Swedish sleep technology company Sleep Cycle AB reported a 21.5% year-over-year decline in net sales for the second quarter of 2026, citing persistent pressure in its consumer business. The company’s shares fell 2.4% to SEK 24.35 following the release of its interim report on August 26.
B2B revenue grew 26.9% to SEK 7.0 million, representing 15.1% of total revenue compared with 4.9% in the first quarter of 2024. Management expects B2B sales to exceed SEK 9 million in the third quarter, driven by already-signed agreements. The company’s core sleep-tracking technology has processed more than 4 billion nights of data across 82 million installations globally.
Sleep Cycle reported an EBIT loss of SEK 7.5 million, including SEK 10.9 million in one-time costs tied to a public cash offer and organizational restructuring. Excluding these items, adjusted EBIT totaled SEK 3.4 million, yielding a 6.8% margin—down from 28.4% in the prior-year period. For the full year, the company projects an EBIT margin of approximately 5% on a reported basis and around 9% on an adjusted basis.
The company’s paying subscriber base declined 24.3% year-over-year to 665,000, while monthly active users averaged 1.5 million during the quarter. Average revenue per user rose 4% on a currency-adjusted basis to SEK 280. Cash and cash equivalents stood at SEK 99.1 million at quarter-end, with operating cash flow positive at SEK 7.6 million. Total cash flow was negative SEK 16.2 million, reflecting a SEK 10.7 million dividend payment and SEK 12.2 million in capital expenditures.
Sleep Cycle highlighted progress in its sleep apnea detection program, which targets a global market estimated at SEK 25 billion. The company has completed 458 of 460 planned clinical study nights but noted a statistical shortfall in the proportion of participants with moderate-to-severe obstructive sleep apnea. FDA pre-submission meetings and external audits are underway, with U.S. regulatory approval targeted for 2027.
The company’s technology licensing business secured multiple partnerships, including a full SDK license agreement with Ultrahuman following a November 2025 pilot. Additional commercial wins include an SDK pilot with Ant Group for the Chinese market, a global IoT customer agreement set to generate revenue in Q3 2026, and a research collaboration with the UK Health Security Agency validating cough detection capabilities. Sleep Cycle also launched Sleep Score Live in Q2 2026.
Management reiterated medium-term financial targets to double revenue over time and achieve at least 25% EBIT margins through the cycle. The company maintains a capital return policy of distributing 40% to 60% of profit after tax to shareholders.
