- Revenue Growth: 33% year-over-year increase.
- Core Subscription Revenue: 52% year-over-year increase.
- Consolidated Subscription Revenue: 44% year-over-year increase.
- Operating Expenses: 4% year-over-year increase.
- Net Loss Improvement: Greater than $60 million year-over-year improvement.
- Adjusted EBITDA: First full year of positive adjusted EBITDA.
- Operating Cash Flow: First full year of positive operating cash flow.
- Monthly Active Users (MAU): 26% year-over-year increase to over 61 million.
- International MAU Growth: 40% year-over-year increase.
- Global Paying Circles: 21% year-over-year increase to 1.8 million.
- Global ARPPC: 25% year-over-year increase.
- GAAP Hardware Revenue: 21% year-over-year increase.
- Non-GAAP Hardware Revenue: 14% year-over-year increase.
- GAAP Hardware Margins: Improved to 19%.
- Other Revenue: $25.5 million, in line with guidance.
- Non-GAAP Gross Profit: $226.8 million, 48% increase.
- Non-GAAP Gross Margin: Increased from 67% to 75%.
- Non-GAAP Subscription Margins: Increased from 81% to 84%.
- Operating Costs as Percentage of Revenue: Declined to 68% from 85%.
- Personnel Costs as Percentage of Revenue: Declined from 37% to 27%.
- Adjusted EBITDA: $20.6 million, $60.7 million improvement from prior year.
- Net Loss: $28.2 million, significant improvement from prior year.
- Operating Cash Flow: $7.5 million, $65 million improvement year-over-year.
- Cash, Cash Equivalents, and Restricted Cash: $70.7 million at year-end.
Release Date: February 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Life360 Inc (ASX:360, Financial) achieved its first full year of positive adjusted EBITDA and operating cash flow.
- The company saw a 26% year-over-year increase in monthly active users (MAU) to over 61 million.
- International growth was particularly strong, with a 40% year-over-year increase in MAU.
- Life360 Inc (ASX:360) reported a 33% year-over-year increase in revenue.
- Core subscription revenue grew by 52% year-over-year, driving consolidated subscription revenue growth of 44%.
Negative Points
- Despite the positive EBITDA, Life360 Inc (ASX:360) still reported a net loss of $28.2 million.
- GAAP operating expenses increased by 4% year-over-year.
- The company experienced a one-time spike in churn due to price increases for legacy customers.
- There was a modest year-on-year decline in other revenue, reflecting the transition to a single data partnership.
- The advertising strategy is still in its early stages, with significant setup costs expected to impact short-term profitability.
Q & A Highlights
Q: Can you provide a sense of the split between core subscription revenue growth versus hardware versus other revenue sources in 2024?
A: We expect core subscription growth of more than 20% in 2024, hardware growth on a similar trajectory, and a small amount for advertising. Other revenue will be fairly stable. β Chris Hulls, Co-Founder & CEO
Q: Where do you see the greatest areas of cost reinvestment in 2024, and how material could the advertising investment be versus the revenue?
A: Over the long run, we think the monetization of our free users could equal subscription revenue. Advertising has a much quicker payback and lower risk compared to new verticals. We expect meaningful contributions with high margins this year. β Chris Hulls, Co-Founder & CEO
Q: Can you unpack the advertising opportunity a bit more? Are you looking to use a partner, and will it start in the US or internationally?
A: We are exploring various networks and new ways to monetize our data. We have already started testing internationally and seen no negative user impact. The initial focus will be in the US due to higher CPMs. β Chris Hulls, Co-Founder & CEO and Russell Burke, CFO
Q: Can you provide some qualitative comments on the UK tier Membership launch?
A: The launch has gone as expected with no big surprises. We have seen the expected churn and reduced conversion in new customers, similar to the US experience. β Chris Hulls, Co-Founder & CEO
Q: What is the timeline for achieving the aspirational $1 billion revenue target?
A: We view it as a five-year plan. Internally, we have even bigger aspirations, aiming to be the number one brand for making everyday life better for families. β Chris Hulls, Co-Founder & CEO and Russell Burke, CFO
Q: Can you explain the setup costs for the advertising strategy and whether they will be capitalized?
A: The setup costs will be expensed and are included in our guidance. They primarily relate to technology and personnel costs. β Russell Burke, CFO
Q: Can you remind us of the terms of the deal with Placer.ai and your intentions for renegotiation?
A: The deal formally expires in 2025, but we are confident it will be extended. The value of our data has increased, and we see the relationship growing stronger. β Chris Hulls, Co-Founder & CEO
Q: How does the advertising model affect your sales and marketing strategy?
A: In the short term, we are not doing much, but over time, it will factor into our LTV model. We expect to see higher leverage in 2025 as advertising revenue grows. β Chris Hulls, Co-Founder & CEO
Q: What are the next most pertinent product initiatives beyond advertising?
A: We will focus on updated hardware, Jiobit integration, and enhancing the free user experience. New verticals like fintech for kids may come in 2025 or 2026. β Chris Hulls, Co-Founder & CEO
Q: How will advertising be monetized for free and paid users?
A: Free users will see basic banner ads, while paid users will have a choice to control their experience. We aim to balance user experience with monetization. β Chris Hulls, Co-Founder & CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
