Owlet (OWLT) Q4 2025 Earnings Call Transcript

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DATE

Thursday, March 5, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Jonathan Harris
• Chief Financial Officer — Amanda Twede Crawford
• Operator

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TAKEAWAYS

• Total Revenue -- $26.6 million for the quarter, reflecting a 29.6% increase year over year, driven by broad-based growth across the Dream product suite and Owlet 360 subscription.
• Annual Revenue -- $105.7 million for 2025, up 35.4%, reaching a new company record and at the high end of the guidance range.
• Gross Margin (Q4) -- 47.6% for the quarter, including a 5–10 basis point negative impact from tariffs.
• Gross Margin (Full Year) -- 50.6%, a record high, impacted by tariffs by 270 basis points.
• Adjusted EBITDA (Q4) -- $100,000, impacted by tariffs, compared to $500,000 in the previous year's quarter.
• Adjusted EBITDA (Full Year) -- $2.0 million, an improvement of $3.8 million versus 2024 and at the high end of guidance expectations.
• Operating Expenses (Q4) -- $17.5 million, a decrease of $0.9 million, representing 66% of revenue versus 90% in the prior year's quarter, evidencing improved operating leverage.
• Cash and Liquidity -- $35.5 million in cash and cash equivalents at quarter end; after paying down $12.0 million on the line of credit, total liquidity was $45.5 million.
• Total Paying Subscribers -- Over 110,000 for Owlet 360 as of early March, with management highlighting continued sequential growth in key metrics including monthly recurring revenue, attach rate, and retention rate.
• Dream Sock U.S. Sell-Through -- Dream Sock up 95%, and Duo up 53% year over year, both supported by strong holiday performance.
• Dream Sock NPS -- Net Promoter Score at 77 for the product, with a blended product NPS of 72.
• Market Share -- 41% of all dollars spent on baby monitors in Q4, up 24% year over year and the highest share since the company began tracking Circana data.
• International Revenue -- $3.9 million in Q4, closing the year at $19.2 million, up 27%, noting a Q4 decline primarily due to a shift in the Amazon UK revenue recognition model.
• International Sell-Through -- UK up 58%, France up 41%, and Nordics up 80%, each measuring year-over-year growth for Q4.
• Regulatory Milestones -- Dream Sock secured regulatory clearance for sales in India and Israel in Q4, expanding the total number of countries with seven regulatory clearances and planning launches in both markets in 2026.
• Healthcare Channel Partnerships -- Initiation of monitor shipments with Children’s Hospital of The King’s Daughters and four additional hospital engagements underway, along with Medicaid reimbursement now in 37 states and 258 commercial carrier relationships supporting over 90% of U.S. births.
• 2026 Financial Guidance -- Revenue projected at $126 million to $130 million (19%-23% growth), gross margins of 49%-52%, and adjusted EBITDA of $3 million to $5 million, reflecting 50%-150% improvement, with first half revenue anticipated to contribute about 40% of the annual total.
• Key Strategic Initiatives -- Focused on expanding Dream Sock globally, scaling the Owlet 360 subscription, growing healthcare channels, and preparing Owlet On Call telehealth for commercial launch after pilot testing.
• AI Platform Development -- Active partnership with Web.ai targeting enterprise-grade, secure pediatric health intelligence, with new AI-driven features and insights positioned for subscriber adoption and engineering workflow efficiency.

SUMMARY

Owlet (NYSE:OWLT) delivered record-breaking annual revenue, margin expansion, and subscriber growth while successfully strengthening its balance sheet through warrant exchange and equity issuance. The new DreamSight camera launched with AI-enabled capabilities, establishing an upgraded camera platform and setting the stage for upcoming camera-specific subscription features. Management announced regulatory clearances for Dream Sock in high-potential international markets, aligning go-to-market efforts for India and Israel, while securing Medicaid and commercial insurance coverage across a broader U.S. footprint. Subscriber momentum continues across all metrics for Owlet 360, which now exceeds 110,000 paying customers after one year, with international expansion of the offering underway. AI-driven engineering and product enhancements, including generative insights and sleep coaching, form a central pillar in the company’s evolution from hardware focus to data-centric pediatric wellness technology.

