Life360 Adds 6.3M Users, Reports Strong Q3 Revenue Growth and Positive Earnings Outlook

About Life360 Inc

Life360 (the Company, ASX: 360) is a dual-listed technology platform based in San Francisco that provides location-based services, including location sharing and notifications to consumers globally. Its core offering is the Life360 mobile application which is a mobile social networking app that is essentially a location-based service to enable friends and family members to share their location with each other. The location sharing and tracking capability extends to pets, and devices like iPhones. The app currently serves more than 76 million Monthly Active Users across 170 countries.

Record third quarter results

Life360 continues to build on the growth momentum from the previous quarter and added 6.3 million net Monthly Active Users to 76.9 million as at 30 September 2024.  This is a 32 percent increase year-on-year.

The number of Users of the Company’s mobile app is a key performance measure and explains the 18 percent year-on-year boost to total revenue for the September quarter to $92.9 million. Of this amount, subscription revenue was $71.8 million, an increase of 27 percent. Adjusted EBITDA increased strongly to $9 million for the quarter, from $5.5 million in the September 2023 quarter.

The only soft spot in the quarterly numbers was the 24 percent decline in Hardware revenue due to lower-than-expected device sales and reduced margins in the September quarter. There were periods when the full lineup of stock was unavailable due to planned inventory shifts to the new product line. These were temporary setbacks, and the issues have now been resolved.

Advertising Initiative shows early promise

The Company’s advertising initiative continues to show significant potential, with its Uber partnership marking an important milestone. Through this collaboration, Life360 Users on arriving at an airport receive an offer for a ride, showcasing the power of Life360’s unique User location data and contextual relevance. The Company’s Uber landing notifications significantly outperform industry-averages for engagement with banner ads. This initial version of Life360’s partnership points to a promising path for monetising additional User location signals, such as moving to a new home, visiting retail stores or quick-service restaurants.

Scaling this opportunity will require time as the backend infrastructure and sales platform is further developed, but the early results support the Company’s confidence that advertising could eventually rival its subscription business. The strong pipeline of potential partners seeking to leverage Life360’s unparalleled first-party location platform implies significant potential to expand the company’s market presence versus competitors.

Positive FY24 Earnings Guidance

Full-year earnings guidance to 31 December 2024 is for Adjusted EBITDA of $39 million – $42 million, upgraded from $36 million – $41 million. Group revenue has been revised slightly lower to the range of $368 million – $374 million, down from $370 million to $378 million to reflect lower hardware revenue. Operating Cash Flow for each quarter of 2024 is forecast to be positive and year-end cash and cash equivalents are forecast to be within the range of $150 million – $160 million.

Aspirational Revenue Goal of US$1 Billion

The Life360 long-term growth outlook remains robust.

The Company’s location and tracking technology has application to not just people and devices, but to pets, and elderly monitoring, as well as auto insurance and advertising revenue. The other emerging revenue source is the sale of location-based analytics services under aggregated data agreements with business customers in the retail and real estate sectors, municipalities and other government agencies.

Against this growth potential, Life360 has detailed the long-term goals that drive the Company’s strategy. These goals include 150 million Monthly Active Users (currently 76.9 million), $1 billion of revenue (currently $370 million) and 25 percent Adjusted EBITDA margins (currently 10 percent).

These long-term targets are not projections and are subject to business, economic, regulatory and competitive uncertainties. However, these targets are based on management assumptions with respect to future decisions based on current business strategies and known risks.

Being a Founder-led Company with significant equity incentives available to the leadership group of Life360, management are highly motivated to work toward these aspirational numbers. It is this potential that has generated and maintained considerable investor interest in the prospects of Life360.

If Life360 can display a consistent revenue and earnings growth pathway toward these numbers, then shareholders can expect significant shareholder value accretion in the decade ahead.