Life360 Inc (ASX: 360) investors are abandoning the US software provider after it revealed heavy losses in its results for the 2021 calendar year.
After the first 20 minutes of trade on Thursday, the Life360 share price had plunged a whopping 26% to $4.99. It closed Wednesday at $6.57.
The company's financial year ends on 31 December each year.
What did the company report?
- Statutory net loss for the full-year ending on 31 December was US$33.6 million, more than double the US$16.3 million in 2021
- Underlying EBITDA loss was US$13.1 million, almost doubled from US$7 million in 2021
- US$12.2 million of cash was used in operating activities, compared to US$7.3 million one year prior
- Revenue was up 40%, hitting US$112.6 million
What else happened in the financial year?
Life360 started as a mobile app that allows parents to track their teeangers' whereabouts. During 2021, the company made two acquisitions — Tile and Jibit — to broaden out its offering as a "family services" software suite.
COVID-19 continued to disrupt mobility for Americans with the Delta and Omicron variants keeping young and old folks at home.
There was also increasing privacy and stalking concerns about Apple Inc (NASDAQ: AAPL)'s AirTag products, which Life360 chief Chris Hulls admitted was a drag on the whole tracking tech category.
What did management say?
Understandably Hulls was focusing on subscriber and revenue growth, rather than the profitability of the business.
"We achieved accelerating operational metrics across the business, with 3 consecutive quarters of record subscriber additions," he said.
"We finished the year with annualised monthly revenue of US$135.7 million, a year-on-year increase of 51% and a strong leading indicator of the growth opportunity ahead."
According to Hulls, Life360 is in a "very strong financial position", currently holding US$94 million of cash and cash equivalents.
"Global monthly active users increased 34% year-on-year, with the US delivering growth of 39%," he said.
"Retention and engagement from our users continue to grow, with the proportion of returning monthly active users (RMAU) reaching a new record. Our membership model benefited from improving conversion to paid, with a 97% year-on-year increase in conversion rates, reflecting the investment we have undertaken in the user experience."
What's next?
Citing US securities regulations, Life360 declined to provide any guidance for 2022.
"After a strong CY21 performance, we are confident in our ability to drive continued growth, in particular in our core Life360 subscription business," the company stated.
"We anticipate that we will return to providing guidance as soon as we can do so in ways that do not potentially raise US securities law implications."
Life360 share price snapshot
Life360 shares were a darling of growth and tech fans for much of 2021, but it has lost half of its value this year so far.
The stock has lost 65% since mid-November. It had gained 248% in just 11 months prior to that.
