The Life360 Inc (ASX: 360) share price is set for a painful day after reporting its 2026 second quarter. The NASDAQ listing declined 27% in after hours trading.
Life360 provides an app that helps families stay connected with location sharing, as well as other services.
Mixed 2026 second quarter
The ASX tech share reported a number of promising growth figures.
Total second quarter revenue grew by 38% to $159 million year on year, with total subscription revenue rising 31% to $115.6 million and advertising revenue soaring 315% to $22 million.
Life360 reported that its global monthly active users (MAU) added were 4.6% taking total MAU to approximately 102.4 million, up 16%.
US MAU grew 14% to 54 million, UK, ANZ and Canada MAU grew 224% to 13.2 million and other international MAU grew 18% to 35.2 million.
It also reported that the quarterly addition of paying circles was 185,000, taking total paying circles to 3.2 million, up 27% year on year. US paying circles grew 25% to 2.3 million, UK, ANZ and Canada paying circles increased 34% to 0.4 million and other international paying circles climbed 31% to 0.6 million.
The company also revealed that average revenue per paying circle (ARPPC) increased 5% year on year primarily due to a shift in the product mix towards higher-priced offerings across specific international markets in the second half of 2025.
The increased number of paying circles led to annualised monthly revenue (AMR) rising 29% to $537.2 million.
Life360 reported that the gross profit margin improved from 85% to 87%, adjusted EBITDA (EBITDA explained) grew by 53% to $31.1 million, while operating cashflow jumped 79% to $23.8 million. I think those are both great signs considering how much faster they grew than revenue.
What were the negatives?
It wasn’t all what the company would have wanted to report.
Total operating expenses as a percentage of revenue increased from 77% in the June 2025 quarter to 80% in the June 2026 quarter, largely due to growth-related expenditure and the Nativo acquisition.
The company’s net profit (‘net income’) fell 28% to $5 million. The biggest impact was $22.8 million of stock-based compensation in the June 2026 quarter (up from $15.2 million in the June 2025 quarter). There were also higher costs from more depreciation and amortisation, as well as workplace restructuring costs.
Additionally, its revenue guidance for 2026 may not have been as strong as hoped.
In FY26, Life360 expects total revenue to grow between 33% to 40%, to between $650 million to $685 million. MAU growth is expected to be between 17% to 20% and advertising revenue is expected to be between $98 million to $115 million.
Adjusted EBITDA is still expected to be between $130 million to $140 million – a margin of around 20%.
Final thoughts on the Life360 share price
The company has done well to grow its core earnings drivers, but its net profit margin was eroded in this quarter. Management will need to balance these competing financial desires.
A 27% sell-off was probably too harsh, in my view, considering it was already down so much since the peak in 2025.
I think this heavy sell-off could be a buying opportunity for brave investors, along with other ASX growth shares.
