10-Q 1 lifx-20240331.htm 10-Q lifx-20240331
000158176012-312024Q1False1P2Yhttp://fasb.org/us-gaap/2023#OtherAccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#OtherAccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2023#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2023#OtherLiabilitiesNoncurrent0.3333P2Y0.250.0625xbrli:sharesiso4217:USDiso4217:USDxbrli:shareslifx:subscription_optionxbrli:purelifx:segmentlifx:claim00015817602024-01-012024-03-3100015817602024-05-0300015817602024-03-3100015817602023-12-310001581760us-gaap:SubscriptionAndCirculationMember2024-01-012024-03-310001581760us-gaap:SubscriptionAndCirculationMember2023-01-012023-03-310001581760lifx:HardwareMember2024-01-012024-03-310001581760lifx:HardwareMember2023-01-012023-03-310001581760us-gaap:ProductAndServiceOtherMember2024-01-012024-03-310001581760us-gaap:ProductAndServiceOtherMember2023-01-012023-03-3100015817602023-01-012023-03-310001581760us-gaap:CommonStockMember2023-12-310001581760us-gaap:AdditionalPaidInCapitalMember2023-12-310001581760us-gaap:RetainedEarningsMember2023-12-310001581760us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001581760us-gaap:CommonStockMember2024-01-012024-03-310001581760us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001581760us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001581760us-gaap:RetainedEarningsMember2024-01-012024-03-310001581760us-gaap:CommonStockMember2024-03-310001581760us-gaap:AdditionalPaidInCapitalMember2024-03-310001581760us-gaap:RetainedEarningsMember2024-03-310001581760us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001581760us-gaap:CommonStockMember2022-12-310001581760us-gaap:AdditionalPaidInCapitalMember2022-12-310001581760us-gaap:ReceivablesFromStockholderMember2022-12-310001581760us-gaap:RetainedEarningsMember2022-12-310001581760us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-3100015817602022-12-310001581760us-gaap:CommonStockMember2023-01-012023-03-310001581760us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001581760us-gaap:ReceivablesFromStockholderMember2023-01-012023-03-310001581760us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001581760us-gaap:RetainedEarningsMember2023-01-012023-03-310001581760us-gaap:CommonStockMember2023-03-310001581760us-gaap:AdditionalPaidInCapitalMember2023-03-310001581760us-gaap:ReceivablesFromStockholderMember2023-03-310001581760us-gaap:RetainedEarningsMember2023-03-310001581760us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-3100015817602023-03-310001581760lifx:ChannelPartnerAppleMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001581760lifx:ChannelPartnerAppleMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001581760lifx:ChannelPartnerGoogleMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2024-01-012024-03-310001581760lifx:ChannelPartnerGoogleMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-03-310001581760lifx:ChannelPartnerAppleMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2024-01-012024-03-310001581760lifx:ChannelPartnerAppleMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-01-012023-12-310001581760lifx:ChannelPartnerGoogleMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2024-01-012024-03-310001581760us-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMemberlifx:DataPartnerAMember2024-01-012024-03-310001581760lifx:RetailPartnerAMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-01-012023-12-310001581760srt:NorthAmericaMember2024-01-012024-03-310001581760srt:NorthAmericaMember2023-01-012023-03-310001581760us-gaap:EMEAMember2024-01-012024-03-310001581760us-gaap:EMEAMember2023-01-012023-03-310001581760lifx:OtherInternationalRegionsMember2024-01-012024-03-310001581760lifx:OtherInternationalRegionsMember2023-01-012023-03-310001581760country:US2024-01-012024-03-310001581760country:USus-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMember2024-01-012024-03-310001581760country:US2023-01-012023-03-310001581760country:USus-gaap:RevenueFromContractWithCustomerMemberus-gaap:GeographicConcentrationRiskMember2023-01-012023-03-3100015817602024-04-012024-03-310001581760srt:MinimumMember2024-03-310001581760srt:MaximumMember2024-03-310001581760us-gaap:FairValueInputsLevel1Member2024-03-310001581760us-gaap:FairValueInputsLevel2Member2024-03-310001581760us-gaap:FairValueInputsLevel3Member2024-03-310001581760us-gaap:FairValueInputsLevel1Member2023-12-310001581760us-gaap:FairValueInputsLevel2Member2023-12-310001581760us-gaap:FairValueInputsLevel3Member2023-12-310001581760us-gaap:DerivativeMember2023-12-310001581760us-gaap:ConvertibleDebtMember2023-12-310001581760us-gaap:DerivativeMember2024-01-012024-03-310001581760us-gaap:ConvertibleDebtMember2024-01-012024-03-310001581760us-gaap:DerivativeMember2024-03-310001581760us-gaap:ConvertibleDebtMember2024-03-310001581760us-gaap:DerivativeMember2022-12-310001581760us-gaap:ConvertibleDebtMember2022-12-310001581760us-gaap:DerivativeMember2023-01-012023-12-310001581760us-gaap:ConvertibleDebtMember2023-01-012023-12-310001581760lifx:ConvertibleDebtRevestingNotesMemberus-gaap:DerivativeMember2023-01-012023-12-310001581760lifx:ConvertibleDebtRevestingNotesMemberus-gaap:ConvertibleDebtMember2023-01-012023-12-310001581760lifx:ConvertibleNotesMemberus-gaap:DerivativeMember2023-01-012023-12-310001581760lifx:ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2023-01-012023-12-310001581760us-gaap:DerivativeMember2023-01-012023-03-310001581760us-gaap:ConvertibleDebtMember2023-01-012023-03-310001581760us-gaap:ComputerEquipmentMember2024-03-310001581760us-gaap:ComputerEquipmentMember2023-12-310001581760us-gaap:LeaseholdImprovementsMember2024-03-310001581760us-gaap:LeaseholdImprovementsMember2023-12-310001581760lifx:ProductionManufacturingEquipmentMember2024-03-310001581760lifx:ProductionManufacturingEquipmentMember2023-12-310001581760us-gaap:ConstructionInProgressMember2024-03-310001581760us-gaap:ConstructionInProgressMember2023-12-310001581760us-gaap:FurnitureAndFixturesMember2024-03-310001581760us-gaap:FurnitureAndFixturesMember2023-12-310001581760us-gaap:TradeNamesMember2024-03-310001581760us-gaap:TechnologyBasedIntangibleAssetsMember2024-03-310001581760us-gaap:CustomerRelationshipsMember2024-03-310001581760us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2024-03-310001581760us-gaap:TradeNamesMember2023-12-310001581760us-gaap:TechnologyBasedIntangibleAssetsMember2023-12-310001581760us-gaap:CustomerRelationshipsMember2023-12-310001581760us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2023-12-310001581760lifx:SoftwareAndSoftwareDevelopmentCostsNotInServiceMember2024-03-310001581760lifx:July2021ConvertibleNotesMember2021-07-3100015817602021-07-310001581760lifx:July2021ConvertibleNotesMember2024-03-310001581760lifx:July2021ConvertibleNotesMember2023-12-310001581760lifx:WarrantTranche1Member2021-07-310001581760lifx:WarrantTranche2Member2021-07-310001581760lifx:WarrantTranche3Member2021-07-310001581760lifx:WarrantTranche3Member2021-07-012021-07-310001581760lifx:July2021ConvertibleNotesMember2021-07-012021-07-310001581760lifx:July2021ConvertibleNotesMember2024-01-012024-03-310001581760lifx:July2021ConvertibleNotesMember2023-01-012023-03-310001581760lifx:September2021ConvertibleNotesMember2021-09-300001581760lifx:ConvertibleDebtRevestingNotesMember2021-09-300001581760lifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2024-03-310001581760lifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2023-12-310001581760lifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2021-09-010001581760us-gaap:MeasurementInputRiskFreeInterestRateMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2024-03-310001581760us-gaap:MeasurementInputRiskFreeInterestRateMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2023-12-310001581760us-gaap:MeasurementInputRiskFreeInterestRateMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2021-09-010001581760us-gaap:MeasurementInputExpectedTermMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2024-03-310001581760us-gaap:MeasurementInputExpectedTermMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2023-12-310001581760us-gaap:MeasurementInputExpectedTermMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2021-09-010001581760us-gaap:MeasurementInputPriceVolatilityMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2024-03-310001581760us-gaap:MeasurementInputPriceVolatilityMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2023-12-310001581760us-gaap:MeasurementInputPriceVolatilityMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2021-09-010001581760us-gaap:MeasurementInputExpectedDividendRateMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2024-03-310001581760us-gaap:MeasurementInputExpectedDividendRateMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2023-12-310001581760us-gaap:MeasurementInputExpectedDividendRateMemberlifx:September2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2021-09-010001581760lifx:ConvertibleDebtRevestingNotesMember2021-09-012021-09-300001581760lifx:ConvertibleDebtRevestingNotesMember2023-01-012023-01-310001581760lifx:ConvertibleDebtRevestingNotesMember2024-01-012024-03-310001581760lifx:ConvertibleDebtRevestingNotesMember2023-01-012023-03-310001581760lifx:September2021ConvertibleNotesMember2024-03-310001581760lifx:September2021ConvertibleNotesMember2023-12-310001581760us-gaap:SubsequentEventMemberlifx:September2021ConvertibleNotesMember2024-04-300001581760lifx:September2021ConvertibleNotesMember2021-09-012021-09-010001581760us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2024-03-310001581760us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2023-12-310001581760lifx:ValuationTechniqueLatticeModelMemberus-gaap:MeasurementInputSharePriceMember2024-03-310001581760lifx:ValuationTechniqueLatticeModelMemberus-gaap:MeasurementInputSharePriceMember2023-12-310001581760lifx:ValuationTechniqueLatticeModelMembersrt:MinimumMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2024-03-310001581760lifx:ValuationTechniqueLatticeModelMembersrt:MaximumMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2024-03-310001581760lifx:ValuationTechniqueLatticeModelMembersrt:MinimumMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-12-310001581760lifx:ValuationTechniqueLatticeModelMembersrt:MaximumMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-12-310001581760lifx:ValuationTechniqueLatticeModelMemberus-gaap:MeasurementInputExpectedTermMember2024-03-310001581760lifx:ValuationTechniqueLatticeModelMemberus-gaap:MeasurementInputExpectedTermMember2023-12-310001581760lifx:ValuationTechniqueLatticeModelMembersrt:MinimumMemberus-gaap:MeasurementInputPriceVolatilityMember2024-03-310001581760lifx:ValuationTechniqueLatticeModelMembersrt:MaximumMemberus-gaap:MeasurementInputPriceVolatilityMember2024-03-310001581760lifx:ValuationTechniqueLatticeModelMembersrt:MinimumMemberus-gaap:MeasurementInputPriceVolatilityMember2023-12-310001581760lifx:ValuationTechniqueLatticeModelMembersrt:MaximumMemberus-gaap:MeasurementInputPriceVolatilityMember2023-12-310001581760lifx:ValuationTechniqueLatticeModelMemberlifx:MeasurementInputOptionAdjustedSpreadMember2024-03-310001581760lifx:ValuationTechniqueLatticeModelMemberlifx:MeasurementInputOptionAdjustedSpreadMember2023-12-310001581760us-gaap:MeasurementInputExpectedDividendRateMemberlifx:ValuationTechniqueLatticeModelMember2024-03-310001581760us-gaap:MeasurementInputExpectedDividendRateMemberlifx:ValuationTechniqueLatticeModelMember2023-12-310001581760lifx:ValuationTechniqueLatticeModelMemberlifx:MeasurementInputExchangeRateMember2024-03-310001581760lifx:ValuationTechniqueLatticeModelMemberlifx:MeasurementInputExchangeRateMember2023-12-310001581760us-gaap:SubsequentEventMemberlifx:PatentInfringementClaimMember2024-04-232024-04-230001581760us-gaap:SubsequentEventMemberlifx:PatentInfringementClaimMember2024-04-230001581760us-gaap:StockCompensationPlanMember2024-03-310001581760us-gaap:StockCompensationPlanMember2023-12-310001581760us-gaap:WarrantMember2024-03-310001581760us-gaap:WarrantMember2023-12-310001581760us-gaap:RestrictedStockUnitsRSUMember2024-03-310001581760us-gaap:RestrictedStockUnitsRSUMember2023-12-310001581760us-gaap:ConvertibleDebtMember2024-03-310001581760us-gaap:ConvertibleDebtMember2023-12-310001581760lifx:SharesToBeGrantedMember2024-03-310001581760lifx:SharesToBeGrantedMember2023-12-3100015817602024-03-012024-03-310001581760srt:MinimumMember2023-12-310001581760srt:MaximumMember2023-12-3100015817602023-01-012023-12-310001581760us-gaap:EmployeeStockOptionMember2024-03-310001581760us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001581760us-gaap:PerformanceSharesMember2024-01-012024-03-310001581760us-gaap:PerformanceSharesMember2022-01-012022-01-310001581760us-gaap:RestrictedStockUnitsRSUMember2023-12-310001581760us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001581760us-gaap:RestrictedStockUnitsRSUMember2024-03-310001581760us-gaap:SubscriptionAndCirculationMemberus-gaap:CostOfSalesMember2024-01-012024-03-310001581760us-gaap:SubscriptionAndCirculationMemberus-gaap:CostOfSalesMember2023-01-012023-03-310001581760lifx:HardwareMemberus-gaap:CostOfSalesMember2024-01-012024-03-310001581760lifx:HardwareMemberus-gaap:CostOfSalesMember2023-01-012023-03-310001581760us-gaap:ProductAndServiceOtherMemberus-gaap:CostOfSalesMember2024-01-012024-03-310001581760us-gaap:ProductAndServiceOtherMemberus-gaap:CostOfSalesMember2023-01-012023-03-310001581760us-gaap:CostOfSalesMember2024-01-012024-03-310001581760us-gaap:CostOfSalesMember2023-01-012023-03-310001581760us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-03-310001581760us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-03-310001581760us-gaap:SellingAndMarketingExpenseMember2024-01-012024-03-310001581760us-gaap:SellingAndMarketingExpenseMember2023-01-012023-03-310001581760us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-03-310001581760us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-03-310001581760lifx:JiobitMemberus-gaap:RestrictedStockMember2021-09-012021-09-300001581760lifx:JiobitMemberlifx:RevestingStockMember2023-01-012023-01-310001581760lifx:JiobitMemberlifx:RevestingStockMember2024-03-310001581760lifx:JiobitMemberlifx:RevestingStockMember2023-12-310001581760us-gaap:EmployeeStockOptionMemberlifx:JiobitMember2021-09-012021-09-300001581760us-gaap:EmployeeStockOptionMemberlifx:JiobitMember2024-03-310001581760us-gaap:EmployeeStockOptionMemberlifx:JiobitMember2024-01-012024-03-310001581760us-gaap:EmployeeStockOptionMemberlifx:JiobitMember2023-12-310001581760us-gaap:EmployeeStockOptionMemberlifx:JiobitMember2023-01-012023-12-310001581760us-gaap:RestrictedStockUnitsRSUMemberlifx:TileIncMember2022-01-012022-01-310001581760us-gaap:PerformanceSharesMemberlifx:TileIncMember2022-01-012022-01-310001581760lifx:TileIncMember2022-03-312022-03-310001581760us-gaap:RestrictedStockUnitsRSUMemberlifx:TileIncMember2024-01-012024-03-310001581760us-gaap:RestrictedStockUnitsRSUMemberlifx:TileIncMembersrt:MinimumMember2024-01-012024-03-310001581760us-gaap:RestrictedStockUnitsRSUMembersrt:MaximumMemberlifx:TileIncMember2024-01-012024-03-310001581760us-gaap:RestrictedStockUnitsRSUMemberlifx:TileIncMember2024-03-310001581760us-gaap:RestrictedStockUnitsRSUMemberlifx:TileIncMember2023-12-310001581760us-gaap:RestrictedStockUnitsRSUMemberlifx:TileIncMember2023-01-012023-12-310001581760us-gaap:EmployeeStockOptionMemberlifx:TileIncMember2022-01-012022-01-310001581760lifx:TileIncMember2022-01-012022-01-310001581760lifx:TileIncMemberus-gaap:RestrictedStockMember2022-01-012022-01-310001581760lifx:TileIncMemberus-gaap:RestrictedStockMember2024-01-012024-03-310001581760lifx:TileIncMemberus-gaap:RestrictedStockMember2023-01-012023-12-310001581760lifx:TileIncMember2023-04-012023-04-300001581760us-gaap:PerformanceSharesMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2024-01-012024-03-310001581760us-gaap:ShareBasedCompensationAwardTrancheTwoMemberus-gaap:PerformanceSharesMember2024-01-012024-03-310001581760us-gaap:StockCompensationPlanMember2024-01-012024-03-310001581760us-gaap:StockCompensationPlanMember2023-01-012023-03-310001581760us-gaap:WarrantMember2024-01-012024-03-310001581760us-gaap:WarrantMember2023-01-012023-03-310001581760us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001581760us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001581760us-gaap:ConvertibleDebtMember2024-01-012024-03-310001581760us-gaap:ConvertibleDebtMember2023-01-012023-03-310001581760us-gaap:SubsequentEventMemberlifx:September2021ConvertibleNotesMember2024-04-012024-04-300001581760us-gaap:SubsequentEventMemberlifx:September2021ConvertibleNotesMemberus-gaap:CommonStockMember2024-04-012024-04-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________

