Q2 2024 Owlet Inc Earnings Call

August 12, 2024

Jayla: Good afternoon. Thank you for attending today's Owlet Q2 2024 earnings call. My name is Jayla and I'll 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. I would now like to turn the conference over to our host.

Operator: In 2024, Ernie's call.

Jayla: for the Earnings Call. My name is Jayla, and I'll 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. I would now like to turn the conference over to our host, Mike Cavanaugh, Investor Relations. Mike, you may proceed.

Jayla: My name is Jayla, and I'll 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. I would now like to turn the conference over to our host, Mike Cavanaugh, Investor Relations. Mike, you may proceed.

Jaila: My name is Jaila, and I'll be your moderator for today. All lives will be needed during the presentation portion of the call, with an opportunity for questions and answers at the end.

Mike Cavanaugh: I would now like to send a conference over to our host, Mike Cavanaugh, Investor Relations. Mike, you may proceed.

Jayla: Mike Cavanaugh, Investor Relations. Mike, you may proceed.

Mike Cavanaugh: Thank you, operator. Good afternoon, everyone, and thank you for joining us today for the. We appreciate your time and interest in our company. Earlier today, Owlet released financial results for the quarter ended June 30, 2024.

Mike Cavanaugh: Thank you, operator. Good afternoon, everyone, and thank you for joining us today for the Owlet Baby Care second quarter, 2024 earnings call. We appreciate your time and interest in our company. Earlier today, Owlet released financial results for the quarter ended June 30, 2024. The release is currently available on the company's website at www.investors.owletcare.com.

Mike Cavanaugh: Good afternoon, everyone, and thank you for joining us today for the Owlet Baby Care second quarter, 2024 earnings call. We appreciate your time and interest in our company. Earlier today, Owlet released financial results for the quarter ended June 30, 2024. The release is 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, Jonathan Harris, president, and Amanda Tweed Crawford, our Chief Financial Officer.

Mike Cavanaugh: Thank you, operator. Good afternoon, everyone, and thank you for joining us today for the Owlette Baby Cares second quarter 2024 earnings call.

Jayla: We appreciate your time and interest in our company.

Mike Cavanaugh: Earlier today, Owlet released financial results for the quarter ended June 30, 2024. The release is currently available on the company's website at www.investors.owletcare.com.

Mike Cavanaugh: The release is currently available on the company's website at www.investors.owliccare.com. Our speakers for today's call are Kurt Workman, Owlet's co-founder and chief executive officer, Jonathan Harris, president, and Amanda Tweed Crawford, our chief financial officer. Kurt will begin with an overview of our performance and key developments, followed by Jonathan, who will provide color on our go-to-market results, and then Amanda will provide a detailed review of our financial results.

Mike Cavanaugh: Our speakers for today's call are Kurt Workman, Owlet's co-founder and chief executive officer, Jonathan Harris, president, and Amanda Tweed Crawford, our Chief Financial Officer. We'll begin with an overview of our performance and key developments, followed by Jonathan, who will provide color on our go-to-market results, and then Amanda will provide a detailed review of our financial results. Following their remarks, we will open the call for 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.

Speaker Change: Our speakers for today's call are Kurt Workman, Owlitz Co-Founder and Chief Executive Officer, Jonathan Harris, President, and Amanda Tweed Crawford, our Chief Financial Officer.

Mike Cavanaugh: Kurt will begin with an overview of our performance and key developments, followed by Jonathan, who will provide color on our go-to-market results, and then Amanda will provide a detailed review of our financial results. Following their remarks, we will open the call for 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.

Jonathan Harris: Kurt will begin with an overview of our performance and key developments, followed by Jonathan who will provide color on our go-to-market results, and then Amanda will provide a detailed review of our financial results.

Mike Cavanaugh: Following their remarks, we will open the call for 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 their most recent filings with the FEC and in the risk factor section of our annual report on Form 10-K for the fiscal year ended December 31, 2023.

Speaker Change: Following their remarks, we will open the call for questions.

Mike Cavanaugh: 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, 2023. 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. Thanks, Mike.

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, 2023.

Mike Cavanaugh: Please note that the company assumed 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: 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.

Mike Cavanaugh: With that, I would now like to turn out the call over to our CEO, Kurt Warpman.

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

Kurt Workman: Thanks, Mike.

Kurt Workman: Thank you.

Kurt Workman: Good afternoon, everyone, and thank you for joining Outlet earnings call today. As always, we appreciate your ongoing support of Outlet. Throughout the first half of 2024, we have consistently delivered on every key operational milestone. These milestones include the launch for FDA-clear devices in both consumer and medical channels and our CE medical approval and its launch in the UK and Europe. We've met all of our key financial goals in the first half, including double-digit self-through and revenue growth, gross margin expansion, and significant operating cost savings, resulting in a positive adjustment in Q2. As promised, we plan on maintaining at-or-near-break-even-adjustcy-but-a-on-a-go-forward basis.

Kurt Workman: Good afternoon, everyone, and thank you for joining Owlet's earnings call today. As always, we appreciate your ongoing support of Owlet. Throughout the first half of 2024, we have consistently delivered on every key operational milestone. These milestones include the launch of FDA-cleared devices in both consumer and medical channels and our CE medical approval and its launch in the UK and Europe. We've met all of our key financial goals in the first half, including double-digit sell-through and revenue growth, gross margin expansion, and significant operating cost savings, resulting in a positive adjusted EBITDA in Q2. As promised, we plan on maintaining at or near break-even adjusted EBITDA on a go-forward basis.

Kurt Workman: Good afternoon, everyone, and thank you for joining Owlet's earnings call today. As always, we appreciate your ongoing support of Owlet. Throughout the first half of 2024, we have consistently delivered on every key operational milestone. These milestones include the launch of FDA-cleared devices in both consumer and medical channels, and our CE medical approval and its launch in the UK and Europe. We've met all of our key financial goals in the first half, including double-digit sell-through and revenue growth, gross margin expansion, and significant operating cost savings resulting in a positive adjusted EBITDA in Q2. As promised, we plan on maintaining at or near break-even adjusted EBITDA on a go-forward basis.

Kurt Workman: Thanks, Mike.

Kurt Workman: Good afternoon everyone and thank you for joining Owlet's earnings call today. As always, we appreciate your ongoing support of Owlet. Throughout the first half of 2024, we have consistently delivered on every key operational milestone.

Speaker Change: These milestones include the launch for FDA cleared devices in both consumer and medical channels and our CE medical approval and its launch in the UK and Europe.

Speaker Change: We've met all of our key financial goals in the first half, including double-digit sell-through and revenue growth, gross margin expansion, and significant operating cost savings, resulting in a positive adjusted EBITDA in Q2.

Speaker Change: As promised, we plan on maintaining at or near break-even adjusted EBITDA on a go-forward basis.

Kurt Workman: In addition to our significant Q2 operational achievements, our July Amazon Prime Event was the strongest in company history and exceeded our expectations with dream stock self-through of 61% year-over-year in units and revenue of 68% year-over-year. We've also crossed the major milestone with the launch of Outlet Care, our new subscription service which was released to a limited number of users. That service will begin to scale to our user-based throughout this year and represent the major shift in the LTV potential for outlet in 2025. Finally, we have now fully integrated our telehealth partnership with Wheel on OwletCare.com to accelerate access to insurance reimbursement.

Kurt Workman: In addition to our significant Q2 operational achievements, our July Amazon Prime event was the strongest in company history and exceeded our expectations, with DreamSock sell-through up 61% year over year in units and revenue up 68% year over year. We've also crossed a major milestone with the launch of OwletCare, our new subscription service which was released to a limited number of users. That service will begin to scale to our user base throughout this year and represent a major shift in the LTV potential for Owlet in 2025.

Kurt Workman: In addition to our significant Q2 operational achievements, our July Amazon Prime event was the strongest in company history and exceeded our expectations, with DreamSock sell-through up 61% year-over-year in units and revenue up 68% year-over-year. We've also crossed a major milestone with the launch of OwletCare, our new subscription service, which was released to a limited number of users. That service will begin to scale to our user base throughout this year and represent a major shift in the LTV potential for Owlet in 2025. Finally, we have now fully integrated our telehealth partnership with Wheel on OwletCare.com to accelerate access to insurance.

Speaker Change: In addition to our significant Q2 operational achievements, our July Amazon Prime event was the strongest in company history.

Speaker Change: and exceeded our expectations with DreamSock Seltzer up 61%.

Speaker Change: year-over-year in units.

Speaker Change: and revenue up 68% year over year. We've also crossed a major milestone with the launch of OwletCare, our new subscription service, which was released to a limited number of users.

Speaker Change: That service will begin to scale to our user base throughout this year and represent the major shift in the LTV potential for Owlette in 2025.

Kurt Workman: Finally, we have now fully integrated our telehealth partnership with wheel on OwletCare.com to accelerate access to insurance. When I look back over the past few years, it's clear that Owlet's commercial position today is the strongest it's ever been.

Speaker Change: Finally, we have now fully integrated our telehealth partnership with Wheel on OwletCare.com to accelerate access to insurance reimbursement.

Kurt Workman: When I look back over the past few years, it's clear that Owlet's commercial position today is the strongest disappointment. There is a robust, continued, and discernible momentum for Owlet in the market that continues to grow on the back of the second of our two FDA approvals in the U.S. Last November. We believe this year's the turning point propelling us to our vision of a safe and healthy journey for every baby in a sustainable growth company.

Kurt Workman: When I look back over the past few years, it's clear that Owlet's commercial position today is the strongest it's ever been. There is a rebuff, and the market continued to grow on the back of the second of our two FDA approvals in the U.S. last November. We believe this year is the turning point, propelling us toward our vision of a safe and healthy journey for every baby in a sustainable growth company.

Speaker Change: When I look back over the past few years, it's clear that Owlett's commercial position today is the strongest it's ever been.

Kurt Workman: It continues to grow on the back of the second of our two FDA approvals in the U.S. last November. We believe this year is the turning point, propelling us toward our vision of a safe and healthy journey for every baby in a sustainable growth company. I'd like to take some time on today's call to share what success looks like over the next few years as we continue to make progress towards our vision.

Speaker Change: There is a robust, continued, and discernible momentum for outlet in the market that continues to grow on the back of the second of our two FDA approvals in the U.S. last November.

Speaker Change: We believe this year is the turning point propelling us to our vision of a safe and healthy journey for every baby in a sustainable growth company.

Kurt Workman: I'd like to take some time on today's call to share what success looks like over the next few years as we continue to make progress towards our vision. There are over 140 million babies born every year, and every single parent is worried about their baby's safety, health, and getting more sleep. And yet, unexpected mortality, respiratory infections, and sleep deprivation are still a major issue for parents. These are universal problems that we firmly believe can be solved with access to personalized information in the home. I say this a lot, but I went through more training to get a driver's license than I did to become a dad.

Speaker Change: I'd like to take some time on today's call to share what success looks like over the next few years as we continue to make progress towards our vision.

Kurt Workman: There are over 140 million babies born every year, and every single parent is worried about their baby's safety, health, and getting more sleep. And yet, unexpected mortality, respiratory infections, and sleep deprivation are still a major issue for parents. These are universal problems that we firmly believe can be solved with access to personalized information in the home. I say this a lot, but I went through more training to get a driver's license than I did to become a dad, the caregiver of a little baby.

Speaker Change: There are over 140 million babies born every year and every single parent is worried about their baby's safety, health, and getting more sleep.

Speaker Change: and yet unexpected mortality, respiratory infections, and sleep deprivation are still a major issue for parents. These are universal problems that we firmly believe can be solved with access to personalized information in the home.

in 2024, Ernie's call.

Jaila: My name is Jaila, and I'll be your moderator for today. All lives will be needed during the presentation portion of the call with an opportunity for questions and answers at the end.

Speaker Change: I say this a lot, but I went through more training to get a driver's license than I did to become a dad.

Kurt Workman: The caregiver of a little baby. Parents are exhausted, worried, and have very few tools in the home to assess their baby's health, and that leads to one of the highest rates of primary and urgent care utilization. It's time to empower parents in the home with tools and technologies they need to give the best care possible to their baby. Owlet has collected a very large data set of infant health and sleep in the home. We've monitored over 15 trillion heartbeats and millions of hours of infant sleep on over 2 million babies the past eight years. We've taken all of that data to build beautiful subscription insights.

Kurt Workman: Parents are exhausted, worried, and have very few tools in the home to assess their baby's health. And that leads to one of the highest rates of primary and urgent care utilization. It's time to empower parents in the home with tools and technologies they need to give the best care possible to their baby. Owlet has collected a very large data set on infant health and sleep in the home. We've monitored over 15 trillion heartbeats and millions of hours of infant sleep on over two million babies for the past eight years.

Mike Cavanaugh: I would now like to send a conference over to our host, Mike Cavanaugh, investor relations, Mike, you may proceed. Thank you, operator.

Speaker Change: the caregiver of a little baby.

Speaker Change: Parents are exhausted, worried, and have very few tools in the home to assess their baby's health, and that leads to one of the highest rates of primary and urgent care utilization. It's time to empower parents in the home with tools and technology they need to give the best care possible to their baby.

Mike Cavanaugh: Good afternoon, everyone, and thank you for joining us today for the We appreciate your time and interest in our company. Earlier today, Owlet released financial results for the corner-ended June 30, 2024. The release is currently available on the company's website at www.investors.owliccare.com.

Speaker Change: Owlet has collected a very large data set of infant health and sleep in the home. We've monitored over 15 trillion heartbeats and millions of hours of infant sleep on over 2 million babies the past eight years. We've taken all of that data to build beautiful subscription insights.

Kurt Workman: The launch of subscription we're calling Owlet Care signals the beginning of Owlet's transformation from a product and hardware company to the platform for pediatric health that helps bridge the gap between the hospital and the home. The rollout of this platform will have three distinct phases. The first phase is focused on unlocking insights and information that helps parents better understand what's normal for their baby and what's not. Parents will be able to get daily updates on how their child's health and sleep are trending relative to their own baseline and how it compares to the broader population.

Kurt Workman: The launch of Subscription, which we're calling OwletCare, signals the beginning of Owlet's transformation from a product and hardware company to a platform for pediatric health that helps bridge the gap between the hospital and the home. The rollout of this platform will have three distinct phases. The first phase is focused on unlocking insights and information that helps parents better understand what's normal for their baby and what's not. Parents will be able to get daily updates on how their child's health and sleep are trending relative to their own baseline and how it compares to the broader population.

Kurt Workman: We've taken all of that data to build a beautiful subscription. The launch of Subscription, which we're calling OwletCare, signals the beginning of Owlet's transformation from a product and hardware company to a service provider, to the Platform for Pediatric Health that helps bridge the gap between the hospital and the home. The rollout of this platform will have three distinct phases.

Speaker Change: The launch of Subscription, we're calling OwletCare, signals the beginning of Owlet's transformation from a product and hardware company to the platform for pediatric health that helps bridge the gap between the hospital and the home.

Kurt Workman: The first phase is focused on unlocking insights and information that helps parents better understand what's normal for their baby and what's not. Parents will be able to get daily updates on how their child's health and sleep are trending relative to their own baseline and how it compares to the broader population. Owlet will also help parents store their baby's health data and important moments captured by the camera and SOC, and it will make it easy for them to share that information with their pediatrician.

Speaker Change: The rollout of this platform will have three distinct phases.

Speaker Change: The first phase is focused on unlocking insights and information that helps parents better understand what's normal for their baby and what's not.

Speaker Change: Parents will be able to get daily updates on how their child's health and sleep are trending relative to their own baseline and how it compares to the broader population.

Kurt Workman: Owlet will also help parents store their baby's health data and important moments captured by the camera and SOC, and will make it easy for them to share that information with their pediatrician. I remember, probably like every parent, being surprised the first few weeks of how often my son was waking up and how frequently he was getting sick. There are so many questions that new parents have, but one comment thread among these is the simple question: is this normal? Is my baby okay? The second phase will integrate professional service partners into our app that will provide integrated care 24 hours a day, seven days a week.

Kurt Workman: Owlet will also help parents store their baby's health data and important moments captured by the camera and SOC and will make it easy for them to share that information with their pediatrician. I remember, probably like every parent, being surprised the first few weeks with how often my son was waking up and how frequently he was getting sick. There are so many questions that new parents have, but one common thread among these is the simple question, is this normal?

Speaker Change: Owlet will also help parents store their baby's health data and important moments captured by the camera and SOC and will make it easy for them to share that information with their pediatrician.

Mike Cavanaugh: 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 describe their most recent filings with the FEC and in the risk factor section of our annual report on form 10K for the fiscal year ended December 31, 2023. Please note that the company assumed no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Kurt Workman: I remember, probably like every parent, being surprised the first few weeks with how often my son was waking up and how frequently he was getting sick. There are so many questions that new parents have, but one common thread among these is the simple question, "Is this normal? Is my baby okay?".

Speaker Change: I remember, probably like every parent, being surprised the first few weeks of how often my son was waking up and how frequently he was getting sick. There are so many questions that new parents have, but one common thread among these is the simple question, is this normal? Is my baby okay?

Kurt Workman: Is my baby okay? The second phase will integrate professional service partners into our app that will provide integrated care 24 hours a day, seven days a week. Parents will be able to chat with pediatricians, nurses, sleep coaches, and maternal health professionals who have access to Owlet's data to provide personalized care at home. We'll be able to use this data and new AI models to deliver unparalleled insights and proactive detection that will help move pediatrics into preventative care in our third phase.

