Life360, Inc.

Greetings, everyone, and welcome to our fourth quarter and fiscal year 2025 earnings conference call. This call is being conducted as a Zoom audio webinar. All participants will be in listen-only mode until the Q&A session. To ask a question, please raise your hand using the icon at the bottom of your screen. We will make forward-looking statements during this call which are subject to risks and uncertainties. A summary of these risks can be found in the risk factor section of our Form 10-K filed with the SEC today, March 2, 2026. These statements are based on assumptions we believe reasonable as of today, and we have no obligation to update them except as required by law. We will also present both GAAP and non-GAAP financial measures. Reconciliations are included in our earnings press release on our investor relations website. This is an audio-only call with no slides. Our updated investor deck is available as a reference on our investor relations website. We'll begin with a business update by CEO Lauren Antonoff. Then CFO Russell Burke will review financials, followed by Lauren's 2026 outlook, and then Q&A. Please limit questions to one per participant. I'll now turn the call over to Lauren.

good afternoon to everyone from the u.s and good morning to those tuning in from australia thank you for joining our fourth quarter and full year results call we've got a lot of material today because there's a lot going on that deserves deeper discussion 2025 was a landmark year for life 360. for the first time in company history we achieved annual net income of over 32 million even excluding a one-time non-cash tax benefit reflecting both the fundamental strength of our premium model and the operating discipline we've built over the past several years. Full-year revenue grew 32% to nearly $490 million, adjusted EBITDA more than doubled to over $93 million, and we ended the year with 95 million monthly active users and 2.8 million paying circles. Beyond the numbers, we made significant progress building our family super app platform, We introduced PetGPS, our first fully in-house created device, which launched simultaneously across five global markets. We acquired Fantix, enabling face ads and uplift, and we completed the Nativo acquisition in January 2026, creating a full-stack advertising platform with Fortune 500 relationships and thousands of publishers. These platform investments position us well for the next major shift reshaping our world, AI. We see AI as an opportunity to accelerate our path and deepen our mode. We're well into the transition to an AI-first world, and I want to share why we're so confident in our position. First, our core use case is durable because it's anchored in real people moving through the physical world. While AI will reshape our product experience, it does not replace your child, your spouse, or your pet. As for market concern that AI will eliminate the need for software products, code is only part of what we do. Family relationships and physical world services like crash detection, emergency response, and roadside assistance go well beyond what software alone can provide, and they're essential to the peace of mind that families rely on us to deliver. Second, AI makes our data more valuable. For many products, data doesn't need to be fresh. A year-old forum thread is nearly as useful as a new one, and once it's absorbed in a model, you may not need that source at all. But our data is fundamentally different because by its nature, it's real-time, continuous, and perishable. Where your child is right now can't be learned from a training set. We keep this data set within our walled garden, and the market's already placing a premium on access to it, validating both its scarcity and its strategic value. Third, AI enhances our ability to delight customers. Today, members engage with Life360 by briefly checking the map or reading notifications. With AI, we can start to play a more active role in our members' lives, telling you that there's a soccer game at 3 or making sure you know you're the one getting the kids and that you have directions to the field and reminding you that you need to leave in 30 minutes so you won't be late. AI connects the dots so you can focus on real life. Where earlier apps have failed because they put the burden on parents to plan ahead, our location intelligence powered by AI can simplify organization for busy parents, deepening the value we offer families. Fourth, AI is improving our execution. The trajectory is promising as organization-wide AI adoption has grown from about 25% to almost 95% in the past year. This is already increasing the pace at which we're delivering product capabilities and experiences that drive growth, further bolstering our confidence in achieving our 20% now target for 2026. Over time, it'll accelerate our path to creating significant operating leverage. Finally, we understand the power of platform shifts because we were born from one. Life360 was founded on the early recognition that mobile would reshape how families stay connected, and we look forward to leading