Annual Report • Feb 8, 2024
Annual Report
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Operating profit was affected by a non-cash impairment loss of tSEK 6,341. Excluding impairment, the margin was 31.1%.
| tSEK | 2023 | 2022* | 2023 | 2022* |
|---|---|---|---|---|
| Net sales | 61,254 | 55,405 | 236,146 | 212,034 |
| Net sales growth (%) | 10.6% | 16.1% | 11.4% | 16.8% |
| Currency-adjusted net sales growth (%) | 5.7% | 8.6% | 3.1% | 12.3% |
| Operating profit/loss | 12,689 | 4,549 | 56,606 | 42,807 |
| Operating margin (%) | 20.7% | 8.2% | 24.0% | 20.2% |
| Non-recurring items | - | -2 802 | -4 831 | -2 802 |
| Adjusted operating profit/loss | 12,689 | 7,351 | 61,437 | 45,609 |
| Adjusted operating margin (%) | 20.7% | 13.3% | 26.0% | 21.5% |
| Profit/loss for the period | 10,445 | 3,685 | 46,142 | 33,941 |
| Operational key performance indicators | ||||
| Total subscriptions (Thousands) | 893 | 904 | 893 | 904 |
| ARPU (SEK) | 272 | 243 | 262 | 234 |
| Average number of employees (#) | 38 | 48 | 45 | 46 |
*The key figures for 2022 have been adjusted to reflect the correction of VAT liability. See more under the section Financial overview. For definitions, justifications, and deductions see page 16.
When summing up 2023, we can conclude that the positive trend from the third quarter continued. The number of subscribers continued to increase in the fourth quarter. Despite a cautious market during the year, sales increased by 10.6% in the quarter and 11.4% for the full year, largely driven by price increases and exchange rate effects. The focus on product development and conversion, combined with cost-effective customer acquisition, has not only enabled us to turn around growth in the number of subscribers during the year, but has also provided an improved user experience.
I have had the privilege of being the CEO of Sleep Cycle since the first of November 2023. I have spent the first few months getting to know the company through meetings with colleagues, investors, partners, and other important stakeholders. After my first few months, I can confirm that the company has a strong market position, a highly appreciated offering, and a competent and innovative team. During the spring, we will present an updated strategy with a focus on increased growth.
As part of an ongoing strategic review, we decided in the fourth quarter to discontinue Sleep Cycle Kids in order to focus even more on our core product. This strategic adjustment is accompanied by a non-cash impairment charge of SEK 6.3 million in the fourth quarter. Excluding this write-down, we had an operating margin of over 31% in the quarter. The positive earnings trend in combination with a strong cash flow is another sign of Sleep Cycle's strong position, as we now enter a new exciting 2024.
Over the coming year we will endeavor to further strengthen our market position by increasing productivity in the company, capitalizing more on our data, and increasing our ability to deliver high-quality sleep analysis to our users worldwide. We will also continue to develop our relationship with our major customers and partners, such as Apple, Google, and Samsung. I see good opportunities to strengthen our commercial focus. A first step in understanding the value of our data outside the core product came in November with the introduction of "Cough Radar," our latest innovation. Sleep Cycle can now apply its extensive user data to analyze the coughing frequency of our users, which we can show in an aggregated format through a so-called "heat-map." It helps the user gain geographical insight into different cough patterns and their development over time, providing a unique insight into the spread of colds and other respiratory symptoms.
Cough Radar is the result of Sleep Cycle's unique sound data, which can provide real-time information about the health status of different regions. My ambition going forward is to maintain focus on the development of the core product based on the insights that our data provides.
As part of our preparations for the future, we decided in January to close our office in Stockholm and offer all employees employment at our office in Gothenburg. This shift brings our various functions closer together in order to increase efficiency and create a stable base for increased growth with reduced overheads.
As the newly appointed CEO of Sleep Cycle, I am positive about the future, and impressed by our dedicated team and its strong execution power. We bring an appreciated product to the market that improves people's health, which is an important purpose. Furthermore, the high quality of the product contributes to a loyal user base. We are now working on an updated growth strategy and a business plan that will leverage the opportunities we see. We will take further steps to strengthen our profitability by focusing on the core product with an even better offering that attracts more users and increases retention.