Kurt Workman: The second phase will integrate professional service partners into our app that will provide integrated care 24 hours a day, 7 days a week. Parents will be able to chat with pediatricians, nurses, sleep coaches, and maternal health professionals who have access to Owlet's data to provide personalized care at home. We'll be able to use this data and new AI models to deliver unparalleled insight and proactive detection that will help move pediatrics into preventative care in our third phase.

Speaker Change: The second phase will integrate professional service partners into our app that will provide integrated care 24 hours a day, seven days a week. Parents will be able to chat with pediatricians, nurses, sleep coaches, and maternal health professionals who have access to outlets data to provide personalized care at home.

Kurt Workman: Parents will be able to chat with pediatricians, nurses, sleep coaches, and maternal health professionals who have access to Owlet's data to provide personalized care at home. We'll be able to use this data and new AI models to deliver unparalleled insights and proactive detection that will help them with pediatrician to preventive care in our third phase. Our strategy is to use our biggest assets, our network of parents, hospitals, and data to drive continued value and torque platform as a result. We expect the price point of our subscription. will evolve over time as well as the value and services we are providing.

Speaker Change: We'll be able to use this data and new AI models to deliver unparalleled insights and proactive detection that will help move pediatrics into preventative care in our third phase.

Kurt Workman: Our strategy is to use our biggest assets, our network of parents, hospitals, and data to drive continued value into our platform. As a result, we expect that the price point of our subscription will evolve over time, as well as the value and services we are providing. I can't imagine a world where every parent and pediatrician doesn't have access to some sort of information, like Owlet, about their baby that we will be providing and passionately advancing.

Kurt Workman: Our strategy is to use our biggest assets, our network of parents, hospitals, and data to drive continued value into our platform. As a result, we expect that the price point of our subscription will evolve over time, as well as the value and services we are providing. I can't imagine a world where every parent and pediatrician doesn't have access to some sort of information like Owlet about their baby, which we will be providing and passionately advancing.

Kurt Workman: With that, I would now like to turn out the call over to our CEO, Kurt Warpman. Thanks, Mike. Good afternoon, everyone, and thank you for joining outlet earnings call today. As always, we appreciate your ongoing support of outlet. Throughout the first half of 2024, we have consistently delivered on every key operational milestone. These milestones include the launch for FDA-clear devices in both consumer and medical channels and our CE medical approval and its launch in the UK and Europe.

Speaker Change: Our strategy is to use our biggest assets, our network of parents, hospitals, and data to drive continued value into our platform. As a result, we expect that the price point of our subscription

Speaker Change: will evolve over time, as well as the value and services we are providing.

Kurt Workman: I can't imagine a world where every parent and pediatrician doesn't have access to some sort of information like Owlet about their baby that we will be providing and passionately advancing. As a corollary, 70 million adults in the U.S. alone have a wearable health sensor, and they've come to expect it for their children. We believe that just like every baby leaves the hospital with a thermometer, a breast pump, and a car seat, every baby will have access to Owlet care that could one day be reimbursed by insurance. Baby sat and dreamed to offer complimentary in this vision, giving access to Owlet's technology to both parents who have a critically ill baby leading the NICU and to the new parent who's trying to navigate bringing their newborn home for the first time.

Speaker Change: I can't imagine a world where every parent and pediatrician doesn't have access to some sort of information like Owlette about their baby that we will be providing and passionately advancing.

Kurt Workman: As a corollary, 70 million adults in the U.S. alone have wearable health sensors, and they've come to expect them for their children. We believe that just like every baby leaves the hospital with a thermometer, a breast pump, and a car seat, every baby will have access to Owlet care that could one day be reimbursed by insurance. Babysat and DreamSock are complementary in this vision, giving access to Owlet technology to both parents who have a critically ill baby leaving the NICU and to the new parent who's trying to navigate bringing their newborn home for the first time.

Speaker Change: As a corollary, 70 million adults in the U.S. alone have a wearable health sensor and they've come to expect it for their children.

Kurt Workman: We've met all of our key financial goals in the first half, including double-digit self-through and revenue growth, gross margin expansion, and significant operating cost savings, resulting in a positive adjustment in Q2. As promised, we plan on maintaining at-or-near-break-even-adjustcy-but-a-on-a-go-forward basis. In addition to our significant Q2 operational achievements, our July Amazon Prime Event was the strongest in company history, and exceeded our expectations with dream stock self-through of 61% year-over-year in units, and revenue of 68% year-over-year.

Speaker Change: We believe that just like every baby leaves the hospital with a thermometer, a breast pump, and a car seat, every baby will have access to outlet care that could one day be reimbursed by insurance.

Speaker Change: Babysat and DreamSock are complementary in this vision, giving access to Alice technology to both parents

Speaker Change: who have a critically ill baby leaving the NICU, and to the new parent who's trying to navigate bringing their newborn home for the first time. The opportunity to become the standard of home care in pediatrics is absolutely massive. It's been overlooked and now it is in the best position to build it.

Kurt Workman: The opportunity to become the standard of home care in pediatrics is absolutely massive. It's been overlooked, and Owlet is in the best position to build it.

Kurt Workman: The opportunity to become the standard of home care in pediatrics is absolutely massive. It's been overlooked, and Owlet is in the best position to build it. We will continue to execute on this vision by focusing on three areas in 2024 and into 2025. First, we will drive continued adoption of DreamSoft. Second, we will expand the medical and health care channels to offer an insurance reimbursement monitor for babies who are sick or at high risk.

Kurt Workman: We will continue to execute on this vision by focusing on three areas in 2024 and into 2025. First, this driving continued adoption of DreamSoft. Second, is expanding the medical and healthcare channels to offer an insurance reimburse monitor for babies who are sick or high risk. Third, is to transition Owlet into a service that helps parents from infancy into the toddler years and increases LTV. The opportunity these three areas present significantly increases our revenue and margin without increasing the complexity of the business and will help to drive continued growth in top and bottom line. We believe our business in the next few years can be several hundred million in revenue and very profitable.

Kurt Workman: Third, is to transition Owlet into a service that helps parents from infancy into the toddler years and increases LTV. The opportunity these three areas present significantly increases our revenue and margin without increasing the complexity of the business and will help to drive continued growth in the top and bottom lines.

Speaker Change: We will continue to execute on this vision by focusing on three areas in 2024 and into 2025. First is driving continued adoption of DreamSoft. Second is expanding the medical and healthcare channels to offer an insurance reimburse monitor for babies who are sick or high risk.

Kurt Workman: We've also crossed the major milestone with the launch of outlet care, our new subscription service which was released to a limited number of users. That service will begin to scale to our user-based throughout this year and represent the major shift in the LTV potential for outlet in 2025. Finally, we have now fully integrated our telehealth partnership with wheel on OwletCare.com to accelerate access to insurance reimbursement. When I look back over the past few years, it's clear that Owlet's commercial position today is the strongest disappointment.

Speaker Change: Third is to transition ALET into a service that helps parents from infancy into the toddler years and increases LTV. The opportunity these three areas present significantly increases our revenue and margin.

Speaker Change: without increasing the complexity of the business and will help to drive continued growth in top and bottom line.

Kurt Workman: We believe our business in the next few years can be several hundred million dollars in revenue and very profitable. Before turning the call over to Jonathan Harris, our president, to talk about these three pillars of our go-to-market strategy and results for Q2, I'd like to welcome Amanda Tweed Crawford to our earnings call today. She will be covering our Q2 financial results. As we announced a few weeks ago, Kate Scolnick is leaving Owlet to pursue other opportunities and will remain at the company in an advisory role for a transition period through September.

Speaker Change: We believe our business in the next few years can be several hundred million in revenue and very profitable.

Kurt Workman: Before turning the call over to Jonathan Harris, our president, to talk about these three pillars of our go-to-market strategy and results for Q2, I'd like to welcome Amanda Tweet, Crawford, to our earnings call today. She will be covering our Q2 financial results. As we announced a few weeks ago, Kate's full neck is losing Owlet to pursue other opportunities and will remain at the company in an advisory role for a transition period through September. On behalf of the board of directors in Owlet, I want to thank Kate for her executive leadership and significant contributions since joining our management team prior to our initial public listing.

Kurt Workman: There is a robust, continued, and discernible momentum for Owlet in the market that continues to grow on the back of the second of our two FDA approvals in the U.S, last November. We believe this year's the turning point propelling us to our vision of a safe and healthy journey for every baby in a sustainable growth company.

Speaker Change: Before turning the call over to Jonathan Harris, our president, to talk about these three pillars of our go-to-market strategy and results for Q2, I'd like to welcome Amanda Tweed Crawford to our earnings call today. She will be covering our Q2 financial results.

Speaker Change: As we announced a few weeks ago, Kate Scolnick is leaving Owlette to pursue other opportunities and will remain at the company in an advisory role for a transition period through September.

Kurt Workman: On behalf of the Board of Directors and Owlet, I want to thank Kate for her executive leadership and significant contributions since joining our management team prior to our initial public listing. Over the last three and a half years, she has been instrumental in supporting our top line growth, margin expansion, and profitability objectives. And with her help, we are on track to achieve our 2024 operational and financial goals. We wish Kate continued success in her future endeavors.

Speaker Change: On behalf of the Board of Directors in Owlett, I want to thank Kate for her executive leadership and significant contributions since joining our management team prior to our initial public listing.

Kurt Workman: Over the last three and a half years, she's been instrumental in supporting our top line growth, margin expansion, and profitability objectives. And with her help, we are on track to achieve our 2024 operational and financial goals. We wish Kate continued success in her future endeavors. Amanda is a key financial leader and contributor at Owlet, and we're excited for her to be moving into the Chief Financial Officer role. She joined us in 2022 with over 15 years of finance and accounting experience from Swire Coca-Cola and Price Waterhouse Coopers, with a Masters in Accounting. Amanda knows our business, our leadership, our community, and our vision incredibly well.

Speaker Change: Over the last three and a half years, she has been instrumental in supporting our top-line growth, margin expansion, and profitability objectives. And with her help, we are on track to achieve our 2024 operational and financial goals. We wish Kate continued success in her future endeavors.

Kurt Workman: Amanda is a key financial leader and contributor at Owlet, and we're excited for her to be moving into the chief financial officer role. She joined us in 2022 with over 15 years of finance and accounting experience from Swire Coca-Cola and PricewaterhouseCoopers, a master's in accounting. Amanda knows our business, our leadership, our community, and our vision incredibly well. And, as such, we anticipate this will be a smooth transition. Welcome, Amanda, and now I'll turn the call over to Jonathan.

Kurt Workman: Amanda is a key financial leader and contributor at Owlet, and we're excited for her to be moving into the chief financial officer role. She joined us in 2022 with over 15 years of finance and accounting experience from Swire Coca-Cola and PricewaterhouseCoopers, a master's in accounting. Amanda knows our business, our leadership, our community, and our vision incredibly well, and as such, we anticipate this will be a smooth transition. Welcome, Amanda. And now I'll turn the call over to Jonathan. Thanks, Kurt.

Kurt Workman: I say this a lot, but I went through more training to get a driver's license than I did to become a dad. The caregiver of a little baby. Parents are exhausted, worried, and have very few tools in the home to assess their baby's health, and that leads to one of the highest rates of primary and urgent care utilization. It's time to empower parents in the home with tools and technologies they need to give the best care possible to their baby.

Speaker Change: Amanda is a key financial leader and contributor at Owlette, and we're excited for her to be moving into the Chief Financial Officer role. She joined us in 2022 with over 15 years of finance and accounting experience from Swire Coca-Cola and PricewaterhouseCoopers with a Master's in Accounting.

Speaker Change: Amanda knows our business, our leadership, our community, and our vision incredibly well, and as such, we anticipate this will be a smooth transition. Welcome, Amanda, and now I'll turn the call over to Jonathan.

Kurt Workman: And as such, we anticipate this will be a smooth transition.

Jonathan Harris: Welcome, Amanda, and I'll turn the call over to Jonathan.

Kurt Workman: Owlet has collected a very large data set of infant health and sleep in the home. We've monitored over 15 trillion heartbeats and millions of hours of infant sleep on over 2 million babies the past eight years. We've taken all of that data to build beautiful subscription insights.

Jonathan Harris: Thanks, Kurt. And as Kurt just mentioned, we have really some really strong momentum building in our business, not only in the U.S. But across the globe.

Jonathan Harris: And as Kurt just mentioned, we have some really strong momentum building in our business, not only in the U.S. but across the globe. First, demand and adoption.

Jonathan Harris: And as Kurt just mentioned, we have some really strong momentum building in our business, not only in the U.S. but across the globe. First, demand and adoption. The response to our new FDA-cleared DreamSock here in the U.S. has been outstanding.

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

Jonathan Harris: First, demand an adoption. The response to our new FDA-clear dream stock here in the U.S. has been outstanding. We've witnessed strong parental engagement with over 66 million organic views of our content across TikTok and Facebook in Q2. And we continue to see great press with almost 1500 pieces of coverage and publication such as BuzzFeed, Ferris Biotech, PureWow, USA Today, CVS, and Today's Parents. The response to the FDA clearance of DreamSoc continues to be strong, with sell-through achieving over 40%. 44% growth with our DreamSoc and Duo products year-over-year. Customer satisfaction supports this growth, with NPS scores exceeding 70 and DreamSoc hitting an all-time high in this category.

Jonathan Harris: The response to our new FDA-cleared DreamSock here in the U.S. has been outstanding. We've witnessed strong parental engagement with over 66 million organic views of our content across TikTok and Facebook in Q2. And we continue to see great press with almost 1500 pieces of coverage and publications such as BuzzFeed, Fierce Biotech, PureWow, USA Today, CBS, and Today's Parents.

Kurt Workman: The launch of subscription we're calling Owlet Care, signals the beginning of Owlet's transformation from a product and hardware company to the platform for pediatric health that helps bridge the gap between the hospital and the home. The rollout of this platform will have three distinct phases. The first phase is focused on unlocking insights and information that helps parents better understand what's normal for their baby and what's not. Parents will be able to get daily updates on how their child's health and sleep are trending relative to their own baseline and how it compares to the broader population.

Speaker Change: First, demand and adoption. The response to our new FDA-cleared DreamStock here in the U.S. has been outstanding.

Jonathan Harris: We've witnessed strong parental engagement with over 66 million organic views of our content across TikTok and Facebook in Q2, and we continue to see great press with almost 1,500 pieces of coverage in publications such as BuzzFeed, Beers Biotech, PureWow, USA Today, CBS, and Today's Parents. The response to the FDA clearance of DreamSock continues to be strong, with sell-through achieving over 44% growth for our DreamSock and Customer satisfaction supports this growth, with NPS scores exceeding 70 and Dream Sock hitting an all-time high in this category.

Speaker Change: We've witnessed strong parental engagement with over 66 million organic views of our content across TikTok and Facebook in Q2.

Kurt Workman: Owlet will also help parents store their baby's health data and important moments captured by the camera and SOC and will make it easy for them to share that information with their pediatrician. I remember probably like every parent being surprised the first few weeks of how often my son was waking up and how frequently he was getting sick. There are so many questions that new parents have but one comment thread among these is the simple question is this normal?

Speaker Change: And we continue to see great press with almost 1,500 pieces of coverage and publications such as BuzzFeed, Beers Biotech, PureWow, USA Today, CBS, and Today's Parents.

Jonathan Harris: The response to the FDA clearance of DreamSock continues to be strong, with sell-through achieving over 44% growth for our DreamSock and Duo products year over year. Customer satisfaction supports this growth, with NPS scores exceeding 70 and Dream Sock hitting an all-time high in this category. We achieved this market enthusiasm while maintaining a strong growth trajectory, including net revenue growth of 58% over Q2 of last year.

Speaker Change: The response to the FDA clearance of DreamSock continues to be strong, with sell-through achieving over 44% growth with our DreamSock and Duo products year over year.

Speaker Change: Customer satisfaction supports this growth with NPS scores exceeding 70 and DreamSock hitting an all-time high in this category.

Jonathan Harris: We achieved this market enthusiasm while maintaining strong growth trajectory, including net revenue growth of 58% over Q2 of last year. Here in the US, our partnerships with major retailers Target and Walmart are growing with expanded merchandising and placements to bring Owlet experience to life. Specifically, we are seeing sell-through a socket target increase by almost 50% year-over-year and Duo almost 40%. While our baby-less registry is growing at almost 60% versus the previous year, proving our messaging and FDA clearance continues to resonate with expecting parents. Owlet is still in the beginning stages of growth for DreamSoc, with about 10% of the 3.6 million US birds every year coming home with an Owlet stock.

Jonathan Harris: We achieved this market enthusiasm while maintaining a strong growth trajectory, including net revenue growth of 58% over Q2 of 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-a-socket target increased by almost 50% year-over-year and dual by almost 40%, while our baby lift registries grew at almost 60% versus the previous year, proving our messaging and FDA clearance continues to resonate with expecting parents. Owlet is still in the beginning stages of growth for Dream Sock, with about 10% of the 3.6 million U.S. births every year coming home with an

Speaker Change: We achieved this market enthusiasm while maintaining strong growth trajectory, including net revenue growth of 58% over Q2 of 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 Owlet experience to life. Specifically, we are seeing cell-through-a-socket target increased by almost 50% year-over-year and dual by almost 40%, while our baby list registries grew at almost 60% versus the previous year, proving our messaging and FDA clearance continues to resonate Owlet is still in the beginning stages of growth for Dream Sock, with about 10% of the 3.6 million U.S. birds every year coming home with an Owlet sock.

Kurt Workman: Is my baby okay? The second phase will integrate professional service partners into our app that will provide integrated care 24 hours a day seven days a week. Parents will be able to chat with pediatricians, nurses, sleep coaches, and maternal health professionals who have access to Owlet's data to provide personalized care at home. We'll be able to use this data and new AI models to deliver unparalleled insights and proactive detection that will help them with pediatrician to preventive care in our third phase.

