its existing apps and platforms: Nike Training Club: Nike's Nike Training Club is an app that aims to aid its users by creating stronger fitness habits and establishing goals, creating an opportunity to integrate the planning-focused aspects of the system with Peloton's vast content base BW POTENTIAL STRATEGIC ACQUIRERS NIKE Nike could drive future growth in its consumer fitness segment Celebrity Endorsements: Nike has one of the most impressive rosters of celebrity endorsements, providing an opportunity for Peloton to gain access to premier guests to appear in its content Strategically Defensive Asset: Prevents other big fitness retail or health and wellness competitors from gaining trophy subscription fitness asset NTC BLACKWELLS CAPITAL NRC Company Overview¹ Market Cap ($M) Enterprise Value ($M) LTM Revenue ($M) Cash and Short-Term Investments ($M) Net Debt/LTM EBITDA Economic Benefits to Nike² Number of Members: 300 million Value Creation at Various Member Penetration Rates: $11.3 billion $22.6 billion $56.6 billion 0.5% 1.0% 2.5% $203,027 $202,217 $46,894 $13,467 NM (1) Source: CapIQ Pro and Company filings. All data as of April 8, 2022 unless specified otherwise. (2) Source: Retail Dive, "How Nike execs think through its digital ecosystem", November 11, 2021. Note: Assumes PTON incremental margin of 60%, below managements guidance of 70%, on current subscription prices. Accretion based on 2022E EBITDA multiples per Capital IQ. 61#62€ ■ ■ Combining Nike Training Club and Peloton's content base provides an opportunity for Nike to drastically increase its content library - Nike's network of celebrity endorsements could be tapped to create guest content such as: Tennis boot camp with Serena Williams Tiger Woods strength training for golf Basketball cardio workout with Lebron James Nike could drive future growth in its consumer fitness segment RETAIL DIVE Peloton would also give Nike significant access to customer data and workout trends, allowing it to stay ahead of the curve in product offerings and new technology and content POTENTIAL STRATEGIC ACQUIRERS NIKE CASE STUDY How Nike execs think through its digital ecosystem Recent collaborations with Megan Thee Stallion and Dick's Sporting Goods have built on the brand's efforts to craft a connected shopping experience across its channels. Published Nov. 11, 2021 BW BLACKWELLS CAPITAL ***** (1) Source: Retail Dive, "How Nike execs think through its digital ecosystem", November 11, 2021. GET LEAN BEGINNER Burn fat and lose inches with 3+ workouts a week and yoga to re-energize. WEEK 1 Day 1 Day 2 MILES Day 4 4:21 PM PROGRAM SWEAT+SHAPE STEADY RUN HURRICANE * 100% 00 Bi SEC SEC SEC SEC SEC 4:21 PM SEC REVIEW RUN IN PLACE SQUAT TO SPLIT JUMP RUN IN PLACE MOUNTAIN CLIMBERS RUN IN PLACE LATERAL BOUNDS 20 RUN IN PLACE SEC *100% STEP UP WITH KNEE DRIVE > > ZOOM IN 5 04:27 25 2/10 Squat To Split Jump 00:27 Next: Run In Place II PAUSE END WORKOUT "Customer data is key to Nike's ability to keep customers within its environment, and Nike uses its membership to actively personalize a customer's experience by recommending products or pushing shoppers to content on its training apps." 1 62#63Peloton is a strategically valuable asset A SALE OF THE COMPANY IS THE BEST RISK-ADJUSTED OPTION FOR SHAREHOLDERS Peloton would be an attractive fit for many strategic acquirers Fair value for Peloton in a sale is at least $75 per share BW BLACKWELLS CAPITAL ▪ Powerful brand and market leader Largest interactive and connected fitness platform in the world Highly engaged customer base with low churn rates H I Significant customer data ▪ Subscribers value the Company's proprietary and differentiated content and user experience Large TAM and still in the early innings of market penetration H I ▪ Potential strategic acquirers including Apple, Amazon, Google, Netflix, Nike and others have highly complementary businesses with existing user bases that would provide many opportunities for cross-selling ▪ An acquirer would be able to realize significant cost synergies and better utilize Peloton's latent pricing power ■ Peloton would fit within product and service ecosystems, including wearables, streaming content and software Extremely difficult-to-replicate business with 10+ years of lead time H 1 Based on comparable transactions and peer multiples, Peloton could be worth at least $75 per share in a sale Buyers could easily justify paying $75 per share or higher based on the high potential for value creation opportunities 63#64BW BLACKWELLS CAPITAL PELOTON INTERACTIVE, INC. Conclusion#65Poor corporate governance and management's lack of credibility continue to depress the share price Peloton's recent leadership transition has not resulted in any meaningful changes or created value for shareholders A "Reimagined Peloton" could create substantially more shareholder value Selling Peloton today would provide shareholders with immediate value and certainty and is preferable to a long and difficult turnaround BW BLACKWELLS CAPITAL ■ ■ ■ ■ CONCLUSION Management team largely remains the same one that destroyed $40 billion in shareholder value ▪ The Board remains populated by directors with myriad connections to each other and seemingly lacks independence Mr. McCarthy's key initiative - cost-cutting - lacks transparency, sufficient scale and fails to address other core issues ■ Insiders continue to exercise voting control of the Company despite their modest economic ownership Significant insider selling and pledging demonstrates that their interests are not aligned CEO search appears driven by legacy directors, resulting in what Blackwells believes was a rushed process and an egregious and off-market sign-on compensation package I A "Reimagined Peloton" as a "Fitness-as-a-Service" platform could enable a potential acquirer to realize substantially more value than conventional cost and revenue synergies ▪ A transformation of Peloton would take years and would involve significant execution risk ▪ Peloton is a strategically valuable asset that would be attractive for many potential acquirers ▪ A strategic acquirer could pay $75 per share or more given ample opportunities for additional value creation ▪ For Peloton to garner a similar share price would likely take years through the acquisition of millions more subscribers 65#66BW BW BLACKWELLS CAPITAL Two months since Peloton hired one of the highest paid CEOs in all of corporate America, nothing has fundamentally changed. BLACKWELLS CAPITAL Peloton's powerful brand, proprietary technology, engaging instructors, and fiercely loyal subscriber base can be shaped into a much more attractive business. But this cannot happen effectively in the public markets, especially with the current leadership in place. 