Life360, Inc. 10-Q

Item 1. Financial Statements (unaudited) 1 Table of Contents Life360, Inc. Condensed Consolidated Balance Sheets (Dollars in U.S. $, in thousands, except share and per share data) (unaudited) March 31, 2025 December 31, 2024 Assets Current Assets: Cash and cash equivalents $ 168,852 $ 159,238 Accounts receivable, net (including related party receivables of $ 0 and $ 55 , respectively) 52,009 57,997 Inventory 9,571 8,057 Costs capitalized to obtain contracts, net 1,178 1,098 Prepaid expenses and other current assets 18,499 14,599 Total current assets 250,109 240,989 Restricted cash, noncurrent 1,503 1,221 Property and equipment, net 2,598 1,779 Costs capitalized to obtain contracts, noncurrent 1,000 1,049 Prepaid expenses and other assets, noncurrent 21,951 21,611 Operating lease right-of-use asset 598 683 Intangible assets, net 43,044 40,574 Goodwill 134,619 133,674 Total Assets $ 455,422 $ 441,580 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable $ 5,212 $ 5,463 Accrued expenses and other current liabilities 27,065 32,015 Deferred revenue, current 41,757 39,860 Total current liabilities 74,034 77,338 Deferred revenue, noncurrent 4,845 5,338 Other liabilities, noncurrent 263 359 Total Liabilities $ 79,142 $ 83,035 Commitments and Contingencies (Note 8) Stockholders’ Equity Common Stock, $ 0.001 par value; 500,000,000 authorized as of March 31, 2025 and December 31, 2024, respectively; 76,418,660 and 75,404,996 issued and outstanding as of March 31, 2025 and December 31, 2024, respectively 76 75 Additional paid-in capital 661,479 648,124 Accumulated deficit ( 285,320 ) ( 289,698 ) Accumulated other comprehensive income 45 44 Total stockholders’ equity 376,280 358,545 Total Liabilities and Stockholders’ Equity $ 455,422 $ 441,580 See accompanying notes to the condensed consolidated financial statements (unaudited). 2 Table of Contents Life360, Inc. Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Dollars in U.S. $, in thousands, except share and per share data) (unaudited) Three Months Ended March 31, 2025 2024 Subscription revenue $ 81,874 $ 61,579 Hardware revenue 8,907 10,188 Other revenue (including related party revenue of $ 292 and $ 0 , respectively) 12,843 6,460 Total revenue 103,624 78,227 Cost of subscription revenue 10,141 9,315 Cost of hardware revenue 8,597 8,012 Cost of other revenue 1,337 887 Total cost of revenue 20,075 18,214 Gross profit 83,549 60,013 Operating expenses: Research and development 30,403 27,258 Sales and marketing 35,308 24,733 General and administrative 15,649 14,401 Total operating expenses 81,360 66,392 Income (loss) from operations 2,189 ( 6,379 ) Other income (expense): Convertible notes fair value adjustment — ( 608 ) Derivative liability fair value adjustment — ( 1,707 ) Other income, net 1,975 311 Total other income (expense), net 1,975 ( 2,004 ) Income (loss) before income taxes 4,164 ( 8,383 ) Provision for (benefit from) income taxes ( 214 ) 1,394 Net income (loss) $ 4,378 $ ( 9,777 ) Net income (loss) per share, basic (Note 14) $ 0.06 $ ( 0.14 ) Net income (loss) per share, diluted (Note 14) $ 0.05 $ ( 0.14 ) Weighted-average shares used in computing net income (loss) per share, basic (Note 14) 75,699,493 68,535,626 Weighted-average shares used in computing net income (loss) per share, diluted (Note 14) 83,445,337 68,535,626 Comprehensive income (loss) Net income (loss) $ 4,378 $ ( 9,777 ) Change in foreign currency translation adjustment 1 1 Total comprehensive income (loss) $ 4,379 $ ( 9,776 ) See accompanying notes to the condensed consolidated financial statements (unaudited). 3 Table of Contents Life360, Inc. Condensed Consolidated Statements of Stockholders’ Equity (Dollars in U.S. $, in thousands, except share and per share data) (unaudited) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders’ Equity Shares Amount Balance at December 31, 2024 75,404,996 $ 75 $ 648,124 $ ( 289,698 ) $ 44 $ 358,545 Exercise of stock options 346,874 — 3,039 — — 3,039 Vesting of restricted stock units 644,538 1 ( 1 ) — — — Taxes paid related to the settlement of equity awards, net of settlement proceeds received — — ( 856 ) — — ( 856 ) Stock-based compensation expense — — 10,173 — — 10,173 Shares issued in connection with an acquisition 22,252 — 1,000 — — 1,000 Change in foreign currency translation adjustment — — — — 1 1 Net income — — — 4,378 — 4,378 Balance at March 31, 2025 76,418,660 76 661,479 ( 285,320 ) 45 376,280 Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders’ Equity Shares Amount Balance at December 31, 2023 68,155,830 $ 70 $ 532,128 $ ( 285,143 ) $ 9 $ 247,064 Exercise of stock options 277,309 — 2,307 — — 2,307 Exercise of warrants 41,685 — 94 — — 94 Vesting of restricted stock units 965,238 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, 2024 69,440,062 $ 71 $ 534,679 $ ( 294,920 ) $ 10 $ 239,840 See accompanying notes to the condensed consolidated financial statements (unaudited). 