Le Lézard
Classified in: Science and technology, Business
Subjects: ERN, ERP

Life360 reports CY 2023 results


SAN FRANCISCO, Feb. 29, 2024 /PRNewswire/ -- San Francisco area-based Life360, Inc. (Life360 or the Company) (ASX: 360) today reported audited financial results for the quarter and year ended December 31, 2023. Life360 Co-founder and Chief Executive Officer Chris Hulls said: "We are incredibly proud that more than 61 million monthly active users (MAU) globally enjoy the peace of mind that comes with the location sharing and safety features of Life360. In CY23 we made significant strides in our member experience, showing our users what their family members are up to, whether they're driving, walking or biking. We put pets and other valuables on the map with Tile, all in the service of our mission to keep people close to the ones they love.

"At the same time we made meaningful progress on our path to profitability as we significantly reduced our net loss, and achieved a major milestone by delivering our first full year of positive Adjusted EBITDA1 and Operating Cash Flow. We are excited to continue building on our leading global position in location sharing, and see exciting opportunities in CY24 and beyond to broaden our reach and deepen engagement with our members. We look forward to bringing the benefits of our subscriptions to more markets globally, and creating new revenue streams that utilize the scale and quality of our member base.

"In 2023, we delivered on our commitment to balance fiscal responsibility and prudent investment to position the business for long-term success. We delivered YoY revenue growth of 33% while GAAP operating expenses increased only 4% YoY. We met or exceeded all of the guidance metrics we provided to the market for CY23."

Looking forward to CY24, we are excited to announce the creation of a new advertising revenue stream that offers partners unparalleled reach to Life360's enormous free user base, and more than 20 million daily active users (DAU) connecting with their families and friends. We have consistently spoken of the potential that our investment in the core user experience, and the scaling of our MAU base, would provide for the future. We are encouraged by the success of early testing and see the opportunity to deliver an attractive platform to advertisers, while continuing to provide a great user experience.

CY23 Financial Highlights 

CY23 Operating Highlights and CY24 Outlook




1

Adjusted EBITDA is a Non-GAAP measure. For the definition of Adjusted EBITDA and the use of this Non-GAAP measure, as well as a reconciliation of Net Loss to Adjusted EBITDA, refer to the Non-GAAP Financial Measures section below.




2

Core Life360 subscription revenue is defined as subscription revenue derived from the Life360 mobile application, excluding certain revenue adjustments related to bundled Life360 subscription and hardware offerings, for the reported period.

Key Performance Indicators

(in millions, except ARPPC, ARPPS, and ASP)

Q4

2023

Q4

2022

% YoY

CY

2023

CY

2022

% YoY

Life360 Core3







Monthly Active Users (MAU) - Global

61.4

48.6

26 %

61.4

48.6

26 %

U.S.

36.8

30.9

19 %

36.8

30.9

19 %

International

24.6

17.6

40 %

24.6

17.6

40 %

Australia

1.9

1.4

36 %

1.9

1.4

36 %

Paying Circles - Total

1.8

1.5

21 %

1.8

1.5

21 %

U.S.

1.3

1.2

14 %

1.3

1.2

14 %

International

0.5

0.3

43 %

0.5

0.3

43 %

Average Revenue per Paying Circle (ARPPC)

$  124.17

$  105.79

17 %

$  121.09

$    96.95

25 %








Life360 Consolidated







Subscriptions

2.4

2.1

17 %

2.4

2.1

17 %

Average Revenue per Paying Subscription (ARPPS)

$  102.17

$    87.54

17 %

$    99.53

$    80.63

23 %

Net hardware units shipped (standalone)4

1.7

1.7

1 %

4.0

3.6

12 %

Average Sale Price (ASP)

$    11.50

$    11.48

? %

$    13.48

$    13.47

? %

Annualized Monthly Revenue (AMR)5

$    274.1

$    224.4

22 %

$    274.1

$    224.4

22 %




3

Life360 Core metrics relate solely to the Life360 mobile application.




4

Net hardware units shipped (standalone) represents the number of tracking devices sold during the period, excluding hardware units related to bundled Life360 subscription and hardware offerings, net of returns by our retail partners and directly to consumers.




