Owlet at TD Cowen Healthcare Conference: Strategic Growth in Baby Health Monitoring

On Wednesday, March 5, 2025, Owlet Inc. (NYSE: OWLT) presented at the TD Cowen 45th Annual Healthcare Conference, outlining a strategic vision focused on expanding its presence in both consumer and medical markets. The company emphasized the recent FDA approval of its BabySat monitor, international growth, and a shift towards a software and services model. While the potential for growth is significant, challenges remain in scaling operations and managing costs effectively.

Key Takeaways

• FDA approval of BabySat opens new prescription and reimbursement opportunities.
• Owlet’s international expansion is gaining traction, notably in Germany.
• The launch of Owlet 360 subscription service is expected to drive margin expansion.
• The company is focusing on data and AI to enhance personalized healthcare.
• Strategic partnerships with DMEs and insurance carriers are crucial for growth.

Financial Results

Owlet provided guidance for revenue between $88 million and $92 million, with gross margins expected to range from 50% to 52%. The company highlighted:

• Q1 is typically the weakest quarter due to fewer promotions.
• International sales doubled over the past year, with Amazon Germany sales up 127% year-over-year during Black Friday.
• BabySat, while not yet a significant revenue driver, has high margin potential.
• The Owlet 360 subscription service boasts gross margins between 85% and 90%.

Operational Updates

Owlet is strengthening its market presence through various initiatives:

• Retail partnerships include over 1,000 Walmart and Target stores.
• BabySat has received FDA approval and is partnering with six DMEs, including Adapt Health, with plans to expand Medicaid reimbursement in 12 states.
• International expansion includes launches in 26 countries, with Germany showing strong growth.
• The Owlet 360 service has 25,000 active subscribers within a month of launch.
• Data initiatives involve collecting symptom and doctor’s note data, with plans for telehealth and AI integration.

Future Outlook

The company is focused on profitable growth, with plans to:

• Expand subscription services and BabySat adoption to increase margins.
• Enter the connected nursery market and enhance telehealth capabilities.
• Leverage data, telehealth, and AI for personalized healthcare experiences.
• Improve contribution margins by controlling marketing expenses and scaling infrastructure.

Q&A Highlights

During the Q&A session, the leadership team addressed:

• BabySat’s gradual rollout, focusing on Medicaid and NICU adoption.
• Clinician concerns being mitigated by FDA clearance and low alarm rates.
• Key milestones include sustained profitable growth and strengthening key relationships.
• EMR integration with platforms like Epic is expected by the end of the year.

Conclusion

For a more detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - TD Cowen 45th Annual Healthcare Conference:

Charles: Alright. Good morning, and thanks for for joining us here for next session. Sorry we’re a couple minutes late here. I’m pleased to have, with us this morning the management team from Owlet. We have, Kurt Workman, Co founder and CEO, Jonathan Harris, President and Chief Revenue Officer, and Amanda Tweed Crawford, chief financial officer.

So thank you guys for being here.

Jonathan Harris, President and Chief Revenue Officer, Owlet: Thanks, Charles.

Charles: Yeah. You know, for for those maybe not familiar, Kurt, maybe you can give a brief overview of Owlette, the mission sort of and the and the and sort of your main products.

Kurt Workman, Co founder and CEO, Owlet: Yeah. So, Owlette, we we make wearable health monitor for babies, tracks babies, key vital signs and sleep. We launched a little over ten years ago. I’m a dad. I’ve got three kids and started out because we were worried our kids would have a heart defect that my wife has.

And so it’s really what inspired it. We have we have now, I think, aggregated the largest pediatric, patient population on the planet in terms of total number of of lives and babies that we’re monitoring. And our vision is to take outlet to every family.

Charles: I want to come back to the data in a second. But maybe just to let folks know what the market looks like. How is the outlet sock, the dream sock different than other monitors that, that, you know, families can get for their children?

Kurt Workman, Co founder and CEO, Owlet: Yeah. Most monitors that you can you can get access to, there’s kind of two big buckets. One is, your traditional sound and video monitors. So as my wife and I were looking at, okay, what what could we use at home? Those monitors are great for knowing when baby wakes up and is crying and and needs you to go get them.

