Conference Transcript - LIF 2026-06-02

Mark Mahaney, Analyst — Evercore ISI

I'm Mark Mahaney with Evercore ISI, part of the Internet Research Franchise. Apologize for my voice. I gave a commencement address this weekend. I mentioned the topic of AI. Hecklers everywhere. I had to shout out, shout to get my message across. Lost my voice. But we're here. And I'll probably ask you about AI, and I'm sure you'll have some commentary on it. Russell Burke is the CFO of Life360, and we're going to go through a series of questions with Russell. And thanks a ton for joining us. Thanks a ton for being part of our annual tech conference here in sensational San Francisco. And actually, you want to just start at a high level. I think there's still not a huge amount of awareness or understanding of Life360. When you think about, like, the two or three things that investors should most know about Life360, what are they?

Russell Burke, CFO

You know, at a base level, we're a sort of family safety and security app. but our real value is much more than that. Our aim is really to be something that makes everyday life for families easier and really sort of brings people close to the ones they love, the things they care about broadly. So our history was sort of a location app, building into driving services, but we're now much more than that for the family right across the board. And our goal here is to be the super app platform for families all across life stages, from kids to elderly parents, and bringing in other parts of the family as well, like pets, which is one of our major initiatives this year. So it's really about that family connectivity and safety.

Mark Mahaney, Analyst — Evercore ISI

All right. All right, I hate to jump right into the MAU growth, but I'm going to jump right into the MAU growth. So I like it when companies give, you know, kind of core guidance. It's a good thing. You know, the key metric that investors are going to look at, you've guided them to this, is to think about MAU growth. MAU growth sort of surprised people a little bit in Q1. So just talk through some of the challenges you had with that MAU growth in Q1. And you had laid out this bogey of 20% MAU growth roughly for the year. Given the challenges in Q1, maybe slopping over a little bit into Q2, you kind of narrowed that range down to 17% to 20%. Just give us the, you know, make sure we get the high level here. How many MAUs do you have? Why did the growth decelerate? And why do you think you can maintain this, you know, good premium MAU growth going forwards?

Russell Burke, CFO

Yeah, so we have close to 98 million MAU globally, and that's split almost 50-50 now between the U.S. and international. And to understand this, I think there's two different sets of MAU. One that we think of as MAU that we're monetizing in the short term. The other is sort of building the overall base for the long term for the company. And that's important as we sort of think about the trends in MAU. What we typically see is a fairly sort of seasonal trend. And particularly when we have a big, really big quarter, which we did in Q4, it does pull back a little bit in the next quarter. We definitely expected that and we saw some of that in Q1. But on top of that, we found that there were a series of technical issues that as we dug deeper into MAU that had impacted growth in Q1. And they range from an issue with one of our providers that stops bots from registering. They'd actually stopped some real people from registering. That was one issue. But then as we dug into it, there were a few more as well, particularly impacting Android lower-end devices. And as I think about that MAU classification, those Android MAU devices tend to be in sort of overly populated, if you like, in areas where what we think of as sort of other international countries where we're really not monetizing at this point. They will be important for the long term, but we're not monetizing them at this point. And that's, again, important because even though we saw this sort of slowdown in growth in MAU in Q1, it really doesn't impact short-term revenues or financials at all. but as I said important for long-term growth we've fixed those issues we are we are back on our sort of what we think of as our regular glide path which is what gives us conviction on those on that range that you mentioned of 17 to 20 percent growth for the year.

Mark Mahaney, Analyst — Evercore ISI

Just to be clear issues fixed so we should be back on that glide path that growth path in Q2?

Russell Burke, CFO

Yeah, they've been almost entirely fixed. And we're seeing that in the MAU trends in Q2. We've still had some impact in April and to some extent in May, but we're definitely seeing that trend come back to that glide path that we expect.