Speaker Change: Here in the U.S., our partnerships with major retailers, Target and Walmart, are growing with expanded merchandising and placements to bring outlet experience to life.

Speaker Change: Specifically, we are seeing cell-through-a-socket target increase by almost 50% year-over-year and dual almost 40%, while our baby list registries grew at almost 60% versus previous year, proving our messaging and FDA clearance continues to resonate with expecting parents.

Kurt Workman: Our strategy is to use our biggest assets, our network of parents, hospitals, and data to drive continued value and torque platform as a result. We expect the price point of our subscription, will evolve over time as well as the value and services we are providing. I can't imagine a world where every parent and pediatrician doesn't have access to some sort of information like Owlet about their baby that we will be providing and passionately advancing.

Speaker Change: Owlet is still in the beginning stages of growth for DreamSock with about 10% of the 3.6 million U.S. births every year coming home with an Owlet sock. We believe that just like car seats and strollers, every baby will have access to health sensing technology at home.

Jonathan Harris: We believe that just like car seats and strollers, every baby will have access to health sensing technology at home. And finally, I'm pleased to share Owlet had its most successful Amazon Prime event in the company's history with record sales of both our Duo and DreamSock. In fact, Owlet was ranked number one Baby Monitor as well as number one in Baby Fave.

Jonathan Harris: We believe that just like car seats and strollers, every baby will have access to health sensing technology at home. And finally, I'm pleased to share Owlet had our most successful Amazon Prime event in the company's history with record sales of both our Duo and DreamSock. In fact, Owlet was ranked number one Baby Monitor as well as number one in Baby Fave. Secondly, our UK CE launch.

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

Jonathan Harris: And finally, I'm pleased to share Owlet had our most successful Amazon Prime event in the company's history, with record sales of both our Duo and DreamSock. In fact, Owlet was ranked number one baby monitor, as well as number one in baby safety.

Speaker Change: And finally, I'm pleased to share Owlet had our most successful Amazon Prime event in the company's history, with record sales of both our Duo and DreamSock. In fact, Owlet was ranked number one baby monitor as well as number one in baby safety.

Kurt Workman: As a corollary, 70 million adults in the U.S, alone have a wearable health sensor and they've come to expect it for their children. We believe that just like every baby leaves the hospital with a thermometer, a breast pump, and a car seat, every baby will have access to Owlet care that could one day be reimbursed by insurance. Baby sat and dreamed to offer complimentary in this vision, giving access to Owlet's technology to both parents who have a critically ill baby leading the NICU and to the new parent who's trying to navigate bringing their newborn home for the first time. The opportunity to become the standard of home care in pediatrics is absolutely massive. It's been overlooked and Owlet is in the best position to build it.

Jonathan Harris: Secondly, our UK CE launch. Owlet is extremely well positioned to take advantage of our UK and CE MedMark clearance with key retail partnerships across the European market, such as Mom and Pop in the UK, Baby One in Germany and into Australia with Baby Bunts, and we're already seeing sell-through up significant weight. With our EU and UK medical clearance releases, we are able to generate over 650 million media views with coverage in Cosmo UK, The Independent, Mother and Baby, and many, many more. Overall, Owlet saw international revenue grow at over 275% over the previous year, providing the demand for Owlet products is truly global.

Jonathan Harris: Owlet is extremely well positioned to take advantage of our UK and CE MedMart clearance with key retail partnerships across the European market, such as Mama and Papa's in the UK, Baby One in Germany, and into Australia with Baby Buns, and we're already seeing sell-through increase significantly. With our EU and UK medical clearance releases, we are able to generate over 650 million unique media views with coverage in Cosmo UK, The Independent, Mother and Baby, and many, many more. Overall, Owlet saw international revenue grow at over 275% over the previous year, proving that demand for Owlet products is truly global.

Jonathan Harris: Secondly, our UK CE launch. Owlet is extremely well positioned to take advantage of our UK and CE MedMart clearance with key retail partnerships across the European market, such as Mama and Papa's in the UK, Baby One in Germany, and into Australia with Baby Buns, and we're already seeing sell-through increase significantly. With our EU and UK medical clearance releases, we are able to generate over 650 million unique media views with coverage in Cosmo UK, The Independent, Mother and Baby, and many, many more.

Speaker Change: Secondly, our UKCE launch.

Speaker Change: outlet is extremely well positioned to take advantage of our UK and CE Med Mart clearance with key retail partnerships across the European market, such as Mama and Papa's in the UK, Baby One in Germany, and into Australia with Baby Bunting, we're already seeing sell-through up significantly.

Speaker Change: With our EU and UK medical clearance releases, we are able to generate over 650 million unique media views with coverage in Cosmo UK, The Independent, Mother and Baby, and many, many more.

Jonathan Harris: Overall, Owlet saw international revenue grow at over 275% over the previous year, proving that demand for Owlet products is truly global. Third, opening medical channels. In a similar vein, the response of pediatricians to Owlet's BabySat has also been extremely positive.

Speaker Change: Overall, Owlet saw international revenue grow at over 275% over the previous year, providing the demand for Owlet products is truly global.

Jonathan Harris: Third, opening medical channels. In a similar vein, the response of pediatricians to Owlet's baby set has also been extremely positive. In Q2, we've seen hundreds of pediatricians prescribing baby sat. The feedback we are receiving from parents and doctors tells us that baby sat is a powerful new tool in the care of at-risk infants. We launched our partnership with Adapt Health and Q2 to expand our distribution and medical channels. Adapt serves as a cornerstone for Owlet successfully entering this vital market. We are integrating with all major insurance plans, including Aetna, Sigma, United, and the Blue Cross networks, removing barriers and ensuring families can access baby sat when they need it most.

Jonathan Harris: Third, opening up medical channels. In a similar vein, the response of pediatricians to Owlet's BabySat has also been extremely positive. In Q2, we've seen hundreds of pediatricians prescribing BabySat. The feedback we are receiving from parents and doctors tells us that BabySat is a powerful new tool in the care of at-risk infants. We launched our partnership with ADAPT Health and Q2 to expand our distribution in medical channels. ADAPT Health serves as a cornerstone for Owlet successfully entering this vital market.

Speaker Change: Third, opening medical channels.

Speaker Change: In a similar vein, the response of pediatricians to Owlet's Babysat has also been extremely positive. In Q2, we've seen hundreds of pediatricians prescribing Babysat.

Jonathan Harris: In Q2, we've seen hundreds of pediatricians prescribing BabySat. The feedback we are receiving from parents and doctors tells us that BabySat is a powerful new tool in the care of at-risk infants. We launched our partnership with ADAPT Health and Q2 to expand our distribution in medical channels. ADAPT Health serves as a cornerstone for Owlet successfully entering this vital market. We are integrating with all major insurance plans, including Aetna, Cigna, United, and Blue Cross Networks, removing barriers and ensuring families can access BabySat when they need it most. We're also streamlining the BabySat Purchase Flow through partnerships with providers like WHEEL, who offer telehealth services directly through OwletCare.com for prescription access. Parents can now seamlessly obtain a prescription and submit for reimbursement through the Owlet website.

Speaker Change: The feedback we are receiving from parents and doctors tell us that BabySat is a powerful new tool in the care of at-risk infants.

Speaker Change: We launched our partnership with ADAPT Health and Q2 to expand our distribution in medical channels. ADAPT serves as a cornerstone for outlets successfully entering this vital market.

Jonathan Harris: We are integrating with all major insurance plans, including Aetna, Cigna, United, and Blue Cross Networks, removing barriers and ensuring families can access BabySat when they need it most. We're also streamlining the BabySat purchase flow through partnerships with providers like WHEEL, who offer telehealth services directly through OwletCare.com for prescription access. Parents can now seamlessly obtain a prescription and submit for reimbursement through the Owlet website. However, we expect this channel to take some time to grow.

Speaker Change: We are integrating with all major insurance plans, including Aetna, Cigna, United, and the Blue Cross Networks, removing barriers and ensuring families can access BabySat when they need it most.

Jonathan Harris: We're also streamlining baby sat purchase flow through partnerships with providers like Weal, who offer telehealth services directly through OwletCare.com for prescription access. Parents can now seamlessly obtain a prescription and submit for reimbursement through the Owlet website. We've spent this channel to take some time to grow.

Amanda Crawford: She will be covering our Q2 financial results.

Kurt Workman: As we announced a few weeks ago, Kate's full neck is losing Owlet to pursue other opportunities and will remain at the company in an advisory role for a transition period through September. On behalf of the board of directors in Owlet, I want to thank Kate for her executive leadership and significant contributions since joining our management team prior to our initial public listing. Over the last three and a half years, she's been instrumental in supporting our top line growth, margin expansion and profitability objectives. And with her help, we are on track to achieve our 2024 operational and financial goals.

Speaker Change: We're also streamlining BabySat purchase flow through partnerships with providers like Wheel, who offer telehealth services directly through OutletCare.com for prescription access. Parents can now seamlessly obtain a prescription and submit for reimbursement through the Outlet website.

Kurt Workman: We wish Kate continued success in her future endeavors.

Jonathan Harris: We expect this channel to take some time to grow. In 2024, it will continue to grow, and we will continue adding new distribution partners to expand our reach. We see this as a long-term opportunity to provide our innovative technology to infants with medical necessity, with insurance, and reimbursement for the family. And finally, a subscription service. In addition to our channel expansion, we're also focused on driving additional value to our customers through a new subscription service.

Jonathan Harris: In 2024, we will continue adding new distribution partners to expand our reach. We do this as a long-term opportunity to provide our innovative technology to infants with medical necessity, with insurance, reimbursement for the families.

Jonathan Harris: In 2024, we will continue adding new distribution partners to expand our reach. We see this as a long-term opportunity to provide our innovative technology to infants with medical necessity with insurance and reimbursement for the family. And finally, the subscription service. 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 15 trillion baby heartbeats, provides deep insights into infant health and sleep that only Owlet can provide.

Speaker Change: We expect this channel to take some time to grow.

Speaker Change: In 2024, we will continue adding new distribution partners to expand our reach. We see this as a long-term opportunity to provide our innovative technology to infants with medical necessity, with insurance reimbursement for the families.

Jonathan Harris: And finally, subscription service. 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 and forward by capturing over 15 trillion baby heartbeats provides deep insights into infant health and sleep that only Owlet can provide. And we're unlocking its potential. Health and sleep are at the fundamental concerns of every parent. When navigating these challenges, parents want to know what's normal and when they need to get professional support. Owlet's impressively large set of infant health data can help parents better navigate what is normal for their baby, when to visit the doctor, and when to stay home.

Speaker Change: And finally, subscription service. In addition to our channel expansion, we're also focused on driving additional value to our customers through a new subscription service.

Kurt Workman: Amanda is a key financial leader and contributor at Owlet, and we're excited for her to be moving into the chief financial officer role. She joined us in 2022 with over 15 years of finance and accounting experience from Swire Coca-Cola and Price Waterhouse Coopers with the Masters in Accounting. Amanda knows our business, our leadership, our community, and our vision incredibly well. And as such, we anticipate this will be a smooth transition.

Jonathan Harris: Our unparalleled data set, informed by capturing over 15 trillion baby heartbeats, provides deep insights into infant health and sleep that only Owlet can provide. And we're unlocking its potential. Health and sleep are the fundamental concerns of every parent. When navigating these challenges, parents want to know what's normal and when they need to get professional support. Owlet's impressively large set of infant health data can help parents better navigate what is normal for their baby, when to visit the doctor, and when to stay home. Additionally, parents lose over 44 nights of sleep in the first year alone.

Speaker Change: Our unparalleled data set informed by capturing over 15 trillion baby heartbeats provides deep insights into infant health and sleep that only Owlet can provide. And we're unlocking its potential.

Jonathan Harris: And we're unlocking its potential. Health and sleep are the fundamental concerns of every parent. When navigating these challenges, parents want to know what's normal and when they need to get professional support. Owlet's impressively large set of infant health data can help parents better navigate what is normal for their baby, when to visit the doctor, and when to stay home. Additionally, parents lose over 44 nights of sleep in the first year alone.

Speaker Change: Health and sleep are at the fundamental concerns of every parent.

Jonathan Harris: Welcome Amanda, and I'll turn the call over to Jonathan. Thanks, Kurt. And as Kurt just mentioned, we have really some really strong momentum building in our business, not only in the U.S, but across the globe.

Speaker Change: When navigating these challenges, parents want to know what's normal and when they need to get professional support. Alice's impressively large set of infant health data can help parents better navigate what is normal for their baby, when to visit the doctor and when to stay home.

Jonathan Harris: First, demand an adoption. The response to our new FDA-clear dream stock here in the U.S, has been outstanding. We've witnessed strong parental engagement with over 66 million organic views of our content across TikTok and Facebook in Q2. And we continue to see great press with almost 1500 pieces of coverage and publication such as Buzzfeed, Ferris Biotech, PureWow, USA Today, CVS, and today's parents. The response to the FDA clearance of DreamSoc continues to be strong with sell-through achieving over 40%, 44% growth with our DreamSoc and Duo products year-over-year. Customer satisfaction supports this growth with NPS scores exceeding 70 and DreamSoc hitting an all-time high in this category.

Jonathan Harris: Additionally, parents lose over 44 nights of sleep in the first year alone. Our subscription service will analyze baby sleep data and provide parents with personalized recommendations and support to get the whole family sleeping better.

Speaker Change: Additionally, parents lose over 44 nights of sleep in the first year alone. Our subscription service will analyze baby sleep data and provide parents with personalized recommendations and support to get the whole family sleeping better.

Jonathan Harris: Our subscription service will analyze baby sleep data and provide parents with personalized recommendations and support to get the whole family sleeping better. We have just released early access to this service to a few highly engaged users, and we expect to make this service available to all Owlet users by Q4. We aren't from offering information 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.

Amanda Crawford: Our subscription service will analyze baby sleep data and provide parents with personalized recommendations and support to get the whole family sleeping better. We have just released early access to this service to a few highly engaged users, and we expect to make this service available to all Owlet users by Q4. We firmly believe that our products and services can extend their value well into the toddler years and beyond.

Jonathan Harris: Owlet has just released early access to this service to a few highly engaged users, and we expect to make this service available to all Owlet users by Q4. Art from offering information and insights 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. By focusing on core parenting pain points in the health and sleep and leveraging our data to drive continued releases of software features, we believe that this can expand our TAM and significantly extend our LTV per customer.

Speaker Change: Owlet has just released early access to this service to a few highly engaged users and we expect to make this service available to all Owlet users by Q4.

Speaker Change: Art from offering information 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.

Jonathan Harris: By focusing on core parenting pain points in health and sleep and leveraging our data to drive continued releases of software features, we believe that this can expand our TAM and significantly extend our LTV per customer. We're a growth-oriented company, operating efficiently and efficiently, and bringing innovative solutions that address the fundamental needs of parents around the world. With our landmark FDA clearances, we're established as a pioneer in infant health technology.

Amanda Crawford: By focusing on core parenting pain points in health and sleep and leveraging our data to drive continued releases of software features, we believe that this can expand our TAM and significantly extend our LTV per customer. We're a growth-oriented company, operating efficiently and efficiently, and bringing innovative solutions that address the fundamental needs of parents around the world. With our landmark FDA clearances, we're established as a pioneer in infant health technology.

Speaker Change: By focusing on core parenting pain points in the health and sleep and leveraging our data to drive continued releases of software features, we believe that this can expand our TAM and significantly extend our LTV per customer.

Jonathan Harris: We achieved this market enthusiasm while maintaining strong growth trajectory, including net revenue, growth of 58% over Q2 of last year. Here in the US, our partnerships with major retailers target and Walmart are growing with expanded merchandising and placements to bring Owlet experience to life. Specifically, we are seeing sell-through a socket target increase by almost 50% year-over-year and Duo almost 40%. While our baby-less registry is growing at almost 60% versus previous year, proving our messaging and FDA clearance continues to resonate with expecting parents. Owlet is still in the beginning stages of growth for DreamSoc, with about 10% of the 3.6 million US birds every year coming home with an Owlet stock.

Jonathan Harris: Owlet is in the stronger commercial position than ever. We're a growth-oriented company operating efficiently and bringing innovative solutions that address the fundamental needs of parents around the world. With our landmark FDA clearances, we're established as a pioneer in infant health technology. This unique set of circumstances has accompanied poised for success as we continue to deliver value for our families and stakeholders alike.

Speaker Change: outlet is in a stronger commercial position than ever.

Speaker Change: efficiently and bringing innovative solutions that address the fundamental needs of parents around the world. With our landmark FDA clearances, we're established as a pioneer in infant health technologies.

Jonathan Harris: This unique set of circumstances has the company poised for success as we continue to deliver value for our families and stakeholders alike. We're excited to share this incredible journey with you. Thank you. And now I'm going to turn it over to Amanda for our financials.

Amanda Crawford: This unique set of circumstances has the company poised for success as we continue to deliver value for our families and stakeholders alike. We're excited to share this incredible journey with you. Thank you, and now I'm going to turn it over to Amanda for our opening answer. Thank you, Jonathan, and thanks to everyone for joining us today.

Speaker Change: This unique set of circumstances has the company poised for success as we continue to deliver value for our families and stakeholders alike.

Jonathan Harris: We're excited to share this incredible journey with you.

