Good morning, and thank you for joining the Life360 December 2021 Quarterly Activities Report and Appendix 4C Conference Call. This is Jolanta Masojada, and I head up investor relations for Life360. The call will begin with some prepared remarks from Co-Founder and CEO, Chris Hulls, and CFO, Russell Burke, followed by a Q&A session. This call is being conducted as a Zoom audio webinar. All participants will be in a listen-only mode until the Q&A. In order to ask a question, you will need to be connected to this call through your browser. Please raise your hand by pressing the Raise Hand icon at the bottom center of your screen, and your line will be unmuted in turn. Participants who have joined by telephone will be in a listen-only mode throughout. I would now like to turn the call over to Chris.
Good morning, everyone, and thanks for joining our December 2021 quarterly business update call. This was another milestone quarter for Life360, where we set new records across many key metrics and made significant progress on our strategic roadmap with the acquisition of Tile. We delivered our third consecutive quarter of record subscriber additions, reaching more than 1.2 million paying circles, with underlying revenue growth of 46% year-over-year and underlying annualized monthly revenue growth of 51%. Direct revenue increased 62%, driven by the continued success of our membership offering, providing a strong leading indicator of our growth momentum. Monthly active users increased 5% from the third quarter to 35.5 million. Life360 is experiencing accelerating growth despite the impact of the Omicron variant in the U.S. and other countries.
While Omicron has had some impact on movement, and therefore membership usage, in our primary markets, this appears to be much less significant than previous COVID-19 variants. Year on year, U.S. MAU increased 39% and international MAU grew 24% in the face of challenging external circumstances. We are seeing continued strength of retention and engagement from our users with the proportion of returning monthly active users reaching a new record. The acquisition of Tile and associated capital raising in November and December received pleasing support from our existing and new shareholders with a transaction closing on January 6th. Tile is undoubtedly the most impactful deal in our company's history and is a fundamental step forward in our vision of being the dominant platform for a much broader suite of family services.
While global supply chain issues were a constraint during the quarter, Tile's performance is tracking to expectations with revenues in line and the business achieving positive EBITDA in its strongest seasonal quarter for the year. Tile recently announced further strategic deals, including an embedded Tile tracker in Sumitomo Mitsui's Visa card in Japan and a partnership with Lenovo, which will embed Tile software to make Lenovo computers findable via the Tile app even when the laptops are offline. With the acquisition of Tile, Life360 will be the only vertically integrated cross-platform solution of scale that brings people, pets, and things together into a unified app. We have already begun integration, developing a plan to offer Tile products as part of Life360 membership subscriptions. By increasing the value of the membership offering, Life360 expects to increase pricing, conversion, and retention, resulting in significantly higher customer lifetime value.
In addition, Tile will add Life360 membership benefits into its premium offering, dramatically accelerating Tile's progress along its roadmap. Tile will also have access to the Life360 user base as a new plugin-ready distribution channel in extension to its current finding network. Life360's global user base of more than 35 million smartphone users will boost Tile's finding network approximately tenfold and provide very broad coverage with higher density, improving the overall experience. During the quarter, we took the first step in the international rollout of our membership model with the launch of the complete membership experience in Canada. Full rollout was reached in December, and early signs are promising, with a greater than 100% increase in average revenue per paying circle from new membership signups since launch.
We expect the Canadian launch playbook to support the acceleration of our global rollout, including a planned launch in the United Kingdom in 2022. We're also pleased to announce a new partnership agreement with Placer.ai, a prominent provider of aggregated anonymous analytics for the retail ecosystem. This marks the beginning of Life360's exit from the traditional data brokerage business and transition solely to sales of aggregated insights. With this agreement, Placer.ai will provide critical insights and analytics services to Life360, which will enhance the product experience for our users. As part of this partnership, Placer.ai will have the right to commercialize solely aggregated data related to Places visits during the term of the agreement. We have begun terminating our relationships with all other location data partners, with the exception of Allstate and Arity, which will continue.
