Owlet Inc ((OWLT)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Owlet Inc. recently held its Q1 2025 earnings call, which conveyed a positive sentiment overall. The company reported strong revenue growth, improved margins, successful product adoption, and strategic partnerships. These positive developments outweighed challenges such as tariffs and litigation costs, painting an optimistic picture for the company’s future.
Revenue Growth
Owlet Inc. reported a significant revenue increase for Q1 2025, reaching $21.1 million, which marks a 43% year-over-year growth. This impressive growth was primarily driven by strong sales of their flagship products, Dream Sock and Dream Duo.
Gross Margin Improvement
The company achieved a gross margin of 53.7%, improving by 930 basis points compared to the previous year. This marks the eighth consecutive quarter of gross margin expansion, highlighting the company’s operational efficiency and cost management.
Owlet 360 Subscription Success
Since its launch on January 28th, the Owlet 360 subscription service has garnered over 48,000 paying subscribers. This strong adoption rate has positively contributed to the company’s business model, demonstrating the value of their subscription offerings.
Strategic Partnerships
A notable development for Owlet is its new distribution partnership with Children’s Hospital of the King’s Daughters. This partnership allows babies to leave the hospital with an Owlet monitor, marking a significant milestone in the company’s strategic growth initiatives.
International Expansion
Owlet’s international revenue saw a remarkable 104% year-over-year increase, with significant growth in key markets such as France and Germany. This expansion underscores the global demand for Owlet’s products and the effectiveness of their international strategy.
Financial Performance
For the fourth consecutive quarter, Owlet achieved breakeven adjusted EBITDA, with a $3.1 million improvement year-over-year. This consistent financial performance reflects the company’s robust operational strategies and cost management.
Tariff Challenges
The introduction of new 10% tariffs on imports from Thailand and Vietnam has impacted Owlet’s gross margin expectations. However, the company has successfully eliminated material exposure to China tariffs, mitigating some of the potential negative effects.
Litigation Settlement Costs
Operating expenses for the quarter increased due to a one-time litigation settlement cost of $0.9 million related to a shareholder derivative suit. Despite this, the company continues to focus on its strategic growth initiatives.
Forward-Looking Guidance
Owlet has raised its full-year revenue guidance to between $91 million and $95 million, anticipating a growth rate of 17% to 22%. This optimistic outlook is supported by their strong start to the year, strategic partnerships, and continued international expansion.
In summary, Owlet Inc.’s Q1 2025 earnings call highlighted a positive trajectory for the company, driven by strong revenue growth, improved margins, and strategic initiatives. Despite challenges such as tariffs and litigation costs, the overall sentiment remains optimistic, with forward-looking guidance reflecting confidence in continued growth.