• Jonathan Harris described the company as becoming "a comprehensive pediatric data platform," highlighting strategic repositioning beyond traditional monitoring.
• CFO Amanda Twede Crawford said, "we have not baked in any material contribution from our new countries or the telehealth opportunity" in 2026 revenue guidance, which may indicate potential upside not captured in expectations.
• The Q1 2026 revenue guide of $20 million to $21 million incorporates both seasonal low demand and retailer inventory tightening, reflecting impacts from Q4 macroeconomic softness and an atypically strong flu season in prior Q1.
• Owlet On Call telehealth platform is described as an "additional upsell, cross-sell, if you will, to Owlet 360" and will launch as a standalone offering following internal pilots before broad release ahead of peak illness season.
• Management disclosed that cohort retention data for Owlet 360 continue to improve, supporting targeted feature rollouts for enhanced customer retention.
• The company ended the quarter actively piloting AI-driven product features and workflow programs, including efforts to streamline regulatory and financial operations.
• Tariff costs remain a headwind and are explicitly factored into 2026 margin guidance at a consistent impact per quarter.

INDUSTRY GLOSSARY

• LTV: Lifetime Value; total revenue or profit attributed to the average customer throughout their relationship with the company.
• Attach Rate: Percentage of core product purchasers who also purchase or subscribe to an ancillary product or service.
• CHDK: Children’s Hospital of The King’s Daughters; referenced as a healthcare channel partner in the company’s consignment and RPM programs.
• Dream Sock: Wearable product offering real-time infant biometric monitoring for sleep, heart rate, and oxygen levels.
• DreamSight: Next-generation, AI-enabled camera platform introduced by Owlet in 2025 for pediatric monitoring.
• Owlet 360: Subscription platform providing extended data insights and connected services for parents using Owlet products.
• On Call: Telehealth platform leveraging real-time vital sign monitoring for pediatric remote care and consultations.

Full Conference Call Transcript

Jonathan Harris, President and CEO, and Amanda Twede Crawford, our CFO. Before we begin, please note that our financial results press release and presentation slides referred to on this call are available under the Events and Presentations section of our Investor Relations website at investors.palletcare.com. This call is also being webcast live with a link at the same website. The webcast and accompanying slides will be available for replay for 12 months following this call. The content of today's call is the property of Owlet, Inc. and cannot be reproduced or transcribed without our prior consent. Before we begin, I would like to refer you to our safe harbor disclaimer on slide three of the presentation.

Today's discussion will contain forward-looking statements based on the company's current views and expectations as of today's date. These statements are only predictions and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, but are not limited to, those described in our most recent filings with the SEC and in the risk factors section of our annual report on Form 10-K, as updated in the company's quarterly reports on Form 10-Q and other filings with the SEC.

Please note that the company assumes no obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required by law. With that, it is my pleasure to turn the call over to Jonathan.

Jonathan Harris: Thanks, Jay. Good afternoon, everyone, and thank you for joining. I am excited to recap the significant progress we have been making, as 2025 was the strongest year in Owlet, Inc.'s history, and we are positioned for continued outperformance in 2026. I will begin on slide five. 2025 was truly a monumental and transformative year for Owlet, Inc., marked by significant growth and expanding our leadership and scale in pediatric health monitoring. The team achieved many milestones and accomplishments, and I would like to highlight three of the most critical. First, the launch of our Owlet 360 subscription service in January proved to be a resounding success, fundamentally reshaping our relationship with our customers and our long-term business strategy.

