Interim report
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Interim report April – June 2025 Sleep Cycle Sleep Cycle AB (publ)
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• Net sales totaled tSEK 63,559 (65,442) and decreased by -2.9% (+12.9%). Currency-adjusted net sales growth amounted to -0.6% (10.5%). • Operating profit amounted to tSEK 18,019 (20,964), with an operating margin of 28.4% (32.0%). The quarter has not been affected by any costs affecting comparability. • The total number of paying subscribers at end of period was 878k (898k). • ARPU in the quarter totaled SEK 271 (282). Currency-adjusted ARPU amounted to SEK 277. • Earnings per share before and after dilution for the quarter amounted to SEK 0.71 (0.84). Second quarter April – June 2025 Significant events during the quarter Significant events after the end of the quarter Period January – June 2025 • Net sales totaled tSEK 128,484 (128,899) and decreased by -0.3% (+13.0%). Currency-adjusted net sales growth amounted to 0.5% (10.8%). • Operating profit amounted to tSEK 35,110 (34,807), with an operating margin of 27.3% (27.0%). The previous year was affected by costs of tSEK 5,756 and the adjusted operating margin was 31.5%. • The total number of paying subscribers at end of period was 878k (898k). • ARPU for the period totaled SEK 272 (279). Currency-adjusted ARPU amounted to SEK 274. • Earnings per share before and after dilution amounted to SEK 1.39 (1.40) for the period. Group key performacne indicators Apr - Jun Jan - Jun Jan - Dec tSEK 2025 2024 2025 2024 2024 Net sales 63,559 65,442 128,484 128,899 261,529 Net sales growth (%) -2.9% 12.9% -0.3% 13.0% 10.7% Currency-adjusted net sales growth (%) -0.6% 10.5% 0.5% 10.8% 9.8% Operating profit/loss 18,019 20,964 35,110 34,807 76,962 Operating margin (%) 28.4% 32.0% 27.3% 27.0% 29.4% Items affecting comparability - - - -5,756 -5,756 Adjusted operating profit/loss 18,019 20,964 35,110 40,563 82,718 Adjusted operating margin (%) 28.4% 32.0% 27.3% 31.5% 31.6% Profit/loss for the period 14,488 16,960 28,280 28,485 62,642 Operational key performance indicators Total subscriptions (Thousands) 878 898 878 898 918 ARPU (SEK) 271 282 272 279 278 Currency-adjusted ARPU (SEK) 277 277 274 273 276 Average number of employees (#) 35 30 34 34 33 For definitions, justifications, and deductions see pages 15-16. • In June, Sleep Cycle initiated a clinical trial for AI-based sleep apnea screening, targeting a billion-dollar market. • In June, Sleep Cycle launched an in-app collaboration with HelloFresh, Factor, and YouFoodz. • No significant events took place after the end of the period. “With Powered by Sleep Cycle, we're taking the next step - making our world-leading sleep technology available for integration into products and services around the world." ERIK JIVMARK, CEO 2 Sleep Cycle Interim report Apr-Jun 2025
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Partnerships as growth drivers Partnership sales is a key part of our strategy – and it is yielding results. Revenue from partnerships has increased by over 68 percent compared to the same quarter in prior year and now accounts for more than 9 percent of our total net sales, which for the quarter amounted to SEK 63.6 million. During the quarter, we welcomed HelloFresh, Factor and YouFoodz as part of Sleep Cycle's partner program and opened up a new platform of in-app offerings, tailored to our health-conscious target audience. Screening for sleep apnea enters clinical phase In June, we initiated our clinical study with over 700 participants for our AI-based screening of obstructive sleep apnea. The study is an important milestone towards medical certification and future approval by the US Food and Drug Administration (FDA). The goal is to offer a simple and accessible solution without expensive hardware or the need for a sleep clinic. We envisage both a service for consumers and offers to partners available in part through licensing. Targeted growth initiatives Despite a challenging market situation for sleep apps, the demand for sleep aid is high and predicted to grow in the coming years. The renewal rate is gradually improving and development is outperforming competitors thanks to targeted product development such as Sleep Stages. The number of paying subscribers is down two percent from prior year and totals 878,000 for the quarter. Developments in the sleep app segment in the Strong margin and growth in partnerships STATEMENT BY THE CEO With a strong margin of 28.4 percent for the quarter, we are further consolidating our position as a technology leader in sleep and health. We are making progress in both clinical validation – as in our study for screening sleep apnea – and commercialization, with growing revenues from partnerships. Revenue from partnerships now accounts for over 9 percent of our net sales. At the same time, the quarter was impacted by a tougher market environment with slower customer growth and a two percent decline in paying subscribers. Market trends show that our long-term strategy is the right way forward, with a diversified offering and more verticals based on our sleep technology. AppStore demonstrate the