66#67BW BLACKWELLS CAPITAL PELOTON INTERACTIVE, INC. Appendix#68Top Takeaways SURVEY TAKEAWAYS BW Fitness Trends PTON Brand Headwinds + Tailwinds Rental Model Explored Purchase Intentions Pricing Power and New Products PELOTON IS A STRATEGICALLY VALUABLE ASSET Consumers consistently view Peloton as the best at-home fitness equipment brand Bespoke Market Intelligence Exercise frequency increased sequentially with the % who work out at home holding steady in the top spot of exercise options. Consumers feel they are working out more now than pre-pandemic and increasingly expect that trend to continue going forward. The primary reason consumers don't buy Peloton products continues to be the price / they can't afford it. Consumers continue to view Peloton as the best at-home fitness equipment brand. Customers are very satisfied with the product and indicate a high degree of loyalty to the brand. Peloton also gets the most credit from respondents for having the "best sense of community." Though consumers prefer the thought of purchasing/financing Peloton products, a reasonably large cohort of consumers preferred the idea of the rental model. The possibility of being able to rent the equipment drives a modest increase in likelihood of buying Peloton equipment in the future among consumers who do not currently own Peloton equipment. The increase in likelihood is tied more to the broader population than it is to respondents who are actively in the market to buy fitness equipment and/or existing Peloton customers. In all, consumers who would prefer purchasing/financing indicate a longer period of expected usage of the equipment compared to those who would prefer to rent. BLACKWELLS CAPITAL Peloton remains the most likely spin bike respondents expect to choose among those currently in the market. Peloton is also the most likely tread respondents expect to choose among those currently in the market. When it comes to the tread, Peloton has gained share of future purchase intentions over the past four quarters. Customers think Peloton's content subscription is a very good value for the price. Peloton customers remain very interested in buying new Peloton products that they might come out with in the future. Source: Bespoke Market Intelligence April 2022 Peloton Survey. "Peloton remains the most likely spin bike respondents expect to choose among those currently in the market. Peloton is also the most likely tread respondents expect to choose among those currently in the market. When it comes to the tread, Peloton has gained share of future purchase intentions over the past four quarters" 68#69Being the household name in bikes, treadmills, and trainers is not enough. Peloton needs to provide more to dominate the connected fitness space and provide a comprehensive /total life solution ■ Connected fitness is one of the fastest growing segments and Peloton is the leading name in the space In order to continue to dominate, Peloton must increase their offerings to become the 'one- stop-shop" in connected fitness Recently acquired fitness app Centr was touted as "your physical trainer, dietician, chef, and wellness coach" as the app offered more than just workouts BW BLACKWELLS CAPITAL Offering Cardio Core DIGITAL ONLY PROVIDERS OVERVIEW HIIT Mobility Strength Yoga Meal Plans / Recipe Mindfulness / Meditation Planners Community Features Social Network Sports Entertainment & Content Celebrity Endorsements Prenatal & Postpartum Fitness Ⓡ PELOTON Centr ✓ ✓ Source: Company filings and publicly available data. ✓ ✓ ✓ ✓ Nike Training Club Apple Fitness + ✓ ✓ ✓ Sweat ✓ Fit Body ✓ Le TRX Sweat Training Studio TV Club Bloom ✓ ✓ ✓ ✓ ✓ ✓ Jefit ✓ ✓ Strava Glo ✓ Beach Body ✓ Zwift Total 14 12 10 9 12 11 01 5 7 9 7 1 0 3 6 69#70We also urge Peloton to integrate its presence deeper in the hardware space through both select product launches and integrated screens and software Peloton's bike and tread are already segment leaders in brand recognition as both surveyed highest in desirability We do not believe Peloton should blindly pursue hardware product launches with little strategy as demonstrated in the launch of the Peloton Guide Instead, the company should maintain their market leading position in the bike while exploring strategic partnerships with other hardware vendors irrespective of the manufacturer BW BLACKWELLS CAPITAL HARDWARE PROVIDERS OVERVIEW P Offering PELOTON Treadmill Elliptical Fitness Mirror Bike Rower Strength Product Climber Boxing HIIT Bootcamp Cooking Classes Meditation Source: Company filings and publicly available data. TBD iFit ✓ ✓ Equinox / Soul Cycle In Gym In Gym In Gym In Gym In Gym ✓ Fight Tonal MIRROR Bowflex Echelon Tempo Camp Hydrow Nautilus ✓ Ergatta Total 6 4 4 6 6 7 6 7 4 1 70#71BW BLACKWELLS CAPITAL CONTACT INFORMATION U 60.4 1.39 76.62 Daniel W. Lawrence Chief Operating Officer & Portfolio Manager W. Gage Holzhauer Executive Director, Investments On 607 23.59 92168:39.61 "95.14 28.78 42.96 36.09 04.20 98. 19 3135 Investor Relations [email protected] 42.92 38.86 60.7462.70 53.73 28 92.14 62.70 938.78 Media Relations Gagnier Communications Dan Gagnier / Jeffrey Mathews 646-569-5897 [email protected] blackwellscap.com