All right, I think we're live. Thanks very much everyone today for joining us. My name's Peter Marks from the Australian research team. I'm very happy today to have the Life360 management team here to chat about the business. Thanks very much for your time.
Happy to.
Thank you. We've got Lauren Antonoff, CEO, and Russell Burke, CFO. Thanks again for your time. In terms of housekeeping, we've got 35 minutes. I am going to ask the first few questions, but we're going to open up the floor to Q&A. If you do have a question, please put your hand up and we'll get a mic to you as soon as we can. With that, Lauren, Russell, maybe we can start quite high level, bit of an introduction to Life360. What do you do? What are the problems that you're solving for customers?
I'll take that. We are the leading family connection and safety app, and the way we rose up was helping families concerned with safety, and we got really outstanding popularity and really well known for families who are having teen drivers, and they were worried. They wanted to make sure that teenagers were safe. What's interesting is that demographic represents about a third of our users. The reality is that all sorts of people in all sorts of family configurations use us because they feel connected to the people that they are close with. People just check. I know I like to check the app and see if my daughter's gotten home from school. I like to just check in before I call. It's a great app for coordination.
The use cases that we see broadly, especially in our 100 million member free user base, are really quite diverse. They anchored on safety, expanded to connection and coordination, and we're expanding from there.
Is there any use case that surprised you as it's developed?
It's full of surprises. I'll talk about some of the stories that have happened in my life in the past year. Actually, I'll do an older one. The thing that brought me to Life360 was something that we didn't do, but it was I had lost my dog, so I was really worried about that. I had researched pet trackers, and they were all short battery life, impractical. They wouldn't really work for a busy exec like me, and it was actually one of those trackers was owned by Life360, and that's what got me interested in the company.
When we set about to make our own, the first pet tracker that we really made as a product, owning the company, we set out to design for regular busy people with a much longer battery life, and when our battery runs out, we still keep it going, still acts like a Tile. So we have that extended battery life. Anyway, the other day, my cat wears one of these trackers. It's kind of too big, I think, for a cat. It was really designed, our first release was designed more with dogs in mind, but I put it on my cat to just see how it worked, and it looked really cute. He's a gray cat, and it's a pink tracker. So I left it on him, and it turns out it's a good thing because he sometimes likes to sneak out the door.
The other day we were going to dinner, and my cat snuck out the door, and we had to rush off, so we left the door open, and we left him outside. I am sitting at dinner, and I get a notification that, "Your cat got home." Which is a really great feeling, and that feeling of everything is okay in the world, that is the feeling that Life360 gives people. That is the thing that brings people back. That is the reason. That feeling is the reason that we have 100 million members coming to us every month and growing. That was one example. Can I keep going?
Please.
I have got a couple of these stories.
You have got it all.
I think these are the greatest stories. Okay, so another one. We recently moved from the Bay Area to Los Angeles, and we left a car up here thinking, "When we are up here, we might want a car." It got stolen. My husband says, "I think I put a Tile in that car." We look, and sure enough, the car is over in Stockton. I do not know if you know where Stockton is, but it is not close to where we live. We told the police, and the police literally were able to go and reclaim our car because we had put a Tile in it. We had put a Tile in it because we were worried about losing the car when we park it, which happens. The benefit is being able to find it when you need it.
And that's, again, the sort of safety net that Life360 has. I will do one more story. Okay. So last one. I'm sitting next to my husband, this is 2 weeks ago, and there's a notification. It's sort of a distinctive alert from my phone. My husband says, "What's that?" I said, "It's a flight landing notification." But our immediate family, my kids and my husband, we knew where they all are. We knew they weren't traveling. So I looked at my phone, and it was my brother, because we have another circle with my brother, and he had just landed in L.A., where I live. And, it turns out he was dropping my niece off at school, and he was just in town for the day, and I said, "Well, let's get together." We were actually able to get together in person.
And so this is one of the things that's so unique about Life360. We're not a platform about being connected digitally. We are a platform about real life and bringing people closer in the real-life world. Then the follow-on of that is the next week I was here for some meetings, and my brother saw the flight landing notification, and he called me and he said, "When are we having coffee?" And we did. So it's just these kinds of delightful stories. Every time I meet somebody, and I tell them I work at Life360, they tell me a story. They want to share how it makes them feel, how it impacts their lives, and most of the stories are great and fun like this. Sometimes the stories are scary or tragic. But it always makes us feel like we're doing really important work.
