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Life360, Inc. (LIFX)·Q1 2024 Earnings Summary

Executive Summary

  • Revenue grew 15% YoY to $78.2M with subscription revenue up 19% to $61.6M; gross margin expanded 400 bps to 77% and Adjusted EBITDA was positive at $4.3M, marking the sixth consecutive quarter of positive Adjusted EBITDA .
  • User growth accelerated: MAUs +31% YoY to 66.4M and net Paying Circle adds hit a Q1 record (96k), with April adding another 32k, supporting accelerating AMR (+19% YoY to $284.7M) .
  • Guidance maintained for CY24: revenue $365–$375M, Adjusted EBITDA $30–$35M, EBITDA loss $(8)–$(13)M, positive operating cash flow each quarter, and YE cash $80–$90M; positive EBITDA targeted 1H CY25 .
  • Strategic catalysts: advertising is live (programmatic in place; direct sales by end of June), a U.S. IPO process (S-3 filed) is underway with an emphasis on minimizing dilution, and a non-binding LOI with Hubble Network (satellite-enabled Bluetooth) targets initial launch in early 2025 (enterprise first) .

What Went Well and What Went Wrong

  • What Went Well

    • Operating leverage: Revenue +15% YoY with operating expenses up just 3% YoY; gross margin rose to 77% (subscription 85%), and operating cash flow was +$10.7M, up $19.9M YoY .
    • Subscriber and MAU momentum: Q1 net Paying Circle adds 96k (record for Q1) and MAU net adds 4.9M (record for Q1); April added 32k Paying Circles, indicating Q2 momentum .
    • Advertising initiative launched with early positive signals; programmatic completed, direct sales at scale targeted by end of June; management reaffirmed high-margin, back-half-weighted ramp .
    • Quote: “Our commitment to balancing fiscal responsibility… is reflected in Q1’24 revenue growth of 15% YoY, while operating expenses increased just 3% YoY.” — CEO Chris Hulls .

  • What Went Wrong

    • Net loss remained negative at $(9.8)M (EPS $(0.14)), though improved vs prior year; EBITDA remained a loss at $(4.1)M despite Adjusted EBITDA turning positive .
    • ARPPC was flat QoQ as international mix in lower-priced territories offset price increases; standalone hardware units shipped declined QoQ (seasonality), with ASP higher QoQ but lower YoY mix-adjusted .
    • UK churn ticked up modestly following January price increases; while the LOI with Hubble carries promise, it is non-binding and near-term revenue is expected in 2025, adding execution/timing risk .

Financial Results

MetricQ1 2023Q4 2023Q1 2024
Total Revenue ($M)$68.1 $87.0 $78.2
Net Income (Loss) ($M)$(14.1) $(3.1) $(9.8)
Diluted EPS ($)$(0.21) —$(0.14)
Gross Margin %73% 69% 77%
EBITDA ($M)$(12.6) $(2.0) $(4.1)
Adjusted EBITDA ($M)$0.5 $8.9 $4.3
Operating Expenses ($M)$64.7 $64.5 $66.4
Operating Cash Flow ($M)$(9.2) $9.0 $10.7
Cash & Restricted Cash ($M)$76.1 $70.7 $74.6

Revenue by category (GAAP)

Revenue ($M)Q1 2023Q4 2023Q1 2024
Subscription$51.7 $59.8 $61.6
Hardware$10.0 $21.1 $10.2
Other$6.5 $6.1 $6.5
Total$68.1 $87.0 $78.2

Core subscription revenue (Non-GAAP)

MetricQ1 2023Q1 2024
Core Subscription Revenue ($M)$46.2 $57.0

KPIs

KPIQ1 2023Q4 2023Q1 2024
MAU – Global (M)50.8 61.4 66.4
MAU – U.S. (M)31.7 36.8 38.8
MAU – International (M)19.1 24.6 27.5
MAU – ANZ (M)1.6 1.9 2.2
Paying Circles – Total (M)1.6 1.8 1.9
Paying Circles – U.S. (M)1.2 1.3 1.4
Paying Circles – International (M)0.4 0.5 0.5
ARPPC ($)$120.70 $124.17 $123.97
Consolidated Subscriptions (M)2.1 2.4 2.5
ARPPS ($)$97.98 $102.17 $102.02
Net Hardware Units Shipped (M, standalone)0.6 1.7 0.5
ASP ($)$17.22 $11.50 $16.50
AMR ($M)$239.5 $274.1 $284.7

Estimates vs Actuals

  • S&P Global consensus estimates for LIFX were unavailable at this time; as a result, we cannot provide a vs-consensus beat/miss assessment for Q1 revenue or EPS. We attempted retrieval via S&P Global but no CIQ mapping exists for ticker ‘LIFX’ currently [SpgiEstimatesError].