Mark Mahaney, Analyst — Evercore ISI

And then, again, at a high level, that is high growth you're talking about. I mean, it's a good base you have, almost 100 million MAUs. and you grow that 20% for a couple of years, oh, I think you'll double that, my math is correct, in about three years, a little over three years. So just remind us, why should you be able to, those are high growth rates, why should you be able to sustain 20%, leaving aside these recent technical issues, why should you be able to sustain 20% MAU growth?

Russell Burke, CFO

It's about the value that we deliver to our members. and we have a very strong philosophy in the company that our number one task is to make the member experience great and that doesn't matter whether it's a free member or a paid member we've seen we've been successful at convincing people to move over to paid but building that overall basis is important and as we add value as we make the experience better and, you know, we've still got, you know, we talk about so the US versus international, our international opportunity is still very, very large. Even though we have a good number of MAU at this point, when we think about our markets there, there's still a huge opportunity, as well as continuing to expand in the US. Again, coming back to that broadening out the use cases and really our aim to be, you know, a key tool for the family in all life stages.

Mark Mahaney, Analyst — Evercore ISI

I think another way you could answer the question is just talk about what your penetration rates are. And I think you've got some cohorts with materially higher penetration than what you're showing overall. Do you have any data points you could share on that?

Russell Burke, CFO

Yeah. Look, our US penetration is around sort of 16% to 17%. And talking about the opportunity in international, you're broadly in international where you're less than 1%. You can see the opportunity there. But that's reinforced by the fact that what we call the triple tier territories internationally, UK, Australia, Canada, They're really catching up very quickly with that, to that US penetration. I think Australia is up to 13, 14% at this point. So we can see where we've focused on territories, where we're able to really move quickly, broaden out that base. And that's not to say that the US is not still growing quickly. We talk a lot about, you know, in our investor deck, as you know, Mark, we have a map of the US and the states where we are highly penetrated in or more highly penetrated in tends to be the southern and midwestern states at this point. But when you dig into it, the penetration rate, even in those top penetrated states, is still growing at a very consistent level. So we're still growing, even where we're highly penetrated in the U.S. Some of the other states have got a bit of catch-up to do, so we still see a big, big runway, both the U.S. and obviously international.

Mark Mahaney, Analyst — Evercore ISI

Has RJ explained to you why there'd be much greater focus on family connectivity and family safety in the South and in the Midwest than in the literal states, in the coastal states?

Russell Burke, CFO

We have a couple of theories. One is that, somewhat counter-intuitively, families in those areas tend to be technology-native or get into that space more quickly because they get, from our perspective, because they get married earlier, they have kids earlier, so they're introduced to Lie 360 earlier. Building on that, things like driving distances in some of those states, a big impetus for Life360 up to this point has been driving and the driving tools and the safety that's built around that for families. So those driving distances do make a difference. Whereas in Manhattan or somewhere else, people are just not driving as much.

Mark Mahaney, Analyst — Evercore ISI

Yeah. Okay. And then one last big picture question, and there's a series of things I want to ask you about. When we think about the subscription revenue drivers going forward, it's P times Q, you know, the number of subscribers and the price you get per subscriber. How do you think about the growth going forward? Should it be relatively balanced between the two? Do you see a particular reason why there's a lot more upside with pricing or ARPU than with unit growth?

Russell Burke, CFO

So, again, sort of coming back to our core philosophy of ensuring that the member experience is great. We're focused on delivering value for the member first and then catching up on pricing. That has been pretty consistently our approach, and I really don't see that changing. We're adding more value and more delight to the experience every day, so we will have opportunities. I think about pricing generally, I think we've got a long way to go before we reach a ceiling. And as we continually add value to the app, it actually raises that ceiling because it becomes more and more valuable for families in their everyday life. Just to remind us, have you had any major price changes? We did, somewhat split between the U.S. and international. In the U.S., about two and a half years ago, we did a pretty substantial sort of catch-up price adjustment. And that was, for monthly members, close to 50%. And, you know, that's obviously a pretty substantial increase. We saw a little bit of a churn event as expected in the first month or two, but growth very, very quickly came back. And on the retention side, that was really very little impacted. So that was a strong indication to us at the time that we were absolutely delivering the value for our members and that they were okay with that price increase. Internationally, it's a little more segmented as we've rolled out to the, again, as we call the triple tier territories. We've rolled out basically the U.S. experience and we've adjusted our pricing as we did that to somewhat equivalent to the U.S. And we'll continue to do that as we effectively add more value to the services as we roll out internationally.

