These statements are based on assumptions we believe reasonable as of today, August 10, 2026, and we have no obligation to update them except as required by law. We will also present both GAAP and non-GAAP financial measures. Reconciliations are included in our earnings press release on our investor relations website. This is an audio-only call with no slides. Our updated investor presentation is available as a reference on our IR website, along with our quarterly shareholder letter from our CEO and CFO. The letter goes into additional detail beyond our prepared remarks on this call. We will begin with a business update from our CEO, Lauren Antonoff. Then CFO Russell Burke will review financial results and outlook, followed by Q&A. CRO James Selby will be joining the call to answer questions. Please limit questions to one per participant to start. I will now turn the call over to Lauren.

Good morning and good afternoon. Thank you for joining the call. We hit a major milestone in Q2, crossing 100 million monthly active users. That's tens of millions of families who trust us every day to keep them connected and safe. Our Q2 results show our discipline execution paying off. We added 4.6 million active members to reach over 102 million MAL, and we delivered our strongest Q2 paying circle growth on record with 185,000 net subscription ads. The signals we pointed to in Q1 delivered as expected, including strong demand, deepening penetration, and steady growth on higher-end devices. Importantly, we ended Q2 back on our MAL glide path. International MAL grew 20% year-over-year, with the US growing 14%, driven by improved brand awareness, funnel efficiencies, and the value we bring to everyday family life. We had tailwinds from unaided brand awareness, which rose an impressive four points in the US during a quarter with lower marketing spend. We're also building momentum internationally. We launched new go-to-market initiatives in Brazil and Mexico and saw unaided brand awareness there increase from nine to 14% in Brazil and from 10 to 16% in Mexico. Both countries are now around that 3% penetration mark where we've historically seen growth rates accelerate. We're reinforcing this momentum with new partnerships, including AT&T Mexico, who featured Life360 in their Back to School campaign across television, radio, cinema, retail, and digital. In Germany, we launched our first local campaigns in Berlin and Cologne, and we're seeing a measurable lift in registration there. We've also been having some fun with global cultural moments. We tapped into the World Cup and brought Disney's Toy Story 5 into the app. Members around the world sent 180 million quick notes tied to those touch points alone. We're proving that cultural relevance is a meaningful lever for member engagement and delight. Meanwhile, our subscription business continues humming along with 27% growth in paying circles. As we get ready to relaunch PetGPS, we've updated our pricing for new subscribers and we're shifting into a bundled PetGPS offer that starts with silver. This is a deliberate choice of subscription scale over near-term monetization as we build pets into a long-term driver of subscription growth. Moving on to our advertising platform, we've largely completed the integration on our shifting focus to commercialize in what we've built. Advertising has become a substantial revenue stream, contributing $22 million this quarter, with revenue tied to the Life360 app growing the fastest. Most importantly, we're starting to prove the advantage that our platform and our audience deliver. Our testing shows that campaigns using our audience data see call-to-action rates up to 47% higher than campaigns using third-party targeting. One example is a top grocery store chain that saw a lift of over 40% in store visits from a single campaign with exceptional performance among the 21 to 24-year-olds. These are compelling results. We're still early in the ads business, but our direction is clear, the momentum is building, and we have a long runway ahead. With so much opportunity in front of us, leveraging AI is essential. AI continues to accelerate both how we build Life360 and what we believe the platform can become. More than 100 million members use Life360 to navigate family life, creating real-world data that no competitor can replicate. One of the earliest benefits we're seeing is from our proprietary AI-powered monetization engine, which continues to deliver exceptional performance by automating our use of first-party data to deliver the right message to the right member at the right time. We're now experimenting with the same approach applied to engagement and retention to support member growth. On the product side, we're leveraging AI as we start to build more dynamic experiences for different types of families. And we're expanding our family AI lab led by executive chair and co-founder Chris Hulls. We entered into an agreement to acquire the team and technology from SuperDuper. What stood out to us about SuperDuper is that they're using AI to understand the real complexities of everyday family life, the calendars, emails, schedules, and errands scattered across dozens of apps, and to connect those dots into a single meaningful picture. This work is bringing us closer to making family life easier, more coordinated, and a little more fun. As we cross the 100 million monthly active users, our disciplined execution has brought our once ambitious targets of 150 million Mal and a billion dollars in revenue within sight, alongside continued margin expansion. We're tailoring our product experiences for more members in more geographies and more life stages with new capabilities like morning check-in, live progress, and our Apple Watch app. We're building new lines of business that didn't exist a few years ago, including advertising, pets, and next, aging parents. Each takes time to nurture, and all are significant growth opportunities built on our established platform and the trust families have placed in us. And each makes Life360 more essential to everyday family life. A strong Q2, momentum heading into back to school, and our upcoming Pets launch set us up for a strong second half across products, subscriptions, advertising, and international. I'm looking forward to showing you more of that momentum in the back half of the year. And with that, I'll turn it over to Russell to share more detail about our performance and outlook.