We are proud to announce that we have crossed 110,000 paying subscribers to begin March, a testament to the value and peace of mind our connected services provide to families. And we have recently launched our international subscription offering, opening new high-margin revenue streams and extending our ecosystem benefits across borders. The introduction of Owlet 360 marked a major milestone in our evolution into a comprehensive pediatric data platform. By leveraging Owlet, Inc.'s massive dataset of pediatric health, we are better able to deliver more advanced and personalized health and wellness information for our families. We are excited about the foundation we laid in 2025 for subscription, and to capitalize on that momentum in 2026.

Second, we launched our new DreamSight camera in September, our next-generation video monitor. DreamSight levels up our camera platform with greater reliability and security, and future-forward technologies, including onboard AI capabilities, all at a price point that makes sense. When paired with Dream Sock, it delivers a holistic view of a child's wellness that no other offering can match. We view the introduction of DreamSight as an important strategic catalyst to expand our LTV, as cameras remain in use past three years of age. We have seen outstanding momentum since DreamSight launch, and we are thrilled to begin rolling out our new camera-specific subscription features in the coming quarters, yet another opportunity to increase subscriber growth.

Third, in 2025, we achieved record annual revenue, gross margin, and adjusted EBITDA, showcasing new highs of financial performance and operational efficiency. Despite the new tariffs, last October, we simplified our capital structure via warrant exchange followed by a successful offering to strengthen our balance sheet, support a path to cash flow independence, and provide flexibility for opportunistic growth investment. Owlet, Inc.'s financial and operational health is stronger than ever, positioning us to execute well on our pediatric health growth opportunity and deliver long-term stakeholder value. Owlet, Inc.'s journey to date has been extraordinary, marked by innovation, strategic expansion, and a relentless focus on our mission: reaching every baby.

Our strategy is anchored in partnering with families during some of the most challenging but rewarding times in the parent journey. We are looking at a demographic of new parents—Gen Z and young millennials—where 60% of the women already own and rely on a connected wearable device. For them, biometric data is not a novelty; it is a baseline expectation. Owlet, Inc. is perfectly positioned to capture this audience by bridging the gap between the wearable tech they already use for themselves and the predictive care they want for their babies. Owlet, Inc. is now a leading family wellness technology brand.

Beyond just a monitor for parent calm, we use our product suite and massive pediatric dataset to digitally translate safety, health, wellness, and development patterns. This allows parents to make proactive, informed decisions and establishes a true biometric baseline for babies from night one. With the rise of AI and advanced monitoring, Owlet, Inc.'s data and ability to deliver actionable insights will become increasingly valuable as children grow. From that larger vision, let us zoom into our fourth quarter 2025 performance on slide six. Owlet, Inc. delivered another strong quarter to cap a record year. We achieved revenue of $26.6 million in Q4 2025, increasing 29.6% versus Q4 2024.

Revenue strength was driven by broad-based growth across the Dream product suite and Owlet 360 subscription. Q4 revenue concluded a record year for Owlet, Inc., with total revenue of $105.7 million for 2025, 35.4% growth over 2024. Fourth quarter 2025 gross margins were 47.6%, including a 5–10 basis point impact from the cost of tariffs. Despite the tariff overhang, full year 2025 gross margins were also a record at 50.6%. Adjusted EBITDA compared to $500,000 in the fourth quarter 2024 was $100,000 in Q4 2025; tariff costs were the primary impact versus prior year's adjusted EBITDA. For full year 2025, adjusted EBITDA was another record for Owlet, Inc. at $2.0 million, a $3.8 million improvement over 2024.

The strength of our results in the fourth quarter and records across all key metrics for the full year 2025 underscore our confidence in strong performance and growth into 2026. Owlet, Inc. is very well positioned as a company as we take last year's momentum and aim even higher in 2026. Turning to our strategic growth areas, our strategy remains consistent from last year, and we have refreshed our priorities to reflect what is most critical in 2026. First, drive global adoption of Dream Sock. Second, expand the Owlet 360 subscription platform. Third, continue to grow the healthcare channels. Finally, launch the Owlet On Call telehealth platform.

