Owlet Announces Strong First Quarter 2024 Results
Owlet, Inc. announced strong first quarter 2024 results with revenue of approximately $14.8 million, up 37% year over year, gross margin at 44.4%, and net income of $3.3 million. The company's adjusted EBITDA loss improved by 46% year over year. Owlet's CEO highlighted the positive feedback on their medical devices and increased demand for their products, projecting continued success in 2024.
Q1 revenue increased by 37% year over year to approximately $14.8 million.
Gross margin stood at 44.4%, up 570 basis points year over year.
Net income for Q1 was approximately $3.3 million, a significant improvement from the net loss of $11.9 million in the previous year.
Adjusted EBITDA loss improved by approximately 46% year over year.
Positive feedback on the Dream Sock and Dream Duo products following FDA clearance led to a 60% increase in consumer demand.
Owlet surpassed 2 million infants monitored, indicating strong market position and operational health for continued success.
Operating loss was approximately $5.7 million for Q1 2024.
Adjusted net loss per share was ($0.39) for the first quarter of 2024, compared to adjusted net loss per share of ($1.10) for the same period in 2023.
Operating expenses, including stock-based compensation, were approximately $12.3 million for Q1 2024.
Insights
Owlet's reported increase in revenue to $14.8 million, up 37% from the previous year and a significant rise in gross margin to 44.4%, suggests the company is experiencing solid growth. This growth is likely attributable to the market's positive reception of their FDA-cleared products, the Dream Sock and Dream Duo.
From a cost perspective, the reported decrease in operating expenses and transaction costs suggest the company is streamlining its operations efficiently. Moreover, transitioning from a net loss of $11.9 million to a net income of $3.3 million year over year represents a substantial turnaround in profitability.
However, one should be cautious about the gain resulting from the change in fair value of common stock warrants, which can be a volatile figure and may not reflect operational performance. Moreover, the adjusted EBITDA still shows a loss, indicating that profitability from core operations may not yet be achieved without considering non-operational gains.
The consumer demand increase by 60% year over year for the company's flagship products indicates a strong product-market fit and brand acceptance. The healthcare sector's trend towards tech-enabled, home-based monitoring could be a key growth driver for Owlet.
The mention of expanded health information and the ability for parents to seek insurance reimbursement suggests Owlet's services are integrating well into consumers' healthcare ecosystems, which could lead to sustainable demand.
It's important for investors to monitor customer satisfaction through metrics like NPS scores and how they correlate with financial performance, as these can be leading indicators of customer retention and lifetime value.
Q1 2024 Financial Highlights:
-
Q1 Revenue was approximately
$14.8 million 37% year over year. -
Q1 Gross Margin was approximately
44.4% , up 570 basis points year over year. -
Q1 Net Income was approximately
$3.3 million $11.9 million -
Q1 adjusted EBITDA loss was approximately
$3.1 million 46% year over year.
“We’ve started off 2024 by delivering solid year over year growth. Consumer sell-through demand is up
Workman continued, “As we’ve surpassed over 2 million infants monitored on our platform, the unequaled insights from our digital data capabilities are strengthening. Globally, parents and caregivers want accessible health insights between hospital and home and Owlet is uniquely addressing this demand. We believe our growing market position and operational health are strong momentum indicators for continued success in 2024.”
Financial Results for the First Quarter Ended March 31, 2024
Revenues for the first quarter of 2024 were approximately
Cost of revenues for the first quarter of 2024 was approximately
Operating expenses, including stock-based compensation, were approximately
Operating loss was approximately
Net income was approximately
A gain of approximately
Adjusted EBITDA loss was approximately
Basic earnings per share 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, outlook based upon regulatory authorizations or product enhancements, 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, May 6, 2024, 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 118135. 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’s digital health infant monitoring platform is transforming the journey of parenting. The Company (NYSE:OWLT), a small-cap healthcare growth equity, offers FDA-authorized medical and consumer pediatric wearables and an integrated HD visual and audio camera that provide real-time data and insights to parents who safeguard health, optimize wellness, and ensure peaceful sleep, for their children.
Since 2012, over 2 million parents worldwide have used Owlet’s platform contributing to one of the largest collections of consumer infant health and sleep data. The Company continues to develop software and digital data solutions to bridge the current healthcare gap between hospital and home and bring new insights to parents and caregivers globally. Owlet believes that every child deserves to live a long, happy, and healthy life. To learn more, visit www.owletcare.com.
Owlet, Inc.
|
||||||||
Assets |
|
March 31, 2024 |
|
December 31, 2023 |
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
18.4 |
|
|
$ |
16.6 |
|
Accounts receivable |
|
|
11.6 |
|
|
|
14.0 |
|
Inventory |
|
|
7.7 |
|
|
|
6.5 |
|
Prepaid expenses and other current assets |
|
|
2.3 |
|
|
|
2.9 |
|
Total current assets |
|
|
40.0 |
|
|
|
39.9 |
|
Property and equipment, net |
|
|
0.3 |
|
|
|
0.4 |
|
Right of use assets, net |
|
|
0.6 |
|
|
|
0.9 |
|
Intangible assets, net |
|
|
2.2 |
|
|
|
2.2 |
|
Other assets |
|
|
0.7 |
|
|
|
0.7 |
|
Total assets |
|
$ |
43.8 |
|
|
$ |
44.1 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
16.1 |
|
|
$ |
13.7 |
|
Accrued and other expenses |
|
|
11.0 |
|
|
|
15.1 |
|
Current portion of deferred revenues |
|
|
1.1 |
|
|
|
1.2 |
|
Line of credit |
|
|
7.2 |
|
|
|
9.3 |
|
Current portion of long-term debt |
|
|
4.0 |
|
|
|
5.9 |
|
Total current liabilities |
|
|
39.5 |
|
|
|
45.1 |
|
Common stock warrant liability |
|
|
25.5 |
|
|
|
27.8 |
|
Other long-term liabilities |
|
|
0.7 |
|
|
|
0.9 |
|
Total liabilities |
|
|
65.6 |
|
|
|
73.8 |
|
Total mezzanine equity |
|
|
11.1 |
|
|
|
7.9 |
|
Total stockholders’ equity |
|
|
(32.9 |
) |
|
|
(37.5 |
) |
Total liabilities and stockholders’ equity |
|
$ |
43.8 |
|
|
$ |
44.1 |
|
Owlet, Inc.
