Owlet, Inc.

Good afternoon. Thank you for attending today's Owlette Q1 earnings call. My name is Tania and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I will now like to pass the conference over to our host, Mike Cavanaugh, Investor Relations of ICR Westwick. Please go ahead.

Good afternoon and thank you for joining us today. Earlier today, Owlet Incorporated released financial results for the quarter ended March 31, 2022. The release is currently available on the company's website at investors.owletcare.com. Kurt Workman, Owlet's co-founder and chief executive officer, and Kate Skolnick, chief financial officer, will host this afternoon's call. Before we get started, I would like to remind everyone that certain matters discussed in today's conference call and or answers that may be given to questions asked are forward-looking statements that are subject to risks and uncertainties relating to future events and or the future financial performance of the company. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in the company's most recent public filings with the U.S. Securities and Exchange Commission, including its annual report filed March 25, 2022, and other reports filed with the SEC, which can be found on its website at investors.outletcare.com or on the SEC's website at www.sec.gov. The information provided in this conference call speaks only as of today's live call. OWLET disclaims any intention or obligation, except as required by law, to update or revise any information, financial projections, or other forward-looking statements, whether because of new information, future events, or otherwise. Please note that OWLET will refer to certain non-GAAP financial information on today's call. You can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures in the company's earnings press release, which is also available on the company's quarter results page of its website. I will now turn the call over to Kurt.

