Sleep Cycle Interim Report July - September 2026: Ready for the next chapter

The third quarter in summary (July – September 2026)

• Net sales amounted to tSEK 50,863 (61,523) and decreased by 17.3% (6.6%). Currency-adjusted net sales growth amounted to -12.4% (-4.7%). Net sales from the B2B-sector grew by 49.2% and represented 19.7% (10.9%) of total net sales.
• EBITDA amounted to tSEK 2,658 (18,535) and the EBITDA margin was 5.2% (30.1%). The quarter has been affected by costs affecting comparability of tSEK 13,962. Adjusted EBITDA amounted to tSEK 16,620 (18,535).
• EBIT amounted to tSEK 1,140 (16,792) and the EBIT margin was 2.2% (27.3%). Adjusted EBIT amounted to tSEK 15,102 (16,792) and adjusted EBIT margin to 29.7% (27.3%).
• The total number of paying subscribers at the end of period was 631k (832k).
• ARPU in the quarter totaled SEK 262 (269). Currency-adjusted ARPU amounted to SEK 282.
• Earnings per share before and after dilution for the quarter amounted to SEK 0.05 (0.67).

The period in summary (January – September 2026)

• Net sales amounted to tSEK 153,345 (190,007) and decreased by 19.3% (2.4%). Currency-adjusted net sales growth amounted to -13.7% (-1.3%). Net sales from the B2B-sector grew by 39.8% and represented 16.4% (9.5%) of total net sales.
• EBITDA amounted to tSEK 4,879 (56,260) and the EBITDA margin was 3.2% (29.6%). The period has been affected by costs affecting comparability of tSEK 24,875. Adjusted EBITDA amounted to tSEK 29,754 (56,260).
• EBIT amounted to tSEK 334 (51,902) and the EBIT margin was 0.2% (27.3%). Adjusted EBIT amounted to tSEK 25,209 (51,902) and adjusted EBIT margin to 16.4% (27.3%).
• The total number of paying subscribers at the end of period was 631k (832k).
• ARPU for the period totaled SEK 256 (272). Currency-adjusted ARPU amounted to SEK 277.
• Earnings per share before and after dilution amounted to SEK 0.03 (2.06) for the period.

Highlights

• On July 3, 2026, Snark BidCo announced that the offer is being completed and thus declared unconditional and that Snark BidCo thereby controlled 78.2 percent of the shares and votes in Sleep Cycle. At the same time, the acceptance period was extended until July 17, 2026, in order to allow shareholders of Sleep Cycle who had not yet tendered their shares additional time to accept the Offer.
• On July 3, 2026, the company announced that a commercial SDK license agreement with Ultrahuman had been signed following a successful pilot project.
• On July 10, 2026, the Board, at the request of Snark BidCo, convened an Extraordinary General Meeting on August 5, 2026, to, among other things, elect a new Board. The Meeting resolved that the Board shall consist of five members without deputies; Andreas Källström Säfweräng, Matilda Elfving Hauan, Anna Bäck, Henrik Torstensson and Steve Savoca were elected as Board members and Andreas Källström Säfweräng was elected Chairman of the Board.
• On July 20, 2026, Snark BidCo publicized the final outcome of the offer and announced that Snark BidCo thereby controls 79.2 percent of the shares and votes in Sleep Cycle.
• On July 23, 2026, it was announced that the company had signed a technology licensing agreement with Ant Group.
• On August 27, Mikael Kågebäck was appointed acting CEO.
• On September 3, it was reported that a study conducted with the UKHSA shows that Sleep Cycle's anonymized cough data can provide early indication of influenza and COVID-19 activity approximately one week in advance.
• On September 17, a reorganization was announced that will result in annual savings of approximately SEK 35 million.
• On September 22, it was announced that Peter Alsterberg was leaving and Samuel Cyprian was joining the management team.
• On October 8, the company’s auditors announced that they were resigning from their assignment due to changes in ownership.
• On October 9, an acquisition of Audiowell through a non-cash issue was proposed. The Board of Directors has called an extraordinary general meeting on November 11 to decide on the transaction and appoint a new auditor.