Beginning with our core business in the U.S., Dream Sock demand continues to be strong. Dream Sock and Duo demonstrated strong domestic year-over-year sell-through at 95% and 53%, respectively, driven by another strong holiday selling period. We observed an expected shift in sales of individual Dream Socks to the Duo package, which we are pleased to see as Duo represents an expanded LTV opportunity and increase for subscription, giving parents a holistic view of a child's wellness that no other offering can match. Strong customer satisfaction supports this growth, as Dream Sock NPS score to end Q4 was 77 and overall blended product NPS of 72. Registry trends continue to demonstrate Dream Sock is a priority for parents.

Q4 showed a 23% increase in year-over-year Dream Sock additions across the registries we track, including Amazon, Babylist, and Target. We also continue to gain market share at scale. According to Circana Consumer Research and our own data, Owlet, Inc. expanded our share of total dollars spent on baby monitors to 41% in Q4 2025, up 24% versus Q4 2024, and another record high for market share since we started tracking Circana data. The data also show our overall category is growing, with consumer spending on baby monitors in 2025 the highest it has been in the last five years. Shifting to international, Q4 international revenue reached $3.9 million, closing a record year of $19.2 million, up 27% versus 2024.

While Q4 revenue declined year over year, this was primarily due to transitioning Amazon UK to a direct import model. This operational shift moved the revenue recognition point from the collection to delivery, pushing a significant portion of UK sell-in revenue—our largest international market—from Q4 into Q1 2026. International sell-through remains strong, with the UK up 58%, France up 41%, and the Nordics up 80% versus Q4 2024. In Q4, we secured regulatory clearance for Dream Sock sales in India, a major step forward in our planned commercial launch in 2026. This market is massive, with over 23 million annual births. The top 1% alone rivals the size of the United States or European opportunities.

We are also pleased to announce that we have received regulatory approval for Dream Sock distribution in Israel, another exciting new sales channel. This gives us another layer of international growth as we plan to launch in 2026. We will be in 31 countries with seven regulatory clearances. In 2026, with both India and Israel expected to be on board, we are focused on scaling our current geographies and consistently opening up new regulatory-approved global sales channels as we ensure availability of Dream Sock to every corner of the globe.

Turning to Owlet 360, we continue to drive meaningful progress expanding the value of our subscription platform, which contributed to our fourth consecutive quarter of sequential growth across paying subscribers, MRR, attach rate, and retention rate. January 28 marked our first full year since subscription launch, and the reception from parents and the performance of the offering has exceeded our expectations. We are proud to report over 110,000 total paying subscribers to begin March. In Q4, we successfully launched Owlet 360 in our first international markets: the UK, Ireland, Australia, New Zealand, and South Africa, and we plan to continue rolling out subscription capabilities to the balance of our regulatory-cleared countries in the coming quarters.

As discussed last quarter, nearly all of our subscriber growth since launch has come from a focus around Dream Sock, and we see a significant opportunity to drive increased subscription adoption by layering differentiated camera-based features onto our latest AI-enabled camera platform, DreamSight, and Duo, to drive subscriber growth while extending customer LTV. For example, combining our proprietary biometric data from the Sock with computer vision from the camera to deliver increasingly personalized and proactive experiences for caregivers in upcoming feature releases. We are focusing intensely on integrating AI across all of our platforms, viewing it as a long-term investment to strengthen our competitive edge and better support parents.

Our strategic partnership with Web.ai will accelerate the development of secure, specialized intelligence using our unique pediatric health dataset. This enterprise-grade AI infrastructure aims to unlock value for personalized experiences and better insights, which we believe will become increasingly differentiated as our data grows. We are excited about the future as we combine AI with our valuable pediatric data built on the foundation of Owlet 360. Turning to our third strategic growth area, we continue to make solid progress in growing Owlet, Inc.'s healthcare channels. In Q4, we sent our first Owlet, Inc. monitors home from Children’s Hospital of The King’s Daughters, officially launching this collaboration.

