Life360, Inc.(LIF) - 2023 Q3 - Quarterly Report

Financial Performance - Subscription revenue for Q3 2023 reached $56.6 million, a 45$39.0 million in Q3 2022[161] - Total revenue for Q3 2023 was $78.6 million, up 38$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$39.2 million in Q3 2022[161] - The net loss for Q3 2023 was $6.5 million, a 69$21.1 million in Q3 2022[161] - Total revenue for the three months ended September 30, 2023, was $78.6 million, a 38$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$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$2.3 million reduction in contractor spend[182] - Sales and marketing expenses rose by $3.0 million, or 4$5.6 million increase in marketing expenses[184] - General and administrative expenses increased by $2.1 million, or 6$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$93.55[203] - Average Revenue per Paying Subscription (ARPPS) for the three months ended September 30, 2023, was $101.33, reflecting a 30$78.03[212] - Annualized Monthly Revenue (AMR) reached $259.1 million as of September 30, 2023, representing a 41$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]