Amanda Crawford: Thank you, and now I'm going to turn it over to Amanda for our financials. Thank you, Jonathan, and thanks to everyone for joining us today. In Q2 2024, Owlet demonstrated strong financial performance and momentum. We achieved 20.7 million in net revenue, up 58% year-over-year, growth margins of 50%, and positive adjusted EBITDA, bringing us closer to our goals of exceeding 50% margins and profitability. Also, in the next few minutes, walking through Owlet's key financial metrics and providing some additional detail. Growth billings for the second quarter were 26.9 million, up 59% year-over-year. Product promotions and discounts were 5 million, primarily higher than average as a percentage of growth billings for Amazon Prime Day load-in.

Speaker Change: We're excited to share this incredible journey with you. Thank you, and now I'm going to turn it over to Amanda for our financials.

Amanda Crawford: Thank you, Jonathan, and thanks to everyone for joining us today. In Q2 2024, Owlet demonstrated strong financial performance and momentum. We achieved $20.7 million in net revenue, up 58% year over year, gross margins of 50%, and positive adjusted EBITDA, bringing us closer to our goals of exceeding 50% margins and profitability. I'll spend the next few minutes walking through Owlet's key financial metrics and providing some additional detail.

Amanda: Thank you, Jonathan, and thanks to everyone for joining us today.

Amanda Crawford: In Q2 2024, Owlet demonstrated strong financial performance and momentum. We achieved $20.7 million in net revenue, up 58% year-over-year, growth margins of 50%, and positive adjusted EBITDA, bringing us closer to our goals of exceeding 50% margins and profitability. I'll spend the next few minutes walking through Owlet's key financial metrics and providing some additional detail. Gross billings for the second quarter were $26.9 million, up 59% year over year. Product promotions and discounts were $5 million, primarily higher than average as a percentage of gross billing for Amazon Prime Day load-in. Returns and Allowance Reserves were $1.1 million, approximately 4.1% of gross billing, and below our average rate.

Jonathan Harris: We believe that just like car seats and strollers, every baby will have access to health-sensing technology at home. And finally, I'm pleased to share Owlet had our most successful Amazon Prime event in the company's history, with record sales of both our Duo and DreamSoc. In fact, Owlet was ranked number one baby monitor, as well as number one in baby safety.

Amanda: In Q2 2024, Allitt demonstrated strong financial performance and momentum.

Amanda: We achieved $20.7 million in net revenue, up 58% year-over-year, gross margins of 50%, and positive adjusted EBITDA, bringing us closer to our goals of exceeding 50% margins and profitability.

Jonathan Harris: Secondly, our UK CE launch. Owlet is extremely well positioned to take advantage of our UK and CE MedMark clearance with key retail partnerships across the European market, such as Mom and Pop is in the UK, baby one in Germany and into Australia with baby bunts and we're already seeing sell-through-up significant weight. With our EU and UK medical clearance releases, we are able to generate over 650 million media views with coverage in Cosmo UK, the independent mother and baby, and many, many more.

Speaker Change: I'll spend the next few minutes walking through ALEC's key financial metrics and providing some additional detail.

Amanda Crawford: Gross billings for the second quarter were $26.9 million, up 59% year over year. Product promotions and discounts were $5 million, primarily higher than average as a percentage of gross billing for Amazon Prime Day load-in. Returns and Allowance Reserves were $1.1 million, approximately 4.1% of gross billing, and below our average range.

Speaker Change: Gross billings for the second quarter were $26.9 million, up 59% year-over-year.

Speaker Change: Product promotions and discounts were $5 million, primarily higher than average as a percentage of gross billing for Amazon Prime Day load-in.

Amanda Crawford: and Drillin. Returns in allowance reserves were 1.1 million, approximately 4.1% of gross billing, and below are average range. QQ Met revenue, which includes promotions, discounts, returns, and allowances, was 20.7 million versus 13.1 million in the prior year. Revenue growth was primarily driven by higher sales of DreamFox products, reflecting an increase in consumer demand as compared to the same period in the prior year. Our gross margin for the second quarter was approximately 50% of over 1,000 basis points from margins in Q2 of the prior year. Gross margin increased primarily due to higher revenues, favorable product mix, and lower direct product and fulfillment costs.

Speaker Change: Returns and allowance reserves were $1.1 million, approximately 4.1% of gross billings and below our average range.

Amanda Crawford: Q2 net revenue, which includes promotions, discounts, returns, and allowances, was $20.7 million versus $13.1 million in the prior year. Revenue growth was primarily driven by higher sales of DreamFox products, reflecting an increase in consumer demand as compared to the same period in the prior year. Our gross margin for the second quarter was approximately 50% of over 1,000 basis points from margins in Q2 of the prior year. Growth margin increased primarily due to higher revenue, favorable product mix, and lower direct product and fulfillment costs.

Jonathan Harris: Overall, Owlet saw international revenue grow at over 275% over the previous year, providing the demand for Owlet products is truly global.

Speaker Change: Q2 net revenue, which includes promotions, discounts, returns, and allowances, was $20.7 million versus $13.1 million in the prior year.

Jonathan Harris: Third, opening medical channels. In a similar vein, the response of pediatricians to Owlet's baby set has also been extremely positive. In Q2, we've seen hundreds of pediatricians prescribing baby sat. The feedback we are receiving from parents and doctors, tell us that baby sat is a powerful new tool in the care at risk infants. We launched our partnership with Adapt Health and Q2 to expand our distribution and medical channels. Adapt serves as a cornerstone for Owlet successfully entering this vital market.

Speaker Change: Revenue growth was primarily driven by higher sales of DreamFox products, reflecting an increase in consumer demand as compared to the same period in the prior year.

Speaker Change: Our gross margin for the second quarter was approximately 50% of over 1,000 basis points from margins in Q2 of the prior year.

Speaker Change: Growth margin increased primarily due to higher revenue, favorable product mix, and lower direct product and fulfillment costs.

Amanda Crawford: During the quarter, we experienced some cost of goods sold expense impact from elevated transportation costs related to global disruptions and inventory routing. Along with other companies seeking shipping alternatives, we are working to mitigate these factors. Total operating expenses in the second quarter were 12.5 million, an increase of approximately 600,000 year-over-year. Excluding stock-based compensation, QQ operating expenses were 10.4 million. Second quarter operating loss was 2.2 million for the quarter compared to an operating loss of 6.7 million in Q2 2023 and 5.7 million sequentially. Second quarter net loss was 1.1 million for the quarter compared to a net loss of 8.5 million in Q2 2023.

Speaker Change: During the quarter, we experienced some cost-of-goods-sold expense impact from elevated transportation costs related to global disruptions in inventory routing. Along with other companies seeking shipping alternatives, we are working to mitigate these factors.

Jonathan Harris: We are integrating with all major insurance plans, including Etna, Sigma, United and the Blue Cross Networks, removing barriers and ensuring families can access baby sat when they need it most. We're also streamlining baby sat purchase flow through partnerships with providers like Weal who offer telehealth services directly through OwletCare.com for prescription access. Parents can now seamlessly obtain a prescription and submit for reimbursement through the Owlet website.

Speaker Change: Total operating expenses in the second quarter were 12.5 million, an increase of approximately 600,000 year over year. Excluding stock-based compensation, Q2 operating expenses were 10.4 million.

Amanda Crawford: Second quarter operating loss was $2.2 million for the quarter compared to an operating loss of $6.7 million in Q2 2023 and $5.7 million sequentially. Second quarter net loss was $1.1 million for the quarter compared to a net loss of $8.5 million in Q2 2023. Within the net loss, there was a gain of $1 million as compared to a loss of $1.6 million in Q2 2023 as a result of a decrease in the fair value of the common stock warrants outstanding. Adjusted EBITDA for the second quarter was $100,000, improving significantly from an adjusted EBITDA loss of $4.3 million in Q2 of last year. Turning to the balance sheet, Q2 ended with $15.6 million in cash and cash-to-club loans.

Jonathan Harris: We've spent this channel to take some time to grow, in 2024, we will continue adding new distribution partners to expand our reach. We do this as a long-term opportunity to provide our innovative technology to infants with medical necessity, with insurance, reimbursement for the families.

Speaker Change: Second quarter operating loss was 2.2 million for the quarter compared to an operating loss of 6.7 million in Q2 2023 and 5.7 million sequentially.

Speaker Change: Second quarter net loss was $1.1 million for the quarter compared to a net loss of $8.5 million in Q2 2023.

Amanda Crawford: Within that loss, there was a gain of 1 million as compared to a loss of 1.6 million in Q2 2023 as a result of a decrease in the fair value of the common stock warrants outstanding. Ajusted EVA staff for the second quarter was 100,000, improving significantly from a adjusted EVA dollop of 4.3 million in Q2 of last year. Turning to the balance, QQ ended with 15.6 million in cash and cash equivalents. We remain focused on executing our strategic initiatives to further strengthen our commercial and financial performance in 2024. Looking forward, we are focused on executing on the core business activities in 2024 that will maximize the following initiatives.

Jonathan Harris: And finally, subscription service. 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 and forward by capturing over 15 trillion baby heartbeat provides deep insights into infant health and sleep that only Owlet can provide. And we're unlocking its potential. Health and sleep are at the fundamental concerns of every parent. When navigating these challenges, parents want to know what's normal and when they need to get professional support.

Speaker Change: Within net loss, there was a gain of $1 million as compared to a loss of $1.6 million in Q2 2023 as a result of a decrease in the fair value of the Common Stock Warrant's outstanding.

Amanda Crawford: Adjusted EBITDA for the second quarter was $100,000, improving significantly from an adjusted EBITDA loss of $4.3 million in Q2 of last year. Turning to the balance sheet, Q2 ended with $15.6 million in cash and cash to club life. We remain focused on executing our strategic initiatives to further strengthen our commercial and financial performance in 2024. Looking forward, we are focused on executing on the core business activities in 2024 that will maximize the following initiatives, supporting Dreamstalk product commercialization globally and driving a continual balance of sell in and sell through of consumer retail inventory.

Speaker Change: Adjusted EBITDA for the second quarter was $100,000, improving significantly from adjusted EBITDA loss of $4.3 million in Q2 of last year.

Speaker Change: Turning to the balance sheet, Q2 ended with $15.6 million in cash and cash-to-club loans.

Amanda Crawford: We remain focused on executing our strategic initiatives to further strengthen our commercial and financial performance in 2024. Looking forward, we are focused on executing on the core business activities in 2024 that will maximize the following initiatives, supporting Dreamstalk product commercialization globally and driving a continual balance of sell in and sell through of consumer retail inventory. From a sell-in linearity perspective, we anticipate a seasonal revenue increase from Q2 to Q3 for sell-in for the November and December holiday promotion.

Jonathan Harris: Owlet's impressively large set of infant health data can help parents better navigate what is normal for their baby, when to visit the doctor and when to stay home. Additionally, parents lose over 44 nights of sleep in the first year alone. Our subscription service will analyze baby sleep data and provide parents with personalized recommendations and support to get the whole family sleeping better.

Speaker Change: We remain focused on executing our strategic initiatives to further strengthen our commercial and financial performance in 2024.

Speaker Change: Looking forward, we are focused on executing on the core business activities in 2024 that will maximize the following initiatives.

Amanda Crawford: Supporting dream stock product commercialization globally and driving continual balance of cell-in and cell-true of consumer retail inventory. From a cell-in linearity perspective, we anticipate a seasonal revenue increase from Q2 to Q3 for cell-in for the November and December holiday promotions. Q4 is expected to be lower than Q3 sequentially due to less promotional activities following the holidays. We are making effective strides in baby stock commercialization with new DME partnerships and will integration on outletcare.com. As a reminder, we anticipate baby stock product revenue will be ramping in 2024 as we develop these partnerships and will drive revenue impact in 2025.

Speaker Change: Supporting DreamStock product commercialization globally and driving continual balance of sell-in and sell-through of consumer retail inventory.

Jonathan Harris: Owlet has just released early access to this service to a few highly engaged users and we expect to make this service available to all Owlet users by Q4. Art from offering information and insights 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. By focusing on core parenting pain points in the health and sleep and leveraging our data to drive continued releases of software features, we believe that this can expand our TAM and significantly extend our LTV per customer.

Amanda Crawford: From a sell-in linearity perspective, we anticipate a seasonal revenue increase from Q2 to Q3 for sell-in for the November and December holiday promotion. However, Q4 is expected to be lower than Q3, sequentially, due to less promotional activity following the holidays.

Speaker Change: From a sell-in linearity perspective, we anticipate a seasonal revenue increase from Q2 to Q3 for sell-in for the November and December holiday promotions.

Amanda Crawford: Q4 is expected to be lower than Q3, sequentially, due to less promotional activity following the holidays. However, we are making effective strides in baby fat commercialization with new DME partnerships and will integration on OwletCare.com. As a reminder, we anticipate BabySTOP product revenue will be ramping in 2024 as we develop these partnerships and will drive revenue impact in 2025. We plan to launch our subscription product in Q3. Projected revenue will also be ramping up in 2024 and driving revenue impact in 2025.

Speaker Change: Q4 is expected to be lower than Q3 sequentially due to less promotional activity following the holidays.

Amanda Crawford: We are making effective strides in baby stock commercialization with new DME partnerships and will integration on OwletCare.com. As a reminder, we anticipate Baby Step product revenue will be ramping in 2024 as we develop these partnerships and will drive revenue impact in 2025. We plan to launch our subscription product in Q3. Projected revenue will also be ramping up in 2024 and driving revenue impact in 2025. We remain focused operationally on driving quarterly growth margins within our target range of 46 to 50% through unit volume, product mix, and operational efficiency.

Speaker Change: We are making effective strides in baby sack commercialization with new DME partnerships and will integration on OwletCare.com.

Speaker Change: As a reminder, we anticipate Baby Step product revenue will be ramping in 2024 as we develop these partnerships and will drive revenue impact in 2025.

Amanda Crawford: We plan to launch our subscription product in Q3. Projected revenue will also be ramping in 2024 and drive revenue impact in 2025. We remain focused operationally on driving quarterly growth margins within our target range of 46 to 50% through unit volume, product mix, and operational efficiencies. We will continue to drive leverage in our business operations, initially towards break even and then towards sustainable profitability. We have reached a level of operational maturity that we are comfortable in providing forward-looking guidance. For the second half of 2024, we are estimating net revenue to be stronger than the first half and in the range of 37 million to 42 million.

Speaker Change: We plan to launch our subscription product in Q3.

Jonathan Harris: With our landmark FDA clearances, we're established as a pioneer in infant health technology. This unique set of circumstances has accompanied poised for success as we continue to deliver value for our families and stakeholders alike.

Speaker Change: Projected revenue will also be ramping in 2024 and drive revenue impact in 2025.

Amanda Crawford: We remain focused operationally on driving quarterly growth margins within our target range of 46 to 50% through unit volume, product mix, and operational efficiency. We will continue to drive leverage in our business operations initially towards breakeven and then towards sustainable profitability. We have reached a level of operational maturity that we are comfortable in providing forward-looking guidance. For the second half of 2024, we are estimating net revenue to be stronger than the first half and in the range of $37 million to $42 million, gross margins of 46% to 50%, and adjusted EBITDA losses of $3 million to break even.

Speaker Change: We remain focused operationally on driving quarterly growth margins within our target range of 46 to 50 percent through unit volume, product mix, and operational efficiencies.

Jonathan Harris: We're excited to share this incredible journey with you.

Amanda Crawford: Thank you and now I'm going to turn it over to Amanda for our financials. Thank you Jonathan and thanks to everyone for joining us today. In Q2 2024, Owlet demonstrated strong financial performance and momentum. We achieved 20.7 million in net revenue up 58% year-over-year, growth margins of 50% and positive adjusted EBITDA, bringing us closer to our goals of exceeding 50% margins and profitability. Also in the next few minutes, walking through Owlet's key financial metrics and providing some additional detail.

Amanda Crawford: We will continue to drive leverage in our business operations, initially towards breakeven and then towards sustainable profitability. We have reached a level of operational maturity where we are comfortable providing forward-looking guidance. For the second half of 2024, we are estimating net revenue to be stronger than the first half and in the range of $37 million to $42 million, gross margins of 46 to 50%, and adjusted EBITDA losses of $3 million to break even. For the full year, we are estimating net revenue to be in the range of $72.5 million to $77.5 million, gross margins of 47 to 49%, and an adjusted EBITDA loss of $6 million to $3 million.

Speaker Change: We will continue to drive leverage in our business operations initially towards break-even and then towards sustainable profitability.

Speaker Change: We have reached a level of operational maturity that we are comfortable in providing forward-looking guidance.

Speaker Change: For the second half of 2024, we are estimating net revenue to be stronger than the first half and in the range of $37 million to $42 million.

Amanda Crawford: Growth margins of 46 to 50% and adjusted EBITDA loss of 3 million to break even. For the full year, we are estimating net revenue to be in the range of 72.5 million to 77.5 million. Growth margins of 47 to 49% and adjusted EBITDA loss of 6 million to 3 million.

Speaker Change: gross margins of 46-50% and adjusted EBITDA loss of $3 million to break even.

Amanda Crawford: For the full year, we are estimating net revenue to be in the range of $72.5 million to $77.5 million, gross margins of 47 to 49%, and an adjusted EBITDA loss of $6 million to $3 million. With that, I will turn the call over to the Q&A portion. Operator, please open up the call to questions.

Amanda Crawford: Growth billings for the second quarter were 26.9 million, up 59% year-over-year. Product promotions and discounts were 5 million, primarily higher than average as a percentage of growth billings for Amazon Prime Day load-in, and Drillin. Returns in allowance reserves were 1.1 million, approximately 4.1% of gross billing, and below are average range. QQ Met revenue, which includes promotions, discounts, returns and allowances, was 20.7 million versus 13.1 million in the prior year. Revenue growth was primarily driven by higher sales of DreamFox products, reflecting an increase in consumer demand as compared to the same period in the prior year.