Thanks, Lauren. Q2 delivered strong financial results across our core business. and our transition to an AI-native operating model is introducing some new revenue and cost dynamics worth walking through. All figures are unaudited and in US dollars. Total revenue grew 38% to a record $159 million. Subscription revenue grew 31% to $115.6 million, with core subscription up 34%. driven by 27% paying circle growth and 5% higher ARPPC. US subscription revenue grew 28% and international grew 45% with particular strength in the UK, Australia and New Zealand and Canada. Advertising revenue was $22 million, growing sequentially and up substantially year over year, reflecting the build out of our managed service offerings both on and off app and contribution from programmatic advertising. Hardware revenue was $9.8 million, down 20%, reflecting our strategic exit for tile from brick and mortar retail and some pet GPS inventory constraints as we completed a production line move. Other revenue grew 25% to $11.6 million. and annualized monthly revenue reached a record $537.2 million, up 29% year over year. Gross margin was 80%, up from 78% in Q2 last year. There are three distinct dynamics across our revenue lines. Subscription gross margin increased to 87% from 85% reflecting continued cost optimisation. Advertising gross margin was 57%. This is down from last year and largely reflects the fact that we are scaling the advertising business by building out a managed service operation, which under GAAP brings costs that impact gross margin. These include traffic acquisition costs, technology and hosting, personnel costs, and data and content licensing. Due to changes in revenue mix, we now expect advertising gross margin to normalize towards 65 to 70% on a GAAP basis in Q4 as we exit 2026. Hardware gross margin was 43%, up from 17% a year ago, but that increase was largely a one-time item, primarily a 3.6 million tariff refund that we'd expected later in the year. Excluding that refund, hardware gross margin would have been closer to 7%, more representative of where we've been trending as we complete our retail exit. We're pricing the pet GPS device itself relative to competing devices to drive adoption, consistent with our strategy of using devices to complement the member experience rather than drive revenue or margin on their own. And we expect a loss at the device gross profit level initially. Given the average pet lives of 10 plus years, we're building this custom relationship for the life of pets and beyond. The silver pet GPS bundle will be priced at $99 annually. We don't expect pet GPS to be a material revenue contributor this year as the category continues to build. Operating expenses were $127 million, up 43%. As we've previously discussed, our operating expense profile has changed slightly this year, partly due to deliberate investment decisions, but also due to the fact that we're brought on a level of fixed operating costs that don't exactly match the timing of revenues due to seasonality. But importantly, they do not impact our overall growing operating leverage. R&D grew 47% to $47.4 million, flowing from advertising engineering headcount, expanded platform infrastructure, and continued product investment. Sales and marketing grew 35% to $52.3 million, reflecting higher variable platform commissions on subscription growth and the addition of Nativo's sales organization. partly offset by growth media that we intentionally shifted into Q3. General and administrative expenses grew 57% to $27.2 million, primarily personnel and technology costs from scaling the business, along with our hardware warehouse relocation and final Nativo integration costs. In Q2, we reshaped our technology organization to accelerate our transition to an AI native operating model, reallocating investment from certain roles toward AI native capabilities and workflow redesign rather than backfilling them. That reallocation is already producing results by enabling us to move faster. Taking one example, our personalization engine built on this same foundation is generating real revenue impact and we're accelerating investment in it based on that early performance. We expect this transition to build faster execution and meaningful operating leverage over time with that benefit compounding from 2027 onward. Gap net income was $5.1 million, including a $4 million tax benefit with basic and diluted EPS at $0.06. Adjusted EBITDA was $31.1 million, up 53% at a 20% margin versus 18% a year ago. Compared to the 16% outlook we gave for the quarter, the timing of the tariff refund drove our actual result about three percentage points higher, and operating leverage added one percentage point. Operating cash flow was $23.8 million, up 79%. We ended the quarter with $467.7 million in cash, cash equivalents, restricted cash, and short-term investments. In May, our board authorised a multi-year repurchase program of up to $225 million and we repurchased $13.2 million of stock in the quarter, leaving $212 million available. We'll continue to be strategic about the pace of repurchases, balancing capital return and offsetting dilution with continued investment in long-term growth. On guidance, we're reiterating our full-year revenue outlook of $650 to $685 million. Within that, we're raising subscription revenue guidance to $475 to $480 million, up from $470 to $475 million, and lowering hardware revenue guidance to $35 to $45 million, down from $40 to $50 million. reflecting device pricing and volume shifts. Advertising and other revenue guidance are unchanged at 98 to 150 million and 42 to 45 million respectively. Our full year adjusted EBITDA outlook of 130 to 140 million also remains unchanged, reflecting operating leverage flow through offset by advertising mix shifts. A couple of modelling points for the balance of the year. Even with some growth media moving from Q2 to Q3, we expect Q3 adjusted EBITDA margin of approximately 18%, showing continued sequential improvement from Q2 while excluding the tariff benefit. We expect Q4 operating expenses as a percentage of revenue to be below Q4 2025. And we expect Q4 2026 adjusted EBITDA margin to exceed the 22% margin we delivered in Q4 2025. The financial setup into the back half is strong. Revenue acceleration, margin expansion, and paying circle and MAU growth are all pointed in the same direction. We look forward to demonstrating that in the quarters ahead.