FORM 10-Q

x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 000-56424
Life360, Inc.
(Exact name of registrant as specified in its charter)
Delaware26-0197666
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
1900 South Norfolk Street, Suite 310
San Mateo, CA
94403
(Address of principal executive offices)
(Zip Code)
Tel: (415) 484-5244
(Registrant's telephone number, including area code)
Not Applicable.
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”):
Title of each classTrading Symbol(s)Name of each exchange on which registered
None.None.None.
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No  o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x   No  o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filero
Non-accelerated filer  
o
Smaller reporting companyo
Emerging growth company
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes   o     No  x
As of May 3, 2024, the registrant had 69,625,755 shares of common stock, par value $0.001 per share, including shares underlying all issued and outstanding Chess Depositary Interests (“CDIs”), outstanding.





Life360, Inc.
Form 10-Q for the Quarter Ended March 31, 2024
Table of Contents
Page
In this report, unless otherwise stated or the context otherwise indicates, the terms “Life360,” “the Company,” “we,” “us,” “our” and similar references refer to Life360, Inc. and its consolidated subsidiaries. The Life360 logo, and other trademarks, trade names or service marks of Life360, Inc. appearing in this Quarterly Report on Form 10-Q are the property of Life360, Inc. All other trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks and trade names in this report may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.


FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our management’s beliefs and assumptions and on information currently available to our management. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act. These forward-looking statements include statements regarding, among other things, (a) our expectations regarding our results of operations and key performance indicators, (b) key factors affecting our performance (c) our growth strategy, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They are generally identifiable by use of the words: “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “continue,” “contemplate,” “possible” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. We caution you the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q. These forward-looking statements are subject to risks and uncertainties, many of which are outside of our control, including risks related to our business, market risks, our need for additional capital, and the risk that our products and services may not perform as expected, as described in greater detail under the heading “Risk Factors” in Part II, Item 1A in this Quarterly Report and Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (“SEC”) on February 29, 2024 (“Annual Report”), as such risks may be updated in subsequent filings with the Australian Stock Exchange (“ASX”) or SEC. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.
The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial results. The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed under “Item 1A. Risk Factors” and other sections in this Quarterly Report.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)




1

Life360, Inc.
Condensed Consolidated Balance Sheets
(Dollars in U.S. $, in thousands, except share and per share data)
(unaudited)
March 31,
2024
December 31,
2023
Assets
Current Assets:
Cash and cash equivalents$73,401 $68,964 
Accounts receivable, net37,036 42,180 
Inventory6,338 4,099 
Costs capitalized to obtain contracts, net961 1,010 
Prepaid expenses and other current assets13,720 15,174 
Total current assets131,456 131,427 
Restricted cash, noncurrent1,202 1,749 
Property and equipment, net684 730 
Costs capitalized to obtain contracts, noncurrent940 834 
Prepaid expenses and other assets, noncurrent5,606 6,848 
Operating lease right-of-use asset933 1,014 
Intangible assets, net44,281 45,441 
Goodwill133,674 133,674 
Total Assets$318,776 $321,717 
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable$9,388 $5,896 
Accrued expenses and other current liabilities25,063 27,538 
Convertible notes, current ($4,057 and $3,449 measured at fair value, respectively)
4,057 3,449 
Deferred revenue, current35,513 33,932 
Total current liabilities74,021 70,815 
Convertible notes, noncurrent
1,161 1,056 
Derivative liability, noncurrent1,924 217 
Deferred revenue, noncurrent1,196 1,842 
Other liabilities, noncurrent634 723 
Total Liabilities$78,936 $74,653 
Commitments and Contingencies (Note 10)
Stockholders’ Equity
Common Stock, $0.001 par value; 100,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 69,440,062 and 68,155,830 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
71 70 
Additional paid-in capital534,679 532,128 
Accumulated deficit(294,920)(285,143)
Accumulated other comprehensive income
10 9 
Total stockholders’ equity239,840 247,064 
Total Liabilities and Stockholders’ Equity$318,776 $321,717 
See accompanying notes to the condensed consolidated financial statements (unaudited).
2

Life360, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Dollars in U.S. $, in thousands, except share and per share data)
(unaudited)
Three Months Ended March 31,
20242023
Subscription revenue$61,579 $51,664 
Hardware revenue10,188 9,984 
Other revenue6,460 6,495 
Total revenue78,227 68,143 
Cost of subscription revenue9,315 8,045 
Cost of hardware revenue8,012 9,426 
Cost of other revenue887 842 
Total cost of revenue18,214 18,313 
Gross profit60,013 49,830 
Operating expenses:
Research and development27,258 27,197 
Sales and marketing24,733 24,316 
General and administrative14,401 13,209 
Total operating expenses66,392 64,722 
Loss from operations(6,379)(14,892)
Other income (expense):
Convertible notes fair value adjustment(608)72 
Derivative liability fair value adjustment(1,707)14 
Other income, net
311 843 
Total other income (expense), net(2,004)929 
Loss before income taxes(8,383)(13,963)
Provision for income taxes1,394 108 
Net loss$(9,777)$(14,071)
Net loss per share, basic and diluted
$(0.14)$(0.21)
Weighted-average shares used in computing net loss per share, basic and diluted
68,535,626 65,592,780 
Comprehensive loss
Net loss$(9,777)$(14,071)
Change in foreign currency translation adjustment1 24 
Total comprehensive loss$(9,776)$(14,047)
See accompanying notes to the condensed consolidated financial statements (unaudited).









3

Life360, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Dollars in U.S. $, in thousands, except share and per share data)
(unaudited)

Common StockAdditional
Paid-In Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
SharesAmount
Balance at December 31, 202368,155,830 $70 $532,128 $(285,143)$9 $247,064 
Exercise of stock options277,309 — 2,307 — — 2,307 
Exercise of warrants41,685 — 94 — — 94 
Vesting of restricted stock units965,238 1 (1)— —  
Taxes paid related to net settlement of equity awards— — (8,110)— — (8,110)
Stock-based compensation expense— — 8,261 — — 8,261 
Change in foreign currency translation adjustment— — — — 1 1 
Net loss— — — (9,777)— (9,777)
Balance at March 31, 202469,440,062 $71 $534,679 $(294,920)$10 $239,840 
Common StockAdditional
Paid-In Capital
Notes Due
from 
Affiliates
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
SharesAmount
Balance at December 31, 202265,239,843 $67 $501,763 $(314)$(256,972)$(6)$244,538 
Exercise of stock options185,073 — 714 — — — 714 
Vesting of restricted stock units870,915 1 (1)— — —  
Taxes paid related to net settlement of equity awards— — (5,731)— — — (5,731)
Repayment of notes due from affiliate— — 77 314 — — 391 
Stock-based compensation expense— — 8,955 — — — 8,955 
Change in foreign currency translation adjustment— — — — — 24 24 
Net loss— — — — (14,071)— (14,071)
Balance at March 31, 202366,295,831 $68 $505,777 $ $(271,043)$18 $234,820 
See accompanying notes to the condensed consolidated financial statements (unaudited).
4

Life360, Inc.
Condensed Consolidated Statements of Cash Flows
(Dollars in U.S. $, in thousands)
(unaudited)
Three Months Ended March 31,
20242023
Cash Flows from Operating Activities:
Net loss$(9,777)$(14,071)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization2,295 2,273 
Amortization of costs capitalized to obtain contracts341 439 
Amortization of operating lease right-of-use asset81  
Stock-based compensation expense8,261 8,955 
Compensation expense in connection with revesting notes 72 
Non-cash interest expense, net128 92 
Convertible notes fair value adjustment608 (72)
Derivative liability fair value adjustment1,707 (14)
Non-cash revenue from investment(446)(496)
Inventory write-off 916 
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable, net5,144 2,145 
Prepaid expenses and other assets3,272 (1,340)
Inventory(2,239)1,113 
Costs capitalized to obtain contracts, net(398)(498)
Accounts payable3,492 (4,274)
Accrued expenses and other current liabilities(3,073)(4,628)
Deferred revenue1,381 189 
Other liabilities, noncurrent(89) 
Net cash provided by (used in) operating activities10,688 (9,199)
Cash Flows from Investing Activities:
Internal use software(1,089)(348)
Purchase of property and equipment (26)
Net cash used in investing activities(1,089)(374)
Cash Flows from Financing Activities:
Proceeds from the exercise of stock options and warrants2,401 714 
Taxes paid related to net settlement of equity awards(8,110)(5,731)
Proceeds from repayment of notes due from affiliates 314 
Net cash used in financing activities(5,709)(4,703)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash3,890 (14,276)
Cash, Cash Equivalents and Restricted Cash at the Beginning of the Period70,713 90,365 
Cash, Cash Equivalents, and Restricted Cash at the End of the Period$74,603 $76,089 
Supplemental disclosure:
Cash paid during the period for taxes$56 $ 


5

Life360, Inc.
The following table presents the cash, cash equivalents, and restricted cash reported within the balance sheets totaling the same such amounts shown above:
March 31,
2024
March 31,
2023
Cash and cash equivalents$73,401 $61,394 
Restricted cash, current 13,094 
Restricted cash, noncurrent1,202 1,601 
Total cash and cash equivalents, and restricted cash$74,603 $76,089 
See accompanying notes to the condensed consolidated financial statements (unaudited).
6