4 Table of Contents Life360, Inc. Condensed Consolidated Statements of Cash Flows (Dollars in U.S. $, in thousands) (unaudited) Three Months Ended March 31, 2025 2024 Cash Flows from Operating Activities: Net income (loss) $ 4,378 $ ( 9,777 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 2,862 2,295 Amortization of costs capitalized to obtain contracts 283 341 Amortization of operating lease right-of-use asset 84 81 Stock-based compensation expense, net of amounts capitalized 9,889 8,261 Non-cash interest expense, net — 128 Convertible notes fair value adjustment — 608 Derivative liability fair value adjustment — 1,707 Non-cash revenue from investments ( 367 ) ( 446 ) Provision for credit losses 339 — Changes in operating assets and liabilities, net of acquisition: Accounts receivable, net 5,648 5,144 Prepaid expenses and other assets ( 4,238 ) 3,272 Inventory ( 1,514 ) ( 2,239 ) Costs capitalized to obtain contracts, net ( 314 ) ( 398 ) Accounts payable ( 139 ) 3,492 Accrued expenses and other current liabilities ( 6,526 ) ( 3,073 ) Deferred revenue 1,771 1,381 Other liabilities, noncurrent ( 96 ) ( 89 ) Net cash provided by operating activities 12,060 10,688 Cash Flows from Investing Activities: Cash paid for acquisition ( 2,825 ) — Internally developed software ( 1,398 ) ( 1,089 ) Purchase of property and equipment ( 124 ) — Net cash used in investing activities ( 4,347 ) ( 1,089 ) Cash Flows from Financing Activities: Proceeds related to tax withholdings on restricted stock settlements and the exercise of stock options and warrants 12,770 2,401 Taxes paid related to net settlement of equity awards ( 10,587 ) ( 8,110 ) Net cash provided by (used in) financing activities 2,183 ( 5,709 ) Net Increase in Cash, Cash Equivalents, and Restricted Cash 9,896 3,890 Cash, Cash Equivalents and Restricted Cash at the Beginning of the Period 160,459 70,713 Cash, Cash Equivalents, and Restricted Cash at the End of the Period $ 170,355 $ 74,603 Supplemental disclosure: Cash paid during the period for taxes $ — $ 56 Cash paid during the period for interest — — Cash payments included in the measurement of operating lease liabilities 97 94 Non-cash investing and financing activities: Fair value of stock issued in connection with acquisition 1,000 — Property and equipment included within accrued expenses and other current liabilities 901 — Stock-based compensation included in internally developed software 284 — 5 Table of Contents Life360, Inc. The following table presents the cash, cash equivalents, and restricted cash reported within the condensed consolidated statements of cash flows shown above: March 31, 2025 March 31, 2024 Cash and cash equivalents $ 168,852 $ 73,401 Restricted cash, noncurrent 1,503 1,202 Total cash and cash equivalents, and restricted cash $ 170,355 $ 74,603 See accompanying notes to the condensed consolidated financial statements (unaudited). 6 Table of Contents 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 additional membership subscription options that are available but not required. In addition to the Life360 mobile application, the Company also offers hardware tracking devices through the sale of Tile, Inc. (“Tile”) and Jio, Inc. (“Jiobit”) products to keep members close to the people, pets and things they care about most. 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 its members, regardless of the devices they use. U.S. Initial Public Offering (“U.S. IPO”) On June 6, 2024, the Company completed its U.S. IPO and began trading on the Nasdaq Global Select Market under the trading symbol “LIF”. The Company issued and sold 3,703,704 shares of common stock and certain selling securityholders sold 2,908,796 shares of common stock (including 862,500 shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares) in each case at an offering price of $ 27.00 per share. The Company received net proceeds of $ 93.0 million after deducting underwriting discounts and commissions of $ 7.0 million. An additional $ 5.5 million of expenses were paid on behalf of selling securityholders. The Company did not receive any proceeds from the sale of shares of common stock by the selling securityholders. In connection with the U.S. IPO, the Company restated its certificate of incorporation to increase the authorized number of shares of its common stock from 100,000,000 shares to 500,000,000 shares. 