OWLT - Earnings call transcript Q4 2024

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Operator

Good afternoon. Thank you for attending the Owlet Fourth Quarter 2024 Earnings Conference Call. My name is Cameron, and I'll be your moderator for today. [Operator Instructions] And I would now like to pass the conference over to your host, Jay Gentzkow, Investor Relations.

You may proceed.

Jay Gentzkow

thank joining and everyone, afternoon, you us. for Good results fourth XX, quarter today, Owlet full the financial released December Earlier and for year XXXX. ended Owlet's Harris, to by Crawford, Officer; our pleased joined Co-Founder Twede Workman, and I'm and Amanda CEO; and President be Jonathan CFO. Chief Revenue Kurt today

or accompanying investors.owletcare.com. press link Relations Presentations will XX consent. same this a call The we is available cannot the call This Before website. results under please transcribed at this website section reproduced slides of webcast presentation following the that available note The content and begin, and for without webcast replay of our property and are today's Investor our referred call It the at financial Events being slides with also our prior release to for is on on call. be Owlet. months be live

turn as report it's of new company otherwise, annual as Kurt recent the to statements, the future SEC forward-looking with refer on contain of obligation required the our our I'd my expectations Before to safe are such the events, you as statements begin, to based law. With and our of filings include, statements over forward-looking Form risks materially cause and Today's but disclaimer note to, most except whether Risk those Kurt? subject harbor are differ CEO, our any current by presentation. the today's on like update limited views we company's and of the X Factors in discussion to Slide no call Workman. to implied that, results not These information, section uncertainties risks described those that date. XX-K. predictions assumes pleasure could to and result and actual or in or expressed from that statements. to a on only These by are certain uncertainties will Please

Kurt Workman

everyone. Year you Fourth Call Thank Quarter afternoon, and Jay, for and Owlet's Full Results Financial XXXX good Thanks, joining today.

Medicaid support. I continued Capitalizing by Sock the XX from in begin us for XXXX the Owlet. a As to kicked contributing was XX opportunity always, of of for market. medical new off a growth open monitor, momentum reimbursement first to pivotal and in our Slide approval baby medical-grade countries leveraged channels FDA-cleared the with to and FDA up infant clearance, X. monitors. We by groundwork defining our will technologies the total our throughout devices, we to XXXX endorsements began began on Europe, the of XXXX year, versus DMEs in Dream creating CE on taking off your launching global XXXX. and year-end, revenue XXXX to XXXX BabySat's sincerely large, rolling of international we health BabySat, long-term medical both category XX% year out ending in expanded to only FDA-cleared XXXX expand medical insurance we distribution appreciate X with Building footprint our a Owlet throughout states. lay powerful

our with with all exceeded to improved of milestone strong financial of guidance we beginning first to is XXXX guidance to of with needing XXXX. navigate years for OwletXXX vision XXXX last exceptional year our financial second year gross gross home, successes, performance, quarter fourth end for marketing to compared off the service company significantly sales today, subscription QX challenges We better and travel the moving XXXX the and for parents records gross without our the revenue, significant XXXX. for partnership representing enabling with profit, full on crossed sleep Finally, of OwletXXX XX% established the adjusted Owlet, results. and our the and health year, call. time adjusted in the we development at in coincided of a margin, profit, history. we to capping margin, the January. Including product earnings of and launch center the deployment year $XX.X end company was full truly new ranges care high revenue, a breakout doctor. Alongside the EBITDA the quarter XXXX EBITDA. This results X gross growth for was released million, financial best revenue the

with growth, to XX% for expanded continued profile year, significantly history. margins throughout strong annual full improve We gross combination line gross margin the year the to and our Owlet's over in the best cost in top XXXX,

turned final this This EBITDA. versus we team adjusted of XXXX XXXX $XX accomplished step huge company. be incredible EBITDA in XXXX. million turning It's on has the at forward of the a was the profitability, as XXXX Owlet, with I over included significantly improving adjusted quarters a amount clear for X and point not prouder could Finally, corner a positive and by

