Life360 Inc (ASX: 360) shares are tumbling on Tuesday.
In morning trade, the location technology company's shares are down 10% to $43.52.
This follows the release of the high-flying stock's third quarter update.
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Life360 shares tumble on results
Investors have been selling the company's shares today after it delivered another record result.
According to the release, Life360's total third quarter revenue came in at US$124.5 million. This represents a year on year increase of 34%.
This comprises total subscription revenue of US$96.3 million (up 34%), hardware revenue of US$11.3 million, and other revenue of US$16.9 million. The latter reflects increases in data and partnership revenue, which includes advertising revenue, and is primarily due to an increased number of partners and higher spend under existing arrangements.
Life360's subscription revenue growth was driven by a 3.7 million or 19% increase in monthly active users (MAU) to 91.6 million and a record 170,000 or 23% increase in Paying Circles to 2.7 million.
Average revenue per Paying Circle (ARPPC) increased 8% year on year to US$137.63. This was primarily due to U.S. price increases, a shift in product mix toward higher-priced offerings, and the introduction of higher-priced membership tiers across select international markets.
This led to Life360's annualised monthly revenue (AMR) coming in 33% higher year on year to US$446.7 million.
Earnings growth accelerates
Life360's earnings growth continues to accelerate as its scales.
Its adjusted EBITDA was $24.5 million for the three months, which is an increase of 174% over the prior corresponding period.
The company also recorded positive operating cash flow of US$26.4 million, which is up 319% from 12 months ago.
This led to Life360 ending the period with cash, cash equivalents, and restricted cash of US$457.2 million.
Management commentary
Life360's CEO, Lauren Antonoff, was pleased with the quarter. She stated:
Life360 delivered another record quarter in Q3 as more families made us part of their daily routines during the back-to-school season, driving strong gains in Paying Circles. Our strategy to build a platform that's relevant to more families in more ways continues to deliver— expanding from location and safety into richer everyday experiences that keep families connected and protected. We're leaning into momentum across the U.S. and international markets with the launch of our Pet GPS that puts furry family members on the map in the U.S., Canada, the U.K., Australia and New Zealand as we head into the holiday gifting season. With significant runways for growth and innovation ahead, we're just getting started.
This sentiment was echoed by Life360's CFO, Russell Burke. He added:
Revenue grew 34% year-over-year (YoY) to $124.5 million and Adjusted EBITDA rose 174% YoY to $24.5 million, reflecting disciplined expense management and durable unit economics. While Q3 standalone hardware gross profit and margin were affected by tariff-related costs, we have taken steps to mitigate that impact going forward.
Burke then revealed that Life360 is upgrading its guidance for FY 2026. He said:
With strong core subscription performance, a resilient balance sheet, and our tenth consecutive quarter of positive operating cash flow, we're raising full-year guidance for both revenue and Adjusted EBITDA.
It now expects consolidated revenue of US$474 million to US$485 million, increased from its prior guidance of US$462 million to US$482 million.
Positive adjusted EBITDA of US$84 million to US$88 million is now expected. This is increased from US$72 million to US$82 million previously.
Acquisition
In a separate announcement, Life360 revealed that it has signed an agreement to acquire Nativo for US$120 million in cash and stock.
It is a leading advertising technology company that helps brands create and distribute engaging, premium ad experiences across premium publisher sites. This is expected to advance Life360's advertising strategy by uniting its rich first-party family and location insights with Nativo's broad publisher network and advanced advertising technology.
