Life360 shares lead ASX 200 losses as Nativo buyout weighs
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More news: Life360 was the worst performer on the ASX 200 after morning trade, despite upgrading its full-year guidance following double-digit revenue growth in the third quarter.
Shares were down 7.4% to $44.74 at 12:15pm AEDT.
E&P analyst Annabel Khun said she "would expect the stock to be supported today" after the Q3 result outstripped consensus estimates across the board.
RBC Capital Markets analyst Wei-Weng Chen also called the Q3 performance "very strong" and said the share price decline could be attributed to the USD120 million acquisition of advertising technology company Nativo, also announced this morning.
Chen said the selloff could also be due to softer-than-expected monthly average users growth and net additions below market forecasts.
Life360 agrees to buy Nativo for $184m, hikes earnings guidance
The news: App developer Life360 has agreed to acquire advertising technology company Nativo for USD120 million ($184 million).
The group also announced its third-quarter results, which included an upgrade to its FY25 earnings guidance.
The context: Life360 said the Nativo acquisition will advance its advertising strategy by combining its first-party family and location insights with Nativo's publisher network and advertising technology. The strategy aims to help brands reach families "in more relevant places and with more relevant messages", both inside the Life360 app and offsite.
Life360 also upgraded its full-year earnings guidance. It now expects consolidated revenue of USD474-485 million, up from prior guidance of USD462-482 million. Guidance for each of its revenue segments — subscription, hardware and 'other' — were also upgraded.
The company expects adjusted EBITDA to be USD84-88 million, increased from USD72-82 million.
The guidance upgrades followed a third quarter where revenue jumped 34% year on year to USD124.5 million and net income rose 27% year on year to USD9.8 million.
What they said: "Acquiring Nativo is an exciting step forward as we build a durable, mission-aligned advertising business," said Life360 CEO Lauren Antonoff.
"This acquisition accelerates our roadmap, adding capabilities that typically take platforms years to develop.
"It allows us to scale faster and bring high-quality, contextual advertising to market sooner - all while enhancing, not disrupting, the Life360 member experience."
Nativo's founder and CEO Justin Choi commented: "At Nativo, we've spent years building technology that makes advertising more effective by enabling ads to be seamlessly integrated, relevant, and non-interruptive to the user experience.
"Joining Life360 allows us to apply that philosophy at scale. Life360 supports the most important network in our lives, our families. Together we can help brands connect with them in meaningful ways within the content and apps they rely on every day."