an in growth profitability margin toward seventh versus were million year X $X.X year-over-year consecutive gross in million our was versus fourth XXXX. EBITDA Adjusting increasing year. distribution consecutive we quarter XX%. Fourth improvement key positive delivered quarter, We fourth of associated with EBITDA million Adjusted exceeding across last XXXX year quarter million partner We forward. margins the $XX.X revenue quarters quarter represents XXXX. performance XXX prior Slide revenue QX of XX.X%, for was shifted new metrics. of with on our exceptional revenue X. points signed quarter XXXX, gross $X into expansion. QX, in the completed the we that fourth achieved quarter from of adjusted year-over-year basis zooming going Now, XXXX all to $X.X Owlet revenue agreement of an in QX expanding expectations QX Amazon look XXXX as

the to of and the X million is and announcing We approximately from annual as In there healthcare ER exceeding has trending the rates years caregivers. A personalized, United the kicked of more We'll year massive our office hands the subscription we ever the launch pediatric momentum underscore children. cohort is puts visits, us quarter health million attach the the key health in XX% the into the better staggering. at OwletXXX significant pediatric alone, be testing coaches, professionals and XX in expectations, life help reminder visits, remote maternal been. manage service, positive, evolution while have that comprehensive our sharing in-app throughout XX care potential in opportunity. Initial refine are improving the States cost month. pediatric results closer begin hundreds company. our their releasing unlocking a OwletXXX, QX quite first on home up strong in thousands dataset of into positioned visits Owlet care. for the billion is parents launch telehealth XXXX will than in just Leveraging of health We OwletXXX value and information This telehealth first with to the with also business. in parents first home infant's major metrics provide better data this overall official parents of them to Owlet's over babies the Our who costs. The empower platform, costs been the as milestone to pediatric app positions of at by we've a that off and subscription information our that U.S. a of in at more directly second we can stay information pediatric adds single $XX in very nurses, able January chat believe health are new with OwletXXX to just of from before broadly NICU. of OwletXXX. actionable, outcomes healthcare XXXX in from for infant order to the of every sleep year their aimed care never sleep the their delivering the pediatricians, reducing

supporting cohort's adoption into this comprehensive will attach continue Owlet's OwletXXX's dive will our evolution significant unpack. a proud innovative we're January so marks any to strategic like before note platform a that step launch And real attach more into health without From official pediatric this marketing details in expect of. launch rate confidence We the standpoint, of in a increase. XX, I'd to potential. Jonathan is on rate that spend service

First, roll We base already planet. loyal Owlet. million population lever, users is with on X.X app over growth for recurring established, We pediatric revenue the aggregated the initially to, an believe monthly customer predictable we've and growing. additional out this Care driving an OwletXXX health Owlet to more have largest

Second, our service are the growing Subscription supports margins does not profitability. costs or OwletXXX of ongoing margins, goal current long-term accretive and substantial capital expenditures. require to

focused for Owlet of extends service Owlet. shift Third, very to part with been important utilization high the to parent-child infants potential continue in stop journey, a Owlet's has as the and pains early wants healthcare of OwletXXX be, LTV an very compelling and Owlet months, but XX at parenthood families. will on represents don't childhood in potential a subscription remains years. of the longevity relationship the be major

differentiation category the competitive leader our and pediatric enhances as OwletXXX in safety. Finally, health

Our growing to through more which massive which better scale value, solutions. product market tools the unique harder proposition and in in makes dataset and turn increases for our today. caregivers Unlocking match drive subscription our is parents competitors these full for increases deliver for to to data the it our value suite,

begin to like excited more the the for and continue professional integrating to could strategic now over about we partners, call platform, value to enhancements Jonathan progress works, areas. service not be will add the as walk in through proposition addition, capabilities, phase recent to We as the such features strengthen. next our In telehealth against this focus other to OwletXXX to turn Owlet. I'd

Jonathan Harris

Thanks, Kurt.

