Life360 Q2 2024 Earnings Call Highlights

Life360 (ASX: 360) shares opened 14.3% higher after smashing Q2 earnings forecasts and upgrading its full-year guidance well-above market expectations.

Q2 2024 Earnings Highlights

• Revenue up 20% to $84.9m , in-line with consensus $84.6m

• Global MAU net additions of 4.3m , up 31% year-on-year to 70.6m and ahead of 69.4m consensus

• Paying Circle net additions of 132,000, up 25% year-on-year to 2.0 million

• Net loss of $11 million which includes IPO-related transaction costs of $5.8 million

• Positive adjusted EBITDA of $11 million vs. $5.7m consensus

• Positive operating cash flow of $3.3 million

• Quarter-end cash position of $162 million

• Full year EBITDA guidance upgraded to $36-41m vs. prior guidance of $30-35m and above $33.7m consensus

Earnings Call Highlights

Financial performance: "Life360 delivered excellent results for the quarter as we set new records in business and financial performance and completed our US IPO ... Adjusted EBITDA was positive for the seventh consecutive quarter, increasing to $11 million from $5.7 million in the prior year." – CEO Chris Hulls and CFO Russell Burke

Market trends and penetration: "We achieved impressive audience growth, increasing our free member base by 4.3 million monthly active users reaching 70.6 million overall, a 31% year-on-year increase ... We believe that we are very early 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." – CEO Chris Hulls

Advertising strategy: "Earlier this year, we launched a new advertising offering which is now live for US members and available soon globally. Importantly, we are focusing on providing our members with contextually relevant ads that enhance the user experience by leveraging our extensive first party location data ... We continue to expect a noticeable 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 at the Trade Desk, LiveRamp, PubMatic and Google Ad Manager." – CEO Chris Hulls

Earnings outlook: "The company expects to continue to be adjusted EBITDA positive on a quarterly basis going forward to achieve a positive EBITDA in Q4, reflecting our usual peak earnings, and to be consistently EBITDA positive on a quarterly basis in 2025." – CEO Chris Hulls

Analyst Q&A Call Highlights

Mark Mahaney (Stifel) about the sustainability of accelerating net adds in Paying Circles: "If you think about the overall trends in millennials aging into our category, people becoming more aware of the product international in particular. We do think there are long term overall wins that are back. We have been also investing and we've been having more optimizations this year, improving our funnel." – CEO Chris Hulls

Maria Ripps (Cannacord) re accelerating core subscription growth in the second half: "We have our seasonality and we normally get a nice wave around back to school, which is obviously happening right now. We have more product optimizations. That's more of a steady drumbeat. We have some new features that we'll be launching in the second half." – CEO Chris Hulls

Mark Kelley (Stifel) re advertising business: "So, that is a very long arc. And to do that, it's -- we need to move beyond just giving banners, but really become a destination where people are coming to be matched with offers that are uniquely tied to the data we know about them." – CEO Chris Hulls

Wei (Jefferies) about ad revenue rollout and international expansion: "So, we're on right now with the basic banners for all US users. We're exploring what goes next internationally ... as it relates to video ads and things, that is not the direction we're going. Going back to the question of user trust, our lifeblood is our core free user base." – CEO Chris Hulls

This article was generated with the support of AI and reviewed by an editor.