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 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 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, 2024, 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. 7 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 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; • allowance for credit losses and product returns; • promotional and marketing allowances; • inventory valuation; • average useful customer life; • valuation of stock-based awards; • achievement of performance-based restricted stock units (“PRSUs”); • legal contingencies; • impairment of long-lived assets and goodwill; • valuation of non-cash consideration, contingent consideration, 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 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses . The ASU requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. The ASU is effective for the Company beginning in fiscal year 2027 and interim periods beginning in fiscal year 2028, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures. 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. Concentrations of Risk and Significant Customers Major Customers The Company’s customers primarily consist of individual consumers, who subscribe to the Company’s product offerings through its third-party platforms (each a “Channel Partner”), data revenue customers, and retail partners, who purchase hardware tracking devices from the Company and resell them directly to individual consumers. Any changes in customer preferences and trends or changes in terms of use of Channel Partners’ platforms could have an adverse impact on the Company’s results of operations and financial condition. 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. 8 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) The following tables set forth the information about the Company’s Channel Partners 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, 2025 2024 Channel Partner (Apple) 56 % 57 % Channel Partner (Google) 19 % 18 % Percentage of Gross Accounts Receivable As of March 31, As of December 31, 2025 2024 Channel Partner (Apple) 59 % * Channel Partner (Google) 12 % 49 % Data Partner A 10 % 11 % Retail Partner A 10 % 17 % * Represents less than 10% Supplier Concentration The Company currently outsources the manufacturing of its hardware devices to a sole contract manufacturer. Although there are a limited number of manufacturers, management believes that other suppliers could provide similar manufacturing 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 $ 1.5 million and $ 1.2 million as of March 31, 2025 and December 31, 2024, 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 one operating segment. Operating segments are defined as components of an entity for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates financial information and resources and assesses the performance of these resources on a consolidated basis. There is no expense or asset information that is supplemental to information disclosed within the condensed consolidated financial statements, that is regularly provided to the CODM. The allocation of resources and assessment of performance of the operating segment is based on consolidated net income (loss) and functional expenses as reported on our condensed consolidated statements of operations and comprehensive income (loss). Because the Company operates as one operating segment, financial segment information, including expense and asset information, can be found in the condensed consolidated financial statements. All material long-lived assets are based in the United States. 9 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) Revenue by geography 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, 2025 2024 North America $ 91,385 $ 70,316 Europe, Middle East and Africa 6,557 4,633 Other international regions 5,682 3,278 Total revenue $ 103,624 $ 78,227 The Company’s revenues in the United States were $ 89.3 million, or 86 %, of total revenue for the three months ended March 31, 2025 and $ 68.9 million, or 88 %, of total revenue for the three months ended March 31, 2024. 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, 2025, the Company recognized revenue of $ 23.0 million that was included in the deferred revenue balance at December 31, 2024. During the three months ended March 31, 2024, the Company recognized revenue of $ 18.4 million that was included in the deferred revenue balance at December 31, 2023. 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 in connection with remaining performance obligations was $ 215.0 million as of March 31, 2025, of which the Company expects 39 % to be recognized over the next twelve months . 5. 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. 