Owlet Inc. reported third‑quarter 2025 results that exceeded consensus estimates, with revenue climbing 44.6% year‑over‑year to $32.0 million. The jump was driven by robust sales of its core Dream Sock and Dream Duo monitors, as well as the launch of the DreamSight camera, which added a new revenue stream and broadened the product mix.
Operating income turned positive at $1.2 million, a turnaround from the $4.8 million operating loss reported in Q3 2024. Net income reached $4.1 million, and adjusted EBITDA rose to $1.6 million, marking the sixth consecutive quarter of adjusted EBITDA profitability. The company’s EPS of $0.17 beat the consensus estimate of $-0.23 by $0.40, a 174% upside that reflects disciplined cost management and a favorable product mix.
Gross margin contracted to 50.6% from 52.2% in the prior year, a 150‑basis‑point decline largely attributable to tariff impacts on imported components. However, margin compression was partially offset by a shift toward higher‑margin subscription services, improved fixed‑cost absorption, and a more favorable product mix that increased the proportion of DreamSight and subscription revenue.
For the full year, Owlet raised its revenue guidance to $103 million–$106 million, a 32%–36% increase from 2024, and projected gross margins of 48%–50%. Adjusted EBITDA guidance was lifted to $1.25 million–$2 million, reflecting confidence in continued cost discipline and the momentum of its subscription platform, which now serves over 85,000 paying customers and is expanding into international markets.
CEO Jonathan Harris highlighted the quarter as “the best in Owlet history across key metrics,” noting that the company’s FDA‑cleared status and the launch of the DreamSight camera are key differentiators that support sustained growth. He also emphasized the company’s international expansion, citing a 171% year‑over‑year increase in overseas sales and a forthcoming launch in India slated for early 2026.
Analysts responded positively to the results, rating the company as a buy or strong buy and maintaining a median 12‑month price target of $13. The consensus EPS estimate of $-0.23 was surpassed by $0.40, underscoring the company’s turnaround and reinforcing confidence in its long‑term strategy.
The results signal that Owlet’s transition toward a comprehensive pediatric health platform is gaining traction, with the combination of FDA‑cleared hardware, a growing subscription ecosystem, and expanding international reach providing a competitive moat and a path to recurring revenue. The company’s ability to achieve profitability while navigating tariff headwinds demonstrates operational resilience and positions it for continued growth in the coming quarters.
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