Q1 2024 Owlet Inc Earnings Call

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Cameron: Thank you for attending the Owlet first quarter 2024 earnings call. My name is Cameron, and I will be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. And I would now like to pass the conference over to your host, Mike Cavanaugh, Investor Relations. You may proceed.

Cameron: Good afternoon. Thank you for attending the outlet first quarter 2024 earnings call. My name is Cameron and I will be your moderator for today all lines will be muted during the presentation presentation portion of the call with an opportunity for questions and answers at the end and I would now like to pass the conference over to your host Mike Cavanaugh.

Mike Cavanaugh: Mr Relations you May proceed.

Mike Cavanaugh: Good afternoon, everyone. Thank you for joining us today for Owlet Baby Care Incorporated's first quarter 2024 earnings call. We appreciate your time and interest in our company. Earlier today, Owlet Incorporated released financial results for the quarter and full year ended March 30, 2024, which are currently available on the company's website at www.investors.owletcare.com. Our speakers for today's call are Kurt Workman, Owlet's co-founder and chief executive officer, and Kate Scolnick, our chief financial officer. Kurt will begin with an overview of our performance and key developments, followed by Kate, who will provide a detailed review of our financial results.

Mike Cavanaugh: Good afternoon, everyone and thank you for joining us today for outlet Baby care Incorporated's first quarter 2024 earnings call.

Mike Cavanaugh: We appreciate your time and interest in our company.

Earlier today I'll, let incorporated released financial results for the quarter and full year ended March 32024.

Mike Cavanaugh: Or at least is currently available on the company's website at www dot investors that I'll, let care dot com.

Mike Cavanaugh: Our speakers for today's call are Curt Workman outlets co founder and Chief Executive Officer, and Kate Skolnick, Our Chief Financial Officer.

Kathryn R. Scolnick: Kurt will begin with an overview of our performance and key developments followed by <unk>, who will provide a detailed review of our financial results.

Kathryn R. Scolnick: Following their remarks, we will open the call for your questions.

Mike Cavanaugh: Following their remarks, we will open the call for your questions. Before we get started, we would like to remind participants that today's discussion will contain forward-looking statements based on current expectations. These statements are only predictions and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, but are not limited to, those described in our most recent filings with the SEC and in the risk factors section of our annual report on Form 10-K for the fiscal year ended December 31, 2024.

Speaker Change: Before we get started we would like to remind participants that today's discussion will contain forward looking statements based on current expectations.

Speaker Change: These statements are only predictions and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Speaker Change: These risks and uncertainties include but are not limited to those described in our most recent filings with the SEC and in the risk factors section of our annual report on Form 10-K for the fiscal year ended December 31 2024.

Mike Cavanaugh: Please note that the company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. With that said, I would now like to turn the call over to our CEO, Kurt Workman.

Speaker Change: Please note that the company assumes no obligation to update any forward looking statements, whether as a result of new information future events or otherwise except as required by law.

Speaker Change: With that I would now like to turn the call over to our CEO Kurt Workman.

Kurt Workman: Thanks, Mike. And also joining us on today's call is Jonathan Harris, Owlet's President and Chief Revenue Officer. Good afternoon, everyone, and thank you for joining Owlet's earnings call today. As always, we appreciate your ongoing support of Owlet.

Kurt Workman: Thanks, Mike and also joining us on today's call is Jonathan Harris, <unk>, President and Chief revenue Officer.

Good afternoon, everyone and thank you for joining Alex earnings call today.

Kurt Workman: We're starting off the year with strong double-digit revenue and sell-through growth, gross margin expansion, significant operating cost savings, and adjusted EBITDA improvement over last year. In addition to our significant Q1 operational achievements, we met our business objectives in our healthcare business as we launched our go-to-market channels to include medical device sales and have now integrated our first telehealth partnerships with Wheel on OwletCare.com. Our recent announcement of CE medical authorization in Europe, in addition to the recent FDA clearances, is a powerful endorsement of our technology, establishing Owlet as a leader in safe and effective health monitoring for infants.

Kurt Workman: As always we appreciate your ongoing support of outlet, we're starting off the year with strong double digit revenue and sell through growth.

Jonathan Harris: Gross margin expansion significant operating cost savings and adjusted EBITDA improvement over last year.

Jonathan Harris: In addition to our significant Q1 operational achievements, we met our business objectives, and our health care business as we launched our go to market channels to include medical device sales have now integrated our first telehealth partnerships with wheel on outlet care dot com or.

Jonathan Harris: Our recent announcement of CE medical authorization in Europe. In addition to the recent FDA clearances are a powerful endorsement of our technology, establishing <unk> as the leader in safe and effective health monitoring right.

Kurt Workman: There's robust and discernible momentum for Owlet in the market. We believe this year is the turning point, propelling us to our vision of a safe and healthy journey for every baby and a sustainable growth company. In 2024, we have three main growth objectives.

There is robust and discernible momentum for outlet in the market. We believe this year is the turning point propelling us to our vision of a safe and healthy journey for every baby and a sustainable growth company in 2024, we have three main growth objectives.

Kurt Workman: First, with the first FDA-cleared monitor on the market, now is the time to drive significant adoption of the DreamSock. Second, with the approval of BabySat, we are opening medical distribution channels to directly serve the babies who need the convenience and reliability of Owlet the very most, with insurance reimbursable. Finally, we will be launching our new subscription service this year, leveraging our vast and growing data set to help guide parents through the health and sleep challenges they face when caring for their newborn. I'll turn the time over to Jonathan Harris, our President and Chief Revenue Officer, to talk about the first two areas of focus for 2024, accelerating adoption in our new medical sales channel.

Jonathan Harris: First with the first FDA cleared monitor on the market now is the time to drive significant adoption of the dreams dock second with the approval of babies that were opening medical distribution channel to directly serve the babies, who need the convenience and reliability at all at the very most with insurance reimbursement.

Jonathan Harris: Finally, we will be launching our new subscription service this year, leveraging our vast and growing data set to help guide parents through health and fleet challenges they face when carrying for their newborn all.

Jonathan Harris: Turn the time over to Jonathan Harris, our President and Chief revenue Officer to talk about the first two areas of focus for 2020 for accelerating adoption and our new medical sales channels.

Jonathan Harris: Thanks Kurt.

Jonathan Harris: I've been fortunate enough to be a part of numerous hyper-growth companies, such as GoPro and Jopo, and some of the key parallels I'm seeing with Owlet are the passion for the brand by the core audience and a strong word of mouth sharing their stories with the global audience. And, as Kurt just mentioned, we have some really strong momentum building, not only in the U.S., but across the globe. I'd like to start with adoption.