10 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 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, 2025 and December 31, 2024 are classified as follows (in thousands): As of March 31, 2025 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 135,377 $ — $ — $ 135,377 Total assets $ 135,377 $ — $ — $ 135,377 As of December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 133,959 $ — $ — $ 133,959 Total assets $ 133,959 $ — $ — $ 133,959 The change in fair value of the Level 3 instruments were as follows (in thousands): As of December 31, 2024 Derivative liability Convertible notes Fair value, beginning of the year $ 217 $ 3,449 Changes in fair value 1,707 608 Settlement of September 2021 Convertible Notes upon conversion — ( 3,548 ) Gain on settlement of September 2021 Convertible Notes — ( 509 ) Gain on settlement of derivative liability $ ( 1,924 ) $ — Fair value, end of period $ — $ — For the three months ended March 31, 2025, the Company recorded no gain or loss associated with the change in fair value of the derivative liability and convertible notes. 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. The amounts have been recorded in other income (expense), net in the condensed consolidated statements of operations and comprehensive income (loss). 6. Business Combinations On February 27, 2025, the Company entered into an Asset Purchase Agreement with Fantix, Inc., to purchase certain assets of Fantix, Inc. for total consideration of $ 4.5 million, consisting of $ 3.5 million in cash and $ 1.0 million in common stock. Of the $ 3.5 million in cash consideration, $ 2.8 million was paid at closing and $ 0.7 million, which is payable one year from the closing date, has been recorded in accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheet. The transaction has been accounted for as a business combination. The Company also recorded $ 3.6 million to intangible assets, net and $ 0.9 million to goodwill. Goodwill represents the excess of the purchase price over the fair value of net assets acquired and reflects benefits from assets not individually identifiable, including anticipated synergies and growth opportunities. The goodwill is not deductible for tax purposes. The Company has not presented the pro forma results of operations for the acquisition as the impact is not material to the Company’s condensed consolidated results of operations. 11 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 7. Balance Sheet Components Accounts receivable, net Accounts receivable, net consists of the following (in thousands): As of March 31, As of December 31, 2025 2024 Accounts receivable $ 52,766 $ 58,391 Allowance for credit losses ( 757 ) ( 394 ) Total accounts receivable, net $ 52,009 $ 57,997 Accounts receivable, net is presented net of the allowance for credit losses, which represents management’s estimate of expected credit losses based on historical trends, current economic conditions, and other relevant factors as of March 31, 2025 and December 31, 2024, respectively. Inventory Inventory consists of the following (in thousands): As of March 31, As of December 31, 2025 2024 Raw materials $ 67 $ 24 Finished goods 9,504 8,033 Total inventory $ 9,571 $ 8,057 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, 2025 2024 Prepaid expenses $ 14,972 $ 11,074 Other receivables 3,527 3,525 Total prepaid expenses and other current assets $ 18,499 $ 14,599 Prepaid expenses primarily consist of certain cloud platform costs, customer service program costs and prepaid advertising. Other receivables primarily consist of freight, refunds owed to the Company and other amounts which the Company is expected to receive in less than twelve months. 12 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) Property and Equipment, net Property and equipment, net consists of the following (in thousands): As of March 31, As of December 31, 2025 2024 Computer equipment $ 297 $ 297 Leasehold improvements 86 101 Production manufacturing equipment 2,038 2,026 Construction in progress 1,263 362 Furniture and fixtures 29 29 Total property and equipment, gross 3,713 2,815 Less: accumulated depreciation ( 1,115 ) ( 1,036 ) Total property and equipment, net $ 2,598 $ 1,779 Construction in progress relates to certain costs incurred with production manufacturing equipment. Depreciation expense was $ 95 thousand and $ 46 thousand for the three months ended March 31, 2025 and 2024, respectively. There was no impairment of property and equipment or long-lived assets recognized during the three months ended March 31, 2025 or 2024. 