Life360, Not Just Another App?

This story features LIFE360 INC, and other companies.
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Life360's Q2 performance yet again beat expectations. What exactly is the 'secret sauce' here and how much growth is potentially still left in the tank?

-Life360 achieves record growth to 88m users globally
-International markets and product launches underpin future growth trajectory
-Not every analyst is on board with this success story
-Leadership transition adds both promise and uncertainty for investors

By Danielle Ecuyer

Life360 has been a growth engine

At my former stint at AusbizTV, I had the opportunity to interview the co-founder of Life360 ((360)), Chris Hull, on at least two occassions. Suffice to say, I have few to no excuses for failing to appreciate the depth of the business model and platform management were building out.

My bad, clearly, as the share price back at the start of 2024 was sub $7 and has subsequenly appreciated by over 510% to current level around $43. The latest quarterly result provided yet another ‘beat’ for this fast-growing technology platform.

RBC Capital reminded investors this week the stock has advanced 92% (versus the ASX100 up 12%) over the last five months since entering the ASX100 index in March this year.

Over the period from 2024 to the latest June quarter, the user base grew to around 88m monthly average users (including freemium) from circa 79.6m, over 10% growth in 18 months. Life360 operates a freemium model alongside paid subscriptions.

A freemium model is a business strategy in which a company offers a core product or service for free, while charging for premium features, advanced functionality, or enhanced experiences. The name combines “free” and “premium”.

Revenue advanced to US$397m from US$371m. Life360 became profitable in the fourth quarter of 2024 and has sustained net income through the first half of 2025.

With the wisdom of Mr Harry Hindsight, and taking a more in-depth look at the company, it is easy to look beyond the key premise of Life360, as described by ChatGPT as a “core platform built around location, safety, and peace-of-mind services, which naturally lend themselves to add-ons”.

Life360 is one of several companies offering up location sharing and tracking, but as its name suggests the offering is more far-reaching.

Bell Potter describes Life360 “as a market-leading app for families with features that range from communications to driving safety and location sharing”.

While Citi believes the company as being in “the early stages of evolving from an app to a family safety tech ecosystem”.

As an observer, taking a step back and within the context of other winning network, flywheel companies such as Netflix, it is easy to see why some analysts are upbeat on the company’s outlook.

Life360 at its core is building out a global user base, which lends itself to sticky subscription revenues, service add-ons, and optionality to inject targeted advertising to its base.

Attracting eyeballs in a media-challenged world can deliver not only growth, but equally so a higher valuation.

What was dished up in the latest results?

Across FNArena’s daily monitored brokers, the five that actively cover the company are in agreeance: the lastest quarterly results are a clear beat against expectations and consensus forecasts.

US monthly average user (MAU) net adds grew 2.2m (from 1.6m in 1Q2025), the largest increase since 3Q2022 and significantly more than the 1.7m recorded in 2Q2024.

Revenue grew 26% in the quarter on the prior year, which came in above Bell Potter’s forecast by 6% and was underpinned by higher subscription and better-than-expected hardware sales (the Tiles used to locate) at US$12.7m against the forecast US$9.5m.

Net adds for international paying circles (the number of user groups with at least one paying subscriber) were steady at 44k. Citi highlights the international revenue per paying circle (ARPPC) lifted 35% to US$76m underpinned by growth in international triple-tier markets (Canada, UK, A&NZ), boosted by the UK market which generated growth of two percentage points to 23% on the prior quarter.

Triple-tier markets are characterised as high adoption and premium-priced markets versus dual-tier markets in other parts of Europe and Asia.

Citi explains the international growth has benefited from the launch of dual-tier plans (cheaper) and legacy price increases in triple-tier markets.

Morgan Stanley comments the second quarter results showed robust operating leverage which paves the way for greater reinvestment. Normalised net profit after tax came in 28% above this analyst’s forecast at US$14m, with a margin of 12% versus 9% forecast and growth on the prior year of 58.5% compared to the forecast 23.8% growth.

Management upgraded full year 2025 guidance, which analysts, excluding Morningstar, consider as conservative.

Revenue guidance for 2025 rose to US$462m-US$482m, a 3% upgrade at the low end. Adjusted earnings (EBITDA) guidance rose 11% at the low end and 9% at the top end to US$72m-US$82m.

Morgan Stanley upgrades earnings (EBITDA) by 10%-14% for 2025-2027, with the company starting 3Q2025 on a strong footing going into the peak back-to-school season. This upgrade won’t be the last for 2025, the analyst predicts.

UBS stands out with a 17% upgrade in EPS forecast for 2025 and 11% for 2026. This analyst’s FY26 earnings (EBITDA) forecast sits 22% above consensus, arising from the strength of US user growth, the build-out of an advertising ramp on the platform, and a swifter, more significant transition to web-based payments.

Other growth levers for the company include increased international marketing spend to achieve “stronger-for-longer” total monthly average user growth. App store changes to encourage improved lifetime customer value and customer acquisition costs would free up capital to invest in marketing and underpin higher adjusted earnings (EBITDA) growth.

New product launches such as pet tracker and the elderly monitor in 2026 offer further upside potential.

Citi upgrades its revenue forecasts by 3% and anticipates Life360 can achieve its aspirational US$1bn revenue target in 2029 sooner than flagged, with upside to earnings (EBITDA) margins from scaling ad revenue. Management is developing its ad products, including trials with partners.

