How Oura Built a $1.4 Billion Business Around a Tiny Ring

CJ Gustafson (0:00)

Oura has filed for an IPO on the NASDAQ. The Finnish-founded health wearable company is making its public market debut on the backs of triple-digit revenue growth in its last fiscal year in actual profitability. This is the Oura Ring IPO S1 breakdown.

So their mission statement, empower people to live healthier longer. That comma there, as AI would say, that's doing a lot of work. So Oura's filed for an IPO, it's gonna be on the NASDAQ, it's gonna be under ticker OURA. I guess it wasn't taken. The Finnish founded health wearable company is making its debut on the backs of triple digit revenue growth in its last full fiscal year, 2025, a trailing 12 month revenue tally of 1.4 billion in actual gap profitability. And now despite my obsession with metrics and health, I do not wear one. So I have three kids that are four and under and scientifically confirming that my sleep score is in the toilet would be a mental excuse to phone in a subpar day. And plus I already know that my heels hurt from running too much. My liver does not need two Miller lattes a night. And I probably shouldn't have eaten my child's leftover pirate booty at 11 p.m. Sleep debt. Sleep debt refers to the feature in Oura app that shows users how much sleep they have missed over the past two weeks based on their personal sleep. Well, I don't own one. I am in awe of their highly retentive consumer business model, which pairs hardware with software subscriptions. And it successfully reaches cohorts of customers across a wide variety of gender, age and income levels, which I'll show you. So I read all 362 pages this Saturday in between shuttling my kids to birthday parties, and many times I thought of the legendary JP Pruitt. So he's the hand model played by David Duchovny in Zoolander. But why male models?

You serious?

I just told you that a moment ago. It's a shame that JP was 25 years too early to make it into this S1, because this document, folks, is literally just like a compilation of hand models. I want to know what the casting call was like. Did an analyst from Goldman Sachs, their lead left, sit in a nondescript conference room on Kearney Street, reviewing the knuckles and cuticles and deciding whose fingers photograph best in titanium rings? Did they ask about the skin routine? Was there a callback? It puts the lotion on the skin. Okay, anywho. So, key stats here. Revenue, $1.4 billion on a trailing 12-month basis. That is 74% year-on-year growth compared to the prior period. Fiscal year of 2025, they did $908 million of revenue off of $407 million the prior year. That's up 123%.

So now you have to break this into hardware versus software subscription revenue. So 80% of the revenue is hardware revenue, 20% is recurring subscription revenue. And now the mix has shifted from 83, 17, and fiscal year 2025 as the subscription base increases, which you would expect. In the hardware portion of the business, that's growing 65% year-on-year, and the subscription portion is growing 121%.

How many rings did they sell last year? Well, on a trailing 12-month basis, they've sold 3.6 million and that represents roughly 2% of the 212 million wearables shipped worldwide. And that's that came from IDC in the S1. Total paid members, 5 million. That was up 100% year-on-year. And paid members have grown over 100% for seven straight quarters, which is a trend you'll have to see. 94% of ring sales, so the hardware portion, turn into a subscription activation. So someone who pays for it. Revenue per ring, 311 bucks for the first nine months of fiscal 2026 So a lot of the stats in here were very frustratingly quoted on a last nine month basis. So right now, average per ring is 311 bucks. That's actually down from 326 in fiscal 2025 and down again from 332 in fiscal 2024 But for context, ring five launched June 4th and it started at 399 bucks and ring four started at 349 So despite these price increases, they're making less per ring as their direct to consumer mix shifts to these retail partners like Costco and Amazon, who will demand some points. Gross margin. So this is both revenue streams, 55%.

This is up from 51% in the prior nine months, but it's actually down from 65% in fiscal 2024 So you're like, whoa, what happened there? More on this later, there was this battery debacle that caused a big warranty expense that drove this down. Now, they don't break out the hardware margin, but you can pretty much back into it. So memberships did 241 million in revenue at 89% margin, which is about 214 million of the 662 million in total gross profits. So some simple math here that leaves 448 million on 974 million of hardware revenue or roughly 46% gross margin. And 46% gross margin on physical objects is actually strong. Apple runs around 37% on hardware. Now at a $311 revenue per unit, that's about $143 of gross profit per ring. And they say they pay back their CAC, customer acquisition costs on day one. Income from operations, 71 million, a 6% margin. It was 60 million in the prior nine months, 45 million in fiscal 2025 and 13 million in fiscal 2024 So the absolute number is getting bigger. Net income of 61 million. So they are legit profitable, but this is a weird one. So they have a net loss attributable to common shareholders of negative 924 million. What? And a loss per share of $89.53.