We will now open up the call to questions and answers. As a reminder, please limit yourself to one question to start and re-queue. Also a reminder, joining us today is James Selby to discuss questions related to advertising. With that, we'd like to open up the call to Lafatani Sotaryu from MST. Can you please unmute your line? Okay, great.

I am now, I just had the option then. Congratulations on a great result and good to see MAU is back on track with a clear record for second quarter paying circle additions. Can I first clarify something Russell said and then I've got a question for Lauren and James. Russell, did you say when the 25% increase to silver package and 13% increase to gold will be implemented from. Has that already gone through that price hike or is that still to come through? And my question for Lauren and James, So we're starting to see some big brands coming through that are being associated with like 360, like Disney, EasyJet. You've got AT&T in Mexico and you've got Apple Watch integration. Some of that isn't strictly on the advertising side, but can you talk us through, are you looking at this more from a one company approach? Are you sort of starting softly like you did with Uber and then expanding? How should we consider the next couple quarters in what we should expect to see on the advertising front with some big brands? Thank you.

So, Lef, let me quickly cover the pricing question first. We're in the process of implementing that, so you'll actually see that fairly soon. And just to emphasise, it is for new subscribers only products.

and then going into the brands. I think it's super exciting, the brands that are coming to us and want to work to us and the way that brands are responding to us when we approach them. We do start from a full company. What are the ways that we want to work together? For Disney, for example, we put together a vision for how would we like to work with Disney? Often these partnerships, like you saw with Uber, will start with let's do something first and then build confidence and build that relationship as it goes. and often we will consider whether advertising is part of that, whether it's early or late. I don't know, James, do you want to add anything to that?

Yeah, I think the only thing I would add is that the brand partnerships really give this fantastic halo effect, making the Life360 brand better known and that helps us push them into bigger partners and new partners.

Can I just clarify? So, you know, you've talked to the platform being in place, Nativo is now all set. How should we look at the ramp up from here in advertising? Maybe you can even just talk to the seasonality, you know, how much is typically in the fourth quarter in terms of the overall revenue for the advertising part of the business? Thank you.

I'm going to let James answer this, but I couldn't help but chime in because the thing that's really exciting for me is not only are we getting some of these great brand relationships, but we're starting to be able to demonstrate the value that we can deliver based on our unique real world data. So James, we'll answer some of those details though.

