The Life360 Inc (ASX: 360) share price has sunk 4% after delivering its 2022 third quarter update.
Life360 said that it offers a platform for families that allows them to better know, communicate with, and protect family members. It has a mobile app, with features like communications, driving safety and location sharing.
2022 third quarter update
Life360 said that it achieved its largest ever quarterly growth of global monthly active users (MAU) of more than 5 million, which was an increase of 39% year over year. There were record net additions in both the US and international markets.
Third quarter revenue jumped 92% to $57.2 million, with third quarter ‘paying circles’ up 36%.
October 2022 average revenue per paying circle increased 47% year over year for new US subscribers, reflecting early benefits of higher pricing.
The company said that the expected 2022 calendar year end annualised monthly revenue (excluding hardware) is more than $215 million, up more than 50% year over year.
Life360 said that it finished the quarter with $58.9 million of cash.
Profitability expected sooner
The company said that strong revenue growth from the price increases, and lower than expected customer churn, along with “prudent financial management”, have resulted in an acceleration of its targets.
It’s now expecting to reach positive adjusted EBITDA (EBITDA explained) and positive operating cash flow in the third quarter of 2023, compared to previous guidance of the fourth quarter of 2023.
Management said that it’s seeing the benefits of bundling, together with higher price points. The company said it’s looking to leverage the “many exciting growth opportunities that are available”. It expects to be able to fund its future growth.
Final thoughts on the Life360 share price
Life360 is expecting good things in 2023. However, for 2022, it reduced its revenue guidance by $20 million, cut its adjusted EBITDA guidance by $2 million to $3 million and expects to have around $5 million to $10 million less cash at the end of the year.
But, it’s still up more than 10% in the past month and it has soared over 70% in six months.
I think the business is on track for a promising future. It’s still down heavily in 2022, so I’m not sure what a bargain price is for the ASX share. I’d be happy to go with a starting position in today’s decline, if I were interested in the business.