That’s kind of the primary use case of a baby monitor today. And then you have these antiquated hospital monitors that are these big bulky boxes with cords that have to go into the crib on the baby, that can track vital signs. They can actually track how well your baby’s breathing, what their heart rate is, temperature, things like that. And so what we’ve done is we’ve consumerized that technology. We’ve made it wearable and wireless.

We are the only FDA cleared monitor on the market available to parents. We’re the only monitor that actually tracks health information similar to what, you know, there’s 70,000,000 adults in The US with a wearable health, you know, tracker. Parents are very used to that technology and that data. We give them access to that for their children, which is a time of life when that information is is, really important.

Charles: Great. And so then maybe talk about sort of Dreamstock here. Obviously, over the last few years, we’ve gone through a lot of changes and a lot of challenges. But as we kind of come out of this year, it seems like things have started to turn you know, in a much more positive direction here and obviously back onto the retail channels. Maybe talk about sort of your positioning there with the partners, maybe give us an update here on, on Amazon as an example and what steps have your retail partners taken to maybe better position outlet?

Jonathan Harris, President and Chief Revenue Officer, Owlet: Yes, good question. Yes, so we have really strong retail partners. We’re over 1,000 Walmart stores with an end cap, cross Target stores as well. So really strong retail presence. Baby List has been doing really well for us on the baby on the registry side of things.

And then Amazon is a global partner for us as well. And they’re continuing to invest in baby and really drive the category as a whole. Right now, we’re the number one most highest registry for any monitor on the baby list growing over 50% year over year. So parents are really asking for this product from their friends when they have a baby. And so that’s a really good leading indicator on how our business is looking towards this year.

Charles: And obviously the way this business works a little different when we think about seasonality and when these are typically gifted as an example. Can you maybe kind of just remind us how seasonality in this business works? Kind of gives us a better understanding sort of the sell in and sell through kind of dynamics?

Amanda Tweed Crawford, Chief Financial Officer, Owlet: Yeah. So of course, babies are born all year, but we do season we do see seasonality in our business, and it’s really driven by big promotions. Typically with the retailer and distributor model, you would be selling to those retailers and distributors in advance of a promotion. That’s typically six to ten weeks before, depending on the retailer. So we do see in terms of seasonality, Q1 is always the lowest just because we don’t have a lot of promotions happening following Q1.

Then Q2, we have a nice uptick. That’s our prime day load in. Q3 has historically been our highest quarter as retailers used to load in for Black Friday in Q3, but we’re seeing a little shift where retailers are tightening up their balance sheets. We’re now expecting Q4 to be the highest quarter, a little bit of shift between Q3 and Q4.

Charles: And I guess just to remind folks, right, so Amazon, they’re basically loading up ahead of their primary, which happens in

Amanda Tweed Crawford, Chief Financial Officer, Owlet: In July. July. Yeah.

Charles: In their third quarter, right?

Kurt Workman, Co founder and CEO, Owlet: Yep.

Charles: In in addition to the consumer, like, I I think a key thing that’s happened recently is the, FDA approval of the prescription version, PAP sat, and the opportunity to go through the, as a as a DME into the, into into the provider market. Can can you give us update what’s going on here? Because, you know, ultimately, right, you know, Kurt, you talked about every baby should have, you know, this monitor coming out of hospital. You need doctors to prescribe it, and it get and to get reimbursed. So give us an update here on where we’re at with that.

Kurt Workman, Co founder and CEO, Owlet: Yeah. And maybe I’ll just talk about BabySat for a second, and then, Jonathan, if you wanna talk about Yep. What’s going on with distribution. Today, when they send a baby home, they send them home with the hospital monitor. These are monitors designed for, for use under the care of a nurse.

It’s a big box with cords that go into the crib. They sound a lot of false alarms. They’re really not appropriate for the home. And so the doctor has a big question to to kind of answer, which is like, gosh, is this baby bad enough that I have to send them home with one of these? That’s really kinda how they how they look at it.

With BabySat, it’s wearable, it’s wireless, it’s a hundredth the size, it’s a tenth the cost, it all the data syncs to the cloud. It’s literally what iRhythm did for adult cardiac monitoring. That’s what we’re doing for pediatrics. It’s a massive market, and BabySat gives doctors the ability to actually prescribe our technology instead of the hospital monitors. We’ve proven that we’re equivalent to them.