need to expand our business and that our strategy is the right way forward. We are working decisively on new customer acquisition, activation, partnerships, and tech licensing under the Powered by Sleep Cycle concept to reverse the trend and build an even stronger Sleep Cycle. This marks a new chapter for us, and although sales cycles in B2B are longer than in the consumer business, we are confident that our technology meets a real need. We are building for long-term impact — and for a future where our technology becomes an integral part of the digital health ecosystem. The market is changing — and we are changing with it. We are not only building for better sleep, but for a greater role in digital health, public health, research, and data analysis. Thank you for your continued support and belief in our vision! ERIK JIVMARK, CEO 3 Sleep Cycle Interim report Apr-Jun 2025
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Sleep Cycle's product offering With more than three billion nights analyzed, Sleep Cycle is helping people around the world understand and improve their sleep. Our patented AI technology enables advanced sleep analysis and personalized insights, promoting better sleep hygiene - one night at a time. Our subscription- based business model creates stable, predictable revenue, while low customer acquisition costs ensure strong profitability and sustainable cash flow. Upgraded audio model for deeper analysis During the quarter, we launched an upgraded audio model – the result of a year of focused development. The aim has been to identify and interpret subtle audio signals that often go unnoticed by the user but play a crucial role in understanding sleep patterns. This upgrade has significantly improved the model's accuracy and deepened insights into sleep structure, an important step in solidifying our position as a leader in advanced sleep analysis. New platform for in-app offers We have strengthened our partner program with a new platform for in-app offers. It gives external brands the opportunity to reach our health-conscious and engaged user base. During the quarter, we have entered into partnerships with HelloFresh, Factor and YouFoodz, which are now offering exclusive offers to Sleep Cycles users. The platform not only creates new revenue streams, but also helps increase daily usage and deepen engagement with Sleep Cycle. Sleep Aid expanded with video courses Our Sleep Aid library for premium users has been updated with new video courses from our sleep expert. The courses focus on common sleep problems in children, teenagers, and women going through menopause. By offering content that meets specific needs, we strengthen both daily use and long-term engagement with the app. Development of a Sleep Test As part of our product development, we have developed a sleep test based on the established RU-SATED concept*. The test provides users with insight into their sleeping habits and presents concrete suggestions for improvement. This initiative is an important part of our new acquisition strategy and contributes to a more personalized and engaging user experience. Cough Radar launches online Sleep Cycle has launched its first stand-alone web feature: Cough Radar. The feature makes community-level cough data available to everyone, free of charge and in real time. Users and partners can monitor global cough trends using an interactive map in the browser. Cough Radar is a key component of our Powered by Sleep Cycle initiative, enabling proactive public health interventions using real-time data on respiratory conditions. New revenue opportunities in sleep apnea Obstructive sleep apnea affects an estimated 950 million adults worldwide, nearly 80 percent of whom are undiagnosed. The condition is linked to serious health problems and is driving demand for more effective diagnostics. The home testing market is expected to grow from $712 million in 2025 to $966 million by 2035, clearly demonstrating the need for scalable and cost-effective solutions. Sleep Cycle's upcoming sleep apnea feature is based on our smartphone technology and proprietary algorithms to offer an affordable and easy home test. As an initial step towards medical certification, we are now conducting a study to validate the technology's capabilities. The solution enables new revenue streams both through in-app subscriptions and through licensing of our technology. *RU-SATED is a standardized questionnaire that measures six key dimensions of sleep health: Regularity, Satisfaction, Alertness, Timing, Efficiency, and Duration. 4 Sleep Cycle Interim report Apr-Jun 20254Interim report Apr-Jun 2025Sleep Cycle
