Life360 Reports Record Q3 2024 Results

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Condensed Consolidated Statements of Operations and Comprehensive Loss(Dollars in U.S.$, in thousands, except share and per share data)(unaudited)  Three Months Ended September 30, Nine Months Ended September 30,  2024   2023   2024   2023 Subscription revenue$71,833  $56,607  $199,090  $160,998 Hardware revenue 11,744   15,541   33,833   37,110 Other revenue 9,288   6,476   23,032   19,447 Total revenue 92,865   78,624   255,955   217,555 Cost of subscription revenue 10,659   8,267   30,367   22,700 Cost of hardware revenue 11,213   11,570   29,147   29,732 Cost of other revenue 981   902   2,790   2,625 Total cost of revenue 22,853   20,739   62,304   55,057 Gross profit 70,012   57,885   193,651   162,498 Operating expenses:       Research and development 29,012   24,569   83,283   74,948 Sales and marketing 30,722   25,741   79,818   73,404 General and administrative 15,229   14,082   44,243   39,788 Total operating expenses 74,963   64,392   207,344   188,140 Loss from operations (4,951)  (6,507)  (13,693)  (25,642)Other income (expense):       Convertible notes fair value adjustment —   (604)  (608)  (798)Derivative liability fair value adjustment —   63   (1,707)  (177)Loss on settlement of convertible notes —   —   (440)  — Gain on settlement of derivative liability —   —   1,924   — Gain on change in fair value of investment 5,389   —   5,389   — Other income (expense), net 2,524   337   (1,772)  1,797 Total other income (expense), net 7,913   (204)  2,786   822 Income (loss) before income taxes 2,962   (6,711)  (10,907)  (24,820)Provision for (benefit from) income taxes (4,727)  (170)  2,146   205 Net income (loss)$7,689  $(6,541) $(13,053) $(25,025)Net income (loss) per share, basic$0.10  $(0.10) $(0.18) $(0.38)Net income (loss) per share, diluted$0.09  $(0.10) $(0.18) $(0.38)Weighted-average shares used in computing net income (loss) per share, basic 74,232,140   67,091,993   71,187,103   66,389,483 Weighted-average shares used in computing net income (loss) per share, diluted 82,083,976   67,091,993   71,187,103   66,389,483 Comprehensive income (loss)       Net income (loss)$7,689  $(6,541)  (13,053)  (25,025)Change in foreign currency translation adjustment —   (17)  (3)  9 Total comprehensive income (loss)$7,689  $(6,558) $(13,056) $(25,016)                 Condensed Consolidated Balance Sheets(Dollars in U.S.$, in thousands)(unaudited)  September 30,2024 December 31,2023Assets   Current Assets:   Cash and cash equivalents$158,980  $68,964 Accounts receivable, net 48,850   42,180 Inventory 13,788   4,099 Costs capitalized to obtain contracts, net 1,037   1,010 Prepaid expenses and other current assets 12,706   15,174 Total current assets 235,361   131,427 Restricted cash, noncurrent 1,205   1,749 Property and equipment, net 1,782   730 Costs capitalized to obtain contracts, noncurrent 1,120   834 Prepaid expenses and other assets, noncurrent 11,199   6,848 Operating lease right-of-use asset 767   1,014 Intangible assets, net 42,279   45,441 Goodwill 133,674   133,674 Total Assets$427,387  $321,717 Liabilities and Stockholders’ Equity   Current Liabilities:   Accounts payable 19,088  $5,896 Accrued expenses and other current liabilities 28,239   27,538 Convertible notes, current —   3,449 Deferred revenue, current 37,947   33,932 Total current liabilities 85,274   70,815 Convertible notes, noncurrent —   1,056 Derivative liability, noncurrent —   217 Deferred revenue, noncurrent 1,969   1,842 Other liabilities, noncurrent 453   723 Total Liabilities$87,696  $74,653 Commitments and Contingencies   Stockholders’ Equity   Common Stock 74   70 Additional paid-in capital 637,806   532,128 Accumulated deficit (298,195)  (285,143)Accumulated other comprehensive income 6   9 Total stockholders’ equity 339,691   247,064 Total Liabilities and Stockholders’ Equity$427,387  $321,717          Condensed Consolidated Statements of Cash Flows(Dollars in U.S.$, in thousands)(unaudited)  Nine Months Ended September 30,  2024   2023 Cash Flows from Operating Activities:   Net loss$(13,053) $(25,025)Adjustments to reconcile net loss to net cash provided by (used in) operating activities:   Depreciation and amortization 7,058   6,844 Amortization of costs capitalized to obtain contracts 974   1,782 Amortization of operating lease right-of-use asset 247   690 Stock-based compensation expense, net of amounts capitalized 30,507   27,678 Compensation expense in connection with revesting notes —   73 Non-cash interest expense, net 59   331 Convertible notes fair value adjustment 608   798 Derivative liability fair value adjustment 1,707   177 Loss on settlement of convertible notes 440   — Gain on settlement of derivative liability (1,924)  — Gain on change in fair value of investment (5,389)  — Non-cash revenue from investment (965)  (1,489)Inventory write-off —   916 Adjustment in connection with membership benefit —   (2,172)Changes in operating assets and liabilities, net of acquisitions:   Accounts receivable, net (6,670)  (6,606)Prepaid expenses and other assets 3,506   (2,036)Inventory (9,689)  (1,026)Costs capitalized to obtain contracts, net (1,287)  (1,567)Accounts payable 12,058   (889)Accrued expenses and other current liabilities (2,736)  (3,163)Deferred revenue 5,108   3,748 Other liabilities, noncurrent (270)  (498)Net cash provided by (used in) operating activities 20,289   (1,434)Cash Flows from Investing Activities:   Internal use software (3,228)  (1,232)Purchase of property and equipment (63)  (26)Net cash used in investing activities (3,291)  (1,258)Cash Flows from Financing Activities:   Indemnity escrow payment in connection with an acquisition —   (13,128)Proceeds from the exercise of stock options and warrants 5,564   4,109 Taxes paid related to net settlement of equity awards (23,371)  (11,392)Proceeds from issuance of common stock in U.S.initial public offering, net of underwriting discounts and commissions 93,000   — Payments of U.S.initial public offering issuance costs (2,719)  — Proceeds from repayment of notes due from affiliates —   314 Repayment of convertible notes —   (3,919)Net cash provided by (used in) financing activities 72,474   (24,016)Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash 89,472   (26,708)    Cash, Cash Equivalents and Restricted Cash at the Beginning of the Period 70,713   90,365 Cash, Cash Equivalents, and Restricted Cash at the End of the Period$160,185  $63,657          Supplementary and Non-GAAP Financial Information We report our financial results in accordance with GAAP, however, management believes that certain non-GAAP financial measures, such as EBITDA, Adjusted EBITDA, and the other measures presented in the tables below provide useful information to investors and others in understanding and evaluating our results of operations, as well as providing useful measures for period-to-period comparisons of our business performance.

