Owlet Announces Fourth Quarter and Fiscal Year 2023 Results
- Strong revenue of $21.0 million in Q4 2023 and $54.0 million for FY 2023.
- Net loss decreased by 65% in Q4 and 59% for FY 2023.
- Adjusted EBITDA loss improved by 95% in Q4 and 76% for FY 2023.
- Gross margin increased to 47.1% in Q4 and 41.8% for FY 2023.
- Successful commercialization of new medical devices and expansion into healthcare channels.
- Partnerships for reimbursement by insurance providers for BabySat.
- Positive outlook for future growth and continued success in 2024.
- None.
Insights
The disclosed financial results of Owlet, Inc. for Q4 and FY 2023 indicate a substantial reduction in net loss and adjusted EBITDA loss year over year. A Financial Analyst would note that the gross margin improvement from 33.7% to 41.8% suggests a more efficient cost structure and potentially increased pricing power. The reduction in operating expenses, down significantly from the previous year, reflects stringent cost control measures and operational efficiency improvements.
However, it's important to analyze the decrease in revenue from $69.2 million in FY 2022 to $54.0 million in FY 2023. This could signal a contraction in sales volume or a shift in product mix, which might concern investors regarding the company's growth trajectory. The market reaction will likely depend on future revenue forecasts and the company's ability to maintain margin improvements while reversing the revenue decline.
A Market Research Analyst would be interested in the impact of Owlet's FDA authorizations on its market position. The entry into healthcare channels and potential insurance reimbursements for the BabySat product could open new revenue streams and bolster market share. The emphasis on commercializing new medical devices suggests a strategic pivot towards higher-margin products that cater to a more regulated and professional healthcare market.
Understanding consumer response to Owlet's product innovations and the competitive landscape is crucial. If Owlet's products resonate with consumer needs and preferences while fulfilling stringent safety standards, the company could see a positive shift in consumer sentiment and increased adoption rates, which would be pivotal for long-term growth.
An expert in the Medical Device Industry would recognize that Owlet's progress in obtaining FDA authorizations is a significant milestone. FDA authorizations can enhance credibility and trust in the company's products, potentially leading to increased sales. It's also a signal of the company's commitment to meeting high regulatory standards, which is essential in the medical device sector.
The mention of insurance reimbursement for BabySat is particularly noteworthy. Reimbursement can be a major driver of product adoption in the medical device industry, as it reduces the out-of-pocket cost for consumers and can lead to broader utilization. The ability to secure insurance partnerships and navigate the complex reimbursement landscape is often a critical factor in a medical device company's success.
Q4 2023 Financial Highlights
-
Q4 Revenue was approximately
$21.0 million -
Q4 Gross Margin was approximately
47.1% . -
Q4 Net Loss was approximately
$6.9 million 65% from$19.5 million -
Q4 adjusted EBITDA loss was approximately
$0.7 million 95% from$15.2 million
Fiscal Year 2023 Financial Highlights
-
FY 2023 Revenue was approximately
$54.0 million -
FY 2023 Gross Margin was approximately
41.8% , up 810 basis points from33.7% in 2022. -
FY 2023 Net Loss was approximately
$32.9 million 59% from$79.3 million -
FY 2023 adjusted EBITDA loss was approximately
$16.3 million 76% from$68.3 million
“I am gratified to announce a very strong operating quarter and year of ongoing fiscal improvement for Owlet. A year ago, we reiterated our significant conviction in Owlet’s fundamentals and vision for the future. Since then, the Company gained two FDA authorizations all while improving operational efficiency, reducing costs and bringing the business toward Adjusted EBITDA breakeven. The mission, direction and momentum of the Company has never been stronger,” said Kurt Workman, Owlet’s Chief Executive Officer and Co-Founder.
