Revenue Performance - Subscription revenue increased by 27% to $71.833 million for the three months ended September 30, 2024[145] - Hardware revenue decreased by 24% to $11.744 million for the three months ended September 30, 2024[145] - Other revenue increased by 43% to $9.288 million for the three months ended September 30, 2024[145] - Total revenue increased by 18% to $92.865 million for the three months ended September 30, 2024[145] - Subscription revenue increased by $15.2 million (27%) in Q3 2024 compared to Q3 2023, driven by 20% growth in total subscriptions and 25% growth in Paying Circles[150] - Hardware revenue decreased by $3.8 million (24%) in Q3 2024 due to delayed product launch and increased discounts[151] - Other revenue increased by $2.8 million (43%) in Q3 2024, primarily due to a $2.0 million increase in data revenue from the A&R Placer Agreement[152] - Subscription revenue increased by $38.1 million (24%) in the nine months ended September 2024 compared to the same period in 2023[153] - Hardware revenue decreased by $3.3 million (9%) in the nine months ended September 2024, mainly due to a $4.8 million decrease in retail sales[154] - Other revenue increased by $3.6 million (18%) in the nine months ended September 2024, driven by a $2.1 million increase in data revenue[155] Profitability and Margins - Gross profit increased by 21% to $70.012 million for the three months ended September 30, 2024[145] - Hardware gross margin decreased to 5% in Q3 2024 from 26% in Q3 2023 due to increased discounts and fewer units sold[160] - Other gross margin increased to 88% due to higher data and partnership revenue while costs remained flat[165] - Hardware gross margin decreased to 14% from 20%, driven by increased freight costs and fixed hardware costs[164] Expenses - Research and development expenses increased by 18% to $29.012 million for the three months ended September 30, 2024[145] - Sales and marketing expenses increased by 19% to $30.722 million for the three months ended September 30, 2024[145] - Cost of subscription revenue increased by 29% to $10.659 million for the three months ended September 30, 2024[145] - Cost of subscription revenue increased by $2.4 million (29%) in Q3 2024, primarily due to higher technology and personnel-related costs[157] - Cost of subscription revenue increased by $7.7 million (34%) in the nine months ended September 2024, driven by higher technology expenses and premium membership costs[162] - Hardware revenue cost decreased by $0.6 million, or 2%, primarily due to reduced units sold and discontinued battery-related membership benefits[163] - Research and development expenses increased by $8.3 million, or 11%, primarily due to personnel-related and stock-based compensation costs[167] - Sales and marketing expenses increased by $6.4 million, or 9%, driven by Channel Partner commissions and other marketing spend[169] - General and administrative expenses increased by $4.5 million, or 11%, due to professional services and personnel-related costs[172] Net Income and Comprehensive Income - Net income improved to $7.689 million for the three months ended September 30, 2024, compared to a net loss of $6.541 million in the same period last year[145] - Total comprehensive income improved to $7.689 million for the three months ended September 30, 2024, compared to a total comprehensive loss of $6.558 million in the same period last year[145] Other Income and Expenses - The company recorded a $5.4 million gain from a fair value adjustment of investment in warrants[178] - Other income (expense), net increased by $2.2 million, or 649%, driven by higher dividend and interest income[180] - Provision for income taxes increased by $1.9 million due to the estimated growth in the company's annual effective tax rate[182] User and Subscription Metrics - Annualized Monthly Revenue (AMR) increased by 30% year over year to $336.2 million as of September 30, 2024[186] - Monthly Active Users (MAUs) grew by 32% year over year to 76.9 million as of September 30, 2024[187] - Paying Circles increased by 25% year over year to 2.2 million as of September 30, 2024[189] - Average Revenue per Paying Circle (ARPPC) increased by 6% year over year to $127.57 for the three months ended September 30, 2024[192] - Subscriptions grew by 20% year over year to 2.8 million as of September 30, 2024[194] - Average Revenue per Paying Subscription (ARPPS) increased by 5% year over year to $106.27 for the three months ended September 30, 2024[197] Hardware Metrics - Net hardware units shipped decreased by 24% year over year to 0.8 million for the three months ended September 30, 2024[201] - Net Average Selling Price (ASP) decreased by 4% year over year to $12.69 for the three months ended September 30, 2024[203] Cash and Financial Position - Cash and cash equivalents increased to $159.0 million as of September 30, 2024, up from $69.0 million as of December 31, 2023[205] - Net cash provided by financing activities was $72.5 million for the nine months ended September 30, 2024, primarily due to the U.S. IPO[214] - Principal commitments include obligations under operating leases for office space and other purchase commitments as of September 30, 2024[216] - Cash equivalents invested in cash and money market funds increased to $159.0 million as of September 30, 2024, up from $69.0 million as of December 31, 2023[220] Risk and Compliance - A hypothetical 10% change in interest rates would not materially impact the company's financial statements as of September 30, 2024[220] - The company's revenue is not significantly exposed to foreign currency risk as the majority of sales are denominated in U.S. dollars[221] - A hypothetical 1,000 basis-point change in the U.S. dollar's relative value would not materially affect operating results[221] - Inflation has not had a material effect on the company's business, results of operations, or financial condition[222] - Disclosure controls and procedures were effective as of September 30, 2024[224] - No changes in internal control over financial reporting materially affected the company during the three months ended September 30, 2024[225] - The company may face future regulatory investigations and inquiries related to data protection, consumer rights, and other legal matters[228] - Litigation and regulatory inquiries could have adverse impacts due to defense costs, management resource diversion, and potential operational restrictions[228]