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, 2025 2024 Prepaid expenses, noncurrent $ 2,189 $ 1,849 Investments 19,762 19,762 Total prepaid expenses and other assets, noncurrent $ 21,951 $ 21,611 Prepaid expenses, noncurrent primarily consist of cloud platform costs as of March 31, 2025 and December 31, 2024. Investments relate to a warrant to purchase shares of preferred stock of a current Data Revenue Partner, a warrant to purchase shares of common stock of a current Related Party (the “Related Party Warrant”), and a Simple Agreement for Future Equity with a related party (the “Related Party SAFE”) as of March 31, 2025 and December 31, 2024. Refer to Note 13, "Related-Party Transactions" for additional information. Leases The Company leases office space under a non-cancelable operating lease with a remaining lease term of 1.7 years, which includes the option to extend the lease. The Company did not have any finance leases as of March 31, 2025 or December 31, 2024. The components of lease expense are as follows (in thousands): Three Months Ended March 31, 2025 2024 Operating lease cost (1) $ 118 $ 110 (1) Amounts include short-term leases, which are immaterial. 13 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) Supplemental balance sheet information related to leases is as follows (in thousands, except lease term): As of March 31, As of December 31, 2025 2024 Operating lease right-of-use asset $ 598 $ 683 Operating lease liability, current (included in accrued expenses and other current liabilities) 371 364 Operating lease liability, noncurrent (included in other liabilities, noncurrent) 263 359 Weighted-average remaining term for operating lease (in years) 1.7 1.9 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, 2025 were as follows (in thousands): Operating leases Remainder of 2025 $ 293 2026 367 Total future minimum lease payments 660 Less imputed interest ( 26 ) Total operating lease liability $ 634 Goodwill and Intangible Assets, net Intangible assets, net consists of the fol lowing (in thousands): As of March 31, 2025 Gross Accumulated Amortization Net Trade name $ 23,380 $ ( 7,684 ) $ 15,696 Technology 25,985 ( 14,858 ) 11,127 Customer relationships 15,290 ( 6,140 ) 9,150 Internally developed software 8,757 ( 1,686 ) 7,071 Total $ 73,412 $ ( 30,368 ) $ 43,044 As of December 31, 2024 Gross Accumulated Amortization Net Trade name $ 23,380 $ ( 7,100 ) $ 16,280 Technology 22,430 ( 13,677 ) 8,753 Customer relationships 15,290 ( 5,668 ) 9,622 Internally developed software 7,076 ( 1,157 ) 5,919 Total $ 68,176 $ ( 27,602 ) $ 40,574 For the three months ended March 31, 2025 and 2024, the Company capitalized $ 1.7 million and $ 1.1 million, respectively, in internally developed software. For the three months ended March 31, 2025 and 2024, amortization expense was $ 2.8 million and $ 2.2 million, respectively. During the three months ended March 31, 2025 and 2024, there was no impairment of intangible assets recorded. 14 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) As of March 31, 2025, the estimated remaining amortization expense for intangible assets by fiscal year is as follows (in thousands): Amount Remainder of 2025 $ 8,804 2026 11,324 2027 6,609 2028 5,014 2029 4,935 Thereafter 4,898 Total future amortization expense 41,584 Internally developed software not yet in service 1,460 Total $ 43,044 The weighted-average remaining useful lives of the Company’s acquired intangible assets, excluding internally developed software projects that were not yet in service, are as follows: Weighted-Average Remaining Useful Life As of March 31, As of December 31, 2025 2024 Trade name 6.7 years 7.0 years Technology 2.7 years 1.9 years Customer relationships 4.9 years 5.1 years Internally developed software 2.5 years 2.6 years As of March 31, 2025 and December 31, 2024, goodwill was $ 134.6 million and $ 133.7 million, respectively. Goodwill increased $ 0.9 million in connection with the Fantix, Inc. acquisition. Refer to Note 6, "Business Combinations" for additional information. No goodwill impairment was recorded during the three months ended March 31, 2025 or 2024. 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, 2025 2024 Accrued vendor expenses $ 14,298 $ 13,856 Accrued compensation 5,566 3,834 Customer related promotions and discounts 3,337 9,761 Sales return reserves 1,823 2,817 Other current liabilities 2,041 1,747 Total accrued expenses and other current liabilities $ 27,065 $ 32,015 As of March 31, 2025, other current liabilities primarily relate to the Company’s operating lease liability, sales taxes payable, and a deferred purchase price liability related to the Fantix, Inc. acquisition. As of December 31, 2024, other current liabilities primarily relate to the Company’s operating lease liability and sales taxes payable. 