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Growth through Sleep Cycle's mission is to improve global health by helping people sleep better. In 2024, we launched an updated business strategy. It takes off from the trends that drive the market and creates opportunities for Sleep Cycle to achieve strong and profitable growth. Increased focus on health and well-being, understanding the importance of sleep to people’s well-being, and the increased acceptance of subscription-based applications are all examples of structural global trends driving the sleep health market. Sleep Cycle’s strategy consists of three main areas – User Growth, User engagement, and Platform & Data – within which we implement a range of tactical activities to achieve our goals. The new strategy aims to aggressively focus on increased growth and to explore new revenue streams based on the unique technology and vast amount of data Sleep Cycle possesses. Our strategy has an aggressive objective: Doubled income over the medium term with an annual profitability of at least 25% operating margin. With a strong core business as a foundation and a competent team, we are convinced that these goals can be achieved. Strategic focus areas This strategic initiative focuses on increasing visibility in earned channels through media exposure, simplified onboarding, continuous branding, new pricing strategy, and product development. With 80 percent of new users coming from referrals, thus demonstrating the quality and reputation of the product. Partnerships play a central role in reaching new customer segments and growing the user base, with tailored approaches to maximize performance for both the company and our partners. User growth Platform and DataUser engagement Sleep Cycle's platform processes over 300,000 hours of sleep data every hour. This means a large volume of health data that in itself has great value but also enables product improvements and business opportunities. The new technology behind Sleep Stages combines sound analysis of respiratory patterns and movements with AI and machine learning based on extensive polysomnographic data. This unique technology is also used to explore solutions for breathing disorders, such as sleep apnea, which is a major public health problem. Thanks to our proprietary technology, Sleep Cycle has full control over the platform and its use, creating opportunities to broaden our commercial offering – something we strive to further develop. Retaining users is crucial to our subscription-based business model, and active users mean increased retention opportunities. This part of the strategy focuses on developing our capabilities to improve data quality and further increase trust in Sleep Cycle. There are many meeting points along the customer journey where we can help our users not only to create good habits, but also to maintain them. In this work, personalization is key. Launches such as Sleep Stages are a clear example of how we employ our unique technology and collected data to make Sleep Cycle an important part of people’s everyday lives and contribute to their well-being. This type of personalized functionality increases user engagement and is also important for increasing conversion to paying users. innovation 5 Sleep Cycle Interim report Apr-Jun 20255Sleep Cycle
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Sales and earnings The Group's net sales during the second quarter totaled tSEK 63,559 (65,442), a decrease of -2.9% (+12.9%) from prior year. Currency- adjusted net sales growth amounted to -0.6% (10.5%) for the quarter. Revenue growth is attributable to lower sales through the AppStore and Google Play platforms, while sales through the web and partnerships are growing. Revenues generated from partnerships represented 9.3% of revenues during the quarter. The corresponding figure for the previous year was 5.4%, which shows that revenue generated from partnerships is growing at a rapid pace. While the second quarter is seasonally weaker for new customer acquisitions, sales to existing customers remain stable and continue to improve gradually. Average Revenue Per Subscription (ARPU) decreased to SEK 271 (282), while currency-adjusted ARPU amounted to SEK 277. The decrease is explained by a lower inflow of new customers and negative exchange rate trends. The number of paying users totaled 878k (898k). This decrease is explained by a lower inflow of new subscribers, while the proportion renewing their subscription remains stable with gradual improvement. The company continued to show good profitability, although earnings were negatively affected by lower revenues compared with the previous year and by increased costs related to growth-promoting initiatives in line with the company's strategy to continue developing the product and find additional revenue streams. Operating profit for the second quarter totaled tSEK 18,019 (20,964) and the margin 28.4% (32.0%). The second quarter has not been affected by costs affecting comparability. Currency fluctuations had some negative impact on results during the quarter. As sales are made in foreign currency but payments from the AppStore, for example, are made in Swedish kronor, revenues are affected by currency fluctuations – especially when the krona strengthens. Additional earnings effects occur when the exchange rate changes between sale and payment. During the quarter, the profit impact was tSEK -1,886, mainly related to price development in USD. Net financial items for the quarter totaled tSEK 246 (426) and taxes on profit for the quarter totaled tSEK -3,777 (-4,429). Profit for the quarter totaled tSEK 14,488 (16,960). Earnings per share before and after dilution amounted to SEK 0.71 (0.84). Cash flow and financial position Cash flow from operating activities in the first quarter amounted to tSEK 19,917 (16,221). Cash flow from investment activities amounted to tSEK -2,971 (-912) related to capitalization of development expenses. The clinical study related to screening for sleep apnea was initiated during the quarter. Cash flow from financing activities in the quarter amounted to tSEK -61,585 (-45,734) related to dividends paid, amortization of lease liabilities and option premiums in 2024. The change is mainly explained by higher dividends in 2025. The dividend paid amounted to tSEK 60,833 (46,638). Cash flow for the quarter totaled tSEK -44,639 (-30,065). The group's cash and cash equivalents at the end of the period totaled tSEK 112,431 (120,443). Consolidated equity totaled tSEK 46,904 as of June 30. Opening balance on January 1 was tSEK 79,457. As all significant operations in the Group are conducted in the Parent Company, the comments below refer to both the Parent Company and the Group. For profit and cash flow, comparative figures refer to the corresponding period for prior year. For financial position, comparative figures refer to the balance sheet item as of December 31, 2024. Changes in net sales, profit, cash flow and financial position for the 2025 period compared to the previous year are largely explained by the same reasons as for the second quarter. Development over a 6-month period is indicated below, with comments in cases where there are causes for development other than for the second quarter. Sales and earnings Consolidated net sales for the period amounted to tSEK 128,484 (128,899), a decrease of -0.3% (+13.0%) compared to the previous year. Currency-adjusted net sales growth amounted to 0.5% (10.8%). Average revenue per user (ARPU) decreased, totaling SEK 272 (279). Currency-adjusted ARPU amounted to SEK 274. The number of paying users totaled 878k (898k). Operating profit totaled tSEK 35,110 (34,807) and the margin was 27.3% (27.0%). The 2025 period has not been affected by any costs affecting comparability. The previous year was affected by costs affecting comparability of tSEK 5,756 related to the reorganization and consolidation of operations to the head office in Gothenburg. The adjusted operating margin in the prior year was 31.5%. Currency fluctuations had some negative impact on results during the period. As sales are made in foreign currency but payments from the App Store, for example, are made in Swedish kronor, revenues are affected by currency fluctuations – especially when the krona strengthens. Additional earnings effects occur when the exchange rate changes between sale and payment. During the period, the profit impact was tSEK -3,176, mainly related to price development in USD. Net financial items for the period totaled tSEK 553 (1,113) and taxes on the profit for the period totaled tSEK -7,383 (-7,435). Profit for the period totaled tSEK 28,280 (28,485). Earnings per share before and after dilution amounted to SEK 1.39 (1.40). Cash flow and financial position Cash flow from operations for the period amounted tSEK 36,629 (34,494). Cash flow from investment activities amounted to tSEK -6,774 (-1 097) related to capitalization of development expenses. The change is explained by higher activation of development spending linked to sleep apnea screening, along with initiatives in line with the company's strategy. Cash flow from financing activities amounted to tSEK -62,658 (-46,401) during the period, mainly related to dividend payments. Cash flow for the period amounted to tSEK -32,803 (-13,004). The group's cash and cash equivalents at the end of the period totaled tSEK 112,431 (120,443). Consolidated equity totaled tSEK 46,904 as of June 30. Opening balance on January 1 was tSEK 79,457. Financial overview Second quarter April – June 2025 Period January – June 2025 6 Sleep Cycle Interim report Apr-Jun 2025
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Other information Employees The average number of employees in the Group for the quarter from April to June 2025 was 35 (30) and for the six months from January to June 2025 was 34 (34). Information on risks and uncertainties The group’s over-arching risk management aims to minimize negative effects on profit and position. Significant risks and uncertainties are described in the annual report for 2024. No significant events have occurred during the period that affect or change the descriptions of the Group's risks and their management. Parent Company The Group's operations are essentially conducted in the parent company, which is why reference is made to the information above for the Group. Related party transactions There have been no related-party transactions aside from transactions with senior executives in their capacity as such. Other information This report has not been reviewed by the Company's auditors. A presentation of Sleep Cycle's interim report for April-June 2025 for shareholders, media, and other stakeholders will be held on August 22 at 9:30 a.m. Participants will be able to follow the presentation via a webcast. This is a translation of the original Swedish Sleep Cycle interim report April-June 2025. In the event of any discrepancies between the two versions, the original Swedish version shall apply. Interim report July-September 2025 October 24, 2025 Upcoming reporting dates 7 Sleep Cycle Interim report Apr-Jun 2025