That's a great overview. Maybe if we can quickly touch on the competitive environment. I guess for those, again, that may not be familiar with the story. Could you just frame it up how you, I guess, see your competitive positioning versus something like Apple's products, and how the company competes with those larger platforms?
Some of the functionality we deliver are things like being able to find a person based on their cell phone's location. It's similar to functionality that you would get in something like Find My, or Tile trackers are similar to AirTags or, there's other pet trackers out there. What's really different is our experience. We have grown to the levels that we've grown to at the same time as Find My's been out there, and most of our users are on iOS. They have the option. They know about Find My. Some of them use Find My. But the use case and the way that we've designed and the set of experiences and services that we have around location tracking are just fundamentally different. Their job is find a device, tell me where that device is. Our job is keeping your family safe and connected.
It produces different experiences. I think maybe the easiest example is location history. From Apple's perspective, history is a liability, right? They don't want to keep that data. They could get into privacy things. For us, it's our job. It's our job to be able to tell you where your family's been so that you can have conversations with your family or just that record. What is a feature for us is something that for them would be a no-fly zone. We continue to be preferred by people who use both as the thing that they check an average of 5 times a day in the U.S., and that's not the way people use Apple services or things like that.
Very helpful. Maybe if we move to subscribers and users, I guess the overall opportunity there. Just to cover off on the U.S., I think 17% of all mobile phone users in the U.S. are now Life360 customers. That feels like a high number to me.
Feels low to me.
Yeah. Well, let's talk about that. Are you seeing any signs of growth slowing down in certain areas or states? Or, on the flip side, is it accelerating as it kind of tracks?
First let's talk about the business a little. The app is free to download. Anybody can download it, anybody can use it, and that's a big part of our motion, is making sure that we're really there broadly. We see ourselves as the number one brand in everyday family life. We want to be there for everybody all the time. Then we monetize it through both subscriptions and now advertising. That's the overall motion. The way that we are best known in the States is that sort of family safety use case. When you talk to people, when I meet people and if they're not Life360 users, they say, "Oh, I don't use it because I don't have teenagers.
I don't have kids." The opportunity for us that we're just breaking into is helping people understand that actually, the majority of our users don't necessarily have teenagers. The majority of users use it in all sorts of different ways. The story with my brother, the story with my car. There's all these use cases that are super valuable to sort of every kind of close circle. We think we're sort of early in that journey, and if you look at the data, we're still growing in the states where we're the most penetrated. Some of the biggest states, we have a lot of room to go in terms of penetration.
We think there's a huge amount of opportunity in the U.S., especially as we add things like our device integration, the work that we're doing around pets, and we're sort of working on a roadmap for aging parents as well.
Super helpful. Just on that, I guess the dispersion in penetration by state, my understanding is you're more penetrated in the more central states and less in the coastal areas. Why is that, and how do you think that'll evolve over time?
It's a little hard to know exactly why sort of history unfolds the way it does. The app was originally conceived as something families might use in an emergency. The Hurricane Katrina story, I think, resonated with early adopters.
There's a lot. We tend to be really popular with places where there's lots of nuclear families, a lot of the traditional families. I think that's where we've gotten an uptake, sort of a higher density of those kinds of families. We're sort of making our way to the coast. We're sort of spreading out from where we got that initial traction.
Yeah.
But I don't think that there's necessarily inhibitors for us growing deeper into other states. We're seeing that growth come along as well. It just got started a little later.
Yeah. I guess probably the last follow-up to that, is there a natural ceiling in terms of penetration? What are the highest areas? How high could it go?
I can't figure out why people wouldn't want Life360. To the extent that, actually, I have a friend, she's on Life360. Her husband, who's also a dear friend, is not. He's like, "Oh, I don't want to be tracked." We think of that kind of use case as a problem that we can go solve. How do we give somebody who is a reluctant, we call them a reluctant sharer, how do we serve them and keep them safe and keep them connected when you need it without maybe being seen all the time? Even those kind of use cases, we think that over time, we can broaden our appeal. Actually, this year, we introduced temporary location sharing, the ability to, if you and I were going to meet up for a drink later, I could just share my location.
