Owlet (OWLT) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $22.5 million, up 6.4% year-over-year, driven by strong subscription growth and offset by a decline in hardware sales.

• Subscription revenue hit a record $2.7 million, with over 115,000 paying subscribers and monthly recurring revenue surpassing $1 million.

• Gross margin improved to 54.5%, up 80 basis points year-over-year despite tariff impacts.

• Net loss was $3.3 million, reversing from net income in Q1 2025, due to higher operating expenses and legal costs.

• Leadership transition occurred in April 2026, with Kurt Workman resuming the CEO role to drive strategic focus and growth.

Financial highlights

• Q1 2026 revenue was $22.5 million, with subscription revenue at $2.7 million and hardware revenue at $19.8 million.

• Subscription gross margin was 67.4%; overall gross margin was 54.5%.

• Operating expenses rose to $17.7 million, or 79% of revenue, mainly due to compensation and headcount.

• Q1 operating loss was $5.5 million; net loss was $3.3 million; adjusted EBITDA was $(1.5) million.

• Cash and cash equivalents stood at $35.5 million at quarter-end; net cash used in operating activities was $5.0 million.

Outlook and guidance

• 2026 revenue guidance revised to $118–$122 million (12–15% growth), down from $126–$130 million.

• Adjusted EBITDA guidance raised to $7–$9 million (250–350% growth), up from $3–$5 million.

• Gross margin expected at 50–52% for 2026; tariff baseline set at 15% for the year.

• Management believes current liquidity is sufficient for at least the next 12 months.

• Revenue outlook reflects exit from lower-margin channels and conservative sell-through assumptions.