Jonathan Harris: I've been fortunate enough to be a part of numerous hyper growth companies, such as gopro and job home.

Jonathan Harris: Some of the key parallels I'm seeing with outlet or the passion for the brand by the core audience and a strong word of mouth sharing their stories with a global audience.

Jonathan Harris: And as Curt just mentioned, we have some really strong momentum building not only in the U S but across the globe.

Jonathan Harris: I'd like to start with adoption. The response to the new FDA cleared dream stock here in the U S has been outstanding we've witnessed strong parental engagement with over 30 million organic views of our video content across tick tock and Facebook in the first quarter and over $1 3 million followers across our social channels the early risk.

Jonathan Harris: The response to the new FDA-cleared DreamSock here in the U.S. has been outstanding. We've written a strong parental engagement story with over 30 million organic views of our video content across TikTok and Facebook in the first quarter and over 1.3 million followers across our social channels. The early response to the FDA clearance of DreamSock has been strong, with sales through achieving over 60% growth compared to Q1 of 2023. Customer satisfaction supports this growth, with NPS scores exceeding 70 and DreamSock hitting an all-time high in this category.

Jonathan Harris: Bonds to the FDA clearance of <unk> stock has been strong with sell through achieving over 60% growth compared to Q1 of 2023.

Jonathan Harris: Satisfaction supports this growth with NPS scores exceeding 70 and dreams stock hitting an all time high in this category.

Jonathan Harris: We achieved this market enthusiasm while maintaining a strong growth trajectory, including 50% gross billings growth and 35% revenue growth over Q1 last year. Here in the U.S., our partnerships with major retailers, Target and Walmart, are growing with expanded merchandising and placements to bring the Owlet experience to life. Specifically, we are seeing cell-through-it targets increase by over 31% year-over-year, and our baby list registries grew at over 64% versus the previous year, proving our messaging is resonating with expecting parents. Owlet is still in the beginning stages of growth for Dream Sock, with about 8% of the 3.6 million birds every year going home with an Owlet sock.

Jonathan Harris: We achieved this market enthusiasm, while maintaining strong growth trajectory.

Jonathan Harris: <unk>, 50% gross billings growth and 35% revenue growth over Q1 last year.

Jonathan Harris: Here in the U S. Our partnerships with major retailers target and Walmart are growing with expanded merchandising and placements to bring the outlet experience to life.

Jonathan Harris: Specifically, we are seeing sell through at target increase by over 31% year over year and our baby list registries grew at over 64% versus the previous year proving our messaging is resonating with expecting parents.

Jonathan Harris: It's still in the beginning stages of growth for Dream Socked with about 8% of the $3 6 million births every year going home with and I'll, let sok <unk>.

Jonathan Harris: We believe that just like car seats, breast pumps, and strollers, every baby will have access to health sensing technology at home. I'm also very excited to announce that we recently obtained CE Medical Clearance. Clearing the way for Owlet to increase reach in this significant European market where over 3.8 million babies are born every year. Owlet is extremely well positioned to take advantage of our EU clearance with key retail partnerships across the European market, the UK, and into Australia, where we're already seeing sell-through increase significantly.

Jonathan Harris: We believe that just like car seats breast pumps and strollers every baby will have access to health sensing technology at home.

Jonathan Harris: I'm also very excited to announce that we recently obtained CE medical clearance.

Jonathan Harris: The way for outlet to increase reach and the significant European market, where over three 8 million babies are born every year. Although it is extremely well positioned to take advantage of our EU clearance with key retail partnerships across the European market U K and into Australia, where we are already seeing sell through up significantly.

Jonathan Harris: For example, baby bunting, Australia's largest baby retailer, saw a year-over-year sell-through increase of over 200% for Owlet products. Our partners are helping us share our story globally, within their markets, and in their own languages. We expect continued growth and momentum as we launch DreamSock as a medical device across these regions. This exciting growth opportunity comes on the back of continued operations. In 2023, we honed our efficiency, showing an impressive near 80% reduction in CPA, cost per acquisition, compared to prior periods, down to a lean $22. This efficiency extends throughout operations, improving our gross margin by 500 basis points over Q1 2023. We've also maintained disciplined control over operating expenses, holding steady at roughly $10 million per quarter, excluding stock-based compensation.

Jonathan Harris: For example, baby Bunting, Australia's largest baby retailer, we saw year over year sell through increase of over 200% of outlet products.

Our partners are helping us share our story globally within their markets and then their own languages. We expect continued growth and momentum as we launched dream stock as a medical device across these regions.

Jonathan Harris: This exciting growth opportunity comes on the back of continuing operating discipline in 2023 honed our efficiency showing the impressive near 80% reduction in CPA cost per acquisition compared to prior periods down to a lean $22. This efficiency extends throughout operations improving our <unk>.

Jonathan Harris: <unk> margin by 500 basis points over Q1 2023.

Jonathan Harris: We've also maintained disciplined control over operating expenses holding steady at roughly $10 million per quarter, excluding stock based compensation.

Jonathan Harris: All of this demonstrates our commitment to maximizing growth while moving decisively towards profitability. Secondly, opening new medical channels. In a similar vein, the response of pediatricians to Owlet's babysat has also been overwhelmingly positive. In the first three months, we've seen hundreds of pediatricians prescribing BabySat. The feedback we are receiving from doctors tells us that BabySat is a powerful new tool which enables not only remote monitoring of babies under their care but also informs more effective ongoing disease management of various conditions. We launched our partnership with AdaptHealth and Q1 to expand our distribution and medical challenge. ADAPT serves as a cornerstone for successfully entering this vital market.

Jonathan Harris: All of this demonstrates our commitment to maximizing growth, while moving decisively towards profitability.

Jonathan Harris: Secondly, opening new medical channels.

Jonathan Harris: Similar vein the response to pediatricians to outlets Babysat has also been overwhelmingly positive and the first three months, we've seen hundreds of pediatricians prescribing babysat the.

Jonathan Harris: The feedback we are receiving from Doctor tells us that babysat is a powerful new tool, which enables not only remote monitoring of babies under their care, but also informs more effective ongoing disease management of various conditions.

Jonathan Harris: We launched our partnership with adapt health in Q1 to expand our distribution and medical channels.

Jonathan Harris: Adapt serves as a cornerstone for successfully entering this vital market, we've integrated with all major insurance plans, including Aetna Cigna, United and many of the Blue Cross networks.

