Thank you everyone for joining us. I have the pleasure of hosting Amanda, CFO of Owlet, and Jay, head of IR. Owlet makes modern parenting more joyful with the first FDA-cleared smart baby monitor and connected nursery ecosystem that provides trusted health insights. We have a buy rating on the company, as we believe its growth opportunities are underappreciated in the market today, and Owlet is poised to gain share in the baby monitoring category. With that, maybe each of you can give me a little bit of your perspective, but since you joined, what has been the biggest change that you observe with the company, and what are you most excited about as you look out the next three to five years? Amanda, maybe start with you. Yeah. I joined Owlet four years ago, and the first two years I was at the company, our focus was really heavily on getting FDA clearance, which is really important for us as an at-home monitor that monitors pulse rate and oxygen for babies, which is the first of its kind for use at home. It was really important that we got that FDA clearance to give us credibility with parents as well as that competitive moat. That was the first two years. Following FDA clearance, it's really changed the company, where we have a really interesting hardware that enables us to offer software features. Now the focus is on getting parents more data and insights about their child so that they can sleep a little better. It's really exciting what we can do with software. We've got the explosion of wearables. We all want to know what's going on with our own health and wellness, and babies can't speak, so we really help become the voice of the baby for parents. Jay. Yeah. FDA approval is such an important moat for us. When we launched the Owlet360 subscription offering in January last year, so just over a year ago, it was really the first opportunity for us to move from more of a consumer hardware product to a pediatric health platform. Subscription is really the method with which we can communicate to parents about the health and wellness of their babies. We're moving more and more to a subscription-first business. Subscription continues to go incredibly well. It's also the unlock to the telehealth opportunity that we have just soft launched and are going to be working more and more on this year. Yeah, launch of subscription was big. Yeah. A key focus as a firm is driving higher LTV with the babies and the parents. You recently updated the camera features, so that's been helping. As you think about increasing the LTV with your customer, what are key opportunities you see? How are you approaching it this year? Yeah. What's interesting is half of our nightly users are camera users. The subscription offering, up until really just this quarter, we launched camera features. That opportunity is really large because parents will use their camera for several years. Opening up that subscription to have a multi-year relationship, then parents have child number two, and then it extends it by a few more years. We really believe we have the opportunity for a multi-year relationship with parents. Yeah. Subscription is such an important part of this puzzle because the more value we can add back to parents and families through the subscription offering and tell them more about the health, wellness, safety of their children, the more they're going to use the product, which just extends both their time of use of subscription, but also, of course, the use of the hardware product. This is a holistic pattern that we're excited about. Yeah. You're relatively under-penetrated, even in the U.S., the penetration's close to low teens. Right versus really saturated markets in the 20s. How do you bridge the gap, you think, across the U.S.? You obviously have the new feature subscription, what are key marketing strategies that go with that and, yeah. Yeah. Right now in the U.S., it's about 11% penetration rate of births, which some of our markets are over 20%. We see a big difference between key markets, and one of the biggest things that we've been working on is AI search optimization, which is really critical. We've got a ton of awareness with our brand, but we want to make sure we maintain that awareness because we have new parents constantly entering the top of the funnel. Optimizing with AI search, really strong word of mouth, that's probably the biggest. If there's a mom that you trust that recommends the product, you're more likely to buy it. That's one of the areas that we've been focused on, is really targeting maybe those markets where we haven't had as high of a penetration rate so that we can build that chain where parents are talking to other parents. It's really helped us grow in all of our markets. Babylist has also been a big tool for you guys, right? The registry. Yes. How are you optimizing that channel? Yeah. Babylist is huge for us. Babylist took over registry following buybuy BABY's bankruptcy. They've really replaced with that gifting platform, and Babylist is one of our fastest-growing channels. We have really good partnerships with them for registry placements, and we're doing really well, and that's a growing channel for us. In last quarter, you referenced optimizing marketing and retail placements, that's helping you drive higher sell-through. What are key changes you anticipate in your strategy this year? How do you ensure you continue to drive higher ROI? You also have a very healthy CAC payback. Could you speak to that a little bit more? Yeah. I kind of already mentioned the AI search optimization. That's huge, making sure that our website blog post has all the information that's going to feed the LLMs. One other thing that we've focused on, specifically with our retail partners, is being really strategic with our