Owlet, Inc.

Thank you for standing by and good afternoon. Thank you for attending today's LAQ324 financial results conference call. My name is Reagan and I will be your moderator today. All lines will be muted during the presentation portion of this call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Jay Ginsko, Vice President of Investor Relations. Jay, you may now proceed.

Good afternoon, everyone, and thank you for joining us. Earlier today, Allett released financial results for the third quarter ended September 30th, 2024. I'm pleased to be joined today by Kurt Workman, Allett's co-founder and CEO, Jonathan Harris, President and Chief Revenue Officer, and Amanda Tweed Crawford, our CFO. Before we begin, please note that our financial results press release and presentation slides referred to on this call are available under the events and presentation section of our investor relations website at investors.allettcare.com. This call is also being webcast live with a link at the same website. The webcast and accompanying slides will be available for replay for 12 months following this call. The content of today's call is the property of Allett. It cannot be reproduced or transcribed without our prior consent. Before we begin, I'd like to refer you to our safe harbor disclaimer on slide three of the presentation. Today's discussion will contain forward-looking statements based on the company's current views and expectations as of today's date. These statements are only predictions and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, but are not limited to, those described in our most recent filings with the SEC and in the risk factors section of our annual report on Form 10-K for the fiscal year ended December 31st, 2023. Please note that the company assumes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. With that, it's my pleasure to turn the call over to our CEO, Kurt Workman.

Kurt? Thanks, Jay. Good afternoon, everyone, and thank you for joining us. I'm very proud of the team's effort and execution to deliver another outstanding quarter following the FDA clearance of both BabySat and DreamSoc, including triple-digit year-over-year revenue growth, our sixth consecutive quarter of year-over-year gross margin expansion, and second consecutive quarter of adjusted EBITDA profitability. Our performance throughout 2024 is a testament to the team's commitment and the passionate community of parents, health professionals, and partners that believe deeply in ALIT's mission. More and more parents are sharing in our vision of bridging technology, safety, and connected data to modern parenting, and that is enhancing our ability to execute on our growth strategies. I will begin on slide five. During the third quarter of 2024, we achieved net revenue of $22.1 million, representing strong year-over-year growth of 141%, driven primarily by global drink stock sales. We also saw continued gross margin expansion as third quarter gross margins increased to 52%, up 1,590 basis points versus third quarter 2023. This is our highest gross margin since going public in our sixth consecutive quarter of year-over-year gross margin expansion. a reflection of our ability to combine top-line growth with the operational improvements we've been driving the past couple of years. Third quarter adjusted EBITDA was $0.6 million, an improvement of $6.1 million versus third quarter 2023. Adjusted EBITDA for Q3 was both a record for Owlet and our second consecutive positive quarter, delivering on our commitment to maintain at or near adjusted EBITDA break-even. Moving to a few recent business highlights. I'm excited to share that we continue to see strong momentum with Amazon following our FDA clearance and shift to Amazon 1P as our distribution partner. As we shared last quarter, we had our most successful Amazon event at Prime Day in July. I'm excited to share that we followed up with a record Prime Big Deal Days event in October. Both events set company records for revenue and sell-through that Jonathan will touch on later in the call. Turning to Babysat. As a reminder, Babysat is our prescription monitor for high-risk babies. We continue to gain traction in the medical community, and we added five additional durable medical equipment manufacturers, or DMEs, to support additional expansion into the medical and healthcare channels. Allard is in a unique position to be both a consumer as well as a medical-grade solution. As we further combine brand strength with increased awareness and adoption of BabySat, we expect to drive complementary growth for DreamStock in the consumer channels. While it will take time for babysat to scale in the medical market, there is a clear need for Owlet's technology as the first FDA-cleared wireless and wearable at-home solution to replace traditional bulky, wired, and expensive medical equipment. Finally, the rollout of Owlet's subscription service continues to make great progress. We successfully launched the beta version to thousands of caregivers in the third quarter. Early results and feedback are off to a great start, including achieving a strong 85% retention rate after the first month, with approximately 60% of subscribers engaging as daily active users. We're excited to provide parents with health insights by leveraging our unmatched health and sleep data set. Subscription represents an exciting margin of creative growth driver, furthering Owlet's ability to define the category of infant health and safety. Finishing up, on the first quarter earnings call, I outlined three strategic focus areas we believe were critical to increasing our growth opportunity and driving margin expansion and profitability. These were, first, drive continued adoption of DreamSoc globally. Second, expand medical and healthcare channels to offer an insurance reimburse monitor. And third, transition Owlet into a service helping parents from infancy into the toddler years, thereby increasing LTV. We've made strong progress this year across these initiatives, and I'm proud of the team's efforts and commitments. I'll now turn the call over to Jonathan to walk through these focus areas in detail.