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Nature of Business
Life360, Inc. (the “Company”) is a leading technology platform connecting millions of people throughout the world to the people, pets and things they care about most. The Company has created a new category at the intersection of family, technology, and safety to help keep families connected and safe. The Company’s core offering, the Life360 mobile application, includes features like communications, driving safety, digital safety and location sharing. Beyond the everyday, Life360 also provides much-needed protection and saves lives, which is crucial for families in emergency situations such as natural disasters, vehicle collisions, physical property theft, and digital identity theft. The Life360 mobile application operates under a “freemium” model where its core offering is available to members at no charge, with three membership subscription options that are available but not required.
The Company acquired Jio, Inc. (“Jiobit”) and Tile, Inc, (“Tile”) in September 2021 and January 2022, respectively, to create a comprehensive platform-agnostic location tracking solution for people, pets and things. Jiobit is a leading wearable location device for young children, pets and seniors and Tile is a leading product suite of location trackers for finding objects.
The Company’s suite of product and service offerings, including the Life360 and Tile mobile applications, and related third-party services, is system and platform-agnostic, allowing its products and services to work seamlessly for members, regardless of the devices they use.
2. Summary of Significant Accounting Policies
Included below are select significant accounting policies. Refer to Note 2, "Summary of Significant Accounting Policies" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024 (“Annual Report”) for a full list of the Company’s significant accounting policies.
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim periods and following the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. All intercompany balances and transactions have been eliminated in consolidation.
The condensed consolidated balance sheet as of December 31, 2023, included herein, was derived from the audited financial statements as of that date. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all normal recurring adjustments necessary to provide a fair presentation of the Company’s financial position, results of operations, stockholders’ equity, and cash flows for the interim periods presented. Operating results for these interim periods are not necessarily indicative of the Company’s future results of operations.
The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report.
Use of Estimates
The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expenses. Significant items subject to such estimates, judgments, and assumptions include:
revenue recognition, including the determination of selling prices for distinct performance obligations sold in multiple performance obligation arrangements, the period over which revenue is recognized for certain arrangements, and estimated delivery dates for orders with title transfer upon delivery;
allowances for credit losses and product returns;
promotional and marketing allowances;
inventory valuation;
7

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
average useful customer life;
valuation of stock-based awards;
legal contingencies;
impairment of long-lived assets and goodwill;
valuation of convertible notes and embedded derivatives;
useful lives of long-lived assets; and
income taxes including valuation allowances on deferred tax assets.
The Company bases its estimates and judgments on historical experience and on various assumptions that it believes are reasonable under the circumstances. Actual results could differ significantly from those estimates.
Accounting pronouncements not yet adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company does not expect adoption of this ASU will have a material impact on its financial position or results of operations.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The updates in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company does not expect adoption of this ASU will have a material impact on its financial position or results of operations.
8

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Concentrations of Risk and Significant Customers
Major Customers
The Company derives its accounts receivable from revenue earned from customers located in the United States and internationally. Channel and retail partners account for the majority of the Company’s revenue and accounts receivable for all periods presented.
The following tables set forth the information about the Company’s third-party platforms and distribution channels (each a “Channel Partner”) that processed the Company’s overall revenue transactions and retail partners who represented greater than 10% of the Company’s revenue or accounts receivable, respectively:
Percentage of Revenue
Three Months Ended March 31,
20242023
Channel Partner (Apple)57 %56 %
Channel Partner (Google)18 %15 %
Percentage of Gross Accounts Receivable
As of March 31,As of December 31,
20242023
Channel Partner (Apple)61 %50 %
Channel Partner (Google)12 %*
Data Partner A10 %*
Retail Partner A*17 %
*    Represents less than 10%

Supplier Concentration
The Company currently relies on a single technology partner for its cloud platform and outsources the manufacturing of the Jiobit and Tile hardware devices to a single contract manufacturer. Although there are a limited number of suppliers, management believes that other suppliers could provide similar services on comparable terms.
Cash and Cash Equivalents
The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include deposit and money market funds. Money market mutual funds are valued using quoted market prices and therefore are classified within Level 1 of the fair value hierarchy.
Restricted Cash
The restricted cash, noncurrent balance of $1.2 million and $1.7 million as of March 31, 2024 and December 31, 2023, respectively, relates to cash deposits restricted under letters of credit issued on behalf of the Company in support of indebtedness to trade creditors incurred in the ordinary course of business.
3. Segment and Geographic Revenue
The Company operates as a single operating segment. The Company’s chief operating decision maker is its chief executive officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. All material long-lived assets are based in the United States.
9

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Revenue by geographic region is generally based on the address of the customer as defined in the contract with the customer. The following table sets forth revenue by geographic region for the periods presented (in thousands):
Three Months Ended March 31,
20242023
North America$70,316 $60,801 
Europe, Middle East and Africa4,633 4,318 
Other international regions3,278 3,024 
Total revenue$78,227 $68,143 
The Company’s revenues in the United States were $68.9 million, or 88%, of total revenue for the three months ended March 31, 2024 and $58.7 million, or 86%, of total revenue for the three months ended March 31, 2023.
4. Deferred Revenue
Deferred revenue consists primarily of payments received and accounts receivable recorded in advance of revenue recognition under the Company’s subscription service arrangements and is recognized as the revenue recognition criteria is met. The Company primarily invoices its customers for its subscription services arrangements in advance. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current and the remaining portion is recorded as deferred revenue, noncurrent on the condensed consolidated balance sheets.
During the three months ended March 31, 2024 and 2023, the Company recognized revenue of $18.4 million and $16.8 million, respectively, that was included in the deferred revenue balance at the beginning of each respective period.
Remaining performance obligations represent the amount of contracted future revenue not yet recognized as the amounts relate to undelivered performance obligations, including both deferred revenue and non-cancelable contracted amounts that will be invoiced and recognized as revenue in future periods.
Revenue expected to be recognized from remaining performance obligations was $36.7 million as of March 31, 2024, of which the Company expects $35.5 million to be recognized over the next twelve months.
5. Costs Capitalized to Obtain Contracts
The Company recognizes as an asset the costs of obtaining a contract with a customer if it expects to recover those costs and they are both direct and incremental. These costs are attributable to the Company’s largest Channel Partners.
Costs of obtaining new revenue contracts are deferred and then amortized on a straight-line basis over the related period of benefit, which is estimated to be two to three years depending on the subscription type.
The following table represents a roll forward of the Company’s costs capitalized to obtain contracts, net (in thousands):
Three Months Ended March 31,
20242023
Costs capitalized to obtain contracts, net, beginning of period$1,844 $2,063 
Additions to costs capitalized to obtain contracts, net398 499 
Amortization of costs capitalized to obtain contracts, net(341)(439)
Costs capitalized to obtain contracts, net, end of period$1,901 $2,123 
10

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
6. Fair Value Measurements
The Company measures its financial assets at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The three levels of inputs which may be used to measure fair value are as follows:
Level 1 - Observable inputs, such as quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Valuations based on unobservable inputs to the valuation methodology and including data about assumptions market participants would use in pricing the asset or liability based on the best information available under the circumstances.
The carrying amounts of certain financial instruments, including cash and cash equivalents, prepaid expenses, accounts receivable, and accounts payable approximate fair value due to their short-term maturities.
The Company measures and reports certain assets and liabilities at fair value on a recurring basis. The fair value of these assets and liabilities as of March 31, 2024 and December 31, 2023 are classified as follows (in thousands):
As of March 31, 2024
Level 1Level 2Level 3Total
Assets:
Money market funds$42,528 $ $ $42,528 
Total assets$42,528 $ $ $42,528 
Liabilities:
Derivative liability (Note 9)$ $ $1,924 $1,924 
Convertible notes (Note 8)  4,057 4,057 
Total liabilities$ $ $5,981 $5,981 
As of December 31, 2023
Level 1Level 2Level 3Total
Assets:
Money market funds $41,981 $ $ $41,981 
Total assets$41,981 $ $ $41,981 
Liabilities:
Derivative liability (Note 9)$ $ $217 $217 
Convertible notes (Note 8)  3,449 3,449 
Total liabilities$ $ $3,666 $3,666 
11

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The change in fair value of the Level 3 instruments were as follows (in thousands):
As of March 31, 2024
Derivative
liability
(Note 9)
Convertible
notes
(Note 8)
Fair value, beginning of the year$217 $3,449 
Changes in fair value1,707 608 
Fair value, end of period$1,924 $4,057 
As of December 31, 2023
Derivative
liability
(Note 9)
Convertible
notes
(Note 8)
Fair value, beginning of the year$101 $6,938 
Vesting of revesting notes 72 
Forfeiture of revesting notes (326)
Repayment of convertible notes (Note 8) (3,919)
Changes in fair value116 684 
Fair value, end of period$217 $3,449 
For the three months ended March 31, 2024, the Company recorded losses associated with the change in fair value of the derivative liability and convertible notes of $1.7 million and $0.6 million, respectively. For the year ended December 31, 2023, the Company recorded losses associated with the change in fair value of the derivative liability and the convertible notes of $0.1 million and $0.7 million, respectively. The amounts have been recorded in other income (expense), net in the condensed consolidated statements of operations and comprehensive loss.
For the three months ended March 31, 2023, the Company recorded gains associated with the change in fair value of the derivative liability and convertible notes of $14 thousand and $72 thousand, respectively. The amounts have been recorded in other income (expense), net in the condensed consolidated statements of operations and comprehensive loss.
7. Balance Sheet Components
Accounts receivable, net
Accounts receivable, net consists of the following (in thousands):
As of March 31,As of December 31,
20242023
Accounts receivable$37,130 $42,274 
Allowance for credit losses(94)(94)
Total accounts receivable, net$37,036 $42,180 
Inventory
Inventory consists of the following (in thousands):
As of March 31,As of December 31,
20242023
Raw materials$18 $298 
Finished goods6,320 3,801 
Total inventory$6,338 $4,099 
12

