Owlet(OWLT) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In 2024, Owlet, Inc. achieved record revenue of $78.1 million, representing a 45$20.5 million, with a year-over-year growth of 37% after adjusting for a revenue shift from Q3 2023 [16][46] - Gross margins for 2024 were over 50%, marking the best annual gross margin in the company's history, with Q4 gross margins at 53.5%, an increase of 650 basis points year-over-year [14][17][47] - Adjusted EBITDA improved by over $14 million in 2024 compared to 2023, with Q4 adjusted EBITDA at$0.5 million, an improvement of $1.2 million year-over-year [15][50][51] Business Line Data and Key Metrics Changes - The launch of the FDA-cleared devices, Dream Sock and Baby Sat, contributed significantly to revenue growth, with Dream Sock demand in the US showing a robust 34$88 million to $92 million in 2025, with a focus on operational efficiency and achieving adjusted EBITDA profitability [53][55] Other Important Information - The company faced legal challenges related to its 2021 SPAC offering, resulting in increased operating expenses in Q4 2024 [48][49] - Cash and cash equivalents at the end of Q4 2024 were$20.2 million, slightly down from $21.5 million in Q3 2024 [52] Q&A Session Summary Question: Guidance on revenue growth and contributions from products - Management indicated that for 2025, they are being cautious with revenue assumptions from Owlet 360 and Baby Sat, not expecting material revenue from these in the upcoming year [58][59] Question: International growth expectations - Management expects growth to come equally from both US and international markets, with international markets representing a larger opportunity for growth [62] Question: Strategies for increasing adoption in populous states - The company plans to drive awareness through partnerships, social media, and product engagement to increase adoption rates in larger states like California and Texas [64][66] Question: Gross margin expectations for 2025 - Management clarified that while Q4 gross margins were high, they expect gross margins for 2025 to be in the range of 50% to 52%, indicating an overall improvement [68] Question: Progress with payers and Medicaid - Management reported solid progress with Medicaid reimbursement and partnerships, indicating a slow but steady advancement in this area [71] Question: Updates on Owlet 360 and user engagement - Early feedback on Owlet 360 has been positive, with high engagement and retention rates, indicating strong potential for future growth [75][78]