Q3 2024 Life360 Inc Earnings Call

November 12, 2024

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Speaker Change: You have joined the meeting as an attendee and will be muted throughout the meeting performance. During this call, which are subject to material risks and uncertainties that can cause actual results to differ materially from such statements.

Speaker: A summary of these risks may be found in the Risk Factors section of our Form 10-Q filing with the SEC dated November 12, 2024. These forward-looking statements are based on assumptions that we believe to be reasonable as of today's date, November 12, 2024, and we have no obligation to update these statements as a result of new information or future events, except when required by law. Additionally, we will present both GAAP and non-GAAP financial measures on today's call. These non-GAAP measures are not intended to be considered in isolation from, a substitute for, or superior to our GAAP results.

Speaker Change: Summary of these risks may be found in the risk factors section of our Form 10-Q filing with the SEC dated November 12 2020 for these forward looking statements are based on assumptions that we believe to be reasonable as of todays date November 12, 2024, and we have no obligation to update these statements as a result of new information or future events.

Except when required by law.

Speaker Change: Additionally, we will present, both GAAP and non-GAAP financial measures on today's call. These non-GAAP measures are not intended to be considered in isolation from a substitute for or superior to our GAAP results. It should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP a description of these non-GAAP.

Speaker: It should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. A description of these non-GAAP financial measures, as well as a reconciliation to the nearest GAAP financial measures, are included at the end of the company's earnings media release issued earlier today, which has been posted on the Investor Relations page of the company's website.

Financial measures as well as a reconciliation to the nearest GAAP financial measures are included at the end of the company's earnings media release issued earlier today, which has been posted on the Investor Relations page of the company's website.

Speaker: We have posted an updated investor presentation on the investor relations page, which includes additional complimentary graphics and data. Please note that it has been provided as an additional reference and that we will not be using the presentation as an exhibit during today's call.

Speaker Change: We have posted an updated investor presentation on the Investor Relations page, which includes additional complementary graphics and data.

Speaker Change: These note that it has been provided as an additional reference and we will we will not be using the presentation as an exhibit during today's call.

Speaker: We will begin with a business update by co-founder and CEO Chris Hulse and then CFO Russell Burke will provide detail on the Q3 financials. Chris will then provide some outlook comments which will be followed by a Q&A session.

Speaker Change: We will begin with a business update by co founder and CEO, Chris holes, and then CFO Russell Burke will provide detail on the Q3 financials. Chris will then provide some outlook comments, which will be followed by a Q&A session. We request that participants limit themselves to one question. So that we can get through as many participants as possible I would.

Speaker: We request that participants limit themselves to one question so that we can get through as many participants as possible.

Speaker: I would now like to turn the call over to Chris. Good afternoon to everyone joining from the US and good morning to those tuning in from Australia. Thank you for being here for our third quarter results.

Now like to turn the call over to Chris.

Chris Holes: Good afternoon to everyone joining from the U S and good morning to those tuning in from Australia. Thank you for being here for our third quarter results call to start a brief personal update as many of you know following our IPO I took my first long break in 17 years with the company I've returned fully recharge, where they're needed energy and excitement for the journey ahead.

Chris Hulse: To start, a brief personal update. As many of you know, following our IPO, I took my first long break in 17 years with the company. I've returned fully recharged with renewed energy and excitement for the journey ahead. I am more committed than ever to leading Light360 as we move toward our $1 billion revenue target and ultimately scaling to multi-billion dollar growth in the years ahead.

Chris Holes: <unk>, a more committed than ever to leading library 60, as we move toward our 1 billion revenue target and ultimately scaling to multibillion dollar growth in the years ahead.

Chris Hulse: With that, let's turn to our most recent results. In Q3 2024, Flight360 made tremendous progress delivering our best ever back-to-school period and setting new records in both monthly active users and subscriber growth, all while advancing our platform strategy. These strong results reflect our focus on key growth priorities across the board. To start, our member base grew significantly, expanding by 6.3 million new monthly active users this quarter to reach a total of 76.9 million, a 32% increase year-over-year and an acceleration over last quarter. This growth includes strong momentum in our paid offerings with a quarterly net increase of 159,000 paying circles and impressive improvement over the 132,000 net additions in Q2.

Chris Holes: With that let's turn to our most recent results.

Chris Holes: In Q3, 'twenty 'twenty four library 60 made tremendous progress delivering our best ever back to school period, and setting New records in both monthly active users and subscriber growth all while advancing our platform strategy. These strong results reflect our focus on key growth priorities across the board to.

Chris Holes: To start our member base grew significantly expanding by 6.3 million new monthly active users this quarter to reach a total of $76 9, million% to 32% increase year over year and an acceleration over last quarter.

Chris Holes: This growth includes strong momentum in our paid offerings with a quarterly net increase of 159000 paying circles and impressive improvement over the 132000 net additions in Q2.

Chris Hulse: This was driven by a new record for quarterly net ads in the U.S. at 111,000 editions. a 64% increase year-over-year. International expansion also played a major role in these results with international MAUs up 51% year-over-year and international paying circles increasing by 37%, even amid price adjustments for legacy subscribers outside our core triple-tier markets. Average revenue per paying circle in international markets grew by 53%, supported by updating our legacy pricing strategy. which allows us to experiment faster with our new dual-tier approach. We're also excited about the next phase of our hardware strategy, which will continue to contribute to subscriber groups.

Chris Holes: This was driven by a new record for quarterly net adds in the U S. At 111000 net additions a 64% increase year over year.

International expansion also played a major role in these results with international M. A use up 51% year over year and international paying circles, increasing by 37%, even amid price adjustments for legacy subscribers outside our core triple tier markets.

Average revenue per paying circle in international markets grew by 53% supported by updating our legacy pricing strategy.

Chris Holes: It allows us to experiment faster with our new dual tier approach.

Chris Holes: We're also excited about the next phase of our hardware strategy, which will continue to contribute to subscriber growth.

Chris Hulse: This quarter, we launched our updated tile device lineup, the first designed entirely in-house by Light360. This new lineup significantly differentiates us from competitors featuring an SOS capability that turns every tile into a safety device, a function unique to our platform and unavailable from other third parties across the Google and Apple networks. The launch garnered widespread press coverage, most of which highlighted their SOS. Initial results have been extremely positive with direct-to-consumer sales more than doubling in the six weeks following the launch compared to the same period last year. Tile is also proving to be a valuable customer acquisition tool for our subscription business.

Chris Holes: This quarter, we launched our updated tile device lineup and the first designed entirely in house by <unk> 60.

Chris Holes: This new lineup significantly differentiates us from competitors, featuring an Sos capability that turns every tile into a safety device a function unique to our platform and unavailable from other third parties across the Google and Apple networks.

Chris Holes: The launch garnered widespread press coverage most of which highlighted our Sos feature initial results have been extremely positive with direct to consumer sales more than doubling in the six weeks following the launch compared to the same period last year.

Chris Hulse: We have been seeing a consistent rise in the percentage of U.S. premium subscribers with an active link Tile in their account, and we expect this to continue with the new product. However, while these results are surpassing our expectations, we did face logistical delays with the TILE launch, including certification, labeling, and supply chain challenges. These delays led to a lower than expected device sales and margins in Q3, as we had periods when the full lineup was unavailable, impacting our ability to fully shift inventory to new products as planned. Fortunately, these issues have been resolved. Although the transition will take some time to flow through brick and mortar retail channels, we're optimistic about Black Friday as an opportunity to establish a new baseline for this improved lineup.

Chris Holes: Tile is also proving to be a valuable customer acquisition tool for our subscription business. We have been seeing a consistent rise in the percentage of U S premium subscribers with an active link tile in their account and we expect this to continue with a new product.

Chris Holes: However, while these results are surpassing our expectations, we did face logistical delays of the tire launch, including certification labeling and supply chain challenges. These delays led to a lower than expected device sales and margins in Q3, as we had periods. When the full lineup was unavailable impacting our ability to fully shift inventory to new products as planned.

Chris Holes: Fortunately these issues have been resolved.

Chris Holes: Although the transition will take some time to flow through brick and mortar retail channels, we're optimistic about black Friday as an opportunity to establish a new baseline for this improved lineup.

Chris Hulse: Now that the tile rollout is complete, our team is focused on further developing our GPS lineup based on GeoBit technology. We plan to begin with a pet tracking device potentially in late 2025, followed by an elder care product anticipated in 2026.

Chris Holes: Neither the tile rollout is complete our team is focused on further developing our GPS lineup based on <unk> technology.

We plan to begin with a pet tracking device potentially in late 2025, followed by an elder care product anticipated in 2026.

Chris Hulse: Since both products require subscription and target high-growth verticals, we are excited about the potential for this next generation of hardware to drive a new wave of subscription In Q3, we made significant strides in advancing our advertising platform, which we are now testing globally. Our objective is to deliver contextually relevant ads that enhance the experience for our members, leveraging our proprietary first-party location data to offer advertisers unmatched precision audio. A key milestone this quarter was our partnership with Uber, which highlights the unique power of our data. Through this collaboration, users arriving at an airport receive a targeted Uber ride offer, demonstrating the value of contextual relevance over traditional banner ads.

Chris Holes: Since both products require subscription and target high growth verticals. We are excited about the potential for this next generation of hardware to drive a new wave of subscription growth.

Chris Holes: In Q3, we made significant strides in advancing our advertising platform, which we're now testing globally our.

Chris Holes: Our objective is to deliver contextually relevant ads that enhance the experience for our members leveraging our proprietary first party location data to offer advertisers unmatched precision audience targeting.

Chris Holes: A key milestone this quarter was our partnership with Uber, which highlights the unique powered by our data.

Chris Holes: Through this collaboration users arriving at an airport receive a targeted Uber right offer demonstrating the value of contextual relevance over traditional banner ads or Uber landing notifications outperformed industry averages for banner ads underscoring the potential of our approach.

Chris Hulse: Our Uber landing notifications outperform industry averages for banner ads, underscoring the potential of our approach. This early phase points to promising opportunities for future monetization by integrating signals from everyday activities, such as relocating to a new home, shopping at retail locations or quick service restaurants, or life events like starting college. Realizing the full potential of this advertising vision will take time as we expand our back-end infrastructure and build out our sales platform, but the early results strengthen our confidence that advertising could eventually become a revenue stream on par with our subscription business. With a strong pipeline of partners seeking to tap into our unparalleled first-party location platform, we see immense potential to expand our market versus competitor.

Chris Holes: This early phase points of promising opportunities for future monetization by integrating signals from everyday activities, such as relocating to a new home shopping at retail locations or quick service restaurants or life events like starting college.

Chris Holes: Realizing the full potential of this advertising vision will take time as we expand our backend infrastructure and build out our sales platform by the early results strengthen our confidence that advertising could eventually became a revenue stream on par with our subscription business.

Chris Holes: With a strong pipeline of partner is seeking to tap into our unparalleled first party location platform, we see immense potential to expand our market versus competitors.

Chris Hulse: Our data business, which had leveled off as we transitioned to aggregated data, returned to growth in Q3, boosted by our exclusive partnership with Placer.ai. We are confident about accelerating growth in 2025 and beyond as this collaboration deepens. Additionally, our newly formalized partnership with Hubble paves the way for a new enterprise revenue stream and significantly enhances the location capabilities of our hardware Together, these strategic partnerships underscore the potential to expand both our data business and our technology offerings as we continue to drive growth for life.

Chris Holes: Our data business, which had leveled off as we transitioned to aggregated data returned to growth in Q3 boosted by our exclusive partnership with placer to AI.

Chris Holes: We're confident about accelerating growth in 2025 and beyond this collaboration deepens.

Additionally, our newly formalized a partnership with hovel paves the way for a new enterprise revenue stream and significantly enhances the location capabilities of our hardware devices together. These strategic partnerships underscore the potential to extend both our data business and our technology offerings as we continue to drive drove drive growth for life 360.

Russell Burke: With that, I'll turn the call over to Russell to run through the finance. Thanks Chris and thanks everyone for joining the call today. As a reminder, all of the financials I'll be referencing are unaudited and denominated in US dollars. Q3 revenue increased 18% year-on-year to $92.9 million. The strong operating metrics that Chris outlined earlier, in particular the record net paying circle additions in the quarter, drove an acceleration in our subscription revenue. Overall subscription increased 27% year-on-year and accelerated from the prior quarter. Core i360 subscription, which excludes hardware subscriptions, increased 34% year-on-year, driven by the 25% increase in global paying circles and 6% higher ARPPPC.

Speaker Change: With that I'll turn the call over to Russell to run through the financials.

Russell Burke: Thanks, Chris and thanks, everyone for joining the call today.

Russell Burke: As a reminder, all of the financials I'll be referencing are unaudited and denominated in U S dollars.

Russell Burke: Q3 revenue increased 18% year on year to $92 9 million.

Speaker Change: The strong operating metrics that Chris outlined earlier in particular, the record net paying cynical additions in the quarter drove an acceleration in our subscription revenue.

Speaker Change: Overall subscription increased 27% year on year and accelerated from the prior quarter.

Speaker Change: Core life, 360, subscription, which excludes hardware subscriptions increased 34% year on year, driven by the 25% increase in global paying circles, and 6% higher a L. P. P. P C.

Russell Burke: Hardware revenue declined 24% year-on-year to $11.7 million, largely due to the six-week delay in the launch of our new Tile product. which resulted in lower unit sales volume. The launch also involved increased discounting in retail channels to clear out existing inventory, along with mixed shifts and additional certification, labelling and shipping costs. all of which impacted hardware margins for the quarter. As a result, standalone units shipped declined nearly 24% year over year, and the average selling price decreased by 4%, resulting in lower margins in the quarter. As Chris mentioned earlier, the new tile devices have been extremely well received and early indicators suggest strong sales momentum.

Hardware revenue declined 24% year on year to $11 7 million.

Speaker Change: Largely due to the six week delay in the launch of a new tile products, which resulted in lower unit sales volumes.

Speaker Change: Launch also involved increased discounting in retail channels to clear out existing inventory along with mix shifts and additional certification labeling and shipping costs, all of which impacted hardware margins for the quarter.

Speaker Change: As a result, standalone units shipped declined nearly 24% year over year and the average selling price decreased by 4%, resulting in lower margins in the quarter.

As Chris mentioned earlier, the new toll devices have been extremely well received and early indicators suggest strong sales momentum.

Russell Burke: However, as is typical, the full impact will become clearer after the key U.S. Cyber 5 retail period. Other revenue in Q3 increased by 43% to $9.3 million. due to the combination of increases in data and partnership revenue, which includes advertising revenue. September annualized monthly revenue reached $336.2 million and increased 30% year-on-year. Accelerating from 23% year-on-year growth in June, reflecting the strong performance of subscription and other recurring revenue. Q3 gross profit of $70 million increased 21% year-on-year, with gross margin slightly higher at 75% compared with 74% in the prior year, due to the increase in subscription and other revenue.

Speaker Change: However, as is typical the full impact will become clearer after the key U S cyber five retail period.

Speaker Change: Other revenue in Q3 increased by 43% to $9 3 million.

Speaker Change: Due to the combination of increases in data and partnership revenue, which includes advertising revenue.

Speaker Change: Okay.

Speaker Change: September annualized monthly revenue reached $336 2 billion and increased 30% year on year.

Speaker Change: Accelerating from 23% year on year growth in June, reflecting the strong performance of subscription and other recurring revenue.

Speaker Change: Q3, gross profit of $70 million increased 21% year on year with gross margin slightly higher at 75% compared with 74% in the prior year due to the increase in subscription and other revenue.

Russell Burke: And while other revenue grew 18% and gross profit increased 21% year-on-year, Q3 operating expenses increased by 14%, excluding commission. Demonstrating our continued operating leverage. R&D costs increased 18% year-on-year, primarily driven by higher personnel-related costs, technology and outside services spend. Sales and marketing costs increased 19% year-on-year, primarily due to higher commissions, which increased in line with the 20% increase in subscriptions. Paid acquisition costs will lower year-on-year due to an intentional shift of allocation of spend to other marketing activity in creative and production, supporting the back-to-school campaigns in the U.S. and U.K. and the launch of the new Tile hardware product line.

Speaker Change: And while other revenue grew 18% and gross profit increased 21% year on year.

Speaker Change: Q3 operating expenses increased by 14% excluding commissions.

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Speaker Change: Demonstrating our continued operating leverage.

Speaker Change: R&D costs increased 18% year on year, primarily driven by higher personnel related costs technology and outside services spend.

Speaker Change: Sales and marketing costs increased 19% year on year, primarily due to higher commissions, which increased in line with the 20% increase in subscriptions.

Speaker Change: Yeah.

Speaker Change: Paid acquisition costs were lower year on year due to an intentional shift of allocation of spend to other marketing activity in creative and production supporting the back to school campaigns in the U S and U K and the launch of the new tile hardware product line.

Raymond Jones: Forward-looking statements made during this call, which are subject to material risks and uncertainties that can cause actual results to differ materially from such statements. A summary of these risks may be found in the Risk Factors section of our Form 10-Q filing with the SEC, dated 12 November 2024. These forward-looking statements are based on assumptions that we believe to be reasonable as of today's date, 12 November 2024, and we have no obligation to update these statements as a result of new information or future events, except when required by law. Additionally, we will present both GAAP and non-GAAP financial measures on today's call. These non-GAAP measures are not intended to be considered in isolation, as a substitute for, or superior to our GAAP results, and should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP.

R J: Forward-looking statements made during this call, which are subject to material risks and uncertainties that can cause actual results to differ materially from such statements. A summary of these risks may be found in the Risk Factors section of our Form 10-Q filing with the SEC, dated 12 November 2024. These forward-looking statements are based on assumptions that we believe to be reasonable as of today's date, 12 November 2024, and we have no obligation to update these statements as a result of new information or future events, except when required by law. Additionally, we will present both GAAP and non-GAAP financial measures on today's call. These non-GAAP measures are not intended to be considered in isolation, as a substitute for, or superior to our GAAP results, and should be read in conjunction with the company's consolidated financial statements prepared in accordance with GAAP.

Russell Burke: Total sales and marketing spend in Q3 was $6.4 million higher than in Q2, in line with our guidance. General and administrative expenses in Q3 increased by 8% year-on-year, primarily driven by higher company growth. We also recorded our first positive net income in Q3 of $7.7 million. which includes other income of $7.9 million and a benefit from income tax that was $4.6 million higher than in Q3'23. Finally, we continue to make progress in expanding profitability. Adjusted EBITDA was positive for the eighth consecutive quarter, increasing to $9 million from $5.5 million in the prior year. and EBITDA loss of $2.6 million decreased from $4.2 million in the prior year as a result of continued strong subscription revenue growth and improved operating leverage.

Speaker Change: Total sales and marketing spend in Q3 was $6 4 million higher than in Q2 in line with our guidance.

Speaker Change: General and administrative expenses in Q3 increased by 8% year on year, primarily driven by higher company growth.

Speaker Change: Okay.

Speaker Change: We also recorded our first positive net income in Q3 of $7 7 million, which.

Speaker Change: Which includes other income of $7 9 million and a benefit from income tax that was $4 6 million higher than in Q3 23.

Speaker Change: Finally, we continue to make progress in expanding profitability.