Mark Mahaney, Analyst — Evercore ISI

Do you want to set up any expectations for investors about when you want to try to capture some of that growing value through further price adjustments?

Russell Burke, CFO

I think we'll look at pricing continually. Internationally, it's going to see that continuous tick up as we roll out to territories and therefore add value. Otherwise, I think it'll be recognizing the right point where we've added value and we should catch up on that. But it's not in our, for example, it's not in our guidance for this year.

Mark Mahaney, Analyst — Evercore ISI

Let's talk about sort of staying on this user and paying circle. And by the way, it's nice. You've got companies that have new metrics, unique metrics. Paying circles is your unique metric. That's a good thing to have. And it's a meaningful one, too. And it also gets across the point that this is like a family, a group service. I think there's just a lot of wins with that expression, paying circles. Paying circles have outgrown mostly, I think, MAU growth for quite some time. So just go through why that is, and should Paying Circle, so the conversion of users in the paid subscribers, should that continue to rise, and how high could that get? At the same time, yes, having more members pay is a good, more users pay is a good thing. Talk about where that conversion is now, how high it can get, and how you get it there.

Russell Burke, CFO

Yeah. So there's a few elements to that, and I would sort of think of MAU growth and Paying Circle growth is slightly different, although they're obviously connected in terms of through the You know, as I said, MAU growth is coming back on the glide path that we expected. So, you know, the MAU growth will be stronger sort of going forward as we think about the rest of this year. That'll sort of change that sort of mathematical equation. but but I do want to talk about the success that we've had with with paying circles and when you when you look at the last 12 to 18 months in particular there's there's a number of things that we've done to really drive that growth and you know in in Q1 we we had the largest paying circle additions that we've ever had as a company so you're aware we're actually achieving that really strong growth and when you look at the the reasons for that there's a number of things sort of through the funnel at the top our marketing has become more sophisticated and more targeted we're able to identify those with a greater propensity to move into paid subscription at the top of the funnel and then we've done a number of things in terms of optimizing the the funnel so if I look at trial starts for example that is that is really expanded and it's not just sort of from new to new registrations it's also tapping the the very large free user base and that's that is a huge opportunity for us going forward and part of the reason I don't see that sort of that growth slowing down and then you know we've just made continuous improvements through through the funnel which has impacted both conversion and retention all of that leads to you know that strong growth in paying circles which I think is you're fairly structural at this point well we'll still see seasonal variations but I don't see that slowing down so for the

Mark Mahaney, Analyst — Evercore ISI

foreseeable future, is it reasonable to assume that paying circles should grow faster than MAUs?

Russell Burke, CFO

You know, it depends on how successful we are with MAUs to some extent. So yes, I would see it, but it won't be the big disparity that we saw in Q1, just as a mathematical consequence. All right.

Mark Mahaney, Analyst — Evercore ISI

Okay, there's a couple of different things I want to touch on. oh who doesn't love pets talk about your pet product i think both hardware and and this is something that you've started to really emphasize i believe in the fourth quarter of last year is when you started rolling out your pet's product does please explain to us what that pet's product is what you've seen so far and what you would hope to have happen with that yeah so stepping