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The share The Company's share has been listed on Nasdaq Stockholm under the ticker SLEEP since June 8, 2021. Share capital on the balance sheet date totaled tSEK 563. Warrant program Number warrants Corresponding number of shares % of total number of shares Exercise price Exercise period 2021/2026 (CEO L TIP) 340,909 419,318 2.1% 196.87 2026 2022/2025 53,700 54,774 0.3% 69.58 2025 2023/2027 (CEO L TIP) 100,000 100,000 0.5% 52.60 2027 2024/2027 800,000 800,000 3.9% 59.20 2027 Total 1,294,609 1,374,092 6.8% Main shareholders in Sleep Cycle AB (publ) as of June 30, 2025 Owner Number of shares Votes and capital Maciej Drejak through company 8,707,984 42.9% Pierre Siri through company 4,047,686 20.0% Avanza Pension 1,038,529 5.1% Nordnet Pensionsförsäkring 892,524 4.4% Lancelot Asset Management AB 650,000 3.2% Cancerfonden - The Swedish Cancer Society 339,993 1.7% Handelsbanken Fonder 179,712 0.9% Johan Qviberg 170,000 0.8% Storebrand Funds 148,373 0.7% Strandberg Asset Management 145,822 0.7% Other 3,956,940 19.5% Total 20,277,563 100% Outstanding warrant program 8 Sleep Cycle Interim report Apr-Jun 2025
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Apr - Jun Jan - Jun Jan - Dec tSEK Note 2025 2024 2025 2024 2024 Operating income Net sales 4 63,559 65,442 128,484 128,899 261,529 Other operating income 47 45 253 245 355 Operating expenses Capitalized work for own account 916 164 1,316 164 447 Distribution costs -13,301 -14,444 -27,194 -28,750 -57,862 Other external expenses -16,125 -13,557 -34,055 -28,530 -58,489 Personnel expenses -13,698 -14,489 -27,448 -32,824 -60,104 Depreciation and impairment of tangible and intangible assets -1,347 -2 ,127 -2,615 -4 ,251 -8,624 Other operating expenses -2,033 -70 -3,631 -147 -290 Operating profit/loss 18,019 20,964 35,110 34,807 76,962 Financial items Financial income 354 654 786 1,513 2,868 Financial expenses -108 -228 -233 -400 -685 Profit before tax 18,265 21,390 35,663 35,920 79,145 Tax on profit for the period -3,777 -4,429 -7,383 -7 ,435 -16,504 Profit for the period attributable to the parent company's shareholders 14,488 16,960 28,280 28,485 62,642 Other comprehensive income - - - - - Comprehensive income for the period attributable to the parent company's shareholders 14,488 16,960 28,280 28,485 62,642 Earnings per share before dilution, SEK 0.71 0.84 1.39 1.40 3.09 Earnings per share after dilution, SEK 0.71 0.84 1.39 1.40 3.09 Average number of shares outstanding for the period before dilution 20,277,563 20,277,563 20,277,563 20,277,563 20,277,563 Average number of shares outstanding for the period after dilution 20,277,563 20,277,563 20,277,563 20,277,563 20,277,563 Consolidated statement of comprehensive income 9 Sleep Cycle Interim report Apr-Jun 2025
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tSEK Note 06/30/2025 06/30/2024 12/31/2024 ASSETS Intangible fixed assets Capitalized development expenditures 10,788 3,724 4,787 Patent - - - Total intangible fixed assets 10,788 3,724 4,787 Tangible fixed assets Right-of-use assets 8,453 13,432 10,799 Cost of improvement on other’s property 771 651 917 Equipment and computers 1,013 1,559 1,316 Total tangible fixed assets 10,238 15,642 13,032 Financial assets Other long-term receivables 24 435 24 Total financial assets 24 435 24 Deferred tax Deferred prepaid tax 143 105 148 Total deferred tax 143 105 148 Current assets Accounts receivable 28,785 32,190 41,199 Other receivables 1,314 784 678 Current tax assets 1,318 3,793 - Prepaid expenses and accrued income 29,620 34,464 31,391 Cash and cash equivalents 112,431 120,443 145,234 Total current assets 173,468 191,674 218,502 TOTAL ASSETS 194,661 211,580 236,493 EQUITY AND LIABILITIES Equity Share capital 563 563 563 Other contributed capital 2,744 2,590 2,744 Retained earnings, including profit for the year 43,597 41,993 76,150 Total equity attributable to the parent company's shareholders 46,904 45,146 79,457 Long-term liabilities Leasing liabilities 5,808 9,585 7,379 Total long-term liabilities 5,808 9,585 7,379 Current liabilities Leasing liabilities 3,104 4,268 4,364 Accounts payable 11,868 14,519 14,704 Current tax liabilities - - 518 Other liabilities 5,111 4,436 3,257 Accrued expenses and deferred income 121,865 133,625 126,815 Total current liabilities 141,948 156,848 149,658 TOTAL EQUITY AND LIABILITIES 194,661 211,580 236,493 Consolidated statement of financial position 10 Sleep Cycle Interim report Apr-Jun 2025