Raymond Jones: A description of these non-GAAP financial measures, as well as a reconciliation to the nearest GAAP financial measures, are included at the end of the company's earnings media release issued earlier today, which has been posted on the investor relations page of the company's website. We have posted an updated investor presentation on the investor relations page, which includes additional complementary graphics and data. Please note that it has been provided as an additional reference and that we will not be using the presentation as an exhibit during today's call. We will begin with a business update by Co-founder and CEO Chris Hulls, and then CFO Russell Burke will provide detail on the Q3 financials. Chris will then provide some outlook comments, which will be followed by a Q&A session.

R J: A description of these non-GAAP financial measures, as well as a reconciliation to the nearest GAAP financial measures, are included at the end of the company's earnings media release issued earlier today, which has been posted on the investor relations page of the company's website. We have posted an updated investor presentation on the investor relations page, which includes additional complementary graphics and data. Please note that it has been provided as an additional reference and that we will not be using the presentation as an exhibit during today's call. We will begin with a business update by Co-founder and CEO Chris Hulls, and then CFO Russell Burke will provide detail on the Q3 financials. Chris will then provide some outlook comments, which will be followed by a Q&A session.

Speaker Change: Adjusted EBITDA was positive for the eighth consecutive quarter, increasing to 9 million from $5 5 million in the prior year.

Speaker Change: An EBITDA loss of $2 6 million decreased from $4 2 million in the prior year as a result of continued strong subscription revenue growth.

Russell Burke: The difference between adjusted EBITDA and EBITDA in the quarter consisted almost entirely of stock-based compensation expenses.

Speaker Change: And improved operating leverage.

Speaker Change: The difference between adjusted EBITDA and EBITDAR in the quarter consisted almost entirely of stock based compensation expense.

Russell Burke: We are raising our outlook for both adjusted EBITDA and EBITDA for 2024. Our updated guidance for full year EBITDA loss is negative $7 million to negative $10 million and includes the IPO transaction costs. and incorporates an expectation of positive EBITDA contribution in Q4, reflecting our usual seasonal peak earnings. Further, we expect to be consistently EBITDA positive on a quarterly basis in 2025.

Speaker Change: Okay.

Speaker Change: We are raising our outlook for both adjusted EBITDA and EBITDA for 2024.

Speaker Change: Our updated guidance for full year EBITDA loss is negative 7 million to negative $10 million and includes the IPO transaction costs.

Raymond Jones: We request that participants limit themselves to one question so that we can get through as many participants as possible. I would now like to turn the call over to Chris.

R J: We request that participants limit themselves to one question so that we can get through as many participants as possible. I would now like to turn the call over to Chris.

Speaker Change: And incorporates an expectation of positive EBITDA contribution in Q4, reflecting our usual seasonal peak earnings.

Chris Hulls: Good afternoon to everyone joining from the US, and good morning to those tuning in from Australia. Thank you for being here for our Q3 results call. To start, a brief personal update. As many of you know, following our IPO, I took my first long break in 17 years with the company. I've returned fully recharged with renewed energy and excitement for the journey ahead. I am more committed than ever to leading Life360 as we move toward our $1 billion revenue target and ultimately scaling to multi-billion dollar growth in the years ahead. With that, let's turn to our most recent results. In Q3 2024, Life360 made tremendous progress, delivering our best ever back to school period and setting new records in both monthly active users and subscriber growth, all while advancing our platform strategy.

Speaker Change: Further we expect to be consistently EBITDA positive on a quarterly basis in 2025.

Russell Burke: Turning now to balance sheet and cash flow. Y360 ended Q3 with cash, cash equivalents, and restricted cash of $160.2 million, a slight decrease of $1.8 million from Q2'24. Operating cash flow was positive for the sixth consecutive quarter. Q3 net cash provided by operating activities of $6.3 million was lower than adjusted EBITDA of $9 million, primarily due to the seasonal build-up of inventory ahead of the Q4 holiday season and the timing of receipts and payables. Net cash used in investing activities of $1 million related to payments for internally developed software. and net cash used in financing activities of $7.2 million related primarily to taxes paid for the net settlement of RSUs.

Speaker Change: Turning now to balance sheet and cash flow.

Slide 360 ended Q3 with cash cash equivalents and restricted cash of $116 2 million a slight decrease of 1.8 million from Q2 24.

Speaker Change: Operating cash flow was positive for the sixth consecutive quarter.

Speaker Change: Q3, net cash provided by operating activities of $6 3 million was lower than adjusted EBITDAR of $9 million, primarily due to the seasonal buildup of inventory ahead of the Q4 holiday season, and the timing of receipts and payables.

Chris Hulls: These strong results reflect our focus on key growth priorities across the board. To start, our member base grew significantly, expanding by 63 million new monthly active users this quarter to reach a total of 76.9 million, a 32% increase year-over-year and an acceleration over last quarter. This growth includes strong momentum in our paid offerings with a quarterly net increase of 159,000 paying circles, an impressive improvement over the 132,000 net additions in Q2. This was driven by a new record for quarterly net adds in the US at 111,000 net additions, a 64% increase year-over-year.

Speaker Change: Net cash used in investing activities of $1 million related to payments for internally developed software.

Speaker Change: And net cash used in financing activities of $7 2 million related primarily to taxes paid for the net settlement of virus use.

Russell Burke: Cash paid on RSU settlements was higher due to our higher stock price and therefore higher fair market value at the time of the settlement of the RSU. and we expect this higher cash outflow to continue to year-end.

Speaker Change: Cash paid on our issues settlements was higher due to our higher stock price and therefore higher fair market value at the time of the settlement of the IRS use.

Chris Hulse: Thanks for your attention, and I'll hand back to Chris to discuss further details on our earnings guidance.

Speaker Change: And we expect this higher cash outflow to continue to year end.

Chris Hulls: International expansion also played a major role in these results, with international MAUs up 51% year-over-year and international paying circles increasing by 37% even amid price adjustments for legacy subscribers outside our core triple-tier markets. Average revenue per paying circle in international markets grew by 53%, supported by updating our legacy pricing strategy, which allows us to experiment faster with our new dual-tier approach. We are also excited about the next phase of our hardware strategy, which will continue to contribute to our subscriber growth. This quarter, we launched our updated Tile device lineup, the first designed entirely in-house by Life360. This new lineup significantly differentiates us from competitors, featuring an SOS capability that turns every Tile into a safety device, a function unique to our platform and unavailable from other third parties across the Google and Apple networks.

Speaker Change: Thanks for your attention and I'll hand back to Chris to discuss further details on our earnings guidance.

Chris Hulse: We are updating our 2024 Outlook, which includes raised guidance for adjusted EBITDA and EBITDA that Russell mentioned. For 2024, we are now anticipating the following. Consolidated revenue of $368 to $374 million, revised from $370 to $378 million to reflect lower hardware revenue. Core subscription revenue growth of 25% year over year. Positive adjusted EBITDA of 39 to 42 million. Upgraded from 36 to 41.

Chris Holes: We are updating our 2024 outlook, which includes raised guidance for adjusted EBITDA and EBIT Dod that Russell mentioned.

Chris Holes: For 2024, we are now anticipating the following.

Chris Holes: Consolidated revenue of $368 million to $374 million revised from $370 million to $378 million to reflects lower hardware revenue.

Chris Holes: Core subscription revenue growth of 25% year over year.

Chris Holes: Positive adjusted EBITDA of 39 to 42 million upgraded from $36 million to $41 million.

Chris Hulse: EBITDA loss of $7 million to $10 million, which includes $5.8 million in IPO-related transaction costs, upgraded from $8 million to $13 million, and to have positive operating cash flow in Q4 and for year-end cash activities, year-end cash, cash influence, and restricted cash of $150 to $160. The forecast includes expected higher outflows from RSU settlements as a result of the higher stock price, the investment huddle, IPO proceeds and related transaction costs, and timing differences in Q4 working capital related to hardware.

Chris Holes: EBITDA loss of 7 million to $10 million, which includes $5 8 million in IPO related transaction costs upgraded from 8 million to $13 million and to have positive operating cash flow in Q4 and for a year end cash activities year end cash cash equivalents and restricted cash of 150 to 106.

Chris Hulls: The launch garnered widespread press coverage, most of which highlighted our SOS feature. Initial results have been extremely positive, with direct-to-consumer sales more than doubling in the six weeks following the launch compared to the same period last year. Tile is also proving to be a valuable customer acquisition tool for our subscription business. We have been seeing a consistent rise in the percentage of US premium subscribers with an active linked Tile on their account, and we expect this to continue with the new product. However, while these results are surpassing our expectations, we did face logistical delays with the Tile launch, including certification, labeling, and supply chain challenges. These delays led to lower than expected device sales and margins in Q3 as we had periods when the full lineup was unavailable, impacting our ability to fully shift inventory to new products as planned.

Chris Holes: <unk> million dollars.

Chris Holes: The forecast includes expected higher outflows from RSV settlements as a result of the higher stock price the investment Hubbell.

Chris Holes: IPO proceeds and related transaction costs and timing differences in Q4, working capital related to hardware inventory.

Chris Hulse: The company continues to expect to be adjusted EBITDA and EBITDA positive consistently on a quarterly basis in 2025.

Speaker Change: The company continues to expect to be adjusted EBITA and EBITDA positive consistently on a quarterly basis in 2025 that concludes our prepared remarks and I'll now turn the call over to RJ will manage the Q&A portion of our call today. Thank.

Operator: That concludes our prepared remarks, and I'll now turn the call over to RJ who will manage the Q&A portion of our call today. Thank you.

Operator: Thanks, Chris.

Operator: As a reminder to participate in the Q&A, please raise your hand by pressing the raise hand icon at the bottom of your screen within the zoom app. You will need to unmute yourself to ask your question.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: Thanks, Chris as a reminder to participate in the Q&A. Please raise your hand by pressing the raise hand icon at the bottom of your screen within the zoom App, you will need to and mute yourself to ask your question.

Chris Hulls: Fortunately, these issues have been resolved. Although the transition will take some time to flow through brick-and-mortar retail channels, we're optimistic about Black Friday as an opportunity to establish a new baseline for this improved lineup. Now that the Tile rollout is complete, our team is focused on further developing our GPS lineup based on Jiobit technology. We plan to begin with a pet tracking device, potentially in late 2025, followed by an eldercare product anticipated in 2026. Since both products require subscription and target high growth verticals, we are excited about the potential for this next generation of hardware to drive a new wave of subscription growth. In Q3, we made significant strides in advancing our advertising platform, which we are now testing globally.

Chris Goller: So to start, I'd like to go to Chris Goller with Goldman Sachs. Good morning, Chris, Russell and RJ. Can you hear me OK? Loud and clear. Great. Thanks for the opportunity.

Speaker Change: So to start I'd like to go to Chris Goller with Goldman Sachs.

Speaker Change: Good morning, Chris Russell at RJ can you hear me okay.

Chris Hulse: First question from me, just in terms of the fourth quarter subscription outlook, typically the third quarter is quite strong with back to school and then there's a little bit of a fourth quarter roll off given that seasonality. Just interested if you could provide any commentary on how things are tracking so far this quarter and any impacts internationally of the rollout of double tier. Thanks.

Speaker Change: Claire.

Speaker Change: Great. Thanks for the opportunity first question for me just in terms of the fourth quarter subscription.

Speaker Change: Outlook typically the third quarters quite strongly its back to school and then there's a little bit of a fourth quarter.

Speaker Change: Roelof keeping that seasonality just interested if you could provide any commentary on how things are tracking so far this quarter and any impacts internationally up the rollout of double T. Thanks.

Chris Hulse: Sure, I'll take that qualitatively and let Russell get a little firmer in numbers we're allowed to do so. Thematically, to your point, first off, RecordNet ads, it's arguably our best back to school ever in our company's history and international driving that growth. And we're seeing continued acceleration in our most penetrated regions. So we're extremely excited that the macro trends are holding, as I think many who have followed the story for a while have long heard me say. A key indicator that I look for is not quarter to quarter noise per se, because. it always shifts around a bit.

Speaker Change: Sure I'll take that qualitatively and let Russell get a little firmer than numbers were allowed to do so dramatically to your point and first off record net adds it's arguably our best back to school ever in our company's history and international driving that growth and we're seeing continued acceleration in our most penetrated regions.

Chris Hulls: Our objective is to deliver contextually relevant ads that enhance the experience for our members, leveraging our proprietary first-party location data to offer advertisers unmatched precision audience targeting. A key milestone this quarter was our partnership with Uber, which highlights the unique power of our data. Through this collaboration, users arriving at an airport receive a targeted Uber ride offer, demonstrating the value of contextual relevance over traditional banner ads. Our Uber landing notifications outperform industry averages for banner ads, underscoring the potential of our approach. This early phase points to promising opportunities for future monetization by integrating signals from everyday activities, such as relocating to a new home, shopping at retail locations or quick service restaurants, or life events like starting college.

Speaker Change: So we're extremely excited that the macro trends are holding and as I think many who have followed the story for a while have.

Speaker Change: <unk> heard me say, a key indicator that I look for is not quarter to quarter noise per se because.

Chris Hulse: But are we seeing these big trends continuing? Are we seeing the back-to-school bump? Are we seeing the ongoing acceleration in more highly penetrated regions? And now in recent years, are we seeing that growth internationally? So all those things are looking good and continue to look good.

Speaker Change: It always shifts around a bit but are we seeing these big trends continuing or are we seeing the back to school bump are we seeing the ongoing acceleration and more highly penetrated regions and now in recent years are we seeing that growth internationally. So all of those things are looking good and continue to look good could there be a pull forward effect that there could be some because it's often.

Chris Hulse: Could there be a pull-forward effect? There could be some, because that's often what has happened after big quarters. Part of why we're so excited about these numbers is that we didn't actually have that last time, because as you know, Q2 was also extremely good. So we're feeling like we're on track, still very early in the quarter.

Chris Hulls: Realizing the full potential of this advertising vision will take time as we expand our back-end infrastructure and build out our sales platform, but the early results strengthen our confidence that advertising could eventually become a revenue stream on par with our subscription business. With a strong pipeline of partners seeking to tap into our unparalleled first-party location platform, we see immense potential to expand our market versus competitors. Our data business, which had leveled off as we transitioned to aggregated data, returned to growth in Q3, boosted by our exclusive partnership with Placer.ai. We are confident about accelerating growth in 2025 and beyond as this collaboration deepens. Additionally, our newly formalized partnership with Hubble Network paves the way for a new enterprise revenue stream and significantly enhances the location capabilities of our hardware devices.

Speaker Change: What has happened after big quarters.

Speaker Change: Part of why we're so excited about these numbers is that we didn't actually have that last time cause is.

Speaker Change: You know Q2 was also extremely good so we're feeling like we're on on track.

Russell Burke: And then, of course, we're very interested to see as we integrate more hardware into the lineup with the new results, how much does that move things? Russell, can you add anything more on the quant side? I guess I would just add two things, Chris. One, we do continue to see the overall sort of strength in subscription. So I think this year, we've clearly accelerated subscription growth. So we are continuing to see that, albeit, as you pointed out, Chris, Q4 is typically a seasonal low for the year. So we fully expect that impact to happen. We also are seeing some impact from the fairly substantial price increases that we've put through internationally.

Speaker Change: Still very early in the quarter and then of course, we're very interested to see her as we integrate more hardware into the lineup with the new results how much of that move things as well.

Russell Burke: Russell can you add anything more on the clock, but I guess I would just add two things Chris.

Russell Burke: One year, we do continue to see the overall sort of strength in subscription. So you I think this this year with we've clearly.

Chris Hulls: Together, these strategic partnerships underscore the potential to expand both our data business and our technology offerings as we continue to drive growth for Life360. With that, I'll turn the call over to Russell to run through the financials.

Russell Burke: Clearly accelerated subscription growth. So we are we are continuing to see that albeit as you pointed out Chris Q4 as is typically a seasonal low for the year. So we fully expect that that.

Russell Burke: Thanks, Chris, and thanks everyone for joining the call today. As a reminder, all of the financials I'll be referencing are unaudited and denominated in US dollars. Q3 revenue increased 18% year-over-year to $92.9 million. The strong operating metrics that Chris outlined earlier, in particular, the record net paying circle additions in the quarter, drove an acceleration in our subscription revenue. Overall, subscription increased 27% year-over-year and accelerated from the prior quarter. Core Life360 subscription, which excludes hardware subscriptions, increased 34% year-over-year, driven by the 25% increase in global paying circles and 6% higher ARPPPC. Hardware revenue declined 24% year-over-year to $11.7 million, largely due to the 6-week delay in the launch of our new Tile products, which resulted in lower unit sales volumes.

That impact to happen are we also seeing centers some some impact from the fairly substantial price increases that we put through internationally.

Russell Burke: Again, we're looking at pretty significant revenue uplifts from that. But it will have a slight impact on subscription growth internationally.

Russell Burke: Again, where we're looking at a pretty significant revenue uplift from that but it will have a slight impact on arden subscription considered subscription growth internationally.

Chris Goller: Cool. Thanks, Chris. Thanks, Russell.

Chris Hulse: Yeah, we can probably look to some of the earlier international rollouts or even the price increases in the U.S. just as an example. When we did the U.S. price increase, I think we actually had a backwards quarter at one point or close to it. And Russell, keep me honest here. Of course, revenue went up. We go through that and then it then it renormalized that growth.

Speaker Change: Cool Thanks, Chris Thanks, Russell now.

Speaker Change: We can probably look to some of the earlier international rollouts or even the price increases in the U S. Just as examples.

Speaker Change: The examples I.

Speaker Change: When we did the U S price increases I think we actually had a backwards quarter at one point or close to it and Russell keep me honest here of course revenue went up we go through that minute then it re normalize that growth trend.

Chris Hulse: Great. Thanks, Chris.

Mark Mahaney: Next, we'd like to go to Mark Mahaney with Evercore. Hey guys, can you hear me? Yes.

Speaker Change: Okay.

Chris: Great. Thanks, Chris.

Chris: I'd like to go to Mark Mahaney with Evercore.

David: Hi, this is David on for Mark. Just wanted to ask if you're seeing any differences in the subscription attach rates to the new tile hardware compared to the old one. And then just in terms of your advertising business, you signed Uber recently. Can you talk about which inning you're in so far? out advertising. Thank you. So in terms of the new tile lineup, everyone is eligible now to get a tile, link it, we test different promos. So there's no exact measurement of how tiles per se are driving subscription, it's just part and parcel. And I'm extremely optimistic as we roll out new marketing, as we come to Black Friday, people are going to see the differentiation in tile versus air tags.

Speaker Change: Hey, guys can you hear me yes.

Speaker Change: Yes.

Speaker Change: Hi, This is David on for Mark.

Speaker Change: Just wanted to ask if you're seeing any differences in the subscription attach rates to the new tayo hardware compared to the old one and then just in terms of your advertising.

Russell Burke: The launch also involved increased discounting in retail channels to clear out existing inventory, along with mix shifts and additional certification, labeling, and shipping costs, all of which impacted hardware margins for the quarter. As a result, standalone units shipped declined nearly 24% year-over-year, and the average selling price decreased by 4%, resulting in lower margins in the quarter. As Chris mentioned earlier, the new Tile devices have been extremely well-received, and early indicators suggest strong sales momentum. However, as is typical, the full impact will become clearer after the key US Cyber 5 retail period. Other revenue in Q3 increased by 43% to $9.3 million due to the combination of increases in data and partnership revenue, which includes advertising revenue.