The following table presents a reconciliation of Net income (loss), the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA:  Three Months Ended September 30, Nine Months Ended September 30,  2024   2023   2024   2023 ($ thousands, except percentages)     Net income (loss)$7,689  $(6,541) $(13,053) $(25,025)Net income (loss) margin 8%  (8)%  (5)%  (12)%Add (deduct):       Convertible notes fair value adjustment16 —   604   608   798 Derivative liability fair value adjustment16 —   (63)  1,707   177 Loss on settlement of convertible notes —   —   440   — Gain on settlement of derivative liability —   —   (1,924)  — Gain on change in fair value of investment17 (5,389)  —   (5,389)  — Provision for (benefit from) income taxes (4,727)  (170)  2,146   205 Depreciation and amortization18 2,397   2,295   7,058   6,844 Other income, net (2,526)  (337)  (3,799)  (1,797)EBITDA$(2,556) $(4,212) $(12,206) $(18,798)Stock-based compensation 11,460   9,454   30,507   27,678 IPO-related transaction costs, including secondary offering costs —   —   5,784   — Workplace restructuring costs19 48   238   153   3,970 Write-off of obsolete inventory20 —   —   —   916 Adjustment in connection with membership benefit21 —   (78)  —   (2,172)Warehouse relocation costs22 —   77   —   77 Adjusted EBITDA$8,952  $5,479  $24,238  $11,671 Adjusted EBITDA margin 10%  7%  9%  5%   16To reflect the change in fair value of the September 2021 Convertible Notes and derivative liability associated with the July 2021 Convertible Notes.  17To reflect the change in fair value of an investment in non-marketable equity securities carried at cost less impairments, if any, plus or minus changes in observable prices.  18Includes depreciation on fixed assets and amortization of intangible assets.  19Relates to non-recurring personnel and severance related expenses.  20Relates to the write-off of raw materials that have no alternative use to the Company following the decision to halt development.  21Relates to an adjustment recorded to reduce product costs recorded to cost of revenue in connection with the discontinuation of certain battery related membership benefits.  22Relates to non-recurring warehouse relocation costs in relation to the Company's transition to a new logistics partner.   Q3’24 delivered a positive Adjusted EBITDA contribution of $9.0 million versus $5.5 million in Q3’23 as a result of continued strong subscription revenue growth and improved operating leverage.

