SAN FRANCISCO, May 9, 2024 /PRNewswire/ -- San Francisco area-based Life360, Inc. (Life360 or the Company) (ASX: 360) today reported unaudited financial results for the quarter ended March 31, 2024. Life360 Co-founder and Chief Executive Officer Chris Hulls said: "Life360's Q1'24 results showed continued momentum, with net Paying Circles additions nearly doubling to 96 thousand from 54 thousand in Q4'23, achieving a new first quarter record. In addition, our efforts in relation to both our free members and international expansion are paying off, with 4.9 million new Monthly Active Users ("MAUs"), also a new first quarter record. The market opportunity is on a global scale, and we believe we have significant headroom to grow as we expand to new regions, and launch new features that expand our relevance to different life stages. This momentum has continued so far in Q2'24 with the achievement of 32 thousand net Paying Circle additions during the month of April. "We continue to make meaningful progress on our path to profitability, narrowing our Net Loss and delivering our sixth consecutive quarter of positive Adjusted EBITDA1, and fourth consecutive quarter of positive Operating Cash Flow. Our commitment to balancing fiscal responsibility, with prudent investment to position the business for long-term success, is reflected in Q1'24 revenue growth of 15% YoY, while  operating expenses increased just 3% YoY. This operating leverage demonstrates that we are on track to reach our target of sustained positive EBITDA1 in CY25. "Last quarter we introduced a new advertising offering which is now live in production with U.S. members and early results are promising. We have completed the development work that allows for programmatic ads, and expect to be set up for direct sales at scale by the end of June. As expected, initial revenue from this new advertising offering in Q1'24 was minimal due to our measured approach; we anticipate more significant growth, although still a modest overall revenue contribution, in the second half of CY24, and substantial scaling in the coming years as we begin to leverage our extensive first-party location data to provide contextually relevant offers. We believe we are strongly positioned to serve ads to our members in a manner that is privacy-first and complementary to the user experience. "In the context of indirect monetization, we are also excited to announce the signing of a non-binding letter of intent to partner with, and make a small investment in Hubble Network, Inc., a space technology company led by Life360 Co-founder, Board director and former CTO, Alex Haro. Hubble's proprietary satellite technology enables two-way communication between ground-based Bluetooth devices, such as Tile, and its newly-launched satellite constellation. This potential partnership is intended to open another low effort, high margin revenue stream and would allow us to potentially monetize the latent demand for enterprise tracking services via Tile, a venture we had previously set aside to focus on consumer offerings. By integrating our Bluetooth finding network with Hubble's satellite technology, we hope to be able to offer global tracking solutions for assets without relying on cellular connections. Additionally, this collaboration would position us to enhance the tracking capabilities of our consumer devices, potentially surpassing those offered by Google and Apple. While currently only two prototype satellites are operational, Hubble plans to launch a full constellation that will eventually provide global coverage. We believe our potential partnership with Hubble will lead the development of this combined phone and satellite network, primarily targeting enterprise applications such as tracking pallets on ships. Subject to execution of definitive documentation, we expect an initial launch of the network in early 2025 and no related revenue during 2024." Q1'24 Financial Highlights Total Q1'24 revenue of $78.2 million, a YoY increase of 15%, with total subscription revenue of $61.6 million, up 19% YoY and Core subscription revenue (Non-GAAP)2 of $57.0 million, up 23% YoY. Annualized Monthly Revenue (AMR) of $284.7 million, up 19% YoY. Q1'24 Net Loss of $(9.8) million. Positive Adjusted EBITDA1 of $4.3 million and EBITDA1 loss of $(4.1) million compared to Adjusted EBITDA of $0.5 million and EBITDA of $(12.6) million, respectively, in Q1'23. Positive Operating Cash Flow of $10.7 million, an improvement of $19.9 million from Q1'23. Quarter-end cash, cash equivalents and restricted cash of $74.6 million, an increase of $3.9 million from Q4'23 despite significantly higher RSU settlement tax payments in the quarter, primarily due to the higher fair market value of issued stock. Q1'24 Operating Highlights and CY24 Outlook Q1'24 global MAU net adds of 4.9 million, a Q1 record, were up 31% YoY to approximately 66.4 million, with significant momentum, particularly in a seasonally lower period for MAU growth. Q1'24 global Paying Circle net additions of 96 thousand were a Q1 record, up 21% YoY to 1.9 million, supported by improved conversion and retention. Preliminary Average Revenue Per Paying Circle ("ARPPC") benefits from the UK triple-tier membership launch in October 2023 and price increase for existing subscribers in January 2024. The Australia and New Zealand triple-tier membership launched in late April 2024, following a price increase for existing subscribers. CY24 guidance maintained: Consolidated revenue of $365-$375 million; Adjusted EBITDA1 of $30 million - $35 million; EBITDA1 loss of $(8) million - $(13) million; year-end cash balance of $80 million - $90 million. 