Shares in Life360 have soared after the ASX-listed location-sharing company closed out earnings season by beating its guidance and unveiling plans for another revenue stream with a new advertising model.
The San Francisco-based company on Friday posted $US20.6 million in earnings before interest, tax, deprecation and amortisation (EBITDA) for calendar year 2023, up from a $40.1 million loss the year before and a 47 per cent beat to its guidance of $12 million to $16 million in EBITDA.
Revenue was up 44 per cent to $US220.8 million and Life360 generated positive operating cash flow of $7.5 million, ahead of guidance of $5 million.
Late on Friday afternoon, shares in Life360 - the last ASX company to report its earnings this season - were the best performing in the ASX200, rising 34.9 per cent to a more than two-year high of $11.01.
The company has an ecosystem of location-tracking devices and smartphone apps aimed primarily at families, letting them keep tabs on things such as how safely their teenagers are driving and where they are.
It had 61.4 million active users at year-end, including 1.9 million in Australia, up 36 per cent from the 1.4 million Aussie users it had a year ago.
Most subscribe to the free service, with the number of its paying customers growing 21 per cent to 1.8 million.
The company plans to roll out a fuller version of its service in Australia between April and June and will launch an advertising business this year.
"We've shown we can monetise our users through subscriptions but how do you make money on the free users?" co-founder and chief executive Chris Hulls told AAP in Sydney on Friday.
"So more and more companies are saying there's a real opportunity here when you have a large mass of engaged users, that the data you have, the ability to sell spots and use that data to monetise, is very powerful."
Uber is on track to bring in $US900 million in revenue from its new advertising business, based on its fourth-quarter results, Life360 said in a presentation.
"We're in a similar size of those guys, from a user engagement standpoint," Mr Hulls said.
"Their revenues, we'd love to have, but in terms of their scale, we're not that far off."
The advertising could range from simple banners in the Life360 app to targeted offers to customers and ads based on where someone has been, both inside and outside the platform, Mr Hulls said.
"There's a lot we can do," he said.
"There's going to be a long, multi-year journey to really dial it in."