5

We use Annualized Monthly Revenue ("AMR") to identify the annualized monthly value of active customer agreements at the end of a reporting period. AMR includes the annualized monthly value of subscription, data and partnership agreements. All components of these agreements that are not expected to recur are excluded.

Operating Results

Revenue


Three Months Ended December 31,


Year Ended December 31,


2023


2022


2023


2022

($ millions)

(unaudited)





Subscription revenue

$             59.8


$             45.4


$           220.8


$           153.3

Hardware revenue

21.1


19.6


58.2


47.9

Other revenue

6.1


6.3


25.5


27.1

Total revenue

$             87.0


$             71.3


$           304.5


$           228.3

Annualized Monthly Revenue - December

$           274.1


$           224.4


$           274.1


$           224.4

Gross Profit


Three Months Ended
December 31,


Year Ended December 31,


2023


2022


2023


2022

($ millions, except percentages)

(unaudited)





Gross Profit

$       60.1


$       45.0


$     222.6


$     148.6

Gross Margin

69 %


63 %


73 %


65 %

Gross Margin (Subscription Only)

86 %


83 %


86 %


80 %


Three Months Ended
December 31,


Year Ended December 31,


2023


2022


2023


2022

($ millions)

(unaudited)





Research and development

$          26.0


$          25.2


$        101.0


$        102.5

Sales and marketing

25.7


22.0


99.1


92.4

Paid acquisition & TV

7.5


5.2


28.9


26.5

Other sales and marketing

7.0


8.1


27.5


34.5

Commissions

11.1


8.7


42.7


31.4

General and administrative

12.8


10.5


52.6


48.1

Total operating expenses

$          64.5


$          57.7


$        252.6


$        243.0




6

Life360 Non-GAAP Hardware Revenue is calculated using Hardware Revenue, GAAP. For a reconciliation between Hardware Revenue, GAAP and Non-GAAP Hardware Revenue, refer to the Revenue (GAAP to Non-GAAP reconciliation) section below. 

EBITDA and Adjusted EBITDA7


Three Months Ended
December 31,


Year Ended December 31,


2023


2022


2023


2022

($ millions)

(unaudited)

Net Loss

$          (3.1)


$        (12.3)


$        (28.2)


$        (91.6)

EBITDA

(2.0)


(10.3)


(20.8)


(85.2)

Non-GAAP Adjustments

10.9


12.0


41.4


45.1

Adjusted EBITDA

$            8.9


$            1.6


$          20.6


$        (40.1)




7

EBITDA and Adjusted EBITDA are non-GAAP measures. For definitions of EBITDA and Adjusted EBITDA, a description of these non-GAAP measures' use, and a reconciliation of Net Loss to EBITDA and Adjusted EBITDA, refer to the Non-GAAP Financial Measures section below.

Balance Sheet and Cash Flow 


Three Months Ended
December 31,


Year Ended December 31,


2023


2022


2023


2022

($ millions)

(unaudited)

Net cash provided by (used in) operating activities

$            9.0


$          (2.2)


$            7.5


$        (57.1)

Net cash provided by (used in) investing activities

(1.0)


2.5


(2.2)


(111.6)

Net cash provided by (used in) financing activities

(0.9)


31.2


(25.0)


27.7

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

7.1


31.5


(19.7)


(141.0)

Cash, Cash Equivalents, and Restricted Cash at the End of the Period

$          70.7


$          90.4


$          70.7


$          90.4

Earnings Guidance8

For CY24 Life360 expects to deliver the following metrics which include both the early revenue, and set-up costs, for the new advertising business:

The company expects to continue to be Adjusted EBITDA positive on a quarterly basis going forward, and to achieve positive EBITDA in the first half of CY25.




8

With respect to forward looking non-GAAP guidance, we are not able to reconcile the forward-looking non-GAAP adjusted EBITDA measure to the closest corresponding GAAP measure without unreasonable efforts because we are unable to predict the ultimate outcome of certain significant items, which are fluid and unpredictable in nature. In addition, the Company believes such a reconciliation would imply a degree of precision that may be confusing or misleading to investors. These items include, but are not limited to, litigation costs, convertible notes and derivative liability fair value adjustments, and gains/losses on revaluation of contingent consideration. These items may be material to our results calculated in accordance with GAAP. 