1 Adjusted EBITDA and EBITDA are Non-GAAP measures. For more information, including the definitions of Adjusted EBITDA and EBITDA, the use of these non-GAAP measures, as well as reconciliations of Net Loss to each of Adjusted EBITDA and EBITDA, refer to the "EBITDA and Adjusted EBITDA" and "Supplementary and Non-GAAP Financial Information" sections below. 2 Core subscription revenue (Non-GAAP) is a non-GAAP measure. For more information, including the definition of Core subscription revenue (Non-GAAP) a description of the use of this measure, refer to the "Non-GAAP Core subscription revenue" and "Supplementary and Non-GAAP Financial Information" sections below.   ANZ launch Life360 launched the full triple-tier product offering to 100% of members in Australia and New Zealand in late April. Enhanced features for subscribers include breakdown assistance, emergency services dispatch with crash detection and digital safety for the whole family. Prices were increased for existing subscribers ahead of the launch which, combined with the pricing impact from the triple-tier introduction, is expected to result in a significant increase in ARPPC. To date the rollout has proceeded smoothly, with the expected impact of temporarily increased churn following the price increases. Details of the new Australian Membership plans can be found here and New Zealand Membership plans here. The media release announcing the launch can be found here. Key Performance Indicators (in millions, except ARPPC,ARPPS, ASP, and percentages) Q1 2024 Q4 2023 Q1 2023 % QoQ % YoY Core3 Monthly Active Users (MAU) - Global 66.4 61.4 50.8 8 % 31 % U.S 38.8 36.8 31.7 5 % 22 % International 27.5 24.6 19.1 12 % 44 % ANZ 2.2 2.0 1.6 8 % 36 % Paying Circles - Total 1.9 1.8 1.6 5 % 21 % U.S 1.4 1.3 1.2 5 % 16 % International 0.5 0.5 0.4 7 % 39 % Average Revenue per Paying Circle (ARPPC) $   123.97 $   124.17 $   120.70 — % 3 % Life360 Consolidated Subscriptions 2.5 2.4 2.1 4 % 17 % Average Revenue per Paying Subscription(ARPPS) $   102.02 $   102.17 $     97.98 — % 4 % Net hardware units shipped (standalone)4 0.5 1.7 0.6 (68) % (6) % Average Selling Price (ASP) $     16.50 $     11.50 $     17.22 43 % (4) % Annualized Monthly Revenue (AMR) $     284.7 $     274.1 $     239.5 4 % 19 % 3 Core metrics relate solely to the Life360 mobile application. 4 Net hardware units shipped (standalone) represents the number of tracking devices sold during the period, excluding hardware units related to bundled Life360 subscription and hardware offerings, net of returns by our retail partners and directly to consumers. Global MAU increased 31% YoY to 66.4 million, with Q1'24 net additions of 4.9 million. U.S. MAU increased 22% YoY, with Q1'24 net adds of 2.0 million. International MAU increased 44% YoY, with Q1'24 net adds of 2.9 million. ANZ MAU increased 36% YoY to 2.2 million. Q1'24 global Paying Circle net additions of 96 thousand were a first quarter record, with a strong performance in both U.S. and international markets. U.S. Paying Circles increased 16% YoY on the back of both higher registrations and improved conversion and retention metrics. International Paying Circles maintained strong momentum, up 39% YoY. UK Paying Circles increased 23% YoY, with a modest uptick in Q1'24 churn, as expected, due to the price increase to existing subscribers in January 2024. The UK triple-tier membership launch and price increase to existing subscribers helped drive 53% higher ARPPC in the first six months relative to the pre-launch baseline. These metrics are outperforming the Canada launch which at the same point achieved 31% ARPPC growth. ANZ achieved record quarterly net subscriber additions and a 47% YoY increase in Paying Circles. Q1'24 global ARPPC increased 3% YoY. U.S. ARPPC increased 8% YoY, benefiting from price increases for existing U.S. Android subscribers in Q2'23. Q1'24 global ARPPC was stable QoQ with the positive impacts from price increases offset by the higher mix of international Paying Circles in lower priced territories. Q1'24 net hardware units shipped was modestly down YoY for the standalone hardware business, and Average Selling Price was slightly lower YoY due to a higher mix of multi-pack units. Tile's product refresh is on track for the Q4'24 holiday season. March 2024 AMR increased 19% YoY, benefiting from accelerating subscription revenue momentum over the course of Q1'24.   