Owlet, Inc.

Q2 total revenue was a record $33.9 million, up 29.9% year over year. Q2 gross margin was 54% excluding the tariff refund, or 64.4% including the onetime tariff benefit; subscription gross margin was 68.4%. Adjusted EBITDA was $2.9 million excluding the tariff refund, versus $0.5 million a year ago, and $6.7 million including the refund. Operating loss was $1.8 million excluding the refund and operating income was $1.7 million including it. Owlet ended the quarter with 130,000 paying subscribers and $3.2 million of subscription revenue, up $2.4 million year over year. International revenue grew 214% year over year, and Q2 2026 was the highest international revenue quarter in company history at $5.7 million excluding a prior-year load-in comparison issue. For 2026, management reaffirmed revenue guidance of $118 million to $122 million, raised gross margin guidance to 53% to 55% from 50% to 52%, and raised adjusted EBITDA guidance to $10.75 million to $12.75 million from $7 million to $9 million. Management said Q3 is expected to decline sequentially and versus Q3 2025, and Q4 guidance was maintained.

Kurt Workman framed Owlet as evolving from a hardware company into a data-and-services platform built around subscription, telehealth, and AI-driven insights. He emphasized three long-term goals: roughly 1 million new customers per year, stronger subscription adoption, and keeping families for at least 2 years to build a recurring base of more than 1 million subscribers. His tone was upbeat and strategic, highlighting category leadership, FDA clearance as a moat, and the opportunity to make Owlet more valuable over time through camera, telehealth, and AI features.

Amanda Crawford focused on the quarter’s financial strength and the impact of the tariff refund. She cited $33.9 million of revenue, 54% gross margin excluding the refund, $2.9 million of adjusted EBITDA excluding the refund, and $30.9 million of cash and cash equivalents at quarter-end, plus $7.5 million of availability under the new Wells Fargo revolver for total available liquidity of about $38.5 million. She also noted the new $25 million asset-based facility lowers the interest rate margin to SOFR plus 2% to 2.25% from SOFR plus 7.5% to 8.5%, and said the company is staying disciplined on capital allocation while expecting lower interest expense going forward.

Analysts pressed on Q3 sell-through trends, the gap between sell-in and sell-through, and whether the subscription attach rate and retention were improving. Management said around 30% of parents ultimately subscribe within the first year, average subscriber life is about 12 months, and nearly 30% of new users in the trial period are choosing the annual plan, but cautioned that year-over-year sell-through comparisons are muddied by Prime Day shifting from Q3 to Q2. Questions also focused on telehealth and AI: management said telehealth will likely become a separate higher tier beyond Owlet 360, and that AI features such as the morning report are already engaging users, with 85% of users engaging daily with that feature. On Web Pay, CFO said App Store fees are about 30% for the first 12 months, and Web Pay should improve subscription margins over time as the mix shifts.