Yeah, so, you know, as we noted, the first half has really been about the tech integration and now it's really about scaling that integration and taking that to market. We had a really fantastic Cannes festival where we had a great setup there. We've been doing many regional marketing events that have been going pretty well. and a lot of the campaigns are starting to show real-world proof points, much like what Lauren spoke about earlier with one of those grocery chains. So we're getting great proof points and that motion in the market is really taking steam.

and just on the financial aspects of that, Laf, our guidance is really unchanged from what we've said before. We do look to sort of Q4 as being this sort of seasonally high period in the advertising business. And we've said before that we expect Q4 revenue to be I should also just further clarification on the price increases that they are for U.S. subs only at this point.

Great. Thanks, Slav. I'd like to open it up now to Mark Mahaney from Evercore.

All right, two questions, please. First, just go through, Russell, why the increase in subscription revenue expected results or guidance for the full year. Just go through those factors. That sounded positive. And then I want to make sure I understand this recovery to growth in MAUs. Is there something in the linearity of the quarter that proves that to you? That 16% is kind of a deceleration from last quarter. So what convinces you that your MAU growth is back on track and potentially back to that 20% goal that had been set at the beginning of the year? Thank you.

So we might have to bounce around a little because there is a lot in there. But I'll start with the motivation on price increase and then let Russell talk about the implications of that. and then we'll come back to the Mal question. So from the price perspective, we've made our priority really growing the number of subs rather than the price per sub. But as we were learning about and testing how to get the most scale out of the pet GPS, what we learned is that bundling it in and bundling in at the lower tier was the way we were going to get the biggest growth. that caused us to look at pricing. That's a lot of value for that tier. And we decided to make a modest increase. So it's a $2 increase on the monthly. It's a equivalent increase on the annual. And then we made adjustments to match that angle basically. Russell, do you wanna talk about what that means?

Yeah, from a pure technical point of view, Mark, it's sort of similar to what we've seen before with price increases. It's a relatively small impact over a period of time for increases to new subs, especially where we're testing that out and perhaps have a holdback group. The larger potential down the road somewhere is across the existing user base. To your question on MAU, I think it's really a factor of that growth that you referred to is over the whole quarter period of period, whereas as we've talked about, that trajectory was really building up over the quarter. So the exit rate is a bit higher than the average for the quarter.

Yeah, I'll just add to that. Not only did we end the quarter with just really good pace, but we've got a lot of stuff in store in the back half of the year. Q3 is when we do back to school. We have a lot of exciting things in pets. So we have the momentum we built up in Q2 that really drove the good result there, coupled with a number of initiatives in the back half of the year.

Thank you, Russell. Thank you, Lauren.

Thanks, Mark. Next, I'd like to open it up to James Bales with Morgan Stanley, please.

Yeah, hi guys. I'd like to firstly cover off on Mal. Can you maybe help us understand about what you're seeing on back-to-school performance and what gives you the confidence in a re-acceleration into quarters three and four?

So it's early on back to school, but so far we're seeing really great results, not only from the beginning of back to school, but we're actually still getting benefit from the advertising that we did in Q1. So one of the factors that is helping to drive some of the good numbers we're seeing is just an increase in brand awareness, both in the U.S. and in those newer international markets. And that makes everything else that we do more customers more receptive to those things. I don't know, Russell, if there's more detail that you want to add.

No, I actually don't think there's a lot more to say on that. So let's leave it at that. Wow.

Thanks, James. Next, I'd like to open it up to Andrew Boone from Citizens.

Thanks so much for taking the question. I wanted to go to Pet and just understand your progress with Pet in the quarter. I'll leave it at that. Thank you.

This is something I'm super excited about. We're really gearing up for a lot of exciting things later this month. You know, we moved our manufacturing, so we had inventory come down for a while and we've got that back going again. We've made some improvements there as well. One of the biggest changes, I think, is a new go-to-market. So before we sold the device as a standalone, now we're going to be selling it bundled. We think that's both a better customer experience and it's good for the business. So it's a win-win there. And then one of the most exciting things is that when we released the PetGPS, we also introduced the PetFinder network. and, you know, this was a way to bring the value of pets to every member and also help us understand who had pets. The adoption there, you know, we have now over 8 million pets registered. The adoption there has really exceeded our expectations and it's made us realize that there's a real opportunity to serve pet parents throughout our base, whether or not they get the tracker. And so we're going to be doing more more things that are good for pet parents on the free tier, and then those things get even better when you have the paid tier.

