Owlet, Inc. (OWLT) could be a solid choice for investors given its recent upgrade to a Zacks Rank #1 (Strong Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Since a changing earni ...

Core Insights - Owlet has partnered with Locus Health to enhance infant health management by integrating data from Owlet's FDA-cleared device, BabySat, into Locus Health's remote patient monitoring platform, allowing healthcare providers secure access to vital infant health information post-hospital discharge [2][3][4] Company Overview - Owlet, Inc. is a pioneer in smart infant monitoring, having monitored over 2.5 million babies and providing parents with reliable tools to track key vitals [9][10] - Locus Health specializes in remote care management software, particularly for vulnerable pediatric patients, and has been recognized for its outcomes-based solutions [6][11] Partnership Details - The collaboration aims to bridge the gap between hospital and home care for nearly 500,000 babies transitioning from ICU each year in the U.S., particularly those with ongoing medical needs [5] - The integration will allow clinicians to monitor key vital signs such as oxygen saturation and pulse rate, facilitating early detection of concerning trends and timely interventions [6] Strategic Goals - The partnership reflects Owlet's commitment to providing accessible, high-quality care for infants and their families, marking a significant step in expanding its clinical partnerships in pediatric healthcare [8] - Owlet's integration with Locus Health is expected to enhance workflow efficiency for healthcare providers while minimizing the burden on parents during challenging times [6]

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Core Insights - Owlet, Inc. reported quarterly earnings of $0.03 per share, exceeding the Zacks Consensus Estimate of a loss of $0.23 per share, marking an earnings surprise of +113.04% [1] - The company generated revenues of $32 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 20.53% and showing an increase from $22.1 million year-over-year [2] - Owlet shares have appreciated approximately 147.2% year-to-date, significantly outperforming the S&P 500's gain of 16.5% [3] Earnings Performance - Over the last four quarters, Owlet has exceeded consensus EPS estimates three times [2] - The company had a previous expectation of a loss of $0.21 per share but reported a smaller loss of $0.05, resulting in a surprise of +76.19% [1] Future Outlook - The sustainability of Owlet's stock price movement will largely depend on management's commentary during the earnings call [3] - Current consensus EPS estimate for the upcoming quarter is -$0.26 on revenues of $24.58 million, and for the current fiscal year, it is -$5.38 on revenues of $98.33 million [7] Industry Context - The Technology Services industry, to which Owlet belongs, is currently ranked in the top 27% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Owlet's performance [5]

Financial Data and Key Metrics Changes - Q3 2025 revenue reached a record $32 million, representing a 45% increase compared to Q3 2024 [4][18] - Q3 gross profit was $16.2 million, resulting in gross margins of 50.6%, despite tariff impacts [4][19] - Q3 adjusted EBITDA was $1.6 million, marking the sixth consecutive quarter of adjusted EBITDA profitability [5][20] - Q3 operating income was $1.2 million, the first quarterly operating profit in company history [5][20] - Net income for Q3 was $4.1 million, compared to a net loss of $5.6 million in the same period last year [20] Business Line Data and Key Metrics Changes - DreamSock demand in the U.S. grew 42% year-over-year, with total sell-through units up 72% during Amazon Prime Day [8][9] - The subscription attach rate for DreamSock surpassed 25% by the end of Q3 [12][13] - Total paying subscribers for Owlet 360 exceeded 85,000, with strong trends in monthly recurring revenue and improved retention [12] Market Data and Key Metrics Changes - International revenue growth was up 171% year-over-year, driven by the launch of DreamSight and ongoing global momentum [11] - Owlet increased its share of total dollars spent on baby monitors to 40% in Q3 2025, a record high [9] Company Strategy and Development Direction - The company aims to transition into a service model through the Owlet 360 subscription, enhancing customer lifetime value [8][12] - Owlet is strategically positioned to capitalize on increased consumer awareness following the FDA's warning against unauthorized infant monitors [5][6] - The launch of the DreamSight camera is expected to enhance the product ecosystem and drive further growth [10][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's market position and ability to drive further share gains despite macroeconomic uncertainties [24] - The company raised its 2025 revenue guidance to a range of $103 million-$106 million, reflecting strong business momentum [24] - Management highlighted ongoing investments in R&D and AI capabilities to enhance product offerings and customer support [15][22] Other Important Information - The company completed a follow-on equity offering raising approximately $32 million, strengthening its balance sheet [23] - Owlet has received six international regulatory clearances for DreamSock, including new clearance in India [11] Q&A Session Summary Question: Partnership with health systems and early experiences - Management indicated that the integration with the Children's Hospital of the King's Daughters has been successful and is being used as a pilot for other healthcare systems [26][27] Question: International growth and future markets - Management noted strong performance in international markets, particularly in Europe, and highlighted ongoing momentum and new regulatory clearances [28] Question: Value proposition of Babysat and integration with Rapid City - The integration with Rapid City is expected to provide real-time access to data for clinicians, facilitating quicker implementation and engagement [29][30] Question: Subscriber retention rates for Owlet 360 - Management reported strong engagement from Owlet 360 customers and indicated plans for new features to enhance user experience [31]

