Life360, Inc. has achieved record quarterly results for the quarter ended June 30. The company broke records in Monthly Active Users (MAUs), Paying Circles, and Subscription Revenue.
The San Francisco based company also successfully completed its initial public offering (IPO) in the United States and began trading on the NASDAQ Global Select Market on June 6, 2024.
“Q2’24 was excellent for Life360, as we set new records in business and financial performance, and completed our US IPO,“ Life360 co-founder and CEO Chris Hulls said.
“Our positive results in Q2'24 continued across our strategic growth priorities. First, we grew our free members base by 4.3 million MAUs and reached 70.6 million overall. Next, we increased net Paying Circles by 132 thousand in Q2’24 compared to the 96 thousand increase in Q1’24, a new quarterly record for global net additions. Our focus on international growth also contributed significantly to our performance, as we grew our international MAUs by 48% YoY and our international Paying Circles by 42% YoY. We believe that we are very early on in penetrating our global market opportunity, and that we have significant headroom to grow as we expand to new regions, and launch new safety, connection, and location features that make everyday family life better throughout all life stages.”
Q2 2024 financial highlights
Total Revenue: Q2 2024 revenue stood at $84.9 million, a 20% year-over-year (YoY) increase. Total subscription revenue reached $65.7 million, up 25% YoY, with core subscription revenue at $60.2 million, also up 25% YoY.
Annualized Monthly Revenue (AMR): AMR grew by 23% YoY to $304.8 million.
Net Loss: The Q2 2024 net loss was $(11.0) million, which included $5.8 million in Initial Public Offering (IPO)-related transaction costs and a $5.2 million increase in income tax provisions compared to Q2 2023. The 2024 income tax expense is expected to range between $2.0 million and $4.0 million.
EBITDA: Positive adjusted EBITDA of $11.0 million and an EBITDA loss of $(5.6) million were reported for Q2 2024. This compares to positive adjusted EBITDA of $5.7 million and an EBITDA loss of $(2.0) million in Q2 2023. The Q2 2024 EBITDA loss includes the $5.8 million in IPO-related transaction costs.
Operating Cash Flow: Positive operating cash flow of $3.3 million, inclusive of $5.8 million in IPO-related transaction costs.
Cash Position: The quarter-end cash, cash equivalents, and restricted cash were $162.0 million, an increase of $87.4 million from Q1 2024, primarily due to net capital raised in the U.S. IPO and related transaction costs.
Q2 2024 Operating highlights and 2024 outlook
Global MAU Growth: Q2 2024 global Monthly Active Users (MAU) increased by 4.3 million, up 31% YoY, reaching approximately 70.6 million, driven by strong organic growth.
Paying Circle Growth: The global Paying Circle net additions in Q2 2024 were a record 132,000, up 25% YoY, bringing the total to 2.0 million. This growth was supported by improved conversion and retention rates.
ARPPC Increase: Average Revenue Per Paying Circle (ARPPC) rose by nearly 6% YoY, largely due to price increases for existing Life360 Android subscribers by the end of Q2 2023, as well as the introduction of Triple Tier memberships in the UK and ANZ in October 2023 and April 2024, respectively.
2024 Guidance Update: The company updated its 2024 guidance, projecting consolidated revenue of $370 million to $378 million, core subscription revenue growth of 25%+ YoY, positive adjusted EBITDA of $36 million to $41 million, an EBITDA loss of $(8) million to $(13) million, and a year-end cash balance of $150 million to $160 million.
New revenue streams
Hulls was also pleased with the progress being made with new revenue streams
“Earlier this year, we launched a new advertising offering, which is now live for US members, and available soon globally. Importantly, we are focused on providing our members with contextually relevant ads that enhance their user experience by leveraging our extensive first-party location data.
“Following the rapid development of our programmatic ad capability, and positive signals in early testing with both users and advertisers, we initiated our direct sales efforts in June. Revenue from our ad offering has continued to expand in Q2’24, and we have been actively engaging with multiple prospective large advertisers and potential partners which align well with our loyal user base of families. The recently expanded partnership agreement with our longtime partner Arity demonstrates traction from these efforts. We continue to expect a noticeable increase in revenue contribution from ads in the second half of 2024, as we build our ad sales, measurement and tech capabilities, and further enable our platform through service integrations like those in place with The Trade Desk (NASDAQ:TTD), LiveRamp, PubMatic, and Google (NASDAQ:GOOGL) Ad Manager. We anticipate we can scale ad revenue substantially in the years ahead.”
“In August, we also expanded and extended our data partnership with Placer.ai, which creates opportunities for increased revenue both near and long term,” continued Hulls. “And we are moving through the finalization process of our relationship with Hubble,” said Hulls. “We remain excited about the long-term potential of their satellite-to-bluetooth technology combined with our location network.”
Life360's CFO, Russell Burke, highlighted the company's ongoing progress towards profitability during the quarter, noting that the recent IPO has enhanced their strategic flexibility. Although the costs associated with the IPO affected the company's net loss compared to the previous year, Burke emphasised that Life360 achieved its seventh consecutive quarter of positive Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) and its fifth consecutive quarter of positive Operating Cash Flow.
Burke further noted that the company's commitment to balancing growth with expanding profitability was evident in its second quarter 2024 results, with total revenue reaching $84.9 million, marking a 20% year-on-year growth. Despite this, total operating expenses increased by 12% year-on-year. He reaffirmed the company's trajectory towards achieving sustained positive EBITDA by 2025.