Owlet Reports Strong Q2 Growth and Plans for Global Expansion

Owlet Baby Care Inc. (OWLT), a prominent player in infant health monitoring technology, has demonstrated robust financial growth in the second quarter of 2024. The company reported a notable rise in sell-through and revenue, alongside gross margin improvement and a positive adjusted EBITDA.

The introduction of Owlet Care, a new subscription service, along with a telehealth collaboration with Wheel, is projected to significantly boost the company’s long-term value. Owlet is strategically positioning itself as a leader in home pediatric care, aiming to achieve several hundred million in revenue and high profitability in the foreseeable future.

Key Highlights:

• Owlet experienced a 58% year-over-year increase in net revenue, totaling $20.7 million for Q2 2024.
• Gross margins rose to 50%, up significantly from the previous year’s quarter.
• The company saw a remarkable 275% year-over-year growth in international revenue.
• Owlet Care was launched, and the integration with Wheel for telehealth services has begun.
• Positive feedback has been received from pediatricians on BabySat, with plans to enter medical markets, including a partnership with AdaptHealth.
• For the second half of 2024, net revenue is expected to range between $37 million and $42 million, with an adjusted EBITDA loss projected between $3 million and breakeven.

Company Outlook:

• Owlet aims to enhance adoption of Dream Sock while expanding into medical and healthcare channels.
• The focus will be on supporting parents from infancy through toddlerhood with its offerings.
• Revenue estimates for the latter half of 2024 remain optimistic, targeting between $37 million and $42 million.

Challenges:

• Projected adjusted EBITDA loss for the second half of 2024 may range between $3 million and breakeven.
• Profitability could be impacted by factors such as cost of goods sold, marketing expenditures, and clinical investments.
• Increased shipping costs, particularly for air transport, may also affect profitability.

Positive Indicators:

• Dream Sock sell-through grew by 61% year-over-year in units, with revenue up 68% during the July Amazon Prime sales event.
• The combined effects of the subscription service and telehealth integration are expected to significantly elevate the company’s lifetime value potential for 2025.
• Owlet anticipates strong international growth, particularly in the EU and UK, following the receipt of CE Mark approval.

Areas of Concern:

• An adjusted EBITDA loss for the full year of 2024 is still anticipated, expected to be between $6 million and $3 million.

Q&A Highlights:

During the earnings call, management discussed the outlook for profitability and expected improvements in the upcoming quarters, especially due to seasonal increases. They emphasized ongoing efforts to enhance brand awareness and establish partnerships within the medical community to streamline access to their products.

Owlet Baby Care Inc. is on a positive trajectory, demonstrating a clear strategy for sustained growth and market expansion. Their advancements in product development, market penetration, and strategic collaborations position the company favorably for future success in the global pediatric care landscape.

Conclusion:
Owlet Baby Care has shown impressive financial growth in Q2 2024, alongside a strong strategy for continued expansion and innovation. With upcoming product launches and partnerships, the company is well-positioned to serve the needs of parents and infants worldwide.