this to leading deliver of platform. Owlet. are positioning to point, on We an marks embark launch as The next inflection long-term exciting for us pediatric thrilled health value chapter OwletXXX the

focus expanding parents hyper-focused first, healthcare subscription, believe value. service across success toddler and insurance-reimbursed infancy consistent priorities Dream with and strong through execution XX% X XXXX. their versus our to the of offer and remains remain adoption U.S., transitioning purposeful growth: on into Our year. In a driving the will customer an OwletXXX Sock; we to monitor; supporting Dream These areas Owlet for and this Sock QX continued growth years of sell-through into third, demand second, they stay continue lifetime increasing global robust, strategic of channels X the medical domestic are to from right areas quarter another on with XXXX, hinges

of seeing to has new positive to registries list. registry Sock Dream maintain historical sentiment all XX% continued parents additions This their year-over-year increase in return on QX our we increasingly with total rates market high trends, prioritizing averages. lower continue than our Dream strong. down Owlet enthusiasm We Sock's consumer According the Circana, at Promoter year dollars research the category. Brand spent XX, largest baby We're has closed gain share. reflecting share to own remains and Score health Owlet's customer in satisfaction. data, Net firm, the monitor also nursery now to Dream Sock in a also track, showing with customer consistently,

across only domestic at to the We broadly baby forward. leader the a and Iowa, will states we on path Looking parents. significantly has monitor category-level amongst eventually have XX% every that access seats the show like the only market. Currently, populations growth enhance health penetration. FDA-cleared and generally breast pumps, of Products health rate often with U.S., demonstrate word or adoption Utah baby safety, birth category and the clear a adoptions. but potential, a smaller higher see price-sensitive, is These Owlet car power and Dream monitoring, of achieve Sock mouth believe Nebraska, and markets, more like

rates Friday U.S., grew unlock adoption Despite continues remains just states and with XX% spot. could revenue benchmarks, Amazon growth. to U.S. California, adoption exceeds continued Florida, Black Texas, awareness sell-through our the was globally. to larger XX% rate and adoption XXX% closer As significant we New align execution, in regions. Internationally, expect grow QX slightly in compared in In XXXX, XXXX. the birth Jersey, like to we're scratching surface a and Europe's U.K. the achieving breakout our up with with those a standout, QX, Germany a bright to top-performing year-over-year. international XX% up in

medical making order healthcare, remains we're adoption into momentum large, parents tap Dream globally, healthcare infants. Owlet. commercialization XXXX, up as from and to global to in BabySat expanding to choose the Sock we ramped progress We channels. more solid intend into opportunities healthcare the market elevate driving XXXX In In XXXX, accretive for critical. on standard-of-care the the in expand worldwide for capitalizing For U.S. to continue higher-risk

reimbursable and babies targets the FDA-cleared over with As annually could from discharged at of continue market all benefit of DME Medicaid with on up, BabySat. In of We're began higher a operational added U.S. in fully commercial to will hospital will such and reminder, XXXX. channel device, But U.S. the XX We from births, continue take out who our onboard reason will why coverage BabySat's value and as This parents working mid-XXXX. we infants partners serious prescription-eligible over the by QX, time rolling feedback XXXX. all shouldn't through new and we're a see prescribed, that signed from at-home potential BabySat, medical-grade whom insurance expanding with reinforces This every XX% to those clinicians no leave opportunity. NICU and long-term scale, conditions. receiving be work our train includes or states risk, and XXX,XXX babies alike monitoring. reimbursement the these one

to our bridges January this the we see per hit exceeding is of international greater from parents will fantastic And XX% rates this execute at against point, cylinders of our subscribers month, patterns hardware growth, XX% personalized, our road ahead like our marketing what's needed. revenue, OwletXXX platform initiatives. to value Retention babies level subscribers boosting add priorities trillions insights. We've vast in about $X.XX QX, insights healthcare monitored underway. introductory rate, later a at and No baby's LTV, Dream company paying scale to and day and this the onboarded from firing is reassurance and even compare confidence, levels, are remained approximately oxygen infant strategic deliver core Sock's Priced already stronger from efficiency OwletXXX. millions has the enhancements, daily platform, understand trends milestone may to at-home pediatric Sustain pediatric with and all active consistent with delivers Building after Owlet of results already expansion operational growing I'd weekly our of inflection introduction Parents pass stakeholders. and of and key expectations, pulse results The year. This predictable well-being a well at cohort attention first meaningful and Parents enter for between XXXX into rates parents prelaunch, remain reduced Finally, over years. the early database, OwletXXX XX,XXX recurring through comfort metrics, outlook. X Attach launch our to call additional all can strong as empowering hospital we our clear. users. visits. health a other noting in toddler and efforts BabySat excited report the with temperature. infant critical more XX% on Kurt's on health their and to to OwletXXX, month, are health advancing daily insights when OwletXXX the be committed some while normal that detail, features, an our our XXXX as supporting comprehensive movement, evolution sleep actionable and on gap service homecare, of to worldwide. I'll with heartbeats, dataset Amanda, with now Amanda driving to and discuss into ecosystem. you. over and We're connected and feedback. as and gaining of offers across health pivotal unnecessary anticipate

