How will the expanding telehealth offering merge into Owlet 360 and drive the subscription model long-term?

Kurt explained a tiered approach: Owlet 360 will incorporate AI capabilities and automated health features, while a separate 'Owlet 360 plus' offering will provide access to physicians. He emphasized that FDA-cleared data at home changes the paradigm for at-home care, allowing doctors to review data and make decisions, creating a new level of continuous monitoring and routine data collection. “There will be another tier that gives access to physicians. Right now, it's on call. That will morph and evolve as we test and learn this year. It's the purpose of this year to make that more accessible, more affordable and ultimately something that we want a majority of our users to be able to have access to.”

Where is the company seeing the most international momentum, and what are the most promising opportunities for the next few years?

Kurt expressed excitement about Europe, noting strong growth in Germany and France, and high penetration in Eastern Europe (e.g., Czech Republic). He believes Europe will mirror the U.S. in adopting health sensing technology for every baby, highlighting the larger birth rate in Europe. “I'm really excited about Europe. Europe continues to grow. It's really very close to the pace that we set in the U.S. if you look at year-by-year growth and penetration. Germany is expanding really well. Everybody told us when we went into France, it would take a few years and then you kind of see it spike. That's exactly what's happening. We're seeing incredible growth in France.”

Can you describe the AI parenting copilot offering, its product roadmap, and monetization strategy?

Kurt explained that Owlet is building the most comprehensive dataset of infant health, combining biometrics, telehealth, and parent logging. This rich data will power AI features, such as the AI morning report (85% daily engagement), which provides sleep summaries and recommendations. He sees it as a component of Owlet 360, with potential for price increases as value grows, aiming for widespread adoption. “We have right now an AI morning report that takes all of your baby's sleep data. And just like a digital sleep coach -- or just like a sleep Coach would, it prepares a summary and gives recommendations for your child for that next day. It's really powerful. 85% of parents who use it, engage with that daily and report that, that's a really strong, powerful feature.”

OWLT

Owlet (OWLT) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Health Care· Aug 11, 2026

Source: earnings call transcript

Executive summary

Owlet Q2 FY26 — Record Revenue and Subscription Growth Driven by FDA Clearance Advantage

Owlet is transforming into a data and services platform, leveraging its FDA-cleared status to drive subscription growth and expand its market position. Despite near-term competitive discounting impacting Prime Day sales and Q3 outlook, the company achieved record Q2 revenue and adjusted EBITDA, fueled by strong international performance and continued subscription momentum, with a focus on extending customer lifetime value through new features and payment flexibility.

Highlights

Record total revenue of $33.9 million, up 29.9% year-over-year.
Q2 gross margin (excluding tariff refund) of 54%, expanding 270 basis points year-over-year.
Adjusted EBITDA (excluding tariff refund) of $2.9 million, a $2.4 million increase compared to prior year.
Subscription revenue grew to $3.2 million, up $2.4 million year-over-year, with 130,000 paying subscribers.
International revenue grew 214% year-over-year to $5.7 million.

Concerns

Units sold during Prime Day were down 8% year-over-year due to aggressive competitor discounting.
Q3 revenue is expected to decline both sequentially and versus Q3 2025 due to competitor discounting and challenging comparisons.
Cash and cash equivalents decreased to $30.9 million as of June 30, 2026, from $35.5 million in the prior quarter.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Revenue	$118 million to $122 million high materiality	FY26	High
Full-year 2026 Gross Margin	53% to 55% high materiality	FY26	High
Full-year 2026 Adjusted EBITDA	$10.75 million to $12.75 million high materiality	FY26	High
Q3 2026 Revenue	Decline sequentially and versus Q3 2025 medium materiality	Q3 · FY26	High
Q4 2026 Revenue	Maintaining forecast medium materiality	Q4 · FY26	High
Tariff Rate	12.5% low materiality	H2 FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
International Highest international revenue quarter in Owlet history. Strong momentum in Europe, particularly Germany and France, and Eastern Europe. Total sell-through unit growth: 38% YoYPrime Day sell-through outside U.S.: >100% YoY	$5.7 million	214%	—	—

Product announcements

Product	Type	Timeline
Web Pay	launch	rolling out in Q3
Upfront Subscription	launch	already live on own website, going live with Babylist soon, retail partners in H2
Owlet 360 subscription	expansion	Q2 FY26
Owlet OnCall	expansion	expanding access more broadly in Q3

Deals & partnerships

Wells Fargo New $25 million asset-based revolving credit facility $25 million

Refinances and replaces both prior asset-based facility and term loan.

