Conference Transcript - LIF 2025-08-12

Maria Ripps, Analyst — Canaccord Genuity

Thank you all for coming. I'm Maria Rips, Internet Analyst here at Canaccord Genuity, and it's my pleasure to introduce Russell Burke, CFO of Live360. Russell, thank you so much for joining us

Russell Burke, CFO

again this year. It's great to see you. Thank you for having us, Maria. It's a pleasure to be here.

Maria Ripps, Analyst — Canaccord Genuity

Perfect. So it's been a great year for the company so far, and you reported pretty strong results last night. So congrats. I think the stock is doing really well this morning. So you also announced management transition last night with Lauren sort of taking the CEO role, increased transitioning to executive chairman. Could you maybe briefly talk about what this means for the company and just sort of, yeah, what are your takeaways from that?

Russell Burke, CFO

It actually just means consistency for the company, to be honest. This is something that's been planned for a while, right from the time that we brought Lauren on as COO, and she has some great experience, really product-focused with both Microsoft and GoDaddy. And that was an important part of recruiting for that COO at the time, to have someone that was able to make that transition. And she and Chris have worked very well together. They're very much of the same mind with a real focus on members and that being the sort of key priority. So it's really the right time. Chris is going to... Chris is not going anywhere. He's stepping into the executive chairman role and he'll be able to really spend more time on his sort of vision and longer-term strategy for the company and he'll still be there working very closely with the team.

Maria Ripps, Analyst — Canaccord Genuity

Great. That's great to hear. So your core business, your core subscription business has been accelerating for several consecutive quarters and you delivered nearly 40% year-over-year growth this year, 38 to be precise. So what's driving this continued momentum?

Russell Burke, CFO

It's really just building on itself over time. I think a lot of the things that we've been doing have really started to come together very well. And we've always been very much focused on the member experience, as you know, and making a delightful experience for members is really the key starting point, and that's helping to increase engagement, which runs through metrics like conversion and engagement. And then, obviously, as we've ramped up things like international expansion and the advertising revenue stream, all of those are building towards our, you know, yesterday's Q2 results, which were record results. It's, as you said, sort of 38% growth in core subscription, 25% growth in MAU numbers and paying circle numbers. And we're just sort of seeing that flow through.

Maria Ripps, Analyst — Canaccord Genuity

Can you maybe also touch on some of the demographic trends that have been contributing to this momentum?

Russell Burke, CFO

Yeah, it's fascinating just seeing the change in, for example, attitudes to location awareness. And that's changed a lot over the last few years. and given that that's a core part of what we do and that location awareness in the family setting is very important to us, that's been a big driver. And that's sort of translated into things like we talked about yesterday, the recent sort of fan-bushing experiences. So kids are now using Life360 to surprise their parents. So that whole attitude towards location awareness has changed. As I said, we're expanding internationally. That's also we're seeing that internationally, that change in attitudes. And then just sort of demographic change generally in terms of supporting digital products. And that's where we are, where we really want to be the super app for families, the go-to digital platform for families in the future.

Maria Ripps, Analyst — Canaccord Genuity

That's fascinating. So let's dive into the specifics of the business. And with any premium model, growing top of funnel is very important, obviously, for growing paying subscribers. Could you maybe walk us through some of the main drivers behind MAU growth as we think about next couple of years?

Russell Burke, CFO

Yeah, it's going to be building. Traditionally, our growth has been organic. So we've traditionally had 70% to 80% of our growth has been organic. It's been viral. And, you know, as we talk about international, for example, we continuously see that tipping point of 3%, 4% penetration and moving into that sort of little viral experience. So that's a big piece of it. And, again, the demographic changes that we talked about are helping to drive that. It's really all coming together.

Maria Ripps, Analyst — Canaccord Genuity

I want to sort of expand on your point about that 3% penetration where I feel like in the past you said that's where sort of growth really starts to accelerate. Just sort of with that in mind, talk about your most mature market, which is U.S., and I feel like you passed that penetration point some time ago, and growth now is accelerating and pretty strong. Just maybe talk about what you're seeing in the U.S.