Thank you.

Thanks, Andrew. Next, we'd like to open it up to Julian Mulcahy.

Just a couple of questions from me. Firstly, Russell, with the tariff benefit you got, you've said you got it earlier than you expected. Was that the magnitude you were expecting in the full year? And is that why guidance hasn't changed on EBITDA? And secondly, maybe for Lawrence, The conversion rate of free to paying has been edging up for nearly two years now. Is there anything you're doing differently now that you weren't previously? And how far do you see that conversion rate lifting from the current levels? Thank you.

Thanks, Julian, and welcome back.

Thanks, Russell.

I'm going to cover the first part of your question in a little more detail about guidance. You asked specifically about the tariff refund. and you're absolutely correct. We had expected that in the second half and that was sort of built into our guidance as such. But there's a timing difference there that came into Q2 and that's why we gave the sort of specific details of the impact on adjusted EBITDA in Q2. in Q2, so you could sort of lay that out. But talking about your guidance generally, in addition to that, in the second half where we are seeing a little bit of a bump in subscription revenue, which is why we increased guidance there, But there's also some other shifts. For marketing, we laid off marketing a little in Q2 and just made an intentional decision to push that into Q3. That's the... Our regular sort of back to school period. And so that, you know, the small incremental margin on higher subscription revenue to where essentially investing into marketing in Q2 to support growth and particularly in international territories as we start to push harder there. and then while advertising is building as we expected, we do recognize that there's really elevated seasonality as we've talked about for advertising and that does create a little bit of a higher risk and that's why we're leaving revenue and adjusted EBITDA guidance unchanged even though we raised in Q1.

And I'll take a question on the conversion rate. I really shouldn't let James do it because his team has done the work here, but I'll take it anyway. So the thing that drives conversion is customers understanding the value that you have in your product. It's partially what we build, but it's just as much customers figuring out that that stuff is in there. So we have some great benefits like roadside assistance and things like that that even many of our paying members don't know about. And so what we've done is this is one of the places where we've leveraged AI. What we've done is create an engine that takes the member profile, that looks at their behaviors, that looks at their families, and it creates a model. And it runs all of these tests to get the right message about our capabilities in front of the right member at the right time. And that's one of the big drivers that's improving conversion. Of course, we continue to improve the features. We have things like pet GPS. But I would say that the bigger jump right now is our ability to get that information in front of customers at the right time.

How much further does it go, do you think?

It's hard to say. There's definitely more gas in the tank. Right now, we're asking the team to broaden the technology platform so that we can use it not just for revenue, but those same sort of discoverability challenges are important for engagement. How do we get free members to use more of our capabilities so that they are more likely to create a new circle and bring in more friends or more likely to stick around with us? So I think it's got a lot of runway ahead of us, but I couldn't give you an exact target.

Thanks, Lauren. Thanks, Russell.

Thanks, Julian. Next, we'd like to open it up to Rob Sanderson from Loop.

Yeah, thank you. Two questions for me, please. Just a question on the pricing update, just the rationale behind sort of new users only. Do you think you're, you know, it seems like you're delivering a lot of value to the existing base as well. Why not raise the price across the board? Is it just sort of want to go slow and test the market at the reaction at the higher prices? You know, anything you can maybe share on the decision to just limit that to new users? And then question, Russell, Advertising gross margin, you went through a lot of detail on how the mix implications and everything we should be considering as we're modeling. It seems like you're kind of landing right where I was modeling to start with. I just am curious, did something change with that or are you just trying to provide incremental color to sort of get consensus into sort of more reflective of what you expect with mixed dynamics?

I'll take the new user questions, then I'll let Russell enter the second half. So the key thing for the reason we decided to adjust price in the first place was about scaling the pet business. And that is about literally getting new subscribers. So the problem we're trying to solve is a new subscriber problem rather than a dollar maximization problem. We want to be really careful when we consider raising prices on the base because we want to get that. We want many, many more subscribers as opposed to sort of the optimal revenue change. So we believe that we're going to learn a lot from the new members and then we'll decide how to take those learnings and consider what we want to do with the base. But the initial decision is really motivated around getting more new subscribers, more new sticky subscribers.

