Owlet, Inc. (“Owlet” or the “Company”) (NYSE:OWLT), the pioneer
of smart infant monitoring, today reports financial results for the
third quarter ended September 30, 2024. Owlet’s Chief Executive
Officer and Co-Founder, Kurt Workman, President and Chief Revenue
Officer, Jonathan Harris, and Chief Financial Officer, Amanda Twede
Crawford, will host a conference call to review the Company’s
results and provide a business update today, November 13, 2024, at
4:30 p.m. ET.
Q3 2024 Financial Highlights:
- Q3 Revenue of $22.1 million, up 141% from Q3 2023
- Q3 Gross Margin of 52.2%, up 1,590 basis points from Q3
2023
- Q3 Net Loss of $(5.6) million, compared to $(5.6)
million in Q3 2023
- Q3 Adjusted EBITDA of $0.6 million, improving $6.1
million compared to Q3 2023
“Owlet is demonstrating significant momentum as we delivered
another quarter of strong revenue growth and meaningful margin
expansion,” said Kurt Workman, Owlet’s Chief Executive Officer and
Co-Founder. “We continue to leverage our differentiated infant
monitoring solutions, including FDA approval and CE clearance, to
grow adoption, capture market share, and address the fundamental
needs of parents around the world.”
Workman continued, “In the quarter, we also successfully
completed a follow-on equity offering and comprehensive debt
refinancing, strengthening our balance sheet and supporting
improved operational flexibility as we hit an exciting inflection
point in the business.”
Workman concluded, “The Owlet team is focused on finishing the
year strong, executing on the growth opportunities in our core
products, and capitalizing on the long-term potential for our
BabySat medical offering and Owlet’s subscription service. We
believe Owlet has never been better positioned as a business to
deliver significant value for our customers, partners, and all
stakeholders.”
Financial Results for the Third Quarter Ended September 30,
2024
Revenue for the third quarter of 2024 was $22.1 million compared
to revenue in the third quarter of 2023 of $9.2 million, an
increase of 141%. The increase was primarily due to higher sales of
Dream Sock products, reflecting an increase in consumer demand
across all sales channels as compared to the same period in the
prior year. During the third quarter of 2023, the Company entered
into an arrangement to start selling products directly to
Amazon.com, Inc. under a first-party seller relationship. As a
result, all sell-in revenue related to Amazon from third quarter
2023 was pushed to the fourth quarter of 2023, which impacted third
quarter revenue growth when comparing year-over-year results, and
will impact year-over-year revenue growth in the fourth quarter of
2024.
Cost of revenue for the third quarter of 2024 was $10.6 million
with a gross margin of 52.2%, compared to cost of revenue of $5.9
million with a gross margin of 36.3% for the third quarter of 2023.
Gross margin significantly increased 1,590 basis points
year-over-year primarily due to higher revenue, favorable product
mix toward Dream Sock, the continuing trend of decreasing overall
return rates, lower direct product and fulfillment costs, and fixed
cost absorption.
Operating expenses, including stock-based compensation, were
$16.4 million for the third quarter of 2024, compared to $11.2
million for the same period in 2023. Operating costs increased
year-over-year primarily due to impairment charges related to
intangible assets, higher compensation expense, including accrued
bonuses, severance-related expenses, and stock-based compensation,
as well as higher marketing expenses.
Operating loss was $4.8 million for the third quarter of 2024,
compared to operating loss of $7.9 million for the third quarter of
2023.
Net loss was $5.6 million for the third quarter of 2024,
compared to net loss of $5.6 million for the third quarter of
2023.
In the third quarter of 2024, we recognized a $1.9 million
charge for asset impairment related to internally developed
software, which was recorded within general and administrative
expenses.
Adjusted EBITDA was $0.6 million for the third quarter of 2024,
compared to a loss of $5.5 million for the third quarter of 2023,
an improvement of $6.1 million.
Net loss per share was $(0.61) for the third quarter of 2024,
compared to net loss per share of $(0.84) for the third quarter of
2023. Adjusted net income per share was $0.03 for the third quarter
of 2024, compared to adjusted net income (loss) per share of
$(0.70) for the same period in 2023.
Updated 2024 Financial Outlook
For full year 2024, we now expect net revenue to be in the range
of $74 million to $77.5 million, gross margins of 48% to 49%, and
adjusted EBITDA loss of $(5) million to $(3) million. At the
midpoints, this implies a raise to the full year 2024 outlook we
provided on the second quarter 2024 financial results call.
Conference Call and Webcast Information
Owlet will host a conference call and webcast today, November
13, 2024, at 4:30 p.m. ET to discuss these results and provide a
business update.
Participants may access the call at 833-470-1428 (domestic) or
404-975-4839 (international) and reference Access Code 626609. A
simultaneous webcast may be accessed online at the Events section
of Owlet’s Investor Relations website at investors.owletcare.com. A
replay will be available shortly after the webcast concludes.
About Owlet, Inc.
Owlet’s digital health infant monitoring platform is
transforming the journey of parenting. Owlet, Inc. (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.