Kurt Workman: We've integrated with all major insurance plans, including Aetna, Cigna, United, and many of the Blue Cross networks, removing barriers and ensuring families can access BabySat when they need it most. We're also streamlining adoption through partnerships with providers like Wheel, offering telehealth services directly through OwletCare.com for prescription access. Parents can now seamlessly get a prescription and submit for reimbursement through the Owlet website, with nearly 70% of private insurers integrated with BabySat. AdaptHealth then handles all the verification and fulfillment of the BabySat device as a nationwide DMV.

Moving barriers and ensuring families can access babysat when they need it most.

Jonathan Harris: We're also streamlining adoption through partnerships with providers like wheel offering telehealth services directly through outlet care Dot com for prescription access parents can now seamlessly get a prescription and submit for reimbursement through the outlet website with nearly 70% of private insurers integrated with babysat.

Adapt held then handles all the verification and fulfillment of the babysat device as a national nationwide.

Kurt Workman: We've also begun educational teach-ins to adapt our large sales force with relationships across over 100. We expect this channel will take some time to mature, but we see this as a very large opportunity to offer families with medical necessity our innovative technology reimbursed through insurance. In 2024, we'll continue to add new distribution partners to help us reach every baby as they leave the hospital. I'll now turn it back over to Kurt to talk about our product development efforts with subscriptions.

Jonathan Harris: We've also begun educational teach ins to adapt large sales force with relationships across over 100 hospitals we.

Jonathan Harris: We expect this channel will take some time to mature, but we see this as a very large opportunity to offer the families with medical necessity, our innovative technology reimbursed through insurance in 2024 will continue to add new distribution partners to help us reach every baby as they leave the hospital.

Jonathan Harris: I'll now turn it back over to Curt to talk about our product development efforts with subscription.

Kurt Workman: Thanks, Jonathan.

Kurt Workman: In addition to our channel expansion, we're also focused on driving additional value to our customers through a new subscription service. Our unparalleled data set, informed by capturing over a trillion baby heartbeats, provides deep insights into infant health and sleep, and we're unlocking its potential. Parents lose over 44 nights of sleep in the first year alone, and there are over 92 million healthcare visits for kids zero to four years old. When navigating these challenges, parents want to know what's normal and when they need to get professional support.

Kurt Workman: <unk> to our channel expansion, we're also focused on driving additional value to our customers through a new subscription service.

Kurt Workman: Unparallel dataset informed by capturing over a trillion baby heartbeats provide deep insights into infant health and fleet and we are unlocking potential parents lose over 44 nights of sleep in the first year alone and Theres over $92 million health care visits for kids zero to four years old when navigating these challenges parents want to know what's normal.

Kurt Workman: Parents want access to information that can help them better navigate when to visit the doctor and when to stay home, and they want the ability to seamlessly share that information with a doctor from the comfort of their home. They also want information that can help them personalize sleep coaching for their baby. Health and sleep are the fundamental concerns of every parent.

Kurt Workman: And when they need to get professional support.

Kurt Workman: Parents want access to information that can help them better navigate when to visit the doctor and window stay home and they want the ability to seamlessly share that information to a doctor from the comfort of their home.

They also want information that can help them personalized sleep coaching for their baby.

Kurt Workman: Health and sleep are the fundamental concerns of every parent power.

Kurt Workman: Our subscription service will analyze this data to offer parents personalized recommendations and support. Engineering work on the service is progressing rapidly, and we expect a beta launch this summer that parents can subscribe to for an additional monthly fee. We believe this subscription will address real pain points for families, creating a compelling and valuable monthly office. Apart from offering data and insights to parents during the initial year of their child's life, we firmly believe that our products and services can extend their value well into the toddler years and beyond.

Kurt Workman: Our subscription service will analyze this data to offer parents personalized recommendations and support.

Kurt Workman: Engineering work on the service is progressing rapidly and we expect the beta launch this summer that parents can subscribe to for an additional monthly fee. We believe this subscription will address real pain points for families, creating a compelling and valuable monthly offering.

Kurt Workman: Apart from offering data and insights to parents during the initial year of their child's life, we firmly believe that our products and services can extend their value well into the toddler years and beyond by focusing on core parenting pain points in health and sleep and leveraging our data to drive continued releases of software features we believe this can expand our Tam and significantly extend our L.

Kurt Workman: By focusing on core parenting pain points and health and sleep and leveraging our data to drive continued releases of software features, we believe this can expand our TAM and significantly extend our LTV for customers. Owlet is in a stronger position than ever.

<unk> per customer.

Kurt Workman: Ill, let us in a stronger position than ever we're a growth oriented company operating efficiently and bring innovative solutions that address the fundamental needs of parents with our landmark FDA clearances were established as a pioneer in infant health technology. This unique set of circumstances has the company poised for success and we continue to deliver value for our families.

Kurt Workman: We're a growth-oriented company operating efficiently and bringing innovative solutions that address the fundamental needs of parents. With our landmark FDA clearances, we're established as a pioneer in infant health technology. This unique set of circumstances has the company poised for success, and we continue to deliver value for our families and stakeholders alike. Thank you. We're excited to share this incredible journey with you. I'm now gonna turn the time over to Kate for the financials.

And stakeholders alike.

Kurt Workman: We're excited to share this incredible journey with you I'm now going to turn the time over to Kate for the financials.

Kathryn R. Scolnick: Thank you, Kurt, and thanks to everyone joining us today. In Q1 2024, Owlet demonstrated strong financial performance. I'll spend the next few minutes walking through Owlet's key financial metrics and providing some additional detail. Gross billings for the first quarter were approximately $18.4 million, up over 48% year-over-year. Product promotions and discounts were $2.2 million, and Returns and Allowance Reserves were $1.4 million, approximately 8% of gross billings within our average, which includes promotions, discounts, and returns and allowances of approximately $14.8 million, up over 37% year-over-year. Revenue growth was primarily driven by higher sales of DreamTack products, reflecting an increase in consumer demand and sell through as compared to the same period in the prior year.

Kathryn R. Scolnick: Thank you Karen and thanks to everyone joining us today.

Kathryn R. Scolnick: <unk> 2024, I'll, let demonstrated strong financial performance.

Kathryn R. Scolnick: Our gross margin for the first quarter was approximately 44.4%, from 38.7% in Q1 of last year. Gross margins increased year-over-year, primarily due to higher revenue and lower direct product and fulfillment costs. During the quarter, we experienced some cost-to-debt expense impact from elevated transportation costs related to the global disruptions in inventory routing. Along with other companies seeking shipping alternatives, we're working to mitigate these factors. Operating expenses in the first quarter were approximately $12.3 million, including stock-based compensation of $2.2 million, representing a 19% decrease in operating expenses year-over-year. Operating costs decrease every year primarily due to transaction costs and lower spend on G&A to support the business, schooling, and stock-based compensation. Q1 operating expenses were approximately $10.1 million.