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consist of the following (in thousands):
As of March 31,As of December 31,
20242023
Prepaid expenses$13,217 $14,520 
Other receivables503 654 
Total prepaid expenses and other current assets$13,720 $15,174 
Prepaid expenses primarily consist of certain cloud platform and customer service program costs. Other receivables primarily consist of refunds owed to the Company and other amounts which the Company is expected to receive in less than twelve months.
Property and Equipment, net
Property and equipment, net consists of the following (in thousands):
As of March 31,As of December 31,
20242023
Computer equipment$297 $297 
Leasehold improvements100 100 
Production manufacturing equipment839 839 
Construction in progress249 249 
Furniture and fixtures29 29 
Total property and equipment, gross1,514 1,514 
Less: accumulated depreciation(830)(784)
Total property and equipment, net$684 $730 
Depreciation expense was $46 thousand and $37 thousand for the three months ended March 31, 2024 and 2023, respectively.
There was no impairment of property and equipment or long-lived assets recognized during the three months ended March 31, 2024 or 2023.
Prepaid Expenses and Other Assets, noncurrent
Prepaid expenses and other assets, noncurrent consist of the following (in thousands):
As of March 31,As of December 31,
20242023
Prepaid expenses, noncurrent$111 $1,353 
Investment5,474 5,474 
Other assets21 21 
Total prepaid expenses and other assets, noncurrent$5,606 $6,848 
Prepaid expenses, noncurrent primarily consist of cloud platform costs. Investment relates to warrants to purchase shares of preferred stock of a current Data Revenue Partner.


13

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Leases
The Company leases office space under a non-cancelable operating lease with a remaining lease term of 2.7 years, which includes the option to extend the lease.
The Company did not have any finance leases as of March 31, 2024 or December 31, 2023.
The components of lease expense are as follows (in thousands):
Three Months Ended March 31,
20242023
Operating lease cost (1)
$110 $245 
(1)    Amounts include short-term leases, which are immaterial.
Payments for operating leases included in cash from operating activities were $0.1 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively.
Supplemental balance sheet information related to leases is as follows (in thousands, except lease term):
As of March 31,As of December 31,
20242023
Operating lease right-of-use asset$933 $1,014 
Operating lease liability, current (included in accrued expenses and other current liabilities)342 335 
Operating lease liability, noncurrent (included in other liabilities, noncurrent)634 723 
Weighted-average remaining term for operating lease (in years)2.72.9
The weighted-average discount rate used to measure the present value of the operating lease liabilities was 5.0% for each period presented.
Maturities of the Company’s operating lease liability, which does not include short-term leases, as of March 31, 2024 were as follows (in thousands):
Operating leases
Remainder of 2024$285 
2025390 
2026367 
Total future minimum lease payments1,042 
Less imputed interest(66)
Total operating lease liability$976 
14

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Goodwill and Intangible Assets, net
Intangible assets, net consists of the following (in thousands):
As of March 31 2024,
GrossAccumulated AmortizationNet
Trade name$23,380 $(5,346)$18,034 
Technology22,430 (10,313)12,117 
Customer relationships15,290 (4,254)11,036 
Internal use software3,506 (412)3,094 
Total$64,606 $(20,325)$44,281 
As of December 31 2023,
GrossAccumulated AmortizationNet
Trade name$23,380 $(4,762)$18,618 
Technology22,430 (9,191)13,239 
Customer relationships15,290 (3,782)11,508 
Internal use software2,416 (340)2,076 
Total$63,516 $(18,075)$45,441 
The Company capitalized $1.1 million and $0.3 million in internal use software during the three months ended March 31, 2024 and 2023, respectively.
Amortization expense was $2.2 million for each of the three months ended March 31, 2024 and 2023.
During the three months ended March 31, 2024 and 2023, there was no impairment of intangible assets recorded.
As of March 31, 2024, the estimated remaining amortization expense for intangible assets by fiscal year is as follows (in thousands):
Amount
Remainder of 2024$6,750 
20258,913 
20268,470 
20274,274 
20284,225 
Thereafter9,012 
Total future amortization expense$41,644 
Internal use software not yet in service$2,637 
Total$44,281 









15

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The weighted-average remaining useful lives of the Company’s acquired intangible assets are as follows:
Weighted-Average Remaining Useful Life
As of March 31,As of December 31,
20242023
Trade name7.7 years8.0 years
Technology2.7 years2.9 years
Customer relationships5.9 years6.1 years
Internal use software1.6 years3.6 years
As of March 31, 2024, the Company had $2.6 million of capitalized internal use software projects that were not yet in service. These assets will be placed into service once the projects have completed, and will be amortized over a three-year useful life. The internal use software projects that were not yet in service have been excluded from the weighted-average remaining useful life calculation for internal use software in the table above.
As of March 31, 2024 and December 31, 2023, goodwill was $133.7 million. No goodwill impairment was recorded during the three months ended March 31, 2024 or 2023.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following (in thousands):
As of March 31,As of December 31,
20242023
Accrued vendor expenses$11,815 $10,020 
Accrued compensation4,314 3,349 
Customer related promotions and discounts3,223 9,049 
Operating lease liability342 335 
Sales return reserves2,899 3,285 
Other current liabilities2,470 1,500 
Total accrued expenses and other current liabilities$25,063 $27,538 
Other current liabilities primarily relate to sales and income taxes payable, as of March 31, 2024, and warranty liabilities related to the Company’s hardware tracking devices, inventory received not yet billed, and sales taxes payable as of December 31, 2023.
8. Convertible Notes
July 2021 Convertible Notes
In July 2021, the Company issued convertible notes (“July 2021 Convertible Notes”) to investors with an underlying principal amount of $2.1 million. The July 2021 Convertible Notes accrue simple interest at an annual rate of 4% and mature on July 1, 2026. The July 2021 Convertible Notes may be settled under the following scenarios at the option of the holder: (i) at any time into common shares equal to the conversion amount of outstanding principal and any accrued but unpaid interest divided by the conversion price of $11.96; (ii) at the option of the holder upon a liquidation event a) paid in cash equal to the outstanding principal and any accrued but unpaid interest or b) into common shares equal to the conversion amount of outstanding principal and any accrued but unpaid interest divided by the conversion price of $11.96; or (iii) upon maturity, settlement in cash at the outstanding accrued interest and principal amount.
16

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Certain conversion and redemption features of the July 2021 Convertible Notes were determined to not be clearly and closely associated with the risk of the debt-type host instrument and were required to be separately accounted for as derivative financial instruments. The Company bifurcated these embedded conversion and redemption (“embedded derivatives”) features and classified these as liabilities measured at fair value. The fair value of the derivative liability of $0.7 million was recorded separate from the July 2021 Convertible Notes with an offsetting amount recorded as a debt discount. The debt discount is amortized over the estimated life of the debt using the straight-line method, as the value attributable to the July 2021 Convertible Notes was zero upon issuance.

As of March 31, 2024 the unamortized amount and net carrying value of the July 2021 Convertible Notes is $0.9 million and $1.2 million, respectively. The amount by which the July 2021 Convertible Notes if-converted value exceeds its principal is $2.4 million as of March 31, 2024.

As of December 31, 2023 the unamortized amount and net carrying value of the July 2021 Convertible Notes was $1.1 million and $1.1 million, respectively. The amount by which the July 2021 Convertible Notes if-converted value exceed its principal was $0.6 million as of December 31, 2023.
In connection with the July 2021 Convertible Notes, the Company issued warrants to purchase 88,213 shares of the Company’s common stock with an exercise price of $0.01 per share and a term of one year (Warrant Tranche 1), 44,106 shares of the Company’s common stock with an exercise price of $11.96 per share and a term of 5 years (Warrant Tranche 2), and 44,106 shares of the Company’s common stock which is exercisable starting twelve months from the issuance date with an exercise price of $11.96 per share and a term of 5 years (Warrant Tranche 3).
The warrants were recorded to additional paid-in capital during the year ended December 31, 2021. The fair value of the warrants issued in connection with the July 2021 Convertible Notes was $0.8 million and was recorded as a debt discount that is being amortized to interest expense under the straight-line method over the term of the respective July 2021 Convertible Notes.
As a result of the beneficial conversion feature associated with the July 2021 Convertible Notes, $0.6 million was added to additional paid-in capital during the year ended December 31, 2021. The beneficial conversion feature was recorded as a debt discount and is being amortized to interest expense under the straight-line method over the term of the respective July 2021 Convertible Notes.
For the three months ended March 31, 2024 and March 31, 2023, the Company recognized a total of $0.1 million and $0.1 million, respectively, in non-cash interest expense related to the July 2021 Convertible Notes.