I look forward to continuing our exciting journey of increased innovation and financial growth.
Thank you for your trust and continued support.
Erik Jivmark CEO Sleep Cycle AB
Sleep Cycle is a leader in the development of AI-based sleep analysis. With more than two million users in more than 150 countries, Sleep Cycle is one of the most widely used sleep services in the world.
Stop 06:47
Good morning!
Our business is based on a subscription-based business model that creates predictability and a strong cash flow through advance payments and recurring revenues. Because we offer an appreciated product built on many years of development, and where customer influx is largely organic, our customer acquisition costs are low, resulting in attractive profitability. Combined with the fact that the cost of each new user is very low, our business is fully scalable.
AI and machine learning have revolutionized our ability to manage large amounts of data and extract valuable information. The application of advanced algorithms and techniques allows us to extract patterns and contexts that were previously unknown and inaccessible.
Sleep Cycle analyzes audio that, using a database of more than two billion nights, gives users individual insights, advice, and recommendations about their sleep. The fact that the analysis is sound-based also makes it possible to capture snoring, coughing, tooth grinding, and other sounds that disrupt sleep and can provide additional health insights in a broader perspective.
The future of sleep optimization offers expansive opportunities in both product development and accessibility of our services on more platforms and in new channels. With a nearly unrivaled volume of sleep data, patented sleep analysis, and a large user base, we are in a very strong position to develop new and innovative services for sleep analysis.
Through continuous product development, Sleep Cycle continues to add new features for analysis of sleep, snoring, sleep hygiene, and coaching tools to help our users achieve better health. Future plans also include bringing out functions for optimizing health, sleep and well-being as well as functions to detect clinical sleep problems such as insomnia and sleep apnea.
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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, 2022.
During a review, it was discovered that Sleep Cycle is liable to pay VAT in Japan, as this is not handled by Apple and Google in that specific market. In total, another current liability of SEK 7.1 million has been booked as of December 31, 2023 regarding VAT on sales for the years 2018 to 2023. The error has been corrected by retroactively recalculating all affected items. Net sales for the fourth quarter of 2022 decreased by tSEK 297. Other operating expenses increased by tSEK 165. Tax on profit for the period decreased by tSEK 95 and Total income for the period decreased by tSEK 367. Current tax receivables increased by tSEK 1,154. Other liabilities increased by tSEK 6,012, and Deferred income decreased by tSEK 534. Equity as of December 31, 2022 decreased by tSEK 4,324. Going forward, Sleep Cycle will handle VAT in Japan through a local agent.
The Group's net sales during the fourth quarter totaled tSEK 61,254 (55,405), which is an increase of 10.6% (16.1%) compared to the previous year. The increase in net sales is due primarily to positive currency effects and higher ARPU. Currency-adjusted net sales growth amounted to 5.7% (8.6%). Average revenue per user (ARPU) increased by 11.9% and amounted to SEK 272 (243). In addition to exchange rate effects, ARPU was positively affected by the price increases introduced in the previous year.
The number of paying users totaled 893k (904k). The decrease in the total number of users is explained by a reduction in the number of users in the previous quarter as a result of a weaker market with fewer downloads. During the third quarter, the negative trend from previous quarters was broken and during the fourth quarter, the number of paying users continued to increase sequentially. An increase of 6k compared to the third quarter, which is explained by positive customer acquisition.
Operating profit totaled 12,689 (4,549) TSEK and the margin 20.7% (8.2%) in the fourth quarter. Earnings have been affected by an impairment charge of tSEK 6,341 related to a strategic decision to discontinue Sleep Cycle Kids. Excluding the write-down, the margin was 31.1%. The improved margin is a result of the efficiency program for increased profitability and continued growth that was communicated during the second quarter. The implementation has had a positive impact on the cost level and margin and entails a reduction in the number of employees, reduced purchases of external services and lower costs for marketing.