Thank you, Mike, and good afternoon to all of those joining us today. First, I want to note the overwhelming support from hundreds of thousands of parents over the past several months. They have been the voice of Owlet's mission to empower parents with the tools, technology, and information that they need to deliver care at home. It's clear that new parents want solutions to help them navigate the incredibly challenging and rewarding stage of early parenthood. We cannot imagine a world in the future where every family doesn't have access to basic health sensing technology to monitor their baby at home. We're more dedicated than ever to achieving that vision. Our monitoring system will become the foundation for what we call the Connected Nurseries Ecosystem, a suite of products and services that will work together to help parents keep their baby safe, healthy, and happy. Outlet is making significant investments toward this vision in 2022 in products like Smart Crib, our Next Generation Camera, a membership program, and expanded Outlet accessories. which will fundamentally change the opportunity to build a longer-term relationship with each customer and expand our LTV in 2023. Additionally, we believe that investments towards regulatory clearances, where needed, will accelerate market adoption and penetration, helping make Owlet the technology platform for every parent. Owlet delivered $21.5 million in revenue during the first quarter, primarily driven by loading in and rebuilding our inventory position with our retail partners. While the DreamSock launched on OutlookCare.com and in some retailers in January following CES, the full rollout of DreamSock happened throughout the quarter, with different retailers stocking their shelves each month of the quarter. Notably, Target did not reset in-store, and Amazon was not at full capacity until the end of March. Many of our key levers of growth were just starting to build throughout the quarter, including baby registries, consumer reviews, and search rankings. As a result, we saw sell-through levels increase throughout the quarter, but we believe we will realize our full sell-through potential as we continue to build our registries, reviews, and rankings. The best way to characterize Q1 2022 is that we focus on regaining our footing and positioning back in the market and work to reestablish ourselves as the best monitoring solution for parents. While we're navigating the short-term headwinds of bringing our core products back online, it's clear that the long-term potential of our DreamSoc and DreamDuo is strong. We're seeing consistent increasing satisfaction ratings, both in our net promoter surveys and our Amazon listings, signaling that customer satisfaction is coming back on track with previous SmartSoc levels. We're also expanding our retail footprint and international presence significantly. We have a robust roadmap of new features and products, and as we continue to build our green platform, we intend to add medical device regulatory clearances that we believe could dramatically accelerate adoption. I'd like to give an update on these four areas of growth, starting with our DreamSoc and Duo penetration in the U.S. We've seen sell-through of the DreamSoc and Duo grow double-digit month-over-month for the past three months. And the products have already been named Best Baby Monitor and Baby Gift from the likes of BabyList, Glamour, Spy, and GearBrain. By the end of the quarter, 100% of our retail channels and doors were back online with Dream products. In the second quarter of the year, we're now focused on growing sell-through. Allard has continued its strong organic referral with 56% of customers sharing about the product through word of mouth. In a recent survey, 93% of parents reported peace of mind with the DreamSoc, which is on par with the metrics we saw around SmartSoc. We've continued to introduce new Dream product features to parents, improving the baseline net promoter score every month, with Amazon reviews for our DreamSoc and Duo climbing to 4.1, 4.3 stars already. Some of the most notable features and enhancements include an even smarter sleep algorithm that's 10 times more responsive and 11% more accurate than when it was first released. At the end of March, we rolled out an app update that included the display of average oxygen in the Dream app to help give parents a more complete view and understanding of baby sleep. DreamSoc and DreamDuo users will also get access to a brand-new feature around predictive sleep in the third quarter. It's a completely personalized sleep tool that helps parents take the guesswork out of getting their baby the rest they need. Parents will receive personalized prompts when their baby needs to go to sleep based on baby's age, time slept in their prior nap, and how long it's been since they slept. This new feature is automated for parents and adapts with baby as parents build routines and schedules. By continuing to add more features to the Dream platform, Owlet is becoming an ingrained part of the parenting journey. We see consistent app engagements every day, and we're exploring additional revenue opportunities like membership that would further enhance this. The second key growth area we're focusing on as a business is expanding our ecosystem with our robust product roadmap and several commercial launches approaching. First, our new sleepwear accessories, the Owlet Dream Sleeper and Dream Sleeper with the Swaddle, will debut later this year. In a survey of Owlet customers, 73% said they would purchase a sleeper from Owlet. In Q3 of this year, the Owlet Cam 2 will launch globally, bolstering the existing 1080p HD video with next-generation artificial intelligence and machine learning to accurately decipher sounds from the nursery and detect when babies cry so parents know when their baby needs them. We'll also use that data to store important video clips throughout the day so that you never miss a moment. Also, part of our product roadmap for the Owlet Connected Nursery ecosystem is our Smart Crib, Our team is making phenomenal progress on the development of the Owlet Smart Crib, which will be an anchor for the ecosystem. We recently brought parents into our office and presented Owlet Crib prototypes alongside other infant bed options currently on the market. And 70% of parents there said they preferred the Owlet Crib over the various other Smart Crib choices we presented. Lastly, we continue in research and development of the outlet pregnancy band, the wearable monitor for expectant mothers. After a successful beta test last year and following continued conversations with FDA, we have a stronger understanding of the opportunity, consumer fit, and market needs. As a result, we are working toward an FDA-cleared medical device rather than a consumer wellness version so we can offer a more robust feature set that we believe will provide the best experience for expectant moms. The wearable pregnancy monitor is just one of the medical devices our team is working on as a third key area of growth for our business. In the U.S., we continue in conversations with FDA as we work toward medical device submissions for both a prescription-only version of the SOC for use with sick babies under the care of a physician and an over-the-counter version of the SOC's heart rate and oxygen notification features for healthy children. We have a strong healthcare team leading these efforts with experience from top healthcare companies like Philips, GE, and Kaiser Permanente. We continue to meet with FDA regarding our submissions, and we believe we're on track to submit for the prescription-only version of the SOC in the summer and the over-the-counter SOC notifications following that. Outside of the U.S., we are pleased with our progress toward filing for the UKCA and CE MedMarkts in the U.K. and Europe. as well as our Health Canada filing, as we recently obtained both our ISO 1345 and MVSAP certifications. Our fourth area of growth is international expansion. 2021 was a banner year for Allett as we expanded sales of our core products into nearly a dozen countries in Europe. This year, we plan to focus on increasing penetration in those markets. Our overall international revenue grew by over 100% year over year, accounting for 13% of our total revenue in the first quarter of 2022. Some highlights from our international efforts include significant retail expansion in the U.K. with carrots, foods, and curries, and doubling the number of SKUs carried by John Lewis. We are now in major pharmacies, consumer electronics, and department stores, in addition to baby retailers across Europe. The SmartSoc was rated a top baby monitor by Les Parisiennes, a top French newspaper, as well as best baby monitor gift in The Independent, a large daily newspaper in the U.K., We are very pleased with this international growth and are eager to continue expanding and growing in these markets. Nearly every day, we hear from parents around the globe sharing their Owlet experience. Our mission is to get Owlet technology to every baby and every family, and international expansion is an integral part of our mission. Also, part of this is our advocacy and charitable work, where we partner with dozens of parent-led nonprofit organizations to provide Owlet products to families in need. In March, in collaboration with many of these nonprofit groups, we were able to donate 650 outlet monitors to Ukrainian refugees that had fled to parts of Europe. I'm grateful to work with so many like-minded groups with the same mission of delivering peace of mind. We believe these key four areas are huge opportunities for outlet both in 2022 and beyond. We're setting the foundation for an ecosystem this year, which we believe will open up significant long-term opportunities. We recently added several new team members to further support and lead outlet. Albert Lee joined in April as Chief Legal Officer, bringing with him more than two decades of healthcare and FDA regulatory expertise from medical product companies like Abbott and Zimmer. Following his tenure with Mattel and PricewaterhouseCoopers, Nate Yu came on board in the first quarter as our Senior Vice President and Chief Accounting Officer. Finally, we added Matthias Kozak as General Manager of our new APAC region. Matthias has extensive international experience from top brands like Adidas and Maui Gym. Thank you for your continued support of Owlet and our mission. I look forward to sharing more updates in our future calls. I'll now turn this call over to Kate.

