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Life360 Inc, (ASX: 360), recently unveiled its quarterly report, sparking a notable reaction in the market. The company, specialising in location technology, witnessed its share price take a downturn, slipping by around 4% to AU$14.90 in the afternoon trading hours of Friday. The reason behind this decline lies in investors’ response to the company's financial performance for the quarter.
The report revealed a 15% year-on-year surge in revenue, totaling US$78.2 million, predominantly fueled by a robust 23% escalation in core subscription revenue, reaching US$57 million. Despite the positive revenue growth, Life360 still reported a loss in its earnings before interest, taxes, depreciation, and amortisation (EBITDA), standing at US$4.1 million, albeit an improvement from the previous quarter.
One of the key drivers behind these figures was the significant expansion in subscription base, with the global monthly active users (MAU) increasing by 4.9 million, totaling 66.4 million. Additionally, the company witnessed a substantial rise in its global Paying Circle metric, adding 96,000 net new paying members during the quarter, reaching a total of 1.9 million. This surge in user base, particularly during a seasonally slower period for MAU growth, underscores the company's resilience and appeal.
Chris Hulls, the co-founder and CEO of Life360, expressed satisfaction with the record-breaking quarter, emphasising the notable increase in net Paying Circle additions and MAUs. He remains optimistic about the company's growth trajectory, citing its vast global market opportunity and ongoing efforts in free member engagement and international expansion. Hulls further highlighted the company's continued momentum into the second quarter, with strong net Paying Circle additions recorded in April.
Despite the positive performance, the market reaction was somewhat muted, possibly due to the company's decision to maintain its guidance for FY 2024. Life360 expects to report consolidated revenue between US$365 million to US$375 million and adjusted EBITDA ranging from US$30 million to US$35 million, with an anticipated EBITDA loss of US$8 million to US$13 million. The lack of upward revision in guidance might have disappointed some investors, leading to the observed decline in share price.