Financial Performance - Q2'24 revenue reached $11.0 million, representing a 13% month-over-month growth[4] - Life360 reported Q2'24 total revenue of $84.9 million, a 20% increase year-over-year, with subscription revenue growing by 25% to $65.7 million[34] - Life360's annualized monthly revenue (AMR) reached $304.8 million, representing a 23% increase compared to the previous year[34] - Operating cash flow for H1 2024 was $13.9 million, demonstrating strong capital efficiency and positive operating cash flow[32] - Adjusted EBITDA for Q2'24 was $11.0 million, marking the seventh consecutive quarter of positive adjusted EBITDA[34] - Adjusted EBITDA for Q2 2024 was $11.0 million, up from $5.7 million in Q2 2023, reflecting improved operational performance[60] - Life360 expects to achieve positive Operating Cash Flow for each quarter of 2024[51] - Life360 plans to continue being Adjusted EBITDA positive on a quarterly basis going forward, aiming for consistent EBITDA positivity in 2025[51] - Life360 has updated its 2024 earnings guidance, expecting consolidated revenue of $370 million - $378 million, an increase from the previous estimate of $365 million - $370 million[51] - Core subscription revenue is projected to grow by over 25% year-over-year, upgraded from the previous guidance of over 20%[51] - The company anticipates positive Adjusted EBITDA of $36 million - $41 million, up from the previous estimate of $30 million - $35 million[51] User Growth and Engagement - Global monthly active users increased to approximately 70.6 million, a 20% year-over-year growth[4] - Life360's Core Monthly Active Users (MAU) reached 30 million, representing a 489% year-over-year growth[10] - Monthly Active Users (MAU) increased to 70.6 million in Q2 2024, up from 66.4 million in Q1 2024, representing a growth of approximately 3.2 million users[53] - Life360 ranked 4th in the U.S. social networking category on iOS by Daily Active Users (DAUs) as of June 2024[13] - The DAU/MAU ratio for Life360 is approximately 64%, indicating high user engagement compared to major social media platforms[14] - Life360's freemium model has driven significant growth, with 82% of U.S. Paying Circles utilizing the service[23] Market Opportunities and Strategy - Life360's U.S. penetration rate for paying users is approximately 10.1 million, indicating a significant market opportunity[4] - The total addressable market (TAM) for subscription services is estimated at $75 billion, with additional opportunities in pet tracking and item tracking[6] - The company is focused on expanding its product offerings, including roadside assistance and ID theft protection, to enhance user value[7] - Life360 aims to grow its audience and scale paid offerings to create new revenue streams[9] - The company is leveraging powerful network effects to drive long-term growth opportunities[9] - Life360's strategy includes meeting family needs at every life stage to strengthen relationships with members[9] - The acquisition of Tile and Jiobil is expected to enhance Life360's service offerings and market position[7] - Life360 has identified new monetization opportunities from its free user base, targeting B2B data providers and advertisers[28] - Life360's global opportunity for international penetration is significant, with current rates at 2% in the UK and 1% in Canada, projected to grow[15] Revenue Streams and Pricing - The company plans to implement price increases for subscriptions in the U.S. and internationally, enhancing revenue potential[24] - Life360's membership offerings include Silver, Gold, and Platinum tiers, with prices ranging from $0.00 to $24.99 per month[22] - The average revenue per paying circle (ARPPC) increased by 8% year-over-year to $152, driven by triple tier membership launches and price increases[42] - The average revenue per paying subscription (ARPPS) increased to $104.00 in Q2 2024, up from $102.02 in Q1 2024[53] - The company is expanding its advertising revenue stream, with an estimated global mobile advertising spend of $402,000 in 2024[30] Operational Costs and Investments - Total operating expenses on a GAAP basis for Q2 2024 were $66.0 million, compared to $59.0 million in Q2 2023, showing an increase in costs[59] - Research and development expenses on a GAAP basis for Q2 2024 were $27.0 million, up from $23.2 million in Q2 2023, highlighting increased investment in innovation[59] - Stock-based compensation for Q2 2024 was $10.8 million, compared to $9.3 million in Q2 2023, indicating a rise in employee compensation costs[60] - Sales and marketing expenses on a GAAP basis for Q2 2024 were $22.5 million, compared to $21.6 million in Q2 2023, showing a slight increase in marketing efforts[59] - The company incurred IPO-related transaction costs of $5.8 million in Q2 