Owlet (OWLT) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 58% year-over-year to $20.7 million, driven by strong Dream Sock sales, expanded market access in Europe after CE Medical certification, and increased consumer demand across all channels.

• Gross margin improved to 50% from 40% in Q2 2023, reflecting higher revenue, favorable product mix, and lower direct and fulfillment costs.

• Operating loss narrowed to $2.2 million from $6.7 million in Q2 2023; net loss was $1.1 million, improved from $8.5 million, with adjusted EBITDA turning positive at $0.1 million.

• Record-breaking Amazon Prime event and strong launches in the UK and Europe supported top-line growth; new subscription service and telehealth partnership launched.

• Cash and cash equivalents stood at $15.4 million as of June 30, 2024, with negative cash flows from operations of $6.7 million for the first half of 2024.

Financial highlights

• Q2 2024 net revenue was $20.7 million, up 58% year-over-year; gross billings were $26.9 million, up 59%.

• Gross margin reached 50%, up over 1,000 basis points from Q2 2023.

• Operating loss narrowed to $2.2 million; net loss was $1.1 million; adjusted EBITDA was $0.1 million, a significant improvement from a $4.3 million loss in Q2 2023.

• Net loss attributable to common stockholders for Q2 2024: $2.7 million ($0.30/share), compared to $9.8 million ($1.19/share) in Q2 2023.

• Cash used in operations for H1 2024: $6.7 million, a reduction from $16.8 million used in H1 2023.

Outlook and guidance

• H2 2024 net revenue expected between $37 million and $42 million; gross margins of 46%-50%; adjusted EBITDA loss of $3 million to break even.

• Full-year 2024 net revenue guidance is $72.5 million-$77.5 million, gross margins of 47%-49%, and adjusted EBITDA loss of $6 million-$3 million.

• Management highlights ongoing risks to liquidity and the need for additional financing to support operations and strategic initiatives.

• Anticipates BabySat and subscription product revenue to ramp in 2024 and drive impact in 2025.