Sleep Cycle (SLEEP) Q1 2026 earnings summary

Executive summary

• Q1 2026 was a deliberate transition quarter with softer top-line results due to planned investments in new growth areas and platform reinvestment, impacting short-term profitability but supporting long-term growth strategy.

• The business is evolving from a consumer app focus to a broader multi-product sleep tech platform, targeting B2B, sleep apnea solutions, and tech licensing.

• B2B revenue accelerated, now representing 14.5% of net sales, up from 2% in 2023, with B2B subscribers growing from 12,000 to 37,000.

• The addressable market expanded from SEK 1.7 billion to SEK 47 billion, driven by sleep apnea and tech licensing opportunities.

• The company leverages a large user base (2.5 million active users, 82 million installs) and over four billion nights of sleep data.

Financial highlights

• Q1 2026 net sales were SEK 52.6 million, down 19% year-over-year (12.2% FX-adjusted).

• EBITDA was SEK 8.2 million (15.6% margin), down 55% YoY; EBIT was SEK 6.7 million (12.8% margin), down 61% YoY.

• B2B revenue grew 42% year-over-year to SEK 7.6 million, with B2B subscribers tripling from 12,000 to 37,000 since Q4 2023.

• Paying subscribers ended at 715,000, down 21% year-over-year; ARPU FX-adjusted was SEK 277, up SEK 7 year-over-year.

• Liquidity at period end was SEK 115–150 million.

Outlook and guidance

• 2026 is a transition year with elevated investments; guided EBIT margin for the year is 5%.

• Medium-term targets remain: double revenues, EBIT margin above 25% per annum, and 40–60% of profit after tax distributed as dividends.

• Growth and profitability expected to resume from 2027 as new revenue streams scale and the multi-product platform matures.

• Clinical validation for sleep apnea tool expected to complete in September 2026, with US launch targeted for H1 2027.