Owlet Hits Record Revenue, But GAAP Loss Clouds Profitability Picture

LEHI, Utah – March 05, 2026 – Smart infant monitoring pioneer Owlet, Inc. (NYSE: OWLT) announced a landmark year, reporting record-breaking revenue of $105.7 million for fiscal year 2025, a 35.4% surge from the previous year. The company also achieved a significant milestone by posting its first-ever full-year positive Adjusted EBITDA of $2.0 million. However, the celebratory top-line numbers are juxtaposed with a substantial GAAP net loss of $39.7 million for the year, painting a complex financial picture as the company charts an ambitious course for 2026.

In a statement accompanying the results, Owlet President and CEO Jonathan Harris hailed the performance as a validation of the company's strategic evolution. “2025 was a defining chapter for Owlet, marked by record-breaking financial performance and a fundamental evolution into a comprehensive pediatric health, safety, and sleep platform,” Harris said. “By delivering $105.7 million in revenue, the strongest in our history, alongside record gross margin and adjusted EBITDA results, we believe we have proven the scalability and resilience of our business model.”

A Tale of Two Ledgers

For investors parsing Owlet’s latest earnings, the story is one of two different accounting perspectives. While the company celebrated its $2.0 million in positive Adjusted EBITDA—a key non-GAAP metric that management believes reflects core operational health—the GAAP-required net loss of $39.7 million tells a different story. This wide gulf is primarily explained by a single, non-cash item: a $26.6 million adjustment related to common stock warrant liabilities.

This accounting adjustment, which does not involve an actual cash outlay, is required for certain financial instruments and can fluctuate with the company's stock price and other market variables. Owlet, like many publicly traded companies, encourages investors to look at non-GAAP figures like Adjusted EBITDA, which exclude such items along with stock-based compensation, interest, and taxes, to get a clearer view of the business's day-to-day performance. The $3.8 million year-over-year improvement in Adjusted EBITDA, from a loss of $1.8 million in 2024, is the figure management points to as evidence of true operational progress and increasing efficiency.

Despite this operational improvement, the persistent GAAP losses are a reminder of the challenges the company has faced. Past filings have included disclosures about the company’s limited operating history and lack of profitability, raising questions about its long-term financial sustainability. The positive Adjusted EBITDA in 2025 is a clear signal that Owlet is moving to answer those questions, demonstrating that its core business can generate cash before accounting for non-operational expenses.

Beyond the Monitor: The Subscription-Fueled Future

The driving force behind Owlet's newfound operational strength is its strategic pivot from a simple hardware manufacturer to a comprehensive pediatric health platform. Central to this transformation is the Owlet360™ subscription service, which has rapidly grown to more than 110,000 paying subscribers. This service provides parents with enhanced insights, historical data, and developmental tracking, creating a source of high-margin, recurring revenue that diversifies the company away from one-time device sales.

Harris described the subscription's success as a “paradigm shift, deepening our relationship with parents and diversifying our long-term revenue streams.” This shift is critical for increasing customer lifetime value and is further enhanced by product innovation, such as the recent rollout of the AI-enabled Dream Sight™ camera. This technology aims to establish what the company calls “the gold standard for accurate infant biometric baselines from the first night.”

By building an integrated ecosystem of hardware, software, and services, Owlet is creating a stickier platform that grows with a family. This strategy not only strengthens its brand but also builds a massive and unique pediatric dataset, which the company plans to leverage for future innovations, including a planned telehealth platform, Owlet OnCall, set for a broader launch in the second half of 2026.

Dominating the Nursery Amidst Headwinds

Owlet’s strategic initiatives appear to be paying dividends in a competitive marketplace. According to market data from Circana, the company captured a record 41% of all dollars spent on baby monitors in the fourth quarter of 2025, a significant 24% increase in share from the prior year. This growing dominance suggests its message of medical-grade technology for the home is resonating with consumers.

A key differentiator for Owlet is its focus on regulatory validation. The company emphasizes its U.S. FDA-cleared and internationally certified products, like the Dream Sock, which provides a significant competitive moat in a category where parental trust is paramount. This regulatory legitimacy separates it from a crowded field of consumer electronics and positions it as a more serious health and wellness tool.

However, the path is not without obstacles. The company's gross margin in the fourth quarter was 47.6%, a decrease from 53.5% in the same period of 2024. Management attributed this primarily to the impact of tariffs, which continue to be a material headwind. While partially offset by a favorable product mix and the growth of high-margin subscriptions, these external cost pressures remain a challenge to profitability.

Charting an Ambitious Course for 2026

Looking ahead, Owlet has issued ambitious guidance for 2026, projecting full-year revenue in the range of $126 million to $130 million, which would represent 19% to 23% growth over its record 2025 performance. The company also expects to more than double its Adjusted EBITDA, forecasting between $3 million and $5 million for the year.

This optimistic outlook is tempered by a cautious projection for the first quarter of 2026, with expected revenue between $20 million and $21 million and an Adjusted EBITDA loss between $1.5 million and $2.5 million. Management cites typical seasonality and retailer inventory tightening for the expected slow start to the year. The full-year guidance, therefore, implies a significant acceleration in the latter half of 2026, banking on continued subscription growth, international expansion, and the success of new product initiatives.

As Harris concluded, “We enter 2026 ready to build on our momentum, and execute on our long-term growth opportunity.” For Owlet, the challenge is now to convert the momentum of a record-breaking 2025 into sustained, profitable growth, proving that its evolution into a pediatric health platform can deliver long-term value for both parents and shareholders.