Sleep Cycle (SLEEP) Q3 2025 earnings summary

Executive summary

• Q3 2025 focused on launching the Powered by Sleep SDK, expanding partnerships, and advancing sleep apnea screening clinical trials, with 20% completion toward medical certification.

• Partnership revenue grew 55% year-over-year, now representing 11% of total revenue.

• Revenue diversification and price increases in key markets are being implemented to offset headwinds in the sleep tracking segment.

• Strategic focus on technology licensing, partnerships, and product innovation to diversify revenue.

• Product innovation includes new AI sleep coach, smart alarm refinements, and premium app design.

Financial highlights

• Net sales for Q3 2025 were SEK 62 million (tSEK 61,523), down 6.6% year-over-year (4.7% FX adjusted).

• EBIT for Q3 2025 was SEK 17 million (tSEK 16,792), with a margin of 27.3%, down from 31.3% a year ago.

• Number of paying subscribers ended at 832,000, down 9% year-over-year.

• ARPU was SEK 271 (SEK 276 FX adjusted), with new sales ARPU in the US reaching SEK 500 in October, up 25% since July.

• Cash and cash equivalents at period end were SEK 114.6 million, with Q3 operating cash flow of SEK 5.5 million.

Outlook and guidance

• Price increases are expected to gradually support ARPU, but the impact is delayed due to 12-month subscription recognition.

• Partnership revenue is expected to continue growing in Q4.

• Ongoing investments in technology licensing, clinical validation for sleep apnea screening, and product innovation.

• Too early to predict if price increases will return subscriber growth in Q4.

• Sleep apnea screening initiative aims for medical certification submission by end of 2026.