Owlet's Q1 2025: Contradictions in Revenue, Margins, and Consumer Behavior

Revenue contribution from new products, gross margin expectations, sales performance and consumer behavior impact, revenue growth and market share opportunities are the key contradictions discussed in Owlet's latest 2025Q1 earnings call.



Strong Financial Performance and Market Share Growth:
- Owlet, Inc. reported revenue of $21.1 million in Q1 2025, up 43% year-over-year, marking the fourth consecutive quarter of breakeven or better adjusted EBITDA.
- The growth was driven by strong execution on growth strategies, leveraging its position as the only FDA and CE cleared infant health monitor, and capturing market share as parents increasingly choose Owlet for infant health and safety.

Dream Sock Sales and International Expansion:
- Owlet's core Dream Sock product saw domestic sell-through growth of 40% compared to Q1 2024, with international revenue growth up 104% year-over-year.
- The strong performance was attributed to a severe cold season with high hospitalization rates, continued strength from Amazon, and expanding market share through international sales channels and new country additions.

Owlet 360 Subscription Launch and Adoption:
- Over 48,000 paying subscribers have joined the Owlet 360 subscription service since its launch.
- The success is driven by the service providing additional tools for infant care at home, improved parent confidence, and aiding in the avoidance of unnecessary healthcare visits by enabling parents to compare their baby's health metrics against a pediatric health database.

Healthcare Channels and Partnerships:
- Owlet announced a new strategic partnership with Children's Hospital of the King's Daughters, enabling infants to leave the hospital with an Owlet monitor for the first time.
- The company is expanding its healthcare channels to offer insurance-reimbursed monitors, supported by the launch of BabySat and Owlet Connect platforms, fulfilling a need for wireless and wearable at-home solutions for high-risk babies.

Tariff Situation and Supply Chain Management:
- Owlet has minimized its exposure to China manufacturing by transitioning production to Vietnam and other countries, reducing risks from recent tariff decisions.
- The company views the current tariff situation as an opportunity to gain market share in the infant health monitoring market, given that many competitors have significant exposure to China manufacturing.