Kathryn R. Scolnick: I'll spend the next few minutes walking through I'll, let key financial metrics and providing some additional detail.

Kathryn R. Scolnick: Gross billings for the first quarter were approximately $18 4 million up over 28% year over year.

Kathryn R. Scolnick: Product promotions and discounts for $2 2 million.

Kathryn R. Scolnick: And returns and allowance reserves for $1 4 million approximately 8% of gross billing with our average range.

Kathryn R. Scolnick: Q1, net revenue, which includes promotion discounts and returns and allowances was approximately $14 8 million up over 37% year over year.

Kathryn R. Scolnick: Revenue growth was primarily driven by higher sales of <unk> products, reflecting an increase in consumer demand and sell through as compared to the same period in the prior year.

Kathryn R. Scolnick: Our gross margin for the first quarter was approximately 44, 4% from.

Kathryn R. Scolnick: From 38, 7% margin in Q1 of last year.

Kathryn R. Scolnick: Gross margins increased year over year, primarily due to higher revenue and lower direct product inputs on that car.

Kathryn R. Scolnick: During the quarter, we experienced some cost of debt expense impact from elevated transportation costs related to the global disruptions inventory routing.

Kathryn R. Scolnick: Along with other companies seeking shipping alternatives for working to mitigate these factors.

Kathryn R. Scolnick: Operating expenses in the first quarter were approximately $12 3 million, including stock based compensation were $2 2 million.

Kathryn R. Scolnick: Presenting a 19% decrease in operating expenses year over year.

Kathryn R. Scolnick: Operating cost decrease year over year, primarily due to transaction costs and lower spend on G&A to support the business.

Kathryn R. Scolnick: Excluding stock based compensation in Q1 operating expenses were approximately $10 1 million.

Kathryn R. Scolnick: First quarter net income was approximately $3.3 million for the quarter compared to a net income loss of approximately $11.9 million in Q1 2023. That income in the first quarter of 2024 was primarily driven by demonstrating stronger operating results over last year and a gain related to the company's common stock warrants outstanding of approximately $9.2 million from a decrease in the fair value of common stock warrants outstanding. This compares to a gain of approximately $1.9 million in the fair value of common stock warrants outstanding in the first quarter of 2023.

Kathryn R. Scolnick: First quarter net income was approximately $3 3 million for the quarter compared to a net income loss.

Kathryn R. Scolnick: Approximately $11 9 million in Q1 2023.

Kathryn R. Scolnick: Net income in the first quarter of 2024 was primarily driven.

Kathryn R. Scolnick: Turning stronger operating results over last year, and a gain related to the companys common stock warrants outstanding of approximately $9 2 million from decrease in the fair value of common stock warrants outstanding.

Kathryn R. Scolnick: This compared to a gain of approximately $1 9 million in the fair value of common stock warrants outstanding in the first quarter of 2023.

Kathryn R. Scolnick: The adjusted EBITDA loss for the first quarter was approximately $3.1 million, improving by approximately 46% from an adjusted EBITDA loss of approximately $5.8 million in Q1 of last year. Turning to the balance sheet, Q1 ended with approximately $18.4 million in cash and cash equivalents, including the $9 million financing announced in February. For being here with good financial flexibility to execute on our 2024 growth initiative and the necessary working capital resources to meet the growing customer demand for FDA cleared products. We remain focused on executing on our strategic initiatives to further strengthen our commercial and financial performance in 2024, and yours off to a strong start.

Kathryn R. Scolnick: Adjusted EBITDA loss for the first quarter was approximately $3 1 million improving approximately 46% from adjusted EBITDA loss of approximately $5 8 million in Q1 of last year.

Kathryn R. Scolnick: Turning to the balance sheet Q1 ended with approximately $18 4 million in cash and cash equivalents.

Kathryn R. Scolnick: Including the $9 million financing announced in February.

Kathryn R. Scolnick: For being there with good financial flexibility to execute on our 2020 core across initiatives.

And then the necessary working capital resources to meet the growing customer demand for FDA cleared products.

Kathryn R. Scolnick: <unk> focused on executing on our strategic initiatives to further strengthen our commercial and financial performance in 2024 and.

Kathryn R. Scolnick: In the year's off to a strong start.

Kathryn R. Scolnick: Looking ahead, we will be refraining from providing specific quarterly revenue guidance. Instead, we are focused on executing on the core business activities in 2024 that will maximize the following initiatives, supporting dream product commercialization globally and driving a continual balance of sell-in and sell-through consumer retail inventory. From a sell-in linearity perspective, we anticipate a seasonal sell-in revenue increase from Q1 to Q2 for Mother's Day holiday promotions and Prime Day. Following Q2, sell-in to retailers for the November-December holiday seasonal promotions usually takes place in Q3, continuing to make strides in baby sack commercialization with new D&E partnerships and Wheel Integration on OwletCare.com.

Kathryn R. Scolnick: Looking ahead, we will be refraining from providing specific quarterly revenue guidance.

Kathryn R. Scolnick: We are focused on executing on the core business activities in 2024 that will maximize the following initiatives.

Appointing dream chronic commercialization globally, and driving continuous balance sell in and sell through our consumer retail inventory.

Kathryn R. Scolnick: From a selling linearity perspective, we anticipate a seasonal sell in revenue increase.

Kathryn R. Scolnick: Q1 to Q2 for mother's day holiday promotions in Prime day. Thank.

Kathryn R. Scolnick: Q2, selling to retailers for the November December holiday seasonal promotions, you usually take place in Q3.

Kathryn R. Scolnick: Continuing to make excellent strides and babysat commercialization with new Danny partnership.

And we'll integration on I'll, let care Dot com.

Kathryn R. Scolnick: As a reminder, we anticipate Baby Step product revenue will be ramping in 2024 as we develop these partnerships and will align for revenue impact in 2025, focusing operationally on driving growth margins within our target range of 45 to 50% through unit volume, product mix, and operational efficiency and driving leverage in our business operations towards breakeven and sustainable profitability. Through 2024, we are targeting operating expenses, excluding stock-based compensation, between 10 to 12 million per quarter. With that, I'll turn the call over to the Q&A portion. Operator, please open up the call for questions.

Kathryn R. Scolnick: As a reminder, we anticipate babysat product revenue will be ramping in 2024 as we develop these partnerships and mono line for revenue impact in 2025.