Amanda Crawford

Jonathan, and and across call will XX. comparing the million. gross I'll exceeded was XXXX our EBITDA. you, the end on fourth fourth begin of Thank provided Slide everyone. quarter I adjusted gross was the the be we the on profit, third in Unless all XXXX of XXXX. results as earnings quarter quarter, revenue, metrics: raised quarter fourth our quarter guidance afternoon, strong filing. QX high we another Revenue key $XX.X margin, noted Financial to are results preliminary XX-K until good otherwise,

growth a mix points fourth of increased to reduction $X.X improvement was XX% the and expansion. over to costs versus of distribution million, $XX.X was our an of Duo. Full by certain versus in quarter at gross record X $X costs margin associated Excluding year record $X.X a of growth Sock made primarily These authorization. of compensation the which exceeding QX, same quarter for charges significant of XXX $X.X end which expanding of basis volume year-over-year matters. Owlet settlement was disclose XXXX, XXX and absorption. Full cost exceeding the impact million related SPAC XXXX, the alleged improved the stock-based due XXXX expectations. towards false period Amazon information XXXX. at increase Smart including plaintiffs Sock XXXX margin XX.X%, failed reflects rates, QX a misleading was of This offering, expenses from in gross Dream points XX% cases high XXXX gross high QX the our with and margin the compared was to revenue strong Dream revenue outstanding and or basis from increase related Revenue last of end a favorable million, device, seventh versus to operating QX year. The of marketing growth, XX.X%, guidance million return year, sales quarter was in Operating million legal primarily certain prior in in million, the Total Sock, the revenue driven representing guidance. as medical product to an were our up shifted transition, classification Gross year FDA's related potential were partner fixed consecutive charges we revenue prior and our year primarily year. requiring prior of statements to to $XX.X fourth regarding our margin legal

settlement. and and disagree do since allegations, continuing filed. of not been we to these cases cost have any the We And admit of were outweighed fight the ever cases wrongdoing strain strongly continue the they resource with vigorously defending while these benefits has to

costs. insurance cover the a settlement will expect We of portion

focus loss the compared was increase, last in compared $X.X was same our positive million million, quarters XXXX in EBITDA to in of was exceeded quarter year adjusted $X fourth been adjusted $X.X Net of in year. has the $X.X our the of in EBITDA year quarter loss adjusted efficiency expectations. any $X.X period EBITDA. as $X.X line year. million insurance period Full end consecutive recovery X growth to fourth compared However, was adjusted improving our operational million positive drove versus EBITDA combination the million $XX.X last Top concluded same with the to period year. XXXX high included last quarter results. Operating an on improvement same potential guidance the $X.X XXXX. we million negative the with XXXX not Fourth the million, million,

balance XXXX as and equivalents XX, Slide third to XX. our down million, Turning slightly quarter million XXXX. Shifting in cash our sheet. financial outlook on Cash were December to XXXX, quarter of the end from $XX.X $XX.X

As XXXX the Jonathan purposeful areas be our will momentum and mentioned, XXXX growth. on for deliver about strategic to exiting on capitalizing execution

For to we to XXXX, the $XX year $XX generate revenue full million. range the expect million in of

to expected Our consistent half second seasonality observing is patterns. first be change retailer in XXXX. a with the revenue half, purchasing In we're

Specifically, inventory QX. key partners are orders pushing holding Black fewer into Friday and weeks of related

there compared in making QX year, shift expect our quarter. a from the revenue to that to prior contribution will revenue highest QX be We QX

which improvement We also EBITDA expect striving gross adjusted XXXX, margins expansion to we the to questions. that, And we demonstrating over full in with year are XXXX. And the your profitability would will range represent of for take now strong finally, over XX%, XX% XXXX. achieve

Operator

with from TD Cowen. Charles [Operator line Instructions] of question Rhyee The the first is

Lucas Romanski

the can XX% much can about Charles. Congrats growth you're how help I on understand to guidance, right. guiding This that understand into is like relation other from well And to, I have OwletXXX. the on Duo, Dream expected you me, offering? XX%, that help as us early your it's quarter. if then, this guess, us believe, I I of, from understand baked come from for days of what's excuse in for contribution as the you subscription Sock Lucas In is guide revenue obviously, to But and products BabySat?

