Life360, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firms ( Deloitte and Touche LLP ; San Francisco, CA ; PCAOB ID # 34 ) 66 Financial Statements Consolidated Balance Sheets 68 Consolidated Statements of Operations and Comprehensive Income ( Loss ) 69 Consolidated Statements of Stockholders’ Equity 70 Consolidated Statements of Cash Flows 71 Notes to Consolidated Financial Statements 73 65 Report of Independent Registered Public Accounting Firm To the stockholders and the Board of Directors of Life360, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Life360, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 2, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Subscription revenue — Refer to Note 2 to the financial statements Critical Audit Matter Description The Company derives a significant amount of its revenue from subscription sales. Subscriptions are considered single combined performance obligations and the subscription fees are fixed and recognized on a straight-line basis over the non-cancellable contractual term of the agreement. During the year ended December 31, 2025, the Company recognized subscription revenue of $369.3 million. We identified subscription revenue as a critical audit matter given the significant volume of transactions. This required an increased extent of audit effort in performing procedures and evaluating audit evidence relating to the accuracy and occurrence of subscription revenue. 66 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the Company's subscription revenue included the following, among others: • We tested the effectiveness of controls relating to the subscription revenue recognition process, including controls over the accuracy and occurrence of subscription revenue recognized. • We tested the internal listing of subscriptions sold used by the Company to calculate subscription revenue by comparing the subscriptions sold to third-party information and cash receipts. • We recalculated the amount of subscription revenue recorded using the internal listing of subscriptions sold. /s/ Deloitte & Touche LLP San Francisco, California March 2, 2026 We have served as the Company's auditor since 2023. 67 Table of Contents Life360, Inc. Consolidated Balance Sheets (Dollars in U.S. $, in thousands, except share and per share data) December 31, 2025 December 31, 2024 Assets Current Assets: Cash and cash equivalents $ 494,261 $ 159,238 Accounts receivable, net (1) 80,715 57,997 Inventory 9,867 8,057 Costs capitalized to obtain contracts, net 1,211 1,098 Prepaid expenses and other current assets 20,050 14,599 Total current assets 606,104 240,989 Restricted cash, noncurrent 1,567 1,221 Property and equipment, net 3,019 1,779 Costs capitalized to obtain contracts, noncurrent 869 1,049 Prepaid expenses and other assets, noncurrent (2)(3) 48,480 21,611 Operating lease right-of-use asset 335 683 Intangible assets, net 38,277 40,574 Goodwill 134,619 133,674 Deferred tax assets, net 126,418 — Total Assets $ 959,688 $ 441,580 Liabilities and Stockholders’ Equity Current Liabilities: Accounts payable $ 8,411 $ 5,463 Accrued expenses and other current liabilities 42,002 32,015 Deferred revenue, current (4) 46,377 39,860 Total current liabilities 96,790 77,338 Convertible notes, net, noncurrent 310,386 — Deferred revenue, noncurrent (5) 4,330 5,338 Other liabilities, noncurrent — 359 Total Liabilities $ 411,506 $ 83,035 Commitments and Contingencies (Note 10) Stockholders’ Equity Common Stock, $ 0.001 par value; 500,000,000 shares authorized as of December 31, 2025 and December 31, 2024, respectively; 79,359,589 and 75,404,996 issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 79 75 Additional paid-in capital 686,921 648,124 Accumulated deficit ( 138,866 ) ( 289,698 ) Accumulated other comprehensive income 48 44 Total stockholders’ equity 548,182 358,545 Total Liabilities and Stockholders’ Equity $ 959,688 $ 441,580 (1) Includes related party receivables of $ 3 and $ 55 as of December 31, 2025 and December 31, 2024, respectively. (2) Includes $ 24,726 and zero measured using the fair value option as of December 31, 2025 and December 31, 2024, respectively, related to the Convertible Note Investment. Refer to Note 5, "Fair Value Measurements" for additional information. (3) The balance as of December 31, 2025 includes the $ 5,882 Related Party Investment and the $ 3,898 Related Party Warrant. The balance as of December 31, 2024 includes the $ 5,000 Related Party SAFE and the $ 3,898 Related Party Warrant. Refer to Note 5, "Fair Value Measurements" and Note 15, "Related-Party Transactions" for additional information. (4) Includes related party deferred revenue, current of $ 780 and $ 877 as of December 31, 2025 and December 31, 2024, respectively. (5) Includes related party deferred revenue, noncurrent of $ 2,242 and $ 3,021 as of December 31, 2025 and December 31, 2024, respectively. See accompanying notes to the consolidated financial statements. 68 Table of Contents Life360, Inc. Consolidated Statements of Operations and Comprehensive Income (Loss) (Dollars in U.S. $, in thousands, except share and per share data) Year Ended December 31, 2025 2024 2023 Subscription revenue $ 369,253 $ 277,845 $ 220,794 Hardware revenue (1) 51,816 57,589 58,178 Other revenue (2) 68,412 36,050 25,546 Total revenue 489,481 371,484 304,518 Cost of subscription revenue 50,968 41,014 30,975 Cost of hardware revenue (3) 51,175 47,225 47,384 Cost of other revenue 6,496 4,088 3,522 Total cost of revenue 108,639 92,327 81,881 Gross profit 380,842 279,157 222,637 Operating expenses: Research and development 128,409 113,071 100,965 Sales and marketing 154,963 113,350 99,072 General and administrative 78,644 60,712 52,583 Total operating expenses 362,016 287,133 252,620 Income (loss) from operations 18,826 ( 7,976 ) ( 29,983 ) Other income (expense): Convertible notes fair value adjustment — ( 608 ) ( 684 ) Derivative liability fair value adjustment — ( 1,707 ) ( 116 ) Loss on settlement of convertible notes — ( 440 ) — Gain on settlement of derivative liability — 1,924 — Gain on change in fair value of investments (4) 609 5,389 — Interest income 13,705 6,009 3,083 Other income (expense), net (5) ( 481 ) ( 7,217 ) 145 Total other income (expense), net 13,833 3,350 2,428 Income (loss) before income taxes 32,659 ( 4,626 ) ( 27,555 ) Provision for (benefit from) income taxes ( 118,173 ) ( 71 ) 616 Net income (loss) 150,832 ( 4,555 ) ( 28,171 ) Net income (loss) per share, basic (Note 17) $ 1.95 $ ( 0.06 ) $ ( 0.42 ) Net income (loss) per share, diluted (Note 17) $ 1.77 $ ( 0.06 ) $ ( 0.42 ) Weighted-average shares used in computing net income (loss) per share, basic (Note 17) 77,251,239 72,125,571 66,748,542 Weighted-average shares used in computing net income (loss) per share, diluted (Note 17) 85,172,415 72,125,571 66,748,542 Comprehensive income (loss) Net income (loss) $ 150,832 $ ( 4,555 ) $ ( 28,171 ) Change in foreign currency translation adjustment 4 35 15 Total comprehensive income (loss) $ 150,836 $ ( 4,520 ) $ ( 28,156 ) (1) Includes related party revenue of $ 195 , $ 55 , and zero for the years ended December 31, 2025, 2024, and 2023, respectively. (2) Includes related party revenue of $ 890 , zero , and zero for the years ended December 31, 2025, 2024, and 2023, respectively. (3) Includes related party cost of revenue of $ 137 , zero , and zero for the years ended December 31, 2025, 2024, and 2023, respectively. (4) Includes a related party gain of $ 882 , zero , and zero for the years ended December 31, 2025, 2024, and 2023, respectively. (5) Includes related party other expense of zero , $ 5,498 , and zero for the years ended December 31, 2025, 2024, and 2023, respectively. See accompanying notes to the consolidated financial statements. 69 Table of Contents Life360, Inc. Consolidated Statements of Stockholders’ Equity (Dollars in U.S. $, in thousands, except share and per share data) Common Stock Additional Paid-In Capital Notes Due from Affiliates Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Shares Amount Balance at December 31, 2022 65,239,843 $ 67 $ 501,763 $ ( 314 ) $ ( 256,972 ) $ ( 6 ) $ 244,538 Exercise of stock options 935,007 1 5,810 — — — 5,811 Vesting of restricted stock units 1,980,980 2 ( 2 ) — — — — Taxes paid related to net settlement of equity awards — — ( 14,033 ) — — — ( 14,033 ) Repayment of notes due from affiliate — — 78 274 — — 352 Stock-based compensation expense — — 38,512 — — — 38,512 Interest accrued relating to notes due from affiliates — — — 40 — — 40 Change in foreign currency translation adjustment — — — — — 15 15 Net loss — — — — ( 28,171 ) — ( 28,171 ) Balance at December 31, 2023 68,155,830 $ 70 $ 532,128 $ — $ ( 285,143 ) $ 9 $ 247,064 Exercise of stock options 758,101 — 5,780 — — — 5,780 Exercise of warrants 129,897 — 1,149 — — — 1,149 Vesting of restricted stock units 2,315,587 2 ( 1 ) — — — 1 Taxes paid related to the settlement of equity awards, net of settlement proceeds received — — ( 26,370 ) — — — ( 26,370 ) Stock-based compensation expense — — 42,983 — — — 42,983 Settlement of convertible notes 341,877 — 5,751 — — — 5,751 Issuance of common stock net of issuance costs of $ 13,293 3,703,704 3 86,704 — — — 86,707 Change in foreign currency translation adjustment — — — — — 35 35 Net loss — — — — ( 4,555 ) — ( 4,555 ) Balance at December 31, 2024 75,404,996 $ 75 $ 648,124 $ — $ ( 289,698 ) $ 44 $ 358,545 Exercise of stock options 1,545,786 2 11,484 — — — 11,486 Exercise of warrants 7,205 — — — — — — Vesting of restricted stock units 2,379,350 2 ( 2 ) — — — — Taxes paid related to the settlement of equity awards, net of settlement proceeds received — — ( 4,802 ) — — — ( 4,802 ) Stock-based compensation expense — — 56,781 — — — 56,781 Shares issued in connection with an acquisition 22,252 — 1,000 — — — 1,000 Purchase of capped calls related to the June 2025 Convertible Notes, net of tax — — ( 25,664 ) — — — ( 25,664 ) Change in foreign currency translation adjustment — — — — — 4 4 Net income — — — — 150,832 — 150,832 Balance at December 31, 2025 79,359,589 $ 79 $ 686,921 $ — $ ( 138,866 ) $ 48 $ 548,182 70 Table of Contents Life360, Inc. Consolidated Statements of Cash Flows (Dollars in U.S. $, in thousands) Year Ended December 31, 2025 2024 2023 Cash Flows from Operating Activities: Net income (loss) $ 150,832 $ ( 4,555 ) $ ( 28,171 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 13,329 9,778 9,141 Amortization of costs capitalized to obtain contracts 1,297 1,268 2,125 Amortization of operating lease right-of-use asset 348 331 842 Stock-based compensation expense, net of amounts capitalized 55,460 42,269 38,512 Compensation expense in connection with revesting notes — — 73 Non-cash interest expense, net 1,271 59 462 Convertible notes fair value adjustment — 608 684 Derivative liability fair value adjustment — 1,707 116 Loss on settlement of convertible notes — 440 — Gain on settlement of derivative liability — ( 1,924 ) — Gain on change in fair value of investments (1) ( 609 ) ( 5,389 ) — Provision for credit losses 799 300 — Non-cash revenue from investments ( 1,174 ) ( 1,040 ) ( 1,608 ) Inventory write-off — — 916 Adjustment in connection with membership benefit — — ( 2,172 ) Deferred income taxes ( 118,354 ) — — Changes in operating assets and liabilities, net of acquisition: Accounts receivable, net ( 23,518 ) ( 16,117 ) ( 9,055 ) Prepaid expenses and other assets ( 6,706 ) 135 ( 6,667 ) Inventory ( 1,810 ) ( 3,958 ) 5,811 Costs capitalized to obtain contracts, net ( 1,231 ) ( 1,571 ) ( 1,905 ) Accounts payable 3,060 ( 433 ) ( 7,895 ) Accrued expenses and other current liabilities 9,312 4,504 2,193 Deferred revenue 6,683 6,564 4,620 Other liabilities, noncurrent ( 359 ) ( 364 ) ( 498 ) Net cash provided by operating activities 88,630 32,612 7,524 Cash Flows from Investing Activities: Cash paid for acquisition ( 2,825 ) — — Internally developed software ( 5,716 ) ( 3,945 ) ( 1,715 ) Purchase of property and equipment ( 1,792 ) ( 1,187 ) ( 506 ) Related Party SAFE — ( 5,000 ) — Convertible note investment ( 25,000 ) — — Net cash used in investing activities ( 35,333 ) ( 10,132 ) ( 2,221 ) Cash Flows from Financing Activities: Indemnity escrow payment in connection with an acquisition — — ( 13,128 ) Proceeds related to tax withholdings on restricted stock settlements and the exercise of stock options and warrants 69,520 14,553 5,811 Taxes paid related to net settlement of equity awards ( 62,836 ) ( 33,995 ) ( 14,033 ) Proceeds from issuance of common stock in U.S. initial public offering, net of underwriting discounts and commissions — 93,000 — Payments of U.S. initial public offering issuance costs — ( 6,292 ) — Proceeds from repayment of notes due from affiliates — — 314 71 Table of Contents Life360, Inc. Repayment of convertible notes — — ( 3,919 ) Proceeds from issuance of convertible senior notes 320,000 — — Payments of debt issuance costs ( 10,884 ) — — Purchase of capped calls ( 33,728 ) — — Net cash provided by (used in) financing activities 282,072 67,266 ( 24,955 ) Net Increase in Cash, Cash Equivalents, and Restricted Cash 335,369 89,746 ( 19,652 ) Cash, Cash Equivalents and Restricted Cash at the Beginning of the Period 160,459 70,713 90,365 Cash, Cash Equivalents, and Restricted Cash at the End of the Period $ 495,828 $ 160,459 $ 70,713 Supplemental disclosure: Cash paid (refunds received) during the period for income taxes, net ( 893 ) 2,381 697 Cash paid during the period for interest — 46 640 Cash payments included in the measurement of operating lease liabilities 390 379 861 Non-cash investing and financing activities: Right of use asset recognized in connection with lease modification $ — $ — $ 1,054 Fair value of stock issued in connection with the acquisition of Fantix, Inc. 1,000 — — Liability incurred in connection with the acquisition of Fantix, Inc. 675 — — Operating lease liability recognized in connection with lease modification — — 1,054 Conversion of September 2021 Convertible Notes to common stock — 3,548 — Conversion of July 2021 Convertible Notes and accrued interest to common stock — 2,203 — Property and equipment included within accrued expenses and other current liabilities — 112 — Stock-based compensation included in internally developed software 1,321 714 — Related Party Warrant — 3,898 — Conversion of Related Party SAFE to Related Party Investment 5,000 — — (1) Includes a related party gain of $ 882 , zero , and zero for the years ended December 31, 2025, 2024, and 2023, respectively. The following table presents the cash, cash equivalents, and restricted cash reported within the consolidated statements of cash flows shown above: December 31, 2025 December 31, 2024 December 31, 2023 Cash and cash equivalents $ 494,261 $ 159,238 $ 68,964 Restricted cash, noncurrent 1,567 1,221 1,749 Total cash and cash equivalents, and restricted cash $ 495,828 $ 160,459 $ 70,713 See accompanying notes to the consolidated financial statements. 