Two of the sports watch industry's mid-tier names filed their 2025 accounts weeks apart, and they went in opposite directions. Suunto returned to profit after two straight loss-making years. Polar's losses widened again.
The headline numbers are real, and so is the mess underneath them. Suunto's profit leaned on a paper currency gain while its cash flow went negative. Polar lost more money than it did the year before but actually improved its cash position, and its auditor attached a note about the going-concern discussion in the accounts.
Here is what the filings actually say, for both companies.
Suunto's Turnaround, in Numbers
Suunto's 2025 was a genuine recovery on the income statement.
- Turnover: 106.5 million euros, up 26.95% from 83.9 million euros
- Operating profit: 2.9 million euros, up from a loss of 7.4 million euros, a swing of about 10.2 million euros
- Operating margin: -8.8% to 2.7%, the third straight year of improvement after -13.9% in 2023
- Net profit: 4.9 million euros, up from a loss of 9.1 million euros
The growth was almost entirely European. EMEA revenue jumped 46.5%, from roughly 47.4 million euros to 69.4 million euros, and accounted for nearly all of the group's increase. The Americas rose 27.3%. APAC fell 13.1%.
Suunto says part of that shift is deliberate: it moved further toward a direct-sales model in EMEA during 2025, a structure its US business already used.
But the Profit Isn't All Trading
Two things complicate the turnaround story.
A chunk of the profit is a paper gain. Suunto booked a net currency gain of 2.32 million euros in 2025, and 2.20 million euros of that was unrealised. It came mainly from revaluing US dollar loans owed to Suunto's Chinese parent as the dollar weakened against the euro, from 1.0389 at the end of 2024 to 1.1750 at the end of 2025. That is an accounting effect, not money earned from selling watches.
Operating cash flow went the wrong way. Before working capital movements, Suunto generated 7.1 million euros in cash, which is healthy. But receivables grew by 7.1 million euros and inventory grew by 5.9 million euros, both of them costs of funding the sales growth. Group operating cash flow ended at negative 437,000 euros, down from a positive 3.27 million euros in 2024. Cash on hand fell 10.4%, to 9.57 million euros.
Group net worth was still negative at year-end, meaning Suunto owed more than it owned on paper. The gap narrowed sharply, from -8.22 million euros to -3.61 million euros, and it was closed entirely after the year ended. On March 18, 2026, Suunto's parent Liesheng converted a $13.9 million capital loan into equity.
KPMG signed an unmodified audit opinion with no going-concern doubt. The firm did separately note that the accounts and board report were signed on August 7, 2026, which missed Finland's statutory deadline for preparing annual accounts. That is a timing remark, not a warning about the business.
What Suunto Cut
This is the part with implications for anyone waiting on Suunto's next watch.
- R&D spending fell 30.8%, from 10.7 million euros to 7.4 million euros, and is down from 13.7 million euros in 2023
- Average headcount fell 22.5%, from 276 to 214, continuing a decline from 310 in 2023
- Personnel costs fell 16.8% to 16.4 million euros
Suunto opened change negotiations in March 2025 covering its supply chain and customer-satisfaction functions, concluded them in April, and began implementing in August. Its own board report says most of the financial benefit lands in the second half of 2026, not in these accounts.
So the 2025 numbers both understate what Suunto's cost base becomes and confirm the turnaround isn't finished.
Polar Went the Other Way
Polar's 2025 accounts are worse on almost every profitability line.
- Turnover: 112.2 million euros, down 2.75%
- Operating loss: 11.0 million euros, widened 42.8% from 7.7 million euros
- Net loss: 14.8 million euros, up 20% from 12.4 million euros
- Net worth: 13.4 million euros, down 54.3% from 29.4 million euros in a single year
- Average headcount: 937, down 3.6%
The parent company looks worse still. Polar Electro Oy swung from a profit of 983,000 euros in 2024 to a loss of 5.2 million euros in 2025, and its dividend income from subsidiaries fell 31%, from 11.7 million euros to 8.1 million euros.