So it’s a massive new channel. We don’t have to go through retailers now. You can now get this from from your, from the neonatologist in the NICU. They’ll send it home with you. That’s the vision with BabySat.

Jonathan Harris, President and Chief Revenue Officer, Owlet: So Yeah. And then we’re partnered today with six different DMEs. Adapt was our first. We actually were just at Adapt’s national sales meeting last week. And, they’re part we’re partnering very closely with them going directly into the NICUs and into the hospitals themselves.

All the NICUs have closets where they keep products that go home with the family. So we’re in the process now of actually getting babysat into those closets. And with that and focused on the 12 states with the Medicaid, really focused on the reimbursement side. So we’re hitting it from both angles where we’re hitting the hospitals and the NICUs, but then really driving their reimbursement side. Cigna is a national carrier, but we’re also working on local states one by one.

And the thinking behind this and we’re partnering with Adapt as you get one leading state to really drive it and then you start cookie cuttering it, right? So one state wants to follow the other state. So it’s a slower process, but we believe that we’re already seeing very positive signs and we’re very opportunistic as we drive down this path.

Charles: Which are some of the first states that you’re getting into because

Jonathan Harris, President and Chief Revenue Officer, Owlet: Like Virginia is a really good one, Pennsylvania is a good one, Texas is another really strong state. So each of those three are really strong with Adapt and we’re driving and leaning in heavily.

Kurt Workman, Co founder and CEO, Owlet: I would say for the first time in our history, we now have we were just in an investor meeting where they said, oh, my my niece just came home from the NICU and the doctors told them to go get an outlet. This Baylor medical system is now telling, you know, NICU grads go go get an outlet. They’re starting to educate on it. It’s a big shift for our business.

Charles: Obviously, right now though, the vast majority of the revenue is the dreams are.

Kurt Workman, Co founder and CEO, Owlet: Yep.

Charles: But not only that though, it’s also a large percentage is international. Maybe talk about sort of the international opportunity where we’re at. Yeah. Because that’s been seemed like had been driving a lot of the growth over the last couple of years.

Jonathan Harris, President and Chief Revenue Officer, Owlet: Yes. That’s a bright spot for sure. So we took the effort, and we got our CE Medmark, which is equivalent to FDA, all across Europe, and we launched that last June. And the response has been very, very positive. So we’re in 26 countries now with a medically cleared device.

We’re really driving big highlight, I would say was Germany like that really felt up Amazon sales over Black Friday were up 127% year over year. So we’re really starting to get that growth in the momentum internationally and we’re talking to a number of countries as we speak in getting those clearances across. So we will be adding more international countries, later this year and moving forward.

Kurt Workman, Co founder and CEO, Owlet: And we doubled our business internationally last year.

Charles: You guys posted a really strong quarter the other day, right? Kind of certainly better than we were expecting. The guide looks pretty solid as we’re going through this year, about $88,000,000 to $92,000,000 in revenue. Was gross margin about 51%, fifty two %?

Amanda Tweed Crawford, Chief Financial Officer, Owlet: Fifty % to 52%.

Charles: Sorry, 50% to 52%.

Kurt Workman, Co founder and CEO, Owlet: Don’t cut out the low end.

Charles: I guess the question here is like, obviously, we are still ramping in a lot of categories. We think international, particularly BabySat as well. Where do you see, like, when we think about the long term model, you know, because I think, if I’m not mistaken, the margin profile for BabySat is actually better than the DreamSock, the commercial product. Where do you kind of see what this mix likely looks like in a few years when things kind of, let’s say, you get through the 12 states and it’s maybe more available nationally. Do you see this more being a medical device?

Most of your sales coming as a medical device or do you see it still largely as a commercial device?

Kurt Workman, Co founder and CEO, Owlet: Well, we really believe that health monitoring 70,000,000 adults have a health monitor or health tracker like it’s become ubiquitous. We think the same thing is gonna happen for the pediatric market, and now it’s gonna lead that. So the the the average baby that leaves the hospital is going to go home with a with a health monitor. There’s a lot of reasons for that, but the biggest one is that we spend $30,000,000,000 a year on primary and urgent care for that group. And so giving parents access to this information and allowing them to share it with the doctor is is eventually, I think, gonna drive reimbursement.

