- Revenue: $78.2 million, up 15% year on year.
- Subscription Revenue: $61.6 million, up 19% year on year.
- Core Life360 Subscription Revenue: $57 million, up 23% year on year.
- Hardware Revenue: $10.2 million, up 2% year on year.
- Other Revenue: $6.5 million, in line with the prior period.
- Gross Profit: $60 million, up 20% year on year.
- Gross Margin: 77%, up from 73% in the prior-year period.
- Operating Expenses: Increased 3% year on year.
- Net Loss: $9.8 million, improved from a loss of $14.1 million in Q1 '23.
- Adjusted EBITDA: $4.3 million, up from $0.5 million in Q1 '23.
- EBITDA Loss: $4.1 million, improved by $8.5 million from Q1 '23.
- Cash, Cash Equivalents, and Restricted Cash: $74.6 million, up $3.9 million from Q4 '23.
- Net Cash Provided by Operating Activities: $10.7 million.
- Net Cash Used in Investing Activities: $1.1 million.
- Net Cash Used in Financing Activities: $5.7 million.
- Net Paying Circle Additions: 96,000, up from 54,000 in Q4 '23.
- Monthly Active Users: 4.9 million new users, a new first-quarter record.
- US Paying Circles: Increased 16% year over year.
- International Paying Circles: Increased 39% year over year.
- UK Paying Circles: Increased 23% year over year.
- Australia and New Zealand Paying Circles: Increased 47% year over year.
- Global ARPPC: Increased 3% year over year.
- US ARPPC: Increased 8% year over year.
- March AMR: Increased 19% year on year.
Release Date: May 10, 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 a new first-quarter record with net Paying Circle additions nearly doubling to 96,000 from 54,000 in Q4 '23.
- The company saw a significant increase in monthly active users, with 4.9 million new users, marking another first-quarter record.
- Life360 Inc (ASX:360) reported a 15% year-over-year revenue growth, reaching $78.2 million in Q1 '24.
- The company delivered its sixth consecutive quarter of positive adjusted EBITDA and fourth consecutive quarter of positive operating cash flow.
- Life360 Inc (ASX:360) is making meaningful progress towards profitability, reducing its net loss and achieving positive adjusted EBITDA of $4.3 million for the quarter.
Negative Points
- Q1 net hardware units shipped were modestly down year over year for the standalone hardware business.
- Average selling price for hardware was slightly lower year over year due to a higher mix of multi-pack units.
- The company experienced a modest uptick in churn in the UK due to a price increase for existing subscribers.
- Initial advertising revenue in Q1 '24 was minimal due to a measured approach, indicating a slow start for the new advertising initiative.
- Life360 Inc (ASX:360) reported a net loss of $9.8 million for the quarter, despite improvements from the previous year.
Q & A Highlights
Q: Can you provide more color on the core drivers of the momentum in MAUs and net adds, especially given that user acquisition spend has been flat to down this year?
A: The growth is primarily driven by millennials, who are now having kids that fit our target demographic. Additionally, our international expansion and improved infrastructure have contributed significantly. Our new CMO has also optimized our marketing efficiency, opening new channels for user acquisition. (Chris Hulls, CEO)
Q: Regarding the full-year EBITDA guidance, what are your thoughts on reinvestment given that net adds are tracking ahead of expectations?
A: We are back-half loaded with many plans for H2. We remain committed to showing financial leverage and achieving statutory breakeven next year, so we are staying the course without changing guidance. (Chris Hulls, CEO; Russell Burke, CFO)
Q: Can you quantify the initial investment in Hubble Network and explain how the partnership might work in terms of sharing OpEx and CapEx?
A: The initial investment will be in the single-digit millions. Hubble will handle most of the development and sales work, leveraging our existing assets with minimal effort from our side. This partnership is similar to our other indirect revenue streams like Arity and Placer. (Chris Hulls, CEO)
Q: Can you clarify the potential secondary sell-down in the proposed US IPO? How many shares might be included?
A: We can't provide specific numbers yet, but our focus is on minimizing dilution. The equity grants to staff are through RSUs, which are separate from the potential secondary sell-down. (Russell Burke, CFO)
Q: How far off are we from first revenue with Hubble?
A: We expect to start seeing revenue from Hubble in 2025. The initial enterprise use cases will not require a full satellite constellation, making it feasible to start generating revenue sooner. (Chris Hulls, CEO)
Q: Can you explain the advantages of Bluetooth over existing solutions for the Hubble Network?
A: The key advantages are cost, battery efficiency, and network coverage. Hubble's technology uses existing Bluetooth chips, avoiding the need for custom modems and hardware, which reduces costs and extends battery life. (Chris Hulls, CEO)
Q: What is the expected impact of the new Tile product launch for the holiday season?
A: The new product launch is expected to help maintain our placement in retailers and support our market share growth. While it may not result in a huge lift in sales, it will refresh the product line and contribute to our overall strategy. (Russell Burke, CFO)
Q: How is the ramp-up of the advertising revenue progressing?
A: We expect to see real revenue from advertising in the second half of this year. The build-out of the infrastructure is ahead of schedule, but the major impact will be seen in the following years as we continue to develop and optimize our ad capabilities. (Chris Hulls, CEO; Russell Burke, CFO)
Q: Are you hiring a key executive to spearhead the advertising business?
A: Yes, we are currently interviewing candidates for the VP of Ad Sales position. We are looking externally and have seen robust demand for this role due to the uniqueness of our first-party data. (Chris Hulls, CEO)
Q: What are the primary drivers for the back-ended earnings this year?
A: The primary drivers include the seasonality of hardware sales, the new product launch for Tile, and the ramp-up of advertising revenue. Additionally, the back-to-school season will provide a boost in Q3. (Russell Burke, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