Speaker Change: Business. He signed Uber recently can you talk about which inning you are in so far.

Speaker Change: Building out advertising. Thank you so in terms of the new tire lineup everyone is eligible.

Speaker Change: Now too.

Speaker Change: To get a tile linked yet we test different promos. So theres no exact measurement of how tiles per se are driving subscriptions, just part and parcel and I'm extremely optimistic as we rollout new marketing as.

Speaker Change: As we come to Black Friday.

Chris Hulse: And I'd encourage everybody to just Google some of the press results that we've had. There's stuff like tile giving air tags around for their money with the SOS feature. So we only need a relatively small portion of people to have that awareness that we are differentiated and your daughter is going to school, college, and you want to have something that keeps her safe, or even a gift of like safety. It's very different. So the real litmus test is coming up. So I don't want to get ahead of ourselves. But I am genuinely excited. And some of the new ad content we have is amazing.

Speaker Change: People are going to see the differentiation in tile versus are tagged and I'd encourage everybody to just.

Google some of the press the results that we've had there's stuff like tile, giving air tags, a run for their money with the Sos feature. So we only need a relatively small portion of people to have that awareness that we are differentiated in your daughter's going to school and college and you want to add something that he keeps your say for even a gift of like safety, it's very different so the real litmus test.

Russell Burke: September annualized monthly revenue reached $336.2 million and increased 30% year-over-year, accelerating from 23% year-over-year growth in June, reflecting the strong performance of subscription and other recurring revenue. Q3 gross profit of $70 million increased 21% year-over-year, with gross margin slightly higher at 75% compared with 74% in the prior year due to the increase in subscription and other revenue. While other revenue grew 18% and gross profit increased 21% year-over-year, Q3 operating expenses increased by 14%, excluding commissions, demonstrating our continued operating leverage. R&D costs increased 18% year-over-year, primarily driven by higher personnel-related costs, technology, and outside services spend.

Speaker Change: <unk> is coming up so I don't want to get ahead of ourselves, but I am genuinely excited in some of the new AD content. We have is is amazing we have Monday night football slots are probably not relevant for Australia investors, but I would say if you're a football fan.

Chris Hulse: We have some Monday night football slots, probably not relevant for our Australian investors, but I'd say if you're a football fan, tune in to some of what we've been doing. We have I also think the best creative ads we've had in the company's history coming out. One thing I can say, I don't have a firm number to share, but the attach rate of premium accounts actually linking Tile is going up significantly. And a lot of that is because we are shifting people to the core Light360 app over time. And the SOS feature requires Light360. So as some might recall, we had low attach rates of linking Tile to Light360 in the beginning because there really wasn't a reason to do so.

Speaker Change: Tune in to some of what we've been doing we have.

Speaker Change: I also think the best creative ads that we've had in the company's history coming out.

Speaker Change: One thing I can say I don't have firm number to share that the attach rate of premium accounts actually linking tile is going up significantly and a lot of that is because the we are shifting people to the core life through 60, App over time and the Sos feature requires like 360, so as semi recall, we had low attach rates of linking tile.

Chris Hulse: But we have now, I'd say, transitioned at least half the functionality from the Tile app to the Light360 app, including our main new differentiated feature. And in terms of those linkage rates, that is up dramatically.

Speaker Change: Till after 16, beginning cause it really wasn't a reason to do so but we have now I'd say transition at least half the functionality from the pilot to delight 60, app, including our main new differentiated feature and in terms of those linkage rates that is up dramatically I want to make sure. These trends hold before I give definitive answers, but I hope it <unk>.

Chris Hulse: I wanna make sure these trends hold before I give definitive answers, but I hope in the next quarter they continue and I can give a very firm update and say we have a whole quarter under our belt because it's very hard to determine what's just that sugar high from a new release. And thank goodness we have the sugar high. It bodes very well, but give us a quarter to let these things solidify.

Speaker Change: Quarter, they continue and I can I can give a very firm update and say, we have a whole quarter under our belt, because it's very hard to determine what's does that sugar high from many releases and thank goodness, we have the sugar high it bodes very well.

Russell Burke: Sales and marketing costs increased 19% year-over-year, primarily due to higher commissions, which increased in line with the 20% increase in subscriptions. Paid acquisition costs were lower year-over-year due to an intentional shift of allocation of spend to other marketing activity in creative and production, supporting the back-to-school campaigns in the US and UK and the launch of the new Tile hardware product line. Total sales and marketing spend in Q3 was $6.4 million higher than in Q2, in line with our guidance. General and administrative expenses in Q3 increased by 8% year-over-year, primarily driven by higher company growth. We also recorded our first positive net income in Q3 of $7.7 million, which includes other income of $7.9 million and a benefit from income tax that was $4.6 million higher than in Q3 2023.

Chris Hulse: Thank you, Chris. Great.

Speaker Change: But give me or give us a quarter to let these things solidify.

Speaker Change: Chris.

Laf Sotiriou: Next, we'd like to go with Laf Sotiriou with MST. Thank you for the opportunity to ask a question. May I unpack the commentary around the PET and elderly packages? I think you discussed next year you're targeting launch of subscriptions around PETs and FY26 for elderly senior packages. This is new information with some clearer timelines rather than it being in the future. It sounds like it's more certain. So can you just talk us through the thinking? Is this going to be an additional say a module or like an extra $5, $10? Will it include things like PET insurance?

Speaker Change: Okay.

Speaker Change: Great next I'd like to go with laugh So to review with MST.

Speaker Change: Thank you for the opportunity to ask a question on the commentary around the pet and elderly I could choose I think you've discussed mixed you you're targeting launches subscriptions around pets.

FY 'twenty six or elderly senior packages. This is Neil.

Speaker Change: New information with some clearer timelines rather than it being in the future it sounds like it's.

Speaker Change: It's a more certain so can you just talk us through the thinking is is going to be an additional bull's eye a module can extra $5 $10 will it be things like pet insurance.

Chris Hulse: How should we be thinking about it and the timing of those launches?

Chris Hulse: Yeah, let me back up a bit and give a bit of recap on the vision and just our move to hardware and the rationale behind it, especially for people who have not been following the story as long. So the vision of Life360 is not just people, it's pets, it's things. We have what we call a religious belief that anything you care about, you're going to know where it is. The idea that you could lose a pet or a car or a laptop, it's going to be downright archaic in the next few years. And those trends are accelerating.

How should we be thinking about it and and then and the timing of those launches, yes, let me back up a bit and give a bit of a recap on the vision and just our move to hardware and the rationale behind it especially for people who have not been fine. This story as long. So the vision of life age 60 is not just people it's pets it's things.

Russell Burke: Finally, we continue to make progress in expanding profitability. Adjusted EBITDA was positive for the eighth consecutive quarter, increasing to $9 million from $5.5 million in the prior year. An EBITDA loss of $2.6 million decreased from $4.2 million in the prior year as a result of continued strong subscription revenue growth and improved operating leverage. The difference between adjusted EBITDA and EBITDA in the quarter consisted almost entirely of stock-based compensation expense. We are raising our outlook for both adjusted EBITDA and EBITDA for 2024. Our updated guidance for full year EBITDA loss is -$7 million to -$10 million, and includes the IPO transaction costs, and incorporates an expectation of positive EBITDA contribution in Q4, reflecting our usual seasonal peak earnings. Further, we expect to be consistently EBITDA positive on a quarterly basis in 2025.

Speaker Change: We have what we call a religious belief that anything you care about youre going to know or to the idea that you could lose a pattern or a car or a laptop it's going to be downright archaic in the next few years and those trends are accelerating and we bought <unk> and tile in 2020 one late 'twenty, one 'twenty 'twenty. If you happen to me, obviously, the pull back quite a bit.

Chris Hulse: We bought Geobit and Tile in 2021, late 21. 2022 happened and we obviously had to pull back quite a bit on some of those plans. It's very frustrating with that downturn. So we put Geobit on ice to focus on Tile, get that integration done. Over the last couple of years, the trends we wanted to see have been dramatically accelerated. Item tracking has been one of the biggest, fastest-growing categories, if not the fastest in the entire consumer electronics category. And we're also seeing pet tracking as a category grow. Companies like Tractive are in the $100 million-plus revenue run rates growing very, very quickly.

Speaker Change: On some of those plans is very frustrated with that downturn. So we put G O bet on ice to focus on tile get that integration done.

Speaker Change: Over the last couple of years the trends we wanted to see have been dramatically accelerated item tracking has been one of the biggest fastest growing categories. If not the fastest in the entire consumer electronics category and we're also seeing pet tracking as a category grow companies like attractive or in the 100 million plus.

Chris Hulse: So we're getting good third-party validation that that overall bet was right. And now that we've done this new tile lineup and these trends are very much holding, we are extremely excited to dust off the GeoBit technology that we own. It still remains arguably the best in the market, and come out with these new products. So our plan for pet tracking now, and this is a bit of a teaser that we're going to share full results. I've seen the prototype and all that. We're very excited. We think we have the opportunity to have the lowest cost with the best battery life, and it's going to be bundled into Light360 subscription tiers.

Speaker Change: Revenue run rates growing very very quickly. So we're getting good third party validation that that overall bet was right.

Russell Burke: Turning now to balance sheet and cash flow. Life360 ended Q3 with cash equivalents, and restricted cash of $160.2 million, a slight decrease of $1.8 million from Q2 2024. Operating cash flow was positive for the sixth consecutive quarter. Q3 net cash provided by operating activities of $6.3 million was lower than adjusted EBITDA of $9 million, primarily due to the seasonal buildup of inventory ahead of the Q4 holiday season, and the timing of receipts and payables. Net cash used in investing activities of $1 million related to payments for internally developed software. Net cash used in financing activities of $7.2 million related primarily to taxes paid for the net settlement of RSUs.

And now that we've done this new tire lineup and these trends are very much holding we are extremely excited to dust off the <unk> technology that we own is still remains arguably the best in the market and come out with these new products.

Speaker Change: So our plan for pet tracking now.

Speaker Change: And this is a bit of a teaser Doug we're going to share full results I have seen in the prototyping all that well.

Speaker Change: We're very excited and we think we have the opportunity to have the lowest cost with the best battery life and it's gonna be bundled into life 360 subscription tiers.

Chris Hulse: And that goes right to the very name Light360. The idea that we had silver, gold, platinum versus like very specific upgrade options was because if you can build a bundled offering, that's a huge differentiation over competitors. And we already own the customer. We have $0 CAC on an incremental user, whereas all our competitors are starting from scratch. And we can just redeploy that into our bundle. And our bundle costs more than a standalone subscription, but it just has such high value. So how that's going to manifest is more people signing up. It'll probably be pets and gold and elder and platinum, but don't hold us to that.

Speaker Change: And that goes right to the very name like 360, the idea that we had silver gold platinum versus a very specific upgrade options was because if you can build a bundled offering that's a huge differentiation over our competitors and we already own the customer we have zero dollar CAC on an incremental user, whereas all of our competitors starting from scratch and we can just redeploy.

Speaker Change: That indoor bundle and unbundle costs more than a standalone subscription, but it just has such high value. So how that's going to manifest is.

Russell Burke: Cash paid on RSU settlements was higher due to our higher stock price, and therefore higher fair market value at the time of the settlement of the RSUs. We expect this higher cash outflow to continue to year-end. Thanks for your attention, and I'll hand back to Chris to discuss further details on our earnings guidance.

Chris Hulse: I think we're going to increase conversion and, more importantly, increase retention, because anyone who has a dog, once you have one of these things on your dog, your churn really goes down. And Geobit was indirectly used as a pet tracker, and we see that data in ourselves. I'm excited about that.

Speaker Change: More people signing up they will probably be pets in gold and elder and platinum, but don't hold us to that.

Speaker Change: I think we are going to increase conversion and more importantly increase retention because anyone who has a dog. Once you have one of these things on your dog your churn really goes down and <unk> was indirectly as a pet tracker and we see that data ourselves I'm excited about that and the elder care space. It's something we've long long talked about but we're also aware that the market hasn't quite.

Chris Hulse: And the eldercare space, it's something we've long, long talked about, but we were also aware that the market hadn't quite gotten there yet, because we need the sandwich generation to get a little bit older and have aging parents themselves, so millennials in particular. To make that a little bit personal and a bit of a sad note for me, my mom is in the mid-stages of Alzheimer's, so it's a little bit of arguably fate that I really need this product myself. I think I'm a very, very good product guy. That was my job in Light360, first and foremost, even as a CEO.

Chris Hulls: We are updating our 2024 outlook, which includes raised guidance for Adjusted EBITDA and EBITDA that Russell mentioned. For 2024, we are now anticipating the following: consolidated revenue of $368 to 374 million, revised from $370 to 378 million to reflect lower hardware revenue. Core subscription revenue growth of 25% year-over-year. Positive Adjusted EBITDA of $39 to 42 million, upgraded from $36 to 41 million. EBITDA loss of $7 to 10 million, which includes $5.8 million in IPO-related transaction costs, upgraded from $8 to 13 million. To have positive operating cash flow in Q4 and for year-end cash activities, year-end cash equivalents, and restricted cash of $150 to 160 million.

<unk> gotten there yet because we didn't need the sandwich generation, you get a little bit older and have aging parents themselves. So millennials in particular.

Speaker Change: To make that a little bit on personal on a bit of a sad enough for me My mom is in the mid stages of Alzheimer's.

Speaker Change: So it's a little bit of a arguably a fact that I really need this product myself I think I'm, a very very good product guy that was my job in life or 61st and foremost even out of CEO. So.

Chris Hulse: So the fact that I can work on this product, this is going to be very relevant for me as the market matures. You're talking like billions of revenue in these eldercare products, and they're horrible. And I can say that both as a businessman running Light360 and someone shopping around for my own mother. So I am going to be the ultimate user of this product when it comes out. So we're just sharing that, that we do have this rollout. People have asked us about what we're doing with the GeoBit asset, the hardware plan. And the exciting thing about these, these are subscription businesses, period.

Speaker Change: The fact that I can work on this product this is going to be very relevant for me as the market matures youre talking like billions of revenue and these elder care products and in their horrible and I can say that both as a businessman running library 60 and someone shopping around for my own mother.

Speaker Change: So I am going to be the ultimate user of this product.

Speaker Change: When it comes out.

Speaker Change: So we're just sharing that that we do have this rollout people have asked us about what we're doing with the G O bid asset the hardware plan and the exciting thing about these these are subscription businesses period.

Chris Hulls: The forecast includes expected higher outflows from RSU settlements as a result of the higher stock price, the investment Hubble, IPO proceeds and related transaction costs, and timing differences in Q4 working capital related to hardware inventory. The company continues to expect to be Adjusted EBITDA and EBITDA positive consistently on a quarterly basis in 2025. That concludes our prepared remarks, and I'll now turn the call over to RJ, who will manage the Q&A portion of our call today. Thank you.

Chris Hulse: We've been transitioning tile as a giveaway to drive subscription, but this is actually driving subscription directly because these need services behind them. And the market has a very high anchor price in them already for inferior products. So we more share that because we knew people were asking about it, but also with a lot of excitement that we successfully did do this tile lineup refresh and the team has already moved their attention to the Pets product for next. Got it.

Speaker Change: We've been transitioning tile is a giveaway to jive subscription, but this is actually driving subscription directly because these need services behind them and the market has a very high anchor pricing them already for inferior products. So we more share that because we knew people were asking about it but also a lot of excitement that we successfully did.

Speaker Change: To do this tire lineup refresh and the team has already moved their attention.

Raymond Jones: Thanks, Chris. As a reminder, to participate in the Q&A, please raise your hand by pressing the Raise Hand icon at the bottom of your screen within the Zoom app. You will need to unmute yourself to ask your question. To start, I'd like to go to Chris Gawler with Goldman Sachs.

R J: Thanks, Chris. As a reminder, to participate in the Q&A, please raise your hand by pressing the Raise Hand icon at the bottom of your screen within the Zoom app. You will need to unmute yourself to ask your question. To start, I'd like to go to Chris Gawler with Goldman Sachs.

Speaker Change: To the pet product for next year.

Speaker: Thank you. You're welcome.

Speaker Change: Yeah.

Speaker Change: Got it thank you.

Maria Ripps: Thank you. Next, we'd like to go to Maria Ripps with County Corps Genuity. Great, thanks so much for taking my question. Just opening up on advertising, do you have any insights into maybe any commitments or positive indications from advertisers for 2025? And then any thoughts more broadly that you maybe can share on sort of expected ad revenue growth next year compared to the 5 to 10 million range this year? And then is that still a good sort of a good range for us to keep in mind for 2024?

Speaker Change: Welcome.

Thank you next we'd like to go to Maria rips with Canaccord Genuity.

Chris Gawler: Good morning, Chris, Russell, and RJ. Can you hear me okay?

Great. Thanks, so much for taking my question.

Chris Hulls: Loud and clear.

Speaker Change: Just following up on advertising do you have any.

Chris Gawler: Great. Thanks for the opportunity. First question from me, just in terms of the Q4 subscription outlook. Typically, the Q3 is quite strong with back to school, and then there's a little bit of a Q4 roll-off given that seasonality. Just interested if you could provide any commentary on how things are tracking so far this quarter and any impacts internationally of the rollout of dual-tier. Thanks.

Speaker Change: Insight into maybe any commitment all positive indications from advertisers for 2025, and then any thoughts more broadly that you maybe you can share on sort of expected and revenue growth next year compared to the five to 10 million range. This year and then is that is that still a good set up a good range for us to keep in mind for 'twenty.

Chris Hulse: Let me take that from the qualitative standpoint, and as I usually do, I'll hand it to Russell for the numbers. That also made me realize I did not answer the second half of last question, so I'm going to tie both of those together. So everything is largely on track and expanding. We're exactly in the zone for this year, and advertising is going to start blurring more and more with our data line because advertising and data, in many ways, it's part and parcel of the same thing, because it's not all just things for customers to click on.

Speaker Change: 24.

Speaker Change: Let me take that from the qualitative standpoint, and as I, usually do I'll hand, it to Russell to the numbers that also made me realize if not answer the second half of last question, So I'm going to tie both of those together.

Chris Hulls: Sure. I'll take that qualitatively and let Russell get a little firmer in numbers we're allowed to do so. Thematically, to your point, first off, record net adds, it's arguably our best back-to-school ever in our company's history and international is driving that growth, and we're seeing continued acceleration in our most penetrated regions. We're extremely excited that the macro trends are holding. As I think many who have followed the story for a while have long heard me say, a key indicator that I look for is not quarter-to-quarter noise per se, because it always shifts around a bit, but are we seeing these big trends continuing? Are we seeing the back-to-school bump? Are we seeing the ongoing acceleration in more highly penetrated regions? Now in recent years, are we seeing that growth internationally?

Speaker Change: So everything is largely on track and expanding we're exactly in the zone for this year and advertising is going to start blurring more and more with our data line because advertising and data in many ways. It's part and parcel of the same thing because it's not all just things for customers to click on it is how we do better matching and audiences.

Chris Hulse: It's how we do better matching in audiences, which is really a broader data product. And we also have a very large pipeline of interested parties. It has not been a difficult sell whatsoever. It's really now we have to build some of the infrastructure and we have to find ways of servicing its customers.

Speaker Change: Which is really a broader data product.

