Life360 Reports Record Q3 2024 Results

Monthly Active Users Reached Approximately 76.9 million for the Quarter

Record Global Net Additions to Paying Circles of 159 thousand - Reaching Nearly 2.2 million Total

Total Revenue Grew 18% Year-Over-Year to $92.9 million

Annualized Monthly Revenue increased 30% Year-Over-Year to $336.2 million

Raising Outlook for 2024 Adjusted EBITDA

SAN FRANCISCO, Nov. 12, 2024 (GLOBE NEWSWIRE) -- San Francisco area-based Life360, Inc. (Life360 or the Company) (NASDAQ: LIF) (ASX: 360) today reported unaudited financial results for the quarter ended September 30, 2024. The Company built on momentum from the previous quarter and again achieved record quarterly results in Monthly Active Users ("MAUs”), Paying Circles, Subscription Revenue, and Annualized Monthly Revenue.

"Life360 made tremendous progress in Q3 2024, achieving our best-ever U.S. back-to-school period with record MAU and subscriber growth while simultaneously advancing our platform strategy,” said Life360 Co-founder and Chief Executive Officer Chris Hulls. "We reached a key milestone in building our advertising business, with our Uber partnership showcasing the power of contextual relevance over generic banners. Additionally, we launched a new lineup of Tile devices, garnering widespread press coverage with hundreds of articles, most of which highlighted our distinctive SOS feature. Our partnership with Hubble is officially signed, and international expansion-a critical pillar for future growth-accelerated significantly as we have started to reach tipping points in multiple countries.

"To quantify these results, our member base grew by 32% year-over-year, with 6.3 million new MAUs added this quarter, bringing our total to 76.9 million. Subscriber growth also hit a milestone, with a quarterly record net increase of 159 thousand Paying Circles-a notable acceleration from the 132 thousand net additions in Q2 and a record for quarterly net additions in the U.S. at 111 thousand net additions, a 64% increase year-over-year. International expansion also played a significant role, with a 51% year-over-year increase in international MAUs and a 37% increase in international Paying Circles, even amid price increases for legacy subscribers outside our core Triple Tier markets. Average Revenue Per Paying Circle in international markets grew by 53% over last year, driven by updating our legacy premium pricing strategy which enables faster experimentation with our new Dual Tier approach.

"We are excited to share the next phase of our hardware strategy, which will continue to contribute to our subscription growth. Our new Tile lineup-the first designed in-house by Life360-significantly differentiates us from our competitors with its SOS feature that turns all Tiles into safety devices, a capability currently unattainable by others at scale across the Google and Apple platforms. Early results are promising, with direct-to-consumer sales more than doubling in the six weeks following the launch compared to the same period last year. Notably, Tile is enhancing our subscription business as a low-cost customer acquisition device. We have been seeing a consistent rise in the percentage of U.S. premium subscribers with an active linked Tile in their account, and we expect this to continue with the new product.

"While these early results are exceeding expectations, the new Tile launch had logistical delays, including certification, labeling, and supply chain issues. This led to lower-than-expected device sales and reduced margins in Q3, as there were periods when our full lineup was unavailable due to planned inventory shifts to the new product line. Fortunately, these were temporary setbacks, and the issues have now been resolved. While it may take time for this transition to fully reflect in brick-and-mortar retail sales, we are optimistic about Black Friday, which we expect to set a new baseline for this enhanced lineup.

"With the new Tile rollout complete, our team is now focused on developing our GPS lineup, built on Jiobit technology. This will begin with a pet device potentially in late 2025, followed by an elder care product anticipated in 2026. Since these devices require a subscription and target rapidly growing verticals, we are excited about the potential for this next generation of hardware to drive a new wave of subscription growth.

"Our advertising initiative continues to show significant potential, with our Uber partnership marking an important milestone. Through this collaboration, Life360 users landing at an airport receive an offer for a ride, showcasing the power of our unique user data and contextual relevance. Our Uber landing notifications significantly outperform industry-averages for engagement with banner ads. This initial version of our partnership points to a promising path for monetizing additional user signals, such as moving to a new home, visiting retail stores or quick-service restaurants, or experiencing major life events like starting college.

"Scaling this vision will require time as we build out our backend infrastructure and sales platform, but the early results strengthen our confidence that advertising could eventually rival our subscription business. With a strong pipeline of potential partners seeking to leverage our unparalleled first-party location platform, we see significant potential to expand our market presence versus competitors.

"Our data business, which had previously leveled off as we transitioned to aggregated data, returned to growth in Q3, bolstered by our exclusive partnership with Placer.ai. We're optimistic about our potential for accelerated growth in 2025 and beyond as this collaboration deepens. Additionally, we formalized our partnership with Hubble, subject to Hubble shareholder approval, paving the way for a new enterprise revenue stream and significantly enhancing the location capabilities of our hardware devices. These strategic partnerships highlight the potential for both expanding our data business and enhancing our technology offerings."

