The Life360 Inc
(ASX: 360) share price has jumped 8% after the ASX tech share revealed an excellent start to 2023.
Life360 says it operates a platform for today’s busy families. Its core offering, the Life360 app, that has features including communications, driving safety and location sharing.
2023 first quarter update
The ASX tech share reported that quarterly revenue grew by 34% year on year to $68.1 million, while ‘core Life360 subscription revenue’ went up by 66% year on year to $46.2 million.
It also said that annualised monthly revenue grew by 44% year on year to $239.5 million.
While it reported a net loss of $14.1 million, the company achieved positive EBITDA (EBITDA explained) of $0.5 million, one quarter ahead of expectations.
Global monthly active users grew 33% to 50.8 million. Life360 also revealed that ‘paying circles’ (customers) grew 22% year on year, with net quarterly additions of 73,000 compared to 69,000 in the first quarter of 2022 despite the price increases. This is very encouraging for the Life360 share price.
The US average revenue per paying circle grew 43% year on year to $140, “reflecting the benefits of higher pricing”. The company pointed to price increases for existing monthly US Android subscribers which were rolled out in April.
The ASX tech share revealed that it had cash of $76.1 million at the end of the quarter.
Outlook for the Life360 share price
Life360 has provided guidance that 2023 could show core Life360 subscription revenue growth of more than 50%. The business is expecting that total revenue will come between $300 million and $310 million.
It’s also expecting that adjusted EBITDA and operating cashflow could come between $5 million to $10 million for the 2023 full year.
I believe it’s great that the business is seeing profit earlier than expected thanks to the price increases and cost efficiencies implemented in January.
Management are confident of long-term success and I think the business can keep doing well if it keeps adding users, which it is. The combination of more users and more revenue per user is a very strong combination.
It’s one of the most promising ASX growth shares in my opinion.