the charge to help families navigate this transformational shift. At the same time as AI is transforming how we work and what we do, we enter 2026 on track to achieve our multi-year strategic goals, surpassing 150 million now and 1 billion in annual revenue, delivering continuous adjusted EBITDA margin expansion on our path to 35% plus, and becoming the number one brand that makes everyday family life better. To achieve these goals, we continue to grow our user base, scale our paid offerings, expand our revenue streams, and enhance our profitability. We'll touch on each of these briefly. Let's start with user growth, which is the engine that fuels both subscription and advertising revenue. In 2026, we expect 20% malgrowth for the full year with significantly quarterly variation in net ads and growth weighted towards H2. Our malgrowth engine operates through two complementary mechanisms, product improvements, and marketing which supplements organic adoption. Both fluctuate due to the varied timing of product improvements and marketing investments, along with unpredictable acquisition spikes, especially in emerging markets. While user growth remains a bit volatile quarter to quarter, we expect to continue steady annual malgrowth. Remember that after strong acquisition quarters, a meaningful share of new users shift from active to passive. Think about a parent who checks the app regularly while their spouse relies on notifications. Both are still getting value, but in this scenario, only one is counted in mal after the first month. Product-led growth benefits from specific improvements and new features like driver reports, no-show alerts, and device integration, as well as network effects from happy members, and both of these compound over time. Across communities, word-of-mouth drives penetration as trust builds through social proof. At the platform level, our growing base of nearly 100 million users attracts partners like Uber and AccuWeather, and those partnerships in turn create new reasons for families to use and stay on Life360. Features like our Pet Finder Network and Pet GPS extend that flywheel further, broadening our relevance and fueling our progress towards super app status. Turning from product-led growth to marketing-led growth, Our marketing now spans the full customer journey. At the top of the funnel, we focus on awareness with evocative video ads you may find on YouTube or premium placements like the Olympics. Mid funnel, we work with influencers and podcasters to enhance consideration and reinforce our family positioning. At the bottom of the funnel, we deploy sophisticated performance marketing to drive installs and registrations. We've validated our hypothesis that by investing more in the upper funnel, we improve efficiency of our lower funnel marketing, so we're putting more dollars behind our brand. To that end, during the Super Bowl, we launched the third chapter of our Family Proof Your Family brand campaign, which had prominent placements across NBC's streaming and broadcast networks during the Olympics. These campaigns represent a significant step forward in building Life360's reputation as the trusted family brand at scale. And we followed up with targeted campaigns leveraging the Life360 advertising platform further down the funnel. Our biggest growth opportunities are in international markets, where penetration averages low single digits compared to 16% in the U.S., In more developed markets like the UK and Australia, we're focused on deepening penetration and monetization. In emerging markets like Mexico and Brazil, we're in the earliest stages of penetration, and we're focused on growing awareness and adoption, and we expect to see continued variability in growth rates. Our second key focus is on scaling our paid offerings. Paying circles grew 26% in 2025, reflecting the increasing value we deliver for families and the impact of continuous funnel optimization, which is driving record conversion rates. As we expand the platform with capabilities like PetGPS and eventually aging parents, families see more values and discover more reason to move into premium tiers. At the same time, international ARPPC remains 40% to 50% below U.S. levels, representing a multi-year runway of natural monetization upside as those markets mature. Our near-term priorities are growth of our membership and subscriber base, but our wide remit addressing the needs of everyday family life opens limitless opportunities to create member value, presenting a pricing opportunity with significant headroom. Tile and PetGPS extend Life360 into the physical world, giving families new reasons to join and deepening engagement with existing members. Devices serve as a subscription growth mechanism, not a standalone hardware business. For Tile specifically, we decided to exit brick-and-mortar retail and focus distribution on direct and online channels where we can better control the full customer journey from purchase to subscription activation. PetGPS launched exclusively through direct and online channels from day one. To give you a perspective on the PetGPS