Owlet Inc ((OWLT)) has held its Q4 earnings call. Read on for the main highlights of the call.
Owlet, Inc. Reports Record Financial Performance Amidst Expansion and Challenges
The recent earnings call for Owlet, Inc. was marked by a strong positive sentiment, highlighting the company’s record financial performance and significant strides in international expansion. The launch of Owlet 360 and progress in strategic focus areas underscored the company’s growth potential. However, challenges such as legal settlement costs and scaling the healthcare channel were notable concerns.
Record Revenue Growth
Owlet, Inc. achieved an impressive record revenue of $78.1 million for 2024, marking a 45% growth compared to 2023. The fourth quarter alone contributed $20.5 million, with a year-over-year growth of 37% when adjusted for prior year revenue shifts. This growth underscores the company’s strong market position and effective business strategies.
Expansion into Global Markets
The company’s international revenue surged by 98% for 2024 compared to the previous year, with Owlet products now available in 26 countries. Key regions such as the UK and Germany showed remarkable growth, with Black Friday sales in Germany increasing by 147% year-over-year. This expansion highlights Owlet’s successful penetration into global markets.
Positive Financial Metrics
Owlet achieved a gross margin of over 50% for 2024, marking the best annual gross margin in its history. The company also reported three consecutive quarters of positive adjusted EBITDA in 2024, improving by over $14 million from 2023. These metrics reflect the company’s strong financial health and operational efficiency.
Launch of Owlet 360
The introduction of Owlet 360, a new subscription service aimed at improving pediatric health, has been well-received. Early subscription metrics exceeded expectations with a 12% attach rate within the first month, indicating strong consumer interest and potential for recurring revenue.
Legal Settlement Costs
Owlet incurred $6.2 million in legal charges related to the settlement of cases from its 2021 SPAC offering. These costs impacted operating expenses and resulted in a net loss of $9.1 million for the fourth quarter, highlighting a significant financial challenge for the company.
Challenges in Scaling Healthcare Channel
While the expansion of the Baby Sat into medical channels is progressing, it is expected to take time to scale fully, with operations anticipated by mid-2025. Efforts to achieve insurance reimbursement and expand Medicaid coverage are ongoing, presenting both challenges and opportunities for future growth.
Forward-Looking Guidance
During the earnings call, Owlet provided robust guidance for 2025, projecting revenue between $88 million and $92 million, with gross margins of 50% to 52%. The company aims for adjusted EBITDA profitability, driven by the launch of the Owlet 360 subscription service. However, significant revenue from this service or the Baby Sat device is not anticipated in 2025.
In summary, Owlet, Inc.’s earnings call reflected a strong positive sentiment, with record financial performance and significant international expansion. Key takeaways include impressive revenue growth, successful global market penetration, and positive financial metrics. Despite challenges such as legal settlement costs and scaling the healthcare channel, the company’s forward-looking guidance suggests continued growth and strategic focus in 2025.