Highlights

  • Bell Potter Securities issued a BUY rating on Life360 (ASX: 360) with a price target of AUD 35.50.
  • Life360 reported 32% annual Revenue growth to USD 489.5 million, alongside record user and subscriber additions.
  • Despite strong fundamentals, the stock remains down ~17% over the past year, reflecting Volatility in high-growth tech valuations.

Life360 Inc (ASX: 360) has attracted renewed institutional attention following a positive research update from Bell Potter Securities, which issued a BUY rating with a price target of AUD 35.50. The upgrade comes after the company reported record-breaking financial and operational results for FY25, highlighting continued momentum across its global family safety platform.

Despite strong underlying performance, Life360 shares are currently trading at AUD 19.30, reflecting a decline of nearly 17% over the past year. This disconnect between operational growth and share price performance underscores the broader volatility seen in high-growth technology and subscription-based software stocks.

Share Price Performance Reflects Market Re-rating Pressure

Life360’s share performance over the past twelve months has been influenced by shifting investor sentiment toward growth equities. While the company has consistently delivered strong revenue and user growth, the stock has experienced valuation compression, might be due to broader caution in the global technology sector.

At AUD 19.30, the stock remains significantly below broker target levels, suggesting that expectations for long-term subscriber expansion and monetization have yet to be fully reflected in market pricing. Trading activity has remained elevated around earnings announcements, indicating sustained investor interest in the company’s growth trajectory.

Bell Potter Upgrade: Confidence in Long-Term Subscription Growth Model

Bell Potter Securities’ BUY rating with AUD 35.50 target price reflects confidence in Life360’s scalable subscription-driven Business model. The broker view highlights sustained growth in monthly active users, improving monetization metrics, and expanding Recurring Revenue streams as key drivers of future valuation upside.

Record FY25 Results Highlight Strong Operational Momentum

Life360 delivered a strong FY25 performance, reporting total annual revenue of USD 489.5 million, representing 32% year-over-year growth. This growth was driven primarily by subscription revenue expansion, which increased 30% year-on-year.

Annualized Monthly Revenue (AMR) reached USD 478 million, also up 30% year-on-year, reflecting consistent monetization across its global user base.

One of the most notable achievements was the expansion of Monthly Active Users (MAU), which reached approximately 95.8 million, up 20% year-on-year. The company also recorded its highest-ever quarterly net additions in MAU, indicating accelerating platform adoption across both domestic and international markets.

Subscriber Growth and Monetization Trends

Paying Circles, a key subscription metric for Life360, increased to 2.8 million, representing 26% year-on-year growth. The company recorded 576,000 net additions in FY25, marking its strongest annual subscriber growth to date.

Growth was supported by improved conversion metrics in the U.S. and strong international expansion. U.S. paying subscribers grew 23% year-on-year, while international markets expanded 32%, highlighting the global scalability of the platform.

Average Revenue Per Paying Circle (ARPPC) increased 6%, driven by pricing adjustments, product mix improvements, and introduction of higher-tier subscription offerings. These factors contributed to stronger monetization efficiency across both developed and emerging markets.

Revenue Diversification and Emerging Business Lines

While subscription revenue remains the core driver of Life360’s business, other revenue streams are becoming increasingly relevant. Other revenue increased 86% year-on-year in Q4 FY25, driven by data partnerships and Advertising-related income.

This segment reflects the company’s gradual evolution toward a broader ecosystem model, where aggregated mobility and safety data supports commercial partnerships. Although still smaller than subscription revenue, this segment is growing rapidly and contributes to overall revenue diversification.

Hardware revenue, however, declined 19% year-on-year, reflecting pricing pressure and shifting product mix dynamics. Despite higher unit shipments, increased discounting and promotional activity impacted segment profitability.

Profitability, Cash Flow, and Balance Sheet Strength

Life360 reported a significant improvement in profitability during FY25. Adjusted EBITDA reached USD 93.2 million, reflecting strong Operating Leverage as revenue scaled.

Operating Cash Flow improved sharply to USD 36.8 million in Q4, representing a 199% year-on-year increase. This improvement highlights stronger cash conversion and improved cost discipline across the business.

The company also strengthened its balance sheet position, ending the period with USD 495.8 million in cash and equivalents, supported in part by Capital raised through convertible notes. This provides financial flexibility to support continued Investment in user growth, product development, and international expansion.

FY26 Outlook: Continued High Growth Trajectory

Life360 has guided for continued expansion in FY26, expecting 20% year-on-year MAU growth and consolidated revenue between USD 640 million and USD 680 million, representing growth of 31% to 39%.

Subscription revenue is expected to remain the primary growth driver, with projected expansion of 25% to 27%. Importantly, “other revenue” is forecast to grow at an even faster pace, reflecting accelerating monetization of data and Partnership opportunities.

Adjusted EBITDA is expected to reach USD 128 million to USD 138 million, implying continued Margin expansion toward approximately 20%.

The guidance also indicates seasonal weighting, with stronger profitability expected in the second half of FY26, reflecting investment timing and subscription growth cycles.

Risks and Execution Considerations

While Life360 continues to demonstrate strong growth momentum, several risks remain relevant. These include reliance on continued user Acquisition growth, competitive pressure in digital safety and tracking applications, and potential fluctuations in advertising and data partnership revenue.

Additionally, hardware revenue volatility and promotional discounting may continue to impact near-term segment performance. Currency fluctuations and international expansion costs also remain important considerations given the company’s global footprint.

Execution of FY26 guidance will be closely monitored, particularly given the expected second-half weighting of profitability.

Conclusion

Life360 is transitioning into a more mature high-growth subscription platform, supported by strong user expansion, improving monetization, and emerging diversified revenue streams. The Bell Potter BUY rating with a AUD 35.50 target price reflects growing confidence in the company’s ability to scale its global ecosystem and improve profitability over time.

Despite a year of share price weakness, FY25 results demonstrate continued operational strength, record user engagement, and accelerating financial performance. As the company moves into FY26 with strong guidance and expanding revenue streams, investor focus is likely to remain on whether sustained growth can translate into improved market valuation.