Adjusted operating profit totaled tSEK 12,689 (7,351) and the adjusted margin was 20.7% (13.3%). The fourth quarter of 2023 has not been affected by costs affecting comparability.
Net financial items for the quarter totaled tSEK 476 (120) and taxes on profit for the quarter totaled tSEK -2,720 (-985). Profit for the quarter totaled tSEK 10,445 (3,685). Earnings per share before and after dilution amounted to SEK 0.52 (0.18).
Cash flow from operating activities in the fourth quarter totaled tSEK 16,429 (13,520).
Cash flow from investment activities amounted to tSEK -187 (-2,840) related to capitalized development expenses and acquisitions of tangible fixed assets. The change is explained by lower capitalization of development expenditure.
Cash flow from financing activities for the quarter totaled tSEK -727 (-629).
Cash flow for the quarter totaled tSEK 15,515 (10,051). The group's liquid funds at the end of the period totaled tSEK 133,471 (232,862).
Consolidated equity amounted to tSEK 60,998 as ofDecember 31. Opening balance on January 1 was tSEK 156,510.
Changes in net sales, profit, cash flow, and financial position for the full year 2023 compared with the previous year are largely explained by the same reasons as for the fourth quarter. Development over a twelve--month period is indicated below, with comments in cases where there are causes for development other than for the fourth quarter.
During a review, it was discovered that Sleep Cycle is liable to pay VAT in Japan, as this is not handled by Apple and Google in that specific market. In total, another current liability of SEK 7.1 million has been booked as of December 31, 2023 for the years 2018 to 2023. The error has been corrected by retroactively recalculating all affected items. Net sales for 2022 decreased by tSEK 1,237. Other operating expenses increased by tSEK 66. Tax on profit for the period decreased by tSEK 268 and Total income for the period has decreased by tSEK 1,035. Current tax receivables increased by tSEK 1,154. Other liabilities increased by tSEK 6,012 and Deferred income decreased by tSEK 534. Equity as of December 31, 2022 decreased by tSEK 4,324.
The Group's net sales for the period totaled tSEK 236,146 (212,034), which is an increase of 11.4% (16.8%) compared with prior year. Currencyadjusted net sales growth was 3.1% (12.3%).
Operating profit totaled tSEK 56,606 (42,807) and the margin was 24.0% (20.2%) for the period. Excluding the impairment, the margin was 26.7%.
Adjusted operating profit totaled tSEK 61,437 (45,609) and the adjusted margin was 26.0% (21.5%). The item other external costs includes costs affecting comparability of tSEK 298 (2,802) related to the public cash offer in 2022. Furthermore, tSEK 83 is included in other external costs and tSEK 4,450 in personnel costs related to the efficiency program implemented in the second quarter. The improved margin is a result of the streamlining initiative for increased profitability and continued growth that was communicated during the second quarter. The increase in personnel costs is related to the change of CEO.
Net financial items for the period totaled tSEK 1,586 (20) and taxes on the profit for the period totaled tSEK -12,050 (-8,886). Profit for the period totaled tSEK 46,142 (33,941). Earnings per share before dilution amounted to SEK 2.28 (1.72) and after dilution SEK 2.28 (1.69).
Cash flow from operating activities for the period totaled tSEK 52,723 (61,528). The change in cash flow from operating activities reflects payments from Apple that do not follow monthly payments and negatively affects working capital. This affects cash flow in that the accounts receivable on the balance sheet date are higher,
as they relate to a longer period, but where the payment is made in the coming period without the accounts receivable falling due.
Cash flow from investment activities amounted to tSEK -6,813 (-7,769) related to capitalized development expenses and acquisitions of tangible fixed assets.
Cash flow from financing activities totaled tSEK -145,302 (14,006) and mainly pertains to amortization of leasing liabilities and dividends paid in 2023. The change in comparison with prior year is due to the dividend paid out.
Cash flow for the period totaled tSEK -99,392 tSEK (67,765). The group's liquid funds at the end of the period totaled tSEK 133,471 (232,862).
