Sleep Cycle as an investment
Sleep Cycle is a subscription-based platform for sleep analysis and sleep improvement. We are the market leader, profitable and have a clear strategic focus on constantly further developing our service. Here we tell you why you should consider investing in Sleep Cycle.
* Average annual subscription revenue per subscriber during the period
Four reasons to invest in Sleep Cycle
1. A leading position in an extensive market
- The market for sleep applications is estimated at SEK 5 billion and is expected to grow at a 19% CAGR
- Sleep Cycle is the market leader and has the most downloaded app in the sleep health segment
- Sleep Cycle has the world's largest database with over 2 billion nights analyzed
2. Accessible product with active users
- Sleep Cycle is available in a portable hardware - the smartphone
- High percentage of active users leads to a growing database that strengthens competitive advantage and improves product innovation
- All-encompassing sleep solution (analyze, educate, improve)
- Dynamic product experience based on user behavior
3. Winning business model
- Recurring revenue from subscription model
- High profitability through scalable product offering
- Good cash conversion driven by advance payments
4. The growth journey has just begun
- Data and insights enable expansion of product and service offerings
- New users are accessed by expansion into new sales channels and partnerships
- Continued strong growth in focus on sleep and health, powered by data-driven insights
Sleep Cycle aims to have annual net sales growth of at least 30% adjusted for currency effects from 2022 onwards.
The company aims to prioritize growth over profitability and aims for an EBIT margin of around 20% in the medium term, with the long-term EBIT margin exceeding 30%.
The Board of Directors in Sleep Cycle AB (publ) has adopted a dividend policy with the goal that dividend shall, over time, amount to between 40% and 60% of annual net profit after taxes.
Sleep Cycle has a history of profitability and strong cash generation. With an asset light business model underpinned by prepaid subscriptions, the Board of Directors opinion is that the company can deliver on its long-term strategic goals, including investments for increased revenue growth, in combination with an annual dividend yield.
Health as a business model
Our business is based on a subscription-based business model that, through advance payments and recurring revenue, creates predictability and a strong cash flow.
Since we offer a valued product that is based on many years of development, and where the influx of customers is largely organic, we have low costs for customer acquisition, which gives high profitability.
In combination with the fact that the cost for each new user is close to zero kroner, our business is one hundred percent scalable.
Sleep Cycle reaches a very large part of the world's population because the app can be used virtually on all iOS and Android devices.
A significant part of the world's population experiences problems with sleep at some point in their lifetime. It can be related to stress, nightmares, or toddlers. Many people do not experience sleep problems but want to sleep well in order to wake up rested and recovered in order to perform well and live their life to the fullest.
Sleep Cycle offers functions for sleep analysis, sleep optimization as well as give tips, advice, and guides for minor sleep problems such as difficulty falling asleep, difficulty fall back asleep or bad habits. Through these types of functions, we target a very large part of the world's population. Through advanced AI-based sleep analysis, we will in the future also be able to indicate clinical sleep problems.
The future of sleep optimization offers expansive opportunities in both product development and accessibility of our services in more channels, platforms, and through new partnerships. Through an almost unique amount of sleep data, patented sleep analysis and a large user base, we are in a very good position to develop the services of the future for sleep analysis.
We are now in a development phase where we continue to expand Sleep Cycle's coaching tools, add new functions for analysis of sleep, snoring, and sleep hygiene while planning to be available on additional platforms and channels. In the somewhat longer term, we envision the possibility of being able to offer more functions for optimizing health, sleep, and well-being as well as functions to be able to indicate clinical sleep problems such as insomnia and sleep apnea.