But BabySat, if you look at, you know, sixteen percent of babies born come home from the NICU, you have babies with acute conditions, chronic conditions. It’s about twenty percent of of babies born are eligible for BabySat. It’s reimbursable today in a bunch of states. It’s gonna be recommended, you know, at the hospital. Of that market, we’re gonna see really high penetration as we as we build the scaffolding.

That has the potential to really grow the business. Long term as we look at our model, you know, it really comes down to to the blend of those two things, but then the LTV we can get from Owlette three sixty. So it’s our new subscription service we just launched. You know, parents are using our our SOC for about eighteen months. They’re using a camera for for three years.

There’s an average of two children per household. That build you can build a five year that onboards Allot three sixty that can more than double the LTV of the business and that gross margin is 85% to 90%. So we have a lot of room for growth, just in what we’re looking at right now and we’ll continue to expand that.

Charles: And you recently launched the subscription service. How is that going to market and how, you know, what is the way you’re trying to acquire members for that?

Kurt Workman, Co founder and CEO, Owlet: Yeah. So we have over half a million parents using our app every night. They’re engaging with the product or with the app three to five times per day. So we have the the the the customer base is already using our app. So it’s all about, driving conversion through our app that’s free.

It’s owned media. We, you know, we we shared. We have 25,000 active subscribers now one month after launch and growing fast. So it’s really just about building all of those funnels in the app and making that

Charles: sounds really interesting. And where where do you see that kind of going, into the future? Because is is this is the way where you’re, like, I guess the question is, like, once you have all the members captured, you know, and you talked about sort of this five year relationship, you know, we haven’t talked about it in a while though. Like, talk about maybe the the product roadmap beyond DreamSock, BabySat. There were some ideas for the band, the crib.

Are those still sort of potentially in the works?

Kurt Workman, Co founder and CEO, Owlet: Yeah. I would say, long term, the, you know, being the leader of the connected nursery is definitely part of part of the vision. But we look over the next few years, we are laser focused on this $30,000,000,000, home health opportunity. That’s as we roll out three sixty, we integrate telehealth. The ability to chat with a doctor in inside of our app using outlets data, integrating, you know, GenAI into that to make that experience really personalized for every family.

That’s such a massive opportunity for the business that if we just go execute on that, that’s going to drive that can be a multibillion dollar revenue company.

Charles: Okay. That’s helpful. Now that you’re about to reach now that you’re reaching sort of a breakeven on adjusted EBITDA and then a full year become really cash flow positive, how should we think about what the long term margins for this business should look like? And, you know, what’s the time frame we should think about getting there?

Amanda Tweed Crawford, Chief Financial Officer, Owlet: Yeah. As far as margins go, if we think about where we’re headed, just given that subscription will be a much larger proportion of the relative business. I mean, I don’t wanna give any guidance, but they should be higher than what we’re expecting above the 50 to 52% that we’re guiding to this year. We do expect margins to expand in the future.

Charles: And in terms from the operating expense side, obviously, a couple of years back, right, went through a lot of restructuring to kind of right size the business. Maybe talk about sort of what we should think from an OpEx standpoint. Do you have enough, like how scalable right now is your infrastructure? Or are we going to have to start investing more as we continue to grow here?

Amanda Tweed Crawford, Chief Financial Officer, Owlet: Yes. I think the good news about our OpEx is a lot of the major investments have already been made, but we do anticipate needing to invest a little bit in our operating expenses, you know, specifically surrounding our subscription offering. So the development there, product innovation. We would just wanna make sure that we’re always making progress. So we do expect some investment, but, not too much incrementally.

Kurt Workman, Co founder and CEO, Owlet: We think a lot about our contribution margin, which for us is gross margin and then minus marketing expenses, how much are we actually contributing into the business. The ratio between contribution margin and operating expenses should continue to grow, if we’re doing our job right with subscription and BabySat and all of the other opportunities. So growing operating expenses, but at a slower rate than we’re growing contribution margin.

Charles: Got it. And just going back because you had mentioned Cigna, obviously, you know, sort of the first major carrier to to reimbursement. That is for the commercial population? That’s for the commercial?