Financial Performance - Revenues for Q3 2025 reached $31,988,000, a 44.5% increase from $22,122,000 in Q3 2024[25] - Gross profit for Q3 2025 was $16,200,000, compared to $11,546,000 in Q3 2024, reflecting a 40.4% increase[25] - Operating income for Q3 2025 was $1,216,000, a significant improvement from an operating loss of $4,822,000 in Q3 2024[25] - Net income for Q3 2025 was $4,134,000, compared to a net loss of $5,611,000 in Q3 2024[25] - The company reported a basic net income per share of $0.20 for Q3 2025, compared to a loss of $0.57 per share in Q3 2024[25] - For the nine months ended September 30, 2025, the net loss was $30,488,000, compared to a net loss of $3,484,000 for the same period in 2024[32] - For the three months ended September 30, 2025, the company reported a net income attributable to common stockholders of $139,000, compared to $3,995,000 in the same period of 2024, reflecting a decrease of approximately 96.5%[148] - The diluted net income per share for the three months ended September 30, 2025, was $0.19, compared to a loss of $(0.06) in 2024[148] Assets and Liabilities - Total current assets increased to $71,638,000 as of September 30, 2025, up from $46,113,000 at the end of 2024, representing a 55.4% growth[23] - Total liabilities rose to $113,464,000 as of September 30, 2025, compared to $66,329,000 at the end of 2024, indicating a 71.1% increase[23] - The total stockholders' deficit increased to $54,143,000 as of September 30, 2025, from $29,751,000 at the end of 2024[23] - The Company reported an accumulated deficit of $298,683 as of September 30, 2025, with negative cash flows from operations of $10,340 and $14,215 for the nine months ended September 30, 2025 and 2024, respectively[42] - The total debt as of September 30, 2025 was $24,948,000, significantly higher than $11,697,000 as of December 31, 2024, marking an increase of 113.1%[74] Cash Flow and Financing - Cash flows from operating activities resulted in a net cash used of $10,340,000 for the nine months ended September 30, 2025, compared to $14,215,000 for the same period in 2024[32] - The total cash provided by financing activities was $14,223,000 for the nine months ended September 30, 2025, compared to $20,127,000 in 2024[32] - Proceeds from short-term borrowings amounted to $67,730,000 in 2025, compared to $28,479,000 in 2024[32] - The company completed an offering of 4,825,400 shares at $7.15 per share in October 2025, generating net proceeds of $32,109 for commercialization and R&D[42] - The Company has borrowings of $7,500 under the WTI Loan Facility and $18,616 under the ABL Line of Credit as of September 30, 2025[42] Expenses - Research and development expenses for Q3 2025 were $3,785,000, up from $2,559,000 in Q3 2024, marking a 47.9% increase[25] - General and administrative expenses decreased by $3,514, or 35.9%, to $6,273 for the three months ended September 30, 2025, compared to $9,787 for the same period in 2024[177] - The company reported stock-based compensation of $4,516,000 for the nine months ended September 30, 2025, down from $7,046,000 in 2024[32] - The company recognized a gain of $4,266 for the three months ended September 30, 2025, compared to a loss of $673 for the same period in the prior year[186] Stock and Equity - The company issued 9,250 shares of convertible preferred stock, raising $2,394 thousand during the reporting period[27] - The total shares of common stock outstanding as of September 30, 2024, were 15,393,881, with a total stockholders' deficit of $(21,459) thousand[27] - The Company issued 3,135,136 shares of common stock in September 2024, receiving net proceeds of $10,590[42] - The Company issued 3,135,136 shares of common stock at a public price of $3.70 per share on September 11, 2024, resulting in net proceeds of $10,590[109] - The Series A Warrants had 390,378 shares exercised, generating $1,822 in cash proceeds during the nine months ended September 30, 2025[119] Market and Revenue Sources - Revenue from the United States for the three months ended September 30, 2025, was $22,249,000, compared to $18,527,000 in 2024, an increase of 20.3%[155] - The Owlet360 subscription service contributed to revenue growth, having launched in January 2025[174] - During the three months ended September 30, 2025, three customers accounted for 37%, 10%, and 10% of total net revenues, with one customer representing 46% of total net revenues for the nine months ended September 30, 2025[47] Valuation and Fair Value - As of September 30, 2025, the total assets measured at fair value were $8,167,000, while total liabilities amounted to $47,386,000[131] - The Series A Warrants had a fair value of $38,802,000 as of September 30, 2025, reflecting a decrease of $2,824,000 in fair value for the three months ended[138] - The Series B Warrants had a fair value of $8,584,000 as of September 30, 2025, with a decrease of $1,442,000 recorded in fair value for the same period[141] Operational Insights - The company operates as a single operating segment, with all significant operating decisions made based on this structure[151] - The Titan Warrants are exercisable starting March 13, 2025, at an exercise price of $4.63, with 25,081 warrants exercised as of September 30, 2025[204] - Tariffs announced in 2025 have adversely impacted the company's cost of goods sold and gross margins[195]