Amanda Crawford

Yes.

in we're the guidance we OwletXXX, pretty which model to we So internally. just far as what careful as goes related being launched,

positive, are really early still indicators looking While early. it's

material assuming we're any So in for OwletXXX both not and BabySat, revenue XXXX.

Lucas Romanski

kind pretty then of terms ask ending international what's 'XX strong the help guidance in growth I you growth of in what Can maybe guys XQ. if and you -- can same in international, assumed XX% saw XXXX and in with a U.S.? maybe us from just in And the understand question

Amanda Crawford

Yes.

a we opportunity So little represent are currently, of bit a international difference so there growth. U.S. in how because look markets of little a between at versus bigger bit a does emerging, still the terms it is just of the international

and international the is equally for So a as international. going more. to expected come growth relative to from international U.S. the is both baseline, proportion grow But

half you would if growth, makes that come the if value from from would international. dollar range, growth that and of come sense, that split the U.S. in So half

Lucas Romanski

you named doing guess I on you Iowa, focusing really had the are specifically. then the obviously, Nebraska guys X in U.S., And out states, well Utah, that

states mouth know guess those an part populated states for states. You the adoption seeing adoption rates? do I and that of guess, attacking see of in populations? more Texas, higher strategy rate higher how word these I -- get to is California, integral Florida we like what's

Kurt Workman

Yes, for sure.

is note is states. to thing adoption biggest these the in think highest the with correlation that the I awareness

So mentioned through the not really in and of levels those reach digital awareness media, awareness it's also the for Owlet. And you social states marketing. X expanding partners about and driving with driving product. And partnerships, highest that engagement states. we're more the each our only we're really influencers, doing in But of credible have

happen every one value think us continue which word month this product we biggest OwletXXX. point of some going of into think lot to tipping that's There's We're this the awareness be year. I to high to of help in going seeing states. states. in turn those that single mouth, already the will driving the is the next with year And more opportunities a

rest here absolutely with As create the of opportunity to that is think onboard, states monitoring a new health a standard the massive. we we category in get of the care

Lucas Romanski

to heavier But as strong to gross up maybe as another mix in Understood. want Obviously, XX% of to Dream guiding saw then the margin on absorption. we I improved well saw Sock, we're nearly And about In fixed cost mix, gross guidance. XX%. XQ, XQ to XX%. question XXXX, ask get margin.

be we're can conservatism? about guess detail down? assuming Or should why margin Is steps I we thinking driving else gross So that delta? you something that largely

Amanda Crawford

Yes. stepping comes XXXX. our around of full had up. year, the is we're looking We at for gross XX% margin, to a year guidance it full margin When it when for actually blended

So guiding for margin seasonality we up. really to bit are as gross of a promotional that's far that our by do for 'XX, go see goes, activity. We quarters percentage and driven as within little our

expecting are to grow we margins So next year.

Lucas Romanski

Understood. And then I guess my back then into last I'll question here, hop and queue. the

You other are progress you having conversations what XX progress payors Can Medicaid now guys Cigna announced us was seeing hear love of states. BabySat. color a progressing. you those kind give Last you're I'd just to noted with making with covering payors? quarter, of types how little maybe on

Jonathan Harris

Yes. great making our well with reimbursement are as their question. really partner, working calling AdaptHealth, working Great team. We're sales their with directly DME strides as hospitals, on that team

where states focused that extremely they're reimbursement. strong really driving really Medicaid we're and on So

success and there, it's and So a process, our in making work strides with but and slow this. push closely partner we're driving on to continuing we're

Operator

Street of the from Haynor with is question next Lake The Markets. Ben line Capital