Morgan Stanley believes product expansion into elder care, insurance, payments, Hubble (Hubble Network, a satellite-based Bluetooth tracking infrastructure that Life360 has partnered with to enhance its global location-tracking capabilities) and targeted eCommerce could create a point of differentiation from legacy providers.

Competition and generating earnings growth

The marketplace in which Life360 operates is competitive, competing against Apple’s Find My and Google Family Link, which are integrated into mobile operating systems.

Standalone family-safety and location-sharing apps like GeoZilla, iSharing, and FamiSafe are equally vying for customers, as does ASX-listed Qoria ((QOR)), as well as hardware-centric trackers such as Samsung SmartTags and GPS pet trackers.

The main challenge is some competitors, especially Apple and Google, offer core location-sharing features for free. Life360’s narrative is it differentiates itself through its cross-platform compatibility (Apple and Android), extensive safety ecosystem, and additional premium services.

Morningstar considers the market, including its analyst peers, is overly optimistic about the potential growth in advertising revenues and, for Life360 to grow them more than the analyst’s forecast, Morningstar views it will require more valuable user data to facilitate targeted advertising or “valuable real digital real estate” — neither of which the company has.

Alternatively, the company’s main focus is the ongoing investment in the improvement of user retention within the core Life360 product. Interestingly, the company’s first-month user retention has reached 71% since 2019 from around 60% in 2018 (the company was founded in 2007).

International retention markets are seemingly less safety concentrated compared to the US market, with first-month retention reaching 45% by 2023 from 30% in 2018. Additional product features and optional offerings are expected to narrow that gap.

Morningstar is notably upbeat on the bundled offers with the company’s Tile hardware, which might be offered with a subscription at cost or at a small loss to drive adoption, and Jiobit wearables to improve retention. Jiobit is a lightweight, GPS-enabled wearable, designed to keep track of vulnerable individuals —like children, pets, or seniors— by seamlessly integrating with smartphones. The company was acquired by Life360 in 2021.

Jiobits are considered higher-quality tracking, which will be boosted by “increased pet-humanisation and helicopter parenting trends”, Morningstar states.

Despite what seems like an upbeat take on the company, this analyst rates Life360 as a “no-moat” company with a 5% upgraded target price to $21.

No surprise, with the shares changing hands around $43 currently, Life360 shares screen as “materially overvalued” to the Morningstar analyst.

What FNArena’s daily monitored are saying about Life360

UBS has an upgraded target price of US$85, up from US$71, and sees potential upside to a US$100 price based on revenue growth of 29%/28% for 2025/2026, respectively, and a 2026 earnings (EBITDA) margin of 25% with a forward price-to-earnings multiple of 55 times.

UBS also balances its upbeat case with a downside case to US$47, which reflects revenue growth of only 24% and 20% respectively for 2025/2026, with a 2026 earnings (EBITDA) margin of 19% on a 35 times prospective multiple.

Some investors may harbour concerns over Chris Hulls’ transition to executive Chair and the appointment of COO Lauren Antonoff to CEO.

Morgan Stanley remains attracted to founder-led businesses and appreciates concerns from co-founder Hulls’ step back but believes the transition is being well managed. This analyst stresses the market, not unlike yours truly, has struggled to understand Life360’s monetisation potential and has been surprised to the upside in the past.

The North Star for Morgan Stanley remains user growth and engagement, with how management converts engagement (eyeballs) to revenue as a key focus.

UBS is not concerned by the management transition and considers Lauren Antonoff as the successor to build the next leg of the Life360 growth journey.

Morningstar, who has been impressed by Hulls’ CEO tenure, believes the move to executive chairman will involve strategy, product development, and key relationships, a positive on balance for shareholders, with Hulls able to devote more time and energy to the strategically significant parts of the business.

RBC Capital confirmed post earnings call the change of leadership does not represent a change in strategic direction for the company to one of profit maximisation. This view supported by ongoing acceleration in revenue growth over 2Q and ongoing growth in the core US business.

RBC believes Life360 compares favourably to other ASX-listed technology companies, like Pro Medicus ((PME)), WiseTech Global ((WTC)), TechnologyOne ((TNE)) and Xero ((XRO)). As defined by forward consensus metrics, the company’s Rule of 40 sits at 40%. Despite strong outperformance, the shares are still seen trading at a discounted sales multiple to peers.

RBC has an Outperform (Buy-equivalent) rating and increased its target price to $45 from $40.

Morgan Stanley’s target rises to $51 from $40, the highest amidst FNArena’s daily monitored brokers, with an Overweight (Buy-equivalent) rating re-iterated.

Ord Minnett also upgrades EPS estimates by 21.7% for 2025 and 22% for 2026, leading to a rise in target to $47 and an upgrade in rating to Accumulate from Hold. Recent growth rates in paying customers, annual monthly recurring revenue, and average revenue per paying circle infer 2026 revenue could exceed US$600m, this analyst suggests.

Citi is Buy rated with a $47 target price. Bell Potter is also Buy rated with an upgraded target of $47.50 from $37.50.

FNArena’s consensus target, the average from daily monitored brokers, sits at $47.62, up 17.1% pre June quarter results.

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