As far as the margin detail go, yes, that's exactly the intention was just to provide some more detail to help with modelling. We're really excited about the The potential for with the acquisition that gives us that full stack advertising range and coming with that is the highly valuable sort of managed services piece. which we think is a real opportunity but does have slightly lower margins than some of the other parts of the business. So we just wanted to lay that out. And the other aspect, obviously, as we've talked about is that as we scale the business, there are some fixed costs inherent there which we'll be able to gain leverage on and therefore grow margins as the business scales.

If I could add a follow-up to that, Russell, just so it's clear, your exit rate on Q4, that's obviously a really heavy seasonal quarter, so we should expect some seasonality again on the margins as we build through 2027, just as we're building our models?

Yes, I would build seasonality into it. Over time, we will be able to increase generally as a result of leverage, but there's definitely going to be seasonality impacts.

Okay, thank you both.

Thanks, Rob. Next, we'd like to open it up to Andrew Gillies from Macquarie.

Thanks, guys. Can you hear me?

Yep.

Perfect. Just glad that question was asked around the 4Q EBITDA margin. Just a quick clarification on that. Does that apply to the whole business? I mean, there are a couple of other things going on at the group level. How much of sort of that strong seasonality, are there any sort of underlying things on the margin side from the 4Q that we should be thinking about sort of dragging into 27? And then I've got to follow up as well.

What I would say is the subscription revenue margins are very stable. In fact, we've managed to push them up a couple of points in the last couple of quarters, and they are very stable and not really subject to seasonality. The pieces that are subject to seasonality is obviously the advertising business that we've talked about, and also the hardware business. And that will be particularly affected this period by what we've talked about with the pet GPS device, which will impact margins but give us considerable benefit in the longer run on subscription revenue.

Perfect. Thank you very much. And then just a quick follow-up, maybe for Lauren. Just on the Apple Watch launch, some of the underlying subscription dynamics, you've spoken quite a lot about pets and some other things, but just curious as to what you're seeing on the Apple Watch launch and really the rationale for how that improves potentially subscription dynamics, particularly in the US, but elsewhere as well.

Great. First of all, Apple Watch has not yet launched. It is in beta. So you guys noticed it before we were ready to sort of bring it out to the world. We want to make sure that it's a really great experience. And, you know, it's intended to be part of our free tier. It is not intended to be a subscription driver. The idea is that we want the families that join us both free and paid to be able to bring their whole families onto the map. and we know that families that are more engaged, that have more people, have a higher tendency to stay, they get more value and they have a higher tendency to get subscribers. So we're not planning to monetize it directly, but we get that indirect benefit of appealing to more families at earlier life stages, providing more value and hopefully win the right to serve them the subscription value.

Thank you very much. Thanks, Andrew. Next, we'd like to open up to Nitin Bansal from Bank of America.

Thank you for taking my question. So in 2Q, there was a step up in both R&D expenses and SPC. Can you help us understand what drove the increase? Is it majorly growing investments in AI? And how should we think about the run rate of these expenses going forward and the potential implications for AI investments on your 2027 margin? Thank you.

Yes, thanks for the question. In terms of R&D, the step up there was from two pieces. One is the headcount increase, which is a combination of normal headcount and R&D. and the additional heads that came with the Nativa acquisition. And some increases in sort of tech costs on the cloud operation side. To your specific question on AI, yes, we have seen those costs increase, particularly as we adopt that sort of very aggressively and encourage our employees to make use of it. but we have been able to really manage those costs in relation to overall headcount for R&D. So we're managing that on essentially a net basis, which is, we've been very effective at containing the overall cost base that way.

And on the SPC, any guidance on that?

I'm sorry, I didn't quite catch that.

On the stock-based compensation, what drove the increase?

on stock-based compensation, there's a couple of pieces and I'll talk more broadly than R&D. I'll sort of talk to that generally. We did see a bit of a step up in Q2 and there's two main drivers for that. One is simply the headcount increase overall that we typically see. And again, that's partly driven by the Nativo acquisition. The other aspect which is not quite as obvious is that there were some performance equity grants that were approved at our AGM in May that once approved essentially get backdated to the beginning of the year. and those performance grants, the way US GAAP accounting works is that they're actually expensed a little faster than normal grants. They still vest over the agreed period, but they do get expensed faster. That means that Q2 for SBC will be the highest quarter for us for SBC costs for this year and that will start to normalize in Q3 and Q4.