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Attributable to the parent company's shareholders tSEK 06/30/2025 06/30/2024 12/31/2024 Opening balance 79,457 60,998 60,998 Comprehensive income for the period 28,280 28,485 62,642 Dividend -60,833 -46,638 -46,638 Warrant premiums - 2,302 2,456 Closing balance 46,904 45,146 79,457 Consolidated statement of changes in equity Consolidated cash flow statement Apr - Jun Jan - Jun Jan - Dec tSEK Note 2025 2024 2025 2024 2024 Cash flow from operating activities Operating profit/loss 18,019 20,964 35,110 34,807 76,962 Adjustments for items not included in cash flow: Depreciation and impairment 1,347 2,127 2,615 4,251 8,624 Other items not affecting cash flow -1 - -52 - - Interest received 354 654 786 1,513 2,868 Interest paid -108 -228 -233 -400 -685 Tax paid -4,435 -3,920 -9,214 -9,102 -13,903 Cash flow from operating activities before changes in working capital 15,175 19,596 29,012 31,069 73,866 Change in working capital Change in operating receivables 16,802 12,803 13,548 4,474 -1,355 Change in operating liabilities -12,061 -16,178 -5,932 -1,049 -8,853 Cash flow from operating activities 19,917 16,221 36,629 34,494 63,657 Investment activities Capitalization of development expenses -2,971 -912 -6,774 -912 -3,261 Acquisition of tangible fixed assets - - - -185 -661 Cash flow from investment activities -2,971 -912 -6,774 -1,097 -3,923 Financing activities Repayment of leasing liabilities -753 -1,038 -1,826 -2,065 -4,175 Warrant premiums - 2,302 - 2,302 2,456 Dividend -60,833 -46,638 -60,833 -46,638 -46,638 Cash flow from financing activities -61,585 -45,374 -62,658 -46,401 -48,358 Cash flow for the period -44,639 -30,065 -32,803 -13,004 11,377 Liquid funds at the beginning of the period 157,071 150,532 145,234 133,471 133,471 Reclassification of cash and cash equivalents - -24 - -24 387 Liquid funds at the end of the period 112,431 120,443 112,431 120,443 145,234 11 Sleep Cycle Interim report Apr-Jun 2025
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Apr - Jun Jan - Jun Jan - Dec tSEK Note 2025 2024 2025 2024 2024 Operating income Net sales 63,559 65,442 128,484 128,899 261,529 Other operating income 47 45 200 245 355 Capitalized work for own account 916 164 1,316 164 447 Operating expenses Distribution costs -13,301 -14,444 -27,194 -28,750 -57,862 Other external expenses -16,985 -14,754 -35,643 -30,918 -63,733 Personnel expenses -13,698 -14,489 -27,448 -32,824 -60,104 Depreciation and impairment of tangible and intangible assets -578 -1,041 -1,222 -2,079 -3,818 Other operating expenses -2,033 -70 -3,631 -147 -290 Operating profit/loss 17,928 20,852 34,863 34,591 76,524 Profit from financial items Interest income and similar income 354 654 786 1,513 2,868 Interest expenses and similar expenses - -68 - -68 -68 Profit after financial items 18,281 21,438 35,649 36,036 79,324 APPROPRIATIONS Group contributions - - - - -50 Profit before tax 18,281 21,438 35,649 36,036 79,274 Tax on profit for the period -3,780 -4,439 -7,378 -7,458 -16,539 Profit/loss for the period 14,501 16,999 28,270 28,579 62,736 Comprehensive income for the period 14,501 16,999 28,270 28,579 62,736 Since the parent company has no items recognized as other comprehensive income, total comprehensive income for the period is equal to profit for the period. Parent company income statement 12 Sleep Cycle Interim report Apr-Jun 2025
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tSEK Note 06/30/2025 06/30/2024 12/31/2024 ASSETS Intangible fixed assets Capitalized development expenditures 10,788 3,724 4,787 Patent - - - Total intangible fixed assets 10,788 3,724 4,787 Tangible fixed assets Cost of improvement on other’s property 771 651 917 Equipment and computers 1,013 1,559 1,316 Total tangible fixed assets 1,784 2,210 2,233 Financial assets Participations in group companies 50 50 50 Deferred prepaid tax 49 18 49 Other long-term receivables 24 435 24 Total financial assets 123 503 123 Total fixed assets 12,695 6,437 7,143 Current receivables Accounts receivable 28,785 32,190 41,199 Other receivables 1,314 784 678 Current tax assets 1,318 3,793 - Prepaid expenses and accrued income 29,620 34,464 31,391 Total current receivables 61,037 71,231 73,267 Short-term investments Other short-term investments 80,000 80,000 80,000 Total short-term investments 80,000 80,000 80,000 Cash and bank balances 32,292 40,344 65,136 Total current assets 173,329 191,575 218,404 TOTAL ASSETS 186,024 198,012 225,547 EQUITY AND LIABILITIES Restricted equity Share capital 563 563 563 Fund for development expenditures 10,788 3,724 4,787 Total restricted equity 11,351 4,287 5,350 Unrestricted equity Share premium fund 2,744 2,590 2,744 Retained earnings 4,815 9,975 8,913 Profit/loss for the period 28,270 28,579 62,736 Total unrestricted equity 35,829 41,144 74,392 Total equity 47,180 45,432 79,742 Current liabilities Accounts payable 11,868 14,519 14,704 Liabilities to group companies - - 50 Current tax liabilities - - 518 Other liabilities 5,111 4,436 3,257 Accrued expenses and deferred income 121,865 133,625 127,276 Total current liabilities 138,844 152,580 145,805 TOTAL EQUITY AND LIABILITIES 186,024 198,012 225,547 Parent company balance sheet 13 Sleep Cycle Interim report Apr-Jun 2025