Life360 Chief Financial Officer Russell Burke noted, "We continued to progress along our path to profitability during the quarter.” Burke continued, "While a one-time gain from investments and a tax benefit drove our first Net Income versus a Net Loss in the prior year period, we achieved our eighth consecutive quarter of positive Adjusted EBITDA¹, and our sixth consecutive quarter of positive Operating Cash Flow. Recurring subscription and other revenue continue to drive top-line growth, and balancing that growth with expanding profitability was demonstrated in our Q3'24 results. Year-to-date our total revenue reached $256 million and grew 18% YoY, while our total operating expenses increased 10% YoY. We remain on track to reach our target of sustained positive EBITDA¹ in 2025.”

Q3'24 Financial Highlights

• Total Q3'24 revenue of $92.9 million, a YoY increase of 18%, with total subscription revenue of $71.8 million, up 27% YoY and Core subscription revenue² of $66.2 million, up 34% YoY.
• Annualized Monthly Revenue (AMR) of $336.2 million, up 30% YoY.
• Q3'24 Net Income of $7.7 million, which includes other income of $7.9 million and a benefit from income tax³ that was $4.6 million higher than in Q3'23.
• Positive Adjusted EBITDA¹ of $9.0 million and an EBITDA¹ loss of $(2.6) million compared to positive Adjusted EBITDA¹ of $5.5 million and an EBITDA¹ loss of $(4.2) million, respectively, in Q3'23.
• Positive Operating Cash Flow of $6.3 million, up 55% YoY.
• Quarter-end cash, cash equivalents and restricted cash of $160.2 million, an increase of $96.5 million from Q3'23, which was primarily the result of net capital raised from the U.S. IPO in Q2'24.

• Q3'24 global MAU net adds of 6.3 million were up 32% YoY to approximately 76.9 million, with significant momentum from organic growth.
• Q3'24 global Paying Circle net additions of 159 thousand were a quarterly record, up 35% YoY. Total Paying Circles grew 25% YoY to 2.2 million, supported by improved conversion and retention.
• Average Revenue Per Paying Circle ("ARPPC”) increased 6% YoY due mainly to impacts from a U.S. shift in product mix towards higher priced products, as well as from the UK and ANZ Triple Tier memberships launched in October 2023 and April 2024, respectively.
• 2024 guidance updated: Consolidated revenue of $368-$374 million; Core subscription revenue² growth of 25%+ YoY; positive Adjusted EBITDA¹ of $39 million - $42 million; EBITDA¹ loss of $(7) million - $(10) million; year-end cash balance of $150 million - $160 million.

• Global MAU increased 32% YoY to approximately 76.9 million, with Q3'24 net additions of 6.3 million. U.S. MAU increased 19% YoY, with Q3'24 net adds of 1.8 million. International MAU increased 51% YoY, with Q3'24 net adds of 4.5 million. ANZ MAU increased 36% YoY to 2.5 million.
• Q3'24 global Paying Circle net additions of 159 thousand were a new quarterly record, driven by strong performance in the U.S. market. U.S. Paying Circles increased 21% YoY on the back of both higher registrations and improved conversion and retention metrics. International Paying Circles maintained strong momentum, up 37% YoY. Total Paying Circles in the triple-tier markets of the UK, Canada, and ANZ increased 20% YoY.
• Q3'24 global ARPPC increased 6% YoY. The uplift to global ARPPC due to price increases occurred despite a 9% increase in the weighting of international Paying Circles as a percentage of global Paying Circles, reflecting faster growth in international regions that have lower pricing relative to the U.S. Q3'24 U.S. ARPPC increased 4% YoY, benefiting from a shift in product mix towards higher priced products. Q3'24 international ARPPC increased 53% YoY due to Triple Tier membership launches and legacy subscriber price increases in the UK and ANZ, and price increases for legacy subscribers in non-Triple Tier markets ahead of the launch of Dual Tier pricing in late September.
• Q3'24 net hardware units shipped decreased 24% YoY due to a delay in our new product launch. The Average Selling Price of hardware units shipped decreased 4% YoY primarily due to increased discounts implemented to clear out existing inventory prior to the new product launch.
• September 2024 AMR increased 30% YoY, benefiting from accelerating subscription revenue momentum over the course of Q3'24.

Revenue

• Q3'24 total subscription revenue increased 27% YoY to $71.8 million, primarily driven by growth in Paying Circles.
• Q3'24 hardware revenue decreased 24% YoY to $11.7 million, primarily driven by the delay in our new product launch, which resulted in lower sales volume and was accompanied by increased discounts implemented to clear out existing inventory.
• Q3'24 other revenue of $9.3 million was $2.8 million higher YoY due to increases in data and partnership revenue, which includes advertising revenue.

• Core subscription revenue is defined as GAAP subscription revenue derived from the Life360 mobile application and excludes non-core subscription revenue, which we define as GAAP subscription revenue from other hardware related subscription offerings, for the reported period. Core subscription revenue represents revenue derived from and the overall success of our core product offering. Core subscription revenue increased 34% YoY primarily driven by a 25% YoY increase in Paying Circles and a 6% higher ARPPC, despite being offset by the impact of increased bundled offerings.¹⁴