Russell Burke, CFO

back a little pet pets generally is part of this broader strategy that i talked about in terms of expanding use cases and your life stages within within the family because when we when we look at our free user base for example you know we've got a lot of your traditional families we also have couples who we know have a pet who who perhaps don't have the immediate need to sign up for a paid subscription, but as they bring their pet into their circle, that could potentially be a driver. So it's part of that overall strategy. What the pet device is, is a GPS device that allows you to track your pet in real time, and that's important because some people use Bluetooth devices which have an obvious delay and sort of inconsistency this is a much more solid way if your dog gets out and is sort of running away you know exactly exactly where he or she is at the time but it's part of a broader strategy here as we think about families with pets we we rolled out this sort of free service to to essentially register your register your pet and take advantage of the of the very large Life360 network so that if your pet becomes lost you can you can go to that network and locally be identified you know all of the Life360 members in your area we've had more than seven million people register for that and you know it's a it's a little bit of a process to register so that that gives us an indication of the potential for this um and we'll where our strategy here is uh continues to evolve as well um it's going to be about um a broader sort of pet experience you know the device plus um that that brings these people in that um may not otherwise have had a specific need to uh to become a paid

Mark Mahaney, Analyst — Evercore ISI

subscriber do you expect this to be more of a cross-sell product or a this is bringing in you

Russell Burke, CFO

brand new users into the Live 360 family? I think it'll be both. Our initial focus is going to be more on the cross-sell sort of bringing, giving our free members another reason to sign up for a paid subscription. Obviously beyond that definitely has potential.

Mark Mahaney, Analyst — Evercore ISI

Any challenges in terms of devices and supply chains?

Russell Burke, CFO

Like everyone else, I think we've had a number of challenges from tariffs to your general supply chain. We have been pretty successful at mitigating those. We did a lot of work on mitigating the overall impact of tariffs, but as part of that, we We did move our contract manufacturing location from China to Malaysia for the PET device. So that did have a bit of an impact sort of late in the year, early this year. But that line is now up and running, so we'll be able to service that device. OK.

Mark Mahaney, Analyst — Evercore ISI

Let's switch and talk a little bit about advertising. You've done some acquisitions here, some integrations. in Q1 you I don't know you hit like a 80 million revenue run rate for ad revenue you know 80 million acquisitions boosted that quite a bit but that's all right so talk about that long-term opportunity

Russell Burke, CFO

and how these acquisitions helped with that yeah I you know advertising is just an area I'm really excited about it's it has sort of so much potential and as an opportunity for us we we started a you know an advertising revenue stream and advertising business a little over a year ago and it was some fair it's it's built up slowly what we did realize from that is that we have an incredibly valuable audience you know our where we have a lot of data on our members and a lot of trust and therefore consent to use that data particularly when it's used for the members own benefit so we have real real-world real-time data which is sort of very very critical it's very desirable for advertisers but what we didn't have necessarily was the whole infrastructure to to take advantage of that. So we'd been building the business slowly. Nativo gave us the tech infrastructure, it gave us a sales team, it gave us relationships with advertisers and publishers that would have just taken a long time to build ourselves. So it gave us a real kickstart in that area. As you said, Mark, our Q1 revenue for advertising was about $20 million. We see that run rate sort of going close to doubling by the end of the year. We're in a situation where we're both building the business and we do expect the sort of typical Q4 seasonality in the business. But it is a really big opportunity for us. You laid out a specific ad revenue target for the year? Yes. Just over 100 million.

Mark Mahaney, Analyst — Evercore ISI

Okay. All right. Let's see. A few other questions here. Let's go back to international. And I know you mentioned, there's an expression you used, the tripartite committee, triple tier. So for UK, Australia and Canada, talk about your best performing international markets. What makes them differentiated? And is it a similar playbook that you have in the US? You're just rolling out to international markets or are there reasons that you have to dramatically