2024, which were not present in Q2 2023, indicating ongoing financial activities related to public offerings[64] - Total general and administrative expenses on a GAAP basis for Q2 2024 were $11.2 million, compared to $59.0 million in Q2 2023, suggesting a significant reduction in administrative costs[59] - The company is focusing on restructuring efforts, with workplace restructuring costs recorded at $1.0 million in Q2 2023, reflecting ongoing adjustments to improve operational efficiency[64] Financial Losses - The company reported a net loss of $11.0 million in Q2 2024, compared to a net loss of $4.4 million in Q2 2023[55] - Q2 2024 net loss was $11.0 million, compared to a net loss of $4.4 million in Q2 2023, indicating a significant increase in losses[60] - Adjusted profit from ordinary activities after tax for Q2 2024 was $7.8 million, compared to $5.4 million in Q2 2023, reflecting better profitability metrics[64]

Financial Performance - Subscription revenue for Q2 2024 reached $65.678 million, a 25% increase from $52.727 million in Q2 2023[145] - Total revenue for Q2 2024 was $84.863 million, up 20% from $70.788 million in Q2 2023[145] - Gross profit for Q2 2024 was $63.626 million, representing a 16% increase compared to $54.783 million in Q2 2023[145] - Net loss for Q2 2024 was $10.964 million, a 148% increase from a net loss of $4.413 million in Q2 2023[145] - Total revenue for the three months ended June 30, 2024, was $84.9 million, representing a $14.1 million, or 20%, increase compared to the same period in 2023[150] - Net loss for the three months ended June 30, 2024, was (13)% of total revenue, compared to (6)% in the same period of 2023[148] Revenue Breakdown - Hardware revenue for Q2 2024 was $11.901 million, a 3% increase from $11.585 million in Q2 2023[145] - Other revenue for Q2 2024 was $7.284 million, a 12% increase from $6.476 million in Q2 2023[145] - Subscription revenue increased by $13.0 million, or 25%, during the three months ended June 30, 2024, primarily due to a 20% growth in total subscriptions and a 25% growth in Paying Circles[150] - Hardware revenue increased by $0.3 million, or 3%, during the three months ended June 30, 2024, primarily due to fewer discounts offered[151] - The company experienced a 12% increase in other revenue during the three months ended June 30, 2024, attributed to a ramp-up of advertising revenue[152] Expenses - Operating expenses for Q2 2024 totaled $65.989 million, a 12% increase from $59.026 million in Q2 2023[145] - Research and development expenses for Q2 2024 were $27.013 million, up 17% from $23.182 million in Q2 2023[145] - Sales and marketing expenses for Q2 2024 were $24.363 million, a 4% increase from $23.347 million in Q2 2023[145] - General and administrative expenses increased by $2.1 million, or 17%, during the three months ended June 30, 2024, primarily due to higher professional and outside services costs[173] - Research and development expenses increased by 22% during the three months ended June 30, 2024, totaling $6.5 million[147] - Sales and marketing expenses increased by $1.0 million, or 4%, during the three months ended June 30, 2024, driven by a $2.1 million increase in commissions to Channel Partners[171] Profitability Metrics - Subscription gross margin decreased to 84% during the three months ended June 30, 2024, down from 88% in the same period of 2023[159] - Hardware gross margin increased to 19% for the six months ended June 30, 2024, up from 16% for the same period in 2023[166] - Average Revenue per Paying Subscription (ARPPS) increased by 6% to $104.00 for the three months ended June 30, 2024, compared to $97.83 for the same period in 2023[187] - Average Revenue per Paying Circle (ARPPC) for the three months ended June 30, 2024, was $125.96, a 6% increase from $119.25 in 2023[193] User Metrics - Monthly Active Users (MAUs) grew by 31% to 70.6 million for the three months ended June 30, 2024, up from 54.0 million in the same period in 2023[187] - Total subscriptions increased by 20% to 2.7 million for the three months ended June 30, 2024, compared to 2.2 million in the same period in 2023[187] - The number of Paying Circles increased to approximately 2.0 million as of June 30, 2024, representing a 25% year-over-year growth from 1.6 million in 2023[191] - Total paid subscribers across Life360, Tile, and Jiobit brands reached approximately 2.7 million as of June 30, 2024, a 20% increase from 2.2 million in 2023[195] Cash Flow and Financial Position - Net cash provided by operating activities for the six months ended June 30, 2024, was $13.9 million, compared to a net cash used of $5.5 million in 2023[209] - As of June 30, 2024, cash and cash equivalents totaled $160.8 million, up from $69.0 million as of December 31, 2023[203] - The company completed its U.S. IPO on June 6, 2024, raising net proceeds of $93.0 million after underwriting discounts and commissions[203] Risks and Regulatory Matters - The company anticipates ongoing regulatory inquiries related to data protection and consumer rights, which may lead to future litigation[228] - The company has not entered into any active hedging arrangements for foreign currency risk, but may consider doing so in the future[220] - The company does not believe inflation has materially affected its business, but significant inflationary pressures could harm its results[222] Internal Controls - As of June 30, 2024, the company's management concluded that its disclosure controls and procedures were effective[224] - There were no changes in internal control over financial reporting that materially affected the company during the three months ended June 30, 2024[225]

