Oura's IPO filing shows a profitable startup that used its raise to buy out early backers

Oura, the Finnish born maker of a health tracking ring, made its prospectus public on September 3, asking to list on the Nasdaq Global Select Market under the symbol OURA. The filing, which follows a confidential submission in May, leaves the share count and price range blank, as is usual before a roadshow. Goldman Sachs leads a long list of underwriters, with Morgan Stanley, J.P. Morgan, Allen & Co. and Jefferies as joint lead bookrunners. Bloomberg reported in August that the company was seeking up to $3bn, and has reported that the listing could value Oura above $16bn.

The numbers in the S-1 are unusual for a venture backed consumer hardware company. Revenue for the nine months to June 30 reached $1,214.5m, up 74% from $697.6m a year earlier, and the company earned net income of $60.8m. Yet the line most readers will see first is a net loss attributable to common stockholders of $924.3m. The gap between those two figures is the most instructive thing in the document, and it says as much about how late-stage private companies now manage their shareholders as it does about Oura itself.

What the prospectus shows

The business has two engines. Hardware, the rings themselves, generated $974.0m in the nine months, about 80% of revenue, from 3.1 million rings sold, against 1.8 million a year earlier. Membership, the subscription that unlocks the app's analysis, brought in $240.5m, more than double the $108.8m of the prior period. Oura had 5.0 million paid members at the end of June, and SiliconANGLE reported that membership carries an 89% gross margin, against 55% for the company as a whole, up from 51%.

Adjusted EBITDA was $106.7m, up from $83.5m. Fiscal 2025 was more modest: revenue more than doubled to $907.9m from $406.8m, while net income was $12,000, according to SiliconANGLE. Part of the reason was quality. The filing attributes an $84.4m increase in warranty expense in fiscal 2025 to battery performance problems in certain cohorts of the Oura Ring 4, and higher warranty costs added another $28.6m to cost of revenue in the latest nine months.

The loss that is not an operating loss

The headline loss comes from a $985.0m deemed dividend to holders of redeemable convertible preferred stock. SiliconANGLE reported that Oura repurchased $1.09bn of preferred stock from early investors, retiring about 17% of the shares issued between the seed round and Series C-1. When a company pays preferred holders more than the carrying value of their shares, accounting rules treat the premium as a distribution to them, which is deducted before arriving at the result for common shareholders.

In plain terms, Oura used a large part of its recent private financing to give early backers an exit before the IPO. SiliconANGLE noted that the company raised more than $1.2bn privately, including a 2025 round of more than $900m at an $11bn valuation led by Fidelity, and that most of that money was returned to earlier shareholders through the buyback. The balance sheet shows the consequence: cash and equivalents of $371.8m at June 30, and about $375.0m drawn on a revolving credit facility.

This is the mechanism that many late-stage companies have used during the long drought in listings. Instead of forcing a sale to generate liquidity, they raise fresh growth capital from crossover investors and recycle it into secondary purchases from seed and early round funds. It keeps early investors patient and cap tables tidy. It also means that the IPO is no longer the main source of returns for the earliest backers, who have already taken some of their money off the table, and that public buyers are being asked to fund the company's next chapter rather than its first exit.

Risks the market will price

Several disclosures will shape the roadshow. Oura says the United States has imposed tariffs on imports from countries where its components and finished rings are made, including Estonia, Finland, Mexico, South Korea, China and the Netherlands. A proposed class action alleges that Oura overstated the accuracy of its sleep tracking, and the company lists real or perceived data inaccuracies as a risk. It is involved in patent litigation as both plaintiff and defendant, including a campaign at the US International Trade Commission against rival ring makers, according to the5krunner. Retail distribution through partners such as Amazon, Best Buy and Target concentrates credit risk in a small number of accounts.

There is also a strategic thread. Eli Lilly holds a Simple Agreement for Future Equity that converts into common stock immediately before the offering closes, and Oura already works with the drugmaker's LillyDirect platform. That link supports the company's argument that it is a health data business rather than a gadget maker, a distinction that matters a great deal for the multiple investors will pay.

A test for the autumn window

The filing lands in a crowded calendar. SoftBank's SB Energy made its own registration public on September 1, seeking to list on Nasdaq under the ticker SBE, and Renaissance Capital estimated a $5bn raise. That is an infrastructure story tied to artificial intelligence. Oura is something different: a consumer subscription business with physical products, real profits and a recognisable brand. If it prices well, it will tell bankers that public investors still pay for growth outside AI, provided it comes with earnings. If it struggles, the lesson will be that even profitable consumer companies cannot command the valuations of the AI cohort.

Our view

Oura's prospectus is better than its headline. A company growing revenue by 74% while reporting net income is rare among venture backed hardware makers, and the subscription line gives investors a recurring, high margin stream to value. The $924.3m loss is an accounting artefact of a capital decision, not a sign that the business burns cash.

That capital decision still deserves scrutiny. Oura paid out more than $1bn to early holders, drew on its credit line and now holds modest cash for a company of its size. Public investors will be entitled to ask why they should supply the equity that private backers took out. For founders, the lesson is that pre-IPO buybacks are a powerful tool to manage a long private life, but they shift the burden of proof to the listing. What to watch: the price range and the share of primary versus secondary stock, how the tariff and accuracy risks are handled on the roadshow, and whether the valuation lands closer to the $11bn private mark or to the reported $16bn.

Sources

• SEC: Oura Inc. Form S-1 registration statement
• SiliconANGLE: Oura files for Nasdaq IPO
• the5krunner: Oura IPO, revenue declared up 74%
• Renaissance Capital: SoftBank-backed power infrastructure developer SB Energy files for an IPO
• SoftBank Group: SB Energy announces public filing of registration statement for proposed initial public offering

Filed under Markets. Written by InvestTimes Editorial under our editorial standards. Commentary and analysis for information only, not investment advice.