Russell Burke, CFO

change it? The reason that we chose those territories in the first place is that they were more similar to the US and we've had great success in rolling out we were able to essentially roll out the the US product more or less as as is it was a matter of your contracting for some local services for things like roadside assistance but but largely it was a very similar product to the to the US in territories where the culture and to some extent those sort of driving patterns were somewhat similar we've had huge success we continue to have real success those um you know those territories are still growing really quickly um our revenue growth year on year in those territories uh just those looking at those three territories was between 60 and 80 percent um so you can see those we've that's been a big part of that driver of international we're now in the sort of second stage where we're looking at countries that have given us the signal that they're that they're ready for that that next stage so our focus territories for this year are brazil mexico and germany we're seeing good growth already in those territories but we're doubling down on that where we're going to go into those territories they are slightly different for example brazil and mexico are more oriented towards the safety applications of the of the app um more more than the the than the driving applications uh but because we have a broad suite of products that's designed uh for for for the family and you're just as i said making family family life easier day to we can take we can emphasize a part of part of that suite in different territories and and localize that way as we go so we're definitely seeing opportunities there will continue to roll out but we're just at the at the beginning of that journey we've got a long long roadway to go their revenue

Mark Mahaney, Analyst — Evercore ISI

growth rate in those three markets higher than than what you have in the three, U.K., Australia, and Canada? Is the revenue growth faster in those three markets than it is in the other international markets, Brazil, Mexico, and Germany?

Russell Burke, CFO

Yes, although Brazil and Mexico, for example, are catching up quickly. And that is a direct result, the way we see it, of the focus and emphasis in those territories.

Mark Mahaney, Analyst — Evercore ISI

Okay. And then beyond those markets, have you already identified other markets that you would expand in?

Russell Burke, CFO

We have. And this is a long-term strategy for us. So we're looking at sort of northern and central Europe as most likely the next areas where we can roll out effectively. But eventually, we do want to be very much a global presence. And the other side that we haven't really talked about sort of coming back to advertising is that we now have multiple ways to monetize our very large free user base. So in the more developed territories, the emphasis will be on subscription. In less developed countries, it might be more an emphasis on advertising and an advertising-supported product. Either way, it gives us a lot of opportunity to monetize that total base, and we see that as an integral part of our long-term strategy.

Mark Mahaney, Analyst — Evercore ISI

All right. Let me end up with two last questions, one on margins and one on capital allocation. So your guidance for this year implies roughly 20% EBITDA margins, and I think you've talked about long-term margins getting to 35%. So how do you bridge that gap?

Russell Burke, CFO

We've been consistently improving our bottom line margin. So essentially for the last few years, it's consistently increased. And a large part of that is really operating leverage. And that's the biggest piece of how we get to that 35% margin. A lot of our costs are sort of fixed costs to some extent in terms of all of the investment that has gone into the technology, the infrastructure, the product itself. And, you know, as we go forward, we absolutely see that revenue growth continuing to be a much higher rate than the increase in operating expenses and the ability to drive margins and build on additional revenue streams. we're building on advertising we we will build on additional revenue streams which uh in our business tend to tend to be high margin streams so all of that combines we we have a very clear path to that 35 um and as i said it's largely driven by scale you mentioned other revenue streams in addition to advertising like what um really partnerships where um as part of our strategy for you're building this sort of family super app platform yeah we want to be the go-to platform for the family in the future no again across those life stages so it doesn't matter whether it's whether it's sort of the connectivity piece whether it's the pets piece there's a number of things that we can build on for you know we've talked about insurance and financial services in the past they're likely to be uh more on the partnership side but we're building an ecosystem where these partners can plug in and we're we're really been talking about that for a little while but we're now just sort of seeing that the traction start um you know we've we've talked about our uber partnership yes and that's that's a broad-ranging partnership it's both advertising and uh um and integration of membership. So that's just one example of how we see broadening out that revenue base. Will you just double-click a little bit on the

Mark Mahaney, Analyst — Evercore ISI

Uber partnership? Yeah. When did you first announce that? Like a year

Russell Burke, CFO

ago? Well, we first started with the advertising side. Them advertising on you? Yes. Again, using our unique real-world, real-time data, the example there was we already had a feature of the app where if you landed an airport you'll film your family circle and notify yes that's right what we did is it adapted that slightly to so that when you landed in the airport you got a message that said we see you've landed at SFO we like to book an Uber so that's that's where it started they saw great success on click-through rates and traction there, and that sort of lended itself to this broader partnership now where we have advertising but also this essentially a sort of swap of member rights. What that does from our point of view, it allows us to build that whole experience within the app, keep our members engaged within Live360, again, give them more reasons to keep coming back. they've been a good partner they've been a very good partner okay and then uh last question has

