Owlet, Inc. Q1 FY2025 earnings call

CEO's Remarks - Kurt Workman

• Q1 2025 was a fantastic start with strong results, exceeding expectations, and driving 43% year-over-year revenue growth. Signed a new distribution partnership with Children’s Hospital of the King’s Daughters. Owlet 360 subscription showed positive momentum. Shared a personal story highlighting the impact of Owlet on a family's life.

Jonathan's Remarks - Strategic Focus Areas

• Took steps to transition manufacturing of cameras from China to Vietnam, with minimal China manufacturing exposure except for some accessories. Made progress in strategic focus areas: strong US momentum for Dream Sock with 40% domestic sell-through growth, 63% year-over-year increase in baby registries for Dream Sock, international revenue growth of 104% year-over-year for Dream Sock, over 48,000 paying subscribers for Owlet 360 subscription, and made progress in healthcare channels with a new partnership with Children’s Hospital of the King’s Daughter and launched BabySat Android app.

Amanda's Remarks - Q1 Results and Guidance

• Detailed Q1 financial results, including revenue of $21.1 million, gross margin of 53.7%, operating expenses, and adjusted EBITDA. Updated 2025 guidance: raised revenue guidance to $91 million to $95 million, revised gross margin expectations to 46% to 50%, with adjusted EBITDA guidance unchanged while striving for full year adjusted EBITDA profitability.

In the first quarter of 2025, Owlet achieved strong results. Revenue was $21.1 million, up 43% year-over-year. Gross margins were 53.7%, an improvement of 930 basis points compared to the prior year, marking the eighth consecutive quarter of year-over-year gross margin expansion. Adjusted EBITDA was breakeven, a $3.1 million improvement year-over-year, representing the fourth consecutive quarter of breakeven or better adjusted EBITDA. The core Dream Sock and Dream Duo products drove the revenue growth.

Revenue Guidance

• Raised 2025 revenue guidance to a range of $91 million to $95 million, representing 17% to 22% year-over-year growth.

Gross Margin Guidance

• Revised full year 2025 gross margin expectations to a range of 46% to 50%.

Adjusted EBITDA Guidance

• Adjusted EBITDA guidance remains unchanged, with stronger revenue expectations offset by tariff costs, and still striving for full year 2025 adjusted EBITDA profitability.

Tariff Uncertainty

• Tariff situation and macro visibility remain limited, creating some uncertainty. Evaluating ways to reduce tariff impacts, with minimal China manufacturing exposure but assessing 10% additional tariff costs on imports from Thailand and Vietnam.

Q: Can you give better understanding of the partnership with Children’s Hospital of the King’s Daughters and if you've sought other hospital partnerships?

A: This partnership involves a consignment program in the NICU for discharges and integrating Owlet data into remote patient monitoring workflows. There are many more partnerships in the queue.

Q: What's resonating well with Owlet 360 offering and contribution moving forward?

A: Feedback from parents has been overwhelmingly positive, with access to insights around baby's health and sleep. Subscribers have grown from 25,000 to over 50,000 in a couple months, and it'll make meaningful contribution towards the end of the year.

Q: How should we think about the revenue cadence throughout 2025?

A: Expecting sequential growth each quarter with Q4 being the biggest quarter due to the holiday promotional season.

Q: Any tailwind from competitors getting hit by tariffs?

A: Many competitor camera manufacturers are manufactured in China with high tariffs, so this is seen as a potential opportunity to capture additional market share