Kathryn R. Scolnick: Focusing operationally on driving gross margins within our target range of 45% to 50% to unit volume product mix and operational efficiencies.

Kathryn R. Scolnick: And driving leverage in our business operations towards breakeven and sustainable profitability.

Kathryn R. Scolnick: 2024, we are targeting operating expenses, excluding stock based compensation between $10 million to $12 million per quarter.

Speaker Change: With that I'll turn the call over to the Q&A portion.

Greater please open up the call for questions.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If, for any reason, you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. And as a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question, and we will pause here briefly as questions are registered. And the first question is from the line of Charles Rhyee with T.D. Cohen. You may proceed.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star followed by 100 your telephone keypad.

Greater: Any reason you would like to remove that question. Please press star followed by two again to ask a question press Star one and as a reminder, if you were using a speaker phone. Please remember to pick up your handset before asking your question and we will pause briefly as questions are registered.

Greater: And the first question is from the line of Charles <unk> with TD Cowen You May proceed.

Charles Rhyee: Yeah, thanks for taking the questions. Hey, I wanted to talk about the court itself, you know, obviously... You know, the gross billions growth, 50%. You know, it sounds very strong. Just curious; obviously, we're kind of coming off sort of depressed levels. If you were to compare that to levels prior to the empty warning letter, how would that compare? I'm just trying to get a sense of whether we are back to pre-warning letter levels yet.

Charles: Yes, thanks for taking the questions.

Charles: Okay.

Charles: Good to talk.

About the quarter itself obviously.

Charles: The gross gross billings growth 50%.

Charles: So it sounds very strong just curious obviously, we're kind of coming off sort of depressed levels. If you were to compare that to <unk>.

Charles: <unk> prior to the FDA warning letter.

Charles: How would that compare I'm just trying to get a sense on are we back to pre pre warning level letter levels yet.

Kurt Workman: I think we're getting really close, Charles. Thanks for the question.

Speaker Change: They were getting really close Charles Thanks for the question and I'll, let Jay kind of follow on with this but yes, we're getting we're getting closer to that I definitely wouldn't take Q1 as all the way back to.

Kurt Workman: And I'll let Kate kind of follow on with this. But yeah, we're getting closer to that. I definitely wouldn't say Q1 is all the way back to smart stock levels, but we're seeing the demand, the demand there, and we're seeing the growth, and we believe that we'll be able to surpass that. But we're not quite there yet.

Speaker Change: Smart stock levels, but we're seeing the demand.

Jay: The demands there we're seeing the growth and we believe that we will be able to surpass that.

Jay: But we're not quite there yet.

Kathryn R. Scolnick: Yeah, I agree with Kurt's comment too. And, yeah.

Jay: Yes, I agree with Craig's comment too.

Jay: Yes, great.

Kathryn R. Scolnick: And part of that, Charles, is that we're doing a lot of work.

Speaker Change: Yeah Yeah.

Speaker Change: Hey, guys.

Speaker Change: We're doing a lot of work.

Kathryn R. Scolnick: I was going to say, we're doing a lot of work to build word of mouth this quarter. It's kind of like, we launched both devices at the beginning of Q1 and have done a ton of work to build demand and word of mouth in the market, and we're seeing that really take hold.

Speaker Change: I was going to say, we're doing a lot of work to build the word of mouth.

Speaker Change: This quarter, it's kind of relaunched both devices at the beginning of Q1 and have done a ton of work to build demand and word of mouth in the market and we're seeing that really take hold we're building the medical distribution channels, we are updating PLP and all the retail channels. We are updating our registry programs, we're seeing registries grow so all the all the time.

Kathryn R. Scolnick: We're building the medical distribution channels. We're updating POP and all the retail channels. We're updating our registry programs. We're seeing registries grow. So all the signs point in the right direction. And this is our first quarter kind of back in the market with now the FDA.

Speaker Change: <unk> point in the right direction and this is our first quarter kind of back in the market with now the FDA clearance.

Speaker Change: Got it.

Kathryn R. Scolnick: And I guess maybe on the Babysat side, it's good to hear sort of the positive commentary on Babysat from physicians already looking to prescribe it. Maybe talk a little bit about your DME partnership with Adapthealth here. Is that fully up and running then? Are physicians able to get access to the product?

Speaker Change: And I guess, maybe on the <unk> side, it's good to hear sort of the positive commentary on <unk> and physicians already looking to prescribe.

Speaker Change: Any.

Speaker Change: Maybe talk a little bit about sort of the <unk> partnership with adopt healthier is that fully up and running then our physicians are able to get access to the product.

Kathryn R. Scolnick: and given sort of that commentary, I know, Kate, you kind of mentioned that you still can't expect really a contribution more of a 2025 event. Any reason why we couldn't see more of a benefit this year?

Speaker Change: And given sort of that commentary I know you kind of mentioned that you still can expect really contribution more of a 2025 of them.

Speaker Change: Any reason why we couldnt see more of a benefit this year.

Speaker Change: Yeah.

Jonathan Harris: Jonathan, do you want to take that one? Yeah, I'll take the first part. Charles, thank you for the question.

Speaker Change: Jonathan.

Jonathan Harris: I'll take I'll take.

Jonathan Harris: Yes, so we are fully up and running. We launched with ADAPT Health at the beginning of Q1, and then we launched with our wheel integration, our telemed for prescriptions. So, we are seeing those numbers increase dramatically. In addition, we are beginning at the early stages of health care reimbursement, insurance reimbursement, and we really see that as a driving factor. So, ADAPT has been a fantastic partner, really helping us get up and running.

Jonathan Harris: Yeah I'll take the first part Charles Thank you for the question.

Speaker Change: So we are fully up and running.

Launched with adapt health at.

At the beginning of Q1, and then we launched with our wheel integration our tele Telenet.

Speaker Change: For prescription so we are seeing those numbers increase dramatically. In addition, we are beginning at the early stages of healthcare reimbursement insurance reimbursement and we really see that as a driving factor. So adapt has been a fantastic partner.

Jonathan Harris: But, as you know, the medical community and health care take a little bit longer than consumers. So, we're definitely building that, and we're driving it to be conservative, but we're very optimistic about where we're going and the direction we're heading and the feedback we're hearing so far.

Speaker Change: Helping us get up and running but as you know the medical community and health care. It takes a little bit longer than consumer. So we are definitely building that and we're driving it to be.

Speaker Change: Conservative, but we're very optimistic about where we're going in the direction, we're having and the feedback we're hearing so far.