You actually don't need to download the app for that. Or if we're going to meet up on a regular basis, I think we could create a circle where the location sharing isn't on all the time. We have to sort of turn it on. We're expanding into those kind of use cases. I think as we sort of look at what actually works for members in our circles and adapt the app to meet those needs, I think the sky's the limit.
Yeah.
I think 17 looks like a very small number to me.
Yeah. Is it almost like a privacy concern that you need to get people past? Is that
Yeah, I think we need to create experiences where people feel like they're in control. There's a lot of people who sort of grew up, especially younger people, who sort of grew up in a world where location sharing was the norm. That's sort of like the easier case as the population ages, as that group gets sort of larger.
That's sort of the easy case. I think where we have to look at how do we create experiences that are a little different are that aging parent generation. You can tell your kid, "Hey, if you're going to take the car, I want you on this app." But you can't tell your mom that. As we're getting to aging, one concern we hear is, "I don't want to be treated like a kid. I can take care of myself." But they do kind of want to be plugged into what's going on in the family, and they do want somebody there in case of emergency. How do we create experiences that thread that needle, that give that connection without you having to know every time I stop by and get a burger at that place? We are working on experiences that thread that needle.
Super helpful. I'm going to ask about recent trends, but before I do that, I'll just flag that I will ask if there's any questions from the audience after this. Just put your hand up if you do have one, we'll get a mic to you. Yeah, can we talk about recent trends?
Sure.
Obviously very topical recently. Can you comment on what you're seeing in the third quarter, or if there's anything you would call out in terms of back to school or anything you've tried differently in terms of growing subscribers and users?
Yeah. Back to school is always an exciting time for us. It is the time historically when we do see a lot of growth. We left Q2 feeling like we were on the glide path that we had set out, and the initiatives and the motions we set out in Q2 are going well. I do not know if there is anything more that we want to
Yeah. I think we talked at Q2 about how we had moved through the technical difficulties that we had early in the year, where that trajectory was very much in evidence at the end of Q2. That gives us a lot of confidence in terms of how we are moving towards the rest of the year and the stated goals and targets that we have. I think everything that we are seeing works to that, whether it is the product initiatives that are rolling out or international expansion. All of those contribute to that accelerated growth.
Okay. Is it worth covering off on the technical issues and how you have, I guess, fixed those?
Yeah, I can speak to that. Around the beginning of the year, we uncovered a break in the funnel where users, especially on lower-end devices early in their journey. We have extensive monitoring when you are using the app, and we have good monitoring on our marketing funnel. But in between when people have decided to get the app, before they are fully registered and set up, there was a gap in monitoring, and there had been one was an edge monitoring technology where some traffic was not getting through. There was another couple of problems in that early usage place that was putting an anchor on growth a little. What we have done is put great end-to-end funnel marketing in place to make sure that that never happens again, and we fixed the problems that we found.
That was a very sort of tactical short-term blip that put us a little behind where we wanted to be for the year, but that didn't change the trajectory.
That's super helpful. I might just check if there are any questions in the room. We've got
Yeah, hi. Can you talk about monetization, how you get free users to subscribe, and advertising?
Yeah. We have these two monetization engines. We both have free users that choose to convert, and the conversion pattern there is about a third of members will convert when they sign up. They sort of see the value props, and we suggest that they might want to. We see some conversion there. Another set of people convert sometime in that first year. They get to know the app, they try it out, and they decide to convert. The third set of users is any time over the long tail of usage. We do see members that convert after being a member for 3 years, then they'll convert. We also see members that will convert, stay members for a while. When they churn, they churn back to free, and then sometimes they subscribe again. We do see some of that behavior as well.
A couple of years ago, we recognized that in addition to the percentage that do convert, that we have a huge base of members that are getting a lot of value from us. They love us a lot, and it costs a lot to serve them. We know a lot about them. That really made the advertising business feel like a good value exchange, where we could continue to invest in giving the service for free, especially as we expand around the world, and monetize it through ads. We started very innocently on an ad journey where we just didn't know a lot about the business. We've learned a lot and come a long way.
