Sleep Cycle AB reported a 20% year-over-year decline in net sales to just under 50 million Swedish kronor (SEK) for the second quarter of 2026, reflecting broader challenges in its consumer business. The company’s shares fell 2.4% to $24.35 in early trading following the earnings update.
Adjusted earnings before interest and taxes (EBIT) came in at a positive 3.4 million SEK, translating to an adjusted margin of nearly 7%, while reported EBIT showed a loss of 7.5 million SEK. Adjustments totaling about 11 million SEK included roughly 9 million SEK in transaction costs tied to a public cash offer and just over 2 million SEK in reorganization expenses.
Paying subscribers declined 24.3% year-over-year to 665,000 from 878,000, though average revenue per user (ARPU) rose 4.1% on a currency-adjusted basis to 280 SEK. Business-to-business revenue grew close to 30% year-over-year, now accounting for roughly 15% of total revenue compared with about 5% nine quarters ago. Management projected B2B revenue to exceed 9 million SEK in the third quarter.
The company’s medium-term ambition includes paying out 40% to 60% of profit after tax to shareholders, with a 0.53 SEK per share dividend approved for the 2025 financial year. Sleep Cycle’s stock remains 22.8% below its 52-week high of $31.60 and 64% above its 52-week low of $14.84, with a beta of 0.07.
Executives highlighted progress in expanding beyond the standalone sleep app market, citing a shift toward sleep apnea and tech licensing that expands the addressable market to roughly SEK 47 billion annually. CEO Erik Jivmark emphasized the company’s move “beyond app stores,” while CFO Elisabeth Hedman noted the B2B revenue share rise as “the single best picture of the transformation.”
Sleep Cycle completed its clinical validation study for sleep apnea on schedule, though fewer participants than expected had moderate to severe obstructive sleep apnea, requiring a larger study for FDA approval. The company has analyzed over 4 billion nights of sleep, reached more than 82 million installs, and logged 150,000 registrations ahead of the sleep apnea launch. Management reiterated a goal to double revenue over time and achieve an EBIT margin of at least 25% while remaining debt-free.