Thank you, and good afternoon, everyone. Our first quarter results were encouraging, and during this period, there were four main operational objectives Owlet achieved. Number one, domestic launch of our DreamSoc and DreamDuo products. Number two, sell into all of our major retail channels online and in-store and relisting with Amazon while growing initial December sales momentum with Owlette Online. Number three, establish a successful return-to-vendor process for domestic SmartSoc and Duo product returns to rework to DreamSoc and DreamDuo inventory. And number four, manage our working capital, operating expenses, and existing cash position effectively. Turning to Q1 results, Q1 gross billings before promotions and reserves were approximately $26 million as compared to $25 million from the same period last year. The 5% year-over-year increase in gross billings reflects our continued international growth. Domestically, we work closely with our retailers to launch our dream line of products throughout the quarter. As of the end of March, we achieved initial selling shipments with all of our key retail partners. However, some of the retailers were not fully utilized for online and in-store sell-through until the end of March. Q1 product promotions and discounts were 1.4 million compared to 1.7 million for the same period last year. Return adjustments for Q1 2022 were 3 million, 11.7% of gross billings. This compares to Q1 2021 return adjustments of 1.2 million, 4.8% of gross billings. The increase in return reserves in Q1 2022 relates to the new Dream product launches, where consumer return rates were higher at the beginning of the quarter at initial launch, but improved dramatically as we moved through the quarter. Looking ahead, we expect return rates will stabilize as parents continue to better understand the new value proposition of the Dream products. Q1 net revenues were $21.5 million, including the impact of adjustments such as promotions, discounts, and other allowances. This compares to net revenues of $21.9 million in Q1 2021 or relative to that. Within this, international revenue was approximately 13% of total revenue, more than double our prior year's first quarter international revenues. Cost of goods sold in Q1 was $12.8 million, and gross profit was $8.8 million. Our gross margin was impacted by macro inflationary pressures, along with several discrete items in the quarter. Q1 gross margin was 40.7%. Our Q1 margin included a significant impact on cost inflation, representing roughly half of the decline in gross margin year over year. Other significant drivers included higher adjustment for returns and a reworked cost associated with return to vendor inventory. Operating expenses for the first quarter of 2022 were $30.5 million compared to $15.5 million for the same period in 2021. The increase in year-over-year operating expenses was primarily for planned increases in spending associated with the scaling of the business and higher marketing spend. Operating loss and net loss for the first quarter of 2022 were approximately $22 million and $29 million, respectively, as compared with $3 million operating loss and $8 million net loss for the same period in 2021. Q1 adjusted EBITDA loss was $18 million compared to adjusted EBITDA gain of $100,000 for the same period in 2021. Turning to the balance sheet, cash and cash equivalents as of March 31, 2022 were approximately $69 million. To effectively support our dream launch in the inventory repositioning with our retailers during the first quarter, a significant amount of capital was utilized on the balance sheet. Our receivable balance grew, both reflecting the timing of selling shipments in the quarter, along with the disruption of return to vendor activity occurring, in some cases, simultaneous with initial dream product selling. Inventory levels grew in the quarter as we executed our plans to rework inventory received back from retailers into Dream products, particularly as a lot of the reworked activity was later in March. We expect them in future quarters. This will decrease the need for working capital usage until we work through the inventory on hand. As a significant portion of the inventory has now been returned from our retail partners, we're actively working with them to normalize our receivable positions. In summary, Q1 was an important transitional product quarter in the U.S. for Owlette. We achieved our top business priorities and have taken many of the necessary steps towards building a stronger global business for Owlette in 2022 and beyond. Looking ahead, like most companies, we have seen increased inflationary cost pressures in our business related to supply chain and transportation, ongoing uncertainty with pandemic concerns, and cost increases for wages and company administration. Within this uncertain macro backdrop, as Kurt discussed, Q2 will be a continued period of repositioning of LS domestic business with focus on driving the first full quarter of retail sell-through in the dream product line and further reestablishing LS market presence after being out of the marketplace last year due to the FCA warning letter. Inventory levels at retailers were elevated as in Q1 compared to last year, primarily reflecting timing of initial selling and sell-through of the Dream products domestically. Inventory sell-through for the second quarter was driven by key promotional dates, including Mother's Day and Father's Day, and online retail events. For Q2, we anticipated achieving revenues in the range of $23 million to $25 million. With regards to gross margin and operating margin, we expect the headwinds we saw in the first quarter to continue in the second quarter, including macroinflationary pressures and return inventory rework costs. With regards to return inventory, we anticipate that we will be substantially complete with inventory rework by the end of the second quarter. OLIP's long-term core growth objectives remain intact, including growing OLIP's connected nursery market penetration domestically and internationally, Executing our vision for the future of the connected nursery market through targeting investments in product innovation to expand the lifetime value of our customers and focusing on developing medical prices and obtaining marketing authorizations in the U.S. and key global markets where required. Thank you. Operators, let's open it up for questions. Thank you. If you would like to ask a question, please press star followed by 1 on your telephone keypad. If for any reason you would like to remove that question, please press star followed by 2. Again, to ask a question, press star 1. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly if questions are registered. The first question is from the line of Charles Reed with Cowan. Your line is open.