As we grew, we made the decision to buy a technology platform to help us accelerate that business, and that is now integrated and going well.
Got plenty of questions on that. I think we have another one at the back of the room, if we could get a mic.
Hi. Thank you for taking my question. It's more concerned about the technology of the trackers, the one that you mentioned which you use for your pet. Does it function the same way as Find My does, where it connects to devices that are nearby and then spreads the signal, or is it direct to satellite?
We have two kinds of trackers. We have Tile trackers, and we have the Life360 Pet GPS. The Tile tracker works like Apple's AirTags. It uses Bluetooth, and it advertises. The device says, "I'm here, I'm here, I'm here." When a phone walks by that has our technology on it, the 100 million people that are using us, when one of those people walks by, then we know it's there, and we show it. That's how the Tile trackers work. The Life360 Pet GPS is a GPS-based product that talks directly to cell phones. You don't need a phone nearby. It's real-time, so it's very different than a Bluetooth experience. I say it's like having a cell phone taped to your dog. Now your dog can text you. That's not exactly true, but we introduced a feature called Zoomies Alerts.
Do you know what zoomies are? The people have pets. Zoomies are when your dog runs crazily back and forth. It's really cute and runs around. We do location tracking. We can see that kind of movement. We decided it would be really cute when your dog is full of joy and excited to create an alert where you see that on your phone, and it's a delightful experience. It's super fun to know when your dog is freaking out and excited. Yeah.
What's the battery life, and then what's the replacement cycle, usually for these pet trackers or pet GPS?
I heard the battery life question. What was the second question?
What is the replacement cycle? Is it a rechargeable battery or is it a replaceable battery?
Yeah. The battery life depends on the more that you are indoors, the longer the battery life. The more that you are on Wi-Fi or things like that, we use tactics to reduce battery usage. Battery life tends to be about 1 week-2 weeks, depending on your usage profile. The battery is rechargeable with a USB-C charger.
All right. Thank you.
Can you talk about the service tiers? I think you have a Gold and Platinum if I am not-
And Platinum
mistaken.
Yep.
And what services you offer there, and what is the roadmap for additional services you can offer over the next 2 years- 3 years?
Great. So we have three tiers: Silver, Gold, and Platinum. They are priced about $20 between tiers, something like-
Yeah. Yep
on a monthly basis. Typically, historically, we really have focused on one tier at a time. For a long time we were mostly selling Gold, if somebody really was excited about getting the best, they could go to Platinum, or if somebody wanted a little bit less service. The big difference between Silver and the top two tiers is that the top two tiers have real-life services. So they have things like emergency response, where we will send out actual ambulances and things like that, and roadside towing. If you are familiar with AAA or things like that is included in our Gold and Silver tiers. The difference between Gold and Silver tends to be how much of that you get, more towing or things like that.
What is exciting is that recently we have gotten a lot more sophisticated in the use of our tiers, I think that the story around Life360 Pet GPS is emblematic at that. In the beginning, we said, "Well, this is high value, so we should put it in our Gold and Silver tiers." That is how we rolled it out initially when we introduced the Pet Tracker a year ago. What we have found is two things. One, we are excited about this, we wanted to have more scale, so we are interested in the lower price, so that made us interested in Silver. More importantly, the kind of services that we offered in Gold and Silver were really designed for that first audience I talked about, those families with teens, so there is a lot in there around roadside assistance and driving and those kinds of things.
A lot of the people who are interested, a lot of the members who are interested in the Pet Tracker, they do not have families yet. So those kind of services feel like overkill to them. They feel like, "Ugh, I do not want to pay for all that because that is not what I need." They do not have the same anxieties as the people who were subscribing to Gold. So by pulling the Pet Tracker into the Silver tier, we make that tier really about people who are getting started. It is not about it is in real life versus not in real life. This is for smaller families, people who have a more narrow set of concerns, and the Pet Tracker is sort of the high-value feature that is in the Silver tier. As you step up, you get more of those sort of bigger family services.
Over time, we are working on, we talk about expanding to serve more members in more life stages. For example, more services for families with parents who are aging. They are worried about the same kind of worries they have about their kids they are now having about mom and dad. But the kind of services those people need are different, whether it is scam protection, or door knocking in the case that you do not get somebody showing up at the door, like a wellness check. So we are looking at a wide variety of services, we are getting smarter about using the tiers to really speak to more distinct audiences. Do you want to add something?