Risks & headwinds

Aggressive competitor discounting Q2 FY26 (Prime Day), Q3 FY26 (expected decline)

Owlet's units sold during Prime Day were down 8% versus last year's event.

Mitigation:Anticipate Amazon's enforcement of FDA clearance requirement to be a long-term tailwind for the business.

Broader macro signals and cautious consumer spending H2 FY26

Prime Day's baby monitor category was down versus last year; category roughly flat or down versus prior year for several large Amazon promotional events.

Mitigation:Taking a deliberately measured view of H2, absorbing near-term pressure within existing guidance range.

What to watch in Q3 FY26

Amazon Enforcement Impact

next quarter

Current Owlet's units sold during Prime Day were down 8% YoY due to aggressive competitor discounting.

Target Reduced competitor discounting, positive impact on Owlet unit sales.

Why it matters

This will validate the long-term competitive benefit of Owlet's FDA clearance and its market position.

We don't yet have full visibility into competitor pricing behavior post August 10 deadline, but we anticipate Amazon's enforcement to be a long-term tailwind for the business.

Find out whether OWLT delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the current sell-through trends, subscription attachment rates, and retention metrics for new cohorts?

Management stated that around 30% of parents subscribe within the first year, with an average subscriber life of about 12 months. They noted that nearly 30% of new users in the trial period elect the annual plan, and 36% of the Dream Sock customer base now has a subscription. They highlighted the potential for camera features and AI capabilities to extend lifetime value.

“So far, what we're seeing with the subscription offering is that around 30% of parents are ultimately subscribing within that first year. We've shared as far as retention goes that we're seeing an average life of about 12 months for our subscribers.”

asked by Julia Shelanski · answered by Amanda Crawford

2 min read 7 chapters

Detailed narrative

Platform Evolution and Subscription Focus

Owlet is evolving into a data and services platform for early childhood, moving beyond a hardware-centric model to a multi-year subscription relationship. The company aims to achieve a recurring base of over 1 million subscribers by winning approximately 1 million new customers annually and retaining them for at least two years. This strategy leverages the intensity of parenting, which lasts for years, not just months.

Subscription Strategy and Expansion

Subscription is central to Owlet's positioning, with over 30% of new U.S. customers subscribing to Owlet 360 in their first year. The company is expanding enrollment options beyond in-app sign-ups to point-of-sale and bundles, and continuously adding features to Owlet 360 to extend customer lifetime value. New initiatives like Web Pay and upfront subscription aim to improve margins and conversion rates.

Competitive Advantage from FDA Clearance

Owlet maintains a dominant position as the first and only FDA-cleared baby monitor. A recent Amazon policy, effective August 10, 2026, requires FDA clearance for vital-sign monitoring products sold on its platform. This is expected to provide a significant long-term competitive benefit for Owlet, as competitors lacking such clearance will be deactivated, despite aggressive discounting observed prior to the deadline.

Strong International Growth

International markets were a standout in Q2, with revenue growing 214% year-over-year to $5.7 million, marking the highest international revenue quarter in Owlet's history. This growth was broad-based, with strong momentum in Europe, particularly Germany and France, and Eastern Europe. International sell-through units grew 38% year-over-year, and Prime Day sell-through outside the U.S. grew over 100%.

AI Parenting Copilot Development

Owlet is building an AI parenting copilot by leveraging its comprehensive and contextualized dataset of infant health, which includes biometrics, telehealth interactions, and parent logging. Early features, such as the AI morning report that provides personalized sleep summaries and recommendations, have shown high engagement, with 85% of users engaging daily.

This AI integration is expected to enhance the value and stickiness of the Owlet 360 subscription.

Telehealth Initiative (Owlet OnCall)

Owlet OnCall is in a test-and-learn phase to explore its potential in pediatric telehealth. Access is being carefully expanded in Q3, with the goal of creating a seamless and proactive experience that connects parents with clinical resources. By integrating FDA-cleared data, Owlet aims to transform at-home care, enabling doctors to make informed decisions and potentially creating a meaningful new revenue stream in the coming year.

New Credit Facility and Capital Allocation

The company entered into a new $25 million asset-based revolving credit facility with Wells Fargo, which significantly reduces its cost of capital by lowering the interest rate margin from SOFR plus 7.5%-8.5% to SOFR plus 2%-2.25%. This provides additional financial flexibility to invest in strategic priorities while maintaining a disciplined approach to capital allocation.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.