Owlet, Inc. (NYSE: OWLT) Q3 2025 Financial Results November 13, 2025 1 March 4, 2025 Owlet, Inc. (NYSE: OWLT) | Q3 2025 Financial Results Conference Call Speakers Webcast Contacts Confidential | 2 ● Jonathan Harris, CEO & President ● Amanda Twede Crawford, CFO ● Jay Gentzkow, VP Investor Relations and Corporate Development ● Domestic Callers: (833) 470-1428 ● International Callers: (646) 844-6383 ○ Access Code: 428622 ● Webcast Archive Available: investors.owletcare.com ● Website: investors.owletcare.com ● ...

Offering Details - The Company is offering a total of 4,196,000 shares of Class A common stock, with an additional option for underwriters to purchase up to 629,400 shares[2]. - The proposed offering of the shares may be made pursuant to General Instruction I.B.1 of Form S-3[11]. - The Offering is expected to commence as soon as the Representatives deem advisable after the execution of the Underwriting Agreement[2]. - The Company has granted an option to Underwriters to purchase up to an additional 629,400 shares of Common Stock[99]. - The company is selling 4,196,000 shares of Common Stock at an initial public offering price of $7.15 per share[177]. - The total number of shares to be sold, including the option shares, is 4,825,400[179]. - The underwriters have been granted an option to purchase an additional 629,400 shares of Common Stock[179]. - The underwriters' discount per share is $0.46475[177]. - William Blair & Company, L.L.C. will purchase 2,194,508 shares, while TD Securities (USA) LLC will purchase 1,670,008 shares[177]. Regulatory Compliance - The registration statement for the public offering was declared effective on August 23, 2024[4]. - The Company has complied with all requests from the Securities and Exchange Commission for additional information[12]. - No stop order suspending the effectiveness of the registration statement has been issued by the Commission[12]. - The Company meets the requirements for use of Form S-3 under the 1933 Act[11]. - The Company has not engaged in any Testing-the-Waters Communication without the consent of the Representatives[20]. - The Company has prepared and will file a final prospectus supplement relating to the shares in accordance with Rule 424(b)[4]. - The Company has filed all required SEC reports on a timely basis, and these reports complied with the applicable requirements[25]. - The Company has maintained compliance with the Sarbanes-Oxley Act in all material respects[28]. - The Company is classified as an "emerging growth company" as defined in Section 2(a) of the 1933 Act[23]. - The Company will comply with the requirements of the 1933 Act and the 1934 Act to permit the completion of the distribution of the Shares[104]. Financial Position - The financial statements comply with Regulation S-X and present fairly the financial position of the Company and its consolidated subsidiaries[27]. - There has been no material adverse change in the Company's business or financial position since the last reporting period[30]. - The Company has not entered into any material transactions or incurred any significant liabilities since the last reporting period[30]. - The Company has not sustained any material losses or business interferences from external calamities or disputes[30]. - The Company must provide a comfort letter from PricewaterhouseCoopers LLP regarding financial statements at the time of execution and at Closing Time[127][128]. - The principal financial officer provided a certificate confirming the accuracy of financial data in the Registration Statement[134]. Legal and Regulatory Matters - The Company and its Subsidiaries are not in violation of any laws or regulations that would result in a Material Adverse Effect[41]. - There are no labor disputes or significant unfair labor practice complaints pending against the Company or its Subsidiaries[43]. - The Company possesses all necessary Governmental Licenses to conduct its business, and they are in compliance with all terms and conditions[47]. - The Company has been in compliance with all FDA regulations and has not received any adverse findings from the FDA[53]. - The Company has maintained compliance with all applicable FDA Laws and has not received any notices of action from the FDA that would result in a Material Adverse Effect[54]. - The Company has all necessary permits and is in compliance with Environmental Laws, with no pending actions or claims