dollars that we're investing there. As far as retargeting customers, we've seen really high ROI where maybe somebody has explored our brand already, and we're able to target those specific customers, and we've seen really strong ROAS there. That's really helpful. Another thing is that for our customers, previously, a lot of people who purchased our product were looking for peace of mind. What's changed is that people are actually looking for more data and more insights, ways that they can help their baby sleep better so that they can sleep better. We're really trying to target a different subset where it's more of the informed parent. Yeah. Subscription is a big part of your story. You're at 34% attachment rate with the Dream Sock. What is a realistic ceiling for you, and what drives incremental conversion from here? What's a realistic number that we can think about, that's sort of embedded in your guide? Any color there would be helpful. Yeah. Right now, 34% penetration on Sock, which is about half of our users. There's a few different ways we can think about this. First is that we're only in English-speaking countries. As we expand into some of our European non-English speaking countries, that'll improve our subscriber base. Really rolling out features is what's going to get the penetration rate up. Right now, it's pretty low on camera, where we see this as the longest LTV opportunity. As we roll out features, it'll become more compelling, and I think we'll see that penetration rate improve. In terms of features, what can we expect, and sort of what's the timing of that? Yeah. Do you want to talk about that, Jay? Yeah. I mean, just like any company, this is a big year for AI for us. The more that we can leverage the information that we're getting off our products and put it right in front of parents so they can make quick decisions about their kids, the better. That's important. Some camera features is a super big focus for us this year because there's kind of already a roadmap for competitors out there that have been successful there. We're working on those, and that'll be a big focus because our attach rate for camera is near 0%, and peers in the space is closer to 30%-40%. There's a lot of tailwind subscriber count to go on camera. On subscription, you noted monthly single-digit churn. What is the opportunity to improve the retention rate over time, and sort of what are the key strategies behind that? I know it's still early days for you. We're at a critical mass where we have over 115,000 subscribers, so we're getting really good information about when they do churn off. Churn's improved every quarter since launch. We are rolling out features that are resonating with parents, and now able to target in the specific months after subscribing, when they churn off, where we want to introduce features that keep them on longer and increase our LTV, and make our parents and families happy. Yeah. Moving on to telehealth, which is another extension of subscription. You're in early stages, but could you just talk about the opportunity that you see ahead, and what are the initiatives you have to scale the telehealth side of the business? Yeah. I mean, we had a friends and family period. We're really testing. We just launched in-app to select participants for the first time, and we also had our last quarter earnings call. Things are going well. It's right where we want to. Some kinks to work out. It's a big opportunity for us because today you can do a telehealth appointment for your kid, but in most cases, they're going to tell you to go in and see the doctor because they're only able to diagnose visually. We have the real unlock with the Dream Sock data, getting respiratory oxygen, vital data that can help triage that appointment and then decide if you need to go to the doctor or what we see in our data is over 90% of ER visits in that first year of life are treat and release, and they send the baby home. That's a big expensive ER bill and a tough environment to take them into. If we can help bridge that gap to get parents answers and save them some money and get better health outcomes, even better. That's the opportunity. This year, we're going to be pretty cautious with how we measure that externally, because we want to make sure we get the solution right, because it's a big long-term opportunity. We'll be reporting quarterly about the progress there because it's important to us. Yeah. BabySat is another segment of your business. Obviously, not as big, how are you thinking about the roadmap to scale BabySat? Strategically, how important is it for you to get more additional deals with different hospitals and get that buy-in from the healthcare community? Yeah. BabySat is our prescription device. It's the same as the Dream Sock, but a doctor can prescribe it. One of the key unlocks for us has been through hospital partnerships, so making it available for parents as they're leaving the NICU. We have had some hospital partnerships. We're working on more. With that, it is a slower channel for us. We think that there could be more opportunity in the future. We're still working on it, but for this year, it is going to be immaterial. It's not included in our guide. I think the key unlock is those hospital partnerships. Yeah. In terms of just investment cycle, as you think about it, what innings are you in in terms of investments you've made? How much more do you think you still need to invest in the business to support additional features or others? We just would love your perspective on the sort of investment side, where we are. Yeah. I mean, a lot of the major investments have already been made, with the biggest one being getting the hardware ready for FDA clearance, going through all of the clinical studies to prove