Workman continued, “As noted in our preliminary results release, the momentum is continuing to build in 2024 as we commercialize our new medical devices, expand distribution into healthcare channels and work with partners to establish reimbursement by insurance providers for BabySat. We believe our strong operating health and unequaled product position, combined with new growth channels from our FDA authorizations, will propel Owlet to the next level. I’m proud of the immense progress our team has made in re-shaping the Company in 2023, and I look forward to continued successes in 2024.”
Financial Results for the Fourth Quarter and Fiscal Year Ended December 31, 2023
Fourth Quarter 2023 Results
Revenues for the fourth quarter of 2023 were approximately
Cost of revenues for the fourth quarter of 2023 was approximately
Operating loss and net loss were approximately
Adjusted EBITDA loss was approximately
Net loss per share was
Fiscal Year 2023 Results
For the fiscal year ended December 31, 2023, revenues were approximately
Cost of revenues for the fiscal year ended December 31, 2023 was
For fiscal year 2023, gross margin was
Operating expenses for the fiscal year ended December 31, 2023 were
Operating loss and net loss for the fiscal year ended December 31, 2023 were
EBITDA loss for fiscal year 2023 was
Adjusted EBITDA loss for the fiscal year ended December 31, 2023 was
Net loss per share for the fiscal year ended December 31, 2023 was
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the Company’s expected financial performance, growth prospects and future operational efficiencies or results. In some cases, you can identify forward-looking statements by terms such as “estimate,” “may,” “believes,” “plans,” “expects,” “anticipates,” “intends,” “goal,” “potential,” “upcoming,” “outlook,” “guidance,” the negation thereof, or similar expressions, although not all forward-looking statements contain these identifying words. Forward-looking statements are based on the Company’s expectations at the time such statements are made, speak only as of the dates they are made and are susceptible to a number of risks, uncertainties and other factors. For all such forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. The Company’s actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by our forward-looking statements. Many important factors could affect the Company’s future results and cause those results to differ materially from those expressed in or implied by the Company’s forward-looking statements. Such factors include, but are not limited to, (i) the regulatory pathway for Owlet’s products, including submissions to, actions taken by and decisions and responses from regulators, such as the FDA and similar regulators outside of
Disclosure Regarding Non-GAAP Financial Measures
In addition to the financial measures presented in this release in accordance with
The Company uses such non-GAAP financial measures as internal measures of business operating performance and as performance measures for benchmarking against the Company’s peers and competitors. The Company believes its presentation of EBITDA, adjusted EBITDA, adjusted net loss and adjusted net loss per share provide a meaningful perspective of the underlying operating performance of the Company’s current business and enables investors to better understand and evaluate its historical and prospective operating performance. The Company believes that these non-GAAP financial measures are important supplemental measures of operating performance because they exclude items that vary from period to period without correlation to the Company’s core operating performance and highlight trends in its business that may not otherwise be apparent when relying solely on GAAP financial measures. Due to the nature of the items being excluded, such items do not reflect future gains, losses, expenses or benefits and are not indicative of the Company’s future operating performance. The Company believes investors, analysts and other interested parties use EBITDA, adjusted EBITDA, adjusted net loss and adjusted net loss per share in evaluating issuers, and the presentation of these measures facilitates a comparative assessment of the Company’s operating performance in addition to the Company’s performance based on GAAP results.
The Company’s non-GAAP financial measures should not be considered as an alternative to net loss or net loss per share as a measure of financial performance or any other performance measure derived in accordance with GAAP, and should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items.
EBITDA is defined as net loss adjusted for income tax provision and interest expense, net and depreciation and amortization.
Adjusted EBITDA is defined as net loss adjusted for income tax provision, interest expense, interest expense from contingent beneficial conversion feature, interest income, depreciation and amortization, restructuring costs, warrant liability adjustments, gain on loan forgiveness, stock-based compensation, and transaction costs.
Adjusted net loss is defined as net loss adjusted for restructuring costs, common stock warrant liability adjustments, stock-based compensation, and transaction costs. Adjusted net loss per share is defined as adjusted net loss divided by weighted-average shares of common stock.