Speaker Change: And we also have a very large pipeline of interested party that has not been a difficult sell whatsoever. It's really now we have to build some of the infrastructure.

Russell Burke: We hired Brian McDivitt a few months ago. He has huge experience doing this at Google. So stuff has to get built. But I would say. exactly on track and maybe even more demand than expected in terms of third parties being very excited.

Speaker Change: And we have to find ways of surfacing its customers, we hired Brian Mcdivett Macdevitt a few months ago. He has huge experience doing this at Google So stuff has to get built but I would say.

Chris Hulls: All those things are looking good and continue to look good. Could there be a pull-forward effect? There could be some because that's often what has happened after big quarters. Part of why we're so excited about these numbers is that we didn't actually have that last time because as you know, Q2 was also extremely good. We're feeling like we're on track, still very early in the quarter. Then of course, we're very interested to see how, as we integrate more hardware into the lineup with the new results, how much does that move things as well. Russell, can you add anything more on the call side?

Speaker Change: Exactly on track and maybe even more demand than expected in terms of third parties being very excited and then the last question on just where are we in terms of what inning on the ore side.

Russell Burke: And then the last question on just where are we in terms of what ending on the Uber side. We're well past banners with it. It's our first contextual push. So you land it in the airport and you get this push that welcome to SFO be like an Uber. I don't have hard numbers I can share but an order of magnitude better than Banner's, even more than that significantly, and is done in a way that doesn't feel like an ad, and the result... are beating expectations. It's a relatively low impression lineup, because people open the app 20 times a day, but they're only flying a few times a year.

Speaker Change:

Speaker Change: We're no we're well past banners with that is our first contextual push so you land at an airport and you get this push that welcome to S. F O V like an Uber.

Speaker Change: I don't have hard numbers I contributors.

Russell Burke: I guess I would just add two things, Chris. One, you know, we do continue to see the overall sort of strength in subscription. You know, I think this year we've clearly accelerated subscription growth. We are continuing to see that, albeit, as you pointed out, Chris, Q4 is typically a seasonal low for the year. We fully expect that impact to happen. We also are seeing some impact from the fairly substantial price increases that we've put through internationally. Again, we're looking at pretty significant revenue uplifts from that, but it will have a slight impact on subscription growth internationally.

Speaker Change: In order of magnitude better than banner's, even more than that significantly.

Speaker Change: And is done in a way that doesn't feel like an AD and the results are.

Speaker Change: Our beating expectations.

Speaker Change: As a relatively low impression.

Chris Hulse: But what it really, really, really validated was we can identify these triggers in real time, pass them to an advertiser, bring something back to our customers that they're excited about and actually use, and have results that dramatically outperform the generic banners. And that is the benefit we have of our first party location data, that can be accessed in real time. Call that inning three, putting me on the spot with exactly one inning. But it's still very early in the sense that we we need to build a platform. We can't be bespoke on everything. We need to have it international.

Speaker Change: Lineup because people open the App 20 times, a day, but they're only flying a few times a year, but what it really really really validated was we can identify these triggers in real time pass them to an advertiser bring something back to our customers that they're excited about and actually use and have or is it all that dramatically outperformed the generic banners.

Speaker Change: And that is the benefit we have of our first party location data that can be access in real time. So.

Speaker Change:

Speaker Change: Call that inning three.

Speaker Change: You put them on the spot with exactly what inning, but it's still very early in the sense that we we need to build out a platform you can't be a bespoke and everything we need to have a international we need to have full end to end pipe, that's going to be awhile, but feeling very good.

Russell Burke: We need to have full end to end pipes. And that's going to going to be a while, but feeling very good. And we are looking and talking to other partners right now and We're doing a lot, we're gonna have to get very technical to explain it, but feeling solid and overall on track.

Chris Hulls: Cool. Thanks, Chris. Thanks, Russell. Yeah, we can probably look to some of the earlier international rollouts or even the price increases in the US just as examples. When we did the US price increase, I think we actually had a backwards quarter at one point or close to it. Russell, keep me honest here. Of course, revenue went up. We go through that, and then it re-normalized that growth trend.

Chris Gawler: Cool. Thanks, Chris. Thanks, Russell.

Chris Hulls: Yeah, we can probably look to some of the earlier international rollouts or even the price increases in the US just as examples. When we did the US price increase, I think we actually had a backwards quarter at one point or close to it. Russell, keep me honest here. Of course, revenue went up. We go through that, and then it re-normalized that growth trend.

Speaker Change: And we are looking and talking to other partners right now and then.

Russell Burke: Russell, do you wanna answer the second half of the question? Yeah, Maria, what I would say, and just sort of layering on what Chris said, is that we're really largely moving along as we expected. We're still very early days in building advertising, we are doing well at sort of putting in the tech stacks. We started to recruit sales staff. As you know, we appointed a VP in that area last quarter. And what we're seeing is a lot of confirmation that the quality of the audience is very high and will be very appealing for advertisers. That said, we always knew that this was going to be a process to build.

Speaker Change: We're doing a lot of it it would be a very technical to explain a bit but feeling solid and overall on track.

Russell Burke: Russell do you want to answer the second half of the question yes.

Russell Burke: Maria what I would say and just sort of layering on what what Chris said is that where we're really largely moving along as we expected, but we're still very early days and in building advertising.

Raymond Jones: Great. Thanks, Chris. Next, we'd like to go to Mark Mahaney with Evercore.

R J: Great. Thanks, Chris. Next, we'd like to go to Mark Mahaney with Evercore.

[Analyst] (Evercore ISI): Hey, guys, can you hear me?

David Palmer: Hey, guys, can you hear me?

Russell Burke: Where we are.

Raymond Jones: Yes.

R J: Yes.

Chris Hulls: Yep.

[Analyst] (Evercore ISI): Hi, this is David on for Mark. Just wanted to ask if you're seeing any differences in the subscription attach rates to the new Tile hardware compared to the old one. Just in terms of your advertising business, you signed Uber recently. Could you talk about which inning you're in so far in terms of building out advertising? Thank you.

David Palmer: Hi, this is David on for Mark. Just wanted to ask if you're seeing any differences in the subscription attach rates to the new Tile hardware compared to the old one. Just in terms of your advertising business, you signed Uber recently. Could you talk about which inning you're in so far in terms of building out advertising? Thank you.

Russell Burke: Doing well it sort of putting in the in the tech stacks where.

Russell Burke: He started to recruit sales staff as you know we are we appointed a BP in that in that area last quarter and you know what with what we're seeing is a lot of confirmation that the quality of the audience is is very high and we will be <unk>.

Chris Hulls: In terms of the new Tile lineup, everyone is eligible, now, to get a Tile, link it. We test different promos. There's no exact measurement of how Tiles per se are driving subscriptions. It's just part and parcel. I'm extremely optimistic as we roll out new marketing, as we come to Black Friday, people are gonna see the differentiation in Tile versus AirTags. I'd encourage everybody to just Google some of the press results that we've had. There's stuff like Tile giving AirTags a run for their money with the SOS feature. We only need a relatively small portion of people to have that awareness that we are differentiated, and your daughter's going to school, college, and you wanna have something that keeps her safe or even a gift of, like, safety. It's very different.

Russell Burke: Very appealing for for our advertisers.

Russell Burke: Advertisers.

Russell Burke: That said, we always knew that this was going to be.

Maria Ripps: And it's ramping up in largely the way we expect. And we've included some additional case studies in the investor presentation that RJ referenced earlier, be available on our IR website. And we are aiming towards the top end of that, but what it clearly shows is that this is an area that takes some time to build up. Great. That's very helpful.

Russell Burke: E a process to build and it's ramping up and largely the way we expect and we've included some some additional case studies in the investor presentation that RJ referenced earlier.

Russell Burke: Available on our IR website.

You we are aiming towards the the top end of that but what it clearly shows is that this is an area that takes some time to build up.

Speaker: Thank you both.

Speaker: Welcome. Great.

Great. That's very helpful. Thank you both.

James Bales: Next, we'd like to go to James Bales with Morgan Stanley. Hi guys, thanks for taking my question. I guess my question is about the call, which was, in my view, the real strength of this result. So maybe can you just help us understand what's changed to accelerate the Mao ads between, say, retention and gross ads, and how should we think about the sustainability of those trends? And then Chris, a couple of years ago you were talking about the ability to drive penetration of paid up towards the rates of peers like Spotify.

Russell Burke: Welcome.

Russell Burke: Yeah.

Chris Hulls: The real litmus test is coming up, so I don't wanna get ahead of ourselves, but I am genuinely excited. Some of the new ad content we have is amazing. We have some Monday Night Football slots, probably not relevant for our Australian investors, but I'd say if you're a football fan, tune into some of what we've been doing. We have. I also think the best creative ads we've had in the company's history coming out. One thing I can say, I don't have firm number to share, but the attach rate of premium accounts actually linking Tile is going up significantly. A lot of that is because we are shifting people to the core Life360 app over time, and the SOS feature requires Life360.

Speaker Change: Great next we'd like to go to James Bales with Morgan Stanley.

Speaker Change: Hi, guys. Thanks for taking my question I guess my question is about the call which was in.

Speaker Change: In my view the real strength of this resolved. So maybe you can you just help us understand what's changed to accelerate the MAU adds.

Speaker Change: Wayne say retention and gross ads and how should we think about the sustainability into those trends.

Chris Holes: And then Chris a couple of years ago, you were talking about the ability to drive penetration of tied up towards the right cells piece like Spotify as advertising change that equation and what's your latest thinking there.

Chris Hulse: Has advertising changed that equation and what's your latest thinking? Sure, so I'll start with what's driving things. And I'd say in general, it's just across the board, the market getting better while we're executing and making the product better. And that might sound like a non-answer, but it really is the truth. Organics doing extremely well as evidenced by back to school. International is doing really well, which is another driver of growth. We now are showing those penetration stats and it's very relieving for me to see that we've said, hey, it seems like something magic happens around 2% penetration in a region.

Chris Hulls: As some might recall, we had low attach rates of linking Tile to Life360 in the beginning 'cause there really wasn't a reason to do so. We have now, I'd say, transitioned at least half the functionality from the Tile app to the Life360 app, including our main new differentiated feature. In terms of those linkage rates, that is up dramatically. I wanna make sure these trends hold before I give definitive answers, but I hope in the next quarter they continue, and I can give a very firm update and say we have a whole quarter under our belt. Because it's very hard to determine what's just that sugar high from a new release. Thank goodness we have the sugar high. It bodes very well.

Speaker Change: Sure. So I'll start with what's driving things and I'd say in general it's just across the board the market getting better while we are executing and making the product better and that might sound like a non answer but but it really is the truth.

Speaker Change: Organic is doing extremely well as evidenced by back to school.

Speaker Change: International is doing really well, which is another driver of growth. We now are showing those penetration stats in and it's very relieving for me to see that we have said hey, it seems like Sunday magic happens around 2% penetration in the region.

Chris Hulse: That is replicating internationally. It's great to see that even in the US where you have huge penetration, that is continuing. On the non-organic side, Mike, our new CMO, man, I really hope everyone watches some of the commercials that we've just launched. Russell, maybe we can get it out there. We've got huge recognition and adage. We had the best creative, I think, of the week of all new ads in the world, literally. We have some big product improvements coming up. We're optimizing growth flows. The new tie lineup, I think, is meaningfully modernizing that part of the business.

Chris Hulls: Give us a quarter to let these things solidify.

That is replicating internationally, it's great to see that even in the U S. Ray of huge penetration that is continuing.

[Analyst] (Evercore ISI): Great. Thank you, Chris.

David Palmer: Great. Thank you, Chris.

Chris Hulls: Welcome.

Speaker Change: On the Nonorganic side.

Raymond Jones: Great. Next, I'd like to go with Lafitani Sotiriou with MST.

R J: Great. Next, I'd like to go with Lafitani Sotiriou with MST.

Speaker Change: Mike our new CMO, Matt I really hope everyone watches under the commercials.

Speaker Change: We've just launched Russell, maybe we can get it out there, but we've got a huge recognition the adage that we we have the best our best Creative I think of the week of all new adds in the world literally we.

Russell Burke: Thank you for the opportunity to ask a question. May I unpack the commentary around the pet and elderly packages? I think you discussed next year you're targeting launcher subscriptions around pets and-

Lafitani Sotiriou: Thank you for the opportunity to ask a question. May I unpack the commentary around the pet and elderly packages? I think you discussed next year you're targeting launcher subscriptions around pets and-

Speaker Change: We have some big product improvements coming up we're optimizing growth flows the new tire lineup I think is meaningfully.

Chris Hulls: Yep.

Russell Burke: FY 26 for elderly senior packages. This is new information with some clearer timelines rather than it being in the future, it sounds like. It's more certain. Can you just walk us through the thinking? Is this going to be an additional, say, a module or like an extra $5, $10? Will it be-

Lafitani Sotiriou: FY 26 for elderly senior packages. This is new information with some clearer timelines rather than it being in the future, it sounds like. It's more certain. Can you just walk us through the thinking? Is this going to be an additional, say, a module or like an extra $5, $10? Will it be-

Chris Hulse: Apple still seems to actually be helping us versus hurting us because in overseas regions in particular there is no cross-platform Find My. So it really is a lot of it, just good execution, good vision. We're hiring amazing people, and that is because. We're doing well. The market is not what it was a couple of years ago. It's the companies with real results that have this better access to talent. Our NASDAQ listing has really helped because it was always a bit of a weird explanation to tell new hires they were an Australian company even though they were based in San Francisco.

Speaker Change: Modern rising that part of the business.

Speaker Change: Yeah.

Speaker Change: Apple still seems to actually be helping us versus hurting us because an overseas regions in particular there is no.

Speaker Change: Cross platform find my so it really is a lot of it just good execution good vision.

Chris Hulls: Yeah.

Russell Burke: Include things like pet insurance? How should we be thinking about it, and then the timing of those launches?

Lafitani Sotiriou: Include things like pet insurance? How should we be thinking about it, and then the timing of those launches?

Speaker Change: We're hiring.

Speaker Change: Amazing people and that is because.

Speaker Change: We're doing well.

Chris Hulls: Yeah. Let me back up a bit and give a bit of recap on the vision and just our move to hardware and the rationale behind it, especially for people who have not been following the story as long. The vision of Life360 is not just people, it's pets, it's things. We have what we call a religious belief that anything you care about, you're gonna know where it is. The idea that you could lose a pet or a car or a laptop. It's gonna be downright archaic in the next few years, and those trends are accelerating. We bought Jiobit and Tile in 2021, late 2021. 2022 happened, and we obviously had to pull back quite a bit on some of those plans. It was very frustrating with that downturn.

Speaker Change: The market is not what it was a couple of years ago with the companies with real results that have us better access to talent or our NASDAQ listing is really helped because it was always a bit of a weird explanation to tell new hires are in Australia, <unk> company and they were based in San Francisco. So again, it's really it really hasnt been good across the board.

Chris Hulse: So again, it really has just been good across the board.

Chris Hulse: In terms of sustainability, I like to be intellectually honest and I'm more trying to say, what are the leading indicators that I am watching? As a founder, I truly believe that location is going to be in everything and there's a hundred billion dollar opportunity here and it's ours to lose. And that's why I want to continue to make sure we're not just getting into harvest mode, which we could do. We want to lean in on growth. We still are committed to profitability, but it really is as this becomes one of these main mobile use cases, which I think at this point it truly is.

Speaker Change: In terms of sustainability.

Speaker Change: Yeah.

Speaker Change: I like to be intellectually honest and I'm more ties a what are the leading indicators that I am watching as a founder I truly believe that location is going to be and everything and there is a $100 billion opportunity here and it's ours to lose and that's why I want to continue to make sure. We're not just getting into harvest mode with which could do we want to lean in on growth. We still are committed to <unk>.

Chris Hulls: We put Jiobit on ice to focus on Tile, get that integration done. Over the last couple of years, the trends we wanted to see have been dramatically accelerating. Item tracking has been one of the biggest, fastest-growing categories, if not the fastest in the entire consumer electronics category. We're also seeing pet tracking as a category grow. Companies like Tractive are in the 100 million plus revenue run rates growing very, very quickly. We're getting good third-party validation that that overall bet was right. Now that we've done this new Tile lineup and these trends are very much holding, we are extremely excited to dust off the Jiobit technology that we own. It still remains arguably the best in the market and come out with these new products.

<unk> ability, but it really is as this becomes one of these main mobile use cases, which I think at this point. It truly is how do we capitalize on that so.

Chris Hulse: How do we capitalize on that? So international could add more users in the U.S. It probably should over time. So that gives me a lot of confidence. I already said this on some previous questions, but I will repeat it again. It just goes to the question on sustainability. Back to school is our best one ever. If it weren't, that would probably be like, OK, what happened there? And if we had a few back to schools in a row, I'd say we probably are hitting some saturation point, but it hasn't yet happened. And then the international tipping effect.

Speaker Change: International.

Speaker Change: Could add more users in the U S. It probably should over time, so that gives me a lot of confidence.

Speaker Change: <unk> said this on some previous questions, but I will repeat it again it just goes to the question on sustainability back to school is our best whenever if it werent that would probably like okay, what will happen there.

Speaker Change: We had a few back to schools in a row I'd say, we probably are hitting some saturation point, but it hasn't yet happened and then our international tipping effect I think we have that slide in the support materials. We can see Canada, where we were always we got a lot of questions. I don't know why isn't Canada growing the U S. We never really knew our thesis was that there was a tipping point and something seems to have tip. So all of those things.

Chris Hulse: I think we have that slide in the support materials. We can see Canada where we were always we got a lot of questions. I don't know why isn't Canada growing in the U.S.? We never really knew our thesis was that there was a tipping point and something seems to have tipped. So all those things give me a lot of confidence. And to me, it's really about outrunning the competition, staying nimble and not getting overly greedy around just dropping cash to the bottom line when there is still much growth potential. That's why I want to launch faster, national keep pushing.

Chris Hulls: Our plan for pet tracking now, and this is a bit of a teaser that we're gonna share full results. I've seen the prototype and all that. We're very excited. We think we have the opportunity to have the lowest cost with the best battery life, and it's gonna be bundled into Life360 subscription tiers. That goes right to the very name Life360. The idea that we had silver, gold, platinum versus like very specific upgrade options was because if you can build a bundled offering, that's a huge differentiation over competitors. We already own the customer. We have $0 CAC on an incremental user, whereas all our competitors are starting from scratch, and we can just redeploy that into our bundle. Our bundle costs more than a standalone subscription, but it just has such high value.

Speaker Change: Give me a lot of confidence and to me, it's really about outrunning the competition staying nimble.

Speaker Change: And not getting overly greedy around just dropping cash to the bottom line. When there is so much growth potential and that's why we wanted to launch faster international keep pushing and again I view now know the leading indicators that I will be looking at.

Chris Hulse: And again, I you now know the leading indicators that I will be looking at. My aggressive founder side says it's massively sustainable. Let's just look at the hard data to inform us. Then in terms of paid conversion, as MAU grows, it temporarily brings down paid because people earlier in the life cycle haven't converted yet, but we feel good about that, and I am very excited to see once the new tile lineup is fully out how much that drives things. And the earlier comment on pets and elder care, that is directly going to drive subscription conversion, and so that will be our first.

Speaker Change: My aggressive founder size as it is massively sustainable bloodlust, let's look at the hard data to inform us.