Speaker Change: For the full year, we are estimating net revenue to be in the range of $72.5 million to $77.5 million.

Speaker Change: Gross margins of 47 to 49% and adjusted EBITDA loss of $6 million to $3 million.

Operator: With that, I will turn the call over to the Q&A portion.

Operator: With that, I will turn the call over to the Q&A portion. Operator, please open up the call to questions. We will now begin our question and answer session. If you would like to ask a question, please press star to qualify once. If you would like to remove that question, please press followed by two again to ask a question is star one as well. Our first question is from Charles Rhyee with the company CD Talon.

Operator: Operator, please open up the call to questions. We will now begin our question session. If you would like to ask a question, please press call up by one.

Speaker Change: With that, I will turn the call over to the Q&A portion. Operator, please open up the call to questions.

Operator: We will now begin our question and answer session. If you would like to ask a question, please press star once to qualify once, and if you would like to remove that question, please press followed by two. I get to ask a question is star one as well. If you're using speakerphone, please remember to pick up your handset before asking a question. Our first question is from Charles Rhyee with the company CD Talon. Charles, your line is now open.

Speaker Change: We will now begin our question and answer session. If you would like to ask a question, please press Followed by one

Operator: Keep reading reluctantly with that question. Please press call up by two.

Speaker Change: Thank you. Bye.

Speaker Change: For any reason you would like to remove that question, please press 1 followed by 2 again to ask a question, press star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question.

Operator: I guess you ask a question to start one. If you are using a speaker phone, please remember to pick up your handset before asking a question.

Charles Rhyee: The first question is free with a company CD talent. If you want to start open. Yeah, thanks, guys, for taking the question. Maybe to start, Jonathan, you talked about the exposure that Alan is gaining across a bunch of media channels, social media as well. How are we tracking that? How are we tracking that in terms of how that is translating into sales? And maybe just sort of how are you looking internally to make sure that you're getting an effective ROI on that spend? Thanks, Charles. Yes, we're tracking that show in Q4 of 2023. We hired a PR agency to actively and aggressively reach out to various press because we saw the clearance of our FDA products.

Charles Rhyee: Charles, your line is now open. Yeah, thanks guys for taking the questions I addressed during the quarter. You know, maybe to start, Jonathan, you talked about sort of the exposure that Owlet is gaining across a bunch of media channels, social media as well. How are we tracking that? And how are we tracking that in terms of how that is translating into sales? And maybe just sort of how you're looking internally to, you know, make sure that you're getting an effective ROI on that spend? Thanks, Charles.

Amanda Crawford: Our gross margin for the second quarter was approximately 50% of over 1,000 basis points from margins in Q2 of the prior year. Gross margin increased primarily due to higher revenues, favorable product mix and lower direct product and fulfillment costs. During the quarter, we experienced some cost of good sold expense impact from elevated transportation costs related to global disruptions and inventory routing. Along with other companies seeking shipping alternatives, we are working to mitigate these factors.

Speaker Change: Our first question calls Reed with the company CD Cowan. Your line is now open.

Charles Rhyee: Yeah, thanks guys for taking the questions I addressed during the quarter. You know, maybe to start, Jonathan, you talked about sort of the exposure that Owlet is gaining, you know, across a bunch of media channels, and social media as well. How are we tracking that, and how are we tracking that in terms of how that is translating into sales? And maybe just sort of how you're looking internally to, you know, make sure that you're getting an effective ROI on that spend?

Speaker Change: Yeah, thanks guys for taking the questions I addressed on the quarter. You know, maybe to start, you know, Jonathan, you know, you talked about sort of the

Speaker Change: The exposure that Allen is gaining, you know, across a bunch of media channels, social media as well.

Speaker Change: How are we tracking that in terms of how that is translating into sales, and maybe just sort of how you're looking internally to make sure that you're getting an effective ROI on that spend?

Amanda Crawford: Total operating expenses in the second quarter were 12.5 million, an increase of approximately 600,000 year-over-year. Excluding stock-based compensation, QQ operating expenses were 10.4 million. Second quarter operating loss was 2.2 million for the quarter compared to an operating loss of 6.7 million in Q2 2023 and 5.7 million sequentially. Second quarter net loss was 1.1 million for the quarter compared to a net loss of 8.5 million in Q2 2023. Within that loss, there was a gain of 1 million as compared to a loss of 1.6 million in Q2 2023 as a result of a decrease in the fair value of the common stock warrants outstanding.

Jonathan Harris: Thanks, Charles. Yes, we're tracking that. So, in Q4 of 2023, we hired a PR agency to actively and aggressively reach out to various press because we saw the clearance of our FDA products. And so, we are really leveraging that PR agency to help us continue to grow and expand our reach, not only here in the U.S. but internationally as well. So, we're having the PR agency, as well as ourselves, monitor that.

Jonathan Harris: Yes, we're tracking that. So, in Q4 of 2023, we hired a PR agency to actively and aggressively reach out to various press because we saw the clearance of our FDA products. And so, we are really leveraging that PR agency to help us continue to grow and expand our reach, not only here in the U.S. but internationally as well. So, we're having the PR agency, as well as ourselves, monitor that. We're tracking site traffic as well as relevant sources.

Speaker Change: Thanks, Charles. Yes, we're tracking that. So, in Q4 of 2023, we hired a PR agency to actively and aggressively

Speaker Change: reach out to various press because we saw

Jonathan Harris: And so we are really leveraging that PR agency to help us continue to grow and expand our reach, not only here in the US, but internationally as well. So we're having the PR agency as well as ourselves are monitoring that. We're tracking site traffic, as well as relevant sources. Additionally, we're looking at what we're seeing organically and inorganically on TikTok and Facebook and really driving that exposure. We're really seeing strong engagement from our social media channels and continuing to drive that, and we're just finding that it's very, very positive and that customer feedback parental.

Speaker Change: the clearance of our FDA products.

Speaker Change: and so.

Speaker Change: We are really leveraging that PR agency to help us continue to grow and expand our reach, not only here in the US, but internationally as well.

Speaker Change: So we're having the PR agency as well as ourselves are monitoring that, we're tracking site traffic.

Jonathan Harris: We're tracking site traffic as well as relevant sources. Additionally, we're looking at what we're seeing organically and inorganically on TikTok and Facebook and really driving that exposure. We're really seeing strong engagement from our social media channels and continuing to drive that. And we're just finding that it's very, very positive and that customer feedback on Parental Awareness is growing and expanding, so it's great news across the globe.

Jonathan Harris: Additionally, we're looking at what we're seeing organically and inorganically on TikTok and Facebook and really driving that exposure. We're really seeing strong engagement from our social media channels and continuing to drive that. And we're just finding that it's very, very positive and that customer feedback on parental awareness is growing and expanding, so it's great news across the globe. And are we still partnering?

Speaker Change: as well as relevant sources. Additionally, we're looking at what we're seeing organically and inorganically on TikTok and Facebook.

Amanda Crawford: Ajusted EVA staff for the second quarter was 100,000, improving significantly from a adjusted EVA dollop of 4.3 million in Q2 of last year. Turning to the balance, QQ ended with 15.6 million in cash and cash equivalent. We remain focused on executing our strategic initiatives to further strengthen our commercial and financial performance in 2024. Looking forward, we are focused on executing on the core business activities in 2024 that will maximize the following initiatives.

Speaker Change: and really driving that exposure. We're really seeing strong engagement from our social media channels and continuing to drive that. And we're just finding that it's very, very positive and that customer feedback, parental.

Jonathan Harris: Awareness is growing and expanding, so it's great news across the globe.

Speaker Change: awareness is growing and expanding, so it's great news across the globe.

Jonathan Harris: Are we still partnering? I know in the past, you've partnered with a lot of, you know, non-profit organizations, you know, particularly groups maybe focused on sins and other conditions, for instance. How much is that part of the strategy, or is this more of a general push into sort of the parenting market?

Jonathan Harris: I know in the past, you've partnered with a lot of, you know, nonprofit organizations, particularly groups may be focused on SIDS and other conditions, for instance. How much is that part of the strategy? Or is this more of a general push into sort of the parenting market? Yeah, great question.

Jonathan Harris: And are we still partnering? I know in the past, you've partnered with a lot of, you know, nonprofit organizations, particularly groups may be focused on SIDS and other conditions, for instance. How much is that part of the strategy? Or is this more of a general push into sort of the parenting market?

Speaker Change: And are we still partnering, I know in the past you've partnered with a lot of non-profit organizations, particularly groups maybe focused on SIDS and other conditions for infants. How much is that part of the strategy or is this more of a general push into sort of the parenting market? For more information visit www.FEMA.gov

Jonathan Harris: Yeah, great question. Yeah, we absolutely, we continue to drive with our partners. That's certainly helping us, but we're not only seeing the awareness from the SIDS partners we have, but, you know, the parental community in general. Parents are looking for insights; they're looking for, how do I get more sleep? What insights can I gain from my baby to help me have a healthier, safer, better sleep for their lives? Okay, got it.

Jonathan Harris: Yeah, we absolutely continue to drive with our partners. That's certainly helping us. But we're not only seeing the awareness from the SIDS partners we have, but you know, the parental community in general. Parents are looking for insights. They're looking for, "How do I get more sleep? What insights can I gain from my baby to help me have a healthier, safer, better sleep for their lives?"

Jonathan Harris: Yeah, great question. We absolutely continue to drive with our partners. That's certainly helping us. But we're not only seeing the awareness from the SIDS partners we have, but you know, the parental community in general. Parents are looking for insights. They're looking for, "How do I get more sleep?" What insights can I gain from my baby to help me have a healthier, safer, better sleep for their lives?

Speaker Change: Yeah, great question. Yeah, we absolutely, we continue to drive with our partners. That's certainly helping us. But we're not only seeing the awareness from the SIDS partners we have, but, you know, the parental community in general. Parents

Speaker Change: are looking for insights. They're looking for how do I get more sleep? What insights can I gain from my baby to help me have a healthier, safer, better sleep for their lives?

Amanda Crawford: As a reminder, we anticipate baby stock product revenue will be ramping in 2024 as we develop these partnerships and will drive revenue impact in 2025. We plan to launch our subscription product in Q3. Projected revenue will also be ramping in 2024 and drive revenue impact in 2025. We remain focused operationally on driving quarterly growth margins within our target range of 46 to 50% through unit volume, product mix, and operational efficiencies. We will continue to drive leverage in our business operations initially towards break even and then towards sustainable profitability.

Amanda Crawford: Okay, got it. And then maybe you want to ask about, you know, I think the comment at the beginning sort of talking about, You know, sort of at or near, Amanda, you talked about sort of at or near Justin Bieber, breaking for the rest of the year and then moving to sustainable growth. Is it fair to think then we should expect positive and just deep to start increasing sequentially as we move through the rest of the year, or are we looking to sort of reinvest income and earnings this year and really move towards more sustainable profitability next year? Hey, Charles, that's a good question.

Charles Rhyee: Okay, got it. And then maybe you want to ask about, you know, I think the comment at the beginning sort of talks about, you know, sort of at or near. Amanda, you talked about sort of being or near Justin Bieber, Da, breaking for the rest of the year, and then moving to sustainable growth. Is it fair to think that we should expect? positive, and Justin Bepida to start increasing sequentially as we move through the rest of the year? Or are we looking to sort of reinvest increment earnings this year and really move towards more sustainable profitability next year?

Amanda Crawford: And then maybe in what I asked about, you know, I think the comments at the beginning sort of talking about, you know, sort of Adam here, Amanda, you talked about sort of Adam here, just deep enough, breaking for the rest of the year. And then moving to sustainable growth, is it better to think that we should expect positive and just be a dot to start increasing sequentially as we move to the rest of the year, or are we looking to sort of reinvest income and earnings this year and really moving towards more sustainable profitability next year?

Speaker Change: Okay, got it. And then maybe, you know, I want to ask about, you know, I think the comment at the beginning sort of talking about

Speaker Change: Amanda, you talked about sort of Admir, Justin Bieberdahl, breaking for the rest of the year.

Speaker Change: and then moving to sustainable growth. Is it fair to think then we should expect positive and just deep to start increasing sequentially as we move through the rest of the year or are we looking to sort of reinvest increment earnings this year and really moving towards more sustainable profitability next year?

Amanda Crawford: Hey, Charles, that's a good question. So when we look at the Q3 and Q4 in terms of profitability, you know, we do expect Q3 to be stronger from a fel in perspective, just due to the holiday load in, like I mentioned, and then, you know, from a adjusted either doubt perspective exiting the year. You know, there's a few things that could impact it, and we will see to match our operating expenses with our top line. There is potential cost to goods full of headwinds from increasing sea and air transportation costs, and then we could potentially, you know, have some sales and marketing investments along with some clinical and regulatory investments towards the second half.

Amanda Crawford: Hey, Charles, that's a good question. So when we look at Q3 and Q4, in terms of profitability, you know, we do expect Q3 to be stronger from a sell-in perspective, just due to the holiday load-in, like I mentioned. And then, you know, from an adjusted EBITDA perspective exiting the year, there are a few things that could impact it, and we will seek to match our operating expenses with our top line.

Amanda Crawford: So when we look at Q3 and Q4, in terms of profitability, you know, we do expect Q3 to be stronger from a sell-in perspective, just due to the holiday load-in, like I mentioned. And then, you know, from an adjusted EBITDA perspective exiting the year, there's a few things that could impact it, and we will seek to match our operating expenses with our top line. There is potential cost of goods headwinds from increasing sea and air transportation costs, and then we could potentially, you know, have some sales and marketing investments, along with some clinical and regulatory investments towards the second half. So we do expect, sequentially, depending on the impact of those items, we may see an increase. However, you know, it's just dependent on those items.

Charles: Hey Charles, that's a good question. So when we look at the Q3 and Q4 in terms of profitability, you know, we do expect Q3 to be stronger from a sell-in perspective, just due to the holiday load-in, like I mentioned. And then, you know, from a adjusted eat-about perspective exiting the year,

Amanda Crawford: We have reached a level of operational maturity that we are comfortable in providing forward looking guidance. For the second half of 2024, we are estimating net revenue to be stronger than the first half and in the range of 37 million to 42 million. Growth margins of 46 to 50% and adjusted EBITDA loss of 3 million to break even. For the full year, we are estimating net revenue to be in the range of 72.5 million to 77.5 million. Growth margins of 47 to 49% and adjusted EBITDA loss of 6 million to 3 million.

Charles: There's a few things that could impact it, and we will seek to match our operating expenses with our top line.

Amanda Crawford: There is potential cost of goods headwinds from increasing sea and air transportation costs, and then we could potentially, you know, have some sales and marketing investments, along with some clinical and regulatory investments towards the second half. So we do expect, sequentially, depending on the impact of those items, we may see an increase. However, you know, it's just dependent on those items. That's why we're looking to break even in the second half of this year. Moving into 2025, Q1 is usually sequentially lower than Q4. But overall for the year, we are expecting to move towards a profitable business overall.

Speaker Change: There is potential cost of goods sold headwinds from increasing...

Speaker Change: to see an air transportation costs. And then we could potentially, you know, have some sales and marketing investments along with some critical and regulatory investments towards the second half. So we do expect, you know, sequentially, you know, depending on the impact of those items.

Amanda Crawford: So we do expect, you know, sequentially, you know, depending on the impact of those items, we may see an increase; however, you know, it's just dependent on those items. That's why we're looking to break even in the second half of this year.

Operator: With that, I will turn the call over to the Q&A portion. Operator, please open up the call to questions. We will now begin our question session. If you would like to ask a question, please press call up by one. Keep reading reluctantly with that question. Please press call up by two. I guess you ask a question to start one. If you are using a speaker phone, please remember to pick up your handset before asking a question.

Speaker Change: We may see an increase. However, you know, it's just dependent on those items. That's why we're looking to break even in the second half of this year. Moving into 2025, Q1 is usually sequentially lower than Q4.

Amanda Crawford: That's why we're looking to break even in the second half of this year. Moving into 2025, Q1 is usually sequentially lower than Q4. But overall, for the year, we are expecting to move towards a profitable business overall. Thanks. And speaking of shipping costs, can you, I mean, I guess when I look at the gross margin guidance for the full year, that implies sort of gross margins down sequentially from the second quarter. Is that all related to shipping costs?

Amanda Crawford: Moving into 2025, Q1 is usually sequentially lower than Q4, but overall for the year, we are expecting to move towards a profitable business overall.

Speaker Change: But overall for the year, we are expecting to move towards a profitable business overall.

Amanda Crawford: And thanks, and speaking of shipping costs, can you, I mean, I guess when I look at the gross margin guidance for the full year, that imply sort of gross margins down sequentially from the second quarter. Is that all that is the shipping costs? And related to that, what is sort of your assumptions for freight? Maybe you can talk about what you're seeing in the outlook right now. And what the trend is going in this sort of continues to take up here. And what are you assuming in the guy?

Charles Rhyee: And speaking of shipping costs, can you, I mean, I guess when I look at the gross margin guidance for the full year, that implies sort of gross margins down sequentially from the second quarter. Is that all related to shipping costs? And related to that, what is your sort of assumption? for free. Maybe you can talk about what you're seeing in the outlook right now and where the trend is going. Does it sort of continue to pick up here, and what are you assuming in the guide?

Charles Rhyee: The first question is free with a company CD talent. If you want to start open. Yeah, thanks guys for taking the question. Maybe to start, Jonathan, you talked about the exposure that Alan is gaining across a bunch of media channels, social media as well. How are we tracking that? How are we tracking that in terms of how that is translating into sales? And maybe just sort of how are you looking internally to make sure that you're getting an effective ROI on that spend?