9

EBITDA and Adjusted EBITDA are non-GAAP measures. For definitions of EBITDA and Adjusted EBITDA, a description of these non-GAAP measures' use, and a reconciliation of Net Loss to EBITDA and Adjusted EBITDA, refer to the Non-GAAP Financial Measures section below.

Investor Conference Call

A conference call will be held today at 9.30am AEDT, Friday 1 March 2024 (Thursday 29 February U.S. PT at 2.30pm). The call will be held as a Zoom audio webinar.

Participants wishing to ask a question should register and join via their browser here. Participants joining via telephone will be in listen only mode.

Dial in details

Australia: +61 2 8015 6011
U.S.: +1 669 444 9171
Other countries: details
Meeting ID: 951 2669 6840

A replay will be available after the call at https://investors.life360.com 

Authorization

Chris Hulls, Director, Co-Founder and Chief Executive Officer of Life360 authorized this announcement being given to ASX.

About Life360

Life360 delivers peace of mind for families of all types. The company's category leading mobile app and Tile tracking devices help members protect the people, pets and things they care about most, with a range of services including location sharing, safe driver reports, and crash detection with emergency dispatch. Life360 is based in San Mateo and has approximately 61 million monthly active users (MAU) located in more than 150 countries. For more information, please visit life360.com and Tile.com.

Life360's CDIs are issued in reliance on the exemption from registration contained in Regulation S of the US Securities Act of 1933 (Securities Act) for offers of securities which are made outside the US. Accordingly, the CDIs have not been, and will not be, registered under the Securities Act or the laws of any state or other jurisdiction in the US. As a result of relying on the Regulation S exemption, the CDIs are 'restricted securities' under Rule 144 of the Securities Act. This means that you are unable to sell the CDIs into the US or to a US person who is not a QIB for the foreseeable future except in very limited circumstances until after the end of the restricted period, unless the re-sale of the CDIs is registered under the Securities Act or an exemption is available. To enforce the above transfer restrictions, all CDIs issued bear a FOR Financial Product designation on the ASX. This designation restricts any CDIs from being sold on ASX to US persons excluding QIBs. However, you are still able to freely transfer your CDIs on ASX to any person other than a US person who is not a QIB. In addition, hedging transactions with regard to the CDIs may only be conducted in accordance with the Securities Act.

Forward-looking statements

This announcement and the accompanying conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Life360 intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements regarding Life360's intentions, objectives, plans, expectations, assumptions and beliefs about future events, including Life360's expectations with respect to the financial and operating performance of its business, including subscription revenue, hardware revenue, advertising revenue, other revenue, consolidated revenue and ability to create new revenue streams, such as advertising; Adjusted EBITDA, and operating cash flow; its capital position; future growth; the impact of past price increases on future results of operations and subscriber churn; scaling its MAU base; its ability to continue building on its leading global position and the strategic value and opportunities for global expansion; operating cost savings, including through reduced commissions; as well as Life360's expectations of any changes to the information disclosed herein. The words "anticipate", "believe", "expect", "project", "predict", "will", "forecast", "estimate", "likely", "intend", "outlook", "should", "could", "may", "target", "plan" and other similar expressions can generally be used to identify forward-looking statements. Indications of, and guidance or outlook on, future earnings or financial position or performance are also forward-looking statements. Investors and prospective investors are cautioned not to place undue reliance on these forward-looking statements as they involve inherent risk and uncertainty (both general and specific) and should note that they are provided as a general guide only and should not be relied on as an indication or guarantee of future performance. There is a risk that such predictions, forecasts, projections and other forward-looking statements will not be achieved. Subject to any continuing obligations under applicable law, Life360 does not undertake any obligation to publicly release the result of any revisions to these forward-looking statements to reflect events or circumstances after the date of this announcement, to reflect any change in expectations in relation to any forward-looking statements or any change in events, conditions or circumstances on which any such statements are based.