Jonathan Harris: about it. And just to be clear, there are existing reimbursement codes for that you can apply for the babysitter, right? You're not waiting for the creation of any new codes, are you? No.

Speaker Change: Got it and just to be clear, there's existing reimbursement codes for that you can apply for the babysat right you're not waiting for the creation of any new codes are no.

Jonathan Harris: No, that is totally correct. What we're doing now is just bringing on more insurance partners.

Speaker Change: No that is totally correct. What we're doing now is just bringing on more insurance partners.

Kathryn R. Scolnick: Okay, awesome. And then, Kate, can you remind me? You talked about a sort of promotion level. Obviously, we're going to have greater promotions in Q2 for Mother's Day and ahead of Prime Day. Can you remind me, on a relative basis, I think you said for 1Q, promotions were about $2.2 million. You know, does that double in 2Q? Like, how should we think about sort of net revenue in 2Q relative to 1Q, perhaps?

Speaker Change: Okay awesome.

Speaker Change: And then can you remind me you talked about sort of promotion level. Obviously, we're going to have greater promotions in Q2 for mothers day and ahead of Prime day can you remind me.

Speaker Change: On a relative basis I think you said for <unk> promotions were about $2 2 million.

Speaker Change: Does that doubled in <unk> like how should we think about.

Speaker Change: Net revenue in <unk> relative to <unk>, perhaps.

Speaker Change: Yeah, usually what we do is.

Kathryn R. Scolnick: Yeah, usually what we do is, you know, as it relates to promotions, we take a reserve, just depending. And usually, it just depends on what we get when we do the timing. In terms of, you know, what we've talked about, too, is that we have Mother's Day during that time. So from a sequential standpoint, the big swing factor, too, is that depending on when we load in for Prime Day, that can also have an impact on Q2.

Speaker Change: As it relates to promotion, we take our reserves.

Speaker Change: Just depending and usually it just depends on what we get when we did the timing.

Speaker Change: <unk>.

Speaker Change: In.

Speaker Change: What we've talked about too is that we have mother's day during that time, so from a sequential standpoint, the big swing factor two is that depending on when we load incur prime day.

Speaker Change: That can also have an impact for Q2, so our sequential growth there, but we're we've average just kind of as it relates to that kind of Q1 or sorry, the difference between now and the growth in that.

Kathryn R. Scolnick: So our sequential growth there, but where we've averaged just kind of as it relates to that kind of Q1, or sorry, the difference between growth and net, you know, we've talked about that being kind of average on the 8% difference, just in that walk. But Q1 to Q2 sequentially, I'd say that we'll probably get back to a pretty healthy run rate from Q1 to Q2.

Kathryn R. Scolnick: [inaudible]

Speaker Change: Yes, we've talked about that being kind of the average on the 8%.

Speaker Change: Difference.

Speaker Change: Just in that walk, but Q1 to Q2 sequentially I'd say that.

Speaker Change: We'll expect to see that we'll have probably back to <unk>.

Speaker Change: A pretty healthy.

Run rate from Q1 to Q2.

Speaker Change: For full revenue.

Kathryn R. Scolnick: Yeah. Mm-hmm. Perfect. Yes, okay.

Speaker Change: Yes.

Speaker Change: So yes, okay.

Charles Rhyee: Um, all right, and then if I could ask, obviously there was an announcement today in Moscow that an open counter monitoring product has also received FDA approval. Maybe, can you talk about sort of what... a second product in the market would mean for you guys? Could that be actually a good thing because the category itself is growing? Maybe it gives you something to compare yourself against.

Speaker Change: Alright, and then I forgot to ask obviously there was announcement I think today Masimo just also received FDA approval.

Speaker Change: Forward open counter monitoring product.

Speaker Change: Can you talk about sort of how.

Speaker Change: Our second product in the market.

Would mean for you guys.

Speaker Change: Could that be actually a good thing because the category itself is growing.

Kurt Workman: You know, maybe thoughts on that. And then maybe just remind us sort of how your relationships with Target and, you know, Amazon work. Is there any... exclusivity with Target, perhaps, that would keep the Mossimo product off the shelves or any kind of color that would be helpful?

Speaker Change: It gives you something to compare yourself against.

Speaker Change: Maybe your thoughts on that and then maybe just remind us sort of how your relationship with target and.

Speaker Change: Amazon work is there any.

Speaker Change: Exclusivity with target, perhaps that would keep the multiple product off the shelves or.

Speaker Change: Kind of color there would be helpful. Thanks.

Kurt Workman: Yeah, thanks, Charles. I'll take the first part. And then Jonathan, if you want to jump in at the end.

Speaker Change: Yes, Thanks, Charles I'll take the first part and then Jonathan do you want to jump at the end.

Kurt Workman: This is a massive market. As we mentioned in the call today, there are 3.6 million babies born every year in the U.S., and 3.8 million babies born in Europe. Owlet is, you know, has built this category. We created it. We're expanding it, and we're leading it. We're in the market with two FDA-cleared products. We just announced our CE MedMark. We have the highest levels of brand awareness. We have an amazing product. We believe we have the most unique and valuable feature set, and trusted technology with FDA clearance.

Speaker Change: This is a massive market we mentioned in the call today. There is $3 6 million babies born every year in the U S $3 8 million babies born in Europe.

Jonathan Harris: All it is.

Jonathan Harris: Built this category we created it.

Jonathan Harris: We're expanding it and we're leading it we're in the market with two FDA cleared product.

Jonathan Harris: Our CE Mark.

Jonathan Harris: The highest levels of brand awareness, we have an amazing products. We believe we have the most unique and valuable features that.

Jonathan Harris: Trusted technology with the FDA clearance, we are clearly the leader in the category. We've also developed a large distribution footprint with channel partners, we expect.

Kurt Workman: We're clearly the leader in the category, and we've also developed a large distribution footprint with channel partners. We expect, you know, the other health monitors in our category will need the same approvals. And, you know, Massimo coming in, I think, is validation of the category for sure. We believe that eventually, every baby will have access to health sensing technology like Owlet and that we will lead that category. So I think it's a good sign.

Jonathan Harris: The other health monitors in our category will need the same approvals and Massimo coming in I think is.

Jonathan Harris: As validation of the category for sure. We believe that eventually every baby you will have access to health sensing technology.

Jonathan Harris: Outlets and that we will leave that category. So I think it's a good sign we're also addressing any IP concerns where we see the most importantly, we're going to do what we've always done which is leading the category and driving innovation for parents.