EBITDA, adjusted EBITDA, adjusted net loss and adjusted net loss per share are not recognized terms under GAAP, and the Company’s presentation of these non-GAAP measures does not replace the presentation of the Company’s financial results in accordance with GAAP. Because all companies do not use EBITDA, adjusted EBITDA, adjusted net loss and adjusted net loss per share (and similarly titled financial measures) in the same way, those measures as used by other companies may not be consistent with the way the Company calculates such measures. The non-GAAP financial measures included in this release should not be construed as substitutes for or better indicators of the Company’s performance than the most directly comparable GAAP financial measures. See the reconciliation tables that accompany this release for additional information regarding certain of the non-GAAP financial measures included herein.
Conference Call and Webcast Information
Owlet will host a conference call and audio webcast today, March 7, 2024, at 4:30 p.m. ET to discuss these results.
To access the conference call by telephone, please dial (404) 975-4839 (domestic) or +833-470-1428 (international) and reference Access Code 102390. To listen to the conference call via live audio webcast, please visit the Events section of Owlet’s Investor Relations website at investors.owletcare.com.
The archived webcast will also be available on Owlet’s Investor Relations website mentioned above.
About Owlet, Inc.
Owlet was founded by a team of parents in 2012. Owlet’s mission is to empower parents with the right information at the right time, to give them more peace of mind and help them find more joy in the journey of parenting. Owlet’s digital parenting platform aims to give parents real-time data and insights to help parents feel calmer and more confident. Owlet believes that every parent deserves peace of mind and the opportunity to feel their well-rested best. Owlet also believes that every child deserves to live a long, happy, and healthy life, and is working to develop products to help further that belief. To learn more, visit www.owletcare.com.
| Owlet, Inc. | ||||||||
| Condensed Consolidated Balance Sheets - Preliminary, Unaudited1 | ||||||||
| (in millions) | ||||||||
| Assets | December 31, 2023 |
December 31, 2022 |
||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ |
16.6 |
|
$ |
11.2 |
|
||
| Accounts receivable |
|
14.0 |
|
|
16.0 |
|
||
| Inventory |
|
6.5 |
|
|
18.5 |
|
||
| Prepaid expenses and other current assets |
|
2.9 |
|
|
5.6 |
|
||
| Total current assets |
|
39.9 |
|
|
51.3 |
|
||
| Property and equipment, net |
|
0.4 |
|
|
1.1 |
|
||
| Right of use assets, net |
|
0.9 |
|
|
2.3 |
|
||
| Intangible assets, net |
|
2.2 |
|
|
2.3 |
|
||
| Other assets |
|
0.7 |
|
|
1.2 |
|
||
| Total assets | $ |
44.1 |
|
$ |
58.1 |
|
||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable |
|
13.7 |
|
|
30.4 |
|
||
| Accrued and other expenses |
|
15.1 |
|
|
20.0 |
|
||
| Current portion of deferred revenues |
|
1.2 |
|
|
1.1 |