Although Life360 believes that the expectations reflected in the forward-looking statements and the assumptions upon which they are based are reasonable, Life360 can give no assurance that such expectations and assumptions will prove to be correct and, actual results may vary in a materially positive or negative manner. Forward-looking statements are subject to known and unknown risks, uncertainty, assumptions and contingencies, many of which are outside Life360's control, and are based on estimates and assumptions that are subject to change and may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include risks related to the preliminary nature of financial results, risks related to Life360's business, market risks, Life360's need for additional capital, and the risk that Life360's products and services may not perform as expected, as described in greater detail under the heading "Risk Factors" in Life360's ASX and SEC filings, including its Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 29, 2024 and other reports filed with the SEC. To the maximum extent permitted by law, responsibility for the accuracy or completeness of any forward-looking statements whether as a result of new information, future events or results or otherwise is disclaimed. This announcement should not be relied upon as a recommendation or forecast by Life360. Past performance information given in this document is given for illustrative purposes only and is not necessarily a guide to future performance and no representation or warranty is made by any person as to the likelihood of achievement or reasonableness of any forward-looking statements, forecast financial information, future share price performance or any underlying assumptions. Nothing contained in this document nor any information made available to you is, or shall be relied upon as, a promise, representation, warranty or guarantee as to the past, present or the future performance of Life360.

Consolidated Statements of Operations and Comprehensive Loss

(Dollars in U.S. $, in thousands, except share and per share data)



Year Ended December 31,


2023


2022


2021

Subscription revenue

$        220,794


$        153,287


$         86,551

Hardware revenue

58,178


47,884


952

Other revenue

25,546


27,134


25,140

Total revenue

304,518


228,305


112,643

Cost of subscription revenue

30,975


30,659


17,807

Cost of hardware revenue

47,384


45,441


1,340

Cost of other revenue

3,522


3,607


3,621

Total cost of revenue

81,881


79,707


22,768

Gross profit

222,637


148,598


89,875

Operating expenses:






Research and development

100,965


102,480


50,994

Sales and marketing

99,072


92,419


47,473

General and administrative

52,583


48,110


23,670

Total operating expenses

252,620


243,009


122,137

Loss from operations

(29,983)


(94,411)


(32,262)

Other income (expense):






Convertible notes fair value adjustment

(684)


1,786


(511)

Derivative liability fair value adjustment

(116)


1,295


(733)

Other income (expense), net

3,228


13


(178)

Total other income (expense), net

2,428


3,094


(1,422)

Loss before income taxes

(27,555)


(91,317)


(33,684)

Provision for (benefit from) income taxes

616


312


(127)

Net loss

(28,171)


(91,629)


(33,557)

Net loss per share, basic

$            (0.42)


$            (1.47)


$            (0.65)

Net loss per share, diluted

$            (0.42)


$            (1.50)


$            (0.65)

Weighted-average shares used in computing net loss per share, basic

66,748,542


62,209,545


51,656,195

Weighted-average shares used in computing net loss per share, diluted

66,748,542


62,839,593


51,656,195

Comprehensive loss






Net loss

(28,171)


(91,629)


(33,557)

Change in foreign currency translation adjustment

15


(6)


?

Total comprehensive loss

$        (28,156)


$        (91,635)


$        (33,557)

 

Consolidated Balance Sheets

(Dollars in U.S. $, in thousands)



December 31,
2023


December 31,
2022

Assets




Current Assets:




Cash and cash equivalents

$         68,964


$         75,444

Restricted cash, current

?


13,274

Accounts receivable, net

42,180


33,125

Inventory

4,099


10,826

Costs capitalized to obtain contracts, net

1,010


1,438

Prepaid expenses and other current assets

15,174


8,548

Total current assets

131,427


142,655

Restricted cash, noncurrent

1,749


1,647

Property and equipment, net

730


393

Costs capitalized to obtain contracts, noncurrent

834


626

Prepaid expenses and other assets, noncurrent

6,848


7,134

Operating lease right-of-use asset

1,014


802

Intangible assets, net

45,441


52,699

Goodwill

133,674


133,674

Total Assets

$       321,717


$       339,630

Liabilities and Stockholders' Equity




Current Liabilities:




Accounts payable

5,896


$         13,791

Accrued expenses and other current liabilities

27,538


27,015

Escrow liability

?


13,274

Convertible notes, current

3,449


3,513

Deferred revenue, current

33,932


30,056

Total current liabilities

70,815


87,649

Convertible notes, noncurrent

1,056


4,060

Derivative liability, noncurrent

217


101

Deferred revenue, noncurrent

1,842


2,706

Other liabilities, noncurrent

723


576

Total Liabilities

$         74,653


$         95,092

Commitments and Contingencies




Stockholders' Equity




Common Stock

70


67

Additional paid-in capital

532,128


501,763

Notes due from affiliates

?


