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The Life360 (ASX:360) share price is going NUTS after its FY23 result

The Life360 Inc (ASX: 360) share price has jumped 30% after investors saw the FY23 result.

Life360 is a software company that allows families to connect with, track and get updates about family members.

FY23 result

Here are some of the highlights for the 12-month period:

  • Revenue rose 33% year on year to $305 million
  • Adjusted EBITDA of $20.6 million
  • Operating cashflow of $7.5 million, up $64.6 million
  • Net loss of $28.2 million, up $63.5 million

Breakdown of the numbers

The company reported core Life360 subscription revenue of $200 million, up 52% year on year, beating guidance of growth of 50%. This revenue growth is a great tailwind for the Life360 share price.

Global monthly active users (MAU) grew by 26% to 61.4 million, which it attributed to an ongoing investment in its core location sharing service. International MAU grew by 40% year on year to 24.6 million, as it improved app to make its features as good as the US offering.

Global paying ‘circles’ increased 21% year on year to 1.8 million, despite “significant price increases” implemented in the second quarter of 2023 which underscored the value that subscribers see in the Life360 services.

The US average revenue per paying circle (ARPPC) increased 32% year on year, driven by price increases.

The adjusted EBITDA of $20.6 million was much stronger than the guidance of between $12 million to $16 million.

This result showed how much operating leverage there is within the business – revenue rose $76.2 million, while the operating expense only increased by $9.6 million.

Outlook for the Life360 share price

The company is expecting another good year in 2024.

It said it’s pursuing new value-added revenue streams including advertising, to utilise Life360’s “enormous free user base”. Life360 is expecting some set-up costs in the first-half of 2024, and a modest revenue contribution in the second half of the year.

In terms of the numbers, its total revenue is expected to be between $365 million and $375 million, adjusted EBITDA is projected to be between $30 million to $35 million, and an EBITDA loss of between $8 million and $13 million.

It finished the 2023 year with $70.7 million of cash (up from $63.7 million last year). The company is guiding that its cash balance could grow to between $80 million to $90 million in 2024.

Life360 is doing very well – it’s growing its number of users, growing the average revenue per user, growing profit margins and looking to diversify its revenue sources. After today’s huge gain, I don’t know if this is going to be the best/lowest price we can invest at during the rest of 2024, but it could keep rising if the numbers keep going in the right direction.

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