Oura Health Launches Generation 3 Ring

which just launched its third generation or A Ring. That was last week, So let's get into it, talk about the company and the outlook of the industry. Heartbreet Rye is CEO of or A Health and he joins us via zoom in San Francisco. Heartpretty great to have you here. Um, how are you? Oh great, Carol, Thanks thanks for asking. I was kidding them, I was cheasing before we got going that. It really was that random call on a summer night and I tracked down your number and was like, Hi,

I want to talk about it. We're ring and there you were. Um, so glad to have you here. Tim and I are both very interested in the company. We have not yet used the product, so we were but we're very familiar with it. We're familiar with the wearables market. Tell us though for those who are not familiar with it, what exactly you guys are doing? Yeah? Look, so we

we make a wearable ring called the Aura ring. You know, it looks like sorry, a normal ring, and it connects to your phone and we have you know, both both the iOS and Android, and you know, we give users daily insights about their health UM, mainly focusing on their sleep, activity,

and something we call readiness. Well, I'm curious about how you get that data and then how you present the data because if you look at what you can do daytime heart rate, period prediction, improved temperature sensing, workout heart rate, improve sleep staging, blood oxygen sensing, UH, activity score, sleep score, activity detection, heart rate. I mean, the list goes on and on and on. How do you make this into actionable data that improves the life of somebody who's using

the product? You know, Tim, It's a great question, right. It almost seems like it can be data overflow, UM, but we we keep it really simple and we personalize it to you. So we have three main scores, your activity score, your sleep score, and something called the writing as score, and the readiness score, something that takes and overall look at both your sleeping activity patterns over over the last two weeks and prior you know, frankly a

month or so. UM. But then as you note some of these other features, right, like things like if you're getting you know, we we we've you have done some research on that during the pandemic UM. You know, we will actually have certain alerts that come through the the

insight messages UM and our scores every day. So every day a user actually sees your own data, sees your scores that are personalized to them based on their baseline, and then it gives you a little bit of a tip or you know, an insight and we we really feel like that helps contextualize the data. And we're now starting to offer a lot more content UM, so you actually get you know, content and ways to learn about your health and actually things that you can do guided

programs that can actually help you improve. So UM we try to simplify all that data down and giving people a little bit of nuggets every day, which we call our insight engine. So heart prey talk to us about UM some of the suggestions you give to people, because I'm always curious about the impact. I really love wearables,

but it is a lot of information. Tell me though, how it can improve us, especially when it comes to something like sleep, which I have to tell you, whenever I go into a doctor with a problem, they're like, so, how are you sleeping? Because your body can keel unless you're sleeping. Well, it really is. I think you've described it as kind of the magic pill. Uh, and it seems so easy, but it's not always that way. Yeah. Look, I think all of us, unfortunately, know what a poor

night of sleep feels like. Right, Like we're more stressful, more irritable, that we're grouchy, we're not as sharp as you want. Why we Tim and I are both very cranky today because we did not sleep well and we both hit our snooze buttons a million times this morning. It's it's okay, it's it's rainy here in San Francisco.

So I'm sure a lot of people did that say too, But um no, Look, I think unfortunately, as you mentioned that the actual impact to sleep in your health right is becoming more and more prevalent in in you know,

the news, as it should be. Um, So you no, lack of sleep has actually been you know, linked to on set early onset of Alzheimer's to you know, unfortunately you know, higher incident rate of cancers, um and and even things you know, um, even things is is you know more simple as like even just your memory recalling what you can remember that day. Um. So I you know, I think sleep does have a huge impact in your health.

And but what we find is by giving users this information every day, right, they're able to see if something's changing and something's off, and then they sort of ask themselves, what did I do yesterday? And so you may actually see that you're resting heart rate you know, on a certain night is actually higher than normal, right, and we'll give you a little message, Hey, it looks like your your heart rate was high, you know, higher than normal.

What is that? Maybe because you ate too late, or maybe you're stressed or you know where you up late working. And so we actually try to give these messages to contextualize the data that allow users to ask themselves, hey, what did I do? And And frankly, you know, I think the analogy I like to use is, you know it's sort of like the car. Right, So cars nowaday have all types of sensors right, and you may have

high pressure running low and in one tire. Now we're not you know, the car doesn't say, hey, your your tires flat. He doesn't say why that happened? Is it because you ran over a nail? Or you know you parked it outside up hill on a cold days? Your

name front tires. So I think it's like that same analogy that if you look at that data, you know, what's that saying Peter Drucker, what could what gets measured gets mastered right right right, and you get when you start to see this date all the time, you can start to see if something's off. And I think it's that check engine light or that check tire and light. Heartbreat the thing that the first thing that I noticed about the Aura ring that's different than other wearable devices.

It's is that it's on the finger rather than being on the wrist like the Apple Watch or the Whoop or you know previous examples of technology like job bone or or a fitbit for example, Why the why the finger? Yeah, look at Tim, it's a great question. Um No, I think from an accuracy point of view and convenience, it just ends up being sort of the sweet spot of wearables. So, um, you know, every hospital you walk into actually takes your heart rate on the finger and your SPO two as well.

