Sleep Cycle (SLEEP) Q2 2025 earnings summary

Executive summary

• Q2 2025 net sales declined 2.9% year-over-year to SEK 63.6 million, with paying subscribers down 2.2% to 878,000, mainly due to softer D2C market conditions and lower new customer intake.

• Partnership revenue grew over 68% year-over-year, now representing more than 9% of total net sales and offering higher margins than traditional subscriptions.

• The company is advancing its AI-based sleep apnea screening, with a clinical study underway involving over 700 participants and FDA submission preparations in progress.

• Strategic focus includes diversifying revenue streams through technology licensing (Powered by Sleep Cycle), expanding into digital health, and launching new in-app partnership platforms.

• Extensive price testing was conducted in major markets, with price increases implemented in August.

Financial highlights

• Q2 2025 net sales: SEK 63.6 million (down 2.9% year-over-year); FX-adjusted decline was 0.6%.

• Q2 EBIT/operating profit: SEK 18 million, margin 28.4%; adjusted EBIT margin above 25% for six consecutive quarters.

• ARPU declined by 3.9% to SEK 271, mainly due to FX effects and price dynamics.

• Dividend of SEK 60.8 million paid out in Q2; cash position at period end was SEK 112.4 million.

• CapEx investment of SEK 3 million in Q2, primarily for sleep apnea screening development.

Outlook and guidance

• Focus on expanding partnerships, clinical validation, and new product features to drive long-term growth.

• Target annual EBIT margin of at least 25% and expectation of slightly higher underlying ARPU following recent price increases.

• Partnership revenue anticipated to grow quarter-over-quarter; aim to launch sleep apnea screening by the second half of next year, pending clinical and regulatory progress.