Speaker Change: Then in terms of paid conversion as <unk> grows it temporarily brings down paid because people earlier in the lifecycle hasnt converted yet, but we feel good about that and I am very excited to see once the new tire lineup is fully out how much that drives things and to the earlier comment on pets and elder care that is directly going to drive subscription conversion and so that will be our first.

Chris Hulls: How that's gonna manifest is more people signing up. It'll probably be pets in gold and elder in platinum, but don't hold us to that. I think we're gonna increase conversion and more importantly, increase retention, 'cause anyone who has a dog, once you have one of these things on your dog, your churn really goes down. Jiobit was indirectly used as a pet tracker, and we see that data ourselves, so I'm excited about that. The eldercare space, it's something we've long talked about, but we were also aware that the market hadn't quite gotten there yet because we need the sandwich generation to get a little bit older and have aging parents themselves, so millennials in particular.

Chris Hulse: new vertical plan. So if we see a lot of people signing up for the pet product, that could be incremental conversions to gold because right now the people are paying as often families with teens. This is going to open up a whole new set of customers who might not have kids in the age range that they normally pay. Now, that's going to be very late 25, and we're trying to not commit to a firm date there, but I think that will be the next real test. And, okay, we launch a brand new vertical, similar to how driving was our big vertical that drove so much success.

New vertical plan. So if we see a lot of people signing up for the pet product that could be incremental conversions to gold.

Because right now the people are paying us often families with teens.

This is going to open up a whole new set of customers, who might not have kids and the agents that are normally paid now that's going to be very late 'twenty five and we're trying to not commit to a firm date, there, but I think that will be the next real test on okay. We launch a brand new vertical similar how driving was there a big vertical that drove so much success can can we hit in.

Chris Hulls: To make that a little bit more personal and a bit of a sad note for me, my mom is in the mid-stages of Alzheimer's. It's a little bit of arguably fate that I really need this product myself. I think I'm a very good product guy. That was my job in Life360 first and foremost, even ahead of CEO. The fact that I can work on this product, this is gonna be very relevant for me as the market matures. You're talking these are like billions of revenue in these eldercare products, and they're horrible. I can say that both as a businessman running Life360 and someone shopping around for my own mother. I am gonna be the ultimate user of this product when it comes out.

Chris Hulse: Can we hit another one at that scale?

Chris Hulse: I don't think advertising really impacts that one way or another, and I don't know if this is what you're getting at the question. Sometimes people use advertising as a bit of a cudgel to get people to upgrade by degrading the experience. But at the point on where we are in that growth curve, we are not in harvest mode, we're in growth mode. So we think it would be penny-wise, pound-foolish to try to degrade the experience to get people to upgrade while we are growing so quickly. I'm not a purist in the strictest sense. At some point when we do level out, we probably will get more aggressive.

Speaker Change: Another one at that scale I don't think advertising really impacts that one way or another.

Don't know if there's a way you are getting at the question sometimes people use advertising is a bit of a casual to get people to upgrade by degrading the experience, but at the point on where we are in that growth curve. We are not in harvest mode. We're in growth mode. So we think it would be penny wise pound foolish to try to degrade the experience to get people to upgrade while we are growing so quickly.

Chris Hulse: But right now is not the time for that.

Speaker Change: <unk> I'm not appear as a stricter sense at some point and we do level out we probably will get more aggressive, but writing right now is not the time for that.

Speaker: Great, thank you. You're welcome.

Chris Hulls: We're just sharing that we do have this rollout. People have asked us about what we're doing with the Jiobit asset, the hardware plan. The exciting thing about these is that these are subscription businesses, period. We've been transitioning Tile as a giveaway to drive subscription, but this is actually driving subscription directly because these need services behind them, and the market has a very high anchor price in them already for inferior products. We're more sharing that because we knew people were asking about it, but also with a lot of excitement that we successfully did do this Tile lineup refresh, and the team has already moved their attention to the pets product for next year.

Chris Kintarek: Great. Next, we'd like to go to Chris Kintarek with UBS. Thanks for taking the question. I wanted to touch on the advertising opportunity. If I'm looking at the right slide, slide 29 in your advertising deck, you're now including Pinterest, and Snap, and the Ad Arpoo. And I think you're showing in your chart here it's kind of the Ad Arpoo more in the $6 to $7 neighborhood. You were previously kind of talking about Uber as the high watermark, or at least as far as what you were comfortable thinking about is the opportunity set.

Speaker Change: Alright, Thank you welcome.

Speaker Change: Great next we'd like to go to Chris <unk> with UBS.

Speaker Change: Okay.

Speaker Change: Great. Thanks for taking my question.

Speaker Change: Wanted to touch on the advertising opportunity I if I'm.

Speaker Change: I'm looking at the right slide slide 29 in your advertising deck.

Speaker Change: You're now, including Pinterest, and snap and the AD or who and I think you're showing in your chart here, it's kind of bad <unk> more in the six to $7 neighborhood. You were previously kind of talking about Uber as the high watermark or at least in.

Russell Burke: As the high end of that opportunity set moved higher, and you also have a chart here just looking at that Ad Arpoo ramp here, should we also be thinking about the longer term opportunity, or? the ramp tying more to those social companies of Pinterest and Snap versus what the other companies that you're showing here. Thanks.

Lafitani Sotiriou: Got it. Thank you.

Speaker Change: Far as what you were comfortable thinking about is the opportunity set as the high end of that opportunity set moved higher and you also have a chart here just looking at that at <unk> ramp here.

Chris Hulls: You're welcome.

Raymond Jones: Thank you. Next, we'd like to go to Maria Ripps with Canaccord Genuity.

R J: Thank you. Next, we'd like to go to Maria Ripps with Canaccord Genuity.

Speaker Change: Should we also be thinking about the longer term opportunity.

Lafitani Sotiriou: Great. Thanks so much for taking my question. Just following up on advertising, do you have any insights into maybe any commitments or positive indications from advertisers for 2025? Any thoughts more broadly that you maybe can share on sort of expected ad revenue growth next year compared to the $5 to 10 million range this year? Is that still a good sort of a good range for us to keep in mind for 2024?

Maria Ripps: Great. Thanks so much for taking my question. Just following up on advertising, do you have any insights into maybe any commitments or positive indications from advertisers for 2025? Any thoughts more broadly that you maybe can share on sort of expected ad revenue growth next year compared to the $5 to 10 million range this year? Is that still a good sort of a good range for us to keep in mind for 2024?

Speaker Change: Our.

Speaker Change: The ramp time more to those social companies of Pinterest and snap versus.

Russell Burke: Russell, do you want to take that one? Sure. Chris, I think the slide in the investor presentation is more illustrative of anything in terms of just what some of these companies have done. Each of these are slightly different. What I would say is that we are incredibly excited about the opportunity because of the quality of the audience and the initial reaction that we're getting from advertisers, from agencies that are really excited about the ability to speak directly in a contextual way to the audience. It will take some time to realise exactly where we're going, but yes, we definitely see the opportunity in the longer term in the higher end of that range.

But the other companies that you're showing here. Thanks.

We're also going to take that one.

Speaker Change: Sure.

Speaker Change: Chris I think the U C.

The slide in the Investor presentation is more illustrative of anything in terms of just what some of these companies have done each of these.

Chris Hulls: Let me take that from the qualitative standpoint, and I usually hand it to Russell for the numbers. That also made me realize I did not answer the second half of last question, so I'm gonna tie both of those together. Everything's largely on track and expanding. We're exactly in the zone for this year, and advertising is gonna start blurring more and more with our data line because advertising and data in many ways is part and parcel of the same thing 'cause it's not all just things for customers to click on. It's how we do better matching and audiences, which is really a broader data product. We also have a very large pipeline of interested parties. It has not been a difficult sell whatsoever.

Slightly different what I would say is that we are incredibly excited about the opportunity because of the quality of the audience and the sort of initial reaction that we're getting from advertisers from agencies.

Speaker Change: The that are really excited about the ability to speak directly in a contextual way to the audience.

Speaker Change: So it will it will take some time to sort of realize where we're we are exactly where we're going.

Chris Hulls: It's really now we have to build some of the infrastructure, and we have to find ways of surfacing it to customers. We hired Brian McDevitt a few months ago. He has huge experience doing this at Google. So stuff has to get built. I would say exactly on track and maybe even more demand than expected in terms of third parties being very excited. Then the last question on just where are we in terms of what inning on the Uber side, we're well past banners with them. It's our first contextual push. So you land at an airport, and you get this push that, "Welcome to SFO. Would you like an Uber?" I don't have hard numbers I can share, but it's an order of magnitude better than banners. Even more than that, significantly.

Speaker Change: But yes, we definitely see the opportunity in the longer term is.

Russell Burke: Got it.

Russell Burke: Thank you.

Russell Burke: And maybe just one follow up. You had mentioned the TV campaigns earlier and the creative there. Just any color you can share about the benefit that you're seeing from those TV campaigns in the US. And could you just remind us about timing there when that started and whether this continues into 4Q and into 25. Thanks.

Speaker Change: You know in the higher end of that range.

Speaker Change: Got it thank you and maybe just one follow up you had mentioned the TV campaigns earlier in the creative there just any color you can share about the benefit that you're seeing from those TV campaigns in the U S and could you just remind us about timing there when that started and whether this continues into <unk> and into 'twenty five.

Chris Hulse: Sure, so... It's still too early to see the hard results, but just the reaction around how positive it is and people understanding more about that bigger vision. And we have been transitioning to performance ads online, which actually undercut the vision because what performs through just standard, like, Google UAC placements is like track your family, which is very narrow. But now we're being able to do things on streaming where we actually can measure the performances telling that bigger story. And we are showing, one is just a very funny and somewhat off color ad about someone using an SOS button on tile through Light360.

Speaker Change: Sure so.

Speaker Change: It's still too early to see the hard results, but just the reaction around how positive is in people understanding more about that bigger vision and we have been transitioning to performance ads online, which actually undercut division because what performs through to standard life <unk>.

Chris Hulls: It's done in a way that doesn't feel like an ad. The results are beating expectations. It's a relatively low impression lineup because people open the app 20 times a day, but they're only flying a few times a year. What it really validated was we can identify these triggers in real time, pass them to an advertiser, bring something back to our customers that they're excited about and actually use, and have results that dramatically outperform the generic banners. That is the benefit we have of our first-party location data that can be accessed in real time. Call that inning three. I'm putting me on the spot with exactly what inning, but it's still very early in the sense that we need to build out a platform. We can't be bespoke on everything.

Speaker Change: Hugo UAC placements as light tracker family, which is very narrow, but now we're being able to do.

Speaker Change: Things on streaming where we actually can measure their performance is telling that bigger story and we are showing a wash, it's a very funny and somewhat off color.

Chris Hulse: So that platform and ecosystem play is really coming through. And to me, it's very hard to quantify, but I'm just so excited and proud of the team, how much we really stepped up and leaned into danger a bit. It reminds me of when we had our extremely successful Gorilla work on TikTok, but now we're going mainstream on regular TV. A lot of that is ramping up now. And that is why I am looking to Black Friday and the holiday season, because it's really a re-baselining. I am genuinely optimistic. That is completely real. DTC is essentially doubled since we've launched that.

Speaker Change: Add about someone using an sos about non tile through like 360, so that platform and ecosystem players really coming through.

Speaker Change: And to me this is very hard to quantify but I'm, just so excited and proud of the team.

Speaker Change: How much we really stepped up and leaned into danger a bit.

Speaker Change: It reminds me of when we had our extremely successful guerilla work on Tictoc Panera going mainstream on regular TV a lot of that is ramping up now and that is why I am looking to.

Chris Hulls: We need to have it international. We need to have full end-to-end pipes. That's gonna be a while, but feeling very good. We are looking, and talking to other partners right now. We're doing a lot. We'd have to get very technical to explain it, but feeling solid and overall on track. Russell, do you want to answer the second half of the question?

Speaker Change: Black Friday, and the holiday season, because it was really a rebase lining I am genuinely optimistic that is completely real DTC has essentially doubled since we've launched that but I want to say is there's more than a sugar high is this sustainable does this get that next wave of growth. So I can't say that definitively yet I can say I'm very excited about it and that's why I'm encouraged.

Chris Hulse: But I wanna see, is this more than a sugar high? Is this sustainable? Does this get that next wave of growth? So I can't say that definitively yet. I can say I'm very excited about it. And that's why I'm encouraging everyone to look themselves because I'm extremely just proud of the work the team.

Russell Burke: Yeah. Maria, what I would say, and just sort of layering on what Chris said, is that, we're really largely moving along as we expected. We're still very early days in building advertising, where we are, you know, doing well at sort of putting in the tech stacks, where we've started to recruit sales staff. As you know, we appointed a VP in that area last quarter. You know, what we're seeing is a lot of confirmation that the quality of the audience is very high and will be very appealing for, you know, advertisers.

Speaker Change: Everyone to look themselves.

Speaker Change: Because I am extremely proud of the work the team had done.

Speaker: Okay, great. Thanks, Chris.

Chris Savage: Next, going to Chris Savage with Bell Potter. So many crisps. My one question is, can you provide any We are doing ongoing international launch work. It would be going too deep for this call to go into specifics. But we're now doing a lighter weight approach to new regions. We're calling it dual tier, where we're just able to prop up the services a little bit faster, and we're using that to inform the approach. And as we've shared with international, we've we've always been. Because this is more mechanical versus strategic vision, we go more on the fly with that.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks, Chris next going to Chris Savage with Bell Potter.

Speaker Change: So many Christians.

My one question is can you provide any detail or color on when and where we might see the next tier membership launch.

Speaker Change: Yeah.

Speaker Change: We are doing ongoing international launch work.

Speaker Change: It would be going too deep for this call to go into specifics, but.

Speaker Change: We're now doing a lighter weight approach to new regions or client dewalt here, where we're just able to prop up the service is a little bit faster and we're using that to inform the approach and as we've shared with internationally we've always been.

Russell Burke: That said, we always knew that this was going to be a process to build and, you know, it's ramping up in largely the way we expect. We've included some additional case studies in the investor presentation that RJ referenced earlier will be available on our IR website. We are aiming towards the top end of that, but what it clearly shows is that this is an area that takes some time to build up.

Russell Burke: And David Rice, who's been with us a very long time, has done a great job of looking at the data, adjusting the signals, figuring out how to have the highest leverage and move. So we are not following a very big kind of lightning strike approach. That is what we did when we launched in the UK, because that was the test platform for the full new triple-tier launch and turnkey system to launch quickly. So it's really going on a quarter-by-quarter basis now, but you expect to see more in Europe over the next year for sure. And Chris, just to add to that, the triple tier territories that are already in place are performing very well, including Canada, which has really started to accelerate once we got past that tipping point.

Speaker Change: Because this is more mechanical versus strategic vision, we go more on the fly with that and David Rice Who's been with US a very long time has done a great job of looking at the data adjusting the signals figure out to have the highest leverage and move. So we are not following a very.

Speaker Change: Yeah.

Speaker Change: Big kind of Lightning strike approach that is what we did when we launched in the U K to that was the the test platform for the four new triple to your launch in.

Raymond Jones: Great. That's very helpful. Thank you both.

Maria Ripps: Great. That's very helpful. Thank you both.

Russell Burke: You're welcome.

Speaker Change: Turnkey system to launch quickly so it's really going on a quarterly quarter by quarter basis now.

Raymond Jones: Great. Next, we'd like to go to James Bales with Morgan Stanley.

R J: Great. Next, we'd like to go to James Bales with Morgan Stanley.

Speaker Change: Do you expect to see more.

Speaker Change: In Europe over the next year for sure.

James Bales: Hi, guys. Thanks for taking my question. I guess my question's about the core, which was, in my view, the real strength of this result. Maybe you can just help us understand what's changed to accelerate the MAU adds between, say, retention and gross adds, and how should we think about the sustainability of those trends? Then, Chris, a couple of years ago, you were talking about the ability to drive penetration of paid up towards the rates of peers like Spotify.

And Chris just to just to add to that the the Triple T territories.

Speaker Change: They are already in place are performing very well, including Canada, which has really started to accelerate.

Russell Burke: With the dual tier strategy, it's to some extent sort of inserting a middle ground where we've been able to deliver sort of two tiers of digital products on a sort of global basis outside of the triple tier territories. And as Chris mentioned, that will really help us inform the next stage for triple tier.

Speaker Change: Once we got past the tipping point.

With the the jewel tier strategy, it's to some extent sort of inserting a at a middle ground, where we have been able to.

Speaker Change: Deliverers sort of two tiers of digital digital products.

On a on a global basis outside of the Triple T territories, and ice and as Chris mentioned that will that will really help us inform the next stage for Triple T M.

Chris Hulls: Yep.

James Bales: Has advertising changed that equation, and what's your latest thinking there?

Chris Hulls: Sure. I'll start with what's driving things. I'd say in general, it's just across the board, the market getting better while we're executing and making the product better. That might sound like a non-answer, but it really is the truth. Organic's doing extremely well, as evidenced by back-to-school. International doing really well, which is another driver of growth. We now are showing those penetration stats, and it's very relieving for me to see that we've said, "Hey, it seems like something magic happens around 2% penetration in a region that is replicating internationally." It's great to see that even in the US, we have huge penetration that is continuing. On the non-organic side, Mike, our new CMO. Man, I really hope everyone watches some of the commercials that we've just launched.

Speaker: Great, thank you. Great.

Rob Sanderson: Next, we'd like to invite Rob Sanderson from Loop Capital Markets. Okay, unmuted. Thank you. Thanks for the opportunity. I guess I wanted to dig deeper on advertising like everybody else, but you're obviously just getting started here, starting to take shape nicely with partners like Uber and some good sort of reference and examples that we can, I guess, conceptualize the power of location. But would you say the next step for you, like call this through the end of 25, is this more about product development, ad formats, ad tech? Or do you think you have enough of this work done now where the next step is more go-to-market motions, bringing on the next Ubers and get more third-party demand flowing through and things like that?

Speaker Change: Great. Thank you.

Speaker Change: Great next I'd like to invite Rob Sanderson from loop capital markets.

Rob Sanderson: Okay. Thank you thanks for the opportunity.

Rob Sanderson: I guess I wanted to dig deeper on advertising like everybody else.

Rob Sanderson: But you obviously just getting started here starting to take shape nicely with partners like Uber and some good sort of reference and examples that we can I guess.

Speaker Change: <unk> the power of location, but is it would you say the next step for you called us through the end of 'twenty. Five is this more about product development AD format AD Tech where do you think you have enough of this work done now we're like the next step is more go to market motions, bringing on do next ubers and <unk> and <unk>.

Chris Hulls: Russell, maybe we can get it out there, but we got huge recognition at Ad Age. We had the best creative, I think, of the week of all new ads in the world, literally. We have some big product improvements coming up. We're optimizing growth flows. The new Tile lineup, I think, is meaningfully modernizing that part of the business. Apple still seems to actually be helping us versus hurting us because in overseas regions in particular, there is no cross-platform Find My. It really is a lot of it just good execution, good vision. We're hiring amazing people, and that is because we're doing well. The market is not what it was a couple of years ago. It's the companies with real results that have this better access to talent.

Chris Hulse: So how should we think about the next step of this crawl before you walk, before you run on ads? So it's both. We are definitely getting real revenue now. There are multiple chess pieces to push down the board. A lot of what we're going to be doing next is around the profiling of our customers to make them readily accessible.

