Owlet(US:OWLT)2023-03-16 00:09Financial Data and Key Metrics Changes - Gross billings for Q4 2022 were $15.4 million, down from $23.4 million in Q3 2022, with product promotions and discounts of $2 million in Q4 compared to $3.2 million in Q3 [8][37] - Q4 operating expenses were $24.1 million compared to $26.4 million in Q3, with underlying operating expenses at $15.2 million, marking a significant improvement [9][38] - The company reported a Q4 operating loss of $20.7 million and a net loss of $19.5 million, with an adjusted EBITDA loss of $15.2 million [38][39] Business Line Data and Key Metrics Changes - Owlet's Dream portfolio was re-launched in early 2022, achieving full-year product portfolio revenues of $69.2 million, while maintaining strong customer satisfaction [70][72] - The company is focused on achieving gross margins of 40% to 50% in future periods through tighter management of promotional spend and supply chain costs [4][108] Market Data and Key Metrics Changes - Owlet is now the number one selling monitor on Amazon year-to-date in 2023, with a significant improvement in customer satisfaction reflected in the Net Promoter Score (NPS) [3][68] - Sell-through growth quarter-over-quarter reached nearly $20 million in gross revenue in Q4, with inventory and channel normalizing [68][78] Company Strategy and Development Direction - The company aims to position itself for cash flow positive, profitable, and long-term sustainable growth through category-defining products [2][69] - Owlet is actively pursuing regulatory clearances for its products, with significant progress made towards FDA and international applications [6][35][128] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties and emphasized the importance of achieving profitability and improving working capital [10][36] - The company expects sell-through to align with sell-in by the end of Q2 2023, with a forecast for sequential revenue improvement throughout the year [32][39] Other Important Information - The company raised $30 million in additional capital to support its balance sheet and operational goals in 2023 [1][73] - Cash and cash equivalents as of December 31, 2022, were approximately $11.2 million, with accounts receivables at $16 million and inventory at $18.5 million [77] Q&A Session Summary Question: What was the sell-through in the first half of the year? - Management indicated that sell-through was substantial, with significant load-in to get back to previous levels of Smart Sock inventory in retail, but initial sell-through did not start as strongly as previous periods [88][89] Question: How do you view the seasonality of the business in a normalized year? - Management noted that Q1 is generally the lightest quarter, with Q2 expected to pick up due to Mother's Day and Father's Day promotions [97] Question: Can you provide insights on the FDA submission process? - Management confirmed that they are currently working through responses to FDA questions and are confident in their products meeting FDA standards [53][60]