And actually most diabetics right measure measure their glucose by taking a finger prick, right, um, And it turns out that the pulse on your finger, the pulse signal is about a hundred times stronger than the rist where your typical wristwatch sits. So we use that phenomenon that you know other devices have used in the past, and actually

made a wearable from that. I think, um, you know, what we found is that it's just much more accurate for a lot of these health features, including sleep, things like heart rid veriability which is a sign of stress, or even things like illness, and even period prediction and some of the women's health features that we've been developed developing. And one thing I'm curious, and I'm thinking of people heart Preach who are listening and saying, okay, lots of

information and give me a heads up. Do you have any anecdote stories about the impact that this device has had on people's lives? Totally? I think, you know, frankly, we've heard everything from people out people finding out they

have a serious medical condition. Um by realizing they have abnormal sleep patterns or that their heart it was really high, um compared to others that think, you um, two people just realizing like hey, I was trying to realize the days that I actually have a glass or two wine, you know, with dinner, that that actually ends up producing my sleep score the next DA and I sort of

feel way worse. And I think, you know, we found people just adjusting your daily habits to funding out about things that may be affecting their health that are much more seriously and and and you know, frankly, I think it's those stories that we hear from our users that really keep us in our team going, Hey, hang on one second, I just want to mention a headline crossing the Bloomberg Rivian automotive we mentioned earlier, targeting an IP

evaluation just above sixty billion that initially coming from down Jones. While it just cross that they plan to sell a hundred thirty five million shares at fifty seven to sixty two dollars each. Uh in that I p O. So again, we continue to see the e V space really often running. Hey, Hartprett, while we're talking about IPOs. What's the endgame for you guys?

Because Tim and I were talking to before we get started with ut Man, this could be a great add on for a lot of well known companies that are out there that are pursuing UH wearables are already in the space. Could be an Apple, could be a Facebook like you could kind of go a lot of different places Amazon. Thank you, Tim. What's what's the plan for you guys? Yeah, No, Look, I think it's a great question.

I think from from our perspective, you know, we'll we'll do whatever you know, really allows for the best risk return for our shareholders and also frankly, what allows us that we think to keep executing on our mission right and and really to bring the world health as a daily practice. And so you know what that means an I p O or you know what that means an acquisition. I think you know, we're We're not focused on that. We're just focused on really making the best possible products

and solutions for our customers. Hey, one thing that I'm wondering about is hardware versus services revenue. If we think about Apple, for example, in the way that it's increasingly moving into services. UH, the aura ring how much is it first of all the third generation? Yeah, it's and we do have a membership model. So yeah, so what question of month is you know, after after six month free trial that we give you to the software. So

how do you make the software part of it? How do you make that a must buy for people who have it? Like can they can they get the or ring and use it without having the software? Yeah? So we um, you know, I think the best way to do is give people the full experience, right. I think that's something we you know, probably learn from Spotify out there right as you know, just your your listeners right there.

Their free trial was really the free experience, right, and then over time it's sort of degraded and they started to put more adload on it and things like that, right, and limiting the functionality. And so I think, you know, from our perspective is you know, when you buy an or ran, it comes with six months right of of our membership services, right, which is all the data, all

the insights, all the content, all the features. And you know, after six months, if you choose not to continue to pay, um, we just leave our members with just the three basic scores, which is your sleep score, your activity score and your readiness score, so you no longer get the personalized insights every day that are generated and nor access to some of the content or even the deeper features and data. Um, you know. And frankly, I think as you're seeing, right,

these wearables have changed. Right when Fitbick came out in the beginning, it was really just a step tracker. Right now these wearables including aura writer or a sleep lab on your finger, right, an illness monitoring system on your on your finger and and I think you know the capability that that that's needed. To do that, you have to invest a lot more as a company, and so I think our our membership, you know, revenue does allow us to invest more rapidly in developing those features that

we think are best in class. And we hope to do that because that's what our consumers and future members want. What can you tell us about metrics where Bloomberg we're a little nerdy about when it comes to some of the business. Uh, metrics and a company, So how many rings have you sold? What kind of growth are you seeing top line? And I'm curious about membership growth too, totally. Well, you know, we we just announced our new genjury just last week. So, um, not a lot of membership growth

yet that we can say because it's so new. UM, But no, we've we've said, we've sold over half a million rings. Now you know, we've been doubling revenue every year since we started, um, you know, including this year. So I think, you know, luckily, things are on good trajectory. You know, the teams now nearly you know, over three fifty people. UM, So I think, you know, by any means you look at, we've been we've been growing pretty

pretty darn fast. And so you know, I think again, like you're you're going to see more of these companies come public and you know, or or get acquired because we're we're seeing so much investment by everyone, as you mentioned in a Facebook or or meta, I should say, even getting into space. Anybody knocking down the door, anybody knocking down the door, I think they're they all have their you know, they're they're all keeping their eyes open and ears to the ground. And so I think there's

there's no shortage of opportunity to space. And I think the big tech companies you know, see that as well. He's not going to tell us he's not okay, but okay, is there other devices that will come on the market to expand the brand somehow? I think, Look, we were focused on that ring form factor with the accuracy that we have. You know, we've been we've shown that, you know, we're most accurate wearable out there on on things like

sleep and sleep staging. And you've now with illness. We have three studies that you know showed our ability, you know, during the pandemic to to see if people are getting sick before they feel symptoms. And you know, the rings went you know into the NBA bubble and w NBA bubbles and and you know, I think the reason that they chose our device over other devices, right is because

of our accuracy. Um And so I think you're you're gonna see more and more features coming out that show that the advantage of the form factor, and hence we'll stick to the ring. We still have a we still have a million more in question. So you're gonna have to come back because I'm also curious about health care companies and really leaning into that area as well. So come back and give us an update very very soon.

Heartbreeat Rye, his chief executive officer at or health, joining us via zoom from San Francisco,