(314)

Accumulated deficit

(285,143)


(256,972)

Accumulated other comprehensive income (loss)

9


(6)

Total stockholders' equity

247,064


244,538

Total Liabilities and Stockholders' Equity

$       321,717


$       339,630

 

Consolidated Statements of Cash Flows

(Dollars in U.S. $, in thousands)



Year Ended December 31,


2023


2022


2021

Cash Flows from Operating Activities:






Net loss

$ (28,171)


$ (91,629)


$ (33,557)

Adjustments to reconcile net loss to net cash used in operating activities:






Depreciation and amortization

9,141


9,199


876

Amortization of costs capitalized to obtain contracts

2,125


2,928


4,014

Amortization of operating lease right-of-use asset

842


?


?

Stock-based compensation expense

38,512


34,680


11,754

Compensation expense in connection with revesting notes

73


(87)


184

Non-cash interest expense, net

462


474


166

Convertible notes fair value adjustment

684


(1,786)


511

Derivative liability fair value adjustment

116


(1,295)


733

(Gain)/loss on revaluation of contingent consideration

?


(5,279)


3,600

Non-cash revenue from investment

(1,608)


(1,504)


?

Inventory write-off

916


?


?

Adjustment in connection with membership benefit

(2,172)


?


?

Changes in operating assets and liabilities, net of acquisitions:






Accounts receivable, net

(9,055)


6,474


(2,689)

Prepaid expenses and other assets

(6,667)


10,629


(943)

Inventory

5,811


(497)


(859)

Costs capitalized to obtain contracts, net

(1,905)


(3,343)


(1,713)

Accounts payable

(7,895)


(12,654)


559

Accrued expenses and other current liabilities

2,193


(7,722)


4,720

Deferred revenue

4,620


4,660


1,671

Other liabilities, noncurrent

(498)


(303)


(1,180)

Net cash provided by (used in) operating activities

7,524


(57,055)


(12,153)

Cash Flows from Investing Activities:






Cash paid for acquisitions, net of cash acquired

?


(110,933)


(2,983)

Internal use software

(1,715)


(701)


?

Purchase of property and equipment

(506)


?


(81)

Cash advance on convertible note receivable

?


?


(4,000)

Net cash used in investing activities

(2,221)


(111,634)


(7,064)

Cash Flows from Financing Activities:






Indemnity escrow payment in connection with an acquisition

(13,128)


?


?

Proceeds from the exercise of options

5,811


2,394


3,543

Taxes paid related to net settlement of equity awards

(14,033)


(4,077)


(4,725)

Proceeds from repayment of notes due from affiliates

314


648


?

Payments on borrowings

?


?


(41)

Repayment of convertible notes

(3,919)


(3,471)


?

Proceeds from capital raise, net of transaction costs

?


32,215


193,064

Cash received in advance of the issuance of convertible notes

?


?


2,110

Net cash provided by (used in) financing activities

(24,955)


27,709


193,951

Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

(19,652)


(140,980)


174,734







Cash, Cash Equivalents and Restricted Cash at the Beginning of the Period

90,365


231,345


56,611

Cash, Cash Equivalents, and Restricted Cash at the End of the Period

$   70,713


$   90,365


$ 231,345






Year Ended December 31,


2023


2022


2021

Supplemental disclosure:






Cash paid during the period for taxes

$         697


$           ?


$           33

Cash paid during the period for interest

640


514


24







Non-cash investing and financing activities:






Fair value of stock issued in connection with an acquisition

?


15,409


13,821

Fair value of convertible debt issued in connection with an acquisition

?


?


11,597

Fair value of contingent consideration issued in connection with an acquisition

?


?


5,900

Fair value of vested options assumed in connection with an acquisition

?


?


533

Forgiveness of convertible debt receivable in connection with an acquisition

?


?


4,023

Relative fair value of warrants issue with convertible debt

?


?


844

Beneficial conversion feature related to convertible debt

?


?


603

Fair value of bifurcated derivative related to convertible debt

?


?


663

Fair value of warrants held as investment

?


5,474


?

Fair value of stock issued in settlement of contingent consideration

?


4,221


?

Right of use asset recognized in connection with lease modification

1,054


?


?

Operating lease liability recognized in connection with lease modification

1,054


?


?