Guidance Changes

MetricPeriodPrevious Guidance (2/29/24)Current Guidance (5/9/24)Change
Consolidated RevenueCY2024$365–$375M $365–$375M Maintained
Core Subscription Revenue Growth (Non-GAAP)CY2024≥20% YoY ≥20% YoY Maintained
Adjusted EBITDACY2024$30–$35M $30–$35M Maintained
EBITDACY2024$(8)–$(13)M $(8)–$(13)M Maintained
Operating Cash FlowCY2024Positive each quarter Positive each quarter Maintained
Year-end Cash12/31/2024$80–$90M $80–$90M Maintained
Positive EBITDA timingOutlook1H CY25 1H CY25 Maintained

Earnings Call Themes & Trends

TopicQ-2 (Q3 2023)Q-1 (Q4 2023)Current (Q1 2024)Trend
Advertising / Indirect monetizationOther revenue stable via single data partner; ads not yet launched Announced plan to add ads; H2 modest contribution; high margin Ads live; programmatic done; direct sales at scale by end-June; H2 ramp expected Improving execution; building
International Triple-Tier + PricingUK launch planned; Canada showed strong ARPPC uplift UK launched; ANZ launch planned Q2’24 ANZ launched late April; UK ARPPC +53% vs pre-launch; modest churn from Jan price increase Scaling internationally
MAU / Paying CirclesRecord Q3 net adds; MAU +24% YoY Seasonal Q4 net adds 54k; MAU 61.4M Q1 records: 96k net adds; MAU net adds 4.9M; April +32k Accelerating
Hardware / ProductMargin improvements; units up YoY Hardware $21.1M; margin improvement Tile refresh on track for Q4’24; Q1 standalone units down QoQ seasonally Seasonal; Q4 catalyst
Profitability / LeverageAdjusted EBITDA $5.5M; leverage emerging Adjusted EBITDA $8.9M Adjusted EBITDA $4.3M; OCF +$10.7M; guidance maintained Sustained progress
U.S. Listing—Raised as strategic goal; US exposure S-3 filed; focus on minimizing dilution; timing subject to conditions Advancing
Hubble Network (satellite)——LOI signed; single-digit $M initial investment; enterprise first; initial launch early 2025; consumer optionality New optionality

Management Commentary

  • “Q1’24 results showed continued momentum, with net Paying Circles additions nearly doubling to 96 thousand… [and] 4.9 million new Monthly Active Users” — CEO Chris Hulls .
  • “We… delivered our sixth consecutive quarter of positive Adjusted EBITDA, and fourth consecutive quarter of positive Operating Cash Flow.” — CEO Chris Hulls .
  • “Q1 revenue increased 15% year-on-year to $78.2 million… gross margin increasing to 77% from 73% [YoY]” — CFO Russell Burke .
  • “Advertising… is now officially live… programmatic [complete]… set up for direct sales at scale by the end of June… significant growth in the second half [albeit modest overall in CY24].” — CEO Chris Hulls .
  • “We have maintained CY’24 guidance… and expect positive EBITDA in the first half of CY’25.” — CEO Chris Hulls .

Q&A Highlights

  • Advertising ramp and margin thesis: High-margin model with initial ramp in H2; programmatic built, direct sales ramp by end-June; early tests showed no negative user impact; building audience segmentation and retargeting infrastructure .
  • Hubble Network partnership: Single-digit million initial investment; enterprise revenue share via “federated network” scanning; minimal Life360 engineering effort; initial launch early 2025; potential to enhance Tile with satellite backup over time .
  • IPO and dilution: S-3 filed for potential U.S. IPO; company focused on minimizing dilution; cannot comment on timing; secondary component considered .
  • Back-half weighting drivers: Back-to-school in Q3, Q4 hardware seasonality with new Tile refresh, plus ad ramp in H2 .
  • Subscriber momentum drivers: Demographic tailwinds (millennial families), international product improvements/translation, efficiency in marketing mix; MAU momentum continued into April .

Estimates Context

  • S&P Global (Capital IQ) consensus estimates for LIFX were unavailable at this time (CIQ mapping missing), preventing revenue/EPS beat/miss comparisons for Q1 2024. Accordingly, no vs-consensus assessments are presented here. We attempted to retrieve estimates and were unable to do so [SpgiEstimatesError].

Key Takeaways for Investors

  • Strong topline and KPI momentum with improving unit economics: gross margin expanded to 77% and Adjusted EBITDA remained positive; MAU/Paying Circles acceleration should support H2 revenue compounding .
  • Guidance was maintained; near-term narrative hinges on execution in ads (direct sales ramp), international triple-tier monetization (UK/ANZ), and seasonal catalysts (back-to-school, Q4 hardware refresh) .
  • Advertising is a multi-year opportunity: initial contribution modest in CY24 but structurally high-margin and leverageable; success here could materially augment revenue mix over time .
  • Hubble LOI offers asymmetric optionality: minimal capital, enterprise-first revenue potential in 2025, with longer-term consumer capabilities potentially enhancing Tile differentiation .
  • U.S. IPO can broaden investor base; management prioritizes minimizing dilution, but timing remains market-dependent—a potential medium-term catalyst .
  • Watch ARPPC mix effects: global ARPPC flat QoQ as international mix rises; UK pricing boosts ARPPC despite temporary churn; ANZ triple-tier rollout and pricing should lift ARPPC over time .
  • Liquidity improving: $74.6M cash at quarter end and positive OCF provide flexibility to fund growth and advertising build-out without sacrificing profitability goals .

References and additional context:

  • Q1 2024 press release (8-K Item 2.02; EX-99.1) with full GAAP and Non-GAAP reconciliations .
  • Q1 2024 earnings call transcript (prepared remarks and Q&A) .
  • April 8, 2024 Market Update 8-K (Q1 operating metrics upside; proxy/dual listing context) .
  • Q4 2023 media release (8-K) for immediate prior quarter comparisons and CY24 initial guidance .
  • Q3 2023 media release (8-K) for trend analysis two quarters back .