Building on the success and foundation we established with CHKD, in the last few months, we have engaged four new hospital partnerships. Our work in establishing the consignment functionality and RPM integration with CHKD laid the groundwork to announce these next hospital collaborations. We are at various stages of integration and expect to share more information in the near term. We also continue to make important progress expanding our coverage network. We ended the year with 37 states on Medicaid reimbursement, up from six to end last year, and we now have 258 commercial insurance carriers, up from 105 from last year, now supporting over 90% of commercial U.S. births.

And finally, our last strategic growth area, Owlet On Call telehealth. We believe the pediatric telehealth opportunity is a game changer. As we have detailed in the past, there are over $30 billion in pediatric healthcare costs every single year just in the U.S., and over 90% of those visits are treat and release. By leveraging real-time infant data from Dream Sock and Owlet 360 to provide more personalized, actionable remote care, we believe we can make a meaningful impact improving overall child health outcomes and reducing costs for families. We will launch the Owlet On Call telehealth platform utilizing Dream Sock and Owlet 360 to capitalize on this opportunity.

This will enable parents to share health vitals—pulse rate, heart rate, oxygen saturation—and the 30-day history from Dream Sock during a telehealth visit. This capability is expected to significantly enhance care quality and patient outcomes, as traditional telehealth often relies on inadequate visual diagnosis without this crucial data. 2026 is the time to test, learn, and expand on Owlet On Call. We are still in the piloting stages for our telehealth offering, as we want to get the experience right before a full launch scheduled later in the year in advance of the winter flu season. To wrap up, I want to thank and congratulate the Owlet, Inc. team for a record 2025.

I also want to thank our customers and investors for your confidence. The differentiation in our product platform and the leadership and expertise in pediatric health monitoring are a strong foundation to build from. As we look to the future, we are laser focused on sustaining our momentum and continuing to execute at a high level across our strategic growth areas. I am confident this strategy will translate into long-term durable growth and value creation. I will now turn the call over to Amanda to go over the financial highlights and our outlook for 2026.

Amanda Twede Crawford: Thanks, Jonathan, and thank you to everyone for joining. I also want to thank our employees for another successful quarter and for the terrific execution that delivered our record 2025 performance. I will begin on slide 12. Unless noted otherwise, I will be comparing fourth quarter 2025 to 2024. Financial results are preliminary prior to our 10-K filing. The fourth quarter was another strong quarter as the momentum continued for Owlet, Inc. Q4 revenue was $26.6 million, up 29.6% year over year. Revenue strength was driven by broad-based growth across the Dream product suite and Owlet 360 subscription. Full year 2025 revenue was a record at $105.7 million, up 35.4% versus 2024, at the high end of our guidance range.

Q4 gross margin was 47.6%, including a 5–10 basis point impact from the cost of tariffs. Full year 2025 gross margin was a record at 50.6%, exceeding the high end of our guidance. Tariff costs impacted our gross margin by 270 basis points for the full year 2025. Moving to the next slide, we have continued to maintain discipline with our operating expenses as we grow the business. Total operating expenses in the fourth quarter were $17.5 million versus $18.4 million in 2024, improving by $0.9 million. As a percentage of revenue, Q4 operating expenses were 66% compared to 90% in Q4 2024 as we continue to drive strong operating leverage.

This has led to consistently strong operating efficiency as we manage investing operating expenses behind revenue growth. Our LTV to customer acquisition cost ratio of 4.4 remains low and is poised to improve as we layer on recurring revenues from subscription. From a revenue per full-time employee perspective, we are running a lean and efficient team at $1.0 million per average FTE. Q4 operating loss was $4.9 million compared to $7.4 million in the same period last year, improving $2.5 million. Net loss in the quarter was $9.2 million versus $9.1 million in the same period last year. Q4 adjusted EBITDA was $100,000 compared to $500,000 in Q4 2024. Tariff costs were the primary impact versus prior year.

