Owlet (OWLT) Q3 2026 earnings summary

Executive summary

• Q3'26 revenue was $30.4M, down 4.9% YoY; gross margin rose 315 bps to 53.8%, and adjusted EBITDA was $3.5M, a record excluding the Q2'26 tariff refund.

• Operating income was $1.2M, net income was $1.4M, and operating cash flow was positive at $2.2M.

• Owlet360 ended the quarter with over 142,000 paying subscribers and record subscription revenue of $3.6M.

Financial highlights

• Revenue was $30.4M versus $32.0M a year earlier, as weaker hardware sales were partly offset by subscription growth.

• Hardware revenue was $26.8M versus $30.5M YoY; subscription revenue was $3.6M versus $1.5M.

• Operating income was $1.2M versus $1.3M YoY; net income was $1.4M versus $4.2M.

• Adjusted EBITDA was $3.5M versus $1.6M YoY; operating cash inflows were $2.2M.

• Nine-month revenue was $86.7M versus $79.6M; net loss was $2.4M versus $29.7M.

Outlook and guidance

• FY2026 financial outlook was withdrawn amid safety-update costs, expected Q4 retail interruption, retailer returns, replenishment uncertainty, and uncertain holiday demand.

• Replacement enclosed cable guard shipments began Nov. 13, free upon request to camera owners; the update is expected to affect Q4.

• Owlet OnCall features are expected to begin rolling out late in 2026 and early in 2027.

• Smart Thermometer retail and international expansion is planned after its U.S. launch.