Acting CEO Mikael Kågebäck comments on the quarter:

“The third quarter was a quarter of decisive change. We have a new organization with a new way of working, a faster path to market for sleep apnea risk detection, and our strongest B2B quarter ever.

Adjusted operating profit amounted to SEK 15.1 million, corresponding to a margin of 29.7 percent. Reported operating profit amounted to SEK 1.1 million and was impacted by items affecting comparability totaling SEK 14.0 million related to the change of CEO and the reorganization. B2B revenue reached a record high of SEK 10.0 million, an increase of 49 percent, and now accounts for 20 percent of net sales. Net sales amounted to SEK 50.9 (61.5) million, a decrease of 17 percent, or 12 percent adjusted for currency effects. The decrease is driven by the consumer business, where new sales in the App Store remain challenging.

In September, we introduced a new, more AI-driven way of working with fewer decision-making levels and smaller teams that take ownership of their results. The changes are expected to yield annual savings of approximately SEK 35 million, with a significant impact already in the fourth quarter.

We are launching Apnea Alert as a Class I medical device in the EU and the UK, with the launch planned for early 2027. More than 150,000 people have expressed interest. Results so far in our clinical studies are promising for both sensitivity and specificity, and we are continuing to evaluate whether data from the U.S. study may be sufficient for the next regulatory step: Class IIa in the EU and an FDA submission in the U.S. So far, the indications are promising; however, it is possible that the FDA in particular will request additional data.

After the end of the quarter, the independent members of the Board proposed that Sleep Cycle acquire Audiowell through a non-cash issue. Audiowell is an independent record label and music publisher that produces and distributes music for purposes such as sleep and relaxation via streaming platforms. Sleep Cycle contributes its sleep analysis platform, and Audiowell contributes its music catalog. Together, we see opportunities for new offerings for both new and existing customers, as well as joint capabilities in the area of well-being. The proposal entails Audiowell Group AB becoming the largest shareholder with some 82 percent of the shares. If the acquisition goes through, the intention is for Audiowell’s CEO, Gustav Forssell, to become CEO of Sleep Cycle, and for me to continue as CTO. A decision will be made at an extraordinary general meeting on November 11.

With the new organization in place, we expect an adjusted operating margin of approximately 20 percent for the full year 2026 for Sleep Cycle’s current operations, excluding the effects of the proposed acquisition. Including items affecting comparability of approximately SEK 25 million so far this year, the reported operating margin is expected to be around seven percent. Sleep Cycle is entering the final quarter of the year leaner, more focused, and with a clearer path toward profitable growth.”

Mikael Kågebäck, Acting CEO

The full interim report is available at https://investors.sleepcycle.com

Sleep Cycle’s acting CEO Mikael Kågebäck and CFO & Head of IR Elisabeth Hedman will give a presentation on October 23 at 9:30 CEST. The presentation can be followed at https://events.inderes.com/sleep-cycle/q3-report-2026

Written questions can be sent in the webcast.

For more information please contact:

Mikael Kågebäck | Acting CEO
mikael.kageback@sleepcycle.com

Elisabeth Hedman | CFO & Head of IR
elisabeth.hedman@sleepcycle.com | +46 76 282 8958

About Sleep Cycle
Sleep Cycle is dedicated to making healthy sleep accessible to everyone. Our app helps users to build hero habits, identify potential sleep issues, and gain valuable insights into their sleep patterns. Leveraging patented sound technology and over 4 billion analyzed sleep sessions, Sleep Cycle provides great accuracy and personalized guidance. As part of its broader partnership program, Sleep Cycle offers company partnerships including in-app promotions, tailored SDK solutions, and an extensive data library, enabling businesses to expand their offerings with sleep solutions and insights. Sleep Cycle is listed on Nasdaq Stockholm under the ticker SLEEP, with its headquarters in Gothenburg, Sweden.

This information is information that Sleep Cycle is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2026-10-23 07:30 CEST.