Executive Summary

Owlet delivered a strong Q1: revenue $21.1M (+43.1% y/y), gross margin 53.7% (+930 bps y/y), and breakeven adjusted EBITDA; GAAP diluted EPS was $0.11 while adjusted EPS was -$0.07 . Versus S&P Global consensus, revenue beat by ~$2.96M (est. $18.14M*), gross margin beat by ~3.5 pts (est. 50.2%), and adjusted/“Primary” EPS (-$0.07) beat est. -$0.27 .
FY25 guidance raised for revenue to $91–$95M (from $88–$92M) and gross margin lowered to 46%–50% (from 50%–52%) to include new 10% tariffs on Thailand/Vietnam; company still targets full-year adjusted EBITDA profitability .
Strategic execution: 48,000+ paying Owlet360 subscribers, new CHKD hospital discharge partnership (first time infants can leave the hospital with an Owlet monitor), and continued international strength (+104% y/y in Q1) .
Watch items: tariff cost pass-through/mitigation, cash burn (operating cash flow -$5.9M in Q1), and execution on sequential revenue growth through year with Q4 as the largest quarter per plan .

What Went Well and What Went Wrong

What Went Well

Demand and margins outperformed: “exceptional start” with revenue +43.1% y/y to $21.1M and gross margin 53.7% (+930 bps y/y); adjusted EBITDA improved by $3.1M to breakeven .
Platform transition gaining traction: “over 48,000 paying subscribers” for Owlet360; management emphasized transition to a “comprehensive pediatric health platform” and highlighted strong early feedback and attach-rate momentum .
Healthcare channel proof-point: partnership with CHKD enables infants to leave the hospital with BabySat/Dream Sock; management expects more hospitals “in the queue” .

What Went Wrong

Tariff headwind in outlook: FY25 gross margin cut to 46%–50% due to assessed 10% tariffs on Thailand and Vietnam manufacturing inputs despite prior exemptions for medical devices .
Higher OpEx from legal matters: Q1 operating expenses rose to $14.0M including $0.9M one-time litigation settlement costs; OpEx up y/y on comp and legal .
Cash burn: operating cash flow -$5.9M in Q1 and cash fell to $16.3M from $20.2M q/q; line of credit usage increased to $8.5M .

Financial Results

Key P&L (GAAP and Non-GAAP)

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($M)	$14.8	$20.5	$21.1
Gross Margin %	44.4%	53.5%	53.7%
Gross Profit ($M)	$6.5	$11.0	$11.3
Operating Expenses ($M)	$12.3	$18.4	$14.0
Operating Income (Loss) ($M)	$(5.7)	$(7.4)	$(2.7)
Net Income (Loss) ($M)	$3.3	$(9.1)	$3.0
Adjusted EBITDA ($M)	$(3.1)	$0.5	$0.0
Diluted EPS (GAAP)	$(0.51)	$(0.63)	$0.11
Adjusted EPS (non-GAAP)	$(0.39)	$(0.07)	$(0.07)

Q1 2025 Actual vs S&P Global Consensus

Metric	Consensus	Actual	Delta
Revenue ($M)	$18.14*	$21.10	+$2.96
Gross Margin %	50.2%*	53.7%	+3.5 pts
“Primary” EPS	-$0.27*	-$0.07	+$0.20

Values marked with * are retrieved from S&P Global.

KPIs

KPI	Q1 2024	Q4 2024	Q1 2025
Owlet360 subscribers	N/A	“25,000+ beta/early subs” (context from Q4 call)	48,000+ paying subs
Domestic Dream Sock sell-through growth y/y	N/A	+34%	+40%
Baby registries (Dream Sock adds) y/y	N/A	+72%	+63%
International revenue growth y/y	N/A	+45% (Q4)	+104%
Dream Sock NPS	~70 blended; 74 DS (Q3 context)	73 (year-end)	73
Return rates	Trending below historical avg	Below historical avg	Below historical avg

Note: Company does not report segment revenues; performance is discussed by product/channel mix and region .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$88–$92M	$91–$95M	Raised
Gross Margin %	FY 2025	50%–52%	46%–50% (includes new tariff costs)	Lowered
Adjusted EBITDA	FY 2025	Strive for profitability	Strive for profitability (unchanged)	Maintained