safety and effectiveness, that was a significant chunk of money. Took several years, which is great because it gives us that competitive moat. Moving forward, it's really focusing on software feature development. That's key, and then there will always be ongoing hardware refreshes, but really at this point, it's about we're focused on our core products, and we're innovating within those products. We talked about channels a little bit, but obviously Babylist, you're on Amazon, you're with some retailers. Is there room to improve sort of your retail partnerships? Within existing partnerships, can you increase shelf space? Are there other retailers that you can sort of partner with in the U.S.? Yeah, I think definitely partnering closely with our retail partners can help us drive return on investment. We are in all of the stores that we intend to be in. There is a little bit of opportunity for door expansion. Like for example, we're expanding our Walmart doors this year, with our Duo product, which is a really great opportunity for us. For our customer to be able to pick up our product same day. As far as retailers that we want to work with, we're really focused on the top five largest retailers within the U.S. and feel like we're in the stores that we need to be in. Yeah. In terms of the guidance, you noted, on the last earnings calls that revised outlook also reflects more conservative sell-through view. What are key assumptions for the category demand, any promotional cadence that's different, and retailer inventory behavior that's embedded in guide? Any sort of details within? Yeah. Within the sell-through, guidance is really focused on improving our non-promotional run rate, which we have seen improvements versus prior year, and then really showing up at the key pillar events. This is when the customers' wallets are open. We need to be there. We need to be present. Like Prime Day, Black Friday. It's really within the same cadence that we were last year. Just making sure that we're also investing behind it in terms of ad placement, so we really win those key events. Yeah. Yeah, inventory trends, and we had communicated those on the first quarter, how some of our retail partners had reduced their inventory turns. We're expecting that to stay consistent through the end of the year, and would be pleasantly surprised at the upside, but want to be conservative with where we are there. Yeah. How do you think about your pricing strategy? Is there room to increase pricing? Is that a lever for you? In terms of promotions, what is the normal cadence? You mentioned the big holidays. How are you strategically thinking about balancing promotions and AUR? There is a key balance between volume and price, and we do see a lot of our volume come through promotional activity. As far as pricing changes, we don't intend to have any retail price increases. We're really mindful in tracking how our promotions perform, what kind of lift we're seeing, just to make sure we're getting the right return on investment. As far as pricing goes, what we've seen is really going all in for big events is critical for us because if we don't go all in, the competition will. Right. When you mean go all in, what are some marketing sort of strategies we can expect, let's say around Prime Day? Yeah. What is a typical sort of marketing messaging and engagement that you try to drive? Yeah, it's really actually in the lead-up to Prime Day, so making sure that we're getting ahead of Prime Day so that we're top of mind for customers. We are planning to make investments up front leading to it, and then obviously during the promotional period as well. Yeah. How important is social media for you? Do you try to engage more on the influencer side? Like, sort of what are key drivers for organic, that word of mouth component? We used to spend a ton of money on influencers. What we've found is that we don't actually need to do that. What we end up doing is sending influencers, and even micro-influencers, they're just like a free product. If we see a post going well or going viral, we can put some dollars behind it to amplify it. We don't spend a ton on influencer marketing. Yeah. Just going back to guidance, obviously you've raised your EBITDA guidance while lowering revenue. Can you detail the drivers just on the margin side, and where do you expect the majority of sort of the savings come from? Yeah. As far as margin goes, there's a couple of things that are helping there, is our subscription offering is becoming a more meaningful relative percentage of revenue, which has higher margins. We also have a little bit of, who knows what's going on with tariffs, but we were previously at 19% and 20%. They're at 10% now. We don't know the legality. There could be some upside there. From an OpEx perspective, as we were looking at our plans, we had a ton of headcount additions planned for 2026. With how fast AI is moving, we've really pulled back on that, so you see that reflected in the updated guidance, that we're really leaning in and leveraging AI in a bigger way. The last thing is just narrowing our focus. Before we had a lot of initiatives going on all at the same time, we're really narrowing focus t hose areas. Yeah, that includes pulling back on some of the simultaneous global launches we had planned, which were our exciting opportunities, but were time-intensive and expensive, and that'll trickle down to the bottom line by not doing those. Not that we won't in the future, not in the near term. Right. Just similar to that, what gives you confidence that you can achieve the guidance? Like what, sort of based on what you're seeing or sort of the key puts and takes that you can think about in the second half, what gives you confidence that you can hit the guidance? Yeah, it's