The effective tax rate in any quarter may be subject to fluctuations during the year as new information is obtained, which may positively or negatively affect the assumptions used to estimate the annual effective tax rate, including factors such as valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related to uncertain tax position, if any, and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business.   Key Performance Indicators (in millions, except ARPPC, ARPPS, ASP, and percentages)Q32024Q22024Q32023% QoQ % YoY Core4     Monthly Active Users (MAU) - Global5 76.9 70.6 58.49%32%U.S. 42.2 40.5 35.44%19%International 34.7 30.1 23.015%51%ANZ 2.5 2.4 1.98%36%Paying Circles - Global6 2.2 2.0 1.78%25%U.S. 1.6 1.5 1.38%21%International 0.6 0.6 0.49%37%Average Revenue per Paying Circle (ARPPC)7,8$127.57$125.96$119.971%6%      Life360 Consolidated     Subscriptions9 2.8 2.7 2.36%20%Average Revenue per Paying Subscription (ARPPS)8,10$106.27$104.00$101.332%5%Net hardware units shipped11 0.8 0.7 1.122%(24)%Average Selling Price (ASP)12,13$12.69$15.92$13.24(20)%(4)%Annualized Monthly Revenue (AMR)$336.2$304.8$259.110%30%   4Core metrics relate solely to the Life360 mobile application.  5A monthly active user ("MAU”) is defined as a unique member who engages with our Life360 branded services each month, which includes both paying and non-paying members, and excludes certain members who have a delayed account setup.  6A Paying Circle is defined as a group of Life360 members with a paying subscription that has been billed as of the end of a period.  7ARPPC is defined as annualized subscription revenue recognized and derived from the Life360 mobile application, excluding certain revenue adjustments related to bundled Life360 subscription and hardware offerings, for the reported period divided by the Average Paying Circles during the same period.  8Excludes revenue related to bundled Life360 subscription and hardware offerings of $(1.4) million and $(4.0) million for the three and nine months ended September 30, 2024, respectively, and $(1.2) million and $(1.9) million for the three and nine months ended September 30, 2023, respectively.  9Subscriptions are defined as the number of paying subscribers associated with the Life360, Jiobit and Tile brands who have been billed as of the end of the period.  10ARPPS is defined as annualized total subscription revenue recognized and derived from Life360, Tile and Jiobit subscriptions, excluding certain revenue adjustments related to bundled Life360 subscription and hardware offerings, for the reported period divided by the average number of paying subscribers during the same period.  11Net hardware units shipped represent 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.  12Excludes revenue related to bundled Life360 subscription and hardware offerings of $1.4 million and $3.9 million for the three and nine months ended September 30, 2024, respectively, and $1.4 million and $2.5 million for the three and nine months ended September 30, 2023, respectively.  13To determine the net ASP of a unit, we divide hardware revenue recognized, excluding revenue related to bundled Life360 subscription and hardware offerings, for the reported period by the number of net hardware units shipped during the same period.   Global MAU increased 32% YoY to approximately 76.9 million, with Q3’24 net additions of 6.3 million.U.S.

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Author / Journalist: Life360, Inc.

Category: Technology

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Topics: AU0000045098 Nasdaq:LIF AUST:360.AX

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Published On: 2024-11-12 @ 21:45:00 (1 weeks ago)

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