Life360 recognizes that aggregated data and analytics, for example, 150 people drove by the supermarket, is the wave of the future and that businesses will increasingly place a premium on data insights that do not rely on device-level or other individual user-level identifiers. As a result, we believe this partnership will enable us to spend less time navigating the rapidly evolving regulatory and platform environment while simultaneously reducing business risk. This agreement includes a minimum revenue guarantee based on the size of Life360's active user base, which we expect will preserve revenue in line with CY 2021 results for the duration of the 3-year agreement. Life360 will also be receiving a 10-year warrant exercisable to purchase up to $25 million in Placer.ai, which recently completed a $100 million capital raise.
The agreement also expressly excludes Tile and Jiobit device data to underscore our clear message that data from Tile and Jiobit devices is not and never will be sold or monetized. In line with our commitment to user privacy. We're pleased to announce the recent appointment of Kirsten Daru as General Counsel, Chief Privacy Officer, and Corporate Secretary. Turning now to the details of the quarter. As of December 2021, Life360's global monthly active user base was 35.5 million, an increase of 1.7 million from the September quarter and 34% year-on-year. U.S. MAU of 23.7 million increased 39% year-on-year and 7% from the September quarter. International MAU of 11.8 million increased 24% year-on-year and 1% for the quarter.
Quarter-on-quarter international growth rates were constrained by Spanish, Portuguese, and Italian-speaking countries, which have experienced a substantial TikTok-driven surge in Q2 and have subsequently normalized. In our listed home of Australia, the MAU base of 969,000 increased 47% year-on-year and 16% quarter-on-quarter, despite continued COVID-related disruption. Revenue in the December quarter, excluding Jiobit, increased 46% year-on-year to $33.1 million and 13% from the September quarter. Including Jiobit, consolidated revenue is $35 million, up 54% year-on-year. CY 2021 consolidated revenue, including Jiobit of $112.6 million, was the top end of guidance of $109-$113 million.
For the month of December, annualized monthly revenue, excluding Jiobit, was $135.7 million, a year-on-year increase of 51% and above guidance of $125 million-$130 million. Direct revenue continued to deliver accelerating momentum, benefiting from the paying circles increase of 39% year-on-year to 1.2 million and an ARPPC increase of 22% year-on-year. The membership model now has 564,000 new and upsell subscribers, accounting for 56% of U.S. paying circles. While legacy subscribers are grandfathered on their previous plans, the new membership cohort is delivering an ARPPC uplift of 38% versus the first half of 2020 prior to the membership launch. Our direct revenue increased 62% year-on-year, providing a strong leading indicator of the growth momentum ahead.
Indirect revenue, which includes data revenue and lead gen partnership, delivered modest growth year-on-year and quarter-on-quarter. Jiobit contributed revenue of $1.9 million for the quarter and $2.3 million from the date of acquisition, at the lower end of guidance of $2-$3 million due to supply constraints which remain a factor. Although the quarter was partially limited by supply, demand continued to be strong, with the best Black Friday and Cyber Monday sales period ever. Jiobit's underlying EBITDA loss for the quarter was $1.6 million and $2.1 million since the date of acquisition, better than guidance of $3 million due to the benefit of cost savings. Paid user acquisition spend of $2.1 million increased from $1.7 million in the September 2021 and December 2020 quarters.
Total investment in paid user acquisition and TV channels of $4 million and $4.6 million, including Jiobit, increased from $3.1 million in the September quarter. Underlying EBITDA loss, excluding stock-based compensation and other non-recurring adjustments of $3 million excluding Jiobit and $4.6 million including Jiobit, were ahead of the September quarter due to a full quarter's contribution from Jiobit. The CY 2021 underlying EBITDA loss of $13.1 million was better than guidance of $14 million-$18 million. I'll now turn it over to Russell, who will share more details on our cash flow performance for the quarter.
