Owlet Announces Second Quarter 2023 Financial Results
- Revenues increased by 22% from Q1 2023
- Gross margin improved to 40%
- Received FDA clearance for BabySat™ pulse-oximetry device
- On track with de novo submission for Health Notifications software
- Operating expenses declined by 21%
See the “Disclosure Regarding Non-GAAP Financial Measures” disclosure and the reconciliation tables that accompany this release for a discussion and reconciliation of certain non-GAAP financial measures included in this release.
Recent Q2 2023 Highlights
-
Received clearance from the
U.S. Food and Drug Administration (“FDA”) of BabySat™, the first medical pulse-oximetry device featuring Owlet’s advanced, wire-free sock design, in June. De novo submission to FDA for the clearance of Owlet’s software-as-a-medical-device, Health Notifications, for use with the Dream Sock, remains on track.
-
Revenues of
increased$13.1 million 22% , as compared with in Q1 2023.$10.7 million
-
Operating expenses of
declined$11.9 million 21% from in Q1 2023 as management positions Owlet for adjusted EBITDA margin break even in late 2023. Excluding stock based compensation, operating expenses of$15.1 million declined$9.3 million 24% from in Q1 2023.$12.3 million
-
Gross margin was
40% for the quarter, increasing significantly year over year from36.1% in Q2 2022.
- The Company had its Continued Listing Compliance Plan with NYSE approved in June and completed a 1:14 reverse stock split in July.
“Our conviction in Owlet’s future remains steadfast as our objectives to strengthen our business remain on track. During the quarter, we sequentially increased gross sales, continued to stabilize gross margins and further reduced operating expenses,” said Kurt Workman, Owlet’s Chief Executive Officer.
“And while we are executing well, we continue to look to future opportunities; to that end, we received FDA clearance for BabySat in June, intended to monitor babies at home under the direct care of their physicians. We remain on track progressing our de novo submission with FDA for our software as a medical device to provide enhanced Health Notifications that parents want in an over-the-counter product for our Dream Sock. I’m proud of the Owlet team’s accomplishments this quarter and look forward to reporting on additional progress in the second half of the year.”
Financial Results for the Second Quarter Ended June 30, 2023
Revenues for the second quarter of 2023 were approximately
Cost of revenues for the second quarter of 2023 was approximately
Operating expenses were approximately
Operating loss and net loss were approximately
Adjusted EBITDA loss was approximately
Net loss per share was (
Financial Outlook
The Company will speak to its financial outlook as part of the business update provided during Owlet’s conference call on August 14, 2023 at 4:30 p.m. ET. Conference call details are provided below and on the Company’s Investor Relations website at Events & Presentations.
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 growth prospects, expanded product offerings and the impacts of new leadership. 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
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 our 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, interest expense, interest expense from contingent beneficial conversion feature, interest income, 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, 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 financial 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, August 14, 2023, at 4:30 p.m. ET to discuss these results.
To access the conference call by telephone, please dial (833) 470-1428 (domestic) or +1 404 975 4839 (international) and reference Access Code 203796. 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.
