Life360 (ASX:360) share price pushes higher after reaching 35.5m users in Q4

Life360 shares are rising today following another strong quarter…

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Key points

  • Life360’s strong revenue and user growth continued in the fourth quarter
  • The company’s monthly active users has now reached 35.5 million
  • Annualised monthly revenue up 51% to US$135.7 million and ahead of guidance

The Life360 Inc (ASX: 360) share price is pushing higher on Thursday morning.

In early trade, the family-focused technology company’s shares are up 2% to $7.80.

Life360 share price higher after reporting further Q4 growth

  • Underlying Q4 revenue growth of 46% to US$33.1 million excluding acquisitions and 54% to US$35 million including Jiobit acquisition
  • Full year revenue of US$112.6 million, which is at the top end of its guidance range of US$109 million to US$113 million
  • Global monthly active users (MAU) reached 35.5 million at the end of December and US MAU reached 23.7 million
  • Annualised monthly revenue (AMR) ahead of guidance and up 51% year on year at US$135.7 million
  • Underling earnings before interest, tax, depreciation and amortisation (EBITDA) loss was better than guidance at US$13.1 million

What happened in the fourth quarter and full year?

Life360 continued its strong form during the fourth quarter, delivering further top line and user growth.

For the three months ended 31 December, the company’s revenue grew 51% over the prior corresponding period to US$35 million. This took its full year revenue to US$112.6 million, which compares to its guidance range of US$109 million to US$113 million.

Things were even better for its annualised monthly revenue (AMR), which came in ahead of guidance. Life360’s AMR grew 51% year on year at US$135.7 million. This compares to its guidance of US$125 million to US$130 million.

This strong growth was underpinned by a further increase in its global user base, which rose 1.7 million during the fourth quarter to 35.5 million. This represents a year on year increase of 34%.

The strongest growth was achieved in the US, with user numbers growing 1.5 million or 7% to 23.7 million. International users were 11.8 million at the end of December, which was up 1% quarter on quarter and 24% year on year.

Another positive is the increasing monetisation of Life360’s user base. Global paying circles grew 11% during the quarter and 39% year on year to 1.2 million. And even better is the fact that the revenue it is generating from these circles is improving on a per circle basis. Average revenue per paying circle grew 3% quarter on quarter and 22% year on year.

And while this couldn’t stop Life360 from posting an EBITDA loss of US$13.1 million for the year, this was better than its guidance for a loss of US$14 million to US$18 million.

Life360 finished the year with a cash balance of US$231.3 million.

Management commentary

Life360’s Chief Executive Officer, Chris Hulls, said: “This was another milestone quarter for Life360, where we set new records across many key metrics, and made significant progress on our strategic roadmap with the acquisition of Tile. We delivered our third consecutive quarter of record subscriber additions, reaching more than 1.2 million Paying Circles, with underlying revenue growth of 46% year-on-year and underlying Annualised Monthly Revenue growth of 51%. Direct revenue increased 62%, driven by the continued success of our Membership offering, providing a strong leading indicator of our growth momentum.”

“Monthly Active Users increased 5% from the third quarter to 35.5 million. Life360 is experiencing accelerating growth despite the impact of the Omicron variant in the US and other countries. While Omicron has had some impact on movement – and therefore membership usage – in our primary markets this appears to be much less significant than previous COVID-19 variants. Year-on-year US MAU increased 39% and international MAU grew 24%. In the face of challenging external circumstances, we are seeing continued strengthening of retention and engagement from our users, with the proportion of Returning Monthly Active Users (RMAU) reaching a new record,” he added.

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Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Life360, Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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