Thanks, Chris, and thanks everyone for joining the call today. Please note that all the numbers I will be discussing are denominated in U.S. dollars, are in accordance with U.S. GAAP accounting standards, and are unaudited. Life360 ended the December quarter with cash and cash equivalents of $231.3 million and debt of $16.2 million related to convertible notes. Following the close of the Tile acquisition in January, Life360 has cash and cash equivalents of approximately $94 million and remains in a strong capital position to invest for future growth. Cash used in operating activities of $11.7 million compared with cash provided of $4.4 million in the September quarter. Revenue of $35 million increased 46% year-on-year on an underlying basis and was $5.3 million ahead of the September quarter.
Receipts from customers of $25.1 million reduced from $26.7 million in the September quarter, reflecting the timing of subscription receipts. Staff payments of $11.2 million reduced from $11.8 million in the September quarter due to the timing of bonus payments. At the end of the quarter, our headcount, including contractors, was 370. Advertising and marketing payments, which include paid user acquisition of $5.3 million, increased from $3.2 million in the September quarter, reflecting the new brand campaign, higher user acquisition spend, and a full quarter of Jiobit. Research and development payments of $5.4 million increased from $2.2 million in the September quarter due to the timing of vendor payments.
Cost of revenue of $10.5 million increased from $1.8 million in the September quarter due to the timing of technology payments. Administration and corporate payments of $3 million increased from $2.5 million in the September quarter due to costs associated with the higher headcount. Cash used in investing activities of $0.2 million, reduced from $4.4 million in the September quarter, reflecting the timing of the Jiobit acquisition. Cash received from financing activities of $192.8 million reflects the proceeds of the capital raising, slightly offset by the exercise of options and settlement of RSUs. Thanks for your attention. I'll now hand back to Chris.
Due to potential implications under U.S. federal securities laws, we are not currently able to provide specific guidance for CY 2022. That being said, we've had a terrific quarter and are confident in our ability to drive continued growth, in particular in our core Life360 subscription business. We anticipate that we will return to providing guidance as soon as we can legally do so in ways that do not potentially raise U.S. securities law implications. With that, I'll turn it over to Mel to run our Q&A.
Thanks, Chris. As a reminder, to participate in the Q&A, please raise your hand by pressing the Raise Hand icon at the bottom of your screen within the Zoom app. You will need to unmute yourself to ask your question. Also, once unmuted, please tell us your full name and what company you're calling from. First up, we have James Bales.
Thanks for taking my question. I'm calling from Morgan Stanley. I just would like to run through a few things. Firstly, you outlined the launch in Canada in December. How has that initial performance compared to plan, and do you have any timing for future international expansion?
So far, very much on plan. We've seen the increase in ARPPC that we expected. It is very, very fresh, and we're gonna use the next few weeks to process the numbers a little bit more and have a much deeper update at full year earnings in a few weeks in later in the month. In terms of other regions, we're looking at the U.K. much later in the year, and of course, what we learn from Canada is going to inform that process, but early signs are all very promising.
Got it. You spoke again about record subs for a third consecutive quarter, implying, you know, an ongoing improved conversion story. How persistent do you think that increased conversion to paying circles can be?
The conversion increase I'd say is permanent. Clearly, the bigger you grow, then you have more of a drag from the existing user base. Overall, it's continuing to go in the right direction. We think things like Tile and Jiobit are gonna hypercharge that later in the year. We don't have any major product initiatives over the next few months that will necessarily do another step function, but we're confident that the relative ratios of conversion are going to maintain, and it was not just a flash in the pan.
Just to add slightly to that, James. What I'd say is that we're seeing improvements right across the funnel, sort of at top of the funnel all the way through in terms of you know, conversions. Yeah, that's definitely looks very sustainable.
Got it. You guys mentioned the Placer.ai deal. Can you sort of help us understand the impact that we should expect on indirect revenue in FY 2022 as a result?
It essentially should be close to nothing. The overall deal, I can't share specifics, but as we've long shared, the data business has not been a strategic one, and we're essentially replacing a very large number of partners with a single partner, with the exception of Arity, which is gonna continue on the driver side. Net-net, you could imagine it will be very similar to what it was previously from a run rate perspective. There might be a little bit of a transition window where it's noisy either direction, but the overall business is gonna remain steady.