opportunity, in the few short months since we introduced our PetFinder network, we now have almost 5 million pets registered, and nearly 90% of those are in free circles. That's a large, growing, identifiable audience we can convert to paid over time. Multi-year subscription revenue from converted users far exceeds the device investment, so we're prioritizing adoption over device margins and getting the model right over near-term device volumes. Initial response has validated our pet GPS thesis, and now we're optimizing unit economics, pricing, and supply chain to maximize subscription growth. This disciplined approach reflects our long-term focus. Our third area is expanding our revenue streams with advertising as a transformational opportunity to build a high-margin business that complements subscriptions. With FanPix, which we acquired in early 2025, we built the intelligence and measurement layer that let us launch PlaceAd and Uplift. With the acquisition of Itibo that closed in January 2026, we now have the pieces in place to operate a full stack advertising technology platform. The logic of this combination is straightforward. We have nearly 100 million users and the richest first-party family location data set in the market. But we were early in building the ad tech platform and off-site reach needed to scale. Nativo had hundreds of advertisers and thousands of publisher relationships, along with a mature ad tech stack and a sales force built over more than a decade. but no first-party data or audience of its own. Let me explain what this combination means in practice. Before Nativo, we were effectively limited to showing ads inside the Live360 app, reaching approximately 40 million ad-eligible US users. Now, we benefit from direct integrations with thousands of publishers, including news sites, lifestyle content, and connected TV. We can take our first-party data, the fact that we know that this is a household with two kids and a dog and a parent who drives to soccer practice every Saturday, and use it to serve ads not just inside Live360, but across that entire publisher network. When that parent is reading an article or streaming content, our data is powering the ad they see. And because we have real-world location data, we can close the loop and tell the advertiser whether the ad actually generated store visits. Importantly, this includes our passive users. members who rely on notifications rather than actively opening the app. Place ads reach these users at the moment they're moving through the physical world, meaning that even members who are not counted in now represent monetizable audience inventory. And throughout all of this, the data never leaves our ecosystems. What our off-site platform enables is that every new publisher relationship becomes another canvas for our ads. That's what takes us from 16% reach to over 95% of the ad-eligible adults in the U.S., and even more as we expand internationally. The U.S. digital advertising market is massive, over $400 billion and growing. The majority flows through three platforms, but more than $100 billion is spent across open web, connected TV, and premium publishers, where advertisers are actively seeking better data, better targeting, and real-world measurement. That's exactly what our platform delivers, and we're uniquely positioned to win in this market. Over the long term, we believe that advertising revenue can rival the scale of subscriptions and ensure that every family can access Life360 in the way that works best to them, whether that's a free ad-supported experience or a premium subscription. The result is a truly multi-engine platform with diverse, high-margin revenue streams. Now, I'll hand it over to Russell to review the financials and discuss how we're enhancing profitability through operating leverage.

Thanks, Lauren, and thanks everyone for joining the call today. As a reminder, the financials I'll be referencing are unaudited for Q4, audited for the full year 2025, and denominated in US dollars. Let's start with the fourth quarter. Q4 revenue increased 26% year-on-year to $146 million, reflecting strong performance across our business. Overall, subscription revenues increased 30% year-over-year to $102.5 million. Core i360 subscription, which excludes hardware subscriptions, increased 33% year-over-year to $97.3 million, driven by the 26% increase in global paying circles and 6% higher ARPPC. Total paying circles growth was supported by improved conversion globally, with Q4 quarterly subscriber net additions achieving a new record. Other revenue in Q4 increased 86% to $24.2 million, driven by continued scaling of our advertising platform and growth in data partnerships. The significant year-over-year increase reflects the ramping of our advertising capabilities and increasing advertiser demand. December annualised monthly revenue reached $478 million and increased 30% year-over-year, reflecting the strong performance of subscription and other recurring revenue. Hardware revenue for the quarter was $19.3 million. While hardware revenue declined 19% year-over-year due