Operating Results GAAP Revenue Three Months Ended March 31, 2024 2023 ($ millions) (unaudited) Subscription revenue $                61.6 $                51.7 Hardware revenue 10.2 10.0 Other revenue 6.5 6.5 Total revenue $                78.2 $                68.1 Q1'24 total subscription revenue increased 19% YoY to $61.6 million. Q1'24 Hardware revenue increased 2% YoY to $10.2 million, with benefits from bundling, fewer discounts offered, and fewer returns, offsetting lower Average Selling Price and standalone units shipped. Q1'24 Other revenue of $6.5 million was in line with the prior period as the Company maintained its single aggregated data arrangement. Non-GAAP Core Subscription Revenue  Core subscription revenue (Non-GAAP) is defined as subscription revenue derived from the Life360 mobile application, including all revenue related to bundled Life360 subscription and hardware offerings, and excluding non-core subscription revenue, which relates to other hardware related subscription offerings, for the reported period. Core subscription revenue represents revenue derived from and the overall success of our core product offering. Core subscription revenue (Non-GAAP), increased 23% YoY supported by the 21% YoY increase in Paying Circles, and 3% higher ARPPC.   Three Months Ended March 31, 2024 2023 ($ millions) (unaudited) Subscription revenue (GAAP) $                61.6 $                51.7 Non-Core subscription revenue (GAAP)5 (5.8) (5.5) Bundled offerings6 1.2 — Core subscription revenue (Non-GAAP) $                57.0 $                46.2 5 Non-Core subscription revenue (GAAP) represents GAAP subscription revenue recognized in relation to subscriptions offered in connection with our hardware offerings. 6 Bundled offerings represents the GAAP revenue recognition of subscription revenue allocated to hardware revenue which is recognized at a point in time rather than ratably over the subscription period. Bundled offerings only represent bundled Life360 subscription and hardware offerings.   GAAP Gross Profit  Three Months Ended March 31, 2024 2023 ($ millions, except percentages) (unaudited) Gross Profit $             60.0 $             49.8 Gross Margin 77 % 73 % Gross Margin (Subscription Only) 85 % 84 % Q1'24 gross profit margin increased to 77% from 73% in the prior year period, driven by an improvement in subscription margins resulting from price increases, as well as an increase in hardware margins which reflected cost efficiencies.   GAAP Operating Expenses Three Months Ended March 31, 2024 2023 ($ millions) (unaudited) Research and development $                27.3 $                27.2 Sales and marketing 24.7 24.3 Paid acquisition & TV 6.0 6.3 Other sales and marketing 6.9 7.7 Commissions 11.8 10.3 General and administrative 14.4 13.2 Total operating expenses $                66.4 $                64.7 Q1'24 operating expenses increased 3% YoY, largely due to higher general and administrative costs primarily related to compliance with the Sarbanes-Oxley Act. Excluding variable commissions, operating expenses were virtually unchanged YoY, despite the revenue increase of 15% YoY, reflecting cost reduction measures undertaken beginning in Q1'23, and the related efficiencies achieved across the business as we continue to demonstrate operating leverage.   GAAP Cash Flow  Three Months Ended March 31, 2024 2023 ($ millions) (unaudited) Net cash provided by (used in) operating activities $                10.7 $                 (9.2) Net cash used in investing activities (1.1) (0.4) Net cash used in financing activities (5.7) (4.7) Net Increase (Decrease) in Cash, Cash Equivalents, and RestrictedCash 3.9 (14.3) Cash, Cash Equivalents, and Restricted Cash at the End of thePeriod $                74.6 $                76.1 Life360 ended Q1'24 with cash, cash equivalents and restricted cash of $74.6 million, an increase of $3.9 million from Q4'23. Q1'24 operating cash flow of $10.7 million was offset by $1.1 million used in investing activities related to payments for internally developed software, and $5.7 million used in financing activities related to taxes paid for the net settlement of equity awards, partially offset by proceeds from the exercise of options. Q1'24 net cash provided by operating activities of $10.7 million was higher than Adjusted EBITDA of $4.3 million primarily due to timing of receipts and payables. See EBITDA and Adjusted EBITDA section below for definition and reconciliation of Adjusted EBITDA. EBITDA and Adjusted EBITDA To supplement our consolidated financial statements prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to facilitate analysis of our financial and business trends and for internal planning and forecasting purposes. Non-GAAP financial measures include earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") and Adjusted EBITDA Margin. EBITDA is defined as net loss, excluding (i) convertible notes and derivative liability fair value adjustments, (ii) provision for income taxes, (iii) depreciation and amortization and (iv) other income, net. Adjusted EBITDA is defined as net loss, excluding (i) convertible notes and derivative liability fair value adjustments, (ii) provision for income taxes, (iii) depreciation and amortization, (iv) other income, net, (v) stock-based compensation, (vi) workplace restructuring costs, and (vii) inventory write-offs. These items are excluded from EBITDA and Adjusted EBITDA because they are non-cash in nature, because the amount and timing of these items are unpredictable, or because they are not driven by core results of operations and render comparisons with prior periods and competitors less meaningful. The following table presents a reconciliation ...