Russell Burke, CFO

Yeah. And our US experience really gives us the roadmap for what we want to do internationally. But we have, on average, 15% penetration across the US. But it varies, as you know, significantly from state to state in some of the southern and Midwest states where over 20% penetrated. in some others there's a long runway still left but the important thing for us is that we're still seeing really strong growth even in those highly penetrated states and you're those states are sort of leading the way in terms of the demographic trends and the and the digital trends that we talked about and it's not slowing down so we we definitely see a lot of runway left there and And particularly as we, on a broader sense, bring in more use cases and broaden out the member experience, make the member experience more engaging so that our members keep coming back more and more often, we really don't see that slowing down.

Maria Ripps, Analyst — Canaccord Genuity

And why do you think that's the case that certain states sort of accelerated up to 20 plus percent? Can you maybe expand on that?

Russell Burke, CFO

Yeah, there's definitely some differences between the states. In some of those states, people tend to get married and have kids earlier. So they've been brought through that digital native sort of evolution more quickly, as well as the fact that there's, because driving tools are an important part of what we provide for families. In some of those states, there's just longer distances that people drive, and they spend more time in their cars. The communication with our driving tools is more prevalent. So there's a number of things that's driving that. But the other states are catching up as well. They're growing pretty quickly as well. Yeah, that's great. So let's maybe

Maria Ripps, Analyst — Canaccord Genuity

talk about Europe, maybe outside of the UK. I feel like your overall penetration there is right under 2%. What are some sort of building blocks to get to that 3% plus level?

Russell Burke, CFO

Yeah, no, it's interesting. As you know, we've rolled out the triple-tier products in those Anglo territories. That's been very successful. We rolled out a dual-tier, digital-only set of products across the other territories around the globe. And our next step is to really focus on more regional and country-specific localisation, essentially, to really understand what is important culturally and while we know that our core experience providing family safety and security is a universal need, We want to use that core and then build sort of local identity around that. So that's the next phase of our international expansion, and we're starting to look at sort of several countries, including Europe, the Nordics, and really build what makes sense locally.

Maria Ripps, Analyst — Canaccord Genuity

Got it. So it sounds like there's still a lot of growth ahead.

Russell Burke, CFO

Oh, there's still huge potential in international. As you said, our penetration outside of those triple-tier territories is still pretty low. So we see that as a major opportunity.

Maria Ripps, Analyst — Canaccord Genuity

So I want to spend a minute talking about the recent Apple ruling. And you launched your first iOS-based test of web-based billing just a few weeks ago. Maybe talk about some of the potential implications for conversion and retention. And have you seen, I know it's been just a few weeks, but have you seen any changes in how sort of users are engaging with your app?

Russell Burke, CFO

Yeah, it's early stages, as you say. We're experimenting with that. We've been given permission to bring users off the app and onboard them through this web experience. and you'll find lots of other developers doing the same thing, experimenting at this point and we'll see where that goes. It's what we've said is that we want to be aware of the level of conversion that is impacted because you're taking people out of the app to onboard them creates friction. Basically, there's several more clicks that people have to go through. So we know there's going to be an impact on conversion. On the other hand, the economics mean that the cost of doing that is much less. And we absolutely see this as an opportunity in the longer term. It's really going to improve unit economics. But we want to experiment. We want to get the right balance. And our ideal here would be to be able to do that within the app, essentially, on board within the app, direct to a credit card. But we'll see where the court case is and Apple's attitude to that goes. But we're not banking on anything in the short term, but we want to be ready to take advantage of it when we can.

Maria Ripps, Analyst — Canaccord Genuity

Yeah, for sure. A lot of investors are paying close attention to that. So it'll be interesting to see how that plays out. I want to talk about pricing next. I guess, how do you view your current gap between price and value of your subscriptions? And what are your thoughts on potentially closing that gap over time?