A replay of the conference call will be available by telephone by dialing +1 866 813 9403 (domestic) or +44 204 525 0658 (international) and using Access Code 203796. 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 | June 30, 2023 | December 31, 2023 | ||||||
Current assets: | ||||||||
Cash and cash equivalents | $ |
24.70 |
|
$ |
11.20 |
|
||
Accounts receivable |
|
13 |
|
|
16 |
|
||
Inventory |
|
12.4 |
|
|
18.5 |
|
||
Prepaid expenses and other current assets |
|
1.6 |
|
|
5.6 |
|
||
Total current assets |
|
51.7 |
|
|
51.3 |
|
||
Property and equipment, net |
|
0.6 |
|
|
1.1 |
|
||
Right of use assets, net |
|
1.6 |
|
|
2.3 |
|
||
Intangible assets, net |
|
2.3 |
|
|
2.3 |
|
||
Other assets |
|
1 |
|
|
1.2 |
|
||
Total assets | $ |
57.30 |
|
$ |
58.10 |
|
||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ |
22.80 |
|
$ |
30.40 |
|
||
Accrued and other expenses |
|
11.2 |
|
|
20 |
|
||
Current portion of deferred revenues |
|
1 |
|
|
1.1 |
|
||
Line of credit |
|
8.2 |
|
|
4.7 |
|
||
Current portion of long-term debt |
|
5.2 |
|
|
10.4 |
|
||
Total current liabilities |
|
48.4 |
|
|
66.6 |
|
||
Long-term debt, net |
|
2 |
|
|
— |
|
||
Noncurrent lease liabilities |
|
0.3 |
|
|
1.2 |
|
||
Common stock warrant liability |
|
26.6 |
|
|
0.7 |
|
||
Other long-term liabilities |
|
1.8 |
|
|
0.3 |
|
||
Total liabilities |
|
79 |
|
|
68.7 |
|
||
Total mezzanine equity |
|
5.6 |
|
|
— |
|
||
Total stockholders’ equity |
|
(27.3 |
) |
|
(10.6 |
) |
||
Total liabilities and stockholders’ equity | $ |
57.30 |
|
$ |
58.10 |
|
||
1 Amounts may not sum due to rounding |
Owlet, Inc. | |||||||
Condensed Consolidated Statements of Cash Flows - Preliminary, Unaudited1 | |||||||
(in millions) | |||||||
For the Three Months Ended June 30, | |||||||
2023 |
2022 |
||||||
Net cash used in operating activities | $ |
(16.8 |
) |
$ |
(55.7 |
) |
|
Net cash used in investing activities |
|
— |
|
|
(1.2 |
) |
|
Net cash provided by financing activities |
|
30.3 |
|
|
(0.9 |
) |
|
Net change in cash and cash equivalents | $ |
13.5 |
|
$ |
(57.8 |
) |
|
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 June 30, | Six Months Ended June 30, | ||||||||||||||
2023 |
2022 |
2023 |
2022 |
||||||||||||
Revenues | $ |
13.10 |
|
$ |
18.30 |
|
$ |
23.80 |
|
$ |
39.90 |
|
|||
Cost of revenues |
|
7.9 |
|
|
11.7 |
|
|
14.4 |
|
|
24.5 |
|
|||
Gross profit |
|
5.2 |
|
|
6.6 |
|
|
9.4 |
|
|
15.4 |
|
|||
Operating expenses: | |||||||||||||||
General and administrative |
|
6.1 |
|
|
9.5 |
|
|
15 |
|
|
19.8 |
|
|||
Sales and marketing |
|
3.1 |
|
|
9.7 |
|
|
6.4 |
|
|
21.4 |
|
|||
Research and development |
|
2.7 |
|
|
7.8 |
|
|
5.6 |
|
|
16.3 |
|
|||
Total operating expenses |
|
11.9 |
|
|
27.0 |
|
|
27.1 |
|
|
57.4 |
|
|||
Operating loss | (6.7 |
) |
|
(20.4 |
) |
|
(17.7 |
) |
|
(42.1 |
) |
||||
Other income (expense): | |||||||||||||||
Interest expense, net |
|
(0.1 |
) |
|
(0.2 |
) |
|
(2.9 |
) |
|
(0.4 |
) |
|||
Common stock warrant liability adjustment |
|
(1.6 |
) |
|
8.8 |
|
|
0.3 |
|
|
1.9 |
|
|||
Other income (expense), net |
|
(0.1 |
) |
|