Total non-cash investing and financing activities

$     2,108


$   25,104


$   37,984

Non-GAAP Financial Measures

We collect and analyze operating and financial data to evaluate the health of our business, allocate our resources and assess our performance.

EBITDA and Adjusted EBITDA 

In addition to total revenue, net loss and other results under GAAP, we utilize non-GAAP calculations of earnings before interest, taxes, depreciation and amortization ("EBITDA") and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"). EBITDA is defined as net loss, excluding (i) convertible notes and derivative liability fair value adjustments, (ii) provision for income taxes, (iii) depreciation and amortization and (iv) other income, net. Adjusted EBITDA is defined as net loss, excluding (i) convertible notes and derivative liability fair value adjustments, (ii) provision for income taxes, (iii) depreciation and amortization, (iv) other expense, net, (v) stock-based compensation, (vi) Form 10 transaction costs, (vii) acquisition and integration costs, (viii) workplace restructuring costs, (ix) inventory write-offs, (x) adjustment in connection with membership benefit, (xi) warehouse relocation costs and (xii) gain on revaluation of contingent consideration.

The above items are excluded from EBITDA and Adjusted EBITDA because these items are non-cash in nature, or because the amount and timing of these items are unpredictable, are not driven by core results of operations and render comparisons with prior periods and competitors less meaningful. We believe EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our results of operations, as well as providing useful measures for period-to-period comparisons of our business performance. Moreover, we have included EBITDA and Adjusted EBITDA in this media release because they are key measurements used by our management team internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting. However, these non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for or superior to financial information presented in accordance with GAAP, and may be different from similarly titled non-GAAP financial measures used by other companies. As such, you should consider these non-GAAP financial measures in addition to other financial performance measures presented in accordance with GAAP, including various cash flow metrics, net loss and our other GAAP results.

The following table presents a reconciliation of net loss, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA:


Three Months Ended
December 31,


Year Ended December 31,


2023


2022


2023


2022

(in thousands)






Net loss

$        (3,146)


$      (12,303)


$      (28,171)


$      (91,629)

Add (deduct):








Convertible notes fair value adjustment

(114)


89


684


(1,786)

Derivative liability fair value adjustment10

(62)


(112)


116


(1,295)

Provision for income taxes

411


228


616


312

Depreciation and amortization11

2,297


2,368


9,141


9,199

Other expense, net

(1,431)


(614)


(3,228)


(13)

EBITDA

$        (2,045)


$      (10,344)


$      (20,842)


$      (85,212)

Stock-based compensation

10,834


10,193


38,512


34,680

Form 10 transaction costs

?


923


?


3,766

Acquisition and integration costs

?


852


?


11,949

Workplace restructuring costs12

54


?


4,024


?

Write-off of obsolete inventory13

?


?


916


?

Adjustment in connection with membership benefit14

?


?


(2,172)


?

Warehouse relocation costs15

44


?


121


?

Gain on revaluation of contingent consideration

?


?


?


(5,279)

Adjusted EBITDA

$          8,887


$          1,624


$        20,559


$      (40,096)




10

To reflect the change in value of the derivative liability associated with the July 2021 Convertible Notes.

11

Includes depreciation on fixed assets and amortization of acquired intangible assets.

12

Relates to non-recurring personnel and severance related expenses in connection with the workplace restructure announced on January 12, 2023.

13

Relates to the write-off of raw materials that have no alternative use to the Company following the decision to halt development.

14

Relates to an adjustment recorded to reduce product costs recorded to cost of revenue in connection with the discontinuation of certain battery related membership benefits.

15

Relates to non-recurring warehouse relocation costs in relation to the Company's transition to a new logistics partner.

Key Financial Metrics:


Three Months Ended
December 31,


Year Ended December 31,


2023


2022


2023


2022

(in millions)

(unaudited)



Revenue








U.S. subscription revenue (Non-GAAP)

$       54.5


$       40.6


$     199.4


$     136.1

International subscription revenue (Non-GAAP)

6.5


4.8


24.5


17.2

Subscription revenue (Non-GAAP)16

61.0


45.2


223.9


153.3

Hardware revenue (Non-GAAP)16

19.8


19.7


54.5


47.8

Other revenue (GAAP)

6.1


6.4


25.5


27.2

Total revenue (Non-GAAP)

87.0


71.3


303.9


228.3

Add: Non-GAAP adjustments related to bundled offerings

?