really, we watch sell-through carefully, and it's watching the non-promotional run rates, making sure that we're growing, and then just tracking performance at those key pillar events. We continue to grow our dollar share in the baby monitoring category. We're feeling really good about that and are confident that the guidance we issued is something we're going to meet or beat. Yeah, we shared on the Q1 earnings call that coming into Q2, April sell-through was above 30%, both for Dream Sock and Dream Duo. That's a really good indicator coming out of what was a softer Q1 of the outlook for the year, and it's trending in a similar direction. Yeah. Obviously, we published the sell-through data, and we've seen your outperformance versus peer. What are you seeing on the competitive dynamic front? Are you seeing sort of a clear share gain in your category for you? What is driving that? We are seeing a clear gain for Owlet, and I think it's our differentiation just because we're so unique in this space. We're the only brand that is FDA-cleared, can monitor vitals, and I think that's really what's changing it for us. Whereas for companies that are maybe just like a fancy camera, like they're struggling because they don't really have that value proposition that we have. With our new camera being launched at $99, it becomes a no-brainer to pair with our Dream Sock as well. We have seen a mix shift from our Sock to our Duo product, which is a positive thing to us and increases that LTV opportunity. I think it's multifaceted, and I think it's just because we are so unique that we're continuing to drive share. Yeah. How do you think about sort of customer awareness of your brand? Do you think there is a lot of still room to grow? Do a lot of people know you're the only FDA-cleared device? Like how do you approach that internally? Yeah. Awareness of our brand is extremely high. Most new parents have heard of Owlet are familiar with it. I think one opportunity, though, is to help parents better understand what that actually means. Like what does it mean to be FDA cleared? It's that we're not just like a gadget or a toy. Like we actually work. We're medical-grade technology at home, and I think conveying that message to parents in a clear way is probably an opportunity for us. Yeah. Structurally sort of thematic, that a theme that we do see is obviously a focus on longevity wellness, and we talked about wearables among adults. How do you see that trickle down to sort of people wanting to get baby monitoring device? Do you have a way to track sort of your, the parents are using wearables as well? Like how do you sort of think about that theme just unfolding? Yeah, maybe not perfectly, but it's obviously a trend that more and more of the younger generation are walking around, w anting to know about their health in real time, it's only a fair assumption that they're going to want to know the same thing about their babies. We're starting to see more and more of that, of the next generation. What you're getting from the Duo, from Cam, from Dream Sock, to know how your baby's feeling. It's maybe obvious, but babies, two-year-olds, three-year-olds, can't communicate. When we wake up in the morning, and we didn't have a good night's sleep, we know it. They can't necessarily communicate that. The more that we can give parents the tools through our products to help bridge that gap and help them know a little bit more about their kids, the more value we're going to deliver. Yeah. We talked about international a little bit. Obviously, you pulled back on expanding into new markets, but you still are present in some of the other, like U.K. and other international markets. What is your strategy there to increase that penetration rate? How do you think about sort of balancing international versus U.S. longer term? Yeah. Right now in Europe, we're in the low single digits in terms of penetration. You think about that compared, there's just as many babies born in Europe as in the U.S. We do believe we have a big opportunity ahead. In Europe, it's a little bit different than in the U.S. because we have such high awareness in the U.S. It's really gaining awareness in those markets, primarily through social media marketing, just making sure parents know who we are and why it's important for them to buy our product. Just out of curiosity, internally, how do you think about the birth rate in the U.S., Europe? It's not exactly going north, right? Like how do you think about that category? Not category, but birth rate. Yeah. Like how do you think your growth opportunity fits into that? Like I'm sure you've heard those arguments internally how you're thinking about it. Yeah. I mean, there's about 3.6 million births in the U.S. It's been relatively flat for a while. What's interesting though is parents are spending more per child than they ever have. Yes, parents are having less children, but on average, families will have two children. We still think it's a big multi-year opportunity for us. Say there's like two years apart, it's still like a four to five-year relationship that we can have with parents. We're well aware of that, but don't really see it as a challenge, more of an opportunity to keep parents with us for longer. Yeah. Yeah. As you think about sort of long-term growth potential of the company, what is the right framework to think about both top and bottom line growth, and what is sort of your steady state margin profile look like, and how would you sort of bridge from where you are today and to hit that sort of longer term target? Yeah, we haven't shared longer term targets. We're thinking more and more about doing that as we have better predictability with the subscription revenue, and want to give investors a framework of how