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, including the Company’s financial outlook, outlook
based upon regulatory authorizations or product enhancements,
growth prospects, and future operational efficiencies or results
and expected market opportunity and acceptance. 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 the United States, as well as Owlet’s
ability to obtain and maintain regulatory approval or certification
for our products and other regulatory requirements and legal
proceedings; (ii) Owlet’s competition and the Company’s ability to
profitably grow and manage growth; (iii) the Company’s ability to
enhance future operating and financial results or obtain additional
financing to continue as a going concern; (iv) Owlet’s ability to
obtain additional financing in the future, as well risks associated
with the Company’s current loan and debt agreements, including
compliance with debt covenants, restrictions on the Company’s
access to capital, the impact of the Company’s overall debt levels
and the Company’s ability to generate sufficient future cash flows
to meet Owlet’s debt service obligations and operate Owlet’s
business; (v) the ability of Owlet to implement strategic
initiatives, reduce costs, grow revenues, develop and launch new
products, innovate and enhance existing products, meet customer
demands and adapt to changes in consumer preferences and retail
trends; (vi) Owlet’s ability to acquire, defend and protect its
intellectual property and satisfy regulatory requirements,
including but not limited to requirements concerning privacy and
data protection, breaches and loss, as well as other risks
associated with Owlet’s digital platforms and technologies; (vii)
Owlet’s ability to maintain relationships with customers,
manufacturers and suppliers and retain Owlet’s management and key
employees; (viii) Owlet’s ability to upgrade and maintain its
information technology systems; (ix) changes in applicable laws or
regulations; (x) the impact of and disruption to Owlet’s business,
financial condition, operations, supply chain and logistics due to
economic and other conditions beyond the Company’s control, such as
health epidemics or pandemics, macro-economic uncertainties, social
unrest, hostilities, natural disasters or other catastrophic
events; (xi) the possibility that Owlet may be adversely affected
by other economic, business, regulatory, competitive or other
factors, such as changes in discretionary consumer spending and
consumer preferences; and (xii) other risks and uncertainties set
forth in the Company’s other releases, public statements and
filings with the U.S. Securities and Exchange Commission (“SEC”),
including those identified in the “Risk Factors” section of the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, as updated in the Company’s Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2024, as any
such factors may be updated from time to time in the Company’s
other filings with the SEC. All such forward-looking statements
attributable to the Company or any person acting on the Company’s
behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to above. Moreover, the Company
operates in an evolving environment. Except as required by law, the
Company assumes no obligation to update any forward-looking
statements after the date of this press release, whether because of
new information, future events or otherwise, although Owlet may do
so from time to time. The Company does not endorse any projections
regarding future performance that may be made by third parties.
Disclosure Regarding Non-GAAP Financial Measures
In addition to the financial measures presented in this release
in accordance with U.S. Generally Accepted Accounting Principles
(“GAAP”), the Company has included certain non-GAAP financial
measures in this release, including EBITDA, adjusted EBITDA,
adjusted net income (loss) and adjusted net income (loss) per
share.
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 income (loss) and adjusted net income
(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 income (loss) and
adjusted net income (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, intangible asset impairment, restructuring costs,
warrant liability adjustments, gain on loan forgiveness,
stock-based compensation, and transaction costs.
Adjusted net income (loss) is defined as net income (loss)
adjusted for restructuring costs, common stock warrant liability
adjustments, stock-based compensation, transaction costs, and
intangible asset impairment. Adjusted net income (loss) per share
is defined as adjusted net income (loss) divided by the
weighted-average shares of common stock outstanding.
EBITDA, adjusted EBITDA, adjusted net income (loss) and adjusted
net income (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 income (loss) and adjusted net income
(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.
A reconciliation of the Company's guidance with respect to
non-GAAP financial measures to the most directly comparable GAAP
financial measure cannot be provided without unreasonable efforts
and is not provided herein because of the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations, the amounts of which could be material.