Russell Burke, CFO

Yeah, we're very focused. We believe we still have pricing power. But we're very focused in our high growth mode at the moment of really providing that value and letting that value then drive pricing. So we continue to make the member experience better and more engaging. We will continue to add things to the product suite. We've got pet tracking coming down the line in the latter part of this year. We'll have other things that we introduce into the product suite to make it more valuable. and we believe that that will further allow us to drive pricing. So we're not necessarily focused, at least in the U.S., on short-term pricing change, but it will come over time.

Maria Ripps, Analyst — Canaccord Genuity

And where were you in the process of rolling out your multi-tier strategy sort of internationally?

Russell Burke, CFO

It's in process. As we rolled out triple-tier, as you know, we largely were able to leverage the R&D existing in the US product and essentially duplicated that in those territories. We also duplicated the pricing structure so in in general the pricing is the same other than your VAT or GST in those territories. As we as we get into the more localized product what we're also doing is fine-tuning pricing. There's a big variance across the globe in terms of the economics of the value, and we want to optimize that in each place that we're going to, but that's the next stage of our international strategy there.

Maria Ripps, Analyst — Canaccord Genuity

That makes sense. I want to switch gears here and talk about competition just for a minute. I mean, obviously, the main competitor there is Apple, but also, I guess, are there any other companies out there that maybe come close to matching your value proposition and just talk about barriers to entry in the market?

Russell Burke, CFO

Yeah. I guess we would say there's no one that comes near to our value proposition, for a start. But it's interesting. On the purely competitive set, we've had smaller players come and go over the years. But our business model where we're very focused on the freemium aspect and building that what is now 88 million global users really provides a strong competitive moat there. It's very difficult to duplicate that. And then in terms of the platforms or the carriers for that matter, it's interesting. We typically say that several things that Apple have done, for example, Find My was actually helpful for us. It helped to normalise location awareness, and that was very helpful for us. We don't typically see Apple as a competitor as such. Find My, which we're always asked about, is a great product. It works as a good utility within the Apple. ecosystem, but that's what it's designed for, to keep people in the Apple ecosystem. What we do is very different. We're providing a full range of safety and security services for the family, and we're very focused on that family experience, family connectivity, tools for the family, and we're building that super app for the family. and that's very different from what Apple or really anyone else is doing. Instagram released a map just in the last week or so and we'll continue to see that because your location awareness is becoming more and more a part of everyday life.

Maria Ripps, Analyst — Canaccord Genuity

Maybe just talk about your cross-platform capabilities that's obviously not available on Apple.

Russell Burke, CFO

I appreciate you bringing that up But that is very important as well. What we do is purely cross-platform. And what we typically see is that once you get more than three members in a family circle, more than half of those circles are cross-platform. So they have both Apple and Android phones within the circle. And again, that's a point of differentiation for us.

Maria Ripps, Analyst — Canaccord Genuity

So let's talk about advertising, and that's a big focus area for the company. Obviously, it's still early days there, but what are some key building blocks for that business to sort of scale over time?

Russell Burke, CFO

Yeah, it is early days, and we've learned a lot in the last 12 months, ramping up pretty much as we expected, different components at different speeds, but we absolutely see a sort of huge opportunity for us in the longer term. What we have realised is that the very unique data set that we have with our members, the first-party location data is very valuable to advertisers What we want to do is work out how to optimally use that data in a way that completely respects the member. Again, it comes back to our number one priority is the member experience. So whatever we do in this area, we'll respect the member's data and their privacy. But it is uniquely valuable. And what we've been doing over the last 12 months is really learning how to optimise that. We started with pretty basic banner ads within the app, and that's the sort of lowest piece of the monetisation tier. But that helped us learn, and even with those, we've been building up the CPMs over time. we've established some partnerships um and you know we've we've talked a couple of times about the the uber partnership for example and um you'll you'll be aware that that that took an application that was already existing in the app of notifying people and their family circle when you landed at a major airport and made that better by adding the messaging of, would you like, see you've landed in Boston, would you like to book an Uber? And that's the sort of value experience that we want to develop for our members, which will also be incredibly valuable for advertisers.