Jonathan Harris, President and Chief Revenue Officer, Owlet: No. That that’s for that’s for BabySat. BabySat.

Charles: But for their commercial members?

Jonathan Harris, President and Chief Revenue Officer, Owlet: Yeah. Correct. That’s national coverage. And then we’re working with Adapt and their team, to reach out to other insurers as well. So we’re we’re we’re not done.

Charles: Was so was that Cigna through Adapt Health?

Jonathan Harris, President and Chief Revenue Officer, Owlet: That was through Adapt Health to help build that relationship. Yeah.

Charles: And where are you with other carriers at this point, with other insurance carriers?

Jonathan Harris, President and Chief Revenue Officer, Owlet: Yes. So we’re continuing to have relationships through Adapt and their teams. So we’re talking to the Aetna’s of the world as well. And then of course we have the Medicaid across the 12 states. So and then that’s also pushing on the Blues as well.

So this is an ongoing dialogue, leveraging the relationships that our DMEs have with those insurers and really trying to broaden that reach.

Charles: And with six DMEs today, is there a need for additional ones to partner with or do you feel pretty well covered? I think

Jonathan Harris, President and Chief Revenue Officer, Owlet: right now we’re really well covered because we’re really driving execution. So if we get too thin on trying to manage too many relationships with DMEs, we’re not going to really be able to go deep and we need to be able to go deep to to unlock the opportunity. So I think we’re good this year.

Charles: Okay. And then, Kirk, you you mentioned some of your meetings, you know, they’re hearing from their doctors, you know, get a get an outlet. Is the doctor still the gate the final gatekeeper? Like, is it like, how much education do we need to get to pediatricians and, you know, pediatric specialists to to really get to prescribe this?

Kurt Workman, Co founder and CEO, Owlet: Yeah. I mean, I think that’s been one of the great things. We’ve we’ve we go to all the medical conferences now or, you know, just met with, Intermountain Healthcare’s entire pediatric team. And what’s great is they’ve heard about the FDA clearance, but as we educate them on BabySat and DreamSock and we go through the clinical studies, answers all of their kind of key questions or concerns. It’s safe, it’s accurate, the benefits outweigh the risks.

There’s not over alarming with our product. The data will first half of this year integrate with their EMRs like all of that is creating a lot of awareness as we’re out selling baby sat, it’s actually educating on DreamSock, and that’s where we’re seeing more and more health systems are just organically telling parents, like, as they’re leaving the NICU, you should go buy a DreamSock or, you know, you can get the baby sat through this this pathway. So it’s just about building all those relationships now.

Charles: And then and then you said at the beginning, right, was it 500,000 Dreamstocks in use today? How many Dreamstocks are actively being used today?

Kurt Workman, Co founder and CEO, Owlet: Today, I don’t know today, but we we shared on the earnings call over half a million.

Charles: Over half a million. Right? Yeah. And so, you know, it all goes into cloud. You’re collecting all this data.

And, you know, arguably, you have probably the largest dataset of pediatric vital signs Uh-huh. You know, out there. How what is the opportunity, because you you look at, you know, to to use AI and to to find new signals in that data. Maybe talk about sort of what you’re thinking about how to maybe monetize this data set.

Kurt Workman, Co founder and CEO, Owlet: Yeah. We’re doing a couple of things and feel free to weigh in here, but the you know, one is we wanna add more contextual information to make that data even more valuable. So as part of ALA three sixty, we’re starting to collect symptoms, you know, any doctor’s notes that the parents are willing to put in. We’re gonna then integrate telehealth and we’ll have the full loop of care. So if we see vital signs were low, doctor recommended this, we’ll have a data set that we can we can start to pull there.

And then lastly, we wanna start we wanna start allowing parents to enroll in clinical, like, a a large health registry in our app. So they’re able to to sign up for that. We’ll be able to pull health outcomes with the vital signs data. That’ll be the most comprehensive data set for pediatrics on the planet by far.

Jonathan Harris, President and Chief Revenue Officer, Owlet: Yeah. I think the way to look at it is we’re in evolution. Right? So we’ve been a hardware company traditionally that has a data set. Now we’re really merging those and becoming a software and services company enabled by our hardware.