against it[60]. - The Company has conducted its business in compliance with the Foreign Corrupt Practices Act and has instituted policies to ensure continued compliance[67]. - The Company has maintained compliance with all applicable privacy, data security, and data protection laws, including the California Consumer Privacy Act and the EU General Data Protection Regulation[73]. Internal Controls and Insurance - The Company maintains effective internal control over financial reporting and has not experienced any material weaknesses in its internal controls[61]. - All required tax returns have been filed, and taxes due have been paid, with adequate reserves established for any contested assessments[63]. - The Company carries insurance with reputable insurers, and there is no reason to believe it will not be able to renew its coverage[64]. Indemnification and Agreements - The Company agrees to indemnify Underwriters against any losses arising from untrue statements or omissions in the Registration Statement[141]. - Each Underwriter agrees to indemnify the Company against losses related to untrue statements or omissions made in reliance on Underwriter Information[143]. - The indemnification agreement includes coverage for expenses incurred in investigating or defending against claims[146]. - The Company and Underwriters agree on the proportional allocation of losses based on the net proceeds from the Offering[148]. - The agreement is governed by the laws of the state of New York[164]. - The agreement supersedes all prior agreements and understandings between the company and the underwriters regarding the subject matter[170]. Miscellaneous - The Company has not engaged in any transactions with affiliates exceeding $120,000, other than for salary or employee benefits[76]. - The Company has taken necessary actions to render anti-takeover provisions inapplicable[77]. - The Company has not made any offers or sales of securities that would cause the Offering to be integrated with prior offerings[78]. - The Company acknowledges that the Underwriters will rely upon the accuracy and truthfulness of the representations made[97]. - The Company must ensure that all conditions specified in the Agreement are fulfilled to avoid termination of the Agreement[140]. - The Representatives may terminate the Agreement if there is a material adverse change in the Company's financial condition or market conditions[155].

Core Insights - Owlet, Inc. reported record financial results for Q3 2025, achieving significant growth in revenue, gross profit, operating income, and adjusted EBITDA, driven by strong sales of its Dream product line and international expansion [3][4][5]. Financial Performance - Revenue for Q3 2025 was $32.0 million, a 44.6% increase from $22.1 million in Q3 2024, primarily due to higher sales of Dream Sock and Dream Duo products [4]. - Gross profit reached $16.2 million with a gross margin of 50.6%, down from 52.2% in Q3 2024, attributed to tariff impacts [5]. - Operating income was $1.2 million, a turnaround from an operating loss of $4.8 million in Q3 2024 [8]. - Net income for Q3 2025 was $4.1 million, compared to a net loss of $5.6 million in Q3 2024 [8]. - Adjusted EBITDA improved to $1.6 million, up from $0.6 million in Q3 2024 [8]. Operational Highlights - Owlet360 subscription service surpassed 85,000 paying subscribers, with plans for international market expansion [3]. - The company experienced approximately 171% year-over-year growth in international markets, with a new regulatory clearance in India expected to support a product launch in early 2026 [3]. - Owlet is piloting its telehealth initiative, Owlet OnCall, to unlock healthcare channels [3]. Financial Outlook - For the full year 2025, Owlet expects revenue between $103 million and $106 million, representing a year-over-year growth of 32% to 36% [10]. - Gross margins are anticipated to be in the range of 48% to 50%, factoring in increased tariff costs [10]. - Adjusted EBITDA is projected to be between $1.25 million and $2 million [10]. Company Overview - Owlet, Inc. is a leading pediatric health platform, recognized for its FDA-cleared wearable pediatric monitors, providing hospital-grade technology for home use [23]. - The company aims to enhance pediatric wellness by integrating advanced medical technology with user-friendly design, having gained the trust of over 2.5 million parents since its inception [23].