Polar's cash position actually improved, which is worth separating from the losses. Operating cash flow went from an outflow of 6.5 million euros to a positive 768,000 euros, and the reason is inventory. Polar cut inventory 33.9%, from 29.3 million euros to 19.3 million euros, releasing cash rather than earning it. Short-term bank borrowing rose 15.2%, to 16.7 million euros.
KPMG's report includes an emphasis of matter pointing to the going-concern discussion in the notes, where Polar describes its financial situation as still challenging. The opinion itself is unmodified, which is a milder signal than a qualified opinion, but it is a real flag.
Polar's defense is that demand held up. It says products continued to sell despite weak consumer confidence and cautious retailers, that the Polar Loop launch in September 2025 was very successful, that its Net Promoter Score for wrist devices stayed excellent, and that new users kept registering devices with Polar Flow. It expects to return to profitability in 2026.
Where Polar's Money Is Going Instead
The most interesting contrast between these two companies isn't the loss. It's what each one protected.
Polar spent 20.2 million euros on R&D in 2025, holding it flat at 17.9% of turnover, while cutting other operating expenses by 20.3%. Suunto cut R&D by nearly a third on a turnover base that is almost identical. Suunto now spends roughly a third of what Polar does on developing new products.
Polar is using that budget on two things: technology that spans its whole product range, and new ways to sell it. Its "Powered by Polar" program licenses Smart Coaching training features and sensor technology to other wearable brands, and Polar names it an explicit 2026 priority.
That strategy already has customers. Polar's sensor technology powers the Sennheiser Momentum Sport earbuds and the Motorola Moto Watch 2026, and a partnership with GreenTEG supplies core body temperature data to compatible Polar watches. Polar also has an existing relationship in the training software world, which we covered in our look at the Polar and TrainingPeaks tie-up.
What the accounts do not disclose is what licensing actually earns. Polar also has a subscription push of its own to fall back on, but no numbers are broken out for either.
One more item Polar's accounts don't mention: Whoop has sued Polar, alleging the Loop copies its trade dress, the protected look of a product, and seeking to block US sales. That is a live legal risk sitting outside the financial statements.
What Both Companies Are Really Showing
Strip it back and these are two answers to the same problem: how a sub-scale watch brand survives when Garmin owns the category.
Suunto's answer is cost. Cut headcount by a quarter, cut R&D by a third, shift to direct sales in its strongest region, lean on a Chinese parent with supply chain leverage, and hope the margin holds. Its own board says the savings arrive next year, which makes 2026 the real test.
Polar's answer is intellectual property. Keep the engineers, cut everything else, and turn the technology inside the watches into a product that other brands buy. It is a smarter-sounding plan with worse numbers today, and it has the same unanswered question: whether licensing revenue can scale to the size of the hole.
Both shipped or teased products through this period. Suunto's Run 2 landed on September 8 to strong reviews, and its next-generation Race watch has already been through certification. Polar's newest watch is the Street X, which we reviewed as a solid value play rather than a category mover.
The Run 2 matters for the Suunto argument specifically. A 31% R&D cut sounds like a product pipeline problem, and Suunto's counter is that with Liesheng's component supply chain, some of what used to be research is now simply buying a finished part. A watch that reviews well immediately after the cuts is evidence for that reading.
Bottom Line
Suunto genuinely turned its year around, with a caveat: a paper currency gain, negative operating cash flow, and a balance sheet that needed a parent loan conversion after year-end to stop being negative on paper. The restructuring savings land in the second half of 2026, so the company is asking to be judged on next year's accounts.
Polar had the worse year and the more interesting plan. Its auditor flagged the going-concern discussion, its net worth halved, and it is betting on licensing its way back to profit rather than cutting its way there. If "Powered by Polar" works, that is a better business than a smaller Polar. If it doesn't, the company is carrying Polar-sized costs on shrinking revenue.
Note on sourcing: the figures above come from the two companies' filed 2025 accounts.
Sources: Suunto's 2025 filed accounts including the KPMG audit opinion and board report, Polar's 2025 filed accounts including the KPMG audit opinion and going-concern notes