72 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements 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 by Life360, Inc. (“Tile”) and Life360 Pet GPS 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. The Company also generates revenue through partnerships, including through the placement of ads within our platform, and the sale of aggregated, non-personally identifiable data for data insight purposes. Management and Board of Directors Transitions On August 11, 2025, the Company announced that its Board of Directors appointed Lauren Antonoff, then Chief Operating Officer, as the Company’s Chief Executive Officer and a member of the Company’s Board of Directors, and Chris Hulls, the Company’s Co-Founder and then Chief Executive Officer, as Executive Chairman of the Board. Effective the same date, the Company’s Board of Directors appointed Mark Goines as Lead Independent Director. 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. Refer to Note 15, "Related-Party Transactions" for further details. 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 Basis of Presentation and Consolidation The consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the U.S., or (“GAAP”), are presented in U.S. dollars unless otherwise stated, and include the accounts of the Company and its wholly owned subsidiaries. All inter-company transactions and balances have been eliminated. During the current period, the Company revised its presentation of Interest income in the consolidated statements of operations and comprehensive income (loss) to provide more meaningful information to financial statement users. Previously, Interest income was included within Other income (expense), net. Comparative prior period amounts have been reclassified to conform to the current period presentation. The reclassification had no impact on net income (loss). 73 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Use of Estimates The preparation of the Company’s 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, including market-based restricted stock units (“MRSUs”); • achievement of performance-based restricted stock units (“PRSUs”); • legal contingencies; • impairment of long-lived assets and goodwill; • valuation of non-cash consideration, contingent consideration, investments, 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. Recently adopted accounting pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU 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, and can be applied either retrospectively or prospectively. The Company adopted the ASU and has opted for retrospective application to our income tax disclosures as presented in Note 14, "Income Taxes". The adoption of this ASU did not have a material impact on the Company’s financial position or results of operations. Prior-year income tax disclosures for 2024 and 2023 have been updated to conform to the current period presentation. Accounting pronouncements not yet adopted In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements . The ASU clarifies and reorganizes interim reporting guidance, including disclosure requirements related to events occurring since the end of the most recent annual reporting period, and improves the presentation and usability of interim financial statement disclosures. The ASU is effective for interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its interim financial reporting and does not expect the adoption of this ASU to have a material impact on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract . The ASU narrows the scope of derivative accounting by excluding certain non-exchange-traded contracts whose terms are based on the normal operations or activities of one of the parties, and clarifies that share-based noncash consideration received from a customer in a revenue contract should be accounted for under ASC 606 until the right to the consideration becomes unconditional. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within those annual periods, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its financial position or results of operations. 74 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software . The ASU eliminates project stages and requires software cost capitalization to begin after management has authorized and committed to funding the software project and it is probable the project will be completed and used to perform the function intended. The ASU also requires additional property, plant and equipment disclosures for all capitalized software costs. The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures. In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets . The ASU introduces a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions from contracts with customers. The ASU is effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures. In November 2024, the FASB issued 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. Revenue Recognition The Company generates revenue from direct and indirect streams. Direct revenue includes subscription and hardware revenue, while indirect revenue consists of all other revenue sources, such as data and partnership, which includes advertising. The Company recognizes revenue upon transfer of control of promised goods or services to customers at transaction price, an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. Transaction price is calculated as the net selling price of variable consideration, which may include estimates for future returns and sales incentives related to current period revenue. The Company determines revenue recognition through the following steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Subscription Revenue The Company’s subscription revenue is comprised of Life360 mobile application subscriptions and premium subscription service plans for hardware tracking devices. The Company’s subscription contracts with customers are established at the point of mobile application download and purchase as indicated through acceptance of the Company’s Terms of Use. The Company’s subscription agreements generally have monthly or annual contractual terms and are billed and paid in advance. The cloud-based subscriptions are considered single combined performance obligations, consisting of multiple features that can be purchased separately, but which are bundled together and delivered to the customer as a combined output. The Company provides its customers with technical support along with unspecified updates and upgrades to the platform on an if and when available basis. 75 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements The premium subscription plan for hardware tracking devices is a distinct and separate performance obligation from the hardware. Subscription fees are fixed and recognized on a straight-line basis over the non-cancellable contractual term of the agreement, generally beginning on the date that the Company’s service is made available to the customer. The Company recognizes revenues on a straight-line basis because the customer receives and consumes the benefits of the service ratably throughout the contractual period. The Company’s contracts are generally non-cancelable and do not provide for refunds to customers in the event of cancellations. Hardware Revenue The Company’s hardware revenue consists of hardware and accessories, embedded software, customer support and unspecified upgrades and updates on a when and if-available basis, and includes amounts generated from a partnership with a related party, as described in Note 15, "Related-Party Transactions". The Company’s hardware and embedded operating system are considered one performance obligation as the embedded operation system is integral to the functionality of the hardware and only combined produce the essential functionality of the hardware. Revenue for the hardware and embedded software performance obligation is recognized when control is transferred to the customer. The allocated value of the unspecified updates and upgrades and customer support are recognized as hardware revenue ratably over the estimated economic life of the hardware. The Company offers certain rights of return and estimates return reserves based on historical experience, and the reserves are recorded as a reduction of revenue and an accrued liability. Amounts billed to customers for shipping and handling are classified as revenue, and the Company’s related shipping and handling costs incurred are classified as cost of revenue. Sales taxes collected from customers and remitted to respective governmental authorities are recorded as liabilities and are not included in revenue. The customers are billed upon shipment of hardware tracking devices. The premium subscription service plans available for hardware tracking devices are separate and distinct from hardware performance obligations and are included in subscription revenue. Other Revenue The Company’s other revenue consists of data and partnership revenue, which includes advertising revenue. Data revenue is generated primarily through an arrangement with a key data partner that provides location-based analytics to customers in the retail and real estate sectors, municipalities, and other private and public organizations (“Data Partner”). In January 2022, the Company announced a partnership agreement with a Data Partner, a prominent provider of aggregated analytics for the retail ecosystem, in which executives of the Company have an immaterial ownership interest through a passive investment vehicle. This agreement was amended and restated in August 2024, and the term was extended for a period of five years . As part of this partnership, the Data Partner will provide data processing and analytics services to the Company and will have the right to commercialize aggregated data related to place visits during the agreement term. The partnership agreement includes fixed and variable monthly revenue amounts, as well as quarterly minimum guarantees, for access to aggregated data for the duration of the five-year agreement. The Company has an obligation to provide aggregated user data over the term of the partnership agreement and recognizes revenue ratably over the performance period as data is delivered. In connection with the original agreement, the Data Partner issued the Company a warrant to purchase up to 5,100,167 shares of Series C Preferred Stock of the Data Partner (the “Data Revenue Partner Warrant”) at an exercise price of $ 4.90 per share. The Company estimates and includes variable consideration related to the Data Revenue Partner Warrant, in the transaction price at contract inception to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The partnership agreement has standard payment terms that require payment within 30 days. The grant of the Data Revenue Partner Warrant is considered non-cash consideration, which the Company measured at fair value on the date of issuance. The warrant was valued using a Black-Scholes option pricing model, and the fair value at issuance of approximately $ 5.4 million has been included as variable consideration in the transaction price of the data partnership agreement, and is 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. Refer to the "Investments" section below for additional information regarding the Company's Data Revenue Partner Warrant. 76 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Data revenue was $ 32.7 million, $ 26.6 million, and $ 21.6 million for the years ended December 31, 2025, 2024, and 2023, respectively. Partnership revenue includes lead generation offerings and agreements with third parties that allow access to anonymized data insights or advertising on the Company’s mobile platform. Under these agreements, the Company may earn a percentage of the revenue generated from data insights or advertising spend. Revenue is recorded on a gross basis if the Company acts as the principal in the transaction, or a net basis if the Company acts as the agent. Variable amounts earned from partnership revenue arrangements are allocated to the month in which the partner’s related revenue is generated or advertising is delivered. Partnership revenue also includes revenue related to the Company’s partnership with a related party. In 2024, the Company entered into a strategic partnership and series of transactions with a related party, including a partnership and revenue share agreement (the “Related Party Agreement”). Refer to Note 15, "Related-Party Transactions" for additional information. The Related Party Agreement includes revenue-share payments in which the related party will pay the Company a percentage of revenues earned from leveraging the new global location-tracking network service offering. In connection with the Related Party Agreement, the related party issued the Company a warrant to purchase up to 6,147,574 shares of its common stock at an exercise price of $ 0.46 per share (the “Related Party Warrant”). The Company estimates and includes variable consideration related to the Related Party Warrant, in the transaction price at contract inception to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Related Party Agreement has standard payment terms that require payment within 30 days. 