More third party demand flowing through and things like that so how should we think about kind of the the next step of this crawl before you walk before you run on ads.

Speaker Change: Yes.

Speaker Change: Both we are definitely getting real revenue now.

Speaker Change: There are multiple chess pieces to push down the board.

Speaker Change: A lot of what we're going to be doing next is around the profiling of our customers to make them readily accessible.

Chris Hulse: I am new to advertising myself. We might want to actually do a breakout with Brian, who really is an expert here. I'm a product leader much more than ad tech leader. But we will have some stuff to announce in terms of how do you target certain audiences on Life360? How do we build unique profiles using real and synthetic data? A lot of what we could be doing is actually making money without even serving an ad. We could open this up for other people because we do have industry-leading opt-in rates to IDFA tracking, which is the ability to track people using the ID for advertisers on iPhone and Google.

Speaker Change: I am new to advertising myself, we might want to actually do a breakout with Brian who really is an expert here I am I am a product leader much more than AD Tech leader.

Speaker Change: But we will have some stuff to announce in terms of how do you target certain audiences unlikely 60, how do we build unique profile using real and synthetic data.

Chris Hulls: Our Nasdaq listing has really helped because it was always a bit of a weird explanation to tell new hires they're an Australian company even though they were based in San Francisco. Again, it really has just been good across the board. In terms of sustainability, I like to be intellectually honest, and I more try to say, what are the leading indicators that I am watching? As a founder, I truly believe that location is gonna be in everything, and there's a $100 billion opportunity here, and it's ours to lose. That's why I wanna continue to make sure we're not just getting into harvest mode, which we could do. We wanna lean in on growth.

Speaker Change: A lot of what we could be doing it actually make money without even serving an AD. We can open this up for other people because we do have industry, leading opt in rates do IVF tracking which is the ability to attract people using the <unk>.

Chris Hulse: So there's a lot there, and I think any answer I give you would not be giving it full justice. But when I have looked at the roadmaps and talked to the team, and just looking at comps, this is usually something that takes a while to build and some of the intent of adding some of those comps. in our support materials was to show that the ramp-up can take a while. So we are trying to be conservative in terms of forecasts. One thing we've shared with advertising is that unlike launching a new vertical or customer-facing features, we have committed to making advertising self-funding immediately.

Speaker Change: I'd for advertisers on iPhone and Google So theres a lot there.

Speaker Change: And I think any answer I give you would not be giving it for justice.

Speaker Change: But when I have looked at the Roadmaps and talk to the team and just looking at comps. This is usually something that takes a while to build and some of the intent of adding some of those comps.

Chris Hulls: We still are committed to profitability, but it really is as this becomes one of these main mobile use cases, which I think at this point it truly is, how do we capitalize on that? International could add more users in the US. It probably should over time. That gives me a lot of confidence. I already said this on some previous questions, but I will repeat it again because it just goes to the question on sustainability. Back to school is our best one ever. If it weren't, that would probably be like, okay, what happened there? If we had a few back to schools in a row, I'd say we probably are hitting some saturation point, but it hasn't yet happened.

Speaker Change: And our support materials was to show that the ramp up can take a while so we are trying to be conservative in terms of forecast one thing we've shared with advertising is that unlike.

Speaker Change: Launching a new vertical or customer facing features we are committed to making advertising self funding immediately so it's not a situation where we go dark for a year and burn the money and kind of second year launch it make money. The third year. We've told the team contribution margin positive day, one so it doesn't mean, we have to necessarily go a little bit.

Chris Hulse: So it's not a situation where we go dark for a year and burn the money and kind of second year launch it make money the third year. We have told the team contribution margin positive day one. So it does mean we have to necessarily go a little bit slower because we're not putting huge dollars into forward investment. So I think it's gonna be a multi-year ramp before we see kind of rivaling our subscription revenues. I mentioned that we are gonna see the lines blurring between our data revenue and our ad revenue. And one of the things we long talked about, which took us a lot longer than we wanted, but I think you'll see resurface as part of this is insurance-based advertising using actual data and risk profiles of our customers.

Chris Hulls: Then that international tipping effect, I think we have that slide in the support materials. We can see Canada, where we got a lot of questions on earnings, like, why isn't Canada growing like the US? We never really knew. Our thesis was that there was a tipping point, and something seems to have tipped. All those things give me a lot of confidence. To me, it's really about outrunning the competition, staying nimble, and not getting overly greedy around just dropping cash to the bottom line when there is still much growth potential. That's why we want to launch fast international, keep pushing. Again, you now know the leading indicators that I will be looking at. My aggressive founder side says it's massively sustainable, but let's look at the hard data to inform us.

Speaker Change: Lower because we're not putting huge dollars into foreign investment.

Speaker Change: So I think it's going to be a multiyear ramp before we see kind of rivaling our subscription revenue as I mentioned at the argument that the lines blurring between our data revenue and our AD revenue and one of the things, we long talked about which took us a lot longer they wanted but I think youll see resurface as part of this is insurance space.

Chris Hulse: So I think next year you will see that ramp happening and I hope to be able to talk with A, more precision on what the out years of the data ad business looks like.

Speaker Change: <unk> using actual data and risk profiles of our customers. So I think next year, you will see that ramp happening and I hope they will talk with a more precision on what the out years of the data that AD business looks like and then hopefully we'll have a time, Oregon.

Chris Hulse: And hopefully we'll have a time where we can introduce you to Brian who can answer questions in a lot more detail and just a lot more roadmap with some certainty around it because we'll have had a lot more experience under our.

Chris Hulls: In terms of paid conversion, as MAU grows, it temporarily brings down paid, because people earlier in the life cycle hasn't converted yet. We feel good about that, and I am very excited to see once the new Tile lineup's fully out, how much that drives things. The earlier comment on pets and eldercare, that is directly going to drive subscription conversion. That will be our first new vertical plan. If we see a lot of people signing up for the pet product, that could be incremental conversions to Gold, because right now the people are paying us, often families with teens. This is gonna open up a whole new set of customers who might not have kids in the age range that they normally pay.

Speaker Change: Introduce you to Brian who can answer your question, there's a lot more detail.

Speaker Change: And just a lot more roadmap with some certainty around it because we will have had a lot more experience under our belt.

Wei Sim: Thank you, Chris. All right, next, we'd like to go to Wei Sim with Jeffrey. Okay, thanks Chris and Ross for taking my question. I just wanted to say, you know, watch the track the code ad. I think it's really cool. Had some good conversations with investors about it. So good work on, you know, putting some of these ads out there. They're very creative. I wanted to ask on just the ad rollout at this point in time. So you mentioned before that now we're doing some of the rollouts in the international area. So I was just hoping you could flesh out on that.

Speaker Change: Thank you Chris.

Speaker Change: Okay.

Speaker Change: Alright next we'd like to go two ways Sim with Jefferies.

Thanks, Okay, Thanks, Christian and Ross for taking my question.

Speaker Change: So I was I wanted to say.

Speaker Change: What's their track record at three of the call had some good conversations with <unk>.

Speaker Change: Investors about it so good luck on.

Speaker Change: We're putting some of these ads out there they're very creative.

Chris Hulls: Now, that's gonna be very late 2025, and we're trying to not commit to a firm date there. I think that will be the next real test on, okay, we launch a brand new vertical, similar to how driving was our big vertical that drove so much success. Can we hit another one at that scale? I don't think advertising really impacts that one way or another. I don't know if this is what you're getting at in the question. Sometimes people use advertising as a bit of a cudgel to get people to upgrade by degrading the experience.

Speaker Change: I wanted to ask on just.

Speaker Change: The AD rollout at this point in time, So you mentioned before that now we're doing some of the.

Chris Hulse: And then also just in terms of the ad strategy, you know, for example, with the Uber partnership right now, is that being done on paid users as well as free users? And, you know, how we think about ads, you know, you mentioned before, Chris, that, you know, we're not looking at detracting from the experience. And I think in many cases, ads, as you've proven, can be additive. So how do we think about the, you know, the monetization of users with ads for paid versus non-paid? Thanks.

Speaker Change: Rollouts of the international areas. So I was just hoping you could flesh out on that and then also just in terms of AD strategy.

Speaker Change: For example, with a group of partnership right now is that being done on paid users as well as free users and how we think about ads you.

You mentioned before Chris that you know, we're not looking at detracting from the experience and I think in many cases ads.

Chris Hulls: At the point on where we are in that growth curve, we are not in harvest mode, we're in growth mode, so we think it would be penny wise, pound foolish to try to degrade the experience to get people to upgrade while we are growing so quickly. I'm not a purist in the strictest sense. At some point, when we do level out, we probably will get more aggressive. Right now is not the time for that.

Speaker Change: You've proven can be additive so how do we think about the.

Chris Hulse: Sure. So first, in terms of international ads, we are testing in other regions now. It is still more with the dull and uninspiring banners, which is how we get our feet wet and learn and explore. Russell can comment if there's anything specific we can share there in terms of countries or numbers.

Speaker Change: The monetization of users with ads for payer dress is not bad.

Speaker Change: Sure so.

Speaker Change: First in terms of the international adds we are testing in other regions now it is still more with the Dol and uninspiring banners, which is how we get our feet wet and learn and explore Russell can comment if there's anything specific we can share there in terms of countries or or numbers.

Russell Burke: Right. Thank you.

James Bales: Right. Thank you.

Chris Hulls: Welcome.

Chris Hulse: to the question of how we think about paid customers. In some respects, you answered your own question that, yes, ads can be additive. And the Uber one in particular, I got the push, and it was actually easier for me to click on the Light360 push to get my Uber there because it notified me right when I landed and I clicked it and I got my Uber. Of course, I'm biased because I was very curious to test it out after a flight. But at that one tap, I got an Uber I was already linked and done.

Raymond Jones: Great. Next, we'd like to go to Chris Kuntarich with UBS.

R J: Great. Next, we'd like to go to Chris Kuntarich with UBS.

Speaker Change: To the question of how we think about paid customers.

Speaker Change: In some respects you answered your own question that yes ads can be additive and Uber one in particular I got the plush and it was actually easier for me to click on a light 60 push to get them over there because it notified me right when I landed I click it and I got my Huber of course I'm biased.

Chris Kuntarich: Great. Thanks for taking the question. I wanted to touch on the advertising opportunity. If I'm looking at the right slide 29 in your advertising deck, you're now including Pinterest and Snap in the ad ARPU, and I think you're showing in your chart here it's kind of the ad ARPU more in the $6 to $7 neighborhood. You were previously kind of talking about Uber as the high watermark, or at least in as far as what you were comfortable thinking about as the opportunity set. Has the high end of that opportunity set moved higher? You also have a chart here just looking at that, ad ARPU ramp here.

Chris Hulse: And if I didn't have the Uber app, it would have got me to download and either create an account or re-log in. The answer though, what about paid? How do we think about that? Well, for premium customers, we'll just make it a choice. We know most people don't go into settings and some people are part of a very vocal minority. So if you're a paid customer, we'll probably at some point just make some sort of setting for you to turn this thing off. I am guessing, though, that the Uber thing would not even look like an ad to someone.

Speaker Change: Because I was very curious to test without after a flight but is that one topic at newberg was already Linkedin and done well.

Speaker Change: And if it didn't have the rapid of got me to download neither create account or re login.

Speaker Change: The answer there, but what about paid how do we think about that.

Speaker Change: For premium customers will just make it a choice.

Speaker Change: We know most people don't go into settings.

And some people are part of a very vocal minority so if Europe and customer will probably at some point just make some sort of does that include a turn this thing off and I am guessing, though that the Uber thing, we're not even look like an add to some more so than.

Chris Kuntarich: Should we also be thinking about the longer term opportunity, or the ramp tying more to those social companies of Pinterest and Snap versus what the other companies that you're showing here? Thanks.

Chris Hulse: So I don't I am not aware of any pushback at all. I don't read all our customer support. But when I get our weekly updates on trends, I have seen. Our customer support team has not brought up a single kind of like, hey, people are complaining about this. We've actually only heard good.

Speaker Change: I am not aware of any pushback at all and I don't read all our customer support but.

Chris Hulls: Russell, do you want to take that one?

Speaker Change: When I get a weekly updates on trends I have seen.

Russell Burke: Sure. Chris, I think you know, the slide in the investor presentation is more illustrative of anything in terms of just what some of these companies have done. Each of these have a slightly different. What I would say is that we are incredibly excited about the opportunity because of the quality of the audience and the sort of initial reaction that we're getting from advertisers, from agencies, that are really excited about the ability to, you know, speak directly in a contextual way to the audience. So it will take some time to sort of realize where exactly we're going.

Speaker Change: Our customer support team and nonprofit a single kind of like Hey people are complaining about this we've actually only heard good things.

Chris Hulse: I also think in our long-term vision around membership, what I'm very excited about is deals and discounts and offers where We might make money on them, we might not, but imagine that we go to like a huge company that's looking to access our audience. We could give an amazing deal to paid customers and an okay deal to free ones. And it's actually be an upgrade draw to say you're gonna get these amazing offers. So I think there is a world where it's like, hey, Disney or Applebee's or whatever business, give something to our customers, give a great deal to our platinum and gold customers and something okay to everyone else.

Speaker Change: I also think in our long term vision around membership what I'm very excited about his deals and discounts and offers where.

Speaker Change: We might make money on them, we might not but imagine that we go to like a huge company. That's looking to access our audience. If you could give an amazing deal to paid customers and a okay deal to free ones and it could actually be an upgrade draw to say youre going to get these amazing offer. So I think there is a world, where it's like a disney or applebee's or whatever business gives on the euro.

Russell Burke: And you're not gonna reach the single largest source of, family users in the country outside of like Facebook at this point. So we were very compelling. platform that I think once we dial it in, there's so much we can do. But to be very clear, if you're paid, we'll just make a setting. You can turn it off if you want.

Speaker Change: Customers give a great deal to our platinum and gold customers and something okay to everyone else and you're not going to reach the single largest source of.

Speaker Change: Family users in the country outside of like Facebook at this point, so we have a very compelling.

Speaker Change: Platform that I think once we dial it in mobile there is so much we can do.

Russell Burke: Yes, we definitely see the opportunity in the longer term as, you know, in the higher end of that range.

Russell Burke: Okay, perfect.

Speaker Change: But to be very clear. If you are paid will just make a setting you can turn it off in one.

Russell Burke: Ross, I'm not sure if there's anything that you wanted to add on or any disclosure that you could put on countries and roll out of the international? Yeah, no, in terms of international, it's still very early days. We're sort of experimenting, testing in a couple of markets, but very early days. What we want to do is, you know, gather data, gather information so that when we're ready with the whole infrastructure and the ad tech side, that we can move fairly quickly.

Speaker Change: Okay.

Chris Kuntarich: Got it. Thank you. Maybe just one follow-up. You had mentioned the TV campaigns earlier and the creative there. Just any color you can share about the benefit that you're seeing from those TV campaigns in the US. Could you just remind us about timing there, when that started and whether this continues into Q4 and into 2025? Thanks.

Speaker Change: Okay perfect.

Speaker Change: Ross I'm not sure if there's anything that you wanted to add on or any disclosure that you could put on them.

Speaker Change: Entries and rollout of our international Yeah, No way in terms of international it's still very early days, we're sort of experimenting testing and in a couple of markets.

Chris Hulls: Sure. It's still too early to see the hard results, but just the reaction around how positive it is and people understanding more about that bigger vision. We have been transitioning to performance ads online, which actually undercut the vision because what performs through just standard like Google UAC placements is like, track your family, which is very narrow. Now we're being able to do things on streaming where we actually can measure the performance as telling that bigger story. We are showing one's just a very funny and somewhat off-color ad about someone using an SOS button on Tile through Life360. That platform and ecosystem play is really coming through.

But very early days.

Speaker Change: What we want to do as you gather gather data gathering information so that when when we're ready with the with the whole infrastructure in the.

Speaker Change: The AD tech side that we can move fairly quickly on that.

Russell Burke: Okay, got it. And if I could just quickly, another one, just in terms of the hardware, you called out, you know, some of the weakness in Q3 from being a slower than expected rollout. So is that impacting, how should we think about that going forward into Q4 and I guess into 2025? Yeah, what I would say is that it's, you know, largely a one-time event. It was a delay, essentially a supply delay that impacted Q3. We will sort of get some of that back in Q4, but not all of it. But in the longer term, given the strong indications on the performance of the new tiles, we expect that to perform strongly.

Speaker Change: Okay got it and if I could just quickly another one just in terms of the hardware you called out.

Speaker Change: So some of the weakness in Q3 from from being a slower than expected rollout is that impacting how should we think about that going forward.

Speaker Change: And into Q.

Speaker Change: Q4, and I guess into 2025.

What are what I would say is that it's a.

Speaker Change: Largely a one time event.

Chris Hulls: To me, it's very hard to quantify, but I'm just so excited and proud of the team, how much we've really stepped up and leaned into danger a bit. It reminds me of when we had our extremely successful guerrilla work on TikTok, but now we're going mainstream on regular TV. A lot of that is ramping up now, and that is why I am looking to Black Friday and the holiday season because it is really a rebaselining. I am genuinely optimistic that is completely real. DTC is essentially doubled since we've launched that. But I wanna see, is this more than a sugar high? Is this sustainable? Does this get that next wave of growth? I can't say that definitively yet.

Speaker Change: It was a.

Speaker Change: A delay is essentially a supply delay.

Speaker Change: <unk> impacted Q3.

We will sort of get some of that back.

Back in Q4, but not all of it but in the longer term given the the.

The strong indications on the performance of the new titles we.

Russell Burke: Perfect. Thanks, Shane.

Speaker Change: Check that to perform strongly.

Andrew Boone: Alright, thanks Wayne. Next we'd like to turn to Andrew Boone with Citizens J&P. Thanks so much for taking my question. I wanted to go to international outgrowth. You guys have seen four straight quarters of accelerating growth. Can you talk about the sustainability of that? Chris, you mentioned earlier the kind of Canada as a focus in terms of hitting that two, 3% threshold. What are you guys seeing there? And how do we think about that growth as we enter into 25, as costs get tougher? Thanks so much.

Jamie: Perfect. Thanks, Jamie.

Speaker Change: Alright, Thanks way next we'd like to turn to Andrew Boone with citizens JMP.

Andrew Boone: Thanks, So much for taking my question I wanted to go to international you guys have seen four straight quarters of accelerating growth can you talk about the sustainability of that Chris mentioned earlier.

Chris Hulls: I can say I'm very excited about it, and that's why I'm encouraging everyone to look themselves, because I'm extremely just proud of the work the team had done. Okay. Thank you.

Andrew Boone: Canada.

Andrew Boone: Our focus in terms of getting that 2% to 3% threshold. What are you guys seeing or how do we think about that growth as we enter into 'twenty five as comps get tougher. Thanks, so much.

Chris Hulse: So my answer will be somewhat similar where I'm a very optimistic founder and I truly believe in my heart of hearts that location sharing is going to be like 90% of people in the world are using it. Very, very, very few people start using location sharing and stop. And I'd say everyone on this call, have you started using this product or even a competitor product and stopped it? So I. I honestly don't even think I'm being irrationally exuberant when I say that. So the real question to me is, are we going to capture and corner the market?