Consolidated equity amounted to tSEK 60,998 as of December 31. Opening balance on January 1 was tSEK 156,510.
The average number of employees in the group for the quarter October to December 2023 was 38 (48) and for the period from January to December 2023 was 45 (46). The number of employees was 38 (51) at year-end.
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 2022. No significant events have occurred during the period that affect or change the descriptions of the Group's risks and their management.
The Group's operations are essentially conducted in the parent company, which is why reference is made to the information above for the Group.
There have been no related-party transactions aside from transactions with senior executives in their capacity as such.
The Annual General Meeting will be held on April 11, 2024 in Gothenburg. The notice will contain practical information regarding registration and attendance.
Sleep Cycle's annual report for 2023 is expected to be published on the home page on March 8, 2024.
The Board of Directors of Sleep Cycle AB (publ) has adopted a distribution policy with the aim that distribution over time will amount to between 40-60% of earnings after taxes.
Sleep Cycle has a history of good profitability and strong cash flows. With a business model with limited investment needs and advance payments it is the opinion of the Board of Directors that the company can deliver on its long-term strategic objectives, including investments for growth, combined with an annual dividend.
The Board of Directors proposes a dividend of SEK 2.30 per share, corresponding to SEK 46.6 million calculated on the basis of the number of outstanding shares on February 7, 2024. SEK 1.30 per share constitutes an ordinary dividend for 2023 and SEK 1.00 per share constitutes an extraordinary dividend. Closing date for trading with the right to receive dividends is April 11, 2024 and the proposed record date for the dividend is April 15, 2024. Euroclear expects to send the dividend to shareholders on April 18, 2024.
This report has not been reviewed by the Company's auditors.
On February 8 at 9:30 a.m., a
presentation of Sleep Cycle's year-end report for 2023 will be held for shareholders, media and other stakeholders. Participants will be able to follow the presentation via a webcast.
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.
| Option program | Number of options |
Corresponding number of shares |
Percentage of total number of shares |
Exercise price | Redemption period |
|---|---|---|---|---|---|
| TO 2021 series 1 | 187,910 | 187,910 | 0.9% | 94.5 | 2024 |
| TO 2021 series 2 | 17,512 | 17,512 | 0.1% | 94.5 | 2025 |
| TO 2022 | 53,700 | 53,700 | 0.3% | 71.2 | 2025 |
| CEO LTIP | 340,909 | 340,909 | 1.7% | 241.2 | 2026 |
| TO 2023 | 100,000 | 100,000 | 0.5% | 52.6 | 2027 |
| Total | 700,031 | 700,031 | 3.5% |
| Owner | Number of shares |
Votes and capital |
|---|---|---|
| Maciej Drejak through company | 8,707,984 | 42.9% |
| Pierre Siri through company | 4,776,686 | 23.6% |
| Nordnet Pensionsförsäkring | 918,519 | 4.5% |
| Avanza Pension | 819,034 | 4.0% |
| Petter Wallin | 691,096 | 3.4% |
| Skandia Fonder | 633,521 | 3.1% |
| Handelsbanken Microcap | 500,000 | 2.5% |
| Lancelot Avalon | 450,000 | 2.2% |
| Cancerfonden | 291,882 | 1.4% |
| Cicero Sustainable Mix | 199,446 | 1.0% |
| Other | 2,289,395 | 11.3% |
| Total | 20,277,563 | 100% |
| tSEK Note 2023 2022 2023 2022 OPERATING INCOME Net sales 4 61,254 55,405 236,146 212,034 Other operating income 240 46 864 529 OPERATING EXPENSES Capitalized work for own account 7 925 1,105 3,224 Platform fees -14,238 -12,833 -53,641 -49,741 Other external expenses -13,146 -22,684 -53,127 -63,383 Personnel expenses -12,693 -14,769 -59,507 -54,201 Depreciation and impairment of tangible and intangible assets -8,653 -1,278 -14,858 -5,261 Other operating expenses -83 -264 -376 -395 Operating profit/loss 12,689 4,549 56,606 42,807 FINANCIAL ITEMS Financial income 1,253 156 2,793 157 Financial expenses -777 -36 -1,207 -137 Profit before tax 13,165 4,669 58,192 42,827 Tax on profit for the period -2,720 -985 -12,050 -8,886 Profit for the period attributable to the parent company's shareholders 10,445 3,685 46,142 33,941 Other comprehensive income - - - - Comprehensive income for the period attributable to the parent company's shareholders 10,445 3,685 46,142 33,941 Earnings per share before dilution, SEK 0.52 0.18 2.28 1.72 Earnings per share after dilution, SEK 0.52 0.18 2.28 1.69 Average number of shares outstanding for the period before dilution 20,277,203 20,277,203 20,277,203 19,729,788 |
Oct - Dec | Jan - Dec | |||
|---|---|---|---|---|---|
| for the period after dilution 20,277,203 20,277,203 20,277,203 20,056,591 |
Average number of shares outstanding |
*The income statement for 2022 has been adjusted to reflect the correction of VAT liability. See more under the section Financial overview.
