What’s pulling Life360 (ASX:360) share price to a 6-month low?

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What’s pulling Life360 (ASX:360) share price to a 6-month low?

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Depicting Life360 Inc. (ASX:360) communication and location sharing app
Image source: © Sapannpix | Megapixl.com

Highlights

  • 360 share price is at its lowest in last six months on the ASX.
  • Life360 reports growth across key metrics in December quarter.
  • Omicron is said to have affected Life360’s app usage.

ASX-listed software company Life360 Inc. (ASX:360) shares have edged down to their lowest price in past six months. 360 shares closed trade at AU$7.090 each today, down 6.95% from previous close. While Life360 has reported growth in key metrics in the December quarter, its share price remains unaffected. Let’s try to understand what’s weighing down on the Life360 share price.

How was Life360’s December quarter?

  • Life360’s business has touched records across many key metrics. The global Monthly Active Users (GAMU) is more than double q-o-q.
  • The increase in subscribers led to a 46% y-o-y and the underlying annualised monthly revenue has grown 51% y-o-y.
  • Life360’s direct revenue has thus soared 62%, mostly driven by membership offering.

One qualitative fact here is that Omicron has had an impact on movement of its members impacting the software usage in its primary markets. However, Life360 believes the impact isa less significant as compared to previous Covid variants. In fact, Life360 claims to be experiencing accelerating growth in the US and other countries despite Omicron.

What is life360’s core offering?

  • Life360’s core offering, is its’ Life360 mobile app. The app helps families ensure safety, connectivity of their members.
  • It also offers a range of features for communication, driving safety and location sharing. The app has more than 35 million monthly active users (MAU) in December 2021, from over 195 countries.
  • Its business currently works on a subscription model and derives revenue from the same. It has in the recent past acquired two wearable businesses- Jiobit and Tiles Inc.
  • Both the businesses seem to have aligned well to life360’s. Both have even started contributing revenue in the December quarter.

How is Life360 planning to churn revenue in future?

  • Life360 believes that aggregated data analytics is a futuristic thing. It believes that the businesses are increasingly focused on data insights that do not come from device-level or user-level identifiers.
  • Recognising this fact, Life360 has signed a new partnership agreement with Placer.ai. Life360’s new partner is a well-known provider of anonymous aggregated data for analytics to retail ecosystem.
  • The partnership with Placer.ai shall thus mark the beginning of Life360’s exit from being a traditional data brokerage business to becoming a seller of aggregated insights. The partnership and business transition might also help Life360 reduce business risk.

Life360’s outlook-

Due to some potential implications of the US federal securities laws, the company has not provided any specific guidance for CY22. However, it seems confident that its business still can drive continued growth via its core subscription business.

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