Maria Ripps, Analyst — Canaccord Genuity

So you, in addition to Uber, you also talk about Aura as one of your newer partners, but maybe more broadly, what type of advertisers are kind of attracted to your platform? What type of advertiser would be the best fit for this kind of advertising offering?

Russell Burke, CFO

It's going to be a pretty broad set. Obviously, we will want to focus on advertisers that also respect the family. So it will be family safe advertising for sure. And we've established some restrictions for age-based and sort of product-based because of that. But that leaves a very big set of advertisers and advertising pool. So we think the opportunity is enormous. And we're building on that. you talked about, Aura is interesting, not only as an advertiser, because we will see some advertising from them this year, but also as a partner to move into employee benefits as well. So some of these partnerships have sort of multiple purposes.

Maria Ripps, Analyst — Canaccord Genuity

And so let's talk about the set of advertising functionalities that you have for your partners. and you recently launched new targeting and measurement features. I know it's been just a few weeks, but talk about what kind of feedback you've been seeing from your advertising partners, and I guess how should we think about further expansion or launches of your advertising capabilities?

Russell Burke, CFO

Yeah. We're building it, and it will build over time. As you know, we made a small asset acquisition last quarter to bring in a team that were focused on the data science side to help us really build the ad tech infrastructure that's required here. And we're now sort of focused on starting to build a sales team. So all of these pieces are required. We're also, we talked about partnerships, but we've launched partnerships with people like Arity who provide an advertising marketplace that we can take advantage of. and we're building that infrastructure not only to provide advertising within the app but also almost a bigger opportunity is to be able to provide advertising outside of the app. What we generally refer to as off-site advertising which enables advertisers to target our members again in a value-oriented way but through other sources.

Maria Ripps, Analyst — Canaccord Genuity

Got it. I think we have just a minute or so left here, but I do want to touch on your hardware business. So you're launching a new pet tracking device later this year. You're launching that internationally. Just maybe talk about that opportunity and when should we expect that to be launched here in the U.S.?

Russell Burke, CFO

We're really excited about the Pet Tracker. It's a unique GPS-enabled device that will be a better way to know where your pet is, especially if they're off and running around. But like all pieces of hardware for us, it's about building it into the ecosystem for Live360. It's designed to help us boost the subscription side of the business and really widen the use case for our members. So we talk about people, pets and things and helping families stay close to the ones they love, whether that's a family member or the broader definition of family, including the pet. So, yeah, we're excited about that. Definitely some tariff challenges in the US with any product like that this year. But we were able to pivot. Not only are we doing a soft launch in the US, but we're launching in Australia and the UK as well. And we'll get a lot of learnings from those places all at the same time. So we are definitely launching this year. And the big bill will come next year.

Maria Ripps, Analyst — Canaccord Genuity

Perfect. So just to wrap up, obviously there is a ton of momentum in your business right now. I think previously you outlined your aspirational goals of 150 million plus MAUs, over a billion dollars in revenue and 25% adjusted EBITDA margin. What are some building blocks for the company to get there?

Russell Burke, CFO

The building blocks are largely in place. It's the things we talked about. It's continuing to make the product and the experience for our members more delightful. And that will increase engagement. That's coming through already in our basic metrics. Conversion and retention are improving over time. You're building on those demographic trends to bring people in at the top of the funnel. All of these pieces are coming together. along with international expansion and building out the use cases that, again, will keep people coming back to Live360. So all of this is sort of coming together. And we're definitely in that scale now where we've talked about operating leverage before, but we're seeing more and more of that ability to really leverage operating expenses. so that's helping us on the profitability side as well. So they're the pieces that will continue to drive us going forward.

Maria Ripps, Analyst — Canaccord Genuity

Perfect. Well, with that, we are out of time. Russell, thank you so much. That was a great discussion and thank you all for joining us.

Russell Burke, CFO

Thank you, Maria.