Got it. I guess the last one that I wanted to check, you sort of talked about giving guidance as soon as possible. Do you expect that to be possible at the result in February?
Unlikely it's that soon, given our broader plans which, due to the intricacies of the live, I have to be careful with what we share. It is unfortunately gonna be a little bit longer, because we do have some things in the works that preclude us from doing that without possibly running afoul of different rules. Russell, if you have a better way of describing that, feel free to jump in.
No. Unfortunately, James, that does pretty much describe it. You know, we've talked about our plans in the past and, you know, it will take some time to work through the various processes.
Yeah, we obviously are still gonna give quarterly results and all that. I am very much looking forward to showing that we will be continuing to drive that core growth.
Awesome. Thanks for your help, guys. I appreciate it.
Thank you.
Thanks, James. Up next, we have Chris Savage. Chris, please let us know which company you're calling from.
Thanks. I'm calling from Bell Potter.
Chris.
First one. Good day, Chris. Are you still targeting a U.S. exchange listing by the end of next quarter?
These are the types of questions I unfortunately cannot give you a direct answer on.
Okay. That was easy or quick. Any update on the supply chain constraints for both Tile and Jiobit?
Sure. Jiobit in particular is still choppy and constrained, but was able to get stock towards the end of December. It is. We think we see the light at the end of the tunnel. Tile was able to maintain stock but had to do things like move to single packs versus multi-packs. We couldn't get enough inventory to have five tiles in one package. Instead, focused on having smaller volumes of things that are gonna have higher margins. Obviously, it's higher margins when you only have a single device. There's definitely still a bit of a drag, but we think it is going to be normalized over the year.
The impact continues to be more heavily weighted on Jiobit. I think Tile now sort of see a clear path going forward.
Okay. I appreciate you can't say much around the guidance. I guess one question, not sure, maybe more for Russell. Do you still anticipate giving us a revenue, EBITDA, and AMR-type guidance around key metrics, or do you think there'll be some refinement of that?
We're working through that. As we said, we'll be restricted from giving guidance in the immediate future. Certainly we'll be most likely moving to the sort of traditional revenue and EBITDA guidance.
All right. Thank you.
Up next, we have Julian. Julian, please repeat your name and what company you're calling from.
Julian Mulcahy from Evans & Partners. Just a couple of questions from me. Firstly, yeah, you reported, you know, a much lower loss and, you know.
Julian, it looks like we may have lost you.
Am I back?
Back.
You're back.
The loss was a lot less than expected, and even in your guidance and free cash flow negative was less than you even expected. Was that mainly about timing differences, or you had really conservative guidance from the start?
The primary factor, Julian, was the continuing growth in subscriber revenue and the flow through impact of that. We didn't necessarily raise our marketing spend in the quarter. Most of that spend was online. We probably had slightly less hiring than we originally anticipated, but the biggest impact was the positive flow through from the growth in the top line.
Right. Okay. With the planned Tile offering across the membership plan, can you talk through that, Chris, as to what's likely to be the offering? Is it mainly with the platinum membership, I suppose?
Sure. We're gonna be incorporating Tile and Jiobit across premium SKUs, and we're also gonna have a free user experience where anyone's gonna be able to link a Tile. We're gonna be doing a very heads down integration period for all of H1 bleeding into H2. But the goal is by back to school and definitely for the holiday season, have this much more integrated experience. We'll be able to share a lot more details of what that will look like at the full year next month.
Right. Will that coincide with quite a ramp in the sales spend in terms of advertising?
We're definitely gonna incorporate that as part of our upcoming brand campaigns, and our plan of record is to do something around each back to school because we had such a successful campaign last period. Obviously being able to talk about the value prop in a bigger way, we think is gonna be very impactful.
Cool. Thanks, guys.
You're welcome. Thank you.
Okay. As there are no more questions, I will now hand it back to Chris for some closing remarks.
Well, thank you everyone again for joining. Very much looking forward to our full year earnings next month. Have a great day.