Yeah, thanks for taking the questions, guys. You know, Kate, just wanted to just clarify, when you talk about this inventory rework, the $3 million, that's what you're referring to in the contra revenue account that you talked about last quarter. Is that right?

The $3 million that we're talking about is on the return reserve. So we talked about gross billings. And then we increased their return reserves. So we've talked about year over year. That's about a million and a half more than we had in the year prior because it's a new product launch. So when you talk about that kind of gross to net, it's a little bit more than we would have had last year if you were doing the year over year comparison. We just wanted to send that for you.

No, no, and that's helpful, but that's separate from the inventory rework related to the FDA. Okay, can you talk, can you, yeah, how much was that impact in the quarter?

The rework activity?

Yeah, or was there any impact in the quarter from that? Because you made mention that you were going to be done with that by the second quarter. Was there any impact to net revenue this quarter?

Right. So what we talked about is that we're about 80% of the way through of the reworked activity. And really what we're talking about there is when you look at, we had talked about that we had made a liability adjustment. And when you look on the balance sheet of what's moved into inventory, that's where you can see the paid adjustment and what we have in inventory. So we've said that we've brought in approximately 75% to 80% of the return to vendor revenue product that we think is out there. And so we probably have a little bit more to go into, too. But then after that, we think that that activity is primarily behind us.

So if I look at the balance sheet from December and then the balance sheet here presented, the difference would be what impacted the quarter? Is that a fair approximation? Yes. Yep. Okay. And then my last question, you know, maybe, Kurt, can you talk about the competitive landscape, how you're seeing it right now? You know, obviously when you guys introduced the Smart Sock years ago, You know, not a lot of competition, I'd say, in terms of really advanced BD monitoring. We're starting to see new entrants in the market, particularly not in a wearable, per se, but in, you know, cameras, you know, or monitors that, you know, using, you know, like computer vision and being able to detect motion, you know, temperature, et cetera, you know, without a wearable part to it. Can you talk about how this market's developing and you see how it's placing it? Thanks.