Kurt Workman: We're also addressing any IP concerns where we see them. And most importantly, we're going to do what we've always done, which is leading the category and driving innovation for parents. In terms of the distribution with Target and Walmart and some of these other retailers, maybe I'll just finish on that one. You know, Owlet's got, we've negotiated improved placements across all of these channels. We have the largest footprint. I think we have the strongest; we definitely have the strongest brand awareness and reputation. And when parents come in to buy a health monitor, they're thinking about Owlet. And I think that's the most important thing we'll focus on. Jonathan, any other comments?

Jonathan Harris: In terms of the distribution with target and Walmart.

Speaker Change: All of these other retailers may I'll, just finish on that one I'll, let Scott.

We've negotiated improved placements across all of these channels, we have the largest footprint.

Speaker Change: I think we have the strongest.

Speaker Change: We definitely have the strongest brand awareness and reputation when parents come in to buy a health monitor their thinking about outlet and I think that's the most important thing we're focused on.

Jonathan Harris: Jonathan any other comments.

Jonathan Harris: No, I would just expand on the relationship and the partnership with our major retailers, not only here in the U.S. but also internationally, and really driving that relationship and the Owlet brand and word of mouth among parents. Not only the parents who are using our products but them speaking to new parents coming in, you know, newly expecting parents, a strong, strong driver for it.

No I would just expand on the relationship and the partnership with our major retailers not only here in the U S. But also internationally.

Jonathan Harris: And really driving that relationship and the outlet brand and word of mouth amongst parents not only the parents who are using our products, but speaking to new parents coming in.

Jonathan Harris: Newly expecting parents.

Jonathan Harris: Strong driver for us.

Charles Rhyee: Great. And maybe, Cade, one last question for you here is, I know you're not really giving, you know, formal, full-year guides, but maybe just to help folks think about sort of trajectories in terms of revenue as we move through the course of this year, sort of any high-level thoughts as you think about, you know, this year and then going forward. And then, obviously, with profitability, you know, I think last quarter, with X one-time items, you would have been positive. This quarter, we're still down a couple million bucks. Maybe you could give us a sense of the trajectory of profitability as well? That'd be helpful. Thanks.

Great and maybe one last question for you here.

Jonathan Harris: I know you are not really giving formal.

Speaker Change: For the full year guidance, maybe just to help folks think about sort of trajectory is in terms of revenue as we move through the course of this year.

Speaker Change: Any high level thoughts as you think about this.

Speaker Change: This year going forward and then obviously with the profitability.

Speaker Change: I think last quarter.

Ex one time items, you would have been positive this quarter were still down a couple of million Bucks.

Speaker Change: Maybe give us a sense for a trajectory on profitability as well that'd be helpful. Thanks.

Kathryn R. Scolnick: Yeah, you know, we'd like to see, you know? We really feel like we're starting out this year with a very strong start, obviously with the two domestic clearances for both of our core products, and then we just announced the CE mark as well internationally, which is very important for our business. So I think those opportunities are very important to us, as Kurt mentioned, and we're going to be layering in a new product with a subscription.

Speaker Change: Yes.

Speaker Change: <unk>.

Speaker Change: We'd like to see.

Speaker Change: We really feel like we're starting out this year with a very strong start obviously with the two.

Speaker Change: Mastec clearances for both of our core products and then.

Speaker Change: We just announced the CE mark as well internationally, which is very important for our business. So I think those opportunities are very important to us.

Speaker Change: Art mentioned, and we're going to be and layering in the new product, but subscription. So I think we'd like to be ahead of them.

Kathryn R. Scolnick: So I think we'd like to be ahead of, you know, well ahead of where we were last year. We had specific headwinds, you know, outside of waiting for those clearances, we had specific headwinds last year with some customers that we do not anticipate repeating this year as well.

Well ahead of where we were last year, we had specific headwinds outside of.

Speaker Change: Waiting for those clearances, we had specific headwinds last year with with some customers that we do not anticipate repeating this year as well so strong double digit growth in revenue is what we're striving for.

Kathryn R. Scolnick: So strong double-digit growth and revenue is what we're striving for. Q2 and Q3 will be very telling for those opportunities, but more importantly, the benefit of setting up Babysat with the partnerships that Jonathan mentioned and setting up subscriptions with the launch here this summer is what we see the momentum for 2025 beyond where we get to in 2024. So we're really excited about what that kind of puts us even further into going out.

Speaker Change: Q2, and Q3 will be very telling for those opportunities, but more importantly, the benefit.

Setting up babysat with the partnerships that Jonathan mentioned and setting up subscription with the launch here. This summer is what we see the momentum for 2025 beyond where we get to in 2024. So we're really excited about what that kind of puts us even further into going out in.

Kathryn R. Scolnick: In terms of the profitability opportunity, we're very focused on getting to the other side of the adjusted EBITDA side. We have maintained this kind of 10 to 12 million on the actual operating spend, excluding stock-based compensation. There's a little bit that we're spending just on some very discrete items, but other than that, we're really trying to control costs as it relates to employee costs, hiring, and anything that's discretionary.

Speaker Change: Terms of the profitability opportunity, we're very focused on getting to the on the other side of the adjusted EBITDA side, we have maintained kind of 10 to 12 million on the actual operating spend.

Excluding the stock based compensation there is a little bit that we're spending.

Speaker Change: Just around some very discrete items.

Speaker Change: But other than that we're really trying to control costs as it relates to employee costs and hiring and anything that's discretionary so as we move into these.

Kathryn R. Scolnick: So as we move into these opportunities around revenue, I think that that's where the leverage of the model kicks in. So we're really trying to get there as we move through the year, and that will be the level at which we get into these higher growth ranges for revenue. Great, I appreciate it all.

Speaker Change: Opportunities around revenue I think that that's where the leverage of the model kicks in so we're really trying to get there as we move through the year and that that will be the level or getting into these higher growth higher growth.

Speaker Change: Growth ranges for revenue.

Charles Rhyee: Great. I appreciate all the comments. Thanks.

Speaker Change: Great.

All the comments thanks, everyone.

Mike Cavanaugh: Thank you, Charles. We will now hand the call back over to Mike Cavanaugh, who will share some questions received via email.

Speaker Change: Thank you Charles we will now hand, the call back over to Mike Cavanaugh, who would show some questions received via email.

Mike Cavanaugh: Thanks, operator.

Mike Cavanaugh: My first question's for Kate. Can you please give us an update on your investor outreach efforts and how you're engaging investors and the Owlet staff?

Mike Cavanaugh: First question is for Kate.

Mike Cavanaugh: Can you please give us an update on your investor outreach efforts and how you are engaging investors in the outlet stock.