So ALLETE360 is the first phase of this, but it will continue to grow and evolve with ALLETE360 with the data insights, telehealth and beyond.

Charles: Have you have you had, you know, pharma companies kind of reach out interested to to see the data?

Kurt Workman, Co founder and CEO, Owlet: We have. Yep. Yep. And then clinical research is a big one too. Yeah.

A lot of healthcare institutions and researchers want access to it. And as you add the outcomes data with the vital signs data, that’s going to become a pool of information that will have continued value.

Charles: You mentioned EMR integration in the first part of this year. Which ones are you looking to integrate first with and how much time is that going to take? Like, what are any kind of strong stumbling blocks or is it simple kind of an API?

Jonathan Harris, President and Chief Revenue Officer, Owlet: It’s pretty simple API. So we’re integrating right now into the BabySat and integrating that data stream, Epic being the largest. So the nice part about the partner we’re using for the middleware is it’s just API and we could connect to any different platform. So we expect to have this coming online back after this year. So it’s going to be exciting.

Charles: And then in terms of the dataset, like what other kind of hurdles do you need or not hurdles, what are the next steps to really, you know, to add in outcomes data to capture symptoms? Is that all just simple, you know, additions to the app itself? Or is there anything that you need to do more to to really make the to kind of make the potential and more robust, I guess.

Kurt Workman, Co founder and CEO, Owlet: Yeah. You’ll see a lot of this happening this year. It’s really software integrations. We just hired a new VP of clinical that came from Medtronic and Boston Scientific and has worked on projects like this before and we worked with them on some of our FDA clearances. So the business is making an investment, a conscious investment in this.

Three sixty is our big launch this year. We’re gonna grow it this year. Telehealth will come out towards the end of the year. It’s really all about integrating this data set in a way that can help, parents better navigate health at home and allow us to publish on that data.

Charles: And the telehealth component, talk about how how are you gonna go to market with that because arguably, you don’t wanna be running your own telehealth operations. You know, what kind of partners are you looking to? Is it with local area providers in market or is this are there some national groups that you’re looking to partner with?

Kurt Workman, Co founder and CEO, Owlet: Yeah. To start it will be a nationwide provider network that does millions of visits per year. And we’ll just offer that within our app so parents can chat with we’ll build a specialized program with them but it’ll be with a with a partner network. We’re not going to hire physicians. Long term we’d love to, as we as we build out more and more integrations, we’d love for parents to be able to to share that data with their pediatrician as well through the app.

Charles: Yeah. Is that possible to also allow just connect to their, you know, to local pediatricians to their own pediatrician possibly in the future?

Kurt Workman, Co founder and CEO, Owlet: It’s a pretty fragmented network. And so I think it’s gonna have to be how we’re building this large population first and then pediatricians choosing to to start to use it as our as our population grows. Right now, one in ten babies. If you think about for the average pediatrician, one in ten of their of the babies that they care for has an outlet. We think that this is going to become a standard of care.

As we start to cross the tipping point, I think we’ll have a lot of leverage to bring people into the network.

Charles: And then talking about going back to BabySat a little bit again, how should we think about the growth ramp for BabySat within the guide of this year? If you had to guess by year end, what percent of sales would you are you expecting for BabySat?

Amanda Tweed Crawford, Chief Financial Officer, Owlet: So we have not specifically disclosed BabySat, but what I can say is that with baby sat, it’s still ramping, and it is not a material part of our guide.

Charles: When what do we need to see for that to really get the tipping point? Is it sort of the rollout within Medicaid? I think it’s a

Jonathan Harris, President and Chief Revenue Officer, Owlet: rollout within Medicaid. It’s also the adoption through the hospitals and the NICUs in particular and really getting that adoption and getting those the product into the closets. So we’re again, we have momentum behind us and we’re continuing to grow, but we’re taking it very slow and steady, because the healthcare system moves extremely slow.

Kurt Workman, Co founder and CEO, Owlet: Well, and I think part of it too is we want to nail it before we scale it. So it’s not like we’re not dumping money or not dumping is the wrong word, but we’re not putting a ton of marketing spend behind BabySat yet because we know it would be inefficient at this point. So as we get the rest of the Medicaid states, as we start to build some of these hospital relationships, when we turn that on and the message is, if your baby is coming home from the NICU or if they have an acute or chronic condition, you can get an Owlette device reimbursed by insurance. Just even just the consumer push on that is going to be fantastic. We know that, but we want to make sure that we can have a campaign that we can take to every every family.

