The Life360 Inc (ASX: 360) share price has surged almost 9% higher today following the release of its half year financial results.
Based in San Francisco, Life360 operates a market-leading mobile app that connects families by helping them stay safe, keep in touch and protect each other.
What were the half year results?
Life360 delivered normalised revenue growth of 57% year-on-year (YoY) to US$38.7 million. This included a non-recurring adjustment of US$0.9 million relating to the deferral of subscription revenue.
The statutory earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped US$7.1 million, a 57% YoY improvement.
The company increased its global monthly user-base (MAU) by 25.2 million, up 9% YoY.
Furthermore, cash from operating activities improved -US$5.5 million from -US$16.7 million in the prior corresponding period. This was due to strong growth in customer receipts and reduced investment in user acquisition. However, it was somewhat offset by higher research and development expenses. Life360 finished the half year with net cash of US$58.4 million and no debt.
Outlook for the Life360 share price
Life360 expects a revenue of US$79–US$82 million in calendar year 2020 and an underlying EBITDA loss of US$10 million–US$14 million, excluding share-based compensation. Operating cash flow is expected to range from US$10 million to US$14 million.
Looking forward, the company is cautious. The coronavirus pandemic has created significant uncertainty in the US and globally. However, its business model has been resilient despite an initial decline in maonthly active users in April.
A new membership offering is delivering strong new subscriber growth. Furthermore, Life360 has resumed new marketing activities that will accelerate as conditions return to normal.
Life360 CEO Chris Hulls said the average revenue per paying circle (ARPPC) for the company’s new cohort of membership subscribers had lifted 33% in the first month since full launch in mid-July. Legacy subscribers were grandfathered on their previous plans, so it will take some time for this increase to be reflected in overall ARPPC.
At time of writing, Life360 share price is trading at $4.03 per share, a jump of 8.92% today.
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Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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