September 2021 Convertible Notes
In September 2021, the Company, in connection with the Jiobit Acquisition, issued $11.6 million representing the fair value of convertible notes (the “September 2021 Convertible Notes”) and $1.6 million of revesting convertible notes (“Revesting Notes”) that vest over time. The September 2021 Convertible Notes were convertible to common stock at any time subsequent to the acquisition at a fixed conversion price of $22.50 per share. The Company agreed to repay 1/3rd of the unconverted principal plus accrued interest to the holders of such notes on each of the first three annual anniversaries of the issuance date of the September 2021 Convertible Notes, the first two payments of which were made in September 2022 and 2023. Upon a change of control, the holder could elect to either convert at the fixed conversion price of $22.50 per share or be repaid in full. The Company elected the fair value option and remeasured the September 2021 Convertible Notes at their fair value on each reporting date and reflect the changes in fair value in earnings.






17

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The estimated fair value of the September 2021 Convertible Notes is determined using a combination of the present value of the cash flows and the Black-Scholes option pricing model using assumptions as follows:
As of March 31,As of December 31,As of September 1,
202420232021
Principal$3,365 $3,365 $11,206 
Interest rate6.8 %5.7 %4.5 %
Common stock fair value per share25.59 15.46 20.49 
Conversion price per share22.50 22.50 22.50 
Risk-free interest rate5.34 %4.96 %0.45 %
Time to exercise (in years)0.4 0.7 3.0 
Volatility36 %29 %37 %
Annual dividend yield0 %0 %0 %
The Revesting Notes are restricted and vest with continuous employment of certain key employees over a 3-year period subsequent to the acquisition. The Revesting Notes are recognized in general and administrative expense. In January 2023, the final key employee exited the Company. As part of their separation agreement, their Revesting Notes are due in their entirety at the maturity date and the Company recorded $0.1 million of compensation expense included in general and administrative expense.
The Company records the Revesting Notes at fair value and will remeasure the Revesting Notes at fair value on each reporting date. As the Revesting Notes vest, the changes in fair value are recorded as general and administrative expense with a corresponding entry to convertibles notes. The estimated fair value of the Revesting Notes is determined using a combination of the present value of the Revesting Notes cash flows and the Black-Scholes option pricing model. The terms of the Revesting Notes are consistent with the terms of the September 2021 Convertible Notes. For the three months ended March 31, 2024 and 2023, the Company recorded zero and $0.1 million, respectively, to compensation expense included in general and administrative expense related to the changes in fair value of the Revesting Notes.
Convertible notes, current and noncurrent consist of the following (in thousands):
As of March 31,As of December 31,
20242023
Convertible notes, current:
September 2021 Convertible Notes$4,057 $3,449 
Convertible notes, noncurrent:
July 2021 Convertible Notes1,161 1,056 
Total convertible notes$5,218 $4,505 
The contractual future principal payments for all convertible notes as of March 31, 2024 were as follows (in thousands):
Amount
(unaudited)
Remainder of 2024$3,365 
2025 
20262,110 
Total principal outstanding5,475 
Fair value adjustment(257)
Total convertible notes$5,218 

In April 2024, the holders of the September 2021 Convertible Notes elected to convert their notes and accrued interest to common stock based on the fixed conversion price of $22.50 per share. Refer to Note 17, "Subsequent Events" for further details.
18

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
9. Derivative Liability
The Company’s derivative liability represents embedded share-settled redemption features bifurcated from its July 2021 Convertible Notes and is carried at fair value. The changes in the fair value of the derivative liability are recorded in other income (expense), net in the Company’s condensed consolidated statements of operations and comprehensive loss.
Estimating fair values of derivative financial instruments requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Since derivative financial instruments are initially and subsequently carried at fair value, the Company’s income will reflect the volatility in these estimate and assumption changes.
The features embedded in the July 2021 Convertible Notes are combined into one compound embedded derivative. The fair value of the embedded derivative was estimated based on the present value of the redemption discount applied to the principal amount of the July 2021 Convertible Notes adjusted to reflect the weighted probability of exercise. The discount rate was based on the risk-free interest rate.

The estimated fair value of the embedded derivative is determined using a lattice model with the following assumptions:
As of March 31,As of December 31,
20242023
Principal$2,110 $2,110 
Interest rate4.0 %4.0 %
Common stock fair value per share$25.59 $15.46 
Risk-free interest rate
3.7% - 4.2%
3.7% - 4.0%
Term (in years)2.32.5
Volatility
66.4% - 76.9%
43.0% - 61.2%
Option adjusted spread (bps)561 613 
Annual dividend yield0 %0 %
Exchange rate (AUD to USD)0.650.68 
Upon the issuance of the July 2021 Convertible Notes, the Company recorded a derivative liability of $0.7 million at fair value using inputs classified as Level 3 in the fair value hierarchy. As of March 31, 2024 and December 31, 2023, the fair value of the derivative liability was $1.9 million and $0.2 million, respectively. Refer to Note 6, "Fair Value Measurements" for further details.
10. Commitments and Contingencies
Purchase Commitments
The Company has certain commitments with its cloud platform provider and sole contract manufacturer that are non-cancellable. As of March 31, 2024, future non-cancellable commitments under these agreements were as follows in thousands):
Amount
Remainder of 2024$21,409 
202525,000 
202625,500 
202726,000 
Total purchase commitments$97,909 



19

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Contingencies
From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. The Company is not subject to any current pending legal matters or claims that the Company believes could have a material adverse effect on its financial position, results of operations or cash flows.
Warranties and Indemnification
To date, the Company has not incurred significant costs and has not accrued any material liabilities in the accompanying condensed consolidated financial statements as a result of its warranty and indemnification obligations.
Litigation
Occasionally, the Company is involved in various legal proceedings, claims and government investigations in the ordinary course of business. The outcome of litigation and other legal matters is inherently uncertain, though the Company intends to vigorously defend the matters. In making a determination regarding accruals, using available information, the Company evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings to which the Company is a party and records a loss contingency when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. When the Company determines an unfavorable outcome is not probable or reasonably estimable the Company does not accrue for any potential litigation loss. Actual outcomes of these legal and regulatory proceedings may materially differ from the Company’s estimates.
On March 12, 2019, a former alleged competitor of Tile, Cellwitch, Inc, filed a patent infringement claim against Tile in the U.S. District Court, Northern District of California, seeking permanent injunction and damages. On December 18, 2019, Tile filed an inter partes review petition with the Patent Trial and Appeal Board (“PTAB”) challenging the validity of the patent. On May 13, 2021, the PTAB issued a Final Written Decision on Tile’s inter partes review petition (the “Final Written Decision”), finding a majority of the claims invalid. The Final Written Decision was affirmed by the U.S. Court of Appeals for the Federal Circuit on May 13, 2022. The case is currently in trial court. The claim construction hearing took place on January 18, 2024, and on April 23, 2024, the court released its order which found 10 of the claims invalid, leaving only 2 active claims remaining. At this time, a loss is not probable nor estimable, and as a result, no litigation reserve has been recorded on our condensed consolidated balance sheet as of March 31, 2024.
No litigation reserve was recorded on our condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023, respectively.
11. Common Stock
The Company has the following potentially outstanding common stock reserved for issuance:
As of March 31,As of December 31,
20242023
Issuances under stock incentive plan6,186,944 6,625,812 
Issuances upon exercise of common stock warrants95,973 137,658 
Issuances upon vesting of restricted stock units5,408,458 6,182,543 
Issuances upon conversion of convertible notes325,981 325,981 
Shares reserved for shares available to be granted but not granted yet20,682,366 16,882,215 
32,699,722 30,154,209 
12. Warrants
As of March 31, 2024, the Company had outstanding warrants to purchase 95,973 shares of Company common stock with exercise prices ranging from $6.44 to $11.96 and expiry dates ranging from 2025 to 2026.

20

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
In March 2024, 41,685 of the Company’s freestanding warrants were exercised to purchase shares of the Company’s common stock at an exercise price of $2.28 per share.

