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| Statement |
|---|
| Gross margin for the full year 2023 was 41.8%, a significant improvement over margins of 33.7% from 2022 |
| And I'm grateful and proud of the team that took time to give back while also pulling Owlet through very difficult times |
| So we have seen sustained sell-through lift that's really promising |
| I'm incredibly pleased to announce that we achieved all three |
| These accomplishments are a testament to our team's dedication, the strength of our product portfolio and the large community of parents, health professionals and partners that believe deeply in the importance and mission of Owlet |
| Most importantly though, these achievements position Owlet for substantial growth in 2024 |
| We're able to do that through our marketing and labeling which is really, really exciting |
| So we really do believe that there's significant revenue and margin growth as we progress here by focusing on those two specific areas with about 140 million babies born globally |
| And I'm excited to report that parents responded in kind in Q4 as evidenced by the doubling of our sell through during the recent holiday period and our Dream Sock sell through has continued to maintain double-digit growth over prior periods |
| Second, it solidifies our market leadership |
| We're really excited about that opportunity |
| So we've been able to continue to also execute against our mission and vision |
| These new channels increase our distribution, strengthen our consumer and medical brand and improve margins |
| Alongside our FDA success, we've dramatically improved financial efficiency |
| I think this support has been really helpful in our ability to deliver against our business and operational plans in 2023 that we've just spent time discussing today and these accomplishments set us up for even more success in 2024 |
| Our gross margin for the fourth quarter was over 47%, a significant increase from 27.8% in the same period last year |
| And so we're really excited about the opportunity, what it provides is better financial stability, better margins, the unit economics through Amazon are better than going through third-party distribution |
| The sell through growth in 2023 and significant year-over-year improvement post FDA clearance demonstrates that we can grow without significantly increasing marketing spend |
| We also improved gross margins to 47% in Q4, a 1,900 basis point improvement year-over-year and would have delivered over 50% and adjusted EBITDA positive if not for the one time impact of our former Amazon partner going out of business |
| The improvement in margins during the year were due to warehouse changes, improving our channel mix, PPV reduction and the onboarding of Amazon 1P |
| So we believe that the execution of last year and also the executional plans that we talked about for is what puts us in the best position to continue to build shareholder value right now |
| I'm really proud of the team's work there |
| With revenue growth, sustained gross margins and controlled expense management, we believe we can continue to drive shareholder value |
| An additional 800 Walmart doors fueled over 100% growth in sell through year-over-year |
| The combined sales effort helped fuel the sell through needed to improve our channel health at retail |
| We're really excited about this |
| We've also been working diligently to reduce our cost of goods sold where possible including negotiating better terms with our suppliers and improving our shipping and warehouse processes |
| Over the same timeframe, we significantly reduced marketing expenses by over 70%, and we've been able to effectively maintain those marketing spend levels while still driving a 20% increase in sell through in 2023 |
| Overall, across 2023, we improved weeks on hand with our retailers by over 45% from the beginning of 2023, setting us up for strong revenue growth in 2024 |
| As we enter 2024, Owlet has the best product portfolio in the industry, strong sales momentum, healthy level of channel inventory, scalable operations and FDA clearance |
| Statement |
|---|
| We were worried about some of the partners' financial strength |
| Adjusted EBITDA loss for the fourth quarter was approximately $0.7 million, down 95% from $15.2 million year-over-year |
| I would say the number 1 concern our customers had heading into Q4 was around the confusion with the FDA |
| Fourth quarter net loss was $6.9 million for the quarter, a 65% decrease from $19.5 million in Q4 2022 |
| For the full year, net loss was $32.9 million, a decrease of $46.4 million year-over-year |
| We don't want to lose that momentum that we have |
| As a microcap company, I think along with others, we've been impacted by these conditions of the capital markets, especially since they've continued to be drawn out over what seems like a long period of time |
| Operating expenses in the Q4 were $13 million including stock based compensation of $2.3 million representing a 46% decrease of $11.1 million year-over-year |
| For the full year, operating expenses were $51.2 million including stock based compensation of $9.9 million representing a 53% decrease of $56.7 million year-over-year |
| We're just scratching the surface of Owlet long-term potential |
| And I can tell you Owlet has never been in a better market position |
| For the full year, adjusted EBITDA loss was $16.3 million, compared to $68.3 million in 2022 |
| We've really been limited for years just being a consumer device and limitations around being in the consumer device space |
| FDA clearance addressed the key customer concerns around regulatory status and the efficacy of our products and firmly |
| Looking ahead, we will again refrain from providing specific quarterly guidance |
| Some of the undulation just kind of comes with the pace through the year, as we talked about the Q1 being a step down from Q4 just given volumes and then as it ramps up in Q2, Q3 with the different holidays and the promotions in Prime Days |
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