Life360 Share Price Rises on Acquisition and Quarterly Update (ASX:360)
The Life360 Inc [ASX:360] share price was up as much as 4.5% in early trade following a quarterly update and an acquisition announcement.
At the time of writing, the family security platform was trading for $8.18 a share.
360 shares are gaining today after the company reported further top-line growth along with news it entered a definitive agreement to acquire Jiobit — a provider of wearable location devices for young children, pets, and seniors.
Highlights from 360 quarterly
Life360 — whose core offering is a mobile app used by families for communication, location sharing, and driving safety — updated the market on its June quarter performance today.
Here are the highlights:
- Underlying revenue growth of 28% year-on-year to US$25.0 million.
- Annualised Monthly Revenue (AMR) in June 2021 was US$105.9 million, a year-on-year increase of 36%.
- Underlying EBITDA loss of US$3.3 million.
- Global Monthly Active User (MAU) base of 32.3 million, up 4.2 million (15%) from the March quarter 15%.
- US MAU base of 20.3 million, up 2.1 million (12%) from the March quarter.
- International MAU base of 12.1 million, up 2.1 million (22%) from the March quarter.
Life360 said the quarter’s performance was especially strong in the US as that segment is entering the back-to-school season.
But management did see a slowdown in registrations in ‘regions heavily impacted by the COVID Delta variant.’
Life360 said this is currently not materially impacting US consumer behaviour and is confident the COVID-slowdown will be ‘transitory’.
Acquisition of Jiobit
The June quarter also saw Life360 signing definitive agreements to acquire Jiobit.
Jiobit supplies wearable location devices for young children, pets, and seniors.
The acquisition will be 360’s largest to date and marks the firm’s expansion into all family life stages.
360 anticipates Jiobit’s annualised monthly revenue for the month of December 2021 to be in the range of US$11–12 million, with a US$4 million revenue contribution in CY21 post acquisition.
Life360 cash flow
For the quarter ended 30 June, 360 posted US$20.63 million from customer receipts. This was up from US$15.8 million in the March quarter.
But after big ticket operating expenses like R&D, marketing, staff costs, as well as cost of revenue, the company ended the June quarter with a net cash loss from operating activities totalling US$1.93 million.
Year-to-date (six months), Life360 recorded a net cash loss from operating activities worth US$4.92 million.
Having started the June quarter with US$53.53 million in cash and cash equivalents, the company ended the quarter with $50.75 million.
Life360 share price outlook
Life360 said it was confident in an ‘improving performance in the second half of CY21.’
It did warn, however, of uncertainties stemming from COVID-19 outbreaks.
If COVID variant surges in the US remain at current levels, Life360 forecasts annualised monthly revenue by December 2021 to exceed its previous guidance of US$110–120 million.
The company still expects revenue at the ‘higher end’ of the guided range even if the surge ‘continues to grow.’
360 also flagged more expenses to accelerate growth.
Importantly, it said investments in growth initiatives are likely to exacerbate the CY21 underlying EBITDA loss from its previous guidance of a loss no greater than US$15 million.
If you’re excited by technology, apps, algorithms, and proprietary machine learning programs, then I think you might also enjoy reading our free report on new small-cap fintech stocks.
The report goes through three innovative Aussie fintech stocks with exciting growth potential. Check it out if you’re interested.
For Money Morning
PS: Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here