Owlet Inc ((OWLT)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Owlet Inc. Reports Record-Breaking Revenue and Global Expansion in Latest Earnings Call
The recent earnings call for Owlet Inc. was marked by a strong performance, showcasing record-breaking revenue and profitability, alongside significant achievements in global expansion. The company celebrated FDA clearance for its DreamSock product, providing a competitive edge, and highlighted a strategic partnership with Rhapsody to enhance hospital integration. Despite concerns regarding tariff impacts and consumer environment uncertainties, the positive highlights significantly outweighed the challenges.
Record-Breaking Revenue and Growth
Owlet Inc. reported a record revenue of $32 million for Q3 2025, representing a 45% increase compared to Q3 2024. The company achieved a gross profit of $16.2 million with gross margins reaching 50.6%. This quarter marked the sixth consecutive quarter of profitability, with an adjusted EBITDA of $1.6 million.
Significant Market Advantage
The FDA clearance of Owlet’s DreamSock as the first over-the-counter infant monitoring device provides a significant competitive advantage in the market, positioning the company as a leader in infant health monitoring technology.
Global Expansion Success
Owlet’s international revenue growth surged by 171% year over year, with regulatory clearance to distribute DreamSock in India, further expanding its global reach and market presence.
Strong Owlet 360 Subscription Growth
The company reported over 85,000 paying subscribers, with the subscription attach rate for DreamSock surpassing 25% by the end of Q3 2025, indicating strong consumer adoption and recurring revenue potential.
Strategic Rhapsody Partnership
The partnership with Rhapsody enhances the value proposition of BabySat, enabling real-time data access for neonatologists and hospitals, and facilitating rapid integration with hospital systems.
Successful Capital Market Activities
Owlet completed a warrant exchange and equity offering, raising approximately $32 million in net proceeds. This capital strengthens the balance sheet and supports the company’s long-term growth initiatives.
Tariff Impact on Gross Margin
Tariff costs negatively impacted the Q3 gross margin by 280 basis points, with new tariffs of 19% and 20% on imports from Thailand and Vietnam, respectively, posing a challenge to profitability.
Consumer Environment Uncertainty
Despite strong performance, Owlet faces uncertainties regarding the consumer environment, potential government shutdown aftereffects, and impacts on the critical Q4 holiday sales period.
Forward-Looking Guidance
Owlet Inc. provided robust forward-looking guidance, highlighting record-breaking financial performance. The company raised its full-year 2025 revenue expectations to between $103 million and $106 million, projecting a 32% to 36% year-over-year growth. Despite tariff impacts, gross margin guidance for 2025 was narrowed to a range of 48% to 50%, and adjusted EBITDA is expected to be between $3.1 million and $3.8 million, marking the first full year of profitability.
In summary, Owlet Inc.’s latest earnings call painted a positive picture of the company’s financial health and strategic direction. With record-breaking revenue, a significant market advantage through FDA clearance, and successful global expansion, Owlet is well-positioned for continued growth. While challenges such as tariffs and consumer uncertainties remain, the company’s strong performance and forward-looking guidance suggest a promising future.