Macro Intelligence: how Life360's latest results are shaping its financial future

Article written by Nadine Blayney (ausbiz)

Pursuing profitability

In this week’s edition of IG Macro Intelligence, we delve into Life360, the location technology company that recently upgraded its FY24 forecast following a record second quarter.

Revenue increased by 20% to $84.9 million, while the San Francisco-based firm posted a Q2 net loss of $11 million, including intial public offering (IPO) -related costs of $5.8 million from its Nasdaq listing.

Life360 achieved record quarterly results in monthly active users (MAU), paying circles, and subscription revenue.

Life360 financial highlights

Globally, MAUs increased by 31%, reaching approximately 70.6 million, with 4.3 million new users added in the second quarter alone. In the US, MAUs grew by 20% with 1.7 million new additions in Q2, while international MAUs surged by 48% with net additions of 2.6 million. The ANZ region saw a 35% increase, reaching 2.4 million.

The company also set a new record for paying circles, with a net addition of 132,000 for the quarter, driven by strong performances in both US and international markets. Additionally, the average revenue per paying circle (ARPPC) rose by 6%, reflecting growth despite the company’s expansion into regions with lower pricing compared to the US.

Life360 is expecting consolidated revenue for FY24 of $370-378 million, with an earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $8-$13 million and a year-end cash balance of $150-160 million.

CFO Russell Burke told ausbiz, Life360 is on a really “strong path to profitability” which they’re expecting by FY25.

Life360 financial update

Tracking gains

Life360 shares skyrocketed on the ASX after its earnings were released to market, and are up more than 100% over the past year.

ASX Tradewatch data shows the stock appears to be in a long-term uptrend with both the 20 and 200-day moving averages sloping upwards, signalling it can continue rallying in both timeframes.

Life360 daily chart

• Life360 debuted on the Nasdaq in early June, under the ticker code (NASDAQ:LIF)
• Shares have risen nearly 30% since debut, and analysts see further growth potential
• UBS raised its target price to $35 per share from $32, while JMP Securities sees the stock rising to $40
• The overall consensus on Wall Street is a “Buy”
• Shares rose almost 11% in New York trade following the Q2 results and upgraded guidance.

Life360 Nasdaq market summary

Locating further growth

Locally, analysts are also bullish on the continued performance of Life360 shares.

Life360 mean chart

Morgan Stanley and Bell Potter have lifted guidance by almost 8% with a target price of $20.50 per share.

Bell Potter analyst Chris Savage called the results above expectations, due to record growth in Paying Circles. He’s increased his valuation multiple to 6.25 times revenue from 6.0 times revenue, while lifting his revenue forecasts by about 1% for each of the three years through 2026.

Meanwhile, Goldman Sachs lifted its price target by 23% to $19.75 and Ord Minnett raised its outlook by 17% to $19.28.

The average target price as assessed by FNArena is $20.093, a 17.5% upside from current near-record prices.

Life360 FNArena chart