we see the long-term business. Stay tuned there. The way we think about it is we're at 11% adoption in the U.S. in our products. Some of our highest adopting states are at 20% or higher. There's an opportunity to bring up the lower quintile states up to that 20%. Our top four states grew year-over-year. Even those higher adopting states, there's room to grow. International opportunity, just in the U.K. and Europe, we're still at low single digits adoption. There's a lot of room to move up to where current domestic is. We just launched a new camera. We think there's a lot of opportunity in the market to continue to take share. The subscription opportunity, we're a year into it. The growth has been above our expectations, and that's really just been on Dream Sock features. Roll out more features for camera. We just expanded internationally in December in English-speaking countries, so room to grow there. Chipping away at the medical opportunity. That's a longer-term one, but there's no babies that need our technology more than the high-risk ones coming out of NICU. Telehealth is here, and we're going to be conservative with numbers this year. We think that's a real opportunity that's going to make a difference next year. Yeah. Anything to add? Yeah, just to add, as subscription becomes a more meaningful relative proportion of revenue, we should start to see margins improve. We're also working on several hardware cost down initiatives to improve the hardware margin. We definitely see margin improvement over time as well. That'll trickle down to the bottom line and with improved profitability and eventually cash flow positivity. Yeah. You mentioned April, obviously sales rate improved, but are you seeing any sort of headwind from the macro noise on the parent sort of maybe pausing the spend or they're waiting for bigger promotions? Is there any sort of difference? Nothing different than what has been there persistently l ast six, nine months. Like, parents can plan ahead to buy our products, so the promotional periods are really important as Amanda detailed. Nothing different in May versus what we were seeing in a few months ago. Yeah. Maybe for the audience, how difficult is it for someone to get FDA cleared? Like, from a competitive moat standpoint, right? Like, to give us a better picture of that how difficult is that to get FDA cleared with someone to try to knock off your product? Right. I mean, Owlet started back in 2012, 2013. By the time we started the FDA clearance, we were on the third generation. You have to think that we had billions, possibly trillions of hours or, like, heartbeats, sleep data. We had to get the algorithm right. There was so much work that went into just the product. You have to do the clinical studies to prove safety and accuracy. For BabySat, we had to compare to Masimo. For Dream Sock, we were a de novo. It was the first of its kind. It took several years, several iterations, and multi-millions dollars that we feel like we've got this moat for quite a while. You got to have a product that really resonates with parents. We had a competitor, Masimo, that came into the market. They got FDA approval. They're obviously a large company, a big pulse oximetry company that had a lot of resources, got FDA approval, and they didn't last in the market past nine months because their product didn't resonate with investors. They didn't know the consumer space. We feel like we have such real strong differentiation in the space to kind of propel that to our other growth opportunities. You mentioned, obviously you have very full breadth of data that you've collected over the years. What is the opportunity with the data set that you have? Yeah. It's really exciting. We believe we have the largest set of pediatric data on the planet. There's nobody else who's been monitoring babies at home like we have. It's a really exciting opportunity to unlock, especially when we think about AI and potential for extracting pieces of data that can really help parents. There are some things that we're working on. One of the key things though is making sure that we have credible tokenized data. While we have a ton of historical data, one of the things we're also working on is a data registry where parents can enroll, and then we can compare our Owlet babies to the rest of the population so that we can make certain claims for various outcomes. There's a lot of information that we can already see in our data set, but this will really help us validate those claims and allow us to make them. Right. As we close out, what do you think is the most misunderstood by investors at this point, and what do you want the audience to take away from today's session? Do you want to take that, Jay? Yeah. I mean, I'll just hit home the real moat we have with our FDA approval and how we're able to leverage that to deliver more information back to parents. As I outlined, we're a 120-person company. We're microcap, there's a lot of different ways to win here from a growth perspective. We're accelerating profitability in the process. Flies under the radar because we're small, it's a big opportunity that we're really optimistic about. Yep. Amanda? Yeah, I think the other side of it is just how far we can take this really. Being at 11% adoption in the U.S., there's just a lot of room to grow. I think that there's more that we could do following that study that I just talked about. Like, different claims that we could make and possibly, I don't want to commit to this, but there's possible for insurance reimbursement broadly and things like that. Just different outcomes that we think that this could be a whole lot bigger. Yeah. Well, thank you, Jay and Amanda for your time. Really appreciate your engagement. Thank you. Thank you. Thanks, Jo.