Owlet Reports Record Revenue and Positive Adjusted EBITDA, Despite Increased Net Loss and Internal Control Weaknesses

summarizeSummary

Owlet, Inc. reported record full-year 2025 revenue of $105.7 million and achieved positive Adjusted EBITDA, marking a significant operational turnaround. However, the company disclosed a substantially higher net loss due to non-cash warrant adjustments and identified material weaknesses in its internal financial controls.

check_boxKey Events

• Record Revenue Growth

  Full-year 2025 revenue reached $105.7 million, a 35.4% increase from $78.1 million in 2024, driven by strong demand for Dream Sock and Dream Duo products and the new Owlet360 subscription service.

• Achieved Positive Adjusted EBITDA

  The company reported its first full year of positive Adjusted EBITDA at $2.0 million in 2025, a significant improvement from a negative Adjusted EBITDA of $(1.8) million in 2024.

• Increased Net Loss

  Despite operational improvements, net loss widened to $(39.7) million in 2025 from $(12.5) million in 2024, primarily due to a $(26.6) million non-cash common stock warrant liability adjustment.

• Material Weaknesses in Internal Controls

  Management identified material weaknesses in internal control over financial reporting, including insufficient accounting personnel and ineffective controls over journal entries, inventory, and debt/equity arrangements.

auto_awesomeAnalysis

Owlet's 2025 annual report presents a mixed financial picture. The company demonstrated strong operational momentum with record revenue growth and achieved a significant milestone of positive Adjusted EBITDA, indicating improved core business performance and market acceptance of its FDA-cleared products and subscription services. This operational strength is crucial for extending its financial runway, especially given the prior going concern disclosures. However, the substantial increase in net loss, largely driven by a non-cash mark-to-market adjustment for warrant liabilities, highlights the volatility associated with certain financial instruments. More critically, the disclosure of multiple material weaknesses in internal control over financial reporting raises concerns about the reliability of financial statements and corporate governance, which could impact investor confidence and future compliance efforts. The successful capital raises in late 2025 provide necessary liquidity but underscore the ongoing need for financing. Investors should monitor the company's progress in remediating its internal control weaknesses and its ability to sustain operational profitability while managing non-cash financial impacts.