Benjamin Haynor

bottom at? out other your seen the experience with users, me, firms, First quite that the the exciting. there Is sense a wondering, retention something sounds have could historical just are can I you at or already was on returns do on like Jonathan? you've subscriptions But in [ OwletXXX, of ], where kind daily on off, where what for on early asymptote it active

Jonathan Harris

quite to see a us success. bit Yes, drive of continuing I

far, With quite bit that on we're the subscription. rolled features of we've a engagement so out seeing

later we other with of as So really pediatric and parents building greater for billion into we're itself. year the word investing engagement get that drive that X greater are to that retention. stories start every we year, And in children telehealth can X. care believe parents to share be mouth it spent on really momentum their Also, drives and to in with really extend as address going helping $XX and

on providing our believe will drive which early true of to in days subscription, great we and momentum super year. continue So a value execute the we're against that that

Benjamin Haynor

OwletXXX. way January kicked I the think XX, anything right can about XXth to for launch. think XXth? anecdotal share when And off And since then on progressed the how on marketing the the said that's and XX guess, -- you what's I Jan you that's Or that?

Jonathan Harris

Yes. Really, we at beta a the were January, in before end of that.

of first So We launch, that prior our to was a like users public true launch. that. subset really had

So we're communication. data we're platform starting engaged, we're Owlet itself, value an seeing not pushing marketing active the phases OwletXXX. and Dream fully but and starting -- of really the now this the campaign, the with of we're in-app in driving really overall Sock to out benefits the really And first of only that build with

the So but be positive extremely feedback that to from believe is extend And friends base. initial again, super we early, going and telling to peer value. their user they're our family and group this about

Benjamin Haynor

see or all it early that sudden you you do you then these adoption get the too outside any countries? in just U.S., great. some critical And and in on Europe of a the Or to to, like point you've dynamics of most a the can of adoption in you accelerates? Okay. that have is experiences states, where That's seen mass

Jonathan Harris

but Germany you it's med that saw Getting probably a example. because is the pretty And say the give great like getting just GDP early, a was then I'd clearance I'll we it's Europe. surge know, Germany still strong Germany mark, in throughout the CE as -- market. always you prove-it-to-me. big But strongest Germany, is a CE

which we're great is market, strong GDP, but sign Germany, see which starting is us see to grow beginning us. Europe that's because a Germany, a a for always within Europe in which really strength to throughout continue across really for we're to for been momentum strong good Like newer market So a us. the will strong Northern has U.K.

Benjamin Haynor

had for you developing then the hospitals And and I sorts there last mentioned updates you Any success and think such. have NICUs with progressed? lastly how on quarter, in in the conversations me, those relationships of

Jonathan Harris

Yes. AdaptHealth has NICUs these us helpful into hospitals. in really these getting been

Owlet. recommending that hearing first for the fact, the actually country we're across are from In people their time, physicians

are So or hospital. the Dream NICU get leaving a instructing neonatologists BabySat babies the a are Sock as parents to

is So full that essentially FDA community that gain momentum. again, a continuing of we've clearance, year had through the and out pediatric to and rolling

not other it's families, recommend. just the to the but now or us So neonatologists pediatricians are and starting

sign very us. So for good

Operator

currently Instructions] registered. additional conference at like [Operator time. are waiting now I no to remarks. the this are would for over There back questions There pass no closing questions

Kurt Workman

of I'm that here and our thank execute. Well, continuing Owlet want I outperform proud for can be we today, Yes. really Really team the and glad to to team.

reinforcing medical vision products, standard are recommending We of monitoring baby. witnessing a making Owlet a increasingly for shift of fundamental health our professionals care with every

data look to we our need the want not revolutionize technology detection address only for navigate and earlier outcomes committed believe babies, our way pediatric parents we're transform health the to care. home. to really also will critical we but We are improve telehealth. And at to improved and ahead, leveraging this able As for

thank support. for joining continued you we today, us your So very for are grateful and

Operator

concludes Earnings of you Conference the Owlet and the day. rest That Fourth your Quarter enjoy XXXX Call. participation, for your Thank

Owlet (OWLT) 4 Mar 252024 Q4 Earnings call transcript