| tSEK | Note | 12/31/2023 | 12/31/2022* |
|---|---|---|---|
| ASSETS | |||
| Intangible fixed assets | |||
| Capitalized expenses for development work | 4,474 | 9,595 | |
| Patent | - | - | |
| Total intangible fixed assets | 4,474 | 9,595 | |
| Tangible fixed assets | |||
| Right-of-use assets | 15,605 | 4,132 | |
| Cost of improvement on other's property | 738 | - | |
| Equipment and computers | 1,703 | 1,468 | |
| Total tangible fixed assets | 18,045 | 5,601 | |
| Financial assets | |||
| Other long-term receivables | 411 | 411 | |
| Total financial assets | 411 | 411 | |
| Deferred tax | |||
| Deferred prepaid tax | 83 | 13 | |
| Total deferred tax | 83 | 13 | |
| Current assets | |||
| Accounts receivable | 38,224 | 22,388 | |
| Other receivables | 2,602 | 1,084 | |
| Current tax assets | 2,148 | 2,628 | |
| Prepaid expenses and accrued income | 31,086 | 27,943 | |
| Cash and cash equivalents | 133,471 | 232,862 | |
| Total current assets | 207,531 | 286,906 | |
| TOTAL ASSETS | 230,545 | 302,525 | |
| EQUITY AND LIABILITIES Equity |
|||
| Share capital Other contributed capital |
563 288 |
563 119,229 |
|
| Retained earnings, including profit for the year | 60,147 | 36,719 | |
| Total equity attributable to the | |||
| parent company's shareholders | 60,998 | 156,510 | |
| Long-term liabilities | |||
| Leasing liabilities | 11,743 | 2,623 | |
| Total long-term liabilities | 11,743 | 2,623 | |
| Current liabilities | |||
| Leasing liabilities | 4,175 | 1,572 | |
| Accounts payable | 13,908 | 14,203 | |
| Other liabilities | 10,322 | 8,900 | |
| Accrued expenses and deferred income | 129,399 | 118,716 | |
| Total current liabilities | 157,804 | 143,392 | |
| TOTAL EQUITY AND LIABILITIES | 230,545 | 302,525 |
*The balance sheet for 2022 has been adjusted to reflect the correction of VAT liability. See more under the section Financial overview.
| tSEK | 12/31/2023 | 12/31/2022 |
|---|---|---|
| Opening balance according to adopted balance sheet | 160,834 | 108,898 |
| Correction of errors (after tax) | - 4,324 | - 3,289 |
| Adjusted opening balance | 156,510 | 105,609 |
| Comprehensive income for the period | 46,142 | 33,941* |
| Dividend | -141,943 | - |
| Option premiums | 288 | 368 |
| New share issues after issue expenses | - | 16,593 |
| Closing balance | 60,998 | 156,510 |
* Equity for 2022 has been adjusted to reflect correction of VAT liability. See more under the section Financial overview.