Yeah, thanks, Charles. I would actually say that early on there was a lot more innovation. There were quite a few more competitors coming to market in this space, and I think Owlet emerged as the clear leader in our category. What we are seeing is more kind of connected innovation uh cameras coming to market uh in the baby monitor section which is obviously competitive to our camera but you know nothing compared to what we are able to offer with the uh dream sock and the features that we have around dream socks that are uh that are kind of the next generation of sleep monitoring so we are seeing some more entrance on the camera side there's You know, there's a new wearable mat, but in terms of sort of being on par with our level of sleep tracking and sleep monitoring and sleep quality indicators that we have, I think Outlet is still in a really strong position and is leading the market in terms of technology. So, yeah, does that answer your question, Charles? Anything else you want me to go deeper on?

No, no, that was helpful. I was just curious how you're seeing sort of the market evolving. That's great. Thanks a lot. I appreciate it.

Yeah, I think it's interesting that, yeah, this market is, I would say, finally evolving for Wi-Fi, where the smart home market has been there for a while, and I think that the majority of the innovation that we're seeing happen right now is video monitors for babies connecting to Wi-Fi.

Great. I appreciate it. Thank you.

Thank you, Mr. Reid. The next question is from John Babcock with Bank of America. Your line is open.

Hey, good afternoon, and thanks for taking my questions. The first question I just had, you talked about higher return rates on the DreamSoc. Might you be able to delve into that a little bit more and what you think drove those higher return rates?

Yeah, sure. So just to clarify that, too, in Charles' question, The impact to revenue is the return in allowances. So what you do is in a normal quarter, you just take that as a percentage of revenue. We had a new product launch and Q1 was the dream product. We took a higher reserve as a new product launch. We saw a slightly higher return rate when we first launched the product. And a little bit of that was, I think, some consumer confusion when we first launched it with the new value prop product. At the very beginning of the product launch, we saw that return rate change very dramatically as we went through the quarter downwards. And we've seen that actually continue downwards into a more normalized rate that we saw with our prior product. So we think that that will continue, as we mentioned, as the value prop continues to resonate and our NPS score continues to go up with the new feature set. But as it works, we take an average for the quarter. So the average is a little bit higher in Q1, and our expectation is that it will be at a lower rate in future periods.

Okay. Out of curiosity, what feature were most of the turns hoping for that I guess didn't exist, you know, in the Dream Talk?

It was all different. So when we launched the product, the differences, that we had was that as we changed the product from smart to dream, some of the feature functionality that's been rolled out since is some of the dream applications, some of the look back applications for the way that the app works and just some of the new features that we've come out with since then. But it's the overall repositioning of the product in the marketplace.

Yeah, I would say, John, just to add to that, I think anytime we launch a new version of any product, generally those first few months you see higher return rates. In addition, just to kind of follow up on the feature question, we launched three new features in the DreamSock in Q1 post-launch. One is a real-time sleep gauge in the app, which is a really cool feature and kind of visually is pretty prominent in the app and helps parents in real time see what sleep kind of state they're in. We made the sleep tracking feature a lot more responsive, and then we launched average oxygen display at the end of the quarter as well. I think all three of those features, we've seen the satisfaction and ratings improve significantly with each new feature rollout in the quarter.

Okay, thanks for that.

And then, you know, last question, I'll kind of combine this into two questions, I guess. First of all, just with regards to your revenue guidance for the quarter, how much visibility do you have into that? And then second of all, are you seeing any impact in your EMEA countries, you know, from this whole Russia-Ukraine crisis? And is that weighing at all on consumers' interest in healthcare?

Do you want to take the revenue and then I'll take the international?

Yeah, sure. I think, you know, as we talked about, I mean, Q1 was a major repositioning for us and we talked about the initial sell-in domestically for Dream. That was an important milestone for our retailers both online and in stores and that sell-in happened throughout the period. We also relisted with Amazon very late in Q1. So we were very happy to have all of that activity at the end of Q1, but it all happened at different times, right? So as a consequence to that, the sell-through activity started happening at very different times. So for Q2, what we're really focused on is the sell-through activity with all the different retailers. And what we're expecting is that a lot of that sell-through activity is going to correlate with the... promotional opportunities with the different holidays. We have some online events that are going to be happening too. And so what we believe is that the demand that we're seeing out there, as you mentioned, with a lot of the new feature functionality that's resonating with folks, you know, we anticipate that that range of revenue is, you know, where we'll see things happening as we start correlating that sell and sell through domestically. And then I'll let Kurt address the overall demand that we're seeing internationally and then the other areas.