10 May 2024 Life360 reports Q1 2024 results San Francisco area-based Life360, Inc. (Life360 or the Company) (ASX: 360) today reported unaudited financial results for the quarter ended March 31, 2024. Life360 Co-founder and Chief Executive Officer Chris Hulls said: "Life360's Q1'24 results showed continued momentum, with net Paying Circles additions nearly doubling to 96 thousand from 54 thousand in Q4'23, achieving a new first quarter record. In addition, our efforts in relation to both our free members and ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________ FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 000-56424 Life360, Inc. (Exact name of registrant as specified in its charter) Delaware 26-0197666 (State or ot ...

Financial Performance - Subscription revenue for Q3 2023 reached $56.6 million, a 45% increase from $39.0 million in Q3 2022[161] - Total revenue for Q3 2023 was $78.6 million, up 38% from $57.2 million in Q3 2022[161] - Hardware revenue increased by 33% to $15.5 million in Q3 2023, compared to $11.7 million in Q3 2022[161] - Gross profit for Q3 2023 was $57.9 million, representing a 48% increase from $39.2 million in Q3 2022[161] - The net loss for Q3 2023 was $6.5 million, a 69% improvement compared to a net loss of $21.1 million in Q3 2022[161] - Total revenue for the three months ended September 30, 2023, was $78.6 million, a 38% increase from $57.2 million in the same period in 2022[166] - For the nine months ended September 30, 2023, subscription revenue increased by $53.1 million, or 49%, compared to the same period in 2022[168] - Total revenue for the nine months ended September 30, 2023, was $217.6 million, a 39% increase from $157.0 million in the same period in 2022[168] Expenses - Total operating expenses for Q3 2023 were $64.4 million, a 7% increase from $60.4 million in Q3 2022[161] - Research and development expenses remained flat at $24.6 million in Q3 2023, compared to the same period last year[161] - Sales and marketing expenses increased by 6% to $25.7 million in Q3 2023, up from $24.2 million in Q3 2022[161] - General and administrative expenses rose by 22% to $14.1 million in Q3 2023, compared to $11.6 million in Q3 2022[161] - Research and development expenses decreased by $2.4 million, or 3%, during the nine months ended September 30, 2023, primarily due to a $2.3 million reduction in contractor spend[182] - Sales and marketing expenses rose by $3.0 million, or 4%, during the nine months ended September 30, 2023, mainly due to a $5.6 million increase in marketing expenses[184] - General and administrative expenses increased by $2.1 million, or 6%, during the nine months ended September 30, 2023, attributed to a $5.3 million gain on revaluation of contingent consideration from the Jiobit acquisition in the prior year[188] Revenue Metrics - Subscription gross margin improved to 85% during the three months ended September 30, 2023, up from 80% in the same period in 2022[172] - Average Revenue per Paying Circle (ARPPC) for the three months ended September 30, 2023, was $119.97, representing a 28% increase year-over-year from $93.55[203] - Average Revenue per Paying Subscription (ARPPS) for the three months ended September 30, 2023, was $101.33, reflecting a 30% increase year-over-year from $78.03[212] - Annualized Monthly Revenue (AMR) reached $259.1 million as of September 30, 2023, representing a 41% increase year-over-year[195] User Metrics - Monthly Active Users (MAUs) grew to approximately 58.4 million as of September 30, 2023, a 24% increase from 47.0 million in the prior year[196] - The number of Paying Circles increased to approximately 1.7 million as of September 30, 2023, reflecting a 17% year-over-year growth[198] - The number of paid subscribers for Life360, Tile, and Jiobit brands increased to approximately 2.3 million as of September 30, 2023, a 14% increase year-over-year from 2.1 million[206] Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2023, were $61.8 million, down from $75.4 million as of December 31, 2022[217] - Net cash used in operating activities for the nine months ended September 30, 2023, was $1.4 million, significantly improved from $54.9 million in the same period of 2022[223][224] - Net cash used in investing activities for the nine months ended September 30, 2023, was $1.3 million, a substantial decrease from $114.1 million in the prior year, primarily due to the Tile Acquisition[225] - Net cash used in financing activities for the nine months ended September 30, 2023, was $24.0 million, compared to $3.5 million in the same period of 2022[226][227] Deferred Revenue and Liabilities - Deferred revenue as of September 30, 2023, was $35.0 million, up from $32.8 million as of December 31, 2022, indicating growth in future revenue recognition[222] - The company reported $3.8 million in liabilities measured at fair value as of September 30, 2023, compared to $7.0 million as of December 31, 2022[234] Regulatory and Compliance - The company expects to continue facing regulatory inquiries related to data protection and consumer rights, which may impact its operations[248] - Future litigation may be necessary to defend against claims related to regulatory, commercial, and intellectual property matters, which could impact operational practices[248] Internal Controls - Management identified material weaknesses in internal control over financial reporting related to IT general controls, which could lead to undetected misstatements[242] - The company is implementing measures to remediate identified control deficiencies, including enhancing IT controls and providing training[243] - The company concluded that its disclosure controls and procedures were not effective as of September 30, 2023, due to identified material weaknesses[239] - Management acknowledges that disclosure controls and procedures cannot prevent all errors and fraud, highlighting inherent limitations in control systems[246]