As of December 31, 2023, the Company had outstanding warrants to purchase 137,658 shares of Company common stock with exercise prices ranging from $2.28 to $11.96 and expiry dates ranging from 2024 to 2026. Refer to Note 8, "Convertible Notes" for further details.
13. Equity Incentive Plan
2011 Equity Incentive Plan
The Company’s equity incentive plan allows the Company to grant restricted stock units, performance-based restricted stock units (PRSU), restricted stock, and stock options to employees and consultants of the Company and any of the Company’s parent, subsidiaries, or affiliates, and to the members of the Board of Directors.
The following summary of stock option activity for the periods presented is as follows (in thousands, except share and per share data):
Number of Shares
Underlying
Outstanding Options
Weighted
Average
Exercise Price
per Share
Weighted
Average
Remaining
Contractual Life
(in Years)
Aggregate
Intrinsic Value
Balance as of December 31, 20236,625,812 $6.57 4.7$59,957 
Options granted   
Options exercised(277,309)8.32 
Options canceled/forfeited (161,559)15.29 
Balance as of March 31, 20246,186,944 6.26 4.6119,570 
Exercisable as of March 31, 20245,327,732 $5.39 4.5$107,623 
As of March 31, 2024, there was total unrecognized compensation cost for outstanding stock options of $3.4 million to be recognized over a period of approximately 1.7 years.
Performance-based Restricted Stock Units
The Company granted 54,075 PRSUs (“the Target Grant”) to certain executives during the three months ended March 31, 2024. The number of PRSUs that may be vested depends on the extent to which performance goals for the award are achieved over a one-year performance period, as determined by the Remuneration and Nomination Committee of the Board, up to a maximum of 200% of the Target Grant. The performance goals for the PRSUs consist of the following two metrics, each with a weighting of 50%: (1) a revenue metric for the year ended December 31, 2024; and (2) an Adjusted EBITDA metric for the year ended December 31, 2024. Each of the metrics are within the Company’s published revenue and Adjusted EBITDA guidance described in the Company’s press release furnished within Exhibit 99.1 of the Company’s Current Report on Form 8-K filed with the SEC on February 29, 2024.

The PRSU awards vest over a four-year period with 1/4th of the shares vesting after the first year and 1/16th of the shares vesting each quarter thereafter. As of March 31, 2024, PRSUs granted in 2024 are being accrued at the target amount. The Company uses the grant date fair value of the common stock to measure compensation expense for PRSU awards. Compensation expense is recognized over the vesting period of the PRSU award using the straight-line method and shares attained over target upon vesting will be recognized as awards granted in the period. No PRSU awards vested as of March 31, 2024.
21

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
The following summary of restricted stock units (including PRSUs) activity for the periods presented is as follows:
Number of SharesWeighted
average grant
date fair value
Balance as of December 31, 20236,182,543 $12.67 
RSU granted685,698 17.64 
RSU vested and settled(1,313,564)22.99 
RSU canceled/forfeited(146,219)12.63 
Balance as of March 31, 20245,408,458 $13.35 
As of March 31, 2024, there was unrecognized compensation cost for outstanding restricted stock units of $64.7 million to be recognized over a period of approximately 2.8 years.
The number of RSUs vested and settled includes shares of common stock that the Company withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.
Stock-based Compensation
Stock-based compensation expense was allocated as follows (in thousands):
Three Months Ended March 31,
20242023
Cost of revenue
Subscription costs$159 $125 
Hardware costs184 206 
Other costs4 11 
Total cost of revenue347 342 
Research and development5,325 4,786 
Sales and marketing632 926 
General and administrative1,957 2,901 
Total stock-based compensation expense$8,261 $8,955 
There was an immaterial amount of capitalized stock-based compensation costs and no stock-based compensation tax benefits recognized during the three months ended March 31, 2024 and 2023, respectively.
Equity Awards Issued in Connection with Business Combinations
Jio, Inc.
In connection with the Jiobit acquisition in September 2021, the Company issued 91,217 shares of restricted common stock with an aggregate fair value of $1.9 million to be recognized as post combination stock-based compensation ratably with continuous employment of certain employees over a 3 year period.
In January 2023, a key employee of the Jiobit acquisition terminated employment with the Company. As part of such employee’s separation agreement, the Company recorded $0.2 million to compensation included in general and administrative expense related to their Revesting Stock. As of each of March 31, 2024 and December 31, 2023, there was zero unrecognized compensation expense related to the restricted common stock, as a result of the termination of certain employees.
22

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Additionally, the Company granted 43,083 service-based stock options under the Plan to certain Jiobit employees with an aggregate fair value of $0.5 million which vests ratably over the requisite service period. As of March 31, 2024, there was $32 thousand of unrecognized compensation expense related to unvested assumed stock options, which is expected to be recognized over the remaining weighted average life of 0.8 years. As of December 31, 2023, there was $0.1 million of unrecognized compensation expense related to unvested assumed stock options, which is expected to be recognized over the remaining weighted average life of 1 year.
Tile, Inc.
In connection with the Tile acquisition in January 2022, the Company issued 1,499,349 shares of retention restricted stock units with an aggregate fair value of $29.6 million. Of the 1,499,349 shares of retention restricted stock units, 787,446 shares valued at $15.6 million contained performance vesting criteria based on the achievement of certain company milestones during the three months ended March 31, 2022, and vest over a two year period. As of March 31, 2022, the vesting criteria had not been met and all 787,446 restricted stock units were forfeited. The remaining 711,903 retention restricted stock units vest over a two to four year period. As of March 31, 2024, there was $0.6 million of unrecognized compensation expense related to the retention restricted stock units which is expected to be recognized over the remaining weighted average life of 1.8 years. As of December 31, 2023, there was $0.7 million of unrecognized compensation expense related to the retention restricted stock units which is expected to be recognized over the remaining weighted average life of 1.9 years.
The Company also issued 38,730 vested common stock options to Tile employees as stock-based compensation on the acquisition date. The aggregate fair value of $0.4 million was recognized as compensation expense on the date of acquisition.
A total of 694,672 shares of common stock with an aggregate fair value of $13.7 million were issued to Tile shareholders as part of purchase consideration. All $13.7 million was included within purchase consideration.
A total of 1,561 shares of common stock with an aggregate fair value of $31 thousand were issued to a key employee, the vesting of which is subject to continued employment over a 30-month period. As of March 31, 2024 and December 31, 2023 there was an immaterial amount of unrecognized compensation expense related to unvested restricted stock units which is expected to be recognized over the remaining 0.3 years and 0.5 years, respectively.
A total of 84,524 shares of common stock were issued as part of consideration transferred and were placed in an indemnity escrow fund to be held for fifteen months after the acquisition date for general representations and warranties. The aggregate fair value of $1.7 million was included within purchase consideration. All 84,524 shares of common stock were released from escrow in April 2023 as scheduled.
14. Income Taxes
The provision for income taxes for interim periods is determined using an estimated annual effective tax rate in accordance with ASC 740-270, Income Taxes, Interim Reporting. The effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related to uncertain tax position, if any, and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business.
The Company recorded a provision for income taxes of $1.4 million and $0.1 million for the three months ended March 31, 2024 and 2023, respectively.
In accordance with the Tax Cuts and Jobs Act of 2017, research and experimental (“R&E”) expenses under Internal Revenue Code Section 174 are required to be capitalized beginning in 2022. R&E expenses are required to be amortized over a period of five years for domestic expenses and fifteen years for foreign expenses. The Company has capitalized R&E expenditures in its income tax provision as a result. Accordingly, for the three months ended March 31, 2024 and 2023, the Company recorded income tax expense of $1.4 million and $0.1 million, respectively.

23

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
15. Defined Contribution Plan
The Company sponsors a defined contribution plan under Section 401(k) of the Internal Revenue Code covering substantially all employees over the age of 21 years. Contributions made by the Company are voluntary and are determined annually by the Board of Directors on an individual basis subject to the maximum allowable amount under federal tax regulations. Employer contributions to the plan were $0.7 million for the three months ended March 31, 2024 and immaterial for the three months ended March 31, 2023.
16. Net Loss Per Share
The following table presents the calculation of basic and diluted net loss per share (in thousands except share and per share information):

Three Months Ended March 31,
20242023
Net loss$(9,777)$(14,071)
Weighted-average shares used in computing net loss per share, basic and diluted68,535,626 65,592,780 
Net loss per share, basic and diluted$(0.14)$(0.21)

The potential shares of common stock that were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive are as follows:
As of March 31,As of March 31,
20242023
Issuances under stock incentive plan6,186,944 7,708,686 
Issuances upon exercise of common stock warrants95,973 137,658 
Issuances upon vesting of restricted stock units5,408,458 5,109,200 
Issuances upon conversion of convertible notes325,981 516,758 
12,017,356 13,472,302 
24

Life360, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
17. Subsequent Events
September 2021 Convertible Notes Conversion
In April 2024, the holders of the September 2021 Convertible Notes elected to convert their notes and accrued interest to common stock based on a fixed conversion price of $22.50 per share. At the time of conversion, the September 2021 Convertible Notes had an outstanding principal and accrued interest balance of $3.5 million. As a result of the conversion, 157,685 shares of common stock with a fair value of $3.5 million were issued to the holders in redemption of the outstanding September 2021 Convertible Notes. In April 2024, the fair value of the issued common stock was recorded within additional paid-in capital on the Company’s condensed consolidated balance sheet and a $0.5 million gain on settlement of the September 2021 Convertible Notes was recorded in other income (expense), net on the condensed consolidated statements of operations and comprehensive loss.
25