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. As of December 31, 2025, 2,049,191 shares of the Related Party Warrant have vested. The warrant was valued using a Black Scholes option-pricing model, and the fair value of approximately $ 3.9 million has been included as consideration in the transaction price of the Related Party Agreement, and 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 $ 0.9 million, zero , and zero in other revenue on the consolidated statements of operations and comprehensive income (loss) in connection with the Related Party Warrant during the years ended December 31, 2025, 2024, and 2023, respectively. Partnership revenue was $ 35.7 million, $ 9.4 million, and $ 3.9 million for the years ended December 31, 2025, 2024, and 2023, respectively. Performance Obligations Some of the Company’s contracts with customers contain multiple performance obligations, primarily hardware and subscription services for hardware tracking devices and hardware bundles (bundled Life360 subscription and hardware offerings). For these contracts, the Company accounts for individual performance obligations separately if they are distinct and distinct within the context of the contract. The transaction price is allocated to the separate performance obligations on a relative stand-alone selling price (“SSP”) basis with the amounts allocated to ongoing services deferred and recognized over a period of time and amounts allocated to hardware tracking devices recognized at a point-in time with a portion of the consideration being allocated to application usage (maintenance) and support. The Company determines SSP based on observable, if available, prices for those related goods and services when sold separately. When such observable prices are not available, the Company determines SSP based on multiple factors including consumer behaviors, the Company’s internal pricing model, and relative costs incurred plus a normal margin. The factors may vary depending on the facts and circumstances related to each performance obligation. 77 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Our hardware sales arrangements typically contain multiple performance obligations, consisting of the hardware sale, application usage, hardware support, and in some cases, premium subscriptions. The Company provides warranties of up to twelve months for products with manufacturing defects or hardware failures. As part of Tile Premium subscriptions, the Company offers warranties to end-users covering the contractual service period (up to 3 years) for products with manufacturing defects or hardware failures. The warranties are not sold separately and do not represent separate performance obligations. Payment terms and conditions vary by contract type and are billed either in advance or have a standard payment term generally requiring payment within 30 to 60 days. Therefore, such warranties are accounted for under ASC 460, Guarantees , and the estimated costs of warranty claims are generally accrued as cost of revenue in the period the related revenue is recorded. Variable Consideration The Company recognizes hardware revenue at the net sales price, which includes certain estimates for variable consideration with its customers. The Company’s variable consideration is primarily in the form of promotional agreements and marketing development fund agreements related to the hardware tracking devices. These agreements are designed to enhance the sale of the Company’s products and consist of incentives to the Company’s customers. The Company estimates variable consideration using the expected value method. All forms of variable consideration are recorded as contra-revenue and a corresponding liability in its consolidated balance sheets. These estimates are based on the Company’s incentive program experience, historical and projected sales data and current contractual terms. The remaining portion of this liability is based on contractual amounts and does not require estimation. Remaining Performance Obligations 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 $ 207.1 million as of December 31, 2025, of which the Company expects 43 % to be recognized over the next twelve months . Cost of Revenue Cost of subscription revenue primarily consists of expenses related to hosting the Company’s services and providing support to the Company’s free members and paying subscribers. These expenses include personnel-related costs associated with the Company’s cloud-based infrastructure and the Company’s customer support organization, third-party hosting fees, software and maintenance costs, outside services associated with the delivery of subscription services, amortization of acquired intangibles and allocated overhead, such as facilities, including rent, utilities, depreciation on equipment shared by all departments, credit card and transaction processing fees, and shared information technology costs. Personnel-related expenses include salaries, bonuses, benefits, and stock-based compensation for operations personnel. Cost of hardware revenue consists of product costs, including hardware production, contract manufacturers for production, shipping and handling, packaging, fulfillment, personnel-related expenses, manufacturing and equipment depreciation, warehousing, tariff costs, customer support costs, credit card and transaction processing fees, warranty replacement, and write-downs of excess and obsolete inventory. Personnel-related expenses include salaries, bonuses, benefits, and stock-based compensation for operations personnel. Cost of other revenue includes cloud-based hosting costs, as well as costs of product operations functions and personnel-related costs associated with the Company’s data and advertising platforms. Personnel-related expenses include salaries, bonuses, benefits, and stock-based compensation for operations personnel. 78 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Costs Capitalized to Obtain Contracts Costs capitalized to obtain contracts are comprised of commission payments in connection with annual subscription sales of the Company’s mobile application through a third-party store platform. These costs that are incremental and directly related to new customer sales contracts are accrued and capitalized upon execution of a non-cancelable customer contract, and subsequently expensed over the estimated period of benefit, which is currently estimated to be three years . The Company has elected the practical expedient under ASC 340-40 to expense incremental costs of obtaining a contract if the amortization periods is one year or less. Accounts Receivable and Allowances Accounts receivable are recorded at the invoiced amount, net of allowance for credit losses. The allowance for credit losses is based on the Company’s assessment of the collectibility of accounts by considering the age of each outstanding invoice, the collection history of each customer, and an evaluation of the current expected risk of credit loss based on current economic conditions and reasonable and supportable forecasts of future economic conditions over the life of the receivable. The Company assesses collectibility by reviewing accounts receivable on an aggregated basis where similar characteristics exist and on an individual basis when specific customers with collectibility issues are identified. As of December 31, 2025 and 2024, the allowance for credit losses was $ 0.1 million and $ 0.4 million, respectively. For the years ended December 31, 2025, 2024, and 2023, respectively, the provision for credit losses expense was $ 0.8 million, $ 0.3 million, and zero . Included in accounts receivable, net are unbilled receivables, which are amounts that have not yet been invoiced to customers as of the balance sheet date, but are contractually owed to the Company.. As of December 31, 2025 and 2024, unbilled receivables were $ 10.3 million and $ 5.5 million, respectively. Inventory and Contract Manufacturing Inventory is comprised of raw materials and finished goods related to hardware tracking devices and accessories. Inventory is stated at the lower of cost or net realizable value on a weighted average basis. The Company assesses the valuation of inventory and writes down the value for estimated excess and obsolete inventory based upon estimates of future demand and market conditions. The Company outsources a significant portion of its manufacturing to an independent contract manufacturer in Asia. A significant portion of its cost of revenue consists of inventory purchased from this manufacturer. The Company’s inventory is held at third party warehouses and the contract manufacturer premises. The Company’s manufacturer procures components and manufactures the Company’s products based on the demand forecasts provided. These forecasts are based on estimates of future demand for the Company’s products, which are in turn based on historical trends and an analysis from the Company’s sales and marketing organizations, adjusted for overall market conditions. Shipments of inventory from the contract manufacturer are recorded as finished goods inventory upon shipment when title and the significant risks and reward of ownership have passed to the Company. Concentrations of Risk and Significant Customers The Company’s business, operations, and financial results are subject to various risks and uncertainties, including adverse global economic conditions and competition in the Company’s industry that could adversely affect the Company’s business, financial conditions, results of operations and cash flows. These important factors, among others, could cause actual results to differ materially from any future results. 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 and partnership 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. 79 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements The Company derives its accounts receivable from revenue earned from customers located in the U.S. and internationally. Channel and retail partners account for the majority of the Company’s revenue and accounts receivable for all periods presented. The following tables set forth the information about Channel Partners that processed revenue transactions and retail partners who accounted for more than 10% of revenue or accounts receivable, respectively: Percentage of Revenue Year Ended December 31, 2025 2024 2023 Channel Partner (Apple) 52 % 53 % 53 % Channel Partner (Google) 19 % 18 % 16 % * Represents less than 10% Percentage of Gross Accounts Receivable As of December 31, 2025 2024 Channel Partner (Apple) 48 % * Channel Partner (Google) 10 % 49 % Data Partner A * 11 % Retail Partner A 17 % 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. Research and Development Costs The Company charges costs related to research and development which consist primarily of personnel-related costs for its engineering, product, and design teams, material costs of building and developing prototypes for new products, mobile app development, and allocated overhead. Sales and Marketing Costs The Company’s sales and marketing expenses consist primarily of commissions to Channel Partners, personnel-related costs, brand marketing costs, lead generation costs, sales incentives, sponsorships, amortization of acquired intangibles, bad debt expense, and allocated overhead. Commission payments to Channel Partners in connection with annual subscription sales of the Company’s mobile application on third-party store platforms are considered to be incremental and recoverable costs of obtaining a contract with a customer and are either expensed as incurred or deferred and amortized over an estimated period of benefit of three years depending on the subscription type. Advertising Expense Advertising expenses are recorded in the period in which cost is incurred, and are presented within sales and marketing expense on the consolidated statements of operations. Advertising expense was $ 36.1 million, $ 23.8 million, and $ 28.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. 80 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements 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 $ 1.6 million and $ 1.2 million as of December 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. Fair Value of Financial Instruments The Company measures and reports certain assets and liabilities 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 Company measures certain non-marketable equity securities and warrant investments at fair value on a nonrecurring basis in accordance with ASC 321, Investment - Equity Securities. Instruments are remeasured to fair value when observable price changes in orderly transactions for an identical or a similar investment of the same issuer occur. The three levels of inputs that 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 recorded carrying amounts of certain financial instruments, including cash and cash equivalents, prepaid expenses, accounts payable, and accounts receivable as of December 31, 2025 and December 31, 2024, approximate fair value due to their short-term maturities. Refer to Note 5, "Fair Value Measurements" and Note 7, "Balance Sheet Components" for additional information on the assets and liabilities measured at fair value. Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. Equipment, computer software, furniture, and product manufacturing equipment, which includes construction-in-process that is capitalized and depreciated when placed into service, have estimated useful lives ranging from three to five years . Leasehold improvements are amortized on a straight-line basis over the lesser of the estimated useful life or the term of the lease with expected renewals. Costs of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the balance sheets and the resulting gain or loss is reported in other income (expense), net in the period realized. 81 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Internally Developed Software For development costs related to internally developed software projects, including costs incurred in connection with the development of new features added to the Life360 app, the Company capitalizes costs incurred during the application development stage, which begins after the completion of the preliminary project phase and when it is probable that the project will be completed and used as intended. Capitalized costs include personnel and related expenses for employees and fees paid to third-party contractors and vendors directly involved in the development effort. The capitalization of costs stops once the software is substantially complete and ready for its intended use. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Internally developed software is amortized to cost of subscription revenue on a straight-line basis over its estimated useful life, which is generally three years . The Company capitalized $ 7.0 million, $ 4.7 million, and $ 1.7 million during the years ended December 31, 2025, 2024 and 2023, respectively. Capitalized costs are included within intangible assets, net on the consolidated balance sheets. Lease Obligation Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at the present value of the future lease payments at commencement date. The interest rate implicit in the Company’s operating leases is not readily determinable, and therefore an incremental borrowing rate is estimated to determine the present value of future payments. The estimated incremental borrowing rate factors in a hypothetical interest rate on a collateralized basis with similar terms, payments, and economic environments. Operating lease ROU assets also include any prepaid lease payments and lease incentives. ROU assets are assessed for impairment in accordance with ASC 360 whenever events or changes in circumstances indicate the carrying value may not be recoverable. As of December 31, 2025, 2024, 2023, respectively, no impairment expense related to ROU assets has been recognized. The operating lease agreement contains rent concession, rent escalation, and option to renew provisions. Rent concession and rent escalation provisions are considered in determining the straight-line single lease cost to be recorded over the lease term. Single lease cost is recognized on a straight-line basis over the lease term commencing on the date the Company has the right to use the leased property. The lease term includes the option to extend or terminate the lease. The Company generally uses the base, non-cancellable, lease term when recognizing the lease assets and liabilities, unless it is reasonably certain that the renewal option will be exercised. In addition, the Company’s operating lease agreement contains tenant improvement allowances from its landlord. These allowances are accounted for as lease incentives and decrease the Company’s ROU asset and reduce single lease cost over the lease term. Refer to Note 7, "Balance Sheet Components" for additional lease disclosures. Restructuring and Other Charges Restructuring generally includes significant actions involving employee-related severance charges, facilities consolidation, and contract termination costs. Employee-related severance charges are largely based upon substantive severance plans, while some are mandated requirements in certain foreign jurisdictions. Severance costs generally include severance payments, outplacement services, health insurance coverage, and legal costs. These charges are reflected in the period when both the actions are probable, at the balance sheet date, and the amounts are reasonably estimable. On January 12, 2023, the Company announced a workforce restructure which resulted in a reduction of the Company’s workforce of approximately 14 %. The Company incurred $ 0.2 million, and $ 4.0 million in non-recurring personnel and severance related expenses in connection with the restructuring during the years ended December 31, 2024 and 2023 respectively. As of December 31, 2024, all expenses incurred had been paid. The restructuring costs are recognized in the consolidated statements of operations for the years ended December 31, 2024 and 2023 are as follows (in thousands). The Company did not incur non-recurring personnel and severance related expenses during the year ended December 31, 2025. 82 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Personnel and Severance Related Expenses Year Ended December 31, 2024 2023 Cost of subscription revenue $ — $ 64 Cost of hardware revenue — 94 Research and development — 1,824 Sales and marketing — 872 General and administrative 153 1,170 Total $ 153 $ 4,024 Business Combinations The Company uses best estimates and assumptions to assign a fair value to the tangible and intangible assets acquired and liabilities assumed in business combinations as of the acquisition date. These estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed may be recorded, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired and reflects benefits from assets not individually identifiable, including anticipated synergies and growth opportunities. Goodwill amounts are not amortized but are tested for impairment annually as of October 31 of each year, or more frequently if indicators of impairment exist. There was no impairment of goodwill during the years ended December 31, 2025, 2024 and 2023. Intangible Assets, net Intangible assets, including acquired, trade names, customer relationships, acquired developed technology, and internally developed software are carried at cost and amortized on a straight-line basis over their estimated useful lives. The Company determines the appropriate useful life of the Company’s intangible assets by measuring the expected cash flows of acquired assets. There was no impairment of intangible assets recorded during the years ended December 31, 2025, 2024 and 2023. Impairment of Long-Lived Assets The Company assesses the impairment of long-lived assets, such as property and equipment subject to depreciation and acquired intangibles subject to amortization, when events or changes in circumstances indicate that their carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company reviews long-lived assets for impairment at least annually, or more frequently if events or changes in circumstances would more likely than not reduce the fair value of its single reporting unit below its carrying value. There was no impairment of long-lived assets recognized during the years ended December 31, 2025, 2024 and 2023. 83 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements 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. Deferred revenue also includes balances related to future performance obligations for hardware and other revenue. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current; the remaining portion is recorded as deferred revenue, noncurrent in the consolidated balance sheets. Investments Investments relate to non-marketable equity securities held in privately held companies without readily determinable market values. Investments in non-public businesses that do not have readily determinable pricing, and for which the Company does not have control or does not exert significant influence, are carried at cost less impairments, if any, plus or minus changes in observable prices for those investments. Gains or losses resulting from changes in the carrying value of these investments are included as non-operating expenses on the Company’s consolidated statements of operations and comprehensive income (loss). Data Revenue Partner Warrant The Data Revenue Partner Warrant is a non-marketable equity security consisting of a warrant held to purchase shares of preferred stock of a Data Revenue Partner. Refer to the “ Revenue Recognition” section above for additional information. In September 2024, an observable price change of the Data Revenue Partner Warrant took place. This resulted in a $ 5.4 million increase in the investment asset value and a corresponding gain on fair value adjustment recorded in other income (expense), net in the consolidated statements of operations and comprehensive income (loss). There was no gain or loss associated with the Data Revenue Partner Warrant in 2025. The carrying value of the Company’s investment in the Data Revenue Partner Warrant is included in prepaid expenses and other assets, noncurrent in the consolidated balance sheets. As of December 31, 2025 and 2024, the balance was $ 10.9 million and $ 10.9 million, respectively. Related Party Simple Agreement for Future Equity (“SAFE”) Conversion to Related Party Investment In December 2024, the Company entered into a SAFE with a related party and invested $ 5.0 million (the “Related Party SAFE”). Under the terms of the SAFE, the Company holds the right to receive equity upon the occurrence of specified future events. For additional information, refer to Note 15, "Related-Party Transactions". In April 2025, the Related Party SAFE was converted into shares of preferred stock in the related party (the “Related Party Investment”). As of December 31, 2024, the Related Party SAFE had a carrying balance of $ 5.0 million, and as of December 31, 2025, the Related Party Investment had a carrying balance of $ 5.9 million. Both investments are included in prepaid expenses and other assets, noncurrent on the consolidated balance sheets. Refer to Note 5, "Fair Value Measurements" for additional information on the conversion of the Related Party SAFE to the Related Party Investment. Related Party Warrant The Related Party Warrant is a non-marketable equity security consisting of a warrant held to purchase shares of common stock of a related party. Refer to the “Revenue Recognition ” section above and Note 15, "Related-Party Transactions" for further details. As of December 31, 2025 and 2024, the carrying value of the Company’s investment in the Related Party Warrant is $ 3.9 million and is included in prepaid expenses and other assets, noncurrent on the consolidated balance sheets. 84 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Convertible Note Investment In May 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 $ 25.0 million convertible note investment by the Company into Aura (“Convertible Note Investment”). The note bears zero interest and matures on May 12, 2030. The principal is due at maturity and includes both optional and mandatory conversion features, which may result in conversion into the issuer’s equity upon the occurrence of specific events, including financing events, change in control, or at maturity. The Company elected to apply the fair value option in accordance with ASC 825, Financial Instruments, to account for the hybrid instrument as a single financial instrument. As a result, the entire instrument is measured at fair value, with changes in fair value recognized in the consolidated statements of operations and comprehensive income (loss) within other income (expense). The Convertible Note Investment is included within prepaid expenses and other assets, noncurrent on the consolidated balance sheets. The Company classifies the Convertible Note Investment as Level 3 due to the absence of relevant observable inputs. The fair value of the Convertible Note Investment was estimated using a scenario-based, probability-weighted option pricing model. Significant assumptions include the discount rate as well as the timing and probability weighting of each settlement scenario. Common Stock Warrants The Company has issued freestanding warrants to purchase shares of common stock in connection with certain debt financing transactions. The warrants are recorded as equity instruments at the grant date fair value using the Black-Scholes option pricing model and are not subject to revaluation at each balance sheet date. Stock-Based Compensation The Company maintains an equity incentive plan under which various types of equity-based awards are granted. The Plan allows the Company to grant restricted stock units (“RSUs”), which include time-based, performance-based, and market-based restricted stock units, restricted stock, as well as 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 Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation, and recognizes stock-based compensation expense based on the grant-date fair value of the awards. The fair value of RSUs and restricted stock awards is based on the fair value of the Company’s common stock on the grant date. For RSUs with market-based vesting conditions, the Company estimates fair value using a Monte Carlo simulation model. The fair value of stock options is determined using the Black-Scholes option pricing model. Stock-based compensation expense is recognized over the requisite service period of the awards, which is generally three to four years . Awards with time-based vesting conditions, including RSUs, restricted stock, and stock options, are recognized on a straight-line basis. Awards with performance-based vesting conditions are recognized using an accelerated attribution method when achievement of the performance condition is considered probable and are reassessed each reporting period. Awards with market-based vesting conditions are recognized over the requisite service period and are not adjusted for actual performance outcomes. The Company accounts for forfeitures as they occur. Refer to Note 13, "Equity Incentive Plan" for further details. Foreign Currency The functional currency of the Company’s foreign subsidiary is the respective local currency. Translation adjustments arising from the use of a differing exchange rate from period to period are included in accumulated other comprehensive income (loss) within the consolidated statements of stockholders’ equity. Foreign currency transaction gains and losses are included in other income (expense), net in the consolidated statements of operations and were not material during the years ended December 31, 2025, 2024 or 2023. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the average exchange rate during the period. 85 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Income Taxes The Company accounts for income taxes under the asset and liability method. The Company estimates actual current tax exposure together with assessing temporary differences resulting from differences in accounting for reporting purposes and tax purposes for certain items, such as accruals and allowances not currently deductible for tax purposes. These temporary differences result in deferred tax assets and liabilities, which are included in the Company’s balance sheets. In general, deferred tax assets represent future tax benefits to be received when certain expenses previously recognized in the Company’s statements of operations and comprehensive income (loss) become deductible expenses under applicable income tax laws or when net operating loss or credit carryforwards are utilized. Accordingly, realization of the Company’s deferred tax assets is dependent on future taxable income against which these deductions, losses and credits can be utilized. The Company must assess the likelihood that the Company’s deferred tax assets will be recovered from future taxable income, and to the extent the Company believes that recovery is not likely, the Company establishes a valuation allowance. To the extent recovery is not considered likely, any previously established valuation allowance is released in the period such determination is made. The assessment of whether a valuation allowance is required often requires significant judgment including current and historical operating results, the forecast of future taxable income and on-going prudent and feasible tax planning initiatives. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The Company did not accrue any interest or penalties related to income tax positions during the years ended December 31, 2025, 2024, and 2023. Net Income (Loss) Per Share The Company computes basic and diluted net income (loss) per share in conformity with ASC 260, Earnings per Share. Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share reflects the potential dilution that could occur from securities that may result in the issuance of common stock and is calculated by dividing net income (loss) by the diluted weighted-average number of shares outstanding. Diluted weighted-average shares outstanding include the effect of potential dilutive securities outstanding during the period, including stock options, restricted stock units, warrants, and other similar equity-based securities, which are calculated using the treasury stock method, as well as convertible debt instruments, which are calculated using the if-converted method. Potential common shares are excluded from diluted net income (loss) per share when their effect would be antidilutive. Refer to Note 17, "Net Income (Loss) Per Share" for further details. 86 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements 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 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 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 consolidated financial statements. All material long-lived assets are based in the U.S. 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): Year Ended December 31, 2025 2024 2023 North America $ 425,760 $ 325,787 $ 272,727 Europe, Middle East and Africa 36,098 27,322 19,159 Other international regions 27,623 18,375 12,632 Total revenue $ 489,481 $ 371,484 $ 304,518 The Company’s revenues in the U.S. were $ 415.4 million, or 85 %, of total revenue for the year ended December 31, 2025, $ 318.6 million, or 86 %, of total revenue for the year ended December 31, 2024, and $ 258.5 million, or 85 % of total revenue for the year ended December 31, 2023. 4. Deferred Revenue The following table represents a roll forward of the Company’s deferred revenue (in thousands): Year Ended December 31, 2025 2024 Deferred revenue, beginning of period $ 45,198 $ 35,774 Additions to deferred revenue 386,753 304,903 Recognized revenue in the period ( 381,244 ) ( 295,479 ) Deferred revenue, end of period $ 50,707 $ 45,198 During the year ended December 31, 2025, the Company recognized $ 39.9 million of revenue that was included in the deferred revenue balance as of December 31, 2024. During the year ended December 31, 2024, the Company recognized $ 33.9 million of revenue that was included in the deferred revenue balance as of December 31, 2023. 87 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements 5. Fair Value Measurements Recurring Fair Value Measurements 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 December 31, 2025 and December 31, 2024 are classified as follows (in thousands): As of December 31, 2025 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 332,808 $ — $ — $ 332,808 Convertible Note Investment — — 24,726 24,726 Total assets $ 332,808 $ — $ 24,726 $ 357,534 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, 2025 Convertible Note Investment Fair value, beginning of the year $ — Initial investment 25,000 Changes in fair value ( 274 ) Fair value, end of period $ 24,726 As of December 31, 2024 Derivative Liability September 2021 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 (Note 8) — ( 3,548 ) Gain on settlement of September 2021 Convertible Notes (Note 8) — ( 509 ) Gain on settlement of derivative liability (Note 9) ( 1,924 ) — Fair value, end of period $ — $ — For the year ended December 31, 2025, the Company recorded a loss associated with the change in fair value of the Convertible Note Investment of $ 0.3 million. The amounts have been recorded in other income (expense), net in the consolidated statement of operations and comprehensive income (loss). For the year ended December 31, 2024, the Company recorded a loss associated with the change in fair value of the derivative liability of $ 1.7 million and a gain related to the settlement of the derivative liability upon conversion of the July 2021 Convertible Notes of $ 1.9 million. For the year ended December 31, 2024, the Company recorded a loss associated with the change in fair value of the September 2021 Convertible Notes of $ 0.6 million and a gain related to the settlement of the September 2021 Convertible Notes upon conversion of $ 0.5 million. The amounts have been recorded in other income (expense), net in the consolidated statement of operations and comprehensive income (loss). 88 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Non-Recurring Fair Value Measurements In April 2025, a related party completed a qualified equity financing and the Related Party SAFE was converted into the Related Party Investment. The conversion resulted in an observable price change based on the financing round for identical preferred shares. As a result, a $ 0.9 million gain on the change in the fair value of the investment was recorded within other income (expense), net on the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2025. The Related Party Investment is classified within Level 2 of the fair value hierarchy as the valuation is based on an observable price for identical shares that are not readily determinable. The Related Party Investment balance as of December 31, 2025 was $ 5.9 million and is included within prepaid expenses and other assets, noncurrent on the consolidated balance sheet. 6. Business Combinations Fantix, Inc. 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 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 Fantix, Inc. acquisition as the impact is not material to the Company’s consolidated results of operations. 7. Balance Sheet Components Accounts receivable, net Accounts receivable, net consists of the following (in thousands): As of December 31, 2025 2024 Accounts receivable $ 80,809 $ 58,391 Allowance for credit losses ( 94 ) ( 394 ) Total accounts receivable, net $ 80,715 $ 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 December 31, 2025 and 2024, respectively. Inventory Inventory consists of the following (in thousands): As of December 31, 2025 2024 Raw materials $ 40 $ 24 Finished goods 9,827 8,033 Total inventory $ 9,867 $ 8,057 89 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements There were no inventory write-offs recorded for the years ended December 31, 2025 and 2024. The Company recorded a raw materials inventory write-off of $ 0.9 million for the year ended December 31, 2023. The write-off resulted from a discontinuation of a product line in the Company’s product roadmap where the raw materials had no alternative use. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in thousands): As of December 31, 2025 2024 Prepaid expenses $ 17,838 $ 11,074 Other receivables 2,212 3,525 Total prepaid expenses and other current assets $ 20,050 $ 14,599 Prepaid expenses primarily consist of advance payments for certain cloud platform costs, advertising, information technology solutions, insurance, and inventory. Other receivables primarily consist of refunds owed to the Company and other amounts which the Company is expected to receive in less than twelve months. Property and Equipment, net Property and equipment, net consists of the following (in thousands): As of December 31, 2025 2024 Computer equipment $ 297 $ 297 Leasehold improvements 86 101 Production manufacturing equipment 4,067 2,026 Construction in progress — 362 Furniture and fixtures 29 29 Total property and equipment, gross 4,479 2,815 Less: accumulated depreciation ( 1,460 ) ( 1,036 ) Total property and equipment, net $ 3,019 $ 1,779 Construction in progress relates to certain costs incurred with production manufacturing equipment. Depreciation expense was $ 0.4 million, $ 0.3 million, and $ 0.1 million for the years ended December 31, 2025, 2024, and 2023, respectively. Prepaid Expenses and Other Assets, noncurrent Prepaid expenses and other assets, noncurrent consist of the following (in thousands): As of December 31, 2025 2024 Prepaid expenses, noncurrent $ 3,110 $ 1,849 Convertible Note Investment 24,726 — Data Revenue Partner Warrant 10,864 10,864 Related Party Investment 5,882 — Related Party Warrant 3,898 3,898 Related Party SAFE — 5,000 Total prepaid expenses and other assets, noncurrent $ 48,480 $ 21,611 90 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Prepaid expenses, noncurrent primarily consist of cloud platform costs. As of December 31, 2025, other assets consists of investments, including the Convertible Note Investment, Data Revenue Partner Warrant, Related Party Investment, and Related Party Warrant. As of December 31, 2024, investments relate to the Data Revenue Partner Warrant, the Related Party Warrant, and the Related Party SAFE. Refer to Note 2, "Summary of Significant Accounting Policies" for additional information. Leases The Company leases office space under a non-cancelable operating lease with a remaining lease term of up to 0.9 years, which includes the option to extend the lease. The Company did not have any finance leases as of December 31, 2025 or December 31, 2024. Operating lease costs were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Operating lease cost (1) $ 502 $ 452 $ 924 (1) Amounts include short-term leases, which are immaterial. For the years ended December 31, 2025, 2024, and 2023, payments for operating leases included in cash from operating activities were $ 0.4 million, $ 0.4 million and $ 0.9 million, respectively. Supplemental balance sheet information related to leases is as follows (in thousands, except lease term): As of December 31, 2025 2024 Operating lease right-of-use asset $ 335 $ 683 Operating lease liability, current (included in accrued expenses and other current liabilities) 359 364 Operating lease liability, noncurrent (included in other liabilities, noncurrent) — 359 Weighted-average remaining term for operating lease (in years) 0.9 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 liabilities as of December 31, 2025, were as follows (in thousands): Operating leases 2026 $ 367 Total future minimum lease payments 367 Less imputed interest ( 8 ) Total operating lease liability $ 359 91 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Goodwill and Intangible Assets, net Intangible assets, net consists of the following (in thousands): As of December 31, 2025 Gross Accumulated Amortization Net Trade name $ 23,380 $ ( 9,575 ) $ 13,805 Technology 25,985 ( 18,756 ) 7,229 Customer relationships 15,290 ( 7,595 ) 7,695 Internally developed software 14,113 ( 4,565 ) 9,548 Total $ 78,768 $ ( 40,491 ) $ 38,277 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 years ended December 31, 2025 and 2024, the Company capitalized $ 7.0 million and $ 4.7 million, respectively, in internally developed software. For the years ended December 31, 2025, 2024, and 2023, amortization expense was $ 12.9 million, $ 9.5 million, and $ 9.0 million, respectively. As of December 31, 2025, the estimated remaining amortization expense for intangible assets by fiscal year is as follows (in thousands): Amount 2026 $ 13,013 2027 8,320 2028 5,454 2029 4,498 2030 2,143 Thereafter 2,027 Total future amortization expense 35,455 Internally developed software not yet in service 2,822 Total future amortization expense $ 38,277 The weighted-average remaining useful lives of the Company’s acquired intangible assets are as follows: Weighted-Average Remaining Useful Life As of December 31, 2025 2024 Trade name 5.5 years 7.0 years Technology 2.3 years 1.9 years Customer relationships 3.9 years 5.1 years Internally developed software 2.3 years 2.6 years 92 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements As of December 31, 2025 and December 31, 2024, the Company had $ 2.8 million and $ 0.9 million of capitalized internally developed software projects that were not yet in service, respectively. These projects have been excluded from the weighted-average remaining useful life calculation for internally developed software in the table above. As of December 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. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): As of December 31, 2025 2024 Accrued vendor expenses $ 14,891 $ 13,856 Customer related promotions and discounts 14,013 9,761 Accrued compensation 7,121 3,834 Sales return reserves 2,072 2,817 Other current liabilities 3,905 1,747 Total accrued expenses and other current liabilities $ 42,002 $ 32,015 As of December 31, 2025, other current liabilities primarily relate to the Company’s deferred purchase price liability related to the Fantix, Inc. acquisition, inventory received but not yet billed, and sales taxes payable. As of December 31, 2024, other current liabilities primarily relate to the operating lease liability and sales tax payable. 8. Convertible Notes June 2025 Convertible Notes In June 2025, the Company issued $ 320.0 million aggregate principal amount of 0.00 % convertible senior notes due June 1, 2030. The June 2025 Convertible Notes are senior unsecured obligations and do not bear regular interest. Each $1,000 principal amount of the notes is initially convertible into 12.3501 shares of the Company’s common stock, which represents a conversion price of approximately $ 80.97 per share, subject to adjustment upon the occurrence of specified events. In certain circumstances, including conversions in connection with a make-whole fundamental change, the conversion rate may be increased, resulting in a conversion price as low as $ 61.11 . However, the maximum number of shares issuable per $1,000 principal amount is capped at 16.3639, which is subject to the same adjustment provisions as the initial conversion rate. The June 2025 Convertible Notes are convertible at the option of the holders prior to the close of business on the business day immediately preceding March 1, 2030, only under the following circumstances: (1) during any fiscal quarter (and only during such quarter) beginning after September 30, 2025, if the closing price of the Company’s common stock for at least 20 trading days in any 30 consecutive trading day period ending on the last trading day of the prior fiscal quarter is greater than or equal to 130 % of the then-applicable conversion price; (2) during the five business days immediately following any 10 consecutive trading day period in which the trading price per $1,000 principal amount of notes was less than 98 % of the product of the closing price of the Company’s common stock and the conversion rate on each applicable trading day, following a request for such determination by a holder; (3) if the Company calls the notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, such as certain mergers, reorganizations, or other changes of control. The June 2025 Convertible Notes are convertible at the option of the holders on or after March 1, 2030, at any time prior to the close of business on the second scheduled trading day prior to the maturity date. Upon conversion, the Company will settle the principal portion of any June 2025 Convertible Notes in cash. Any amounts due on conversion over the principal portion may be settled, at the Company’s election, in cash, shares of common stock, or a combination thereof. 93 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements The Company may not redeem the June 2025 Convertible Notes prior to June 5, 2028. On or after that date, the Company may redeem all or a portion of the notes for cash if the closing price of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during a 30 consecutive trading day period ending on the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will equal the principal amount of the notes to be redeemed, plus any accrued and unpaid interest up to, but excluding, the redemption date. Upon the occurrence of a fundamental change, which includes certain change-of-control transactions, a delisting of the Company’s common stock, or a liquidation event, holders may require the Company to repurchase up to 100 % of their notes, plus accrued and unpaid special interest, if any, to, but excluding, the fundamental change repurchase date for cash. The Company accounts for the June 2025 Convertible Notes entirely as a liability in accordance with ASC 470-20, Debt with Conversion and Other Options, as amended by ASU 2020-06. The embedded conversion feature is not separately accounted for as it does not require bifurcation under ASC 815, Derivatives and Hedging , as it is considered clearly and closely related to the host debt contract and does not meet the criteria for derivative accounting. The notes were issued at par and are recorded net of debt issuance costs. As of December 31, 2025, the June 2025 Convertible Notes are classified as noncurrent as the conditions allowing holders of the notes to convert have not been met and the notes are not redeemable until June 5, 2028. The balance has been recorded within convertible notes, net, noncurrent on the Company’s consolidated balance sheet. The net carrying amount of the June 2025 Convertible Notes consists of the following (in thousands): As of December 31, 2025 Principal $ 320,000 Unamortized debt issuance costs ( 9,614 ) Net carrying amount $ 310,386 The debt issuance costs are amortized to interest expense over the term of the June 2025 Convertible Notes using the effective interest rate method. The effective interest rate used to amortize the debt issuance costs is 0.68 %. Interest expense recognized related to the June 2025 Convertible Notes was $ 1.3 million for the year ended December 31, 2025. Interest expense is included within other income (expense), net on the consolidated statements of operations and comprehensive income (loss). The estimated fair value of the June 2025 Convertible Notes, which we classify as Level 2 financial instruments, was determined using observable market prices. As of December 31, 2025, the estimated fair value of the June 2025 Convertible Notes was $ 343.2 million. June 2025 Capped Calls In connection with the pricing of the June 2025 Convertible Notes, the Company entered into privately-negotiated capped call transactions with certain dealer counterparties (the “June 2025 Capped Calls”). The June 2025 Capped Calls have an initial strike price of approximately $ 80.97 per share, which corresponds to the initial conversion price of the June 2025 Convertible Notes and is subject to certain adjustments. The June 2025 Capped Calls have a cap price of $ 122.22 per share, which is also subject to certain adjustments. The $ 33.7 million cost incurred in connection with the June 2025 Capped Calls was recorded as a reduction to Additional paid-in capital on the Company’s consolidated balance sheet. This was partially offset by an $ 8.0 million increase to Additional paid-in capital related to the release of the associated valuation allowance as of December 31, 2025. Conditions triggering adjustments to the initial strike price and the initial cap price of these capped calls are similar to those causing adjustments for the June 2025 Convertible Notes. 94 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements The June 2025 Capped Calls are intended to reduce or offset potential dilution to our common stock upon any conversion of the June 2025 Convertible Notes, with this reduction or offset subject to the specified cap price. The June 2025 Capped Calls are separate transactions, and are not part of the terms of the June 2025 Convertible Notes. These transactions are classified as equity in accordance with ASC 815, Derivatives and Hedging, as they are (i) indexed to the Company’s own stock, (ii) settled in shares or permitted net-share settlement, and (iii) do not require net cash settlement. As such, the June 2025 Capped Calls have been recorded within stockholders’ equity and are not accounted for as derivatives. July 2021 Convertible Notes In July 2021, the Company issued the July 2021 Convertible Notes to investors with an underlying principal amount of $ 2.1 million. In June 2024, the July 2021 Convertible Notes were converted to common stock based on a fixed conversion price of $ 11.96 per share. At the time of conversion, the July 2021 Convertible Notes had an outstanding principal and accrued interest balance of $ 2.2 million. As a result of the conversion, 184,192 shares of common stock were issued to the holders in redemption of the outstanding July 2021 Convertible Notes. In June 2024, the fair value of the issued common stock was recorded within additional paid-in capital on the Company’s consolidated balance sheet and a $ 0.9 million loss on the settlement of the July 2021 Convertible Notes was recorded in other income (expense), net on the consolidated statements of operations and comprehensive income (loss). As of December 31, 2025 and 2024, the balance of the July 2021 Convertible Notes is zero on the Company’s consolidated balance sheets. The Company recognized a total of zero , $ 0.1 million, and $ 0.4 million in non-cash interest expense related to the July 2021 Convertible Notes for the years ended December 31, 2025, 2024, and 2023, respectively. September 2021 Convertible Notes In September 2021, the Company issued $ 11.6 million representing the fair value of convertible notes (the “September 2021 Convertible Notes”) and $ 1.6 million of revesting convertible notes that vested over time. In April 2024, the holders of the September 2021 Convertible Notes elected to convert their notes and accrued interest to common stock based on a fixed conversion price of $ 22.50 per share. At the time of conversion, the September 2021 Convertible Notes had an outstanding principal and accrued interest balance of $ 3.5 million. As a result of the conversion, 157,685 shares of common stock with a fair value of $ 3.5 million were issued to the holders in redemption of the outstanding September 2021 Convertible Notes. In April 2024, the fair value of the issued common stock was recorded within additional paid-in capital on the Company’s consolidated balance sheet and a $ 0.5 million gain on settlement of the September 2021 Convertible Notes was recorded in other income (expense), net on the consolidated statements of operations and comprehensive income (loss). As of December 31, 2025 and 2024, the balance of the September 2021 Convertible Notes is zero on the Company’s consolidated balance sheets. 9. Derivative Liability The Company’s derivative liability, which represented embedded share-settled redemption features bifurcated from its July 2021 Convertible Notes, was settled in June 2024 upon the conversion of the July 2021 Convertible Notes to common stock based on a fixed conversion price of $ 11.96 per share. A $ 1.9 million gain was recorded at the time of conversion within other income (expense), net on the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2024. As of December 31, 2025 and 2024, the fair value of the derivative liability was zero on the Company’s consolidated balance sheets. 10. Commitments and Contingencies Purchase Commitments The Company has contractual commitments with our cloud platform provider and contract manufacturer that are non-cancellable. As of December 31, 2025, future non-cancellable commitments under these arrangements were as follows (in thousands): 95 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Amount 2026 $ 39,062 2027 26,000 Total purchase commitments $ 65,062 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 The Company enters into standard indemnification agreements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third party with respect to its technology. The term of these indemnification agreements is generally perpetual after the execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future but have not yet been made. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. To date, the Company has not incurred significant costs and has not accrued any material liabilities in the accompanying consolidated financial statements as a result of its indemnification obligations. Litigation and Arbitration Occasionally, the Company is involved in various legal proceedings, formal and informal dispute resolution processes, which may include arbitration or litigation, 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 against 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. As previously disclosed, in March 2019, Cellwitch, Inc. filed a patent infringement action against Tile in the U.S. District Court for the Northern District of California. Following inter partes review proceedings in which the Patent Trial and Appeal Board invalidated a majority of the asserted claims, and subsequent affirmance by the U.S. Court of Appeals for the Federal Circuit, the district court proceedings continued. As previously reported in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, in April 2024, the district court invalidated all but two asserted claims. On May 16, 2025, the district court granted Tile’s motion for summary judgment of non-infringement, and on June 12, 2025, Cellwitch statutorily disclaimed the asserted patent. In light of these developments, no loss was considered probable and no litigation reserve was recorded. On August 5, 2025, the parties settled the remaining claims at no cost. 96 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements 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 (the “Court”), seeking damages as well as injunctive and declaratory relief. 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. On February 14, 2025, the Company filed a Motion to Dismiss. As of August 6, 2025, the Court granted the Company’s Motion to Dismiss the claims of the Ireland-Gordy plaintiffs with prejudice and the remaining plaintiffs' claims are stayed pending an appeal of the Court's ruling on the Company's Motion to Compel Arbitration, which was granted-in-part and denied-in-part. The hearing on the appeal occurred on January 5, 2026. At this time, a loss is not probable nor estimable, and as a result, no legal accrual has been recorded on the Company’s consolidated balance sheet as of December 31, 2025. The Company receives claims and other threats of litigation from customers in the ordinary course of business. These claims are arbitrable and the Company accrues various costs for these claims including arbitration fees, legal fees and costs. At this time, a loss is not probable nor estimable from any such claims, and as a result, no legal accruals have been recorded on the Company’s consolidated balance sheet as of December 31, 2025. No litigation reserve was recorded on the Company’s consolidated balance sheets as of December 31, 2025 or December 31, 2024. 11. Common Stock The Company has the following potentially outstanding common stock reserved for issuance: As of December 31, 2025 2024 Issuances under stock incentive plan, stock options 4,108,029 5,673,947 Issuances upon exercise of common stock warrants — 7,761 Issuances upon vesting of restricted stock units 4,294,367 5,091,601 Shares reserved for shares available to be granted but not granted yet 15,118,992 12,815,029 23,521,388 23,588,338 12. Warrants As of December 31, 2024, the Company had 7,761 outstanding warrants, entitling the holder thereof to purchase shares of the Company’s common stock with an exercise price of $ 6.44 . In September 2025, all 7,761 outstanding warrants were exercised on a cashless basis at an exercise price of $ 6.44 per share, resulting in the issuance of 7,205 shares of common stock. As of December 31, 2025, no warrants remained outstanding. 13. Equity Incentive Plan 2011 Equity Incentive Plan The Company’s 2011 Stock Plan was originally adopted by the Company’s Board of Directors on July 27, 2011 and the Company’s stockholders on October 11, 2011, and most recently amended and restated, and adopted by the Board of Directors on March 10, 2020 and the Company’s stockholders on July 21, 2020 (as restated, the “Plan”). The Plan allows the Company to grant restricted stock units (“RSUs”), which include time-based, performance-based, and market-based restricted stock units, restricted stock, as well as 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. Options granted under the Plan may be either incentive stock options or nonqualified stock options. Incentive stock options (“ISOs”) may be granted only to employees of the Company or any of the Company’s parent or subsidiaries (including officers and directors who are also employees). Nonqualified stock options (“NSOs”) may be granted to any person eligible for grants under the Plan. As of December 31, 2025, the Company had 23,521,388 shares reserved for issuance and 15,118,992 shares available for issuance under the Plan. 97 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Time-Based Restricted Stock Units Time-based restricted stock units (“TRSUs”) generally vest based on continued service over a specified period, which is typically four years . Each TRSU represents the right to receive one share of common stock upon vesting. The fair value of TRSUs is determined based on the closing price of the Company’s common stock on the date of grant. Stock-based compensation expense for these awards is recognized on a straight-line basis over the requisite service period and is offset by actual forfeitures as they occur. Performance-Based Restricted Stock Units PRSUs are granted primarily to executive officers and, in limited cases, to certain other senior-level employees. Vesting is based on continued service and the attainment of certain financial performance metrics, including revenue and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization targets, over a one-year performance period, as established and approved by the Board of Directors. The number of shares issued upon vesting may be greater or lesser than the target award amount depending on actual performance, and shares attained over target will be recognized as awards granted in the period earned. During the years ended December 31, 2025 and 2024, 225,386 and 115,403 PRSUs (“the Target Grant”) were granted with a weighted average grant-date fair value per share of $ 36.61 and $ 27.40 , respectively. No PRSUs were granted during the year ended December 31, 2023. The fair value of PRSUs is determined based on the closing price of the Company’s common stock on the date of grant. Stock-based compensation expense is recognized on a graded-vesting basis for multi-tranche awards and on a straight-line basis for single-tranche awards, based on the estimated probability of achieving the performance conditions, which is reassessed each period. If achievement of the performance conditions is not considered probable, all previously recognized stock-based compensation expense related to the unvested awards is reversed. As of December 31, 2025, the performance goals for the PRSU awards granted in 2025 have been achieved. Accordingly, stock-based compensation cost related to these awards is no longer subject to reversal, and vesting is contingent solely upon the continued service conditions. In accordance with the vesting schedule of the awards, no shares related to these awards have vested as of December 31, 2025. Market-Based Restricted Stock Units Certain executive officers were granted MRSUs during the year ended December 31, 2025. No MRSUs were granted during the year ended December 31, 2024 or 2023. Vesting is based on continued service and the Company’s total shareholder return during one-year , two-year , and three-year performance periods as measured relative to the group of companies comprising the S&P Software and Services Index. The number of shares issued upon vesting may vary from the target award amount depending on actual performance, and shares attained over the target will be recognized as awards granted in the period earned. During the year ended December 31, 2025, 59,622 MRSUs were granted with a total weighted average grant-date fair value per share of $ 114.73 . Stock-based compensation expense is recognized on a graded-vesting basis over the requisite service period and is not adjusted for actual performance outcomes. The Company estimated the fair value of the MRSUs granted using a Monte Carlo simulation model with the following assumptions: Tranche 1 Tranche 2 Tranche 3 Expected volatility 55.6 % 55.6 % 55.6 % Risk-free interest rate based on U.S. Treasury yields 3.8 % 3.6 % 3.6 % Expected term (years) 1 2 3 Weighted average grant-date fair value per share $ 99.14 $ 121.80 $ 122.99 98 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements RSUs, including TRSUs, PRSUs, and MRSUs 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 2,167,685 49.79 RSUs vested and settled ( 2,452,615 ) 19.78 RSUs cancelled/forfeited ( 512,304 ) 19.79 Balance as of December 31, 2025 4,294,367 $ 34.05 As of December 31, 2025, there was total unrecognized stock-based compensation expense for outstanding RSUs of $ 127.7 million to be recognized over a period of approximately 2.8 years. This amount is comprised of unrecognized compensation expense of $ 116.2 million related to outstanding TRSUs, $ 5.7 million related to outstanding PRSUs, and $ 5.8 million related to outstanding MRSUs. The number of RSUs vested and settled includes shares of common stock that the Company withheld on behalf of employees to satisfy the tax withholding requirements. RSUs granted during the years ended December 31, 2025, 2024, and 2023 had a weighted average grant date fair value of $ 49.79 , $ 27.36 , and $ 13.15 per share, respectively. The total fair value of shares vested during the years ended December 31, 2025, 2024, and 2023 was $ 160.8 million, $ 101.0 million, and $ 39.2 million, respectively. Stock Options The Company granted no stock options during the years ended December 31, 2025, 2024, and 2023. Outstanding options at December 31, 2025 relate to historical grants under the Plan. 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 ( 1,545,786 ) 7.43 Options cancelled/forfeited ( 20,132 ) 10.30 Balance as of December 31, 2025 4,108,029 5.66 2.8 240,230 Exercisable as of December 31, 2025 4,064,254 $ 5.60 2.8 $ 237,923 As of December 31, 2025, there was total unrecognized compensation cost for outstanding stock options of $ 0.1 million to be recognized over a period of approximately 0.3 years. The intrinsic values of outstanding, vested, and exercisable options were determined by multiplying the number of shares by the difference in exercise price of the options and the fair value of the common stock as of December 31, 2025, 2024, and 2023 of $ 64.14 , $ 41.27 , and $ 15.46 per share, respectively. The intrinsic value of the options exercised represents the difference between the exercise price and the fair market value on the date of exercise. The total intrinsic value of the options exercised during the years ended December 31, 2025, 2024, and 2023 was $ 88.8 million, $ 18.2 million, and $ 7.7 million, respectively. 99 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements Stock-Based Compensation Stock-based compensation expense was allocated as follows (in thousands): Year Ended December 31, 2025 2024 2023 Cost of subscription revenue $ 1,869 $ 730 $ 651 Cost of hardware revenue 1,476 798 1,096 Cost of other revenue 8 4 43 Total cost of revenue 3,353 1,532 1,790 Research and development 28,037 25,457 22,015 Sales and marketing 7,029 3,344 3,059 General and administrative 17,041 11,936 11,648 Total stock-based compensation expense, net of amounts capitalized $ 55,460 $ 42,269 $ 38,512 There was $ 1.3 million and $ 0.7 million of capitalized stock-based compensation costs during the years ended December 31, 2025 and 2024, respectively. There was an immaterial amount of capitalized stock-based compensation costs during the year ended December 31, 2023. 14. Income Taxes During the year ended December 31, 2025, the Company incurred $ 30.6 million of pre-tax net operating income in the U.S. and $ 2.0 million of pre-tax net operating income internationally. The Provision for (benefit from) income taxes is composed of the following (in thousands): Year Ended December 31, 2025 2024 2023 Current State and local $ 181 $ ( 71 ) $ 616 Total current 181 ( 71 ) 616 Deferred Federal ( 104,351 ) — — State and local ( 14,003 ) — — Total deferred ( 118,354 ) — — Provision for (benefit from) income taxes $ ( 118,173 ) $ ( 71 ) $ 616 100 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements The reconciliation of the Company’s effective tax to the U.S. statutory federal income tax is as follows: Year Ended December 31, 2025 2024 2023 (in thousands) Percent (in thousands) Percent (in thousands) Percent Statutory federal income tax $ 6,858 21 % $ ( 972 ) 21 % $ ( 5,640 ) 21 % State and local income taxes, net of federal income tax effect (1) ( 10,264 ) ( 31 ) % 114 ( 2 ) % 338 ( 1 ) % Tax credits Research & development tax credits ( 2,915 ) ( 9 ) % ( 4,805 ) 104 % ( 2,296 ) 9 % Change in valuation allowance ( 87,509 ) ( 269 ) % 11,936 ( 259 ) % 4,475 ( 18 ) % Nondeductible items Stock issuance cost — % 1,178 ( 25 ) % — % Stock-based compensation ( 30,207 ) ( 92 ) % ( 12,641 ) 273 % ( 267 ) 1 % Other permanent differences 1,069 3 % 157 ( 3 ) % 239 ( 1 ) % Officer compensation - 162(m) 7,794 24 % 4,701 ( 102 ) % 2,666 ( 10 ) % Fair value adjustment — % 154 ( 3 ) % 181 ( 1 ) % Meals & entertainment 80 — % 53 ( 1 ) % 72 — % Worldwide changes in unrecognized tax benefits ( 3,079 ) ( 9 ) % 54 ( 1 ) % 909 ( 3 ) % Foreign tax effects Canadian rate differential 128 — % 71 ( 2 ) % 18 — % Canadian SRED credit (2) ( 406 ) ( 1 ) % 1,065 ( 23 ) % ( 704 ) 3 % Canadian valuation allowance 278 1 % ( 1,136 ) 25 % 625 ( 2 ) % Effective income tax $ ( 118,173 ) ( 362 ) % $ ( 71 ) 2 % $ 616 ( 2 ) % (1) The states and local jurisdictions that contribute to the majority (greater than 50%) of the tax effect in this category include Illinois, California, New York, Georgia, Pennsylvania, and Tennessee. (2) Canadian SRED credit refers to the Canadian Scientific Research and Experimental Development tax incentive program. 