?


0.6


?

Total revenue (GAAP)

87.0


71.3


304.5


228.3









Non-GAAP Gross Profit17

62.0


46.4


226.8


153.5

Non-GAAP Gross Margin %17

71 %


65 %


75 %


67 %

Non-GAAP Subscription Gross Margin %

85 %


84 %


84 %


81 %









Research and Development (Non-GAAP)

19.6


18.8


76.1


82.5

Sales and Marketing (Non-GAAP)








User acquisition and TV costs

7.5


5.2


28.9


26.4

Other Sales and Marketing

5.1


6.2


19.4


26.0

Commissions

11.1


8.7


42.7


31.4

General & Administrative (Non-GAAP)

9.8


5.9


39.7


28.5

Non-GAAP Operating Expenses18

53.1


44.8


206.8


194.8









Net loss (GAAP)

(3.1)


(12.3)


(28.2)


(91.6)









Adjusted EBITDA (Non-GAAP)

8.9


1.6


20.6


(40.1)

Non-GAAP Adjusted EBITDA Margin %

10 %


2 %


7 %


(18) %

Stock-based Compensation (GAAP)

(10.8)


(10.2)


(38.5)


(34.7)

Other Non-GAAP Adjustments

(0.1)


(1.9)


(2.9)


(10.5)

EBITDA (Non-GAAP)

$       (2.0)


$     (10.4)


$     (20.8)


$     (85.2)




16

Life360 Non-GAAP Revenue is calculated using GAAP Revenue. For a reconciliation between GAAP Revenue and Non-GAAP Revenue, refer to the Revenue (GAAP to Non-GAAP reconciliation) section in this table.


17

Non-GAAP Gross Profit is calculated using Revenue, Non-GAAP and Cost of revenue, Non-GAAP. Non-GAAP Gross Margin is calculated by dividing Non-GAAP Gross Profit by Total Revenue (Non-GAAP). For a reconciliation between Total Revenue, GAAP and Total Revenue, Non-GAAP and Total Cost of revenue, GAAP and Total Cost of revenue, Non-GAAP, refer to the Revenue and Cost of Revenue (GAAP to Non-GAAP reconciliation) sections below.




18

Non-GAAP operating expenses are calculated using Research and Development, Non-GAAP, Sales and Marketing, Non-GAAP and General & Administrative, Non-GAAP expenses. For a reconciliation between Total operating expenses, GAAP and Total operating expenses, Non-GAAP, refer to the Operating expenses (GAAP to Non-GAAP reconciliation) section below.

Revenue (GAAP to Non-GAAP reconciliation):


Q1 2023


Q2 2023


Q3 2023


Q4 2023

(in millions)








Subscription revenue, GAAP included in Adjusted EBITDA

$         51.7


$          52.7


$          56.6


$          59.8

Bundled offerings19

?


0.7


1.2


1.2

Total Subscription revenue, Non-GAAP

$         51.7


$          53.4


$          57.8


$          61.0









Hardware revenue, GAAP included in Adjusted EBITDA

$         10.0


$          11.6


$          15.5


$          21.1

Bundled offerings19

?


(1.1)


(1.4)


(1.2)

Total Hardware revenue, Non-GAAP

$         10.0


$          10.5


$          14.2


$          19.8




19

The net difference of the bundled offerings represents the GAAP revenue recognition of subscription revenue allocated to hardware revenue which is recognized at a point-in-time rather than ratably over the subscription period. Bundled offerings only represent bundled Life360 subscription and hardware offerings.

Cost of Revenue (GAAP to Non-GAAP reconciliation):


Three Months Ended December 31,


Year Ended December 31,


2023


2022


2023


2022

(in millions)




Cost of subscription revenue, GAAP

$                8.3


$                7.9


$             31.0


$             30.7

Less: Depreciation and amortization

(0.3)


(0.3)


(1.2)


(0.9)

Less: Stock-based compensation

(0.2)


(0.1)


(0.7)


(0.6)

Less: Severance and other

?


?


(0.1)


?

Less: Adjustment in connection with membership benefit

?


?


1.8


?

Non-GAAP Cost of subscription revenue included in Adjusted EBITDA

$                7.7


$                7.5


$             30.8


$             28.9

Less: Hardware bundling adjustment

1.5


?