Financial Performance - Subscription revenue for Q1 2023 reached $51.664 million, a 56% increase from $33.062 million in Q1 2022[163] - Total revenue for Q1 2023 was $68.143 million, up 34% from $50.970 million in Q1 2022[163] - Gross profit for Q1 2023 was $49.830 million, representing a 42% increase from $35.118 million in Q1 2022[163] - The net loss for Q1 2023 was $14.071 million, a 44% improvement compared to a net loss of $25.222 million in Q1 2022[163] - Total revenue for the three months ended March 31, 2023, was $68.1 million, representing a $17.2 million, or 34%, increase from $51.0 million in the same period in 2022[166] - Gross profit increased by $14.7 million, or 42%, to $49.8 million for the three months ended March 31, 2023, compared to $35.1 million for the same period in 2022[168] Operating Expenses - Operating expenses for Q1 2023 totaled $64.722 million, a 4% increase from $62.225 million in Q1 2022[163] - Research and development expenses increased to $27.197 million in Q1 2023, up 6% from $25.737 million in Q1 2022[163] - Research and development expenses rose by $1.5 million, or 6%, to $27.2 million for the three months ended March 31, 2023, primarily due to increased personnel-related costs and stock-based compensation[172] Revenue Breakdown - Hardware revenue for Q1 2023 was $9.984 million, a slight increase of 3% from $9.647 million in Q1 2022[163] - Other revenue decreased by 21% to $6.495 million in Q1 2023 from $8.261 million in Q1 2022[163] - Hardware revenue increased by $0.3 million, or 3%, to $10.0 million for the three months ended March 31, 2023, compared to $9.6 million in the same period in 2022[167] - Other revenue decreased by $1.8 million, or 21%, to $6.5 million for the three months ended March 31, 2023, compared to $8.3 million in the same period in 2022, due to a strategic shift in focus[167] User Growth - Monthly Active Users (MAUs) grew by 33% year-over-year, reaching approximately 50.8 million as of March 31, 2023, up from 38.3 million in the same period in 2022[182] - The number of Paying Circles increased by 22% year-over-year, reaching approximately 1.6 million as of March 31, 2023, compared to 1.3 million in the same period in 2022[184] - Average Revenue per Paying Circle (ARPPC) increased by 36% year-over-year to $120.70 for the three months ended March 31, 2023, compared to $88.98 for the same period in 2022[188] - Average Revenue per Paying Subscription (ARPPS) increased by 31% year-over-year, reaching $97.98 for the three months ended March 31, 2023, compared to $74.66 in 2022[197] Cash Flow and Liquidity - As of March 31, 2023, Life360 had cash and cash equivalents of $61.4 million, down from $75.4 million as of December 31, 2022[201] - Net cash used in operating activities for Q1 2023 was $9.2 million, an improvement from $21.5 million in Q1 2022[208][209] - For the three months ended March 31, 2023, net cash used in investing activities was $0.4 million, significantly lower than $112.5 million in Q1 2022, which was primarily due to the Tile acquisition[210] - Net cash used by financing activities for Q1 2023 was $4.7 million, compared to a net cash provided of $0.9 million in Q1 2022[211][212] Financial Controls and Risks - The company identified a material weakness in internal control over financial reporting related to information technology general controls, which could lead to undetected misstatements[227] - Management is implementing remediation measures, including enhancing IT controls and providing training on their importance[228] - The company concluded that its disclosure controls and procedures were not effective as of March 31, 2023, due to identified material weaknesses[225] - A hypothetical 10% relative change in interest rates would not have a material impact on the company's consolidated financial statements[217] - The company does not believe inflation has materially affected its business, but significant inflationary pressures could harm its financial condition[219] Legal and Regulatory Matters - The company anticipates ongoing regulatory inquiries related to data protection and consumer rights due to the evolving legal landscape[233] - Future litigation may be necessary to defend against claims related to regulatory, commercial, and intellectual property matters[233] - The outcomes of current or future regulatory inquiries or litigation are uncertain and could adversely impact the company[233] - Defense and settlement costs, as well as management resource diversion, may result from ongoing legal challenges[233] - The company has received claims from third parties regarding information published on its platform[233] - Legal proceedings may arise from various claims, including those related to competition, tax, and consumer rights[233] - The company is involved in legal proceedings as part of its ordinary course of business[233] - The company has incorporated information regarding commitments and contingencies related to litigation in its financial statements[234]

