Sleep Cycle (SLEEP) Q4 2024 earnings summary

Executive summary

• Achieved 9% year-over-year revenue growth in Q4 2024 and 10.7% for the full year, driven by increased subscriptions, ARPU, and successful partnerships.

• Ended the year with 918,000 paying subscribers, up 25,000 year-over-year, with ARPU for Q4 at SEK 279.

• Maintained strong profitability with a Q4 EBIT margin of 32.3% and a full-year margin of 29.4%; adjusted EBIT margin for the year was 31.6%.

• Proposed total dividend of SEK 3.00 per share, including an extraordinary dividend, reflecting robust cash flow and liquidity.

• Strategic focus on product innovation, medical-grade certification, and leveraging technology and partnerships for future growth.

Financial highlights

• Q4 net revenue was SEK 66.8m, up 9% year-over-year; full-year net revenue reached SEK 261.5m, up 10.7%.

• EBIT for Q4 was SEK 21.5m (32.3% margin); full-year EBIT was SEK 77.0m (29.4% margin); adjusted EBIT for the year was SEK 82.7m (31.6% margin).

• ARPU increased by 2.6% to SEK 279 in Q4, supporting revenue growth.

• Cash flow from operations was SEK 17.3m in Q4 and SEK 63.7m for the year; liquidity at year-end was SEK 145m.

• Q4 EPS was SEK 0.86; full-year EPS was SEK 3.09.

Outlook and guidance

• Updated EBIT margin target to at least 25% annually, with a goal to double revenue in the medium term.

• Plans to pay annual dividends of 40-60% of net profits.

• Strategic initiatives for 2025 include new product development, data monetization, and expanded partnerships.

• Anticipates short-term slowdown in subscriber growth due to price adjustments, but expects long-term revenue strengthening.

• Focus on new customer acquisition, price optimization, and product innovation to drive long-term growth.