ASX 200 stock surges 11% on mega revenue gains

This ASX 200 tech company has just released its 3Q FY23 update… and the market likes it.

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ASX 200 tech stock Life360 Inc (ASX: 360) soared by 11.3% in early trading on Wednesday after the company released its 3Q FY23 results.

The Life360 share price hit $9.34 as investors digested the numbers, which include a near-40% boost in total revenue over the quarter.

The ASX 200 stock has since settled back to $8.78 at the time of writing.

Life360 is the company behind the Life360 global app, a real-time location-sharing app for families.

Let's take a look at the unaudited numbers released by Life360 today.

Life360 share price surges on 40% revenue uplift

Here are the highlights of the report:

  • Total revenue of $78.6 million, up 38% on the prior corresponding period (pcp) of 3Q FY22
  • Annualised monthly revenue of $259.1 million, up 41% pcp
  • Third consecutive quarter of positive adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) at $5.5 million
  • Second consecutive quarter of positive operating cash flow (OCF) at $4.1 million
  • Net loss of $6.5 million
  • Cash equivalents and restricted cash of $63.7 million as of 30 September.

What did Life360 management say?

Life360 co-founder and CEO Chris Hulls emphasised the increase in subscriber numbers over the period.

Hulls said:

Life360 has delivered an exceptional quarter with net subscriber additions of 118 thousand, a record for Q3, and just shy of our all-time record of 119 thousand in Q4'21, which was prior to our nearly 50% price increase, and benefited from the post-COVID reopening.

The 17% year-on-year growth was underpinned by all-time record international subscriber additions, up 44% YoY. This impressive growth bodes well for the international rollout of our Triple Tier Membership offering which went live in the UK in early October, with Australia now planned for the first half of CY24.

Overall we have seen continued outperformance from predominantly English speaking countries (Canada, UK, and Australia) which in aggregate saw Paying Circles increase 52% YoY.

What's next for this ASX 200 stock?

Life360 reaffirmed its CY23 guidance for more than 50% annual growth in core Life360 subscription revenue and consolidated revenue of between $300 million and $310 million.

The company increased its guidance for positive adjusted EBITDA to a range of $12 million to $16 million. That's up from the previous guidance of between $9 million and $14 million.

Life360 share price snapshot

The Life360 share price is up by 79.5% in the year to date and up 21.1% over the past 12 months.

The ASX 200 tech stock has vastly outperformed its peers.

The S&P/ASX 200 Index (ASX: XJO) is up 2.5% in the year to date and down 0.35% over the past 12 months.

The S&P/ASX 200 Information Technology Index (ASX: XIJ) is up 23.3% in 2023 and down 17.2% over the past 12 months.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. 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 Scott Phillips.

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