|
||
| Line of credit |
|
9.3 |
|
|
4.7 |
|
||
| Current portion of long-term debt |
|
5.9 |
|
|
10.4 |
|
||
| Total current liabilities | $ |
45.1 |
|
$ |
66.6 |
|
||
| Long-term debt, net |
|
— |
|
|
— |
|
||
| Noncurrent lease liabilities |
|
— |
|
|
1.2 |
|
||
| Common stock warrant liability |
|
27.8 |
|
|
0.7 |
|
||
| Other long-term liabilities |
|
0.9 |
|
|
0.3 |
|
||
| Total liabilities |
|
73.8 |
|
|
68.7 |
|
||
| Total mezzanine equity |
|
7.9 |
|
|
— |
|
||
| Total stockholders’ equity |
|
(37.5 |
) |
|
(10.6 |
) |
||
| Total liabilities and stockholders’ equity | $ |
44.1 |
|
$ |
58.1 |
|
||
| 1 Amounts may not sum due to rounding | ||||||||
| Owlet, Inc. | |||||||
| Condensed Consolidated Statements of Cash Flows - Preliminary, Unaudited1 | |||||||
| (in millions) | |||||||
Years Ended |
|||||||
December 31, |
|||||||
2023 |
|
2022 |
|||||
| Net cash used in operating activities |
|
(23.5 |
) |
|
(81.4 |
) |
|
| Net cash used in investing activities |
|
(0.1 |
) |
|
(1.6 |
) |
|
| Net cash provided by financing activities |
|
28.9 |
|
|
(0.9 |
) |
|
| Net change in cash and cash equivalents | $ |
5.3 |
|
$ |
(83.8 |
) |
|
| 1 Amounts may not sum due to rounding | |||||||
| Owlet, Inc. | |||||||||||||||
| Condensed Consolidated Statements of Operations and Comprehensive Loss - Preliminary, Unaudited1 | |||||||||||||||
| (in millions, except share and per share amounts) | |||||||||||||||
Three Months Ended |
|
Years Ended |
|||||||||||||
December 31, |
December 31, |
||||||||||||||
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
| Revenues | $ |
21.0 |
|
$ |
12.0 |
|
$ |
54.0 |
|
$ |
69.2 |
|
|||
| Cost of revenues |
|
11.1 |
|
|
8.6 |
|
|
31.4 |
|
|
45.9 |
|
|||
| Gross profit |
|
9.9 |
|
|
3.3 |
|
|
22.6 |
|
|
23.3 |
|
|||
| Operating expenses: | |||||||||||||||
| General and administrative |
|
6.9 |
|
|
12.1 |
|
|
27.3 |
|
|
41.5 |
|
|||
| Sales and marketing |
|
3.8 |
|
|
7.4 |
|
|
13.5 |
|
|
38.5 |
|
|||
| Research and development |
|
2.3 |
|
|
4.5 |
|
|
10.3 |
|
|
27.9 |
|
|||
| Total operating expenses |
|
13.0 |
|
|
24.1 |
|
|
51.2 |
|
|
107.9 |
|
|||
| Operating loss |
|
(3.1 |
) |
|
(20.7 |
) |
|
(28.6 |
) |
|
(84.6 |
) |
|||
| Other income (expense): | |||||||||||||||
| Interest expense, net |
|
(0.2 |
) |
|
(0.3 |
) |
|
(3.2 |
) |
|
(1.1 |
) |
|||
| Common stock warrant liability adjustment |
|
(3.6 |
) |
|
1.5 |
|
|
(0.9 |
) |
|
6.3 |
|
|||
| Other income (expense), net |
|
— |
|
|
— |
|
|
(0.1 |
) |
|
0.1 |
|
|||
| Total other income (expense), net |
|
(3.8 |
) |
|
1.2 |
|
|
(4.3 |
) |
|
5.3 |
|
|||
| Loss before income tax provision |
|
(6.9 |
) |
|
(19.5 |
) |
|
(32.9 |
) |
|
(79.3 |
) |
|||
| Income tax provision |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||
| Net loss and comprehensive loss |
|
(6.9 |
) |
|
(19.5 |
) |
|
(32.9 |
) |
|
(79.3 |
) |
|||
| Accretion on Series A convertible preferred stock |
|
(1.3 |
) |
|
— |
|
|
(4.6 |
) |
|
— |
|
|||
| Net loss attributable to common stockholders | $ |
(8.2 |
) |
$ |
(19.5 |
) |
$ |
(37.5 |
) |
$ |