| Oct - Dec | Jan - Dec | |||
|---|---|---|---|---|
| tSEK Note |
2023 | 2022 | 2023 | 2022 |
| Cash flow from operating activities | ||||
| Operating profit/loss | 12,689 | 4,549 | 56,606 | 42,807 |
| Adjustments for items not included in cash flow: | ||||
| Depreciation and impairment | 8,653 | 1,278 | 14,858 | 5,261 |
| Interest received | 1,253 | 156 | 2,793 | 157 |
| Interest paid | -777 | -36 | -1,207 | -137 |
| Tax paid | -1,963 | 1,516 | -11,639 | -5,525 |
| Cash flow from operating activities before changes in working capital |
19,854 | 7,463 | 61,411 | 42,563 |
| Change in working capital | ||||
| Change in operating receivables | -5,665 | -3,597 | -20,497 | -2,309 |
| Change in operating liabilities | 2,240 | 9,654 | 11,809 | 21,274 |
| Cash flow from operating activities | 16,429 | 13,520 | 52,723 | 61,528 |
| Investment activities | ||||
| Capitalization of development expenses | -187 | -2,701 | 5,086 | -6,917 |
| Acquisition of tangible fixed assets | - | -139 | -1,727 | -852 |
| Cash flow from investment activities | -187 | -2,840 | -6,813 | -7,769 |
| Financing activities | ||||
| Repayment of leasing liabilities | -1,015 | -629 | -3,647 | -2,899 |
| Option premiums repaid | -4 | - | -4 | -11 |
| Option premiums received | 292 | - | 292 | 378 |
| Dividend | - | - | -141,943 | - |
| New share issues | - | - | - | 16,538 |
| Cash flow from financing activities | -727 | -629 | -145,302 | 14,006 |
| Cash flow for the period | 15,515 | 10,051 | -99,392 | 67,765 |
| Liquid funds at the beginning of the period | 117,956 | 222,811 | 232,862 | 165,508 |
| Reclassification of cash and cash equivalents | - | - | - | -411 |
| Liquid funds at the end of the period | 133,471 | 232,862 | 133,471 | 232,862 |
| Oct - Dec | Jan - Dec | ||||
|---|---|---|---|---|---|
| tSEK | Note | 2023 | 2022* | 2023 | 2022* |
| OPERATING INCOME | |||||
| Net sales | 61,254 | 55,405 | 236,146 | 212,034 | |
| Other operating income | 240 | 46 | 864 | 529 | |
| Capitalized work for own account | 7 | 925 | 1,105 | 3,224 | |
| OPERATING EXPENSES | |||||
| Platform fees | -14,238 | -12,833 | -53,641 | -49,741 | |
| Other external expenses | -14,343 | -23,348 | -57,378 | -66,413 | |
| Personnel expenses | -12,693 | -14,769 | -59,507 | -54,201 | |
| Depreciation and impairment of tangible and intangible assets |
-7,567 | -638 | -10,961 | -2,340 | |
| Other operating expenses | -83 | -264 | -376 | -395 | |
| Operating profit/loss | 12,577 | 4,524 | 56,252 | 42,697 | |
| PROFIT FROM FINANCIAL ITEMS | |||||
| Interest income and similar income | 1,253 | 156 | 2,793 | 157 | |
| Interest expenses and similar expenses | -594 | - | -594 | - | |
| Profit before tax | 13,236 | 4,680 | 58,451 | 42,855 | |
| Tax on profit for the period | -2,734 | -987 | -12,101 | -8,890 | |
| Profit/loss for the period | 10,501 | 3,694 | 46,350 | 33,964 | |
| COMPREHENSIVE INCOME FOR THE PERIOD | 10,501 | 3,694 | 46,350 | 33,964 |
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.