Financial Performance - Total revenue for the year ended December 31, 2022, was $228.3 million, a significant increase from $112.6 million in 2021 and $80.7 million in 2020, representing a year-over-year growth of 103.0% from 2021 to 2022[16] - Net loss for the year ended December 31, 2022, was $91.6 million, compared to a net loss of $33.6 million in 2021 and $16.3 million in 2020, indicating an increase in losses[16] - Revenue, excluding Tile and Jiobit revenue, has increased each quarter since 2016, but future growth is uncertain[147] Business Model and Strategy - Life360 operates under a "freemium" model, with paid memberships ranging from $7.99 to $24.99 per month, offering various premium safety services[20] - The company plans to grow its member base in new and existing markets and increase monetization through disciplined expansion into new use cases[17] - The company aims to leverage word-of-mouth referrals to drive new member growth and plans to invest in marketing and brand awareness initiatives[19] - Life360 operates under a "freemium" model, offering a free app while monetizing through paid subscriptions, which is critical for revenue growth[78] Product Offerings - The acquisition of Jiobit and Tile was aimed at creating a comprehensive cross-platform location tracking solution, enhancing the Life360 service offerings[14] - Jiobit devices are priced at $129.99, with subscription plans ranging from $8.99 to $14.99 per month, depending on the contract duration[26][28] - Tile devices are sold at retail prices ranging from $14.99 to $34.99, with additional bundles available at higher price points[24] Workforce and Culture - As of December 31, 2022, Life360 had approximately 400 full-time employees and 200 contractors, with a commitment to diversity in the workforce[37] - The company’s ability to maintain its corporate culture is critical for future success, especially as it continues to expand[140] - The company’s future success depends on attracting and retaining highly skilled personnel, with competition for talent being intense[136] Research and Development - Research and development expenses were $102.5 million, $51.0 million, and $39.6 million for the years ended December 31, 2022, 2021, and 2020, respectively, indicating a significant investment in enhancing customer offerings[47] - The company is focused on improving its technology infrastructure and systems to support new products and market expansion[150] Risks and Challenges - The company faces risks from competition in the digital consumer subscription products market, which may impact its ability to attract and retain members[72] - Economic downturns or uncertainties may adversely affect consumer discretionary spending and demand for the company's products and services[73] - The company is subject to numerous data privacy and security obligations, including the CCPA and EU GDPR, which may increase compliance obligations and exposure for noncompliance[62] - The company has identified a material weakness in internal controls, potentially affecting the accuracy and timeliness of financial reporting[74] - The company may experience challenges in expanding its member base outside the United States, which could limit its growth potential[91] Marketing and Customer Engagement - Attracting members requires considerable marketing expenditure, and evolving consumer behavior may affect the effectiveness of traditional marketing channels[102] - The company generates a portion of its revenue through lead generation offerings, which may be impacted by competition and relationships with advertising partners[164] International Expansion - The company faces risks related to international expansion, including operational and compliance challenges, foreign currency fluctuations, and differing tax laws[131] - As of December 31, 2022, international members represented over 36% of total Monthly Active Users (MAUs) and accounted for approximately 8% of revenue[130] Compliance and Regulatory Environment - The company is subject to stringent data privacy and security laws, which could lead to regulatory actions and significant penalties if not complied with[174] - Non-compliance with privacy laws such as the CCPA could result in civil penalties of up to $7,500 per violation[176] - The company may face significant fines under the EU GDPR, with penalties reaching up to 20 million Euros or 4% of annual global revenue[179] Supply Chain and Manufacturing - The company relies on a limited number of suppliers and manufacturers, and any loss could negatively impact operations[72] - The primary manufacturer’s facilities are located in the PRC and Malaysia, and any disruptions in these regions could adversely affect the company's operations[126] - The company relies significantly on third-party publishers and platforms for the distribution and marketing of its products, which could adversely affect its business if these partners change their policies[103] Financial Outlook - The company expects existing cash and cash equivalents from subscription sales to meet anticipated cash needs for at least the next 12 months[167] - Future capital requirements will depend on subscription growth rates, renewal activity, and the introduction of new products and services[167] Cybersecurity and Data Privacy - Company processes sensitive data and faces threats from cyber-attacks, including ransomware, which could disrupt operations and lead to reputational harm[191] - Increased risks from remote work and reliance on third-party service providers could introduce new cybersecurity vulnerabilities[196][197]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________ FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (State or other jurisdiction of incorporation or organization) 539 Bryant Street, Suite 402 San Francisco, CA 94107 (Address of principal executive offices) (Zip C ...