Russell Burke: Thanks, Chris. Next, going to Chris Savage with Bell Potter.

R J: Thanks, Chris. Next, going to Chris Savage with Bell Potter.

Speaker Change: My answer will be somewhat similar where I am a very optimistic founder and I truly believe in my heart of Hearts that location sharing is going to be like 90% of people in the world are using it very very very few people start using location sharing and stop and when I say everyone. On this call have you started.

Chris Savage: Many Chrises. My one question is, can you provide any detail or color on when and where we may see the next tiered membership launch?

Chris Hulls: We are doing ongoing international launch work. It would be going too deep for this call to go into specifics, but we're now doing a lightweight approach to new regions. We're calling it dual-tier, where we're just able to prop up the services a little bit faster, and we're using that to inform the approach. As we've shared with international, because this is more mechanical versus strategic vision, we go more on the fly with that. David Rice, who's been with us a very long time, has done a great job of looking at the data, adjusting the signals, figuring out how to have the highest leverage and move. We are not following a very big kind of lightning strike approach.

Speaker Change: Using this product or even a competitive product in and stop them. So.

Speaker Change: Hi.

I honestly don't even think I'm being irrationally exuberant when I say that.

Chris Hulse: And in the U.S., we have Apple and Find My, and that has actually helped us because we're a much better product. But international, Google does not have any meaningful location sharing product, and Apple does not have its strong stranglehold like it does here. And even in the U.S., more than half our premium customers are mixed platform. So it feels to me like these trends are inevitable and we should be a beneficiary of them because there isn't the Apple behemoth, and we just need to get these countries to this tipping point. And of course, we need to stay ahead of the inevitable competition that will come up.

Speaker Change: So the real question to me is are we going to capture and corner of the market and in the U S. We have Apple and find my and that has actually helped us because we are a much better product by international Google does not have any meaningful location sharing products and.

Speaker Change: Apple does not have as strong stranglehold like it does here and even in the U S more than half of our premium customers are our MX platform. So it feels to me like these trends are inevitable and we should be a beneficiary of them because there isn't the Apple behemoth and we just need to get these countries as a tipping point and of course needed to stay ahead of the inevitable competition that will come up.

Chris Hulse: I, it's. I'm already shocked how little competition we have, how big we are. We kind of got to the silent and gilant before people are really realizing just how big this opportunity is. So that's my long-winded way of saying, I think it's absolutely sustainable, but I do try to look at the numbers as a founder because I try to keep myself honest and not drink the Kool-Aid. And that is why internally, we really just try to see like, okay, how are these trends changing? Are we hitting these tipping points? Is there anything that would make us feel like...

Chris Hulls: That is what we did when we launched in the UK, 'cause that was the test platform for the full new triple-tier launch and turnkey system to launch quickly. It's really going on a quarterly, quarter by quarter basis now. Expect to see more in Europe over the next year for sure.

Speaker Change: Got it.

I am already shocked how little competition, we have a big wheel are we kind of got to this island gilot before people are really realizing as how big this opportunity is so that's my long winded way of saying I think it's absolutely sustainable.

Russell Burke: Chris, just to add to that, the triple-tier territories that are already in place are performing very well, including Canada, which has really started to accelerate once we got past that tipping point. With the dual-tier strategy, it's to some extent sort of inserting a middle ground where we've been able to deliver a sort of two tiers of digital products on a sort of global basis outside of the triple-tier territories. As Chris mentioned, that will really help us inform the next stage for triple-tier.

But I do try to look at the numbers as a founder because I tried to keep myself honest and not drunk. The Kool aid and that is why internally, we really just try to say like okay. How are these trends changing RV hitting these tipping points is there anything that would make us feel like.

Chris Hulse: either another competitor is taking our spot overseas, or this is a U.S. phenomenon. And as of now, we're seeing those tipping points. So I think it's sustainable.

Speaker Change: Either another competitor has taken our spot overseas or this is a U S phenomenon and as of now we're seeing this tipping point so.

Chris Hulse: I'm excited about where we're going with the product, and I'm a product purist. I think we can never be a lazy company and say the product's done. I am perpetually dissatisfied. I think that's a strength in this context. I always want it to be better, and I have a hundred ideas on how it can be better. And if we continue doing that, I think it's ours to lose. international should be even easier than the US because there's really just no cross-platform thing out there. So I'd say we have taken the approach of publicly showing that data around penetration, so it's out there for all to see.

Speaker Change: I think as sustainable.

Speaker Change: I am excited about where we're going with the product and the product Trs I think we can never be lazy company in say the.

Speaker Change: The product's done I I am perpetually dissatisfied I think that's a strength in this context.

Speaker Change: I always wanted to be better and I have 100 ideas and how it can be better and if we continue doing that I think it's ours to lose.

Chris Savage: Great. Thank you.

Russell Burke: Great. Next, we'd like to invite Rob Sanderson from Loop Capital Markets.

R J: Great. Next, we'd like to invite Rob Sanderson from Loop Capital Markets.

And international should be even easier than the U S. The U S. Because there's really just no cross platform thing out there. So I'd say each we have taken the approach of publicly showing.

Rob Sanderson: Okay, unmuted. Thank you. Thanks for the opportunity. I guess I wanted to dig deeper on advertising like everybody else. But you're obviously just getting started here, starting to take shape nicely with partners like Uber and some good sort of reference and examples that we can, I guess, conceptualize the power of location. Would you say the next step for you, like call this through the end of 25, is this more about product development, ad formats, ad tech, or do you think you have enough of this work done now where like the next step is more go to market motions, bringing on the next Ubers and get more third-party demand flowing through and things like that?

Russell Burke: That's what I am looking at to give me confidence that these trends are accelerating. Are we hitting these tipping points? Are we slowing down? Do we know what the ceiling is? And as of now, we're not seeing.

That data around penetration so it's out there for Odyssey, that's what I am looking at you give me confidence that these trends are accelerating or we are we hitting these tipping points RV slowing down do we know what the ceiling is and as of now we're not England.

Russell Burke: Andrew, just from a Metrix point of view, I would add that we've clearly got continuing both demographic and platform tailwinds internationally, and if you look at the penetration in our triple-tiered territories, as Chris said, we're just in some of them just getting to that tipping point. In the rest of the world, it's still very low penetration, and we think there's a huge opportunity ahead.

Speaker Change: And Andrew just from a metrics point of view I would add that.

Speaker Change: We've clearly got continuing both demographic and platform tailwind internationally and if you look at the penetration in our triple tiered territories as Chris said, we're just in some of them just getting to that tipping point and in the rest of the world, It's still still very low penetration.

Rob Sanderson: How should we think about kind of the, you know, the next step of this crawl before you walk, before you run on ads?

<unk> and we think there's a huge opportunity ahead.

Chris Hulls: It's both. We are definitely getting real revenue now. There are multiple chess pieces to push down the board. A lot of what we're gonna be doing next is around the profiling of our customers to make them readily accessible. I am new to advertising myself. We might wanna actually do a breakout with Brian, who really is an expert here. I'm a product leader much more than ad tech leader. But we will have some stuff to announce in terms of how do you target certain audiences on Life360, how do we build unique profiles using real and synthetic data. A lot of what we could be doing is actually making money without even serving an ad.

Wei-Wing Chen: All right, we'll move on to the next question with Wei-Wing Chen from RBC. Hi guys. Yeah, my question was, I guess, in addition to your strong cash balance, you've got a strong share price now and that offers you some optionality when it comes to M&A. Just wondering if there was any appetite to accelerate your plans, either growth plans or capabilities plans, through acquisitions? And also, does your share price change how you or your employees think about compensation mix?

Alright, we'll move onto the next question with Wei Weng Chen from RBC.

Hi, guys. Yeah. My question was I.

Speaker Change: Yes.

Speaker Change: In addition to a strong cash balance you've got a strong share price now and that offer you. Some optionality when it comes to M&A I'm. Just wondering if there was any appetite to accelerate your plans either growth plans or capabilities plans through acquisitions and also does your share price change how you view, how you or your <unk>.

Chris Hulse: Let me Take the first part of the question. I'll leave most of the compensation piece to Russell from a numbers standpoint. We are definitely open to seeing how we can expand the share price. It's nice to be recognized for our performance. And there are definitely some verticals that before the market correction, they had these crazy high multiples while we were trading. weirdly lower. So that has inverted.

Speaker Change: Please think about compensation mix.

Speaker Change: Let me.

Chris Hulls: We could open this up for other people because we do have industry-leading opt-in rates to IDFA tracking, which is the ability to track people using the ID for advertisers on iPhone and Google. There's a lot there, and I think any answer I give you would not be giving it full justice. When I have looked at the roadmap and talked to the team and just looking at comps, this is usually something that takes a while to build, and some of the intent of adding some of those comps in our support materials was to show that the ramp-up can take a while. We are trying to be conservative in terms of forecasts.

Speaker Change: Take the first part of the question I'll leave most of the compensation piece.

Russell Burke: Russell from a numbers standpoint.

Speaker Change: We are definitely open to see how we can expand the share price, it's nice to be recognized for our performance and there are definitely some verticals that are.

Speaker Change: Before the market correction. They had these crazy high multiples, where we were trading.

Chris Hulse: One of my key lessons learned is the cliche one is the need for focus. So right now the team is gelling very well, we're executing very well, and I'm very reticent to get in the way of that. I learned a lot with the tile acquisition in particular because we've never done anything of that size. And timing was obviously in hindsight quite unfortunate given that it happened right before the market correction and we had to go immediately in the cutting mode, which made it even harder. But I want to be very, very, very intentional. I think what is much more realistic in shorter midterm would be us looking at things that are more like acquihires or small bolt-ons where we're not rejiggering the management team.

Speaker Change: Yeah.

Speaker Change: Weirdly lower so that has inverted.

Speaker Change: One of my key lessons learned as the cliche one is the need for focus so right now the team is gelling very well, we're executing very well and I'm very reticent to get in the way of that.

Chris Hulls: One thing we've shared with advertising is that unlike launching a new vertical or customer-facing features, we have committed to making advertising self-funding immediately. It's not a situation where we go dark for a year and burn the money and kinda second year launch it, make money the third year. We've told the team contribution margin positive day one, so it does mean we have to necessarily go a little bit slower 'cause we're not putting huge dollars into forward investment. I think it's gonna be a multi-year ramp before we see kinda rivaling our subscription revenue. As I mentioned, we are gonna see the lines blurring between our data revenue and our ad revenue.

Speaker Change: I learned a lot with the tile acquisition in particular, because we've never done anything of that size and timing was obviously in hindsight quite unfortunate given that it happened right before the market correction. We had to go immediately in the cutting mode, which made it even harder, but I want to be very very very intentional.

Speaker Change: I think what is much more realistic and shorter midterm would be us looking at things that are more like aqua hires or small bolt ons, where we're not rejiggering the management team and I wouldn't even call. It a new developments necessarily I think we've been very consistent that that's something we have done for years.

Chris Hulse: And I wouldn't even call that a new development necessarily. I think we've been very consistent that that's something we have done for years well before we were even public. That is where I'd say we have been skilled as a company. And we certainly... see some interesting things that we're open to. We have no massive big acquisitions plan, but as we looked at these new verticals and as we continue to. execute. Yeah, we're definitely, I'd say. new verticals are an interesting thing to look at.

Chris Hulls: One of the things we long talked about, which took us a lot longer than we wanted, but I think you'll see resurface as part of this, is insurance-based advertising using actual data and risk profiles of our customers. I think next year you will see that ramp happening, and I hope that we'll talk with more precision on what the out years of the data, the ad business looks like. Hopefully we'll have a time where we can introduce you to Brian, who can answer your questions in a lot more detail, and just a lot more roadmap with some certainty around it because we'll have had a lot more experience under our belt.

Speaker Change: Well before we were even public that is where I'd say, we had been skilled as a company.

Speaker Change: And we certainly.

Speaker Change: See some interesting things that we're open to that.

We have no massive big acquisitions plan, but as we looked at these new verticals.

Speaker Change: And as we continue to do.

Speaker Change: <unk>.

Speaker Change: Execute yes.

Russell Burke: Moving to the compensation philosophy, Russell can talk a bit about it just in terms of how it flows through from earnings in dollars and numbers. If I, I'll add something that's a little more indirect to your question, but we want to pay people very well, while we also really want to up our standards. And we do not want to be known as an easy place to work. We want to be known as a place for very ambitious people who will be paid well, but with high expectations. It's also how we think we can make remote first sustainable.

Speaker Change: I would say new verticals are an interesting thing to look at.

Russell Burke: Moving to the compensation philosophy, Russell can talk a bit about it just in terms of how it flows through from.

Rob Sanderson: Thank you, Chris.

Chris Hulls: Welcome.

Russell Burke: Earnings in dollars the numbers if I.

Russell Burke: All right. Next, we'd like to go to Wei Sim with Jefferies.

R J: All right. Next, we'd like to go to Wei Sim with Jefferies.

Speaker Change: All I'll add something a little more indirect your question, but.

Wei Sim: Thanks, RJ. Thanks Chris and Ross for taking my question. I just also wanted to say, you know, watched the Track the Code ad, think it's really cool. Had some good conversations with investors about it. Good work on, you know, for putting some of these ads out there. They're very creative. I wanted to ask on just the ad rollout at this point in time. You mentioned before that now we're doing some of the rollouts in the international areas. I was just hoping you could flesh out on that. Also just in terms of the ad strategy, you know, for example, with the Uber partnership right now, is that being done on paid users as well as free users?

We want to pay people very well, while we also really want to up our standards and we do not want to be known as an easy place to work we want to be known as a place. We're very ambitious people, who will be paid well, but with high expectations. It's also how we think we can make remote first sustainable.

Russell Burke: This is absolutely not a nine to five. place to work and our outperformance in light of the broader market, and I think the broader market being a lot of companies that had good vanity metrics but not as good fundamentals, we've never had better access to talent in our company's history. So one approach would be, well, we can actually pay people less, we can be more aggressive in terms of cutting. We're not taking that approach, it's much more we want to continue to be an employer of choice by paying very well but while having extremely high standards.

Speaker Change: This is absolutely not a nine to five place.

Speaker Change: Place to work and our outperformance.

Speaker Change: In light of the broader market and I think the broader market being a lot of companies that had good vanity metrics, but not as good fundamentals, we've never had better access to talent in.

Speaker Change: Our company's history. So one approach would be what we can actually pay people asked me and be more aggressive.

Wei Sim: You know, how we think about ads. You know, you mentioned before, Chris, that, you know, we're not looking at detracting from the experience, and I think in many cases, ads, as you've proven, can be additive. How do we think about the, you know, the monetization of users with ads for paid versus non-paid? Thanks.

Speaker Change: In terms of cutting we're not taking that approach is much more we want to continue to be an employer of choice by paying very well, but we're having extremely high standards and so that's a lot of the conversation.

Russell Burke: And so that's a lot of the conversation internally to the board.

Russell Burke: Russell, I'll let you finish the rest of the questions. No, all I would say on that is that the stock price impact has been very useful in terms of compensation. To some extent, it sort of cuts both ways in terms of recruiting as well, but what it does do is give us the flexibility to really play with that mix of cash and equity and really optimise for that, which is what we'll be doing.

Chris Hulls: Sure. First, in terms of international ads, we are testing in other regions now. It is still more with the dull and uninspiring banners, which is how we get our feet wet and learn and explore. Russell can comment if there's anything specific we can share there in terms of countries or numbers. To the question of how we think about paid customers, in some respects, you answered your own question that, yes, ads can be additive. The Uber one in particular, I got the push, and it was actually easier for me to click on the Life360 push to get my Uber there 'cause it notified me right when I landed, and I clicked it and I got my Uber. Of course, I'm biased, because I was very curious to test it out after a flight.

Speaker Change: Turning to the board level.

Russell Burke: Russell I finished the the rest of the question.

Speaker Change: No all I would say.

Speaker Change: Although I'd say on that is that.

Speaker Change: The stock price impact as.

Speaker Change: As has been the free for a useful in terms of compensation to some extend it sort of cuts both ways in terms of recruiting as well, but what it does do is give us the flexibility to.

Speaker Change: Too early.

Speaker Change: Really play with that mix of of cash and equity.

Speaker: Cool, thanks. Great.

Speaker Change: Really optimized for that which is what we'll be doing.

Chris Hulls: At that one tap, I got an Uber. I was already linked and done. If I didn't have the Uber app, it would've got me to download and either create an account or re-log in. To answer, though, what about paid? How do we think about that? For premium customers, we'll just make it a choice. We know most people don't go into settings, and some people are part of a very vocal minority. If you're a paid customer, we'll probably at some point just make some sort of setting for you to turn this thing off. I am guessing, though, that the Uber thing would not even look like an ad to someone. I am not aware of any pushback at all.

Julian Mulcahy: With that, we'll quickly go to our last question with Julian Mulcahy with EMP, please. Thanks, Raymond. My question is on advertising. Surprise, surprise. You're saying everything's kind of on track, but it also still sounds as if it's very much work in progress and all the things you need to build and profile and all that sort of thing. And then you look at like slide 29, you've added some more logos, but most of those businesses are kind of their revenue model is going to be very different to yours in that it's yours is going to be very specific, targeted, where a lot of those are just sort of display video ads.

Speaker Change: Cool thanks.

Speaker Change: Great with that we'll quickly go to our last question with Julian Mulcahy with E&P. Please.

Speaker Change: Okay.

Speaker Change: Thanks Ryan.

Speaker Change: The my question is on advertising surprise surprise.

Speaker Change: You're saying, it's b readings counter or on track with Lucerne two sounds if it's very much work in progress and all the things you need to build and profiling. The rents would be and then you look at slide 29, you've added small logos.

Speaker Change: Most of those businesses are kind of the revenue models can be very different to using that its use is going to be very specific targeted where a lot of those are just sort of display and video ads.

Chris Hulls: I don't read all our customer support, but when I get our weekly updates on trends, I have seen. Our customer support team has not brought up a single kind of like, "Hey, people are complaining about this." We've actually only heard good things. I also think in our long-term vision around membership, what I'm very excited about is deals, discounts, and offers where we might make money on them, we might not. Imagine that we go to, like, a huge company that's looking to access our audience. We can give an amazing deal to paid customers and an okay deal to free ones, and it's actually an upgrade draw to say, "You're gonna get these amazing offers." I think there is a world where it's like, "Hey, Disney or Applebee's or whatever business, give something to our customers.

Chris Hulse: So is that kind of the way to present it or should we be looking at a scale much higher than those numbers because you're going to have much higher success rate on your ads if they click through? Again, as I think we mentioned earlier, that's more illustrative, and don't take it overly literally. If there's any theme we'd like to take away, it's showing how these businesses can build over time, and what is achievable, and things are not overnight. So, it is fair that we are, I think I said ending three to last question. And I am open that I am not an advertising expert, but we are seeing these very good indicators.

Speaker Change: Is that kind of a wider presented was the should we be looking in the skies are much higher than those numbers, because you're going to have much higher success rate and you read seems like click through.

Speaker Change: Again as I think we mentioned earlier, that's more illustrative and don't take it over the literally if theres any theme, we'd like to takeaway showing how these businesses can build over time.

Speaker Change: And what is achievable and things are not overnight. So it is fair that we are I think I said inning three to last question.