*The Parent Company's income statement for 2022 has been adjusted to reflect the correction of VAT liability. See more under the section Financial overview.
| tSEK Note |
12/31/2023 | 12/31/2022* |
|---|---|---|
| ASSETS | ||
| Fixed assets | ||
| Intangible fixed assets | ||
| Capitalized expenses for development work | 4,474 | 9,595 |
| Patent | - | - |
| Total intangible fixed assets | 4,474 | 9,595 |
| Tangible fixed assets | ||
| Cost of improvement on other's property | 738 | - |
| Equipment and computers | 1,703 | 1,468 |
| Total tangible fixed assets | 2,441 | 1,468 |
| Financial assets | ||
| Participations in group companies | 50 | 50 |
| Deferred prepaid tax | 18 | - |
| Other long-term receivables | 411 | 411 |
| Total financial assets | 479 | 461 |
| Total fixed assets | 7,395 | 11,524 |
| Current assets | ||
| Current receivables | ||
| Accounts receivable | 38,224 | 22,388 |
| Other receivables | 2,602 | 1,084 |
| Current tax assets | 2,148 | 2,628 |
| Prepaid expenses and accrued income | 31,086 | 27,943 |
| Total current receivables | 74,061 | 54,043 |
| Cash and bank balances | 133,363 | 232,746 |
| Total current assets | 207,423 | 286,789 |
| TOTAL ASSETS | 214,818 | 298,314 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Restricted equity | ||
| Share capital | 563 | 563 |
| Fund for development expenditures | 4,474 | 9,595 |
| Total restricted equity | 5,038 | 10,158 |
| Unrestricted equity | ||
| Share premium fund | 288 | 119,229 |
| Retained earnings | 9,514 | -6,857 |
| Profit/loss for the period | 46,350 | 33,964 |
| Total unrestricted equity | 56,151 | 146,336 |
| Total equity | 61,189 | 156,494 |
| Current liabilities | ||
| Accounts payable | 13,908 | 14,203 |
| Other liabilities | 10,322 | 8,900 |
| Accrued expenses and deferred income | 129,399 | 118,716 |
| Total current liabilities | 153,629 | 141,819 |
| TOTAL EQUITY AND LIABILITIES | 214,818 | 298,314 |
* The Parent Company's balance sheet for 2022 has been adjusted to reflect the correction of VAT liability. See more under the section Financial overview.
The address of the company's registered office is Drakegatan 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 December 31, 2023 consists of the wholly owned subsidiary Sleep Cycle Sverige AB (559278–9688).
Sleep Cycle's year-end report for Jan-Dec 2023 was approved for publication on February 8 per board decision on February 7, 2024.
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 reports have been prepared in 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 2022. New standards and interpretations that came into force on 1 January 2023 have not had any effect on the group's or the parent company's financial reports for the interim period.
Sleep Cycle's CEO, as the highest executive decision-maker, follows up and analyzes results and financial position for the Group as a whole. 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 following IFRS 8, it can be seen that the Sleep Cycle Group consists of only one reporting segment.
| Oct - Dec | Jan - Dec | |||
|---|---|---|---|---|
| tSEK | 2023 | 2022 | 2023 | 2022 |
| Subscription income | 60,530 | 55,191* | 234,948 | 211,297* |
| Other income | 725 | 214 | 1,198 | 737 |
| Total | 61,254 | 55,405 | 236,146 | 212,034 |
*Subscription revenue for 2022 has been adjusted to reflect the correction of VAT liability. See more under the section Financial overview.
| tSEK | 12/31/2023 | 12/31/2022 |
|---|---|---|
| Financial assets valued at amortized cost | ||
| Accounts receivable | 38,224 | 22,388 |
| Other receivables | 3,013 | 1,496 |
| Cash and cash equivalents | 133,471 | 232,862 |
| Total financial assets | 174,708 | 256,746 |
| Financial liabilities valued at amortized cost | ||
| Accounts payable | 13,908 | 14,203 |
| Other current liabilities | 10,560 | 11,861* |
| Total financial liabilities | 24,468 | 26,064 |
* Other current liabilities for 2022 have been adjusted to reflect the correction of VAT liability. See more under the section Financial overview.
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.
