Q: As telehealth continues to expand, how will it merge into Owlet 360 and become an additional driver of the subscription model over the long term? A: Kurt Workman, President, CEO, and Co-Founder: We think about telehealth in tiers. There is an element of telehealth in 360 today that gives parents health trends and information without connecting to a doctor. There will be another tier that gives access to physicians, which is currently Owlet OnCall. This will morph and evolve as we test and learn this year, with the goal of making it more accessible and affordable for the majority of our users. With FDA-cleared data at home that physicians can review, we can change the paradigm for at-home care, creating a new level of care with continued monitoring and check-ins with a doctor from home. There will be multiple tiers, likely Owlet 360 and an Owlet 360+ with the telehealth offering.

Q: What has been the sell-through trend quarter-to-date, and how is the gap between sell-in and sell-through? Also, can you update us on subscription attachment rates and retention as you observe new cohorts? A: Amanda Tweed-Crawford, CFO: From an attachment perspective, around 30% of parents subscribe within the first year, and we are seeing an average subscriber life of about 12 months. Kurt Workman, President, CEO, and Co-Founder: We are now seeing nearly 30% of new users in the trial period elect the annual plan, which is exciting for LTV. 36% of our DreamSock customer base now has subscription. With the camera feature rollout in the second half, which represents more than half of our user base, and the fact that users use the camera twice as long as the socks, this represents a big opportunity. Regarding sell-through, comparisons are nuanced because Prime Day shifted from Q3 to Q2 this year, making year-over-year comparisons muddy.

Q: How much of the full-year guidance embeds a specific year-end subscriber count, or can you provide a range? A: Amanda Tweed-Crawford, CFO: We are not sharing a specific range for subscriber count, but we have considered how we have been trending this year and built that into our guidance. Essentially, if you look at the run rate and how many additional adds we have been seeing, that is what we are modeling through the end of the year.

Q: With the new web pay option, does that take subscription gross margin from around 70% to mid-to-high 90s, or what is the difference? A: Amanda Tweed-Crawford, CFO: With the app store, for the first 12 months of the subscriber life, we pay about 30% in fees. Web pay allows us to bypass those fees, with only small immaterial credit card charges and a small amount of software amortization. However, since many customers have already signed up through the App Store, it will take time for the subscriber mix to change from App Store purchases to web pay, so this will improve over time.

Q: You mentioned Babylist as an upcoming channel for upfront subscription enrollment. Are there other retail or registry partners in the pipeline, and how important is D2C versus third-party retail to the long-term subscription conversion strategy? A: Kurt Workman, President, CEO, and Co-Founder: Babylist is unique because it is a gifting and registry platform, where we generally see higher order values. We are selling annual memberships to 360 and bundling them with the product so parents or grandparents can gift them. You will see this rollout across all of our retail channels with smart bundles. We want to meet parents where they are, and registry is a big part of the parenting journey. We want parents to think of Owlet as a service, not just a product, and we are seeing that become more of a reality.

Q: Regarding international subscription opportunities, are there any bigger countries you are missing right now, given the additional 5% to 10% of users that can now subscribe? A: Kurt Workman, President, CEO, and Co-Founder: We just completed the majority of our language translation and rollout for subscription across our biggest markets and countries. We feel we are there in terms of availability. Most of that rolled out at the end of the quarter, so we should see some benefits in Q3 and beyond.

Q: WebPay and upfront subscription at the point of purchase went live this quarter. From where I sit, these look like the most economically significant things you announced. Is that a fair read, and how are early results tracking? A: Kurt Workman, President, CEO, and Co-Founder: It is significant, though it may not be significant on this year's P&L because it will take time for the blend of our customer base to move toward direct web pay. It expands our margin over time and allows us to get the credit card at the point of purchase, so people pull out their credit card once, not twice. This not only helps lift the overall percentage of users that get Owlet 360 but also increases the margin on Owlet 360, which is substantial over time.

Q: Where are you seeing the most momentum internationally, and what do you see as the most ripe opportunities over the next few years? A: Kurt Workman, President, CEO, and Co-Founder: Europe continues to grow very close to the pace we set in the US. Germany is expanding really well, and France is seeing incredible growth as expected. Eastern Europe, including the Czech

For the complete transcript of the earnings call, please refer to the full earnings call transcript .