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Owlet(OWLT) - 2025 Q2 - Quarterly Results
OwletOwlet(US:OWLT)2025-08-07 20:24

Executive Summary and Strategic Updates Owlet reported strong Q2 2025 financial results, announced a CEO transition, and raised its full-year 2025 financial outlook, expecting adjusted EBITDA profitability Q2 2025 Financial Highlights Owlet reported strong financial results for Q2 2025, outperforming expectations with significant revenue growth, gross margin expansion, and improved adjusted EBITDA. The Owlet360 subscription service continued its positive trend, surpassing 66,000 paying subscribers Q2 2025 Key Financial Metrics (YoY Change) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | Basis Points Change | | :--------------- | :----------------- | :----------------- | :--------- | :------------------ | | Revenue | $26.1 | $20.7 | 25.9% | - | | Gross Margin | 51.3% | 49.5% | - | +180 bps | | Net Loss | $(37.6) | $(1.1) | - | - | | Adjusted EBITDA | $0.3 | $0.1 | +$0.2 | - | - Owlet360 subscription service surpassed 66,000 paying subscribers, showing steady growth in monthly recurring revenue, attach rate, retention rate, and consumer satisfaction2 CEO Transition Plan Owlet announced that Jonathan Harris, current President, will succeed Kurt Workman as Chief Executive Officer, effective October 1, 2025. Kurt Workman will transition to Executive Chairman of the Board, focusing on long-term strategy and expanding access to Owlet's mission - Jonathan Harris, current President, will become CEO of Owlet, effective October 1, 20253 - Co-Founder Kurt Workman will transition from CEO to Executive Chairman of the Board of Directors3 - Jonathan Harris is credited with leading global go-to-market strategies post-FDA/CE clearances, spearheading international growth, establishing Owlet360 subscription, and driving organizational streamlining6 Updated 2025 Financial Outlook Owlet increased its full-year 2025 financial guidance, expecting higher revenue and gross margins, and anticipates achieving adjusted EBITDA profitability for the full year Updated Full Year 2025 Financial Outlook | Metric | Range | YoY Growth | | :----------------- | :--------------------- | :--------- | | Revenue | $97 million to $100 million | 24% to 28% | | Gross Margins | 46% to 50% | - | - The Company now fully expects to be adjusted EBITDA profitable for the full year 202512 Detailed Financial Performance This section details Q2 and year-to-date 2025 financial performance, highlighting revenue growth, gross margin expansion, and significant net losses primarily due to warrant liability adjustments Second Quarter Ended June 30, 2025 For Q2 2025, Owlet reported a 25.9% increase in revenue, primarily driven by Dream Sock and Dream Duo sales. Gross margin expanded by 180 basis points due to favorable product mix and cost efficiencies. Operating expenses increased, leading to a slight improvement in operating loss. However, net loss significantly widened to $37.6 million, largely due to a $34.8 million non-cash common stock warrant liability adjustment Q2 2025 Financial Performance (YoY Comparison) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | YoY Change | | :-------------------------- | :----------------- | :----------------- | :--------- | | Revenue | $26.1 | $20.7 | +25.9% | | Cost of Revenue | $12.7 | $10.4 | +22.1% | | Gross Margin | 51.3% | 49.5% | +180 bps | | Operating Expenses | $15.3 | $12.5 | +22.4% | | Operating Loss | $(1.9) | $(2.2) | +$0.3 | | Net Loss | $(37.6) | $(1.1) | - | | Adjusted EBITDA | $0.3 | $0.1 | +$0.2 | | Net Loss per Share (GAAP) | $(2.37) | $(0.30) | - | | Adjusted Net Loss per Share | $(0.05) | $0.00 | - | - The significant increase in net loss was primarily due to a $34.8 million non-cash, mark-to-market common stock warrant liability adjustment10 Six Months Ended June 30, 2025 For the first six months of 2025, Owlet's revenue increased by 33.3% year-over-year. While operating loss improved, the net loss significantly widened to $34.6 million, primarily due to a common stock warrant liability adjustment, contrasting with a net income in the prior year period Six Months Ended June 30, 2025 Financial Performance (YoY Comparison) | Metric | 6M 2025 (Millions) | 6M 2024 (Millions) | YoY Change | | :-------------------------- | :----------------- | :----------------- | :--------- | | Revenues | $47.2 | $35.4 | +33.3% | | Gross Profit | $24.7 | $16.8 | +47.0% | | Operating Loss | $(4.6) | $(8.0) | +$3.4 | | Net Income (Loss) | $(34.6) | $2.1 | - | | Adjusted EBITDA | $0.3 | $(3.0) | +$3.3 | | Net Loss per Share (GAAP) | $(2.26) | $(0.08) | - | | Adjusted Net Loss per Share | $(0.12) | $(0.38) | +$0.26 | - The net loss for the six months ended June 30, 2025, was significantly impacted by a $(28.1) million common stock warrant liability adjustment, compared to a $10.2 million positive adjustment in the prior year3233 Financial Statements and Reconciliations This section presents condensed consolidated financial statements, including balance sheets, cash flows, and statements of operations, along with reconciliations of GAAP to non-GAAP financial measures Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows an increase in total assets, primarily driven by higher accounts receivable. Total liabilities also increased significantly, largely due to a substantial rise in common stock warrant liabilities and the line of credit Condensed Consolidated Balance Sheet Highlights (Millions) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | Total current assets | $60.7 | $46.1 | | Total assets | $63.5 | $49.5 | | Total current liabilities | $52.8 | $36.4 | | Common stock warrant liabilities | $51.7 | $25.3 | | Total liabilities | $108.0 | $66.3 | | Total stockholders' deficit | $(59.2) | $(29.8) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, Owlet experienced net cash outflows from operating and investing