Subscription model shows 89% gross margins on five million members
Oura, the maker of smart rings used for fitness and sleep tracking, publicly filed its initial public offering paperwork on Thursday. The company, founded in Finland in 2013 and headquartered in San Francisco, aims to list on the Nasdaq as soon as this month.
The filing disclosed $1.21 billion in revenue for the nine months ended June 30, up 74% from the same period a year earlier. Oura also reported a profit of $60.8 million in the period, compared with $1.6 million in the prior-year period, the company said.
Oura’s rings track metrics including heart rate, temperature, and sleep quality, and they retail for $349 to $499. Customers who enroll as members pay $5.99 per month or $69.99 annually for full access to health insights through the Oura app, according to the filing.
The filing showed gross margins of 89% on memberships during the nine-month period. Subscribers opened the Oura app more than 3.5 times a day on average during the first three quarters of the fiscal year, according to the filing.
Hardware sales accounted for roughly 80% of revenue in the nine months ended June 30, with memberships making up the remaining 20%, according to the filing.
Oura said it has five million paying members. The company disclosed user demographic details in the filing: 72% of members are women, 42% of subscribers are between the ages of 30 and 45, and 31% are under 29.
Oura is expected to fetch a valuation well above the $11 billion mark reached in a funding round the prior year, according to The Wall Street Journal. The filing did not specify the amount Oura intends to raise in the offering.
Eighteen firms are listed as underwriters. Goldman Sachs, Morgan Stanley, JPMorgan, Allen & Co., and Jefferies are the lead bookrunners on the deal, according to the filing. Robinhood, the retail brokerage that has sought a bigger role in IPOs, is also among the underwriters.
In a section on risks, Oura said its rapid growth might not be sustainable. “We expect our growth rate to slow over time,” the filing stated. The company also listed user retention, a competitive market, and changes to tax-advantaged accounts as potential risks.
Oura has cultivated its user base among health and longevity enthusiasts, the company said. In recent years it has signed deals with sports leagues and celebrity ambassadors, and it cited the Department of Defense as a key revenue generator.
The filing did not disclose a price range for the offering. Oura plans to list on the Nasdaq under the symbol OURA.