(79.3 |
) |
|||
| Net loss per share attributable to common stockholders, basic and diluted | $ |
(0.97 |
) |
$ |
(2.43 |
) |
$ |
(4.53 |
) |
$ |
(9.98 |
) |
|||
| Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted |
|
8,467,028 |
|
|
8,017,507 |
|
|
8,276,481 |
|
|
7,950,757 |
|
|||
| 1 Amounts may not sum due to rounding | |||||||||||||||
| Owlet, Inc. | |||||||||||||||
| Reconciliation of GAAP to Non-GAAP Measures - Preliminary, Unaudited1 | |||||||||||||||
| (in millions, except share and per share amounts) | |||||||||||||||
Three Months Ended |
|
Years Ended |
|||||||||||||
December 31, |
December 31, |
||||||||||||||
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
| Net loss | $ |
(6.9 |
) |
$ |
(19.5 |
) |
$ |
(32.9 |
) |
$ |
(79.3 |
) |
|||
| Income tax provision |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||
| Interest expense, net |
|
0.2 |
|
|
0.3 |
|
|
3.2 |
|
|
1.1 |
|
|||
| Depreciation and amortization |
|
0.1 |
|
|
0.4 |
|
|
0.8 |
|
|
1.4 |
|
|||
| EBITDA | $ |
(6.6 |
) |
$ |
(18.9 |
) |
$ |
(28.9 |
) |
$ |
(76.8 |
) |
|||
| Restructuring costs |
|
— |
|
|
0.2 |
|
|
— |
|
|
1.4 |
|
|||
| Common stock warrant liability adjustment |
|
3.6 |
|
|
(1.5 |
) |
|
0.9 |
|
|
(6.3 |
) |
|||
| Stock-based compensation |
|
2.3 |
|
|
4.4 |
|
|
9.9 |
|
|
12.9 |
|
|||
| Transaction costs |
|
— |
|
|
0.6 |
|
|
1.7 |
|
|
0.6 |
|
|||
| Adjusted EBITDA | $ |
(0.7 |
) |
$ |
(15.2 |
) |
$ |
(16.3 |
) |
$ |
(68.3 |
) |
|||
Three Months Ended |
|
Years Ended |
|||||||||||||
December 31, |
December 31, |
||||||||||||||
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
| Net loss | $ |
(6.9 |
) |
$ |
(19.5 |
) |
$ |
(32.9 |
) |
$ |
(79.3 |
) |
|||
| Non-GAAP adjustments: | |||||||||||||||
| Restructuring costs |
|
— |
|
|
0.2 |
|
|
— |
|
|
1.4 |
|
|||
| Common stock warrant liability adjustment |
|
3.6 |
|
|
(1.5 |
) |
|
0.9 |
|
|
(6.3 |
) |
|||
| Stock-based compensation |
|
2.3 |
|
|
4.4 |
|
|
9.9 |
|
|
12.9 |
|
|||
| Transaction costs |
|
— |
|
|
0.6 |
|
|
1.7 |
|
|
0.6 |
|
|||
| Adjusted net loss | $ |
(1.0 |
) |
$ |
(15.8 |
) |
$ |
(20.3 |
) |
$ |
(70.8 |
) |
|||
| Net loss per share attributable to common stockholders | $ |
(0.97 |
) |
$ |
(2.43 |
) |
$ |
(4.53 |
) |
$ |
(9.98 |
) |
|||
| Adjusted net loss per share attributable to common stockholders | $ |
(0.12 |
) |
$ |
(1.97 |
) |
$ |
(2.46 |
) |
$ |
(8.91 |
) |
|||
| Weighted average number of shares outstanding |
|
8,467,028 |
|
|
8,017,507 |
|
|
8,276,481 |
|
|
7,950,757 |
|
|||
| 1 Amounts may not sum due to rounding | |||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240307005562/en/
Investor Contacts:
Mike Cavanaugh
ICR Westwicke
Phone: +1.617.877.9641
mike.cavanaugh@westwicke.com
Media Contacts:
pr@owletcare.com
owlet@diffusionpr.com
Source: Owlet, Inc.
FAQ
What was Owlet's revenue in Q4 2023?
How much was Owlet's net loss in FY 2023?
What was the adjusted EBITDA loss for Owlet in Q4 2023?
What was the gross margin for Owlet in FY 2023?
What initiatives did Owlet undertake to improve operational efficiency?