Speaker Change: And thanks. And speaking of shipping costs, can you, I mean, I guess when I look at the gross margin guidance for the full year.

Speaker Change: that imply sort of gross margins down sequentially from the second quarter. Is that all related to shipping costs and related to that, what is sort of your assumptions?

Amanda Crawford: And related to that, what is your sort of assumption for freight? Maybe you can talk about what you're seeing in the outlook right now and where the trend is going. Is it sort of going to pick up here? And what are you assuming in the guide?

Speaker Change: for freight. Maybe you can talk about what you're seeing in the outlook right now and what the trend is going. Is it sort of continue to pick up here and what are you assuming in the guide? Thanks.

Amanda Crawford: Thanks. Yeah, so we are assuming a certain, to a certain degree, just because we are operating at a very lean level in terms of working capital and inventory and just keeping up with the demands that we've seen in our business. It's highly likely that we will need to air freight in some of our inventory just to get it on time to support the holiday season. So we do have a small level of that in the plan, but just depending on how we continue to perform, we could see higher air freight costs to support the business.

Amanda Crawford: Thanks. Yeah, so we are assuming to a certain degree, just because we are operating at a very lean level in terms of working capital and inventory, and just keeping up with the demand that we've seen in our business, it's highly likely that we will need to air freight some of our inventory just to get it on time to support the holiday season. So we do have a small level of that in the plan.

Amanda Crawford: Yeah, so we are assuming to a certain degree, just because we are operating at a very lean level in terms of working capital and inventory and just keeping up with the demand that we've seen in our business. It's highly likely that we will need to air freight some of our inventory just to get it on time to support the holiday season. So we do have a small level of that in the plan.

Speaker Change: Yeah, so we are assuming a certain to a certain degree, just because we are operating at a very lean level in terms of working capital and inventory and just keeping up with the demand that we've seen in our business.

Charles Rhyee: Thanks Charles. Yes, we're tracking that show in Q4 of 2023. We hired a PR agency to actively and aggressively reach out to various press because we saw the clearance of our FDA products. And so we are really leveraging that PR agency to help us continue to grow and expand our reach not only here in the US, but internationally as well. So we're having the PR agency as well as ourselves are monitoring that.

Speaker Change: It's highly likely that we will need to air freight in some of our inventory just to get it on time to support the holiday season. So we do have a small level of that in the plan, but just depending on how we continue to perform, we could see higher air freight costs to support the business.

Amanda Crawford: But just depending on, you know, how we continue to perform, we could see higher air freight costs to support the business. But with that, we are proactively looking at our inventory plan and seeking to get ahead of that. We're placing POs sooner, just to make sure that we can, you know, get the product in time through the most cost-effective shipping means possible. Okay, I see. So it's really more of a mix of what type of shipping that you're looking to utilize that's driving the higher cost.

Amanda Crawford: But with that, we are proactively looking at our inventory plan and seeking to get ahead of that. We're placing POs sooner just to make sure that we can get the product in time through the most cost-effective shipping means possible. Okay, I see, so it's really more of a mix of what type of shipping that you're looking to utilize that's driving sort of the higher cost. Are we seeing long delays and traditional shipping sort of by container? I think the containers are taking a little bit longer than what we typically see historically, but it's really just a matter of us having sufficient inventory to meet the demand in the second half.

Speaker Change: But with that, we are proactively looking at our inventory plan and seeking to get ahead of that. We're placing POs sooner just to make sure that we can, you know, get the product in time through the most cost-effective shipping means possible.

Charles Rhyee: We're tracking site traffic, as well as relevant sources. Additionally, we're looking at what we're seeing organically and inorganically on TikTok and Facebook and really driving driving that exposure. We're really seeing strong engagement from our social media channels and continuing to drive that and we're just finding that it's very, very positive and that customer feedback parental. Awareness is growing and expanding, so it's great news across the globe. Are we still partnering? I know in the past, you've partnered with a lot of, you know, non-profit organizations, you know, particularly groups maybe focused on sins and other conditions, for instance.

Charles Rhyee: Okay, I see. So it's really more of a mix of what type of shipping that you're looking to utilize that's driving sort of the higher cost. Are we seeing long delays in traditional shipping, sort of by container?

Speaker Change: Okay, I see, so it's really more of a mix of what type of shipping that you're looking to to utilize that striving sort of the higher cost. Are we seeing long delays in traditional shipping sort of by container?

Amanda Crawford: Are we seeing long delays in traditional shipping sort of by container? I think the containers are taking a little bit longer than we typically see historically, but it's really just a matter of us having sufficient inventory to meet the demand in the second half. As you know, this first half was stronger than we expected internally, and we are seeking to build up our inventory just so we can meet the needs of the business in the second half.

Amanda Crawford: I think the containers are taking a little bit longer than we typically see historically, but it's really just a matter of us having sufficient inventory to meet the demand in the second half. As you know, this first half was stronger than we expected internally, and we are seeking to build up our inventory just so we can meet the needs of the business in the second half.

Speaker Change: I think the containers are taking a little bit longer than what we typically see historically, but

Speaker Change: It's really just a matter of us having sufficient inventory to meet the demand in the second half.

Amanda Crawford: As you know, this first half was stronger than we expected internally, and we are seeking to build up our inventory just so we can meet the needs of the business in the second half. Okay, I see.

Speaker Change: As you know, this first half was stronger than we expected internally, and we are seeking to build up our inventory just so we can meet the needs of the business in the second half.

Charles Rhyee: How much is that part of the strategy, or is this more of a general push into sort of the parenting market? Yeah, great question. Yeah, we absolutely, we continue to drive with our partners. That's certainly helping us, but we're not only seeing the awareness from the SIDS partners we have, but, you know, the parental community in general, parents are looking for insights, they're looking for, how do I get more sleep? What insights can I gain from my baby to help me have a healthier, safer, better sleep for their lives?

Amanda Crawford: Okay, I see. Okay, that makes sense. Maybe just real quick on the revenue side, you know, where are we in terms of, uh, returns as a percent of gross revenue? You know, have we finally gotten back to a normal level? Or, you know, I, I know, uh, last year and before we, you know, we've been, uh, you know, dealing with sort of returns of the original SOC.

Charles Rhyee: Okay, I see. Okay, that makes sense.

Amanda Crawford: Okay, that makes sense.

Amanda Crawford: Maybe just work with on the revenue side. You know, where are we in terms of returns as a percent of growth throughout the new, you know, have we finally gotten back to normal level or, you know, I know last year and before we, you know, we've been dealing with sort of returns with the original stock. Where are we in terms of that at this point?

Speaker Change: Okay, I see. Okay, that makes sense. Maybe just real quick on the revenue side.

Charles Rhyee: Um, maybe just real quick on the revenue side. You know, where are we in terms of returns as a percent of gross revenue? You know, have we finally gotten back to a normal level? Or, you know, I know, last year and before that, we've been dealing with sort of returns on the original SOC. Where are we in terms of that at this point?

Speaker Change: Where are we in terms of returns as a percent of gross revenue? Have we finally gotten back to a normal level? I know last year and before we've been dealing with sort of returns of the...

Amanda Crawford: Just where are we in terms of that at this point? Yeah, so returns for this quarter were 4.1% of gross billings, which is well below our average rate. Typically, we were seeing around, and Michael D.

Amanda Crawford: .. .. .. .. ....

Speaker Change: the original SOC, just where are we in terms of that at this point?

Amanda Crawford: Yes, the return for this quarter were 4.1% of growth buildings, which is well below our average rate; typically, we were seeing around. In percent in the business, this quarter, we did have a little bit of recoveries of some chargebacks from some retailers, but overall our historical rate that we base our reserve upon has decreased. So, you know, looking ahead, we're expecting to see a reduction in return overall. And I think it just speaks to the health of our business and, you know, consumers are buying the product and keeping the product, and this is a positive thing.

Amanda Crawford: Yeah, so returns for this quarter were 4.1% of gross billings, which is well below our average rate. Typically, we were seeing around Currently, our retail production is down 14% in the business. This quarter we did have a little bit of recoveries of some chargebacks from some retailers, but overall, our historical rate that we base our reserve upon has decreased. So, looking ahead, we're expecting to see a reduction in returns overall, and I think it just speaks to the health of our business, and consumers are buying the product and keeping the product. So, this is a positive thing.

Speaker Change: Yeah, so returns for this quarter were 4.1% of gross billings, which is well below our average rate. Typically, we were seeing around

Charles Rhyee: Okay, got it. And then maybe in what I asked about, you know, I think the comments at the beginning sort of talking about, you know, sort of Adam here, Amanda, you talked about sort of Adam here, just deep enough, breaking for the rest of the year. And then moving to sustainable growth, is it better think than we should expect positive and just be a dot to start increasing sequentially as we move to the rest of the year, or are we looking to sort of reinvest income and earnings this year and really moving towards more sustainable profitability next year?

Speaker Change: in the business. This quarter, we did have a little bit of recoveries of some chargebacks from some retailers, but overall our historical rate that we base our reserve upon has decreased.

Kurt Workman: So, you know, looking ahead, we're expecting to see a reduction in returns overall, and I think it just speaks to the health of our business. And, you know, consumers are buying the product and keeping the product, and this is a positive thing. And maybe a question, Kurt, you know, you talked about, you know, maybe leaving with a car seat and that's reimbursed by insurance. If we get to the point where, you know, everyone leaves with a sock, that would suggest that babysitting is the predominant driver of revenue.

Speaker Change: So, you know, looking ahead, we're expecting to see a reduction in returns overall, and I think it just speaks to the health of our business and, you know, consumers are buying the product and keeping the product, and this is a positive thing.

Amanda Crawford: Got it.

Charles Rhyee: And maybe a question, Kurt, you know, you talked about, you know, maybe leave with a, or you're required to leave it with a car seat, and that's reimbursed by insurance. You know, if we get to the point where, you know, we tend to, you know, leaves with a, with a sock. You know, that was just that babysat is the predominant driver of revenue. I mean, is that, is that sort of where we could be heading?

Charles Rhyee: and maybe a question, Kurt, you know, you talked about, you know, maybe leaving with a car seat and that's reimbursed by insurance. If we get to the point where, you know, every infant leaves with a sock, you know, that would suggest that babysitting is the predominant driver of revenue. I mean, is that, is that sort of where we could be heading? And, you know, maybe talk about what it takes to sort of increase insurance coverage.

Speaker Change: Got it. And maybe a question, Kurt, you know, you talked about, you know,

Charles Rhyee: Hey, Charles, that's a good question. So when we look at the Q3 and Q4 in terms of profitability, you know, we do expect Q3 to be stronger from a fel in perspective, just due to the holiday load in, like I mentioned, and then, you know, from a adjusted either doubt perspective exiting the year. You know, there's a few things that could impact it, and we will see to match our operating expenses with our top line.

Kurt Workman: maybe leave with a, or you're required to leave with a car seat, and that's reimbursed by insurance. You know, if we get to the point where...

Speaker Change: You know, every infant, you know, leaves with a sock.

Speaker Change: That would suggest that babysat is the predominant driver of revenue, I mean, is that?

Kurt Workman: I mean, is that sort of where we could be heading? And, you know, maybe talk about what it takes to sort of increase the insurance coverage. My understanding is that you can get reimbursed under current codes.

Kurt Workman: And, you know, maybe talk about what it takes to sort of increase the insurance coverage. My understanding is that you can get reimbursed under current codes. Maybe give us an update on, on sort of what it would take to sort of have a sort of a mandatory type of, not maybe the outlet per se, but having sort of some type of monitoring device, for instance. You know, leave in the hospital.

Speaker Change: is that sort of where we could be heading and, you know, maybe talk about what it takes.

Charles Rhyee: My understanding is that you can get reimbursed under current codes; maybe give us an update on what it would take to sort of have this sort of mandatory type of, not maybe the outlet per se, but having sort of some type of monitoring device, for instance.

Speaker Change: to sort of increase the insurance coverage. My understanding is that you can get reimbursed under current codes. Maybe give us an update on.

Charles Rhyee: There is potential cost to goods full of headwinds from increasing sea and air transportation costs, and then we could potentially, you know, have some sales and marketing investments along with some clinical and regulatory investments towards the second half. So we do expect, you know, sequentially, you know, depending on the impact of those items, we may see an increase, however, you know, it's just dependent on those items. That's why we're looking to break even in the second half of this year.

Kurt Workman: Maybe give us an update on sort of what it would take to sort of have this sort of a mandatory type of, not maybe the outlet per se, but having sort of some type of monitoring device for infants, you know, leaving the hospital. Yeah, this is my favorite subject of all subjects, so thanks. Thanks, Charles.

Speaker Change: on sort of what it would take to sort of have sort of a mandatory type of, not maybe the outlet per se, but having sort of some type of monitoring device for infants, you know, leaving the hospital.

Kurt Workman: Yeah, this is my favorite subject of all subjects. So thanks, Frank Starles. Yeah, I think the FDA clearance was probably the biggest milestone we can cross towards that. You can see not only just in the business but the parental demand, the satisfaction with the product has taken a step function up, and we're taking advantage of that right now. There's so much momentum in the business. I think you can feel that in the morning. We're opening up the medical channels. When I think about every baby, it's going to start with, you know, every right today. It's every baby that, you know, that, you know, parents who have that concern, they get an outlet.

Kurt Workman: Yeah, this is my favorite subject of all subjects. So, thanks, thanks, Charles.

Speaker Change: Yeah, this is my favorite subject of all subjects. So thanks. Thanks, Charles.

Kurt Workman: We, yeah, we, I think the FDA clearance was probably the biggest milestone we could cross towards that. You can see not only just in the business, but the parental demand, the satisfaction with the product has, has taken a step function up, and we're, we're taking advantage of that right now. There's so much momentum in the business. I think you can feel that in the earnings.

Speaker Change: We, yeah, we, I think the FDA clearance was probably the biggest milestone we can cross towards that. You can see not only just in the business, but the parental demand, the satisfaction with the product is.

Charles Rhyee: Moving into 2025, Q1 is usually sequentially lower than Q4, but overall for the year, we are expecting to move towards a profitable business overall. And thanks, and speaking of shipping costs, can you, I mean, I guess when I look at the gross margin guidance for the full year, that imply sort of gross margins down sequentially from the second quarter, is that all that is the shipping costs and related to that, what is sort of your assumptions for freight, maybe you can talk about what you're seeing in the outlook right now.

Speaker Change: has taken a step function up and we're taking advantage of that right now. There's so much momentum in the business, I think you can feel that in the earning.

Kurt Workman: We're opening up the medical channels. When I think about every baby, it's going to start with, you know, every right today. It's every baby that, you know, that, parents who have that concern get an Owlet. Owlet is the number one choice. We're expanding that to be every baby that leaves the NICU has some sort of health condition with an Owlet. It's literally a tenth the size, and it's significantly less expensive. There are no wires that go into the crib.

Speaker Change: We're opening up the medical channels. When I think about every baby, it's going to start with, you know, every, right today, it's every baby that, you know, that, you know, parents who have that concern, they get an outlet. Outlet is the number one choice. We're expanding that to be every baby that leaves the NICU has some sort of health condition.

Kurt Workman: All it is the number one choice. We're expanding that to be every baby that leaves the NICU has some sort of health condition should go home with an outlet. It's literally a tensed size. It's significantly less expensive. There's no wires that go into the crib. There's no reason my baby should leave the hospital with wired technology anymore. And, you know, there's about 20% of babies born between, you know, those leaving the NICU, those with serious respiratory conditions or heart conditions. All of those babies should have monitoring at home, and we're making that happen. There's existing insurance reimbursement codes.

Kurt Workman: We're expanding that to be every baby that leaves the NICU has some sort of health condition with an Owlet. It's literally a tenth the size. It's significantly less expensive because there are no wires that go into the crib. There's no reason why babies should leave the hospital with wired technology anymore. And, you know, there are about 20% of babies born between those leaving the NICU with serious respiratory conditions or heart conditions. All of those babies should have monitoring at home, and we're making that happen.

Speaker Change: should go home with an outlet. It's literally a tenth the size. It's significantly less expensive. There's no wires that go into the crib. There's no reason why babies should leave the hospital with wired technology anymore.

Kurt Workman: There's no reason why babies should leave the hospital with wired technology anymore. And, you know, there are about 20% of babies born between those leaving the NICU with serious respiratory conditions or heart conditions. All of those babies should have monitoring at home, and we're making that happen. There are existing insurance reimbursement codes. We're building out the infrastructure for that right now. That's a really exciting piece, and as we continue to show the outcomes and the results from having access to this monitoring at home, we're going to expand this to include healthy babies at home. Because even healthy babies are at risk. The highest rates of unexpected mortality happen because of sewage.

Speaker Change: And, you know, there's about 20% of babies born between...

Speaker Change: you know, those leaving the NICU, those with serious respiratory conditions or heart conditions.

Charles Rhyee: And what the trend is going in this sort of continues to take up here. And what are you assuming in the guy? Thanks. Yeah, so we are assuming a certain, to a certain degree, just because we are operating at a very lean level in terms of working capital and inventory and just keeping up with the demands that we've seen in our business. It's highly likely that we will need to air freight in some of our inventory just to get it on time to support the holiday season.

Speaker Change: All of those babies should have monitoring at home, and we're making that happen. There's existing insurance reimbursement codes.

Kurt Workman: There are existing insurance reimbursement codes. We're building out the infrastructure for that right now. That's a really exciting piece.