|
|||||
|
For the Three Months Ended
|
||||
|
2024 |
|
2023 |
||
Net cash used in operating activities |
(3.3 |
) |
|
(9.4 |
) |
Net cash used in investing activities |
(0.1 |
) |
|
— |
|
Net cash provided by financing activities |
5.2 |
|
|
22.9 |
|
Net change in cash and cash equivalents |
1.8 |
|
|
13.5 |
|
1 Amounts may not sum due to rounding
Owlet, Inc.
|
|||||||
|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
Revenues |
$ |
14.8 |
|
|
$ |
10.7 |
|
Cost of revenues |
|
8.2 |
|
|
|
6.6 |
|
Gross profit |
|
6.5 |
|
|
|
4.2 |
|
Operating expenses: |
|
|
|
||||
General and administrative |
|
6.1 |
|
|
|
8.9 |
|
Sales and marketing |
|
3.9 |
|
|
|
3.4 |
|
Research and development |
|
2.3 |
|
|
|
2.9 |
|
Total operating expenses |
|
12.3 |
|
|
|
15.1 |
|
Operating loss |
|
(5.7 |
) |
|
|
(11.0 |
) |
Other income (expense): |
|
|
|
||||
Interest expense, net |
|
(0.2 |
) |
|
|
(2.8 |
) |
Common stock warrant liability adjustment |
|
9.2 |
|
|
|
1.9 |
|
Other income (expense), net |
|
— |
|
|
|
— |
|
Total other income (expense), net |
|
9.0 |
|
|
|
(0.9 |
) |
Loss before income tax provision |
|
3.3 |
|
|
|
(11.9 |
) |
Income tax provision |
|
— |
|
|
|
— |
|
Net income (loss) and comprehensive loss |
|
3.3 |
|
|
|
(11.9 |
) |
Accretion on convertible preferred stock |
|
(1.3 |
) |
|
|
(0.7 |
) |
Net income (loss) allocated to participating securities |
|
(0.7 |
) |
|
|
— |
|
Net income (loss) attributable to common stockholders |
|
1.3 |
|
|
|
(12.5 |
) |
|
|
|
|
||||
Net income (loss) per share attributable to common stockholders: |
|
|
|
||||
Basic |
$ |
0.15 |
|
|
$ |
(1.54 |
) |
Diluted |
$ |
(0.51 |
) |
|
$ |
(1.54 |
) |
Weighted-average shares used in computing net income (loss) per share: |
|
|
|
||||
Basic |
|
8,740,059 |
|
|
|
8,110,387 |
|
Diluted |
|
9,617,825 |
|
|
|
8,110,387 |
|
1 Amounts may not sum due to rounding
Owlet, Inc. Reconciliation of GAAP to Non-GAAP Measures - Preliminary, Unaudited1 (in millions) |
|||||||
|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
Net loss |
$ |
3.3 |
|
|
$ |
(11.9 |
) |
Income tax provision |
|
— |
|
|
|
— |
|
Interest expense, net |
|
0.2 |
|
|
|
2.8 |
|
Depreciation and amortization |
|
0.1 |
|
|
|
0.3 |
|
EBITDA |
$ |
3.5 |
|
|
$ |
(8.8 |
) |
Common stock warrant liability adjustment |
|
(9.2 |
) |
|
|
(1.9 |
) |
Stock-based compensation |
|
2.2 |
|
|
|
2.8 |
|
Transaction costs |
|
0.3 |
|
|
|
2.1 |
|
Adjusted EBITDA |
$ |
(3.1 |
) |
|
$ |
(5.8 |
) |
|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
Net loss |
$ |
3.3 |
|
|
$ |
(11.9 |
) |
Non-GAAP adjustments: |
|
|
|
||||
Common stock warrant liability adjustment |
|
(9.2 |
) |
|
|
(1.9 |
) |
Stock-based compensation |
|
2.2 |
|
|
|
2.8 |
|
Transaction costs |
|
0.3 |
|
|
|
2.1 |
|
Adjusted net loss |
$ |
(3.4 |
) |
|
$ |
(8.9 |
) |
Adjusted net loss per share attributable to common stockholders |
$ |
(0.39 |
) |
|
$ |
(1.10 |
) |
Weighted average number of shares outstanding |
|
8,740,059 |
|
|
|
8,110,387 |
|
1 Amounts may not sum due to rounding
View source version on businesswire.com: https://www.businesswire.com/news/home/20240506909699/en/
Investors:
Mike Cavanaugh
ICR Westwicke
Phone: +1.617.877.9641
mike.cavanaugh@westwicke.com
Media:
pr@owletcare.com
owlet@diffusionpr.com
Source: Owlet, Inc.
FAQ
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