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Note 1 General information The address of the company’s registered office is Drakegata 10, 412 50 Gothenburg, Sweden. Sleep Cycle is developing of one of the world's most widely used sleep platforms. Sleep Cycle’s sleep solutions help users fall asleep more easily, measure sleep habits and improve sleep and with the extensive sleep database contribute to improved sleep habits and increased sleep awareness worldwide. The business is essentially conducted in the parent company. The parent company's holding of shares in group companies as of June 30, 2025 consists of the wholly owned subsidiary Sleep Cycle Sverige AB (559278–9688). Sleep Cycle’s interim report for January-June 2025 was approved for publication on August 22 per Board decision on August 21, 2025. Note 2 Accounting principles The consolidated financial statement for Sleep Cycle AB has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, the Swedish Annual Accounts Act (ÅRL) and the Swedish Financial Reporting Board’s RFR 1 "Supplementary accounting rules for groups". The parent company’s financial statements are prepared in Note 4 Distribution of net sales Apr - Jun Jan - Jun Jan - Dec tSEK 2025 2024 2025 2024 2024 Subscription income 60,324 63,181 122,204 124,759 252,100 Other income 3,234 2,261 6,280 4,139 9,429 Total 63,559 65,442 128,484 128,899 261,529 For the second quarter, 9.3% (5.4%) of net sales were generated from partnerships. For the period January to June, 8.8% (5.1%) of net sales were generated from partnerships. Note 5 Financial instruments tSEK 06/30/2025 06/30/2024 12/31/2024 Financial assets valued at amortized cost Accounts receivable 28,785 32,190 41,199 Other receivables 25 435 24 Accrued income 774 1,711 696 Cash and cash equivalents 112,431 120,443 145,234 Total financial assets 142,016 154,779 187,153 Financial liabilities valued at amortized cost Accounts payable 11,868 14,519 14,704 Accrued expenses 5,919 2,478 4,264 Total financial liabilities 17,788 16,997 18,968 Sleep Cycle does not hold any financial instruments that are valued and reported at fair value. For all financial assets and liabilities, the carrying amount is considered as above to be a reasonable approximation of fair value. Note 6 Accrued expenses and deferred income tSEK 06/30/2025 06/30/2024 12/31/2024 Contractual liabilities (deferred income) 108,037 121,631 116,782 Accrued staff-related costs 9,876 9,950 6,389 Other items 3,952 2,044 3,644 Total 121,865 133,625 126,815 accordance with the Annual Accounts Act and RFR 2, “Accounting for Legal Entities.” This interim report has been prepared in accordance with IAS 34 “Interim Financial Reporting.” Disclosures in accordance with IAS 34 are provided in notes as well as elsewhere in the interim report. The accounting principles and calculation methods applied are in accordance with those described in the annual report for 2024. New standards and interpretations that came into force on January 1, 2025 have not had any effect on the group's or the parent company's financial reports for the interim period. Note 3 Segment information Sleep Cycle’s CEO, as the most senior executive decision-maker, monitors and analyses profit and loss and the financial position of the group in its entirety. The CEO does not track results at a level lower than the Group as a whole. The CEO thereby also decides on allocation of resources, and makes strategic decisions based on the Group as a whole. Based on the above analysis, which is itself based on IFRS 8, it is concluded that the Sleep Cycle group consists of a single reporting segment. Notes 14 Sleep Cycle Interim report Apr-Jun 2025
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Sleep Cycle applies the guidelines for alternative key performance indicators issued by ESMA. This report presents certain financial key performance ratios, including alternative key performance indicators which are not defined under IFRS. The Company considers these key performance indicators an important complement, as they facilitate a better evaluation of the Company's financial trends. These financial indicators should not be assessed independently or considered substitutes for performance indicators calculated in accordance with IFRS. In addition, such key performance indicators, as defined by Sleep Cycle, should not be compared with other key performance indicators with similar names utilized by other companies. This is because the key performance indicators below are not always defined in the same way, and other companies may calculate them differently than Sleep Cycle. Key performance indicators Definition Background of the use of the key performance indicator Net sales growth Change in net sales compared with the same period of prior year. The measure shows the company's growth in net sales compared with the same period of prior year. Currency-adjusted net sales growth Defined as net sales for the year divided by net sales for the previous year translated at average exchange rates for the year. Used to measure the company's underlying net sales growth adjusted for currency effects. Operating profit/loss Operating profit before interest and tax. Operating profit is used to understand the company's earning capacity. Operating margin Operating profit as a percentage of the company's net sales. Operating margin is an indication of the company's earning capacity in relation to net sales. Items affecting comparability Items of a non-recurring nature that are not part of normal business and therefore affect comparison between