Kurt Workman: We're building out the infrastructure for that for that right now. That's a really exciting piece. And as we continue to show the outcomes and the results from having access to this monitoring at home, we're going to expand this to include healthy babies at home because even healthy babies are at risk. There's the highest rates of unexpected mortality happened from sewage babies who have respiratory illnesses at home leads the number one cause for birth, yard visits, and doctor's visits. Parents are losing hundreds of hours of sleep that first year. So there's no reason why, you know, there's a practical solution for every parent.

Kurt Workman: And as we continue to show the outcomes and the results from having access to this monitoring at home, we're going to expand this to include healthy babies at home because even healthy babies are at risk. The highest rates of unexpected mortality happen in suits.

Speaker Change: We're building out the infrastructure for that for that right now. That's a really exciting piece And as we continue to show the outcomes and the results from having access to this monitoring at home We're going to expand this to include healthy babies at home because even healthy babies

Speaker Change: are at risk. There's the highest rates of unexpected mortality happen from suits, babies who have respiratory illnesses at home leads the number one cause for.

Charles Rhyee: So we do have a small level of that in the plan, but just depending on how we continue to perform, we could see higher air freight costs to support the business. But with that, we are proactively looking at our inventory plan and seeking to get ahead of that, we're placing POs sooner just to make sure that we can get the product in time through the most cost effective shipping means possible. Okay, I see so it's really more of a mix of what type of shipping that you're looking to to utilize that's driving sort of the higher cost.

Kurt Workman: Babies who have respiratory illnesses at home are the number one cause for ER visits and doctor's visits. Parents are losing hundreds of hours of sleep that first year. This is a practical solution for every parent. There's no reason why every parent shouldn't have access to it. We think we will be able to demonstrate those outcomes over time. And as we do that, the ability to reimburse this by insurance will expand as well. When we think about that business, that's a massive business. We're at 10% market penetration today. That's 100% market penetration, like car seats and breast pumps and thermometers and strollers.

Speaker Change: ER visits and doctor's visits. Parents are losing hundreds of hours of sleep that first year. So there's no reason why, you know, this is a practical solution for every parent. There's no reason why every parent shouldn't have access to this. We think that we'll be able to demonstrate those outcomes over time. And as we do that, the, the

Kurt Workman: There's no reason why every parent should have access to this. We think that we'll be able to demonstrate those outcomes over time. And as we do that, the ability to reimburse this by insurance will expand as well. When we think about that business, that's a massive business. We're at 10% market penetration today. That's 100% market penetration, like car seats, breast pumps, and thermometers, and strollers. We think that's where the category goes here and in Europe. And then that will position us to take this globally. So this is a massive opportunity. We're just getting started in how it's in the very best position in the market from a data perspective, from a clearance perspective through the community of over 2 million parents.

Kurt Workman: We think we'll be able to demonstrate those outcomes over time, and as we do that, the ability to reimburse this by insurance will expand as well. When we think about that business, that's a massive business. We're at 10% market penetration today. That's 100% market penetration, like car seats and breast pumps and thermometers and strollers. We think that's where this category will go here and in Europe, and then that will position us to take this globally.

Speaker Change: ability to reimburse this by insurance will expand as well.

Speaker Change: When we think about that business, that's a massive business. We're at 10% market penetration today.

Charles Rhyee: Are we seeing long delays and traditional shipping sort of by container? I think the containers are taking a little bit longer than what we typically see historically, but it's really just a matter of us having sufficient inventory to meet the demand in the second half. As you know, this first half was stronger than we expected internally, and we are seeking to build up our inventory just so we can meet the needs of the business in the second half.

Speaker Change: That's 100% market penetration like car seats and breast pumps and thermometers and strollers. We think that's where this category goes here and in Europe and then that will position us to take this globally. So this is a

Kurt Workman: We think that's where this category will go here and in Europe, and then that will position us to take this globally. So this is a massive opportunity. We're just getting started, and Owlet is in the very best position in the market from a data perspective, and from a clearances perspective. We have a community of over 2 million parents. That's, yeah, it's the most exciting thing about this business. And Kurt, like, who is the main driving impetus? Where's the driving impetus coming from?

Kurt Workman: So this is a massive opportunity. We're just getting started, and Owlet is in the very best position in the market from a data perspective, from a clearances perspective, with a community of over 2 million parents. That's, yeah, it's the most exciting thing about this business for sure.

Speaker Change: Massive opportunity. We're just getting started and how it's in the very best position in the market from a data perspective, from a clearances perspective. We have a community of over 2 million parents. That's, yeah, it's the most exciting thing about this business for sure.

Kurt Workman: That's, yeah, it's the most exciting thing about this business for sure.

Kurt Workman: Is that working through Adapt Health and other of your GME partners? Like, like, who is it going to go to providers to really kind of demonstrate the effectiveness of the Owlet Sock and why it should be the preferred device for infants? Or are we going to require to build out more of a sales force internally to really push this outward? I think the incredible thing about Owlet is that we have a community of 2 million parents. You can ask any parent in the United States, you can show them a picture of the sock and say, "What is this?", and 50% of them, without any brand recall, will say that it's the Owlet sock.

Charles Rhyee: And Kurt, who is the main driving impetus coming from? Is that working through Adapt Health and other of your DME partners? Like who is going to go into the providers to really kind of demonstrate the effectiveness of the Owlet Sock and why it should be the preferred device for infants? Or is this going to require building out more of a sales force internally to really push outward?

Kurt Workman: And who's the main, like, where's the driving into this coming from? Is that, is that working through Adapt Health and other of your DME partners, like, like, when who is it that is going into the providers to really kind of demonstrate the effectiveness of the Alice socket and why it should be the preferred device for, for infants or, or is this we're going to require a build out more of a sales force internally to really push push outwards. I think the incredible thing about Outlet is that we have a community of 2 million parents. You can ask any parent in the United, you can show them a picture of the sock and say, "What is this?"

Speaker Change: And Kurt, who's the main, like where's the driving impetus coming from? Is that?

Speaker Change: Is that working through AdaptHealth and other of your DME partners? Who is it that is going into the providers to

Charles Rhyee: Okay, I see. Okay, that makes sense. Maybe just work with on the revenue side. You know, where are we in terms of returns as a percent of growth throughout the new, you know, have we gotten finally gotten back to normal level or, you know, I know last year and before we, you know, we've been dealing with sort of returns with the original stock. Where are we in terms of that at this point?

Speaker Change: really kind of demonstrate the effectiveness of the outlet socket and why it should be the preferred device for infants or is this we're going to require a build-out more of a sales force internally to really push push outwards?

Kurt Workman: I think the incredible thing about Owlet is that we have a community of two million parents. You can ask any parent in the United States, you can show them a picture of the sock and say, what is this? And 50% of them, without any brand recall, will say, that's the Owlet sock.

Kurt Workman: That's pretty incredible brand awareness. They're demanding it from their pediatricians. We've also seen more pediatricians reach out to Owlet proactively than we've ever seen in our history. We've had children's hospitals reach out and say, "Why are we sending babies home with these big hospital devices?" I think the advantages are so obvious to the market right now that we're seeing them come from both sides of the market. There's interest from the providers. There is definite brand awareness and interest from parents.

Speaker Change: I think the incredible thing about Owlet is that we have a community of 2 million parents. You can ask any parent in the United States, you can show them a picture of the sock and say, what is this, and 50% of them without any brand recall will say that's the Owlet sock. That's pretty incredible brand awareness.

Charles Rhyee: Yes, the return for this quarter were 4.1% of growth buildings, which is well below our average rate, typically we were seeing around. In percent in the business, this quarter, we did have a little bit of recoveries of some chargebacks from some retailers, but overall our historical rate that we base our reserve upon has decreased. So, you know, looking ahead, we're expecting to see a reduction in return overall. And I think it just speaks to the health of our business and, you know, consumers are buying the product and keeping the product and this is a positive thing.

Kurt Workman: And 50% of them without any brand recall will say that's the Alice sock. That's pretty incredible brand awareness. They're demanding it from their pediatricians. We've also seen more pediatricians reach out to outlet proactively than we've ever seen in our history. We've had children's hospitals reaching out and saying, "Why are we sending babies home with these big hospital devices?" I think the advantages are so obvious to the market right now that we're seeing it come from both sides of the market. There's interest from the providers. There's definite brand awareness and interest from parents. And that's what I think is creating the momentum.

Speaker Change: They're demanding it from their pediatricians. We've also seen more pediatricians reach out to Owlette proactively than we've ever seen in our history.

Speaker Change: We've had children's hospitals reaching out and saying, why are we sending babies home with these big hospital devices? I think the advantages are so obvious to the market right now that we're seeing it come from both sides of the market. There's interest from the providers. There's definite brand awareness and interest from...

Kurt Workman: There is definite brand awareness and interest from parents, and that's what I think is creating the momentum. We're continuing to build out the infrastructure this year, just to be clear. There's going to be, there's work to be done there for babysitters, but as that comes together and we're able to take this message to parents and say, hey, look, if your baby is coming home from the NICU and or they have some sort of condition.

Kurt Workman: We're continuing to build out the infrastructure this year, just to be clear. There's going to be, there's work to just to be down there for baby. But as that comes together and we're able to take this message to parents to say, hey, look, if your baby is coming home from the neck, you and/or they have some sort of condition. And they need monitoring. You can get an Owlet reimbursed by insurance. That's a really powerful message that's going to be very sticky in the market, and you're going to see every parent can understand that message very quickly when we get to that point.

Speaker Change: from parents. And that's what I think is creating the momentum. We're continuing to build out the infrastructure this year, just to be clear, there's gonna be, there's work to be done there for babysat. But as that comes together and we're able to take this message to parents to say, hey, look, if your baby is coming home from the NICU,

Kurt Workman: And that's what I think is creating the momentum. We're continuing to build out the infrastructure this year, just to be clear. There's going to be work to be done there for BabySat.

Charles Rhyee: Got it. And maybe a question, Kurt, you know, you talked about, you know, you know, maybe leave with a, or you're required to leave it with a car seat, and that's reimbursed by insurance, you know, if we get to the point where, you know, we tend to, you know, leaves with a, with a sock. You know, that was just that babysat is the predominant driver of revenue. I mean, is that, is that sort of where we could be heading?

Kurt Workman: But as all that comes together, and we're able to take this message to parents and say, hey, if your baby is coming home from the NICU, or they have some sort of condition, you can get an Owlet reimbursed by insurance, a really powerful message that's going to be very sticky in the market, and you'll see every parent understands that message very quickly when we get to that. And maybe one last one from me in terms of the international market.

Kurt Workman: Tring, you can get an Owlet reimbursed by insurance. That's a really powerful message that's going to be very sticky in the market. And you'll see every parent understands that message very quickly when we get to that point.

Speaker Change: and or they have some sort of condition and they

Speaker Change: you can get an outlet reimbursed by insurance. That's a really powerful message that's gonna be very sticky in the market. And you're gonna see, every parent's gonna understand that message very quickly when we get to that point.

Charles Rhyee: And, you know, maybe talk about what it takes to sort of increase the insurance coverage, my understanding is that you can get reimbursed under current codes, maybe give us an update on, on sort of what it would take to sort of have a sort of a mandatory type of, not maybe the outlet per se, but having sort of some type of monitoring device for instance. You know, leave in the hospital. Yeah, this is my favorite subject of all subjects.

Kurt Workman: Great. And maybe one last one from me in terms of the international market. You know, given that when we go outside the U.S., we're talking about single-payer health systems, particularly in Europe and in Canada and Australia. What is the potential here that this could become more of a mandated covered item at a national level? And maybe you can talk about any kind of discussions you've had now that you have the CE mark in place.

Speaker Change: Great, and maybe one last one from me in terms of the international market.

Kurt Workman: You know, given that when we go outside the US, we're talking about single-payer health systems, particularly in Europe and in Canada and Australia, what is the potential here that this could become more of a mandated covered item at a national level? And maybe you can talk about any kind of discussions you've had now that you have the CE mark in place. Yeah, Charles and Jonathan. I'll grab that one.

Speaker Change: You know, given that we're, you know, when we go outside the U.S., we're talking about single-payer health systems, particularly in Europe and in Canada and Australia. What is the potential here that this could, we could see this more of a mandated covered item?

Charles Rhyee: We could see this more of a mandated covered item at a national level, and maybe you can talk about any kind of discussions you have now that you have to see Mark in place. Yeah, Charles is Jonathan.

Speaker Change: at a national level, and maybe you can talk about any kind of discussions you've had now that you have the CE mark in place.

Jonathan Harris: Yes, getting the CE med mark in the EU and UK, we've seen the demand; our international business is up over 275% year over year. So we're really seeing demand; we're starting to have conversations with Alder Hay, which is one of the leading pediatric research hospitals in the UK. So again, getting those clearances is opening the door, and we're actually getting inbound calls from these markets as well. So again, these are early days, and we're just starting these conversations. But having these clearances is really, it's not us dialing out looking for help; we're actually getting inbound as well.

Jonathan Harris: Charles and Jonathan, I'll grab that one. Yes, getting the CE med mark in the EU and UK. We've seen the demand; our international business is up over 275% year over year. So, we're really seeing demand. We're starting to have conversations with Alder Hay, which is one of the leading pediatric research hospitals in the UK.

Charles Rhyee: So thanks, Frank Starles. Yeah, I think the FDA clearance was probably the biggest milestone we can cross towards that. You can see not only just in the business but the parental demand, the satisfaction with the product has taken a step function up and we're taking advantage of that right now. There's so much momentum in the business. I think you can feel that in the morning. We're opening up the medical channels. When I think about every baby, it's going to start with, you know, every right today.

Jonathan Harris: I'll grab that one. Yes, getting the CE Medmark in EU in UK, we've seen the demand or international businesses up over 275% year over year. So we're really seeing demand. We're starting to have conversations with Alder Hey, which is one of the leading pediatric research hospitals in the UK. Again, getting those clearances is opening the door, and we're actually getting inbound calls from these markets as well. Again, these are early days, and we're just starting these conversations, but having these clearances are really, it's not us dialing out looking for help. We're actually getting inbound as well.

Speaker Change: Yeah, Charles is Jonathan. I'll grab that one.

Charles: Yes, getting the CE med mark in the EU and UK.

Charles: We've seen the demand. Our international business is up over 275% year over year.

Speaker Change: So, we're really seeing demand. We're starting to have conversations with Alder Hay, which is one of the leading pediatric researchers.

Speaker Change: hospitals in the UK.

Jonathan Harris: So, again, getting those clearances is opening the door, and we're actually getting inbound calls from these markets as well. So, again, these are early days, and we're just starting these conversations, but having these clearances is really, it's not us dialing out looking for help; we're actually getting inbound calls as well. So, it's super exciting, not only here in the US but internationally as well. And we're answering every call, and we're going to continue to keep driving forward. Great. I'll stop there. Congratulations again. Thanks.

Charles Rhyee: It's every baby that, you know, that, you know, parents who have that concern, they get an outlet. All it is the number one choice. We're expanding that to be every baby that leaves the NICU has some sort of health condition should go home with an outlet. It's literally a tensed size. It's significantly less expensive. There's no wires that go into the crib. There's no reason my baby should leave the hospital with wired technology anymore.

Speaker Change: So again, getting those clearances are opening the door, and we're actually getting inbound calls from these markets as well. So again, these are early days, and we're just starting these conversations, but having these clearances...

Speaker Change: are really, it's not us dialing out looking for help, we're actually getting inbound as well. So it's super exciting, not only here in the US, but internationally as well. And we're answering every call and we're gonna continue to keep driving forward.

Jonathan Harris: So it's super exciting, not only here in the US but internationally as well. And we're answering every call, and we're going to continue to keep driving forward. Okay. I'll stop there.

Jonathan Harris: So it's super exciting, not only here in the US, but internationally as well. And we're answering every call, and we're going to continue to keep driving forward.

Charles Rhyee: And, you know, there's about 20% of babies born between, you know, those leaving the NICU, those with serious respiratory conditions or heart conditions. All of those babies should have monitoring at home and we're making that happen. There's existing insurance reimbursement codes. We're building out the infrastructure for that for that right now. That's a really exciting piece. And as we continue to show the outcomes and the results from having access to this monitoring at home, we're going to expand this to include healthy babies at home because even healthy babies are at risk.

Operator: Great.

Charles Rhyee: Congratulations again. Thanks. Westbrook.

Charles Rhyee: Great, I'll stop there and congratulate you again. Thanks.

Operator: I'll stop there.

Operator: Thank you.

Speaker Change: Great, I'll stop there. Congrats again, thanks.

Speaker Change: Thank you. Thank you.

Operator: Thanks, Charles.

Mike Cavanaugh: Thanks, Charles. I think we're going to have Mike go through some of the written questions, right?

Mike Cavanaugh: Thanks, Charles. I think we're going to have Mike go through some of the written questions, right? Yeah, we've, that's right, Kurt, we've received some questions from our investors in the retail community and wanted to share them during the Q&A. First one is for Jonathan.

Operator: I think we're going to have Mike go through some of the written-in questions, right? Yeah, we've, that's right, Kurt. We've received some questions from our investors in the retail community and wanted to share them during the Q&A.

Speaker Change: Thanks, Charles. I think we're going to have Mike go through some of the written-in questions, right?

Mike Cavanaugh: Yeah, we've, that's right, Kurt. We've received some questions from our investors in the retail community and wanted to share them during the Q&A. First one is for Jonathan. How should we think about this year's progress with the FDA and other clearances, combined with BabySat and subscription, translating into revenue growth in 2025?

