Owlet's Q4 Loss Narrower Than Expected, Revenues Rise Y/Y

Core Insights - Owlet, Inc. (OWLT) reported a narrower fourth-quarter fiscal 2025 loss per share compared to estimates, with revenues exceeding expectations and showing year-over-year growth [1][3][10] Financial Performance - The adjusted loss per share for Q4 was 3 cents, significantly better than the Zacks Consensus Estimate of a 13-cent loss by 76.9%, and improved from a 7-cent loss in the same quarter last year [3][10] - Quarterly revenues reached $26.6 million, surpassing the consensus mark of $25 million by 4.6% and increasing 29.6% year over year, driven by strong demand for the Dream product suite and the Owlet360 subscription service [4][10] - Gross profit for the quarter was $12.6 million, up 14.5% from $11 million in the prior year, although gross margin declined by 596 basis points to 47.6% due to tariff-related cost pressures [5] - Total operating expenses decreased to $17.5 million from $18.4 million year over year, aided by reduced legal expenditures [6] - The operating loss improved to $4.9 million from $7.4 million in the previous year, while adjusted EBITDA was $0.1 million, down from $0.5 million [7] Annual Highlights - For fiscal 2025, Owlet reported revenues of $105.7 million, a 35.4% increase from fiscal 2024, with annual gross profit rising to $53.5 million from $39.3 million [8] - The adjusted EBITDA for the year was $2 million, a significant improvement from a loss of $1.8 million in fiscal 2024 [8] - The operating loss for 2025 was $8.3 million, down from $20.2 million in fiscal 2024 [9] Guidance - For Q1 fiscal 2026, Owlet expects revenues between $20 million and $21 million, with a projected gross margin of 50% to 52% [12] - For fiscal 2026, the company anticipates revenues of $126 million to $130 million, indicating growth of approximately 19% to 23% from 2025 levels, with adjusted EBITDA projected between $3 million and $5 million [13] Balance Sheet - As of December 31, 2025, cash and cash equivalents were $35.5 million, up from $20.2 million a year earlier, while inventory increased by 45.7% year over year to $15.3 million [11]