0.1 |
|
|
(0.1 |
) |
|
0.1 |
|
|||
Total other income (expense), net |
|
(1.7 |
) |
|
8.7 |
|
|
(2.7 |
) |
|
1.6 |
|
|||
Loss before income tax provision |
|
(8.5 |
) |
|
(11.7 |
) |
|
(20.3 |
) |
|
(40.4 |
) |
|||
Income tax provision |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||
Net loss and comprehensive loss |
|
(8.5 |
) |
|
(11.7 |
) |
|
(20.3 |
) |
|
(40.5 |
) |
|||
Accretion on Series A convertible preferred stock |
|
(1.3 |
) |
|
— |
|
|
(2.0 |
) |
|
— |
|
|||
Net loss attributable to common stockholders | $ |
(9.8 |
) |
$ |
(11.7 |
) |
$ |
(22.3 |
) |
$ |
(40.5 |
) |
|||
Net loss per share attributable to common stockholders, basic and diluted | $ |
(1.19 |
) |
$ |
(1.48 |
) |
$ |
(2.73 |
) |
$ |
(5.12 |
) |
|||
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted |
|
8,213,247 |
|
|
7,915,156 |
|
|
8,162,102 |
|
|
7,899,959 |
|
|||
1 Amounts may not sum due to rounding |
Owlet, Inc. | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Measures - Preliminary, Unaudited1 | |||||||||||||||
(in millions) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2023 |
2022 |
2023 |
2022 |
||||||||||||
Net loss | $ |
(8.5 |
) |
$ |
(11.7 |
) |
$ |
(20.3 |
) |
$ |
(40.5 |
) |
|||
Income tax provision |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||
Interest expense, net |
|
0.1 |
|
|
0.2 |
|
|
2.9 |
|
|
0.4 |
|
|||
Depreciation and amortization |
|
0.2 |
|
|
0.4 |
|
|
0.5 |
|
|
0.7 |
|
|||
EBITDA | $ |
(8.2 |
) |
$ |
(11.1 |
) |
$ |
(16.9 |
) |
$ |
(39.3 |
) |
|||
Common stock warrant liability adjustment |
|
1.6 |
|
|
(8.8 |
) |
|
(0.3 |
) |
|
(1.9 |
) |
|||
Stock-based compensation |
|
2.6 |
|
|
3.3 |
|
|
5.4 |
|
|
6.6 |
|
|||
Transaction costs |
|
(0.4 |
) |
|
— |
|
|
1.7 |
|
|
— |
|
|||
Adjusted EBITDA | $ |
(4.3 |
) |
$ |
(16.7 |
) |
$ |
(10.1 |
) |
$ |
(34.7 |
) |
|||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2023 |
2022 |
2023 |
2022 |
||||||||||||
Net loss | $ |
(8.5 |
) |
$ |
(11.7 |
) |
$ |
(20.3 |
) |
$ |
(40.5 |
) |
|||
Non-GAAP adjustments: | |||||||||||||||
Common stock warrant liability adjustment |
|
1.6 |
|
|
(8.8 |
) |
|
(0.3 |
) |
|
(1.9 |
) |
|||
Stock-based compensation |
|
2.6 |
|
|
3.3 |
|
|
5.4 |
|
|
6.6 |
|
|||
Transaction costs |
|
(0.4 |
) |
|
— |
|
|
1.7 |
|
|
— |
|
|||
Adjusted net loss | $ |
(4.6 |
) |
$ |
(17.3 |
) |
$ |
(13.5 |
) |
$ |
(35.8 |
) |
|||
Net loss per share attributable to common stockholders | $ |
(1.19 |
) |
$ |
(1.48 |
) |
$ |
(2.73 |
) |
$ |
(5.12 |
) |
|||
Adjusted net loss per share attributable to common stockholders | $ |
(0.56 |
) |
$ |
(2.18 |
) |
$ |
(1.65 |
) |
$ |
(4.54 |
) |
|||
Weighted average number of shares outstanding |
|
8,213,247 |
|
|
7,915,156 |
|
|
8,162,102 |
|
|
7,899,959 |
|
|||
1 Amounts may not sum due to rounding |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230814641799/en/
Investors and Media
Mike Cavanaugh
ICR Westwicke
Phone: +1.617.877.9641
Email: mike.cavanaugh@westwicke.com
Source: Owlet, Inc.
FAQ
What were the Q2 2023 revenues?
What was the gross margin for Q2 2023?
What FDA clearance did Owlet receive?