activities, which were more than offset by net cash inflows from financing activities, resulting in a positive net change in cash Condensed Consolidated Statements of Cash Flows (Millions) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(8.2) | $(6.7) | | Net cash used in investing activities | $(0.2) | $(0.1) | | Net cash provided by financing activities | $9.9 | $5.6 | | Net change in cash, cash equivalents, and restricted cash | $1.5 | $(1.2) | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) The income statement details revenue growth for both the quarter and six-month period. Despite improved operating loss, the net loss was significantly impacted by a large non-cash common stock warrant liability adjustment, leading to a substantial net loss for both periods Condensed Consolidated Statements of Operations (Millions, except per share) | Item | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :---------------------------------------- | :------ | :------ | :------ | :------ | | Revenues | $26.1 | $20.7 | $47.2 | $35.4 | | Gross profit | $13.4 | $10.3 | $24.7 | $16.8 | | Operating loss | $(1.9) | $(2.2) | $(4.6) | $(8.0) | | Common stock warrant liability adjustment | $(34.8) | $1.0 | $(28.1) | $10.2 | | Net income (loss) | $(37.6) | $(1.1) | $(34.6) | $2.1 | | Net loss per share attributable to common stockholders, basic and diluted | $(2.37) | $(0.30) | $(2.26) | $(0.08) | Reconciliation of GAAP to Non-GAAP Measures This section provides a reconciliation from GAAP net income (loss) to non-GAAP measures such as EBITDA, Adjusted EBITDA, and Adjusted Net Income (Loss), highlighting adjustments for non-cash items like common stock warrant liability and stock-based compensation, which significantly impact reported GAAP figures GAAP to Non-GAAP Reconciliation Highlights (Millions, except per share) | Item | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :---------------------------------------- | :------ | :------ | :------ | :------ | | GAAP net income (loss) | $(37.6) | $(1.1) | $(34.6) | $2.1 | | Non-GAAP EBITDA | $(36.5) | $(1.0) | $(32.4) | $2.5 | | Non-GAAP Adjusted EBITDA | $0.3 | $0.1 | $0.3 | $(3.0) | | Non-GAAP adjusted net income (loss) | $(0.8) | $0.0 | $(1.9) | $(3.4) | | Non-GAAP adjusted net income (loss) per share | $(0.05) | $0.00 | $(0.12) | $(0.38) | - Key adjustments include common stock warrant liability adjustment ($34.8M in Q2 2025, $(1.0)M in Q2 2024) and stock-based compensation ($1.6M in Q2 2025, $2.1M in Q2 2024)33 Corporate Information and Disclosures This section covers forward-looking statements, non-GAAP financial measure disclosures, conference call details, company overview, and contact information Forward-Looking Statements This section serves as a cautionary disclosure, highlighting that the press release contains forward-looking statements subject to various risks and uncertainties. These statements are based on current expectations and may differ materially from actual results due to factors such as regulatory pathways, competition, financing, and economic conditions. The company disclaims any obligation to update these statements - Forward-looking statements are based on expectations at the time they are made and are susceptible to risks, uncertainties, and other factors14 - Key risk factors include regulatory pathways (FDA), competition, ability to obtain financing, implement strategic initiatives, protect intellectual property, maintain relationships, and adapt to economic conditions14 - The Company assumes no obligation to update any forward-looking statements after the date of the press release, except as required by law15 Disclosure Regarding Non-GAAP Financial Measures Owlet provides non-GAAP financial measures (EBITDA, Adjusted EBITDA, Adjusted Net Income/Loss) to offer a meaningful perspective of its underlying operating performance, benchmarking, and trend analysis. These measures exclude items not correlated to core operations but should not be considered alternatives to GAAP measures - Non-GAAP financial measures are used as internal measures of business operating performance and for benchmarking against peers17 - EBITDA is defined as net income (loss) adjusted for income tax, interest, depreciation, amortization, and impairment of intangible assets19 - Adjusted EBITDA further adjusts for common stock warrant liability, stock-based compensation, transaction costs, and legal matters19 - These non-GAAP measures are not recognized under GAAP and should not be construed as substitutes for GAAP financial measures22 Conference Call and Webcast Information Details for accessing the conference call and webcast hosted by Owlet on August 7, 2025, to discuss the financial results and provide a business update - Conference call and webcast held on August 7, 2025, at 4:30 p.m. ET24 - Access via domestic (833-470-1428) or international (404-975-4839) numbers with Access Code 579904, or online at investors.owletcare.com25 About Owlet, Inc. Owlet, Inc. is a pioneer in smart infant monitoring, offering an FDA-authorized digital health platform with medical and consumer pediatric wearables and an integrated camera. The company aims to transform parenting by providing real-time data and insights to safeguard infant health, optimize wellness, and ensure peaceful sleep, leveraging data from over 2 million parents worldwide - Owlet is a pioneer of smart infant monitoring, offering an FDA-authorized digital health infant monitoring platform26 - Products include medical and consumer pediatric wearables and an integrated HD visual and audio camera, providing real-time data and insights to parents26 - Over 2 million parents worldwide have used Owlet's platform, contributing to one of the largest collections of consumer infant health and sleep data27 Contacts Contact information for investor relations and media inquiries - Investor Relations contact: ir@owletcare.com34 - Media contact: pr@owletcare.com34