Owlet, Inc.

What they do

Owlet sells wearable pediatric monitors for home use that combine clinically tested monitoring hardware, an integrated video platform, and a mobile app giving parents real-time health insights. The company describes itself as the only company globally to offer U.S. FDA-cleared and internationally medically-certified wearable pediatric monitors for home use. Revenue comes from product sales and from subscriptions to its Owlet360 service, which are billed either month-to-month or on one-year terms.

Revenue drivers

• Product sales (monitors and hardware) — The majority of revenue: Q2 2026 total revenue was $33.9 million against $3.2 million of subscription revenue, so hardware and related products account for the large majority.
• Owlet360 subscription — Recurring app subscription revenue recognized ratably over month-to-month or one-year terms; Q2 2026 subscription revenue was $3.2 million, up $2.4 million from $0.9 million in Q2 2025, with subscription gross margin of 68.4%.
• International and channel expansion — Management cited 'standout international momentum' and noted a prior decision to exit lower-margin, high-burden revenue streams in non-core geographies and new channels.

Recent performance

Q2 2026 revenue was a record $33.9 million, up 29.9% from $26.1 million in Q2 2025. GAAP gross margin was 64.4%, or 54.0% excluding $3.5 million in tariff refund impact, up about 270 basis points year-over-year. Net loss was $0.6 million versus a $37.4 million net loss in Q2 2025; excluding $3.75 million in tariff refund impact, net loss was $4.4 million. Adjusted EBITDA was $6.7 million, or $2.9 million excluding the tariff refund, compared with $0.5 million a year earlier. Operating income was $1.7 million versus an operating loss of $1.7 million in Q2 2025, with operating expenses of $20.1 million.

Strategy

Management frames Owlet as moving from a device company to a data and services platform anchored on subscription. Stated goals are to win roughly one million new customers per year and retain families for at least two years, pointing toward a recurring base of more than one million subscribers. Named growth levers are new family acquisition, Owlet360 subscription growth, expansion in pediatric telehealth, and international scaling, all anchored on the company's pediatric dataset. Operating expenses in Q2 2026 included severance costs tied to an April 2026 CEO transition and marketing spend pulled forward by Prime Day timing.

Risks

• GAAP profitability depends on one-time items — Q2 2026 net loss of $0.6 million and gross margin of 64.4% both relied on $3.5 million to $3.75 million of IEEPA tariff refund impact; excluding it, net loss was $4.4 million and gross margin 54.0%.
• Loss history — Owlet reported net losses every year from 2021 through 2025, including $38.8 million in 2025, larger than the $12.7 million loss in 2024.
• Subscription base still small relative to products — Q2 2026 subscription revenue of $3.2 million is a small share of $33.9 million total revenue, so the stated subscription-led model depends on continued growth from a low base.
• Thin equity cushion — As of June 30, 2026, total liabilities of $54.7 million against $93.6 million of assets left shareholder equity of $23.1 million, with $30.9 million of cash and no long-term debt.

Outlook

Management updated its full-year 2026 financial outlook to reflect the one-time IEEPA tariff refund recognized in the second quarter of 2026 and what it described as a measured view of the second half. The company did not provide specific full-year revenue or earnings figures in the excerpt. Management continues to point to new customer acquisition, Owlet360 subscription growth, pediatric telehealth, and international expansion as the main levers.