I will just add to that. Lauren talked about your Gold being historically the primary landing point, essentially. The other flip side almost of putting people in Silver with Life360 Pet GPS is we are just getting better at optimizing the funnel and using AI tools to identify people as they come through the funnel. So we can identify people who are more likely to want the services that are part of Platinum, for example. So we are just getting more sophisticated that way.
Yeah, it is a really good point. People ask how are you using AI in your org, and we are now using it for everything. It seems like a year ago people were like, "I do not want that," and now people are like, "Don't take it away." But one of the things that has had the biggest impact in the organization is using it to optimize what members we talk to what experiences about. So when you are driving free to pay conversion, the key thing is that you have to get the right value points, and you have to let people know what they are paying for.
But not everybody cares about the same thing, and when you just give a standard list of all the features, if the first 2 features or 3 features that you show aren't a fit for me, then I am not reading the rest. I am not studying this. And so what this does is let us speak to people about very specific services that we believe, based on the data, the profile that we have of them, that are the most likely to convert them. And the AI is able to test a lot of these micro tests of what kind of things work for which people and make these continuous optimizations. And that is one of the reasons that our core business is performing extraordinarily. Record subscription growth in Q2.
That is great. Maybe we can touch on international users and then go to advertising and pets with the time we have left. Can we just briefly touch on international? Where are you strongest at the moment? Where is the biggest opportunity? Anything else you wanted to talk about in the international side of things?
You're looking at him. You want a chance to talk? You want me to talk?
No, you should go.
Okay. Internationally, it's a huge opportunity. We're much more deeply penetrated in the U.S. than we are in international regions. Frankly, the product was really designed by us in the United States, so the countries that look more like the U.S. have adoption profiles that look more like the U.S. Outside the U.S., we have work to do, I think, to really understand and tailor the app to fit those places. If you look at the Anglo countries, Australia, I think, is the closest to the U.S. in terms of its sort of performance profile. What we've built resonates and sort of has similar profile in those regions. What we're excited about is we're starting to go deep in other markets. In particular, this year, we've been focused on Mexico, Brazil, and Germany, and really understanding what's different.
There's two classes of differences. One that's become very evident is that the device profiles are different. There are different carriers, there's different phone makers, there's different networks. That means that we have to adapt the strategies. The battery profiles and the way that we use battery in the U.S. or in Australia doesn't necessarily work for a phone in Mexico or Brazil. We're learning about those differences and thinking about how might the app have to change to accommodate those. The other is that if you think about our core services, even things like safety, driving safety is a big deal in the U.S. Apparently, it's a big deal in Australia. It's not the thing that people are worried about in Brazil. Personal safety when I'm walking from here to there, is a bigger concern.
We are sort of working on developing these experiences that speak directly to it. We have just introduced an experience specifically for Latin America. It is called Watch Over Me, which is just a way of sort of notifying somebody and say, "Keep your eyes on me while I am going from here to there." That sort of plug-in to local markets to understand what those local needs are and how we serve them better is sort of key to our international strategy.
From a financial point of view, I think the one thing that has been really interesting and exciting for us just in the last 12 months is realizing that in a country like Brazil, there is a significant piece of the population that is more than happy to subscribe. They will form a really good paid subscriber base. The balance of the country, or that population, we now have advertising as a tool to create that ad-supported service as well. It gives us that complete comprehensive coverage.
I think that is a good segue. We need to speak about advertising. It feels like a big opportunity. I think you have launched 2 years ago now, advertising?
I think we started about then.
Yeah. You purchased Nativo just under a year ago. What have you learned, I guess, as you've done that?
When we first started advertising, it actually came from someone in the team who sort of said, "Hey, wouldn't it be great?" He showed a little presentation showing, like, what if when you walk into McDonald's, you could see an ad? We were like, "How would we do that? That seems crazy." Anyway, we sort of carved off a little bit of budget and told our chief revenue officer, "See what you can do." That's how we started, and it was really figuring it out as we went. We started working with Google Ad Manager, or one of the Google services. We didn't know a lot. What we saw is there was definite demand. We could make a good experience. We started to figure out what we didn't know. We got smarter about what we didn't know.
