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]
Life360, Inc.(LIF) - 2023 Q1 - Quarterly Report