Chris Hulls: Give a great deal to our platinum and gold customers and something okay to everyone else." You're now gonna reach the single largest source of family users in the country outside of, like, Facebook at this point. We have a very compelling platform that I think once we dial it in, we'll. There's so much we can do. To be very clear, if you're paid, we'll just make a setting. You can turn it off if you want.

Speaker Change: And I I I I am open that I am not an advertising expert, but we are seeing these very good indicators and when we look at the benchmarks the team set out for themselves and as discussed at the board, where we do have members of the team who really know what they're doing we're all feeling it is very largely on track, but we are setting those expectations that can take a while.

Chris Hulse: And when we look at the benchmarks the team set out for themselves, and as discussed with the board, where we do have members of the team who really know what they're doing, we're all feeling it is very largely on track, but we are setting those expectations. It can take a while. It's very hard to say definitively. what lever is bigger or smaller than the others. Because as much as we have this amazing. well-targeted real-time data. We also don't have a lot of browse-based behavior, which is a lot of what drives things like Pinterest or Reddit, because you're in that zone of, I am just bored.

Speaker Change: And.

Wei Sim: Okay, perfect. Ross, I'm not sure if there's anything that you wanted to add on or any disclosure that you could put on countries and rollout of international.

Speaker Change: It's very hard to understand to say definitively.

Speaker Change: What levers bigger or smaller than the others.

Speaker Change: Because as much as we have this amazing.

Russell Burke: Yeah, no. Way in terms of international, it's still very early days. We're sort of experimenting, testing in a couple of markets, but very early days. What we wanna do is to gather data, gather information so that when we're ready with the whole infrastructure and the ad tech side, that we can move fairly quickly on that.

Speaker Change: Well targeted real time data. We also don't have a lot of browse based behavior, which is a lot of what drives things like pinterest to read it because you're in that zone of I am just board I'm looking at content. So it's not going to disrupt me to click in AD that's completely different than I am at the airport getting off a plane in Uber you'd have zero chance of getting someone to click through and pinch us for that.

Chris Hulse: I'm looking at content, so it's not going to disrupt me to click an ad. That's completely different than I'm at the airport getting off a plane in Uber. You'd have zero chance of getting someone to click through on Pinterest for that. It's a very high chance for us. Our hope, of course, is that we're much... probably lower display count, but much higher actual customer accuracy. and these are more bespoke hooks. But I get excited stuff we've thought about, like even in very early days of the company, when do people buy home security or homeowners? It's when you move.

Speaker Change: He has a very high chance for us So our hope of course is that we're much.

Wei Sim: Okay, got it. If I could just quickly, another one. Just in terms of the hardware, you called out, you know, some of the weakness in Q3 from being slower than expected rollout. Is that impacting? How should we think about that going forward, into Q4 and I guess into 2025? Thanks.

Speaker Change: Probably lower display counts, but much higher actual customer action and these are more bespoke hubs, but I get excited that we've thought about like even in very early days of the company when do people buy home security or homeowners is when you move and we not only will know when you move in real time, you know before you move because you're visiting homes for sale in the MLS.

Chris Hulse: And we not only will know when you move in real time, we know before you move because you're visiting homes for sale on the MLS. So our almost like minority report style targeting system could have so much upside, but we really are pioneering new ground here because there hasn't been a location sharing app at scale that's moved this direction. So in some ways, advertising is that kind of, I'd call it like a series B, series C pitch. Like there's real dollars there, the team's there, the hooks are there, the pipes are there, but you still need to have faith that a few things shape up to really be as big as we want.

Russell Burke: Yeah. What I would say is that it's largely a one-time event. It was a delay, essentially a supply delay, that impacted Q3. We will sort of get some of that back in Q4, but not all of it. In the longer term, given the strong indications on the performance of the new tiles, we expect that to perform strongly.

Speaker Change: So our almost like minority report style targeting system could have so much upside, but we really are pioneering new ground here because we there hasnt been a location sharing app at scale that's move this direction.

Speaker Change: So in some ways advertising is that kind of a.

Speaker Change: I've got like a series B series C pitch like there's real dollars there the teams there the huckster there the pipes are there, but you still needed to have faith that a few things shape up to really be as big as we want.

Chris Hulse: So very much on track, could very much outperform, but it is going to take a couple cycles before we definitively know.

Wei Sim: Perfect. Thanks, team.

Speaker Change: So very much on track could very much outperform but it is going to take a couple of cycles before we definitively now and again given the number of question I am getting.

Chris Hulse: And again, given the number of questions I am getting, I will have a discussion with Russell and team about doing something where we can go a little bit deeper on ads because Russell and I are not the experts on this particular business more broadly. Whereas if you're talking about consumer subscriptions or freemium, I'll feel very comfortable going head to head with anybody, but not. So is it fair to say it's going more like a commission rather than a ARPU per MAU type We won't? I don't think so, because a lot of people do want to just reach people and build brand exposure around different triggers.

Raymond Jones: All right. Thanks, Wei. Next, we'd like to turn to Andrew Boone with Citizens JMP.

R J: All right. Thanks, Wei. Next, we'd like to turn to Andrew Boone with Citizens JMP.

Andrew Boone: Thanks so much for taking my question. I wanted to go to international now growth. You guys have seen four straight quarters of accelerating growth. Can you talk about the sustainability of that? Chris, you mentioned earlier the kinda Canada as a focus in terms of hitting that 2-3% threshold. What are you guys seeing there? How do we think about that growth as we enter into 2025 as costs get tougher? Thanks so much.

I will have a discussion with Russell and team about.

Speaker Change: Doing something where we can go a little bit deeper on ads because.

Speaker Change: Russell and I are or are not the experts on this particular business more broadly, whereas if you're talking about consumer subscriptions or freemium.

Speaker Change: I feel very comfortable going head to head with anybody but not on that.

Speaker Change: Is it fair to start skewing, Milwaukee Commission rather than I.

Chris Hulls: My answer will be somewhat similar, where I'm a very optimistic founder, and I truly believe in my heart of hearts that location sharing is gonna be like 90% of people in the world are using it. Like, very few people start using location sharing and stop. I'd say everyone on this call, have you started using this product or even a competitor product and stopped it? I honestly don't even think I'm being irrationally exuberant when I say that. The real question to me is, are we going to capture and corner the market? In the US, we have Apple and Find My, and that has actually helped us because we're a much better product.

Speaker Change: The EMEA, Utah.

Speaker Change: We've known I don't think so because a lot of people do want to just reach people and build brand exposure on different triggers I think more than a display company for sure, but I wouldn't say that the entire model will be predicated on that.

Chris Hulse: I think more than a display company, for sure, but I wouldn't say that the entire model will be predicated. And again, we are, I guess this would be commissioned, but there is the whole retail media networks and building audiences helping match offsite ads, which it's not exactly, I guess it would be a commission in that regard, but it's not even a customer clicking an ad, it's helping other people gain insights and better target at a user level, which is why I say the line between advertising and data is really gonna blur and why it's gonna essentially be a single line at some point, not that we're trying to obfuscate different lines.

Speaker Change: And again, we are.

Speaker Change: I guess it would be commission, but there is the whole retail media networks and building audiences, helping match off site ads, which is not exactly I guess it would be a commission on that regard, but it's not even a customer clicking it at its helping other people gain insights and better target had a user level, which is why I say the line between advertising and data is really going to blur.

Speaker Change: <unk> and why it is going to essentially be a single line at some point not that we're trying to obfuscate different lines.

Chris Hulse: We already have some things in the works. you could argue that it is data, you could argue it's advertising, and both things are true. We're clearly sort of building our own business here, and the infrastructure for that does take time, which is kind of what we're saying. It's still very early days. All of these other companies are different, and that's the point. We have a very different audience, a different audience performance, but that audience is considered very valuable. Either way, it's going to take some time to build that business. We absolutely see the opportunity over a period of time, but it will take some time.

Chris Hulls: International, Google does not have any meaningful location sharing products, and Apple does not have its strong stranglehold like it does here. Even in the US, more than half our premium customers are mixed platform. It feels to me like these trends are inevitable and we should be a beneficiary of them because there isn't the Apple behemoth, and we just need to get these countries to this tipping point. Of course, we need to stay ahead of the inevitable competition that will come up. I'm already shocked how little competition we have, how big we are. We kinda got to this island in Thailand before people are really realizing just how big this opportunity is.

Speaker Change: We already have some things in the works or.

Speaker Change: You you could arguably argue that it is data you could argue it's advertising and both things are true.

Jeremy: Thanks, Jeremy.

Speaker Change: With clearly sort of building our own business here in the infrastructure for that does take time, which is kind of what we're saying is it's still very early days.

Speaker Change: All of these other companies are different and that's the point, we have a very different.

Speaker Change: Odeon a different audience performance, but that audience is considered very valuable either way, it's going to take some time to build that business, we absolutely see the the the opportunity over a period of time, but it will take some time.

Chris Hulls: That's my long-winded way of saying, I think it's absolutely sustainable, but I do try to look at the numbers as a founder because I try to keep myself honest and not drink the Kool-Aid. That is why internally, we really just try to say, like, "Okay, how are these trends changing? Are we hitting these tipping points? Is there anything that would make us feel like either another competitor is taking our spot overseas or this is a US phenomenon?" As of now, we're seeing those tipping points. I think it's sustainable. I'm excited about where we're going with the product, and I'm a product purist. I think we can never be a lazy company and say, the product's done. I am perpetually dissatisfied. I think that's a strength in this context.

Speaker: Thank you guys.

Chris Hulse: That concludes our Q&A. Chris, would you like to part? I have very little other than thank you all for joining.

Speaker Change: Thanks, guys.

Speaker Change: That concludes our Q&A, Chris would you like to park.

Chris Hulse: I'll be talking to many of you in coming days and I'm looking forward to heading to Australia this Friday to see our overseas investors in person. Thank you very much.

Chris Holes: Very little other than thank you all for joining I'll be talking to many of you in coming days and I'm looking forward to heading to Australia. This Friday to.

Chris Holes: See our overseas investors in person. Thank you very much.

Operator: Goodbye.

Chris Holes: Goodbye.

Chris Hulls: I always want it to be better, and I have 100 ideas on how it can be better. If we continue doing that, I think it's ours to lose. International should be even easier than the US because there's really just no cross-platform thing out there. So I'd say we have taken the approach of publicly showing that data around penetration, so it's out there for all to see. That's what I am looking at to give me confidence that these trends are accelerating. Are we hitting these tipping points? Are we slowing down? Do we know what the ceiling is? As of now, we're not seeing one.

Russell Burke: Andrew, just from a metrics point of view, I would add that, you know, we've clearly got continuing both demographic and platform tailwinds, internationally. If you look at the penetration in our triple-tier territories, as Chris said, we're just in some of them, just getting to that tipping point. In the rest of the world, it's still very low penetration, and we think there's a huge opportunity ahead.

Raymond Jones: All right. We'll move on to the next question with Wei-Weng Chen from RBC.

R J: All right. We'll move on to the next question with Wei-Weng Chen from RBC.

Speaker 15: Hi, guys. Yeah, my question was, I guess in addition to your strong cash balance, you've got a strong share price now, and that offers you some optionality when it comes to M&A. Just wondering if there was any appetite to accelerate your plans, while either, you know, growth plans or capabilities plans through acquisitions. Also, does your share price change how you view how you or your employees think about compensation mix?

Wei Weng: Hi, guys. Yeah, my question was, I guess in addition to your strong cash balance, you've got a strong share price now, and that offers you some optionality when it comes to M&A. Just wondering if there was any appetite to accelerate your plans, while either, you know, growth plans or capabilities plans through acquisitions. Also, does your share price change how you view how you or your employees think about compensation mix?

Chris Hulls: Let me take the first part of the question. I'll leave most of the compensation piece to Russell from a numbers standpoint. We are definitely open to seeing how we can expand the share price. It's nice to be recognized for our performance, and there are definitely some verticals that, before the market correction, they had these crazy high multiples while we were trading weirdly lower. That has inverted. One of my key lessons learned, this is a cliché one, is the need for focus. Right now the team is gelling very well. We're executing very well, and I'm very reticent to get in the way of that. I learned a lot with the Tile acquisition in particular, because we've never done something of that size.

Chris Hulls: Timing was obviously, in hindsight, quite unfortunate, given that it happened right before the market correction, and we had to go immediately into cutting mode, which made it even harder. I wanna be very intentional. I think what is much more realistic in shorter midterm would be us looking at things that are more like acquihires or small bolt-ons, where we're not rejiggering the management team. I wouldn't even call that a new development necessarily. I think we've been very consistent that that's something we have done for years, well before we were even public. That is where I'd say we have been skilled as a company, and we certainly see some interesting things that we're open to.

Chris Hulls: We have no massive big acquisitions planned, but as we look to these new verticals and as we continue to execute, yeah, we're definitely, I'd say, new verticals are an interesting thing to look at. Moving to the compensation philosophy, Russell can talk a bit about it just in terms of how it flows through from earnings, in dollars and numbers. I'll add something that's a little more indirect to your question, but we want to pay people very well while we also really wanna up our standards. We do not want to be known as an easy place to work. We wanna be known as a place for very ambitious people who will be paid well, but with high expectations. It's also how we think we can make remote-first sustainable. This is absolutely not a nine-to-five place to work.

Chris Hulls: Our outperformance in light of the broader market, and I think the broader market being a lot of companies that had good vanity metrics, but not as good fundamentals, we've never had better access to talent in our company's history. So one approach would be, well, we can actually pay people less. We can be more aggressive in terms of cutting. We're not taking that approach. It's much more we want to continue to be an employer of choice by paying very well, but while having extremely high standards. And so that's a lot of the conversation internally to the board level. Russell, I'll let you finish the rest of the question.

Russell Burke: No. All I would say on that is that, you know, the stock price impact has been very useful in terms of compensation. To some extent it sort of cuts both ways in terms of recruiting as well. What it does do is give us the flexibility to, you know, really play with that mix of cash and equity, and really optimize for that, which is what we'll be doing.

Chris Hulls: Cool. Thanks. Great. With that, we'll quickly go to our last question with Julian Mulcahy with E&P, please.

Wei Weng: Cool. Thanks.

R J: Great. With that, we'll quickly go to our last question with Julian Mulcahy with E&P, please.

Speaker 16: Thanks, Raymond. My question is on advertising. Surprise, surprise. You're saying it's, everything's kind of on track, but it also still sounds as if it's very much work in progress and all the things you need to build and profile and all that sort of thing. Then you look at like slide 29. You've added some more logos, but most of those businesses are kind of their revenue models can be very different to yours in that it's, yours is gonna be, you know, very specific targeted, where a lot of those are just sort of, you know, display video ads. So is that kind of the way to present it? Or is it, should we be looking at a scale, you know, much higher than those numbers because you're gonna have much higher success rate on your ads if they click through?

Julian Mulcahy: Thanks, Raymond. My question is on advertising. Surprise, surprise. You're saying it's, everything's kind of on track, but it also still sounds as if it's very much work in progress and all the things you need to build and profile and all that sort of thing. Then you look at like slide 29. You've added some more logos, but most of those businesses are kind of their revenue models can be very different to yours in that it's, yours is gonna be, you know, very specific targeted, where a lot of those are just sort of, you know, display video ads. So is that kind of the way to present it? Or is it, should we be looking at a scale, you know, much higher than those numbers because you're gonna have much higher success rate on your ads if they click through?

Chris Hulls: Again, as I think we mentioned earlier, that's more illustrative and don't take it overly literally. If there's any theme we'd like to take away, it's showing how these businesses can build over time and what is achievable, and things are not overnight. It is fair that we are, I think I said inning three to last question, and I am open that I am not an advertising expert, but we are seeing these very good indicators. When we look at the benchmarks the team set out for themselves, and as discussed with the board, where we do have members of the team who really know what they're doing. We're all feeling it is very largely on track, but we are setting those expectations it can take a while.

Chris Hulls: It's very hard to say definitively what lever is bigger or smaller than the others, because as much as we have this amazing well-targeted real-time data, we also don't have a lot of browse-based behavior, which is a lot of what drives things like Pinterest or Reddit, 'cause you're in that zone of, "I am just bored. I'm looking at content, so it's not gonna disrupt me to click an ad." That's completely different than, "I'm at the airport getting off a plane. I need an Uber." You'd have zero chance of getting someone to click through on Pinterest for that. You have a very high chance for us. Our hope, of course, is that we're much probably lower display count, but much higher actual customer action. These are more bespoke hooks.

Chris Hulls: I get excited, stuff we've thought about, like even in very early days of the company, like when do people buy home security or homeowners? It's when you move. We not only will know when you move in real time, we know before you move 'cause you're visiting homes for sale on the MLS. Our almost like minority report style targeting system could have so much upside, but we really are pioneering new ground here because there hasn't been a location sharing app at scale that's moved this direction. In some ways, advertising is that kind of, I'd call it like a series B, series C pitch. Like, there's real dollars there, the team's there, the hooks are there, the pipes are there, but you still need to have faith that a few things shape up to really be as big as we want.

Chris Hulls: Very much on track. Could very much outperform, but it is gonna take a couple cycles before we definitively know. Again, given the number of questions I am getting, I will have a discussion with Russell and team about doing something where we can go a little bit deeper on ads because Russell and I are not the experts on this particular business more broadly. Whereas if you're talking about consumer subscriptions or freemium, I'll feel very comfortable going head to head with anybody, but not on ads.

Speaker 16: Is it fair to say it's going more like a commission rather than an ARPU per MAU type reward?

Julian Mulcahy: Is it fair to say it's going more like a commission rather than an ARPU per MAU type reward?

Chris Hulls: No, I don't think so, because a lot of people do want to just reach people and build brand exposure around different triggers. I think more than a display company for sure, but I wouldn't say that the entire model will be predicated on that. Again, I guess this would be commission, but there is the whole retail media networks, building audiences, helping match off-site ads, which is not exactly. I guess it would be a commission in that regard, but it's not even a customer clicking an ad. It's helping other people gain insights and better target at a user level, which is why I say the line between advertising and data is really gonna blur and why it's gonna essentially be a single line at some point. Not that we're trying to obfuscate different lines.

Chris Hulls: We already have some things in the works, or you could argue that it is data, you could argue it's advertising, and both things are true.

Speaker 16: Cool. Thanks, Chris.

Julian Mulcahy: Cool. Thanks, Chris.

Russell Burke: We're clearly sort of building our own business here and, you know, the infrastructure for that does take time, which is kind of what we're saying. It's still very early days. All of these other companies are different, and that's the point. We have very different audience, a different audience performance, but that audience is considered very valuable. Either way, it's gonna take some time to build that business. We absolutely see the opportunity over a period of time, but it will take some time.

Speaker 16: Thanks, guys.

Julian Mulcahy: Thanks, guys.

Chris Hulls: That concludes our Q&A. Chris, would you like to add? I have very little other than thank you all for joining. I'll be talking to many of you in coming days, and I'm looking forward to heading to Australia this Friday to see our overseas investors in person. Thank you very much.

R J: That concludes our Q&A. Chris, would you like to add?

Chris Hulls: I have very little other than thank you all for joining. I'll be talking to many of you in coming days, and I'm looking forward to heading to Australia this Friday to see our overseas investors in person. Thank you very much.

Speaker 17: Goodbye.

Operator: Goodbye.

Q3 2024 Life360 Inc Earnings Call

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