Owlet (OWLT) TD Cowen 45th Annual Healthcare Conference summary

Product innovation and market positioning

• Wearable health monitors track vital signs and sleep, with the largest pediatric dataset globally.

• Dream Sock is the only FDA-cleared, wireless, wearable monitor for babies, differentiating from traditional monitors.

• Strong retail presence in Walmart, Target, Babylist, and Amazon, with Dream Sock leading registry growth over 50% year over year.

• International expansion accelerated after CE Mark, now in 26 countries, with Germany and Amazon sales up 127% YoY.

• Over 500,000 Dream Socks in use, with data aggregated in the cloud for future AI and clinical research applications.

Financial performance and outlook

• Revenue guidance for the year is $88–92 million, with gross margins of 50–52%.

• Margins expected to expand as subscription and BabySat become larger revenue contributors, with subscription margins at 85–90%.

• Revenue grew 45% in 2024, while margin increased 75%, with further margin expansion anticipated.

• Major OpEx investments are complete; future increases will focus on subscription and product innovation.

• Focus remains on profitable growth, with contribution margin expected to outpace OpEx growth.

Medical channel and reimbursement strategy

• BabySat, a prescription, wearable, wireless monitor, is FDA-cleared and entering the provider market via DME partnerships.

• Six DME partners, including AdaptHealth, are driving hospital and NICU adoption, with focus on 12 Medicaid states and Cigna national coverage.

• Early adoption in Virginia, Pennsylvania, and Texas, with Baylor Health Care System recommending the product.

• BabySat is not yet a material revenue contributor but is expected to grow as Medicaid and hospital adoption increases.

• Education efforts at medical conferences and EMR integration are increasing clinician awareness and adoption.