Life360 shares soar on strong Q2 results
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More news: After Life360's Nasdaq equity performed well on Thursday, the company's share price shot up on the ASX on Friday.
Life360 shares were up 20.17% on the ASX in early trading, to an all-time high of $17.85. It is within sight of a $4 billion valuation, currently standing at $3.9 billion.
What they said: RBC Capital Markets analyst Wei-Weng Chen wrote in a research note that "there is a lot to like" in Life360's second-quarter results.
He pointed, in particular, to the increased guidance, stronger-than-expected operating cash flow and a record new number of paying customers.
Life360 surges on Nasdaq on record Q2 results
The news: Life360 shares surged after it reported a record number of monthly active users and subscription revenue in its first earnings report since listing on the Nasdaq.
The numbers: Life360 reported 70.6 million users in the June quarter, a 31% rise from the same quarter in 2023. Of those, two million are paying users. That plus sales of the company's Tile hardware and small-but-growing advertising sales led to revenue of USD84.4 million ($128.08 million), a 20% jump year-on-year.
Life360's stock spiked 10% during Thursday's Nasdaq trading day, to USD32 and during after hours trading was up another 3.58%.
Life360 upgraded its guidance for the year by boosting revenue expectations from up to USD370 million to up to USD378 million. Around a quarter of that is from expected rise in advertising sales.
The context: Life360 is based in California but listed on the ASX in 2019. In May it became a dual-listed company by launching an offering on the Nasdaq.
The company's stock has surged 89% on the ASX in the past year due to both international expansion and an anticipated advertising push, which can monetise the vast majority of Life360 users who do not pay to use the app.
At present, however, advertising remains a small part of the business — crammed in the "other revenue" segment of its balance sheet. Speaking to Capital Brief in May, CEO Chris Hulls said it would take "many years" for advertising to become a major part of Life360.
Life360 is not yet a profitable company.
What they said: "Q2'24 was excellent for Life360, as we set new records in business and financial performance, and completed our US IPO," Hulls said.
"Earlier this year, we launched a new advertising offering, which is now live for US members, and available soon globally."
"Following the rapid development of our programmatic ad capability, and positive signals in early testing with both users and advertisers, we initiated our direct sales efforts in June. Revenue from our ad offering has continued to expand in Q2'24, and we have been actively engaging with multiple prospective large advertisers and potential partners which align well with our loyal user base of families."
Life360 chief financial officer Russel Burke said the company was on track to reach "sustained positive EBITDA in 2025."
The sources: ASX announcement, RBC Capital Markets