Full year 2025 adjusted EBITDA was a record for Owlet, Inc. at $2.0 million and at the high end of our guidance expectations. 2025 adjusted EBITDA improved $3.8 million compared to 2024. Turning to our balance sheet, cash and cash equivalents, excluding restricted cash, as of quarter end December 31, 2025 were $35.5 million, up from $23.8 million in the third quarter 2025. With a portion of the proceeds from the equity offering in October, we paid down $12.0 million on our line of credit, decreasing to $7.0 million at the end of Q4.

We had $10.0 million of undrawn availability on the line of credit at the end of Q4, increasing our total liquidity to $45.5 million as of December 31, 2025. The principal balance on our term loan was $7.0 million at the end of Q4 versus $7.5 million at the end of Q3. We began repayment on the term loan in November 2025, and we expect it to be paid off by January 2028. Shifting to our financial outlook on slide 16, following the most successful year in Owlet, Inc.'s history, our 2026 outlook is built on the scale we established in 2025 and centered on continued execution on our strategic areas for growth.

For Q1 2026, we expect revenue in the range of $20 million to $21 million, gross margins of 50% to 52%, and adjusted EBITDA of negative $2.5 million to negative $1.5 million. A reminder that the seasonality of the business positions the first quarter as consistently our lowest revenue contribution quarter. And also of note, when comparing Q1 2026 revenue to prior year Q1 2025, revenue was especially strong due to a heavy RSV and flu season. We also began investing post offering in Q4 and now in Q1 in additional R&D resources to drive features and services for our Owlet 360 subscription and On Call telehealth.

And for our full year 2026 outlook, we are expecting another record year of growth. For 2026, we expect revenue in the range of $126 million to $130 million, representing growth of 19% to 23% over 2025. Similar to prior years, we are expecting revenue contribution to be roughly 40% in the first half of 2026 and 60% in the back half, as we observe our typical seasonality and as subscription revenue sequentially becomes a larger portion of revenue throughout 2026. For full year 2026, we expect gross margins in the range of 49% to 52% and adjusted EBITDA in the range of $3 million to $5 million, representing growth of 50% to 150% over 2025.

There remains uncertainty surrounding the volatile tariff situation and the war in the Middle East. As a result, our 2026 guidance includes tariff cost impacts consistent with Q4 2025 at 5–10 basis points to our margin per quarter. With that, operator, can you please open up the call for questions?

Operator: If you would like to ask a question, please press 1. If for any reason you would like to remove that question, please press star followed by 2. Again, to ask a question, and as a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We ask that you please limit yourselves to two questions and then return to the queue for follow-ups. We will pause here briefly as questions are registered. First question is from the line of Andrew Brackmann with William Blair. Your line is now open.

Andrew Brackmann: Maybe we could start here on guidance. As I sort of look at the full year, it looks like you bracket industry sort of on key metrics. But for Q1 in particular, I think revenue was a bit below where the Street was. But also just as I look at sort of the percentage of the full year revenue expectation versus what we have seen in prior years, I think it is a little bit lower. So can you maybe just talk about why that is this year, and I guess more importantly, can you just talk about your line of sight to that second half ramp that is sort of implied here? Thanks.

Amanda Twede Crawford: Yes, that is a fair question, Andrew, and I wanted to provide some context for the Q1 guide. First, inherently, we have got seasonality in the business with Q1, which is historically our lowest revenue contributor. When we are looking at the year-over-year comparison, we are lapping an exceptionally strong Q1, which was driven by a heavy RSV and flu season. The other thing to look at is the current macro environment. We did observe some softness in consumer spending through the Q4 holiday period—whether it was influenced by the government shutdown or broader macroeconomic pressures—we have seen retailers respond by tightening their weeks of supply, which is reflected in the Q1 guide.

Just to be clear though, we are the leader in the category. The timing of when the revenue is going to hit within the quarters is coming back lighter in Q1, but fundamentally, we are in a strong competitive position. And this confidence is baked into the full-year guide, which reflects the strong long-term demand that we are expecting.