101 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements The significant components of net deferred income tax assets were as follows (in thousands): Year Ended December 31, 2025 2024 Deferred tax assets Reserves and allowances $ 3,400 $ 2,977 Lease liability 85 175 Net operating loss carryforward 80,404 52,776 Stock-based compensation 3,907 3,307 Capitalized research and development 28,441 42,610 Credits carryforward 22,033 16,937 June 2025 Convertible Notes 7,157 — Total deferred tax assets 145,427 118,782 Deferred tax liabilities Operating lease ROU asset ( 80 ) ( 165 ) Depreciable assets ( 274 ) ( 125 ) Acquired intangibles ( 7,764 ) ( 9,178 ) Data Revenue Partner Warrant ( 2,347 ) ( 2,302 ) Total deferred tax liabilities ( 10,465 ) ( 11,770 ) Less: Valuation allowance and other reserves ( 8,544 ) ( 107,012 ) Deferred tax assets, net $ 126,418 $ — The valuation allowance decreased by $ 98.5 million during 2025 due to the release of the valuation allowance on the Company’s U.S. and state deferred tax assets. As a result of the release, the Company recognized $ 126.4 million of previously unrecognized net deferred tax assets on the consolidated balance sheet. Additionally, the Company recorded $ 118.4 million in Provision for (benefit from) income taxes on the consolidated statement of operations and comprehensive income (loss), and $ 8.0 million as an increase to Additional paid-in capital related to the purchase of the June 2025 Capped Calls on the consolidated statement of stockholders’ equity. The remaining valuation allowance of $ 8.5 million primarily relates to California state tax credits and Canadian SRED credits as of December 31, 2025. Since the Company mainly conducts research and development activities in California, but earns a substantial portion of its U.S. income in other states, the Company could not assert, at the required more likely than not level of certainty, that it would generate future taxable California income sufficient to realize the benefit of those deferred tax assets. Similarly, the Company has historically generated more Canadian tax credits than it utilizes each year. Accordingly, the Company maintained a valuation allowance specific to California state tax credits and Canadian SRED credits. At December 31, 2025 the Company had approximately $ 339.9 million and $ 135.4 million of federal and state net operating loss carryforwards, respectively, available to offset future taxable income. Such carryforwards expire in varying amounts beginning in 2027. The federal net operating loss carryforwards of $ 254.7 million arising after December 31, 2017 do not expire. The Company also had federal and state research and development credit carryforwards of $ 18.5 million and $ 10.4 million, respectively. The federal tax credits expire in varying amounts beginning in 2034. The state tax credits do not expire. Additionally, the Company has approximately $ 0.5 million of tax credits in Canada, which are expected to expire in varying amounts beginning 2033. The Tax Reform Act of 1986 limits the use of net operating loss carryforwards in certain situations where changes occur in the stock ownership of a Company. The annual limitation may result in the expiration of net operating losses and credits before utilization. The Company performed a Section 382 analysis through December 31, 2025. The Company does not expect any previous ownership changes (as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended) to result in a limitation that will materially reduce the total amount of net operating loss carryforwards and credits that can be utilized. Subsequent ownership changes may affect the limitation in future years. 102 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions and Canada. In the normal course of business, the Company is subject to examination by taxing authorities throughout the nation. The Company is not currently under audit by the Internal Revenue Service or other similar state and local authorities. All tax years remain open to examination by major taxing jurisdictions to which the Company is subject. As of December 31, 2025 and 2024, the Company had $ 7.4 million and $ 12.0 million, respectively, of gross unrecognized tax benefits related to federal and state research credits. As of December 31, 2025, $ 5.0 million of these unrecognized tax benefits, if recognized, would affect the Company’s effective tax rate. T he aggregate changes in the balance of gross unrecognized tax benefits were as follows (in thousands): Balance as of December 31, 2023 $ 12,059 Additions based on tax positions related to 2024 2,050 Reductions for tax positions of prior years ( 2,077 ) Balance as of December 31, 2024 12,032 Additions based on tax positions related to 2025 1,816 Reductions for tax positions of prior years ( 6,477 ) Balance as of December 31, 2025 $ 7,371 The amounts of cash paid (refunds received) during the period for income taxes, net were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Federal $ — $ 481 $ — State and local ( 893 ) 1,900 697 Cash paid (refunds received) during the period for income taxes, net $ ( 893 ) $ 2,381 $ 697 15. Related-Party Transactions Hubble Transactions In 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 (the “Hubble Agreement”), (ii) a Hubble SAFE investment (the “Related Party SAFE”); and (iii) Hubble’s issuance of a warrant to purchase common stock (“Related Party Warrant”). The Hubble Agreement has an initial term of 5 years beginning on November 12, 2024. 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. 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 will pay the Company a percentage of revenue earned from leveraging the new global location-tracking network service offering. Refer to Note 2, "Summary of Significant Accounting Policies" for additional information. As of December 31, 2025, and 2024, the Company earned immaterial net revenue from the revenue share arrangement. 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 %. During the years ended December 31, 2025 and 2024, the Company recognized $ 0.2 million and $ 0.1 million in hardware revenue from sales to Hubble, respectively. The related cost of hardware revenue totaled $ 0.1 million and zero during the years ended December 31, 2025 and 2024, respectively. These amounts are reflected within hardware revenue and cost of hardware revenue, respectively, on the Company’s consolidated statements of operations and comprehensive income (loss). As of December 31, 2025 and 2024, the Company recorded immaterial amounts and $ 0.1 million of accounts receivable, net from Hubble, respectively, on the Company’s consolidated balance sheets. 103 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements As of December 31, 2025, 2,049,191 shares of the Related Party Warrant have vested. The carrying value of the warrants as of December 31, 2025 and 2024, was $ 3.9 million and is also included in prepaid expenses and other assets, noncurrent. The related deferred revenue, current and deferred revenue, noncurrent balance as of December 31, 2025 was $ 0.8 million and $ 2.2 million, respectively. The deferred revenue, current and deferred revenue, noncurrent balance as of December 31, 2024 was $ 0.9 million and $ 3.0 million, respectively. The fair value of the warrant included within deferred revenue is amortized to other revenue over the life of the agreement. The Company recognized $ 0.9 million and zero in other revenue on the consolidated statements of operations and comprehensive income (loss) in connection with the Related Party Warrant during the year ended December 31, 2025 and 2024, respectively. Refer to the “Other Revenue” section of “Note 2, "Summary of Significant Accounting Policies" for additional information on the Related Party Warrant. As of December 31, 2024, the carrying value of the Related Party SAFE was $ 5.0 million and included within prepaid expenses and other noncurrent assets on the consolidated balance sheet. In April 2025, the Related Party SAFE converted to the Related Party Investment and resulted in a gain of $ 0.9 million, which was recorded within gain on change in fair value of investments on the consolidated statement of operations and comprehensive income (loss). As of December 31, 2025, the carrying value of the Related Party Investment was $ 5.9 million and is included within prepaid expenses and other noncurrent assets on the consolidated balance sheet. Refer to Note 5, "Fair Value Measurements" for additional information. Payments made on behalf of Related Parties in connection with the U.S. IPO On June 6, 2024, in connection with its U.S. IPO, the Company issued and sold 3,703,704 shares of common stock and certain selling securityholders including members of the Company’s Board of Directors, executive officers, non-executive employees, and other stockholders of the Company, 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. The Company did not receive any proceeds from the sale of shares of common stock by the selling securityholders. The Company paid the underwriting discounts and commissions in connection with the sale of shares of common stock by the selling securityholders. A summary of the expenses paid on behalf of the selling securityholders is detailed below (in millions): Year Ended December 31, 2024 Executive Officers (1) $ 0.9 Board of Directors 3.9 Non-Executive Employees 0.1 Other 0.6 Total $ 5.5 (1) Includes $ 0.7 million in expenses paid on behalf of a securityholder who is both an executive officer and member of the board of directors. The $ 5.5 million in total fees paid have been recorded within Other income (expense), net on the consolidated statement of operations and comprehensive income (loss) for the year ended December 31, 2024. For additional details regarding this transaction, refer to the prospectus supplement filed with the SEC on June 6, 2024 as well as the registration statement on Form S-3 (File No. 333-279271) filed with the SEC on May 9, 2024, of which the prospectus supplement forms a part. 16. Defined Contribution Plan The Company sponsors a defined contribution plan under Section 401(k) of the Internal Revenue Code covering substantially all employees over the age of 21 years. Contributions made by the Company are voluntary and are determined annually by the Board of Directors on an individual basis subject to the maximum allowable amount under federal tax regulations. Employer contributions to the plan were $ 1.4 million, $ 1.2 million, and $ 1.1 million for the years ended December 31, 2025, 2024, and 2023, respectively. 104 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements 17. Net Income (Loss) Per Share The Company computes basic and diluted net income (loss) per share in conformity with ASC 260, Earnings per Share. Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share reflects the potential dilution that could occur from securities that may result in the issuance of common stock and is calculated using the treasury stock method. Diluted weighted-average shares outstanding include the effect of potential dilutive securities outstanding during the period, including stock options, restricted stock units, warrants, and other similar equity-based securities, which are calculated using the treasury stock method, as well as convertible debt instruments, which are calculated using the if-converted method. Potential common shares are excluded from diluted net income (loss) per share when their effect would be antidilutive. The following table presents the calculation of basic and diluted net income (loss) per share (in thousands, except share and per share data): Year Ended December 31, 2025 2024 2023 Numerator: Net income (loss) $ 150,832 $ ( 4,555 ) $ ( 28,171 ) Denominator: Weighted-average shares used in computing net income (loss) per share, basic 77,251,239 72,125,571 66,748,542 Net income (loss) per share, basic $ 1.95 $ ( 0.06 ) $ ( 0.42 ) Year Ended December 31, 2025 2024 2023 Numerator: Net income (loss) $ 150,832 $ ( 4,555 ) $ ( 28,171 ) Denominator: Weighted-average shares used in computing net income (loss) per share, basic 77,251,239 72,125,571 66,748,542 Effect of dilutive securities: June 2025 Convertible Notes 43,432 — — Outstanding options, RSUs, and warrants 7,877,744 — — Adjusted weighted-average shares used in computing net income (loss) per share, diluted 85,172,415 72,125,571 66,748,542 Net income (loss) per share, diluted $ 1.77 $ ( 0.06 ) $ ( 0.42 ) The potential shares of common stock that were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been antidilutive are as follows: Year Ended December 31, 2025 2024 2023 Issuances under stock incentive plan, stock options — 5,673,947 6,625,812 Issuances upon exercise of common stock warrants — 7,761 137,658 Issuances upon vesting of restricted stock units 106,496 5,091,601 6,182,543 Issuances upon conversion of convertible notes — — 325,981 Total 106,496 10,773,309 13,271,994 105 Table of Contents Life360, Inc. Notes to Consolidated Financial Statements 18. Subsequent Events On January 2, 2026, the Company completed the acquisition of Nativo, Inc., acquiring all outstanding equity interests. The total consideration was approximately $ 106.0 million, and consisted of $ 78.0 million in cash and $ 28.0 million in shares of the Company’s common stock, measured based on the closing market price on the acquisition date in accordance with ASC 805. 106 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.