Owlet, Inc. Condensed Consolidated
Balance Sheets - Preliminary, Unaudited1 (in millions)
Assets
September 30, 2024
December 31, 2023
Current assets:
Cash and cash equivalents
$
21.5
$
16.6
Restricted Cash
0.3
—
Accounts receivable, net
17.2
14.0
Inventory
10.6
6.5
Prepaid expenses and other current
assets
2.7
2.9
Total current assets
52.3
39.9
Property and equipment, net
0.2
0.4
Right of use assets, net
0.1
0.9
Intangible assets, net
0.9
2.2
Other assets
2.8
0.7
Total assets
$
56.1
$
44.1
Liabilities, Mezzanine Equity, and
Stockholders’ Deficit
Current liabilities:
Accounts payable
$
11.5
$
13.7
Accrued and other expenses
12.4
15.1
Current portion of deferred revenues
1.4
1.2
Line of credit
9.9
9.3
Current portion of long-term debt and
other debt
0.5
5.9
Total current liabilities
35.7
45.1
Long-term debt, net
4.6
—
Common stock warrant liabilities
25.1
27.8
Other long-term liabilities
0.1
0.9
Total liabilities
65.5
73.8
Total mezzanine equity
12.1
7.9
Total stockholders’ deficit
(21.5
)
(37.5
)
Total liabilities, mezzanine equity, and
stockholders’ deficit
$
56.1
$
44.1
1 Amounts may not sum due to rounding
Owlet, Inc. Condensed Consolidated
Statements of Cash Flows - Preliminary, Unaudited1 (in
millions)
Nine Months Ended September
30,
2024
2023
Net cash used in operating activities
(14.5
)
(22.0
)
Net cash used in investing activities
(0.7
)
—
Net cash provided by financing
activities
20.6
25.9
Net change in cash, cash equivalents, and
restricted cash
5.3
3.9
1 Amounts may not sum due to rounding
Owlet, Inc. Condensed Consolidated
Statements of Operations and Comprehensive Income (Loss) -
Preliminary, Unaudited1 (in millions, except share and per
share amounts)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Revenues
$
22.1
$
9.2
$
57.6
$
33.0
Cost of revenues
10.6
5.9
29.2
20.3
Gross profit
11.5
3.3
28.3
12.7
Operating expenses:
General and administrative
9.8
5.4
22.1
20.4
Sales and marketing
4.0
3.3
11.8
9.8
Research and development
2.6
2.4
7.3
8.1
Total operating expenses
16.4
11.2
41.2
38.3
Operating loss
(4.8
)
(7.9
)
(12.8
)
(25.6
)
Other income (expense):
Interest income (expense), net
(0.1
)
(0.1
)
(0.3
)
(3.0
)
Common stock warrant liability
adjustment
(0.7
)
2.4
9.5
2.7
Other income (expense), net
—
—
0.1
(0.1
)
Total other income (expense), net
(0.8
)
2.2
9.4
(0.4
)
Loss before income tax provision
(5.6
)
(5.6
)
(3.5
)
(26.0
)
Income tax provision
—
—
—
—
Net loss and comprehensive loss
(5.6
)
(5.6
)
(3.5
)
(26.0
)
Accretion on convertible preferred
stock
(1.2
)
(1.3
)
(4.1
)
(3.3
)
Accretion on redeemable common stock
—
—
—
—
Allocation of net loss attributable to
redeemable common stockholders
0.1
—
—
—
Net loss attributable to common
stockholders
(6.8
)
(7.0
)
(7.5
)
(29.3
)
Net loss per share attributable to common
stockholders, basic and diluted
$
(0.61
)
$
(0.84
)
$
(0.79
)
$
(3.56
)
Weighted-average number of shares
outstanding used to compute net loss per share attributable to
common stockholders, basic and diluted
11,042,602
8,310,965
9,555,467
8,212,268
Net loss per share attributable to
redeemable common stockholders, basic and diluted
$
(0.57
)
$
—
$
(0.66
)
$
—
Weighted-average number of shares
outstanding used to compute net loss per share attributable to
redeemable common stockholders, basic and diluted
122,283
—
41,058
—
1 Amounts may not sum due to rounding
Owlet, Inc. Reconciliation of GAAP to
Non-GAAP Measures - Preliminary, Unaudited1 (in millions)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
GAAP net Loss
$
(5.6
)
$
(5.6
)
$
(3.5
)
$
(26.0
)
Income tax provision
—
—
—
—
Interest expense, net
0.1
0.1
0.3
3.0
Depreciation and amortization
0.1
0.2
0.3
0.7
Impairment of intangible assets related to
internally developed software
$
1.9
$
—
$
1.9
$
—
Non-GAAP EBITDA
$
(3.5
)
$
(5.3
)
$
(1.0
)
$
(22.3
)
Common stock warrant liability
adjustment
$
0.7
$
(2.4
)
$
(9.5
)
$
(2.7
)
Stock-based compensation
2.7
2.2
7.0
7.6
Transaction costs
—
—
0.4
1.7
Restructuring costs
$
0.7
$
—
$
0.7
$
—
Non-GAAP Adjusted EBITDA
$
0.6
$
(5.5
)
$
(2.4
)
$
(15.6
)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
GAAP net loss
$
(5.6
)
$
(5.6
)
$
(3.5
)
$
(26.0
)
Non-GAAP Adjustments:
Common stock warrant liability
adjustment
0.7
(2.4
)
(9.5
)
(2.7
)
Stock-based compensation
2.7
2.2
7.0
7.6
Transaction costs
—
—
0.4
1.7
Impairment of intangible assets related to
internally developed software
$
1.9
$
—
$
1.9
$
—
Restructuring costs
$
0.7
$
—
$
0.7
$
—
Non-GAAP adjusted net income (loss)
$
0.4
$
(5.8
)
$
(3.0
)
$
(19.3
)
Non-GAAP adjusted net income (loss) per
share
$
0.03
$
(0.70
)
$
(0.31
)
$
(2.35
)
Weighted average number of shares
outstanding
11,042,602
8,310,965
9,555,467
8,212,268
1 Amounts may not sum due to rounding
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version on businesswire.com: https://www.businesswire.com/news/home/20241113988770/en/
Investor Relations: ir@owletcare.com
Media: pr@owletcare.com
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