Andrew Brackmann: Okay. I appreciate all that color. And then, Jonathan, you talked about launching some generative AI insights here in the coming months. Can you maybe just talk a little bit more about that, give a little bit of color on what those offerings might look like? And then as you sort of think about increasing the stickiness to 360, how do those sort of play into that? Thanks for taking the question.

Jonathan Harris: Yes. We see a massive opportunity to leverage AI to support and drive our evolution from a hardware company into a leading pediatric data platform. We see it a couple different ways. We see product intelligence. We are evolving from simple hardware monitoring to real-time personalized AI sleep coaching. AI Sleep Insights will convert static data into actionable daily plans for parents. We believe that this is also going to drive high-value subscription features in our audio and our vision, really driving the whole ecosystem across both the Sock and DreamSight, our camera.

Additionally, we are really driving and focused on AI-assisted engineering workflows to reduce turnaround times and accrue across all functions of the business—to streamline regulatory submissions, to automate financial data entry, to drive measurable productivity gains. And then we are in the early phases of our Web.ai partnership where we are really going to work on real-time, on-the-edge AI functionality that, again, is going to help parents with real-time data to help on their parenting journey. Thanks for your question.

Operator: Next question is from the line of Jonah Kim with TD Cowen. Your line is now open.

Jonah Kim: Thank you for taking my question. As it relates to the international expansion, when should we start to see some of the sell-in revenue for new markets there? And we would love to hear any early learnings from the international subscription that you rolled out—how that progress has been, and any early learnings there. And then just lastly, in terms of your guidance for the year, what is baked in terms of your expectation on the low end and high end—just would like to get additional color on the expectations that you have embedded in your guide. Thank you so much.

Jonathan Harris: Great. I will take the first half of that. So we expect further international expansion revenue to begin in the first half of this year with rollout in the first half in these new markets, so we are very excited about that. We continue to see very strong sell-through success across our European markets and continue to grow. And we are still very, very early on our international subscription, but we are excited to drive that. Right now, it is only English-speaking countries, and we look to expand further European languages in the first half of this year as well. So very excited to see more subscription drive on a global basis.

Amanda Twede Crawford: All right. And then just regarding your question on what is baked in at the low end and the high end, as far as revenue goes in our guidance, we have not baked in any material contribution from our new countries or the telehealth opportunity. So we see that as upside in the guide. The high end versus the low end will depend on our hardware growth as well as the contribution from subscription. So within that range, the higher end would imply stronger growth in both of those areas. And then just from a cost of goods perspective, we said in the remarks that we are including tariffs that are consistent with what we saw in Q4.

As everyone knows, the tariff situation remains volatile and is changing day to day, so depending on where those ultimately land, there can be a little bit of upside as well.

Jonah Kim: Thank you for the color.

Operator: Thank you for your question. Next question is from the line of Owen Ray Rickert with Northland Capital Markets. Your line is now open.

Owen Ray Rickert: Hey, guys. Thanks for taking the question here. Looks like that On Call telehealth is launching in the back half of the year. Can you just walk us through the go-to-market strategy there, and more specifically, is this being positioned as a stand-alone code here? Is it a premium add-on to Owlet 360, or bundled into the system subscription plans? Just give us some more color on that offering?

Jonathan Harris: I have that, Owen. Good to see you. We hear you. So we began internally piloting with friends and family just recently, and we are continuing to grow that. We are really flushing that out based on that real-world experience. And this will be an additional upsell, cross-sell, if you will, to Owlet 360. It will be a separate platform. So we are really working on getting the experience right before launching in 2026 and well ahead of the cold and flu season. We are really excited and continue to build, and we are going to have this rolling out ahead of 2026.

Owen Ray Rickert: Got it. And then second one for me. There is a past 110,000 for Owlet 360 subscribers. How is the bookings looking there? Monthly churn rate—how has that trended over the past few quarters?

Jonathan Harris: Could you repeat the question? You were breaking up a little bit. Sorry.

Owen Ray Rickert: Oh, yes. No problem. I was just asking about how it is going—like, looking on Owlet 360—110,000 subscribers and maybe how that has expanded over the past few quarters.