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report. In addition to historical financial information, the following discussion contains forward-looking statements that are based upon current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the section titled “Risk Factors” under Part II, Item 1A in this Quarterly Report on Form 10-Q and Part I, Item 1A in our Annual Report.
Overview
Life360 is a leading technology platform used to locate the people, pets and things that matter most to families. Life360 is creating a new category at the intersection of family, technology, and safety to help keep families safe and connected. Our core offering, the Life360 mobile application, includes features that range from communications to driving safety and location sharing. The Life360 mobile application operates under a “freemium” model where its core offering is available to members at no charge, with three membership subscription options that are available but not required. We also generate revenue through Jiobit and Tile subscription services and hardware tracking devices. By offering devices and integrated software to members, we have expanded our addressable market to provide members of all ages with a vertically integrated, cross-platform solution of scale.
Key Factors Affecting Our Performance
We believe that our results of operations are affected by a number of factors, such as: the ability to remain a trusted brand; attracting, retaining, and converting members; maintaining efficient member acquisition; the ability to attract new and repeat purchasers of our hardware tracking devices; growth in Average Revenue per Paying Circle (“ARPPC”); expanding offerings on our platform; attracting and retaining talent; seasonality; and international expansion. We discuss each of these factors in more detail under the heading “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Performance” in our Annual Report. While we do not have control of all factors affecting our results from operations, we work diligently to influence and manage those factors which we can impact to enhance our results of operations.
Key Components of Our Results of Operations
Revenue
Subscription Revenue
We generate revenue primarily from sales of subscriptions on our platform, including Life360, Jiobit and Tile. Revenue is recognized ratably over the related contractual term generally beginning on the date that our platform is made available to a customer. Our subscription agreements typically have monthly or annual contractual terms. Our agreements are generally non-cancellable during the contract term. We typically bill in advance for monthly and annual contracts. Amounts that have been billed are initially recorded as deferred revenue until the revenue is recognized.
Hardware Revenue
We generate our hardware revenue from the sale of the Jiobit and Tile hardware tracking devices and related accessories. For hardware and accessories, revenue is recognized at the time products are delivered. We sell hardware tracking devices and accessories through a number of channels including our websites, brick and mortar retail and online retail.



26

Other Revenue
We also generate revenue through an arrangement with a key data partner that provides location-based analytics services to customers in the retail and real estate sectors, municipalities, and other private and public organizations. The agreement permits commercialization of certain aggregated and de-identified data and provides for fixed and variable monthly revenue amounts. Other revenue also includes advertising and partnership revenue, which represents agreements with third parties to provide access to advertising on the Company’s mobile platform. Advertising revenue for the three months ended March 31, 2024 was immaterial, however, we anticipate meaningful growth in the second half of the year.
Cost of Revenue and Gross Margin
Cost of Subscription Revenue
Cost of subscription revenue primarily consists of expenses related to hosting our services and providing support to our free and paying subscribers. These expenses include personnel-related costs associated with our cloud-based infrastructure and our customer support organization, third-party hosting fees, software, and maintenance costs, outside services associated with the delivery of our subscription services, amortization of acquired intangibles and allocated overhead, such as facilities, including rent, utilities, depreciation on equipment shared by all departments, credit card and transaction processing fees, and shared information technology costs. Personnel-related expenses include salaries, bonuses, benefits, and stock-based compensation for operations personnel.
We plan to continue increasing the capacity and enhancing the capability and reliability of our infrastructure to support member growth and increased use of our platform. We expect that cost of revenue will increase in absolute dollars in future periods.
Cost of Hardware Revenue
Cost of hardware revenue consists of product costs, including hardware production, contract manufacturers for production, shipping and handling, packaging, fulfillment, personnel-related expenses, manufacturing and equipment depreciation, warehousing, tariff costs, customer support costs, credit card and transaction processing fees, warranty replacement, and write-downs of excess and obsolete inventory. Personnel-related expenses include salaries, bonuses, benefits, and stock-based compensation for operations personnel.
Cost of Other Revenue
Cost of other revenue includes cloud-based hosting costs, as well as costs of product operations functions and personnel-related costs associated with our data and advertising platforms. Personnel-related expenses include salaries, bonuses, benefits, and stock-based compensation for operations personnel.
Gross Profit and Gross Profit Margin
Our gross profit has been, and may in the future be, influenced by several factors, including timing of capital expenditures and related depreciation expense, increases in infrastructure costs, component costs, contract manufacturing and supplier pricing, and foreign currency exchange rates. Gross profit and gross profit margin may fluctuate over time based on the factors described above.
Operating Expenses
Our operating expenses consist of research and development, selling and marketing, and general and administrative expenses.
Research and Development
Our research and development expenses consist primarily of personnel-related costs for our engineering, product, and design teams, material costs of building and developing prototypes for new products, mobile app development and allocated overhead. We believe that continued investment in our platform is important for our growth. We intend to continue to invest in research and development to bring new customer experiences and devices to market and expand our platform capabilities.
27

Sales and Marketing
Our sales and marketing expenses consist primarily of personnel-related costs, brand marketing costs, lead generation costs, sales incentives, sponsorships and amortization of acquired intangibles. Revenue-share payments to third parties in connection with annual subscription sales of the Company’s mobile application on third-party store platforms are considered to be incremental and recoverable costs of obtaining a contract with a customer and are deferred and typically amortized over an estimated period of benefit of two to three years depending on the subscription type.
We plan to continue to invest in sales and marketing to grow our member base and increase our brand awareness, including marketing efforts to continue to drive our business model. We expect that sales and marketing expenses will increase in absolute dollars in future periods and will fluctuate as a percentage of revenue. The trend and timing of sales and marketing expenses will depend in part on the timing of marketing campaigns.
General and Administrative
Our general and administrative expenses consist primarily of employee-related costs for our legal, finance, human resources, and other administrative teams, as well as certain executives. In addition, general and administrative expenses include allocated overhead, outside legal, accounting and other professional fees, change in fair value of contingent consideration for business combinations, and non-income-based taxes. We expect our general and administrative expenses will increase in absolute dollars as our business grows.
Convertible Notes Fair Value Adjustment
The Company issued convertible notes to investors in July 2021 (the “July 2021 Convertible Notes”), and as part of the purchase consideration related to the Jiobit Acquisition in September 2021 (the “September 2021 Convertible Notes” and together with the July 2021 Convertible Notes, the “Convertible Notes”). The September 2021 Convertible Notes were recorded at fair value and revalued at each reporting period.
Derivative Liability Fair Value Adjustment
Derivative liability fair value adjustment relates to the change in the fair value of the embedded conversion and redemption features associated with the July 2021 Convertible Notes.
Other Income (Expense), net
Other income (expense), net consists of interest income earned on our cash and cash equivalents balances, foreign currency exchange (losses)/gains related to the remeasurement of certain assets and liabilities of our foreign subsidiaries that are denominated in currencies other than the functional currency of the subsidiary and foreign exchange transactions gains/(losses) and interest expense primarily related to the Convertible Notes.

Provision for Income Taxes
Provision for income taxes consists of U.S. federal and state income taxes and foreign income taxes in jurisdictions in which we conduct business. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is not more likely than not that the deferred tax assets will be realized.
28

Results of Operations
The following tables set forth our condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2024 and 2023 (in thousands, except percentages).

Three Months Ended March 31,
20242023% Change
Subscription revenue$61,579 $51,664 19 %
Hardware revenue10,188 9,984 %
Other revenue6,460 6,495 (1)%
Total revenue78,227 68,143 15 %
Cost of subscription revenue(1)
9,315 8,045 16 %
Cost of hardware revenue(1)
8,012 9,426 (15)%
Cost of other revenue(1)
887 842 %
Total cost of revenue(1)
18,214 18,313 (1)%
Gross profit60,013 49,830 20 %
Operating expenses(1):
Research and development27,258 27,197 — %
Sales and marketing24,733 24,316 %
General and administrative14,401 13,209 %
Total operating expenses66,392 64,722 %
Loss from operations(6,379)(14,892)(57)%
Other income (expense):
Convertible notes fair value adjustment(608)72 (944)%
Derivative liability fair value adjustment(1,707)14 (12,293)%
Other income, net
311 843 (63)%
Total other income (expense), net(2,004)929 (316)%
Loss before income taxes(8,383)(13,963)(40)%
Provision for income taxes1,394 108 1,191 %
Net loss(9,777)(14,071)(31)%
Change in foreign currency translation adjustment24 (96)%
Total comprehensive loss$(9,776)$(14,047)(30)%
____________________
(1)Includes stock-based compensation expense as follows (in thousands, except percentages):
Three Months Ended March 31,
20242023% Change
Cost of revenue
Subscription costs$159 $125 27 %
Hardware costs184 206 (11)%
Other costs11 (64)%
Total cost of revenue347 342 
Research and development5,325 4,786 11 %
Sales and marketing632 926 (32)%
General and administrative1,957 2,901 (33)%
Total stock-based compensation expense$8,261 $8,955 (8)%
29

The following table sets forth our results of operations as a percentage of total revenue:
Three Months Ended March 31,
20242023
Subscription revenue79 %76 %
Hardware revenue13 %15 %
Other revenue%10 %
Total revenue100 %100 %
Cost of subscription revenue12 %12 %
Cost of hardware revenue10 %14 %
Cost of other revenue%%
Total cost of revenue
23 %27 %
Gross profit77 %73 %
Operating expenses:
Research and development35