Mike Cavanaugh: Yeah, that's right, Kurt. We've received some questions from our investors in the retail community and wanted to share them during the Q&A. First one is for Jonathan.

Charles Rhyee: There's the highest rates of unexpected mortality happened from sewage babies who have respiratory illnesses at home leads the number one cause for birth, yard visits and doctor's visits. Parents are losing hundreds of hours of sleep that first year. So there's no reason why, you know, there's a practical solution for every parent. There's no reason why every parent should have access to this. We think that we'll be able to demonstrate those outcomes over time.

Jonathan Harris: Okay, first one is for Jonathan. How should we think about this year's progress with the FDA and other clearances combined with baby sad and subscription, translating into revenue growth in 2025? Great. Yes, so we haven't provided specific guidance for 2025. But based on our current market share, global footprint, and beginning stages of baby sad and soon to be our subscription service, we believe that there's considerable runway for sustainable growth in 2025 and beyond.

Jonathan Harris: How should we think about this year's progress with the FDA and other clearances combined with babysitting and subscription, translating into revenue growth in 2025? Great. Yes, so we haven't provided specific guidance for 2025, but based on our current market share, global footprint, and the beginning stages of BabySat, and soon to be our subscription service, we believe that there is considerable runway for sustainable growth in 2025 and beyond. We will provide additional commentary on our November call. Great

Speaker Change: How should we think about this year's progress with the FDA and other clearances combined with BabySat and subscription translating into revenue growth in 2025?

Jonathan Harris: Great. Yes, so we haven't provided specific guidance for 2025, but based on our current market share, global footprint, and the beginning stages of BabySat, and soon to be our subscription service, we believe that there is considerable runway for sustainable growth in 2025 and beyond. We will provide additional commentary on our November call.

Jonathan Harris: Great. Yes, so we haven't provided specific guidance for 2025, but based on our current market share, global footprint, and beginning stages of BabySat,

Charles Rhyee: And as we do that, the, the ability to reimburse this by insurance will expand as well. When we think about that business, that's a massive business. We're at 10% market penetration today. That's 100% market penetration like car seats and breast pumps and thermometers and strollers. We think that's where the category goes here and in Europe. And then that will position us to take this globally. So this is a massive opportunity. We're just getting started in how it's in the very best position in the market from a data perspective, from a clearance perspective through the community of over 2 million parents.

Jonathan Harris: and soon to be our subscription service, we believe that there's considerable runway for sustainable growth in 2025 and beyond.

Jonathan Harris: We will provide additional commentary on our November call.

Amanda Crawford: Great. Next question is to the management team: is the focus going forward going to be on top line or bottom line growth? Thanks, Mike.

Mike Cavanaugh: Great. The next question is for the management team. Is the focus going forward going to be on top line or bottom line growth?

Amanda Crawford: Next question is for the management team. Is the focus going forward going to be on top line or bottom line growth? Thanks, Mike. I'll take this one. The short answer is both.

Speaker Change: Great. Next question is to the management team. Is the focus going forward going to be on top line or bottom line growth?

Amanda Crawford: Thanks, Mike. I'll take this one.

Amanda Crawford: I'll take this one. The short answer is both, but the longer answer is our top priority is building a sustainable and profitable business. So to achieve this, we'll focus on accelerating revenue growth. You know, we've just talked about it. The opportunity is massive for us. And we're at about 10% penetration in the United States. We have a huge opportunity internationally. So the opportunity to grow our revenue is there. As we've shown, we're expanding our margins. You know, with the addition of subscription and accelerating baby fat, the overall volume increase that will help us expand our margins.

Speaker Change: Thanks, Mike. I'll take this one. The short answer is both, but the longer answer is our top priority is building a sustainable and profitable business.

Amanda Crawford: The short answer is both. But the longer answer is that our top priority is building a sustainable and profitable business. So to achieve this, we'll focus on accelerating revenue growth. You know, we've just talked about it.

Amanda Crawford: But the longer answer is, our top priority is building a sustainable and profitable business. So to achieve this, we'll focus on accelerating revenue growth. You know, we've just talked about it. The opportunity is massive for us. You know, we're at about 10 percent penetration in the United States.

Charles Rhyee: That's, yeah, it's the most exciting thing about this business for sure. And who's the main, like, where's the driving into this coming from? Is that, is that working through adapt health and other of your DME partners, like, like, when who is it that is going into the providers to really kind of demonstrate the effectiveness of the Alice socket and why it should be the preferred device for, for infants or, or is this we're going to require a build out more of a sales force internally to really push push outwards.

Speaker Change: So to achieve this, we'll focus on accelerating revenue growth, you know, we've just talked about it. The opportunity is massive for us.

Amanda Crawford: The opportunity is massive for us, and we're at about 10% penetration in the United States. We have a huge opportunity internationally, so the opportunity to grow our revenue is there. As we've shown, we're expanding our margins, you know, with the addition of subscriptions and accelerating baby fat, and the overall volume increase, that will help us expand our margins. We intend to invest strategically, you know, utilize our operating leverage that we have currently. And then, overall, just maintain operational efficiency. So we really believe we have momentum in the business, and we'll continue to build upon it and become the sustainable, profitable business we are seeking to be.

Amanda Crawford: We have a huge opportunity internationally, so the opportunity to grow our revenue is there. As we've shown, we're expanding our margins, you know, with the addition of subscriptions and accelerating babysat, and the overall volume increase, that will help us expand our margins. We intend to invest strategically, you know, utilize our operating leverage that we have currently, and then overall, just maintain operational efficiency. So we really believe we have momentum in the business and will continue to build upon it and become the sustainable profitable business we are seeking to be.

Speaker Change: And we're at about 10% penetration in the United States. We have a huge opportunity internationally. So the opportunity to grow our revenue is there.

Speaker Change: As we've shown, we're expanding our margins. You know, with the addition of subscription and accelerating babysat and the overall volume increase, that will help us expand our margins.

Charles Rhyee: I think the incredible thing about outlet is that we have a community of 2 million parents. You can ask any parent in the United, you can show them a picture of the sock and say, what is this? And 50% of them without any brand recall will say that's the Alice sock. That's pretty incredible brand awareness. They're demanding it from their pediatricians. We've also seen more pediatricians reach out to outlet proactively than we've ever seen in our history.

Amanda Crawford: We intend to invest strategically, you know, utilize our operating leverage that we have currently. And then overall, just maintain the operational efficiency. So we really believe we have momentum in the business, and we'll continue to build upon it and become the sustainable, profitable business we are seeking to be.

Speaker Change: We intend to invest strategically, you know, utilize our operating leverage that we have currently.

Speaker Change: And then overall, just maintain the operational efficiency. So we really believe we have momentum in the business and we'll continue to build upon it and become the sustainable profitable business we are seeking to be.

Charles Rhyee: We've had children's hospitals reaching out and saying, why are we sending babies home with these big hospital devices? I think the advantages are so obvious to the market right now that we're seeing it come from both sides of the market. There's interest from the providers. There's definite brand awareness and interest from parents. And that's what I think is creating the momentum. We're continuing to build out the infrastructure this year just to be clear.

Amanda Crawford: Thanks, Amanda.

Kurt Workman: Thanks, Amanda. And the final question we've got today for the team. What is your plan to get people to notice the stock going forward on the back of these strong results?

Amanda Crawford: Thanks, Amanda. And the final question we've got today for the team. What is your plan to get people to notice the stock going forward on the back of these strong results? I'll take that one.

Kurt Workman: And final question we've got today for the team. What is your plan to get people to notice the stock going forward on the back of these strong results?

Amanda: Thanks Amanda. And final question we've got today for the team. What is your plan to get people to notice the stock going forward on the on the back of these these strong results?

Kurt Workman: I'll take that one. You know, first and foremost, it's business results. We've achieved every one of our key financial milestones and our operational milestones this year. I think if you look at the company over the last three years, gaining the FDA clearance of driving significant adoption, opening up to healthcare channels, launching our subscription with limited access, those are all the key milestones that are kind of continued to propel the business towards sustainable growth, profitability like Amanda talked about. And I think that's going to be hard to ignore.

Kurt Workman: You know, first and foremost, it's business results. We've achieved every one of our key financial milestones and our operational milestones this year. I think if you look at the company over the last three years, gaining FDA clearances, driving significant adoption, opening up the health care channels, and launching our subscription with limited access, those are all the key milestones that are going to continue to propel the business towards sustainable growth and profitability, like Amanda talked about. And I think that's going to be hard to ignore.

Kurt Workman: I'll take that one. First and foremost, it's business results. We've achieved every one of our key financial milestones and our operational milestones this year. I think if you look at the company over the last three years, gaining FDA clearances, driving significant adoption, opening up the healthcare channels, launching our subscription with limited access, those are all the key milestones that are going to continue to propel the business towards sustainable growth and profitability, like Amanda talked about.

Speaker Change: I'll take that one.

Speaker Change: First and foremost, it's business results.

Charles Rhyee: There's going to be, there's work to just to be down there for baby. But as that comes together and we're able to take this message to parents to say, hey, look, if your baby is coming home from the neck you and or they have some sort of condition, and they need monitoring. You can get an Owlet reimburse by insurance. That's a really powerful message that's going to be very sticky in the market and you're going to see every parent can understand that message very quickly when we get to that point.

Speaker Change: We've achieved every one of our key financial milestones and our operational milestones this year. I think if you look at the company over the last three years, gaining the FDA clearances, driving significant adoption, opening up the health care channels, launching our subscription with limited access,

Speaker Change: Those are all the key milestones that are going to continue to propel the business towards

Kurt Workman: We're also spending more time and energy building awareness among investors through our IR efforts and through online and social channels. And we'll continue those efforts and continue to deliver the business execution and just keep that drumbeat going. And I think it'll be a story that a lot of people are really excited about.

Kurt Workman: And I think that's going to be hard to ignore. We're also spending more time and energy building awareness among investors through our IR efforts and through online and social channels. And we'll continue those efforts and continue to deliver the business execution and just keep that drumbeat going. And I think it'll be a story that a lot of people are really excited about.

Amanda: sustainable growth, profitability like Amanda talked about, and I think that's going to be hard to ignore.

Kurt Workman: We're also spending more time and energy and building awareness among investors through our IR efforts and through online and social channels. And we'll continue those efforts and continue to deliver the business execution and just keep that Trump being going, and I think it'll be a story that a lot of people are really excited about.

Speaker Change: We're also spending more time and energy in building awareness among investors through our IR efforts and and through online and social channels and we'll continue those efforts and continue to deliver the business execution and just keep that drumbeat going and I think it'll be a story that a lot of people are really excited about.

Charles Rhyee: We could see this more of a mandated covered item at a national level and maybe you can talk about any kind of discussions you have now that you have to see Mark in place. Yeah, Charles is Jonathan. I'll grab that one. Yes, getting the CE Medmark in EU in UK, we've seen the demand or international businesses up over 275% year over year. So we're really seeing demand. We're starting to have conversations with Alder Hay, which is one of the leading pediatric research hospitals in the UK.

Mike Cavanaugh: Great, and that's all the time we have for questions today, and we'll turn it back over to Kurt for final remarks.

Kurt Workman: Great, and that's all the time we have for questions today, and we'll turn it back over to Kurt for final remarks. Well, thank you, everybody, for joining us today. I think it's clear there's a lot of momentum in the business. It's been an exciting journey for Owlet, and we're grateful for everybody's continued support. I'd like to take this opportunity to thank our talented team for the incredible dedication and hard work that they put in at Owlet. Your commitment to our mission and drive for innovation is absolutely inspiring. It's what makes this all work.

Kurt Workman: Great, and that's all the time we have for questions today, and we'll turn it back over to Kirk for final remarks. Well, thank you, everybody, for joining us today. I think it's clear there's a lot of momentum in the business. It's been an exciting journey for Outlet and we're grateful for everybody's continued support. I'd like to take this opportunity to thank our talented team for the incredible dedication and hard work that they put in at Outlet. Your commitment to our mission and drive for innovation is absolutely inspiring. It's what makes this all work. We have achieved significant milestones this quarter.

Speaker Change: Great, and that's all the time we have for questions today, and we'll turn it back over to Kurt for final remarks.

Kurt Workman: We have achieved significant milestones this quarter, and we're demonstrating strong financial performance and continued growth. And 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, our data, our unwavering commitment to quality, and the passionate team that delivers all this will continue to drive success for Owlet. So, thank you again for your trust and your partnership. That will conclude today's conference call. Thank you for your participation. It's a sweet day.

Kurt Workman: Well, thank you, everybody, for joining us today. I think it's clear there's a lot of momentum in the business. It's been an exciting journey for Owlet, and we're grateful for everybody's continued support. I'd like to take this opportunity to thank our talented team for the incredible dedication and hard work that they put in at Owlet. Your commitment to our mission and drive for innovation is absolutely inspiring. It's what makes this all work.

Kurt Workman: Well, thank you everybody for joining us today. I think it's clear there's a lot of momentum in the business. It's been an exciting journey for Owlette and we're grateful for everybody's continued support. I'd like to take this opportunity to thank our talented team for the incredible dedication and hard work that they put in at Owlette.

Charles Rhyee: Again, getting those clearances are opening the door and we're actually getting inbound calls from these markets as well. Again, these are early days and we're just starting these conversations but having these clearances are really, it's not us dialing out looking for help. We're actually getting inbound as well. So it's super exciting, not only here in the US, but internationally as well. And we're answering every call and we're going to continue to keep driving forward.

Kurt Workman: Your commitment to our mission and drive for innovation is absolutely inspiring. It's what makes this all work.

Kurt Workman: We have achieved significant milestones this quarter. We're demonstrating strong financial performance and continued growth. And 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, our data, our unwavering commitment to quality, and the passionate team that delivers all this will continue to drive success for Owlet. So, thank you again for your trust.

Kurt Workman: We're demonstrating strong financial performance and continued growth. And 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, our data, our unwavering commitment to quality, and the passionate team that delivers all this will continue to drive success for outlet. So thank you again for your trust and your partnership.

Kurt Workman: We have achieved significant milestones this quarter. We're demonstrating strong financial performance.

Kurt Workman: and continued growth. And as we move forward, we remain focused on executing our strategic initiatives.

Speaker Change: to further strengthen our commercial and financial performance. And we're confident that our innovative solutions, our data, our unwavering commitment to quality and the passionate team that delivers all this will continue to drive success for ALEC. So thank you again for your trust and your partnership.

Operator: That will conclude today's conference call. Thank you for your participation.

Charles Rhyee: Great. I'll stop there. Thank you. Thanks, Charles. I think we're going to have Mike go through some of the written in questions, right? Yeah, we've, that's right, Kurt. We've received some questions from our investors in the retail community and wanted to share them during the Q&A. Okay, first one is for Jonathan. How should we think about this year's progress with the FDA and other clearances combined with baby sad and subscription, translating into revenue growth in 2025?

Speaker Change: That will conclude today's conference call. Thank you for your participation.

Speaker Change: Have a sweet day.

Speaker Change: and the rest of the team. Thank you. Thank you. Thank you. Thank you.

Speaker Change: [inaudible]

Charles Rhyee: Great. Yes, so we haven't provided specific guidance for 2025. But based on our current market share, global footprint and beginning stages of baby sad and soon to be our subscription service, we believe that there's considerable runway for sustainable growth in 2025 and beyond. We will provide additional commentary on our November call. Great. Next question is to the management team is the focus going forward going to be on top line or bottom line growth?

Charles Rhyee: Thanks, Mike. I'll take this one. The short answer is both, but the longer answer is our top priority is building a sustainable and profitable business. So to achieve this, we'll focus on accelerating revenue growth. You know, we've just talked about it. The opportunity is massive for us. And we're at about 10% penetration in the United States. We have a huge opportunity internationally. So the opportunity to grow our revenue is there. As we've shown, we're expanding our margins.

Charles Rhyee: You know, with the addition of subscription and accelerating baby fat, the overall volume increase that will help us expand our margins. We intend to invest strategically, you know, utilize our operating leverage that we have currently. And then overall, just maintain the operational efficiency. So we really believe we have momentum in the business and we'll continue to build upon it and become the sustainable profitable business we are seeking to be. Thanks Amanda.

Charles Rhyee: And final question we've got today for the team. What is your plan to get people to notice the stock going forward on the on the back of these these strong results? I'll take that one. You know, first and foremost, it's business results. We've achieved every one of our key financial milestones and our operational milestones this year. I think if you look at the company over the last three years gaining the FDA clearance of driving significant adoption, opening up to healthcare channels, launching our subscription with limited access, those are all the key milestones that are kind of continued to propel the business towards sustainable growth, profitability like Amanda talked about.

Charles Rhyee: And I think that's going to be hard to ignore. We're also spending more time and energy and building awareness among investors through our IR efforts and through online and social channels. And we'll continue those efforts and continue to deliver the business execution and just keep that Trump being going and I think it'll be a story that a lot of people are really excited about. Great and that's that's all the time we have for questions today and we'll turn it back over to Kirk for final remarks.

Charles Rhyee: Well, thank you everybody for joining us today. I think it's clear there's a lot of momentum in the business. It's been an exciting journey for outlet and we're grateful for everybody's continued support. I'd like to take this opportunity to thank our talented team for the incredible dedication and hard work that they put in at outlet. Your commitment to our mission and drive for innovation is absolutely inspiring. It's what makes this all work.

Charles Rhyee: We have achieved significant milestones this quarter. We're demonstrating strong financial performance and continued growth. And 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, our data, our unwavering commitment to quality and the passionate team that delivers all this will continue to drive success for outlet. So thank you again for your trust and your partnership. That will conclude today's conference call. Thank you for your participation.

Q2 2024 Owlet Inc Earnings Call

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