The Ring That Wants to Be a Software Company

Oura's S-1 is the cleanest test yet of whether wearables can earn software valuations

By Elliot Anselme | The Meridian Market Review

Oura filed its S-1 with the SEC on September 3 and plans to trade on Nasdaq under the symbol OURA. It is reportedly seeking up to $3 billion at a valuation in excess of $16 billion, roughly three times the $11 billion valuation it carried in October last year, when it raised $900 million in a Series E led by Fidelity. Goldman Sachs is lead-left, with Morgan Stanley, J.P. Morgan and eighteen other banks in the syndicate.

The interesting part of the filing is not the valuation. It is that Oura is entering the public markets with a level of profitability that is rare in consumer hardware.

The numbers

Revenue for the nine months ended June 30, 2026 was $1.21 billion, up 74% from $697.6 million in the same period of 2025. On a trailing twelve month basis, revenue is approximately $1.4 billion. Fiscal 2025 revenue was $907.9 million, up 123% from $406.8 million in fiscal 2024.

Growth is slowing, but from a very high base, and that matters less than it appears. Going from 123% to 74% in a single year is the expected pattern for a market leader saturating its early adopters. The next quarter will show whether that curve is flattening gently or falling off.

Net income for the nine months was $60.8 million, against $1.6 million in the same period of 2025. Adjusted EBITDA was $106.7 million. Gross margin was 55%, up from 51%.

There is also a headline loss in the filing of $924.3 million attributable to common stockholders, and that number will be misinterpreted. It is essentially a $985.0 million deemed dividend to holders of redeemable convertible preferred stock: an accounting artifact of the pre-IPO capitalization, not a cash loss. The operating business is profitable. At least one news article will open with the loss anyway.

The mix is the story

Oura sells a ring priced between $349 and $499 depending on model and finish. After channel discounts and whatever was agreed with Costco, the company nets roughly $311 per ring. In the nine months ended June 30, 2026, it sold 3.1 million rings, up from 1.8 million a year earlier.

Hardware is the entry point, not the end point. The subscription to Oura's app, data and scores generated $240.5 million, up 121%. Paying subscribers have doubled to five million. Subscriptions now contribute 20% of revenue, up from 17% in fiscal 2025, and carry an 89% gross margin against roughly 46% for hardware.

That is the whole investment case. A hardware business doing $1.4 billion in revenue earns a single-digit revenue multiple. A business converting hardware buyers into recurring, higher-margin software revenue at a 94%-plus attach rate can argue for a SaaS multiple. At $16 billion, investors are paying roughly eleven times trailing revenue. That only works if the second story is believed.

The strongest version of that story is the data. The S-1 leans on the scale of Oura's biometric dataset, tens of billions of hours of it, as a moat a competitor cannot quickly replicate or buy. Whether heart rate and sleep data translate into durable pricing power, or even into a better sleep score than a $199 rival, is not something the filing can answer.

What could go wrong

Three items stand out in the risk factors.

Customer concentration. Oura's two largest customers contributed 12% and 10% of total revenue, and five customers held 82% of accounts receivable as of June 30, 2026. For a company that describes itself as direct-to-consumer, that is meaningful dependence on retail partners who can renegotiate terms. It gets less comfortable if hardware sales slow and shelf space has to be fought for.

Data accuracy. A class action alleges that Oura overstated the accuracy of its sleep tracking, and it appears in the risk factors. The filing is specific about the product: a ring sensor measuring photoplethysmography produces a far stronger signal than a wrist sensor, by Oura's account up to a hundred times stronger, yielding 99% accuracy in heart rate measurement. That claim is the product. Litigating it during a roadshow is awkward, and an adverse outcome would hit both the marketing and the multiple.

Competition. Samsung and Ultrahuman are in the market, alongside a growing number of cheaper entrants, some of which charge no subscription at all. If the market decides software should come free with the hardware, the 89% margin line compresses fast, and the case for a software multiple goes with it. Oura's defense is data and brand. The counterargument is that consumers have repeatedly shown they will accept a slightly worse product to avoid a recurring charge.

The insider question

Roughly $1.09 billion was sold to early investors before public investors got a look. This is not unusual at this stage, and secondary sales are a common condition of employee retention. But the size of the transaction says something about how insiders view the offering price. It is the number a cautious investor should sit with longest.

The filing also carries a governance note. One day before it was submitted, four new directors joined the board, including people who have worked at Robinhood and Netflix. This is the standard pre-IPO refresh, intended to produce a board that looks appropriate for a public company.

The read

Oura is the cleanest test yet of whether a wearables company can cross from a hardware valuation to a software one. The revenue growth is real. The profitability is real. The attach rate is genuinely impressive in a category that has historically struggled to charge twice.

Whether $16 billion is justified turns on a question the filing cannot answer: how many of those five million subscribers are still paying every month three years from now, once the novelty of the score has worn off and a competitor offers something adequate for free. Public markets will start pricing that prediction shortly.

This is not investment advice. It is a reading of what the filing states.