different periods. Refers to costs related to IPO in 2021, public cash offer in 2022, cost savings in 2023, and reorganization in 2024. The measure is used to understand the company's development and comparison between the years. Adjusted operating profit/ loss Operating profit adjusted for items affecting comparability. Adjusted operating profit is used to understand the company's earning capacity adjusted for items affecting comparability. Adjusted operating margin Adjusted operating profit as a percentage of the company's net sales. Adjusted operating margin is used to understand the company's earning capacity adjusted for items affecting comparability. Total subscriptions Total number of subscriptions at the end of the period (closing balance). The measure indicates how many subscribers the company has at the end of the period. Subscription income Income attributable to a paying subscriber. Subscription revenue is used to measure the company’s revenue generation from subscribers. ARPU Average annual subscription revenue per subscriber during the period. Quarters and periods are annualized. The measure indicates the company's subscription income per subscription on average during the period. Currency-adjusted ARPU Average annual subscription revenue per subscriber during the period converted at the previous year's average exchange rates. Quarters and periods are annualized. The metric indicates the company's average subscription revenue per subscription adjusted for currency effects. Definitions of key performance indicators and calculations 15 Sleep Cycle Interim report Apr-Jun 2025
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The table below derives from the calculation of alternative key performance indicators not defined in accordance with IFRS or where the calculation is not shown in another table in this report. Net sales growth and currency-adjusted net sales growth Apr - Jun Jan - Jun Jan -Dec tSEK 2025 2024 2025 2024 2024 Net sales previous period 65,442 57,952 128,899 114,114 236,146 Net sales current period 63,559 65,442 128,484 128,899 261,529 Net sales growth -2.9% 12.9% -0.3% 13.0% 10.7% Currency-adjusted net sales previous period 63,942 59,223 127,845 116,335 238,186 Net sales current period 63,559 65,442 128,484 128,899 261,529 Currency-adjusted net sales growth -0.6% 10.5% 0.5% 10.8% 9.8% Operating profit and operating margin Apr - Jun Jan - Jun Jan - Dec tSEK 2025 2024 2025 2024 2024 Net sales 63,559 65,442 128,484 128,899 261,529 Other operating income 47 45 253 245 355 Capitalized work for own account 916 164 1,316 164 447 Distribution costs -13,301 -14,444 -27,194 -28,750 -57,862 Other external expenses -16,125 -13,557 -34,055 -28,530 -58,489 Personnel expenses -13,698 -14,489 -27,448 -32,824 -60,104 Depreciation and impairment of tangible and intangible assets -1,347 -2 ,127 -2,615 -4 ,251 -8,624 Other operating expenses -2,033 -70 -3,631 -147 -290 Operating profit/loss 18,019 20,964 35,110 34,807 76,962 Operating margin 28.4% 32.0% 27.3% 27.0% 29.4% Adjusted operating profit and adjusted operating margin Apr - Jun Jan - Jun Jan - Dec tSEK 2025 2024 2025 2024 2024 Operating profit/loss 18,019 20,964 35,110 34,807 76,962 Items affecting comparability Other external expenses - - - -794 -794 Personnel expenses - - - -4,962 -4,962 Total items affecting comparability - - - -5,756 -5,756 Adjusted operating profit/loss 18,019 20,964 35,110 40,563 82,718 Adjusted operating margin 28.4% 32.0% 27.3% 31.5% 31.6% During the first quarter of 2024, a total of tSEK 5,756 has been adjusted for related to reorganization, of which tSEK 794 relates to other external costs and tSEK 4,962 relates to personnel costs. ARPU and currency-adjusted ARPU Apr - Jun Jan - Jun Jan - Dec tSEK 2025 2024 2025 2024 2024 Subscription income 60,324 63,181 122,204 124,759 252,100 Currency-adjusted subscription income 61,665 61,932 123,138 122,447 250,220 Number of subscriptions previous period (thousands) 904 893 918 893 893 Number of subscriptions current period (thousands) 878 898 878 898 918 ARPU (SEK) 271 282 272 279 278 Currency-adjusted ARPU (SEK) 277 277 274 273 276 Reconciliation of alternative key performance indicators 16 Sleep Cycle Interim report Apr-Jun 2025
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The Board of Directors and CEO assure that the interim report provides a fair and accurate overview of the operations, financial position and earnings of the parent company and group and describes significant risks and uncertainties that the parent company and the companies included in the group face. Gothenburg, August 21, 2025 Anne Broeng Chairman of the Board Maciej Drejak Board member Erik Jivmark CEO Hans Skruvfors Board member Mathias Høyer Board member Erik Jivmark, CEO Tel: +46 72-159 20 23 email: erik.jivmark@sleepcycle.com Elisabeth Hedman, CFO and Head of Investor Relations Tel: +46 76-282 89 58 email: elisabeth.hedman@sleepcycle.com Sleep Cycle AB (publ) Business reg. No. 556614-7368, Drakegatan 10, 412 50 Gothenburg https://investors.sleepcycle.com/ For further information, please contact: Submission of the interim report Jan - Jun 2025 Contact 17 Sleep Cycle Interim report Apr-Jun 2025