to promotional pricing and product mix, device unit shipments increased 3% as we integrate hardware more deeply into the Live360 subscription experience. As we've stated previously, Our strategic focus with hardware remains on expanding the member experience and ultimately our subscriber base, rather than near-term hardware margins. In 2026, we've made the strategic decision to exit physical retail and focus exclusively on direct-to-consumer and online channels like Amazon. Unit volumes are expected to decline year-over-year as we eliminate retail margin pressure and optimize pricing in our digital channels where we control the full customer experience. Q4 gross profit of $109.7 million increased 28% year-over-year with gross margins of 75%, higher than the prior year. The stability in gross margin reflects the balance of high margin subscription and other revenue with strategic investments in hardware. At the device level, pet GPS margins were negative as we priced for market penetration rather than near-term profitability. We expect this approach to continue in 2026, with device margins fluctuating quarterly between breakeven and negative. In Q1, we expect negative device margins as we conduct extensive price testing with PetGPS and absorb the impact of our exit from brick and mortar retail. However, our consolidated gross margins remain strong in the 75% to 78% range, driven by high margin subscription and other revenue, which continue to become a larger part of the mix. Q4 total operating expenses remain flat as a percentage of revenue year over year at 69%. Q4 operating expenses excluding commissions increased 26% year over year versus subscription revenue growth of 30%. This demonstrates our continued operating discipline even as we made strategic investments in pet GPS launch and international expansion. R&D costs increased 12% year-over-year to support our expanding product suite, and importantly, our AI investments are embedded within this existing cost structure and will help us build faster and work more efficiently. Sales and marketing costs increased 25% year-over-year, driven by higher commissions and planned pet GPS and seasonal marketing. Q4 G&A increased 55% year-over-year, supporting company growth in our expanding advertising platform, and importantly, including transaction costs related to the Nativo acquisition. We expect G&A costs to normalize in 2026, inclusive of our AI investments. We continue to make substantial progress in expanding profitability. First, we recorded positive net income of $129.7 million in Q4, up from $8.5 million in the prior year, and I note that it includes a one-time non-cash tax benefit of $118.4 million. Next, adjusted EBITDA increased 53% to $32.4 million in Q4, from $21.2 million in the prior year. with adjusted EBITDA margin expanding to 22%, our highest quarterly margin to date. This performance demonstrates the significant operating leverage inherent in our business model as we scale. That operating leverage carries on into 2026 as we expand high margin subscription and other revenues, even as we make growth-orientated investments and integrate Nativo in the first half. Advertising in particular creates high incremental margins as it scales in the second half, partly related to seasonality, but also importantly leveraging our existing infrastructure and user base. Looking briefly at the full year results for 2025, which exceeded guidance across the board, total revenue increased 32% year over year to $489.5 million. Gross margin expanded to 78%, three percentage points higher than 2024. Total operating expenses grew 26% year over year, but declined as a percentage of revenue, driving strong operating leverage. Net income for the year was $150.8 million, compared to a $4.6 million loss in 2024. This marks our first fully profitable year in company history, even excluding the one-time non-cash tax benefit. Adjusted EBITDA increased $47.7 million year-over-year to reach $93.2 million, exceeding our outlook range, with margin expanding from 12% in 2024 to 19% in 2025. Turning now to the balance sheet and cash flow, Life360 ended 2025 with cash, cash equivalents, and restricted cash of $495.8 million, a significant increase from $160.5 million at year-end 2024. This increase was primarily driven by operating cash flow and the net proceeds from our June 2025 convertible notes offering, which provided $275.4 million in net proceeds. partially offset by the $25 million investment in AURA convertible notes. The result is a substantially stronger balance sheet with significant financial flexibility to invest in our highest return growth opportunities while maintaining disciplined capital allocation. Operating cash flow was positive again in Q4. Net cash provided by operating activities of $36.8 million during the quarter increased nearly 200% from $12.3 million in the prior year, reflecting our strong and accelerating cash generation. For the full year, operating cash flow reached $88.6 million, up $56 million from 2024. Thanks for your attention, and I'll hand back to Lauren to discuss our 2026 guidance.