Why the change: Q1 outperformance and momentum lifted revenue; assessed 10% tariffs on Thailand/Vietnam imports reduced GM outlook despite procurement gains .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Tariffs / Supply chain	Planned camera shift China→Vietnam; medical devices historically exempt; exploring mitigations	Manufacturing now largely in Thailand (Sock/Duo) and Vietnam (camera); assessing 10% tariffs on both; minimal China exposure; view as share-gain opportunity	Cautious headwind; mitigation progressing
Subscription (Owlet360)	Beta launched; ~85% month-1 retention; 60% DAU; Jan 28 public launch planned	48k+ paying subs; attach rates rising; price moved to $9.99; meaningful contribution later in ’25	Building momentum
Healthcare channels (BabySat)	6 DMEs; 12 Medicaid states targeted; Cigna coverage; early scaling	CHKD hospital discharge program live; Android app; Owlet Connect soft launch; Medicaid in 12 states via AdaptHealth	Expanding footprint
International	CE med clearance; +96% y/y in Q3; +45% in Q4	+104% y/y in Q1; strength in France/Germany (sell-through +95%/+72%)	Strengthening
Product performance	Record Prime events; DS mix drives GM; returns down	Core Dream Sock/Duo momentum; baby registries +63% y/y; NPS 73	Solid
Macro / demand	“Cautiously optimistic”; consumer backdrop supportive	Heavy flu season aided Q1; expecting sequential growth; Q4 largest	Stable/seasonal
Regulatory	Only FDA- and CE-cleared monitors	Reiterated category leadership positioning	Stable

Management Commentary

“We drove revenue growth of over 43% year-over-year and delivered our fourth consecutive quarter of breakeven or better adjusted EBITDA” .
“Leveraging our leading position as the only FDA- and CE-cleared infant health monitors on the market… momentum for Dream Sock and Dream Duo” .
“Owlet360… over 48,000 paying subscribers, changing the profile of the business into a comprehensive pediatric health platform” .
On tariffs: “We have minimal China exposure… Thailand is our largest source… assessing the 10% additional tariff costs… evaluating numerous ways to reduce our tariff impacts” .
Outlook cadence: “Expecting sequential growth each quarter with Q4 being the biggest” .

Q&A Highlights

Hospital partnership mechanics: CHKD program uses consignment in NICU and integrates Owlet data into RPM workflows; more hospitals in the queue via AdaptHealth .
Subscription trajectory: grew from ~25k to “over 50k” subs within a couple months; pricing moved to $9.99; contribution expected to build by year-end .
2025 revenue cadence: sequential quarterly growth with Q4 largest due to holiday/promotions .
Marketing focus: leaning into FDA/CE clearances and “every baby” messaging; registries up >50% q/q; strong response .
Tariffs as competitive tailwind: many competitors’ cameras made in China; if 10% tariffs stick, OWLT sees share gain opportunity .

Estimates Context

Q1 2025 consensus vs actual: Revenue $18.14M* vs $21.10M (+$2.96M beat); Gross Margin 50.2%* vs 53.7% (+3.5 pts); Primary/Adjusted EPS -$0.27* vs -$0.07 (+$0.20 beat) .
Implications: Revenue/margin upside likely drive upward revisions to FY revenue; GM outlook trimmed on tariffs may cap near-term margin estimate upgrades; management still targets full-year adj. EBITDA profitability .
Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

Beat-and-raise quarter: strong demand/mix drove revenue and margin beats; FY revenue guidance raised despite tariff headwinds .
Tariff overhang manageable: manufacturing diversified (Thailand/Vietnam), minimal China exposure; gross margin guide embeds 10% tariff impact .
Subscriptions emerging as second growth engine: 48k+ paying subs with rising attach; pricing power evidenced by move to $9.99 .
Healthcare channel catalysts: CHKD discharge program, 12 Medicaid states via AdaptHealth, Android app and Owlet Connect support scaling .
International acceleration: +104% y/y with Germany/France standouts; supports multi-year runway .
Cash/FCF watch: Q1 operating cash flow -$5.9M; monitor liquidity, tariff offsets, and sequential growth into seasonally strong 2H .
Trading setup: narrative likely hinges on continued sub attach, incremental hospital partnerships, and clarity on tariff mitigation; Q2/Q3 execution and Q4 seasonality are key inflection points .

Owlet, Inc. (OWLT)·Q1 2025 Earnings Summary