Part I - Financial Information [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements for the period ended June 30, 2022, detailing key financial positions, operational results, cash flows, and significant accounting policies including recent acquisitions [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2022, shows a significant increase in total assets to $323.7 million, primarily driven by a rise in goodwill and intangible assets from recent acquisitions, while cash and cash equivalents decreased to $64.3 million and total liabilities increased to $94.1 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $64,264 | $230,990 | | Goodwill | $133,244 | $31,127 | | Intangible assets, net | $56,822 | $7,986 | | **Total Assets** | **$323,730** | **$302,376** | | Total current liabilities | $82,163 | $41,446 | | **Total Liabilities** | **$94,077** | **$52,331** | | **Total stockholders' equity** | **$229,653** | **$250,045** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended June 30, 2022, total revenue grew 95% year-over-year to $48.8 million, driven by strong subscription growth and hardware revenue from acquisitions, though net loss widened significantly to $33.0 million due to increased operating expenses Statement of Operations Summary (in thousands) | Metric | Q2 2022 | Q2 2021 | YoY Change | H1 2022 | H1 2021 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total revenue | $48,844 | $25,009 | +95% | $99,814 | $48,001 | +108% | | Gross Profit | $29,288 | $20,249 | +45% | $64,406 | $38,752 | +66% | | Loss from operations | $(33,468) | $(6,807) | +392% | $(60,575) | $(10,659) | +468% | | Net Loss | $(32,985) | $(6,804) | +385% | $(58,207) | $(10,656) | +446% | | Net loss per share | $(0.53) | $(0.13) | - | $(0.95) | $(0.21) | - | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2022, net cash used in operating activities significantly increased to $38.5 million, with $113.8 million used in investing activities primarily for the Tile acquisition, resulting in a $152.0 million net decrease in cash Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(38,528) | $(4,919) | | Net cash used in investing activities | $(113,797) | $(2,500) | | Net cash provided by financing activities | $300 | $1,563 | | **Net Decrease in Cash, Cash Equivalents, and Restricted Cash** | **$(152,025)** | **$(5,856)** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business, significant accounting policies, and financial statement components, highlighting the acquisitions of Jiobit and Tile, changes in data revenue models, and significant customer concentration - The company operates a "freemium" model and expanded its offerings through the acquisitions of Jiobit (wearable location devices) in September 2021 and Tile (smart location devices) in January 2022[27](index=27&type=chunk) - The acquisition of Tile on January 5, 2022, had an aggregate purchase consideration of **$173.6 million**, consisting of **$158.0 million in cash** and **$15.6 million in equity**[127](index=127&type=chunk) - The company is exiting its legacy data sales model and transitioning to commercializing solely aggregated data through a new partnership with Placer.ai[52](index=52&type=chunk)[53](index=53&type=chunk) Customer Concentration | Partner | % of Revenue (Q2 2022) | % of Gross A/R (June 30, 2022) | | :--- | :--- | :--- | | Channel Partner A | 49% | 37% | | Channel Partner B | 15% | 12% | | Retail Partner A | 13% | 17% | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q2 2022 financial performance, highlighting a 95% revenue increase driven by acquisitions and organic growth, alongside significant increases in operating expenses and net loss due to integration costs and strategic investments Q2 2022 Financial Highlights (YoY) | Metric | Q2 2022 | Q2 2021 | Growth | | :--- | :--- | :--- | :--- | | Total revenues | $48.8 million | $25.0 million | 95% | | Subscription revenues | $36.0 million | $19.2 million | 87% | | Net loss | $33.0 million | $6.8 million | 385% | | Adjusted EBITDA loss | $18.7 million | $3.3 million | 445% | Key Performance Indicators (as of June 30) | Metric | 2022 | 2021 | Growth | | :--- | :--- | :--- | :--- | | Annualized Monthly Revenue (AMR) | $174.4 M | $105.9 M | 65% | | Members (MAU) | 42.0 M | 32.4 M | 29% | | Paying Circles | 1.42 M | 1.01 M | 41% | | Avg. Revenue Per Paying Circle (ARPPC) | $89.34 | $79.95 | 12% | - The company is focused on retaining its trusted brand, attracting and converting members, maintaining efficient member acquisition, and expanding platform offerings, such as through the Tile and Jiobit acquisitions[221](index=221&type=chunk)[222](index=222&type=chunk)[225](index=225&type=chunk) - Operating expenses increased significantly, with **R&D up 125%** and **Sales & Marketing up 116% YoY** for Q2 2022, primarily due to increased headcount from acquisitions and higher marketing spend[297](index=297&type=chunk)[299](index=299&type=chunk) - Net cash used in operating activities for the first six months of 2022 was **$38.5 million**, a substantial increase from **$4.9 million** in the same period of 2021, driven by a higher net loss[311](index=311&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company outlines its exposure to market risks, primarily from interest rate fluctuations, foreign currency exchange rates, and fair value changes of certain liabilities, concluding these risks are not currently material - Primary market risks identified are interest rate, foreign currency exchange, and fair value risk[319](index=319&type=chunk) - Interest rate risk is considered immaterial, as a hypothetical 10% change in rates would not have a material impact on financial statements[320](index=320&type=chunk) - Foreign currency risk is limited because all sales are denominated in U.S. dollars, though some operating expenses are in foreign currencies[321](index=321&type=chunk) - As of June 30, 2022, the company had **$10.1 million** of liabilities measured at fair value, which are subject to market fluctuations[323](index=323&type=chunk) [Item 4. Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2022, with no material changes to internal control over financial reporting during the second quarter - Management, including the Principal Executive Officer and Principal Financial Officer, concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2022[326](index=326&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2022, that materially affected, or are reasonably likely to materially affect, internal controls[327](index=327&type=chunk) Part II - Other Information [Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) The company discloses its involvement in ongoing patent infringement litigation inherited from the Tile acquisition, specifically cases with Cellwitch, Inc. and Linquet Technologies, with outcomes currently undeterminable - The company is involved in a patent infringement claim filed by Cellwitch, Inc. against Tile in March 2019, with the case currently in the trial court with discovery stayed[174](index=174&type=chunk) - A separate patent infringement lawsuit from Linquet Technologies was dismissed, but an inter partes review of the patent's validity is pending[175](index=175&type=chunk) - The company is unable to predict the outcome of these legal matters or estimate a range of possible loss[176](index=176&type=chunk) [Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Registration Statement on Form 10 - There have been no material changes from the risk factors previously disclosed within Item 1A "Risk Factors" in the Form 10[331](index=331&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details the issuance of unregistered equity securities during Q2 2022, including stock options and vested RSUs to employees, directors, and consultants, asserting exemption from SEC registration requirements - In April and May 2022, the company granted stock option awards to employees and non-employee directors to acquire a total of **676,461 shares** of common stock[332](index=332&type=chunk)[333](index=333&type=chunk) - In June 2022, the company issued **179,118 shares** of common stock to employees and consultants upon the vesting of RSUs[334](index=334&type=chunk) - The company believes these issuances were exempt from registration under the Securities Act, relying on Section 4(a)(2), Regulation D, or Rule 701[335](index=335&type=chunk) [Defaults Upon Senior Securities](index=64&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports that there were no defaults upon senior securities during the reporting period - None[336](index=336&type=chunk) [Mine Safety Disclosures](index=65&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business operations - Not applicable[337](index=337&type=chunk) [Other Information](index=65&type=section&id=Item%205.%20Other%20Information) The company reports that there is no other information to disclose for this item - None[338](index=338&type=chunk) [Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section provides a list of all exhibits filed with the Quarterly Report on Form 10-Q, including an amendment to a data services agreement and certifications by the CEO and CFO - The list of exhibits includes CEO and CFO certifications pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act of 2002[340](index=340&type=chunk) - An amendment to the Data Services and License Agreement with Placer Labs Inc. is included as an exhibit[340](index=340&type=chunk)