Kathryn R. Scolnick: Yeah, sure. So, as we've just been talking about, first and foremost is delivering strong operational results and communicating about that execution. We've been talking about our financial results, our growth objectives and accomplishments around our products, around our channels, both domestically and internationally, our regulatory clearances, and then growing that investor engagement. So we've been growing our presence both virtually and in person. We've announced a number of conferences that we'll be at in Q1 and Q2, so look for more opportunities as we head through the year.

Kathryn R. Scolnick: Yeah sure. So as we've just been talking about first and foremost is delivering strong operational results and communicating on that execution.

We've been talking about our financial results, our growth objectives and accomplishments around our product to turnaround our channels, both domestically and internationally.

Kathryn R. Scolnick: Regulatory clearances, and then growing that investor engagement. So we've been.

Our present, both virtually and in person, we've announced a number of conferences that we will.

Kathryn R. Scolnick: In Q1, and Q2 here, so look for more opportunities as we head through the year.

Mike Cavanaugh: Great. Thanks, Kate. Next question for the team. Can you please discuss the growth plan in terms of the new product pipeline, new channels, and new marketing efforts?

Speaker Change: Great. Thanks Kate.

Speaker Change: Next question for the team can you. Please discuss the growth plan in terms of new product pipeline, new channels and new marketing efforts.

Jonathan Harris: Yeah, I'll take that one. This is Jonathan. I think we answered a lot of these, but again, really focused on the retailers that we have today. We're in the process of expanding our in-store merchandising throughout Target and over a thousand Walmart stores to really bring to life the Owlet experience for parents and newly expecting parents. Additionally, we're working on increasing our marketing efforts focused on sharing parent stories from our customers with new parents, showcasing how Owlet helped provide better parenting insights and peace of mind.

Speaker Change: Yes, I'll take that one this is Jonathan.

Jonathan Harris: I think we answered a lot of this but reiterating.

Jonathan Harris: Really focus on the retailers that we have today.

Jonathan Harris: We're in process of expanding our in store merchandising throughout target in over 1000, Walmart stores to really bring to life the outlet experience for parents and newly expecting parents.

Jonathan Harris: Additionally, we're working increasing our marketing efforts focused on sharing parent stories from our customers with new parents showcasing how outlet help provide better parenting insights and peace of mind, So really sharing the story the story telling of our existing parents and customers.

Jonathan Harris: So really sharing the story, the storytelling of our existing parents and customers. Growing channels, we've talked a little bit about international, continuing to strengthen and grow international, which is critically important to us as well with our CE, clearance, and medical sales channels. We're presently partnered with Adapt Health, a national DME, and that will provide direct access to Babysat and, in many cases, full insurance reimbursement for the Babysat product to parents. Lastly, a subscription service, lengthening our LTD, offering data and insight to parents during the initial year of their child's life.

Jonathan Harris: Growing channels, we've talked a little bit about international continuing to strengthen and grow international which is critically important to us as well with our CE clearance.

Jonathan Harris: And medical sales channels, we're presently partnered with adapt health National DMA.

And that will provide direct access to babysat and in many cases full insurance reimbursement for the babysat product to parents.

Lastly, subscription in subscription service.

<unk>, our LTV offering data and insight to parents during the initial year of their child's life, we firmly believe that our products and service can extend their value well into the toddler years and beyond so.

Jonathan Harris: We firmly believe that our products and services can extend their value well into their toddler years and beyond. So we really believe that we have a strong partnership on the distribution platform here and internationally, continue to expand medical channels, and build out our subscription service.

Jonathan Harris: We really believe that we have a strong partnership on distribution platform here and internationally.

Jonathan Harris: Continuing to expand medical channels and build out our subscription services.

Mike Cavanaugh: Great. Thanks, Jonathan. And last question for the team. So can you tell us where you are in terms of working with health insurance providers to secure reimbursement for babysitting?

Speaker Change: Great. Thanks, Jonathan.

Speaker Change: Last question for the team.

Jonathan Harris: Yes, as we previously mentioned, through ADAPT Health with our BabySat product, we've integrated with many major insurance plans, including Aetna, Cigna, United, and many of the Blue Cross networks. So we're expanding on, focused on expanding our DME and provider partnerships, as well as integrating with Medicare and Medicaid to expand the opportunity for every baby who needs Owlet to have the ability to have it.

Speaker Change: So can you tell us where you are in terms of working with health insurer insurance providers to secure reimbursement for babysat.

Mike Cavanaugh: Great. Thanks, Jonathan. That's all the questions we have. I think with that, we can turn it back over to Kurt Workman for final remarks. Thanks, Mike.

Speaker Change: Yes, as we previously mentioned to adapt health with our babysat product.

We've integrated with many major insurance plans, including Aetna Cigna, United and many of the Blue Cross networks that we're expanding on focus on expanding our DNA and provider partnerships.

Speaker Change: As well as integrating with Medicare and Medicaid.

Speaker Change: To expand the opportunity for every baby who needs outlet to have the ability to have it.

Speaker Change: Great. Thanks, Jonathan that is that is all the questions we have.

Speaker Change: So I think with that we can turn it back over to Curt Workman for final remarks.

Speaker Change: Okay.

Kurt Workman: Thanks, Mike. Thanks for joining us today. It's been an exciting journey for Owlet, and we are grateful for the continued support. I'd like to take this opportunity to thank our talented team for their incredible dedication and hard work. Your commitment to our mission and drive for innovation is inspiring. We've achieved significant milestones this quarter, demonstrating strong financial performance and continued growth. As we move forward, we remain focused on executing our strategic initiatives to further strengthen our commercial and financial performance. And we're confident that our innovative solutions, unwavering commitment to quality, and passionate team will continue to drive success for Owlet. Thank you again for your trust and partnership.

Kurt Workman: Thanks, Mike Thanks for joining us today, it's been an exciting journey for outlet and we are grateful for the continued support I would like to take this opportunity to thank our talented team for their incredible dedication and hard work and your commitment to our mission and drive for innovation is just inspiring.

We've achieved significant milestones this quarter demonstrating strong financial performance with continued growth as we move forward. We remain focused on executing our strategic initiatives to further strengthen our commercial and financial performance and we're confident that our innovative solutions unwavering commitment to quality and passionate team will continue to drive success for all of that thank you again.

For your trust and partnership.

Operator: That concludes the Owlet first quarter 2024 earnings call. Thank you for your participation.

Speaker Change: That concludes the outlet first quarter 2024 earnings call. Thank you for your participation.

Speaker Change: That concludes the <unk>.