Charles: Basically, you wanna be able to supply it on on the back end. Right?

Kurt Workman, Co founder and CEO, Owlet: Exactly. So fragmented right now. It’s gotta come together. Yep.

Charles: Any kind of pushback that you get from you you talked about presenting before, like, Intermountain. You know, what are the the the key concerns that come up? Like, what are the questions that still come up from clinicians, regarding the device, if any?

Kurt Workman, Co founder and CEO, Owlet: Yeah. I mean, educating them on FDA clearance, most of them know that by now. They’re they’re used to using this hospital technology. So when they think about pulse oximetry, they think, you know, intrusive, lots of alarms, tons of questions from parents. And so we go and we say, look, we FDA had us do this study where we compared our device to the hospital monitor.

We had one tenth the alarm rate, but we picked up all the clinical events. It’s like, wow. Okay. That’s a game changer. We talk about the patient experience and the usability that we have that makes it so it’s not intrusive in their lives.

That’s that’s a big unlock for them. And then we talk about the benefits. We share case studies. We’ve published some of the studies on on, infant heart issues and on SIDS. We start to share that information, and then they they really start to align.

But a lot of them are using it with their own kids. We index way higher with pediatricians and nurses that use our device. So they’re they’re you know, we are we already have a base that I I think understands it, and the FDA clearance is the biggest catalyst to that. So

Charles: That that’s pretty that’s interesting. And so I I guess then, finally, in the last couple of minutes, where where do you where do what are the key milestones that we should be watching for? Obviously, you gave pretty strong guidance for the year. Is it just really just tracking sort of the momentum here? Or are we waiting for any key milestones you think that we should be alert for that as another good signal of things going well?

Jonathan Harris, President and Chief Revenue Officer, Owlet: Yes. I would say that is we’re really focused on driving sustained profitable growth. We’re not growing at all costs. We’re growing profitably to really drive the business for long term value. So we don’t want to scale this thing and spend too much money.

We want to really grow profitably, keep a sharp eye on OpEx, keep sharp eye on margins and really continue to strengthen our relationships both here and abroad.

Charles: And we should think that over time, right, if you’re talking about a subscription service that is 80%, ninety % gross margins, BabySat which actually has a much higher ASP, so a higher gross margin as well. Is it fair to think that we could see, you know, gross profit dollars growing at a faster rate than revenue, you know, as we build out of next year’s?

Kurt Workman, Co founder and CEO, Owlet: Yeah. And think oh, sorry.

Amanda Tweed Crawford, Chief Financial Officer, Owlet: I was gonna say that’s exactly what we saw happen in in ’24, where revenue grew 45, but margin was up about 75. So I do think that we’ll continue to see margins expand ahead of revenue growth.

Kurt Workman, Co founder and CEO, Owlet: In our guide this year, we said no material revenue for March, no material revenue for BabySat. Those are our highest margin activities and we’re driving those right now. Right? So we’re we’re trying to be realistic and make sure we don’t get ahead of ourselves, but we’re really optimistic about those opportunities and we we haven’t even modeled into it the telehealth opportunity that will start to expand at the end of the year. So

Charles: When should we expect the telehealth capabilities for parents in app?

Kurt Workman, Co founder and CEO, Owlet: So it’ll be in our app first doctor visit the first half of this year, and then we’ll scale it towards the end of the year.

Charles: And is that an announcement that we might hear about like who you’re partnering with? Or is that just

Kurt Workman, Co founder and CEO, Owlet: Yeah.

Amanda Tweed Crawford, Chief Financial Officer, Owlet: Okay.

Kurt Workman, Co founder and CEO, Owlet: Yeah. You’ll hear that.

Charles: All right. Well, we’re about time here, so maybe we’ll pause here and, you know, want to thank everyone for being with us today and and listening on the webcast. So thank you very much.

Kurt Workman, Co founder and CEO, Owlet: Awesome. Thanks, Charles.

Amanda Tweed Crawford, Chief Financial Officer, Owlet: Thank you.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.