4.0


?

Total Cost of subscription revenue, Non-GAAP

$                9.2


$                7.5


$             34.8


$             28.9









Cost of hardware revenue, GAAP

$              17.7


$              17.5


$             47.4


$             45.4

Less: Depreciation and amortization

(0.9)


(0.9)


(3.6)


(3.6)

Less: Stock-based compensation

(0.4)


(0.1)


(1.1)


(0.4)

Less: Severance and other

?


?


(0.2)


(0.1)

Less: Adjustment in connection with membership benefit

?


?


0.4


?

Non-GAAP Cost of hardware revenue included in Adjusted EBITDA

$              16.3


$              16.5


$             42.9


$             41.3

Less: Alignment of accounting policies20

?


?


?


1.0

Less: Hardware bundling adjustment

(1.5)


?


(4.0)


?

Total Cost of hardware revenue, Non-GAAP

$              14.8


$              16.5


$             38.9


$             42.3









Cost of other revenue, GAAP

$                0.9


$                0.9


$               3.5


$               3.6

Less: Stock-based compensation

?


(0.1)


?


(0.3)

Total Cost of other revenue, Non-GAAP

$                0.9


$                0.9


$               3.5


$               3.5









Cost of revenue, GAAP

$              26.8


$              26.3


$             81.9


$             79.7

Less: Depreciation and amortization

(1.2)


(1.2)


(4.8)


(4.5)

Less: Stock-based compensation

(0.6)


(0.3)


(1.8)


(1.3)

Less: Severance and other

?


?


(0.3)


(0.1)

Less: Adjustment in connection with membership benefit

?


?


2.2


?

Non-GAAP Cost of revenue included in Adjusted EBITDA

$              24.9


$              24.8


$             77.2


$             73.8

Less: Alignment of accounting policies20

?


?


?


1.0

Total Cost of revenue, Non-GAAP

$              24.9


$              24.9


$             77.2


$             74.8



20

Includes non-recurring costs reflecting the alignment of accounting policies attributable to the integration with Tile. As these adjustments are not deemed to be non-routine or one time in nature, they have not been added back to EBITDA or Adjusted EBITDA.

Operating expenses (GAAP to Non-GAAP reconciliation):


Three Months Ended December 31,


Year Ended December 31,


2023


2022


2023


2022

(in millions)






Research and development expense, GAAP

$              26.0


$              25.1


$             101.0


$             102.4

Less: Depreciation and amortization

?


?


(0.1)


?

Less: Stock-based compensation

(6.5)


(6.3)


(22.0)


(19.4)

Less: Severance and other

0.1


?


(2.7)


(0.5)

Total Research and development, Non-GAAP

$              19.6


$              18.8


$              76.1


$              82.5









Sales and marketing expense, GAAP

$              25.7


$              22.1


$              99.1


$              92.4

Less: Depreciation and amortization

(1.1)


(1.1)


(4.2)


(4.3)

Less: Stock-based compensation

(0.8)


(0.7)


(3.1)


(3.7)

Less: Severance and other

?


(0.1)


(0.9)


(0.6)

Total Sales and marketing expense, Non-GAAP

$              23.7


$              20.2


$              90.9


$              83.8









General and administrative expense, GAAP

$              12.8


$              10.5


$              52.6


$              48.1

Less: Depreciation and amortization

?


(0.1)


?


(0.4)

Less: Stock-based compensation

(2.9)


(2.9)


(11.6)


(10.1)

Less: Severance and other

(0.1)


(1.6)


(1.2)


(9.1)

Total General and administrative expense, Non-GAAP

$                9.8


$                5.9


$              39.7


$              28.5









Total Operating expenses, GAAP

$              64.5


$              57.7


$             252.6


$             243.0

Less: Depreciation and amortization

(1.1)


(1.2)


(4.3)


(4.7)

Less: Stock-based compensation

(10.2)


(9.9)


(36.7)


(33.2)

Less: Severance and other

(0.1)


(1.7)


(4.8)


(10.2)

Total Operating expenses, Non-GAAP

$              53.1


$              44.9


$             206.8


$             194.8

 

Note: The financial information in this announcement may not add or recalculate due to rounding. All references to $ are to U.S. dollar.

SOURCE Life360


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