For instance, advertisers really want to know how their ads perform, and we just hadn't thought about, well, how are we going to tell that story? There was a lot to do. The further we got, we started doing direct deals. We hired a couple of salespeople, not very many. We found we didn't have enough reach in terms of our sales team to be able to talk to all the people that we needed to talk to. Advertisers want to start small and see how it goes, and we weren't really prepared for what I would now call the normal advertising life cycle. Then there's a lot of platform and tools that you use to support ad deals to be able to do things like measure performance and give reports to customers, and we didn't have that either.
As we got bigger, it became clear there was a lot of work to do, and that's when we made the decision to buy Nativo, which was a really great fit for us because not only did they have the platform, they were designed sort of around customer experience. Nativo, the name Nativo comes from a reference to native ads that are designed to fit into the publishing experience they appear in. They had relationships because of that with all sorts of these really high-quality publishers, leading magazines, all sorts of really great places where advertisers want to reach. We can put our data, our audience, our understanding of customers together with their tools and this reach and platform they have and the sales team, and that is a really great fit.
Yeah.
Our core subscription business is a very high-margin business, is performing extremely well. That gives us the scope to invest a little more in some of these growth businesses where the margin is building over time and the overall business is starting to build. The end result gives us that longer-term opportunity that is really going to help grow the company overall.
That is great. I wanted to ask you about, I think you have spoken in the past about QSR opportunities in particular, and I think you have been talking about a recent grocery example as well. Can you talk about those and then perhaps we will, with the time we have got left, we better go to pet as well.
Yeah. The exciting thing about being a location platform is you can tell an advertiser did their ad move a human to where they wanted them to go? Did they actually physically get up and go there, and in what time frame? This is a great fit for fast food, for the kinds of businesses that really care about foot traffic. We did work, we talked about this in our Q2 earnings. We worked with a grocery store that wanted to bring people in at the times that they cared about, and were able to get outstanding results. They put us up against some other kinds of technology and found that we trumped the competition.
Super interesting. Maybe we will go to pets. Again, I think this is a pretty recent launch. How has your go-to market changed, I guess, since you launched? Again, what have been the key learnings so far?
Yeah. When we first introduced the pet tracker, we think that there's a lot of opportunity here, but it's a market that isn't well-established. It's still an early market in general. We wanted to sort of get the word out, so we introduced the device as sort of a low-price device. But it requires a subscription. What we found is that people were excited to get the device, but then they would think about like, "Okay, well, am I really ready to do the subscription now?" That wasn't great for building momentum in our business.
People sometimes felt like, "Well, I didn't really think about how much this would cost me over time." What we did, we actually had a period of time where we decided, because of tariffs, to move our manufacturing, so we had a time where we had kind of a fixed level of inventory. We decided to use it for a lot of price testing, and to really understand the sort of customer psychology and how people think about whether or not to buy this kind of device, and is it worth it to them. What we've found is that bundling the device with a subscription gives us that, sort of sets the expectation right for the member, and for our business, a lot easier to manage. That bringing the price down to Silver opens that up to a lot more families.
We have changed it from a buy the device and then buy the subscription to a bundled deal. Now, when you buy the device, the device costs $99 and comes with a free subscription to Silver for a year. So, if you already are a member and you're already paying for it, you just pay for the device. But if you're not a member, we get you on board with Silver. If you want to upgrade, you can upgrade.
It reflects our strategy, which is the device is an acquisition tool for subscription. Everything that we do here is about enhancing the subscription experience for our members.
Super helpful. Got one minute left. I might ask, longer term, new product development. I think, beyond pet, I think you've got elderly care offerings as well. Are there any other obvious capabilities that you think you might like to add to the platform in the longer term?
That's sort of like an unlimited question.
Yeah.
I think what's so exciting-
Got 30 seconds.
What's so exciting about the platform is that the things that are important to people in their everyday family life are fairly unlimited. We've built a tremendous amount of trust and resonance with families, and our job is to figure out how we serve those customers better and better in more places around the world. We talk about more members in more life stages in more of the moments that matter.
All right. We might leave it there. Thank you very much, Lauren, Russell. Please join me in thanking the Life360 team. Appreciate it.