Mark Mahaney, Analyst — Evercore ISI

to do with capital allocation so where where are we here you got 460 million in cash that's pretty

Russell Burke, CFO

good i don't think you have any debt or do you need that uh well we have the convertible notes that that we that we issued so that's right that's just a little over 300 million that's right okay

Mark Mahaney, Analyst — Evercore ISI

so just you know help us think through how you balance growth investments m a shareholder returns? If I give you those three, how do you balance them?

Russell Burke, CFO

Yep. So thinking about the elements of those, we are still very much a growth company. We see, you've heard me talk about a broad range of opportunities. There's an enormous amount of opportunity here to continue to fuel that very strong growth. So that's where we see the ultimate value for shareholders is continuing to drive that growth, continuing to improve margins, continuing to really scale both top-line and bottom-line. So we definitely see opportunities there. Where we did announce this sort of share repurchase program very much along the lines of offsetting the dilution from SVC that was that was a message that we had from from our investors and that's that's exactly what it's designed to do so it's not going to take away you talked about our large cash balances we have very we're now in sort of very strong sort of cash flow generation mode so it won't it won't dilute from the overall cash balance we still believe that We have a lot of scope there to deploy those funds where we see the right opportunity, which brings me to M&A. We've just done a moderate size acquisition from our point of view. We're continuing to evolve that and sort of digest that, although it's now starting to really fire. But so looking at this year, We probably won't have any large scale acquisitions, but we'll continue to look at opportunities and there's definitely opportunities in sort of aqua hire type acquisitions as well. But our approach here is to thinking about our overall strategy. We prioritise the strategies that we want to do in the short term. We then look at the buy-build-partner question and move that to the most effective means of achieving that strategy.

Mark Mahaney, Analyst — Evercore ISI

Hey, I forgot. Back on the margins, I promise this will be the last question. You talked about leverage against things like product spend, infrastructure spend, tech spend. What should we expect in terms of leverage against marketing spend? So you're clearly a consumer, family product. I expect marketing spend from businesses like yours. What's a reasonable expectation that marketing stays in a band as a percentage of revenue for the next couple of years? Do you want to lay out an expectation that you get leverage against that line? Or is the way you phrased it sounds to me like we should expect leverage in the other areas?

Russell Burke, CFO

I think we will get more leverage in R&D and G&A, absolutely. But as you think about the sales and marketing line, there's a couple of aspects. One, the largest single element of that sales and marketing expense line is platform commissions that we pay to Apple and Google. That is something of a variable cost to subscription, but we absolutely see the opportunity for that to come down over the next couple of years because there's continuing intense pressure on on Apple in particular we all know about the lawsuits we see that as coming down there'll be opportunities to for example to do off-platform billing but but aside Aside from that, to your question in terms of what we tend to call growth marketing, the other aspect is, historically, a lot of our subscriber growth has been word of mouth Something like 70% to 80% of our growth has been attributed to that organic word of mouth and your family's on the sideline of the kids' soccer match, really recommending us. we've seen that consistently. We have increased our marketing in the last couple of years in particular because it's gotten more mature we've gotten more conviction in terms of the ability to get a very strong return on that and you can see that in our, we talked before about the paying circles growth, it's all part of that cycle. To answer your specific question I see that piece This probably being a fairly sort of consistent level of percentage of revenue, certainly percentage of subscription revenue for the next couple of years. But we will get leverage out of that line as well.

Mark Mahaney, Analyst — Evercore ISI

Okay, Russell Burke, CFO of Life360. Thank you very much.

Russell Burke, CFO

I appreciate the time, Mark, and good to come and chat.

Mark Mahaney, Analyst — Evercore ISI

Yes, likewise.

Russell Burke, CFO

Thank you.