15 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 8. Commitments and Contingencies Purchase Commitments The Company has contractual commitments with our cloud platform provider and contract manufacturer that are non-cancellable. As of March 31, 2025, future non-cancellable commitments under these arrangements were as follows (in thousands): Amount Remainder of 2025 $ 25,242 2026 25,500 2027 26,000 Total purchase commitments $ 76,742 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. 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 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 any such 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 reasonably possible but not estimable, and as a result, no litigation reserve has been recorded on our condensed consolidated balance sheet as of March 31, 2025. On August 14, 2023, plaintiffs Stephanie Ireland-Gordy and Shannon Ireland-Gordy filed a putative class action lawsuit against Tile, Life360, and Amazon.com, Inc. in the U.S. District Court for the Northern District of California. An amended complaint was filed on April 26, 2024, adding named plaintiffs Melissa Broad and Jane Doe. Plaintiffs allege that Tile trackers were used by third parties to monitor their movements without their consent, and assert product liability and other claims. At this time, a loss is not probable nor estimable, and as a result, no legal accrual has been recorded on our consolidated balance sheets as of March 31, 2025. No litigation reserve was recorded on our condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024, respectively. 16 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 9. Common Stock The Company has the following potentially outstanding common stock reserved for issuance: As of March 31, As of December 31, 2025 2024 Issuances under stock incentive plan, stock options 5,326,260 5,673,947 Issuances upon exercise of common stock warrants 7,761 7,761 Issuances upon vesting of restricted stock units 4,465,914 5,091,601 Shares reserved for shares available to be granted but not granted yet 16,567,240 12,815,029 26,367,175 23,588,338 10. Warrants As of March 31, 2025 and December 31, 2024, the Company had outstanding warrants entitling the holder thereof to purchase 7,761 shares of Company common stock with an exercise price of $ 6.44 and expiry date of September 2025. 11. Equity Incentive Plan 2011 Equity Incentive Plan The Company’s equity incentive plan allows the Company to grant restricted stock units (“RSUs”, which includes PRSUs), 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, 2024 5,673,947 $ 6.16 3.9 $ 199,239 Options granted — — Options exercised ( 346,874 ) 8.71 Options cancelled/forfeited ( 813 ) 5.71 Balance as of March 31, 2025 5,326,260 5.99 3.4 172,495 Exercisable as of March 31, 2025 5,040,826 $ 5.65 3.4 $ 165,061 As of March 31, 2025, there was total unrecognized compensation cost for outstanding stock options of $ 1.6 million to be recognized over a period of approximately 0.8 years. Restricted Stock Units The Company did no t grant any new PRSUs during the three months ended March 31, 2025. 17 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) RSU activity for the periods presented is as follows: Number of Shares Weighted average grant date fair value Balance as of December 31, 2024 5,091,601 $ 19.22 RSUs granted 214,622 43.02 RSUs vested and settled ( 663,207 ) 15.82 RSUs cancelled/forfeited ( 177,102 ) 15.88 Balance as of March 31, 2025 4,465,914 $ 20.86 As of March 31, 2025, there was unrecognized compensation cost for outstanding RSUs of $ 81.7 million to be recognized over a period of approximately 2.7 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, 2025 2024 Cost of revenue Cost of subscription revenue $ 168 $ 159 Cost of hardware revenue 235 184 Cost of other revenue — 4 Total cost of revenue 403 347 Research and development 5,709 5,325 Sales and marketing 1,326 632 General and administrative 2,451 1,957 Total stock-based compensation, net of amounts capitalized $ 9,889 $ 8,261 There was $ 0.3 million and an immaterial amount of capitalized stock-based compensation costs recognized during the three months ended March 31, 2025 and 2024, respectively. 12. Income Taxes The provision for income taxes for interim quarterly reporting periods is based on the Company's estimates of the effective tax rates for the full fiscal year, in accordance with ASC 740-270, Income Taxes, Interim Reporting . ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate be applied to year to date income/loss in interim periods. The effective tax rate in any quarter may be subject to fluctuations during the year as new information is obtained, which may positively or negatively 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. 