Yeah, I would just add that, you know, Europe's really a bright spot for the company right now. We're seeing incredible growth year over year. The team has done a great job of really, you know, not only building a great team there, but working with each country specifically to, build good marketing programs for each of the geographies. We mentioned the midwife recommendation we recently got, the expansion into Boots and expansion in John Lewis and expansion to Harrods. So the business is growing really well there, and we're seeing strong consumer demand. I do think there was a little bit of softness, especially kind of at the peak of some of the news around the war in Ukraine. But overall, the business is strong.

All right, great. Thank you.

Thank you, Mr. Babcock. Again, to ask a question, press star one. The next question is from Jim Simbo with Citigroup. Your line is open.

Thank you. I have a question for Kurt about strategy. You mentioned that you're launching the pregnancy band with working with the FDA for that as opposed to call it a health device path. What's the reasoning behind that? Is that you always plan to do that? Or did the FDA kind of tell you, hey, we're going to view this as a health device and not, I'm sorry, as a medical device and not health device? Or I'm just kind of curious about that path because your other devices, you've taken the other route of going as more of a health device rather than an FDA health approved device.

Yeah, thanks for the question, Jim. You know, I would say that in Q4, as we were having discussions with the FDA around SOC, we were proactive in discussing band with them as well because it's in a similar vein. we were able to get to a point with the agency where we had a clear path for launching a wellness device, but there were certain features that we wanted to make sure were included at launch and felt like the best approach and the recommendation from the FDA was to seek clearance on those features prior to launch. So we did change strategy a little bit with that product and have decided to just completely embrace the medical pathway and get clearance prior to launching it.

Okay, that makes sense. And, again, you mentioned if I heard right, you're planning to submit for that in summertime, or did I get that mixed up with a different comment?

Yeah, so the babysat, which is the prescription version of the SOC, is what we're anticipating submitting this summer. We haven't announced the timeline for the submission of the band yet. Okay, gotcha.

Um, are you relatively getting? Are you relatively getting close to that? Or are these things so complicated? We're looking at kind of beyond this calendar year. If you can give any commentary for that. I just don't know about the longevity of that detailed process.

Yeah, I think we're still in conversations about exactly what we're going to put in the submission with the FDA. So we'll have more information in future calls.

Okay, gotcha. And a question for Kate, can you make a comment about cash flow was impacted by the reworking of the recalled products that you returned to shift over from a medical to more of a health packaging, which makes sense. And you mentioned that was a head-winding challenge for working capital in the March quarter. Does that mean that in the June quarter we should be thinking about cash flow materially changing because it kind of, I want to say, unwraps itself or reverses itself? Or can you help us with more clarity about what you were referring to about that?

working capital comment that you gave on your prepared comments so a lot of the activity jim was just staging a process with the retailers of bringing back the inventory that they had in terms of smart sock and the duo product bringing that back in-house to rework for dream sock and dream duo and then reworking that as inventory and then getting product back out to the retailers. And so a lot of that affected not only the process of getting it back into our company, but also then, as you can imagine, accounts receivable and that whole process as far as selling in and selling through as we work with our customers. It's taking a little bit of time to get that all worked through, but we think that we're about 80% of the way done. Then we will be able to kind of settle out with those customers. I think in Q2 we should be mostly done, and then I think we'll have more back to that flow that we usually have where we sell in and then we have that kind of normal payment cycle with them. but it's just kind of taking a little bit of patience, and everybody's been on a little bit of a different cycle. So that's why you see some of it just a little bit tied up and some of the numbers on the balance sheet and the cash flow. But all expected in Q1, and to be honest, to get through a lot of that in a short period of time has been put a lot of effort in at the retailer side and our side. So we're really happy with where we are, but we also expect to be mostly done by the end of this quarter.

Thank you both for the clarifications. It's extremely useful. Thank you.

Thank you, Mr. Suva. That is all the time we have for questions. I will now turn the conference over to Kurt for any closing remarks.

Yeah, I just want to thank everybody for joining today. Thank you, Charles and Jim and John, for the good questions. I want to thank everybody for supporting Owlet as we're working to innovate and solve real needs for parents. And I want to thank our team and our customers for all the support we've seen over the last few months. So thank you. Have a great day.

That concludes the Owlix Q1 earnings call. Thank you for your participation. You may now disconnect your lines.