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 key performance indicators should not be assessed
independently or considered replacements for performance indicators that have been 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 the year's net sales divided by prior year's net sales adjusted to the year's average exchange rates. |
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 |
Non-recurring items not included in normal operations and therefore disrupt comparability between different periods. Refers to costs related to IPO in 2021, public cash offer in 2022, and cost savings in 2023. |
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. |
| 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. |
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 | Oct - Dec | Jan - Dec | ||
|---|---|---|---|---|
| tSEK | 2023 | 2022* | 2023 | 2022* |
| Net sales previous period | 55,405 | 47,702 | 212,034 | 181,530 |
| Net sales current period | 61,254 | 55,405 | 236,146 | 212,034 |
| Net sales growth | 10.6% | 16.1% | 11.4% | 16.8% |
| Currency-adjusted net sales previous period | 57,951 | 51,017 | 229,045 | 188,808 |
| Net sales current period | 61,254 | 55,405 | 236,146 | 212,034 |
| Currency-adjusted net sales growth | 5.7% | 8.6% | 3.1% | 12.3% |
| Oct - Dec | Jan - Dec | |||
|---|---|---|---|---|
| tSEK | 2023 | 2022* | 2023 | 2022* |
| Net sales | 61,254 | 55,405 | 236,146 | 212,034 |
| Other operating income | 240 | 46 | 864 | 529 |
| Capitalized work for own account | 7 | 925 | 1,105 | 3,224 |
| Platform fees | -14,238 | -12,833 | -53,641 | -49,741 |
| Other external expenses | -13,146 | -22,684 | -53,127 | -63,383 |
| Personnel expenses | -12,693 | -14,769 | -59,507 | -54,201 |
| Depreciation and impairment of tangible and intangible assets | -8,653 | -1,278 | -14,858 | -5,261 |
| Other operating expenses | -83 | -264 | -376 | -395 |
| Operating profit/loss | 12,689 | 4,549 | 56,606 | 42,807 |
| Operating margin | 20.7% | 8.2% | 24.0% | 20.2% |
| Oct - Dec | Jan - Dec | |||
|---|---|---|---|---|
| tSEK | 2023 | 2022* | 2023 | 2022* |
| Operating profit/loss | 12,689 | 4,549 | 56,606 | 42,807 |
| Items affecting comparability | ||||
| Other external expenses | - | -2,802 | -381 | -2,802 |
| Personnel expenses | - | - | -4,450 | - |
| Total items affecting comparability | - | -2,802 | -4,831 | -2,802 |
| Adjusted operating profit/loss | 12,689 | 7,351 | 61,437 | 45,609 |
| Adjusted operating margin | 20.7% | 13.3% | 26.0% | 21.5% |
The item other external costs includes costs affecting comparability of tSEK 298 (2 802) related to the public cash offer in 2022. Furthermore, tSEK 83 is included in other external costs and tSEK 4,450 in personnel costs related to the efficiency program implemented in the second quarter.
*Alternative performance indicators for 2022 have been adjusted to reflect the correction of VAT liability. See more under the section Financial overview.
| ARPU | Oct - Dec | Jan - Dec | ||
|---|---|---|---|---|
| tSEK | 2023 | 2022* | 2023 | 2022* |
| Subscription income | 60,530 | 55,191 | 234,948 | 211,297 |
| Number of subscriptions previous period (thousands) | 887 | 912 | 904 | 901 |
| Number of subscriptions current period (thousands) | 893 | 904 | 893 | 904 |
| ARPU (SEK) | 272 | 243 | 262 | 234 |
*Alternative performance indicators for 2022 have been adjusted to reflect the correction of VAT liability. See more under the section Financial overview.
The Board of Directors and CEO assure that the year-end 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, February 7, 2024
Anne Broeng Chairman of the Board
Rasmus Järborg Board member
Olof Nilsson Board member
Mathias Høyer Board member
Maciej Drejak Board member Erik Jivmark CEO
For more information, please contact:
ERIK JIVMARK, CEO Tel: +46 72-159 20 23 Email: [email protected]
PER ANDERSSON, CFO Tel: +46 70-939 53 27 Email: [email protected]
SLEEP CYCLE AB Business reg. No. 556614-7368, Drakegatan 10, 412 50 Gothenburg www.sleepcycle.com
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