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. This is a driver for the annual estimated income tax rate used to calculate the provision for income taxes. For the three months ended March 31, 2025 and 2024, the Company recorded a benefit from income taxes of $ 0.2 million and a provision for income taxes of $ 1.4 million, respectively. 18 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 13. Related-Party Transactions Hubble Transactions In November and December 2024, the Company entered into a strategic partnership and series of transactions with Hubble Network, Inc. (“Hubble”), including (i) a technology exclusivity and revenue share agreement (“Hubble Agreement”), (ii) the Related Party SAFE; and (iii) Hubble’s issuance of the Related Party Warrant. The Hubble Agreement has an initial term of 5 years beginning on November 12, 2024. As part of this partnership, the Company will leverage Hubble’s global satellite infrastructure to introduce a new global location-tracking network service offering. The partnership agreement includes revenue-share payments in which Hubble wil l pay the Company a percentage of revenue earned from leveraging the new global location-tracking network service offering. The partnership also allows Hubble to purchase Tile hardware devices at a price equal to the Company’s burdened cost of goods sold plus 12.5 %. The grant of the Related Party Warrant was considered non-cash consideration, which the Company measured at fair value on the date of issuance. The Related Party Warrant includes various performance-based vesting conditions based on revenue and operational milestones to be measured and assessed throughout the term of the agreement. The first tranche, consisting of 2,049,191 shares, of the Related Party Warrant vested as of March 31, 2025. The warrant was valued using a Black Scholes option-pricing model, and the fair value of approximately $ 3.9 million is also included in prepaid expenses and other assets, noncurrent and deferred revenue on the Company’s consolidated balance sheets. The fair value of the warrant included within deferred revenue is amortized to other revenue over the life of the agreement. The Company recognized $ 0.3 million in other revenue on the condensed consolidated statements of operation and comprehensive income (loss) in connection with the Related Party Warrant during the three months ended March 31, 2025 . Alex Haro, the founder, and Chief Executive Officer of Hubble is a co-founder, former executive, and existing member of the Company’s Board of Directors. In addition, as part of the agreement, the Company obtained an observer right to Hubble’s board of directors. As a result, all transactions with Hubble entered into in connection with the strategic partnership are considered related party transactions. 14. Net Income (Loss) Per Share Basic net income (loss) per share is calculated by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net income (loss) per share reflects the potential dilution that could occur if options, RSUs, PRSUs, warrants, or other securities with features that could result in the issuance of common stock were exercised or converted to common stock using the treasury-stock method. 19 Table of Contents Life360, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) The following table presents the calculation of basic and diluted net income (loss) per share (in thousands, except share and per share information): Three Months Ended March 31, 2025 2024 Net income (loss) $ 4,378 $ ( 9,777 ) Weighted-average shares outstanding: Basic 75,699,493 68,535,626 Dilutive effect of outstanding options, RSUs and warrants 7,745,844 — Diluted 83,445,337 68,535,626 Net income (loss) per share: Basic $ 0.06 $ ( 0.14 ) Diluted $ 0.05 $ ( 0.14 ) Certain potential shares of common stock were excluded from the diluted net income (loss) per share calculation as their inclusion would have been antidilutive. Excluded shares are as follows: Three Months Ended March 31, 2025 2024 Issuances under stock incentive plan, stock options — 6,186,944 Issuances upon exercise of common stock warrants — 95,973 Issuances upon vesting of restricted stock units 102,180 5,408,458 Issuances upon conversion of convertible notes — 325,981 Total 102,180 12,017,356 15. Subsequent Events On May 12, 2025, the Company entered into a series of transactions with Aura Consolidated Group, Inc (“Aura”) including (i) a 3 year advertising partnership and revenue sharing agreement intended to expand the Company's other revenue channels and subscription membership offerings, and (ii) a $ 25 million convertible note investment by the Company into Aura. 20 Table of Contents