Jonathan Harris: Yes. We continue to see Owlet 360 grow. We will be sharing more data on Owlet 360 on our upcoming calls because we just hit our one-year anniversary. But what we can share is the metrics are trending in all the right directions. We have had four consecutive quarters of sequential growth across paying subscribers, MRR, attach rate, and retention rate. We have also been tracking a cohort analysis. It is showing retention continues to improve at a consistent basis, and this is also helping us identify time periods where there is opportunity to target rolling out specific features to improve retention even further.

A great example of that is just adding the additional features that we are looking to launch on DreamSight, really bringing both the Sock and the camera subscription and that holistic view for the parent.

Owen Ray Rickert: Okay. Thanks, guys.

Operator: Thanks for your question. Next question is from the line of Ian Arndt with Lake Street Capital Markets. Your line is now open.

Ian Arndt: Hey, guys. Thanks for taking the question. I am on here for Ben. And I was just wondering how do you guys view international revenue longer term? There is data to show that there are more babies born outside the developed world, obviously, and just wondering where you guys kind of see international sales ending up as a percentage of revenue several years down the road. And—Yes, sorry.

Jonathan Harris: No, go ahead. Sorry.

Ian Arndt: I was just going to add if you had any thoughts on the pairing—if there is a meaningful difference with adding subscription internationally, or how long is that pairing as well?

Jonathan Harris: Yes. We continue to see this as a great opportunity. We have roughly 11% penetration in the U.S., meaning 11 out of 100 babies are actually wearing an Owlet Sock. So we see that opportunity, whereas in Europe, for example, we are closer to 3%. So if you just look at Europe, there is a tremendous amount of growth opportunity there. As we have mentioned before, there are 23 million babies born a year in India alone. So even if we look at the top strata—the top 1%—that top 1% is as large a market opportunity as both the United States and Europe. So we see that as a really strong opportunity.

And they are English speaking by and large over there. So we are really excited to roll out more international subscription in various languages and provide the amazing success that we have seen on Owlet 360 in the English-speaking countries and continue to expand and grow that. So we are going to continue to work on expanding and growing our adoption both here in the U.S., in Europe, and opening up new markets where we see strong opportunity, and then layering on our subscription platform on top of that to drive a really nice high-margin recurring revenue stream.

Ian Arndt: Okay. That is great. Thank you. And then one more: if you could comment on if there has been any additional follow-through from the FDA safety communication that went out last year?

Jonathan Harris: Another good question. Yes. We have not heard anything further from that communication that went out in September 2025. There is quite a bit of turmoil going on within the FDA, but we have a really strong relationship with them, and we are continuing to dive in. Our market share continues to grow in the U.S., where that is most applicable, and we are over 41% of all dollars spent in the entire baby monitor category, and feel really strong about our position with or without the FDA. And we are going to continue to drive, and that would be a really nice additional tailwind if and when the FDA actually does something.

Ian Arndt: Great. Yes. It makes sense. Thank you, guys.

Operator: Thank you for your question. There are apparently no further questions registered. So as a reminder, it is star 1 on your telephone keypad. There are no additional questions waiting at this time, so I will pass the call back to Jonathan Harris for any closing remarks.

Jonathan Harris: Thank you, operator, and thanks again to everyone for joining us and for your continued support. After a record-breaking year, our team has not taken the foot off the gas. We are entering 2026 ready to build on our performance and our massive long-term opportunity. Owlet, Inc. is evolving into a comprehensive pediatric sleep health and wellness platform. We are focused on executing this vision, which positions us as much more than just a baby monitor brand. Owlet, Inc. is a sophisticated data platform designed to establish the gold standard for accurate infant biometric baseline from the very first night. Ultimately, Owlet, Inc. is uniquely positioned to lead modern parenting and become the essential wellness technology for families worldwide.

Thank you again, and talk to you next quarter.

Operator: That concludes the conference call. Thank you for your participation. You may now disconnect your lines.

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