Thank you.

Thanks, Justin. I'd like to open it up to Shiraz Ahmed from Citi.

Thanks. Maybe just a question for Lauren. Lauren, in terms of MAU cadence, right, I mean, pretty strong 2Q, good improvement. But just given you have left the guidance rate unchanged, just keen to understand how you're thinking about 3Q and 4Q, because we had this discussion before where you'll have to have record quarters in the third quarter and fourth quarter, right? So how are you thinking about it? And do you actually think 20% is achievable?

Thank you so much.

And any reason why you've now formally given that, what do you call it, passive users or something in the appendix? I think it's 19 million. Any reason for that? Do you reckon that comes into MAU? There's initiatives to put that in?

We sometimes look at passive users and try to activate them, but I think it's more to give a more complete picture of what our user base really looks like. We are a little bit unusual in how we look at users and we have a very definition, very narrow definition of who counts as an active user. You have to open the app, even though people are literally giving us their location all day, every day, they're getting notifications, but they don't count. So I think we wanted to be transparent about that because there's a lot of these things that affect both are overall business growth and in particular revenue growth that just didn't have optics previously.

Got it. And quick one for Russell. Russell, can I just, just thinking about your guidance, pre-Q at 18% EBITDA margin and then leaving Julianne change. To get to your midpoint of EBITDA guidance, you sort of need to get like 30% EBITDA margin and 4Q, right? Is that fair or do you reckon you're trending towards the lower end? just given advertising and hardware gross margin. And also, wouldn't 4Q be having the highest sort of negative drag from pet tracker gross margin given that's the holiday period? Just keen to understand how to think about that and then fork into next year. Thanks. Yeah.

Yes, so there's a few parts to that, but... What I would say is that we've specifically said that Q4 adjusted EBITDA margin will be considerably higher than what we delivered in Q4 last year. I'm not saying that would get to that 30% number that you were discussing. And I don't think we need to get quite to that to deliver the guidance that we've talked about. In terms of the impact of the pet GPS device, I think hardware revenues as a whole have become a sort of smaller piece of the pie, even as subscription is growing very, very strongly. So essentially the impact of that will be felt, but based on what we see at the moment, that will be more than offset by the the subscription side of the business. So we're keeping our margin guidance intact.

Thank you.

Thanks, Suresh. I'd like to open the call up to Stephen Ju from UBS.

Great. So while we have you on this call, James, I just wanted to ask you, I think you touched on onboarding spend from brand advertisers. But given the location data, it seems like there's an underlying opportunity to drive more the performance ad budgets on the platform as well. So I'm wondering where that sits from a product development point of view in terms of the list of your priorities. And right now, what ad verticals are working particularly well? And I guess, Lauren, looking very much big picture, You're seeing other subscription-driven companies roll out advertising as a supplementary, I guess, stream of revenue. But the other thing that's happening in the background is that might help the entry point from a subscription fee standpoint. So this might be something that you might want to contemplate maybe a couple of years down the line. But I'm just wondering if having an ad-sponsored subscription model for like F360 is something that we should be thinking about longer term. Thanks.

Maybe I'll take that one first and then let James go from there. So when we contemplated bringing ads into the app, we were very clear that our first priority was to ensure that we continue to deliver member delight and that our app is a place where people really trust us with their family and with their data. And so we decided not to follow some of our peers who use ads sort of to annoy people into becoming subscribers. So that is not our intent. Ours is really to deliver value to members. Ultimately, our vision is to be able to have ads that are so good, kind of like Uber, where people don't even think of them as ads, where they're just value ads. And we'll see how close we can get to that. We're on a good start with some of the partners that we're with, but that is not our plan. James?

Yeah, so maybe I'll start on verticals because then it will lead nicely to our focus on performance. So on verticals, where we're finding the most success is really verticals that are in real world, in real life. So that might be automotive, QSR, travel, and retail. Where we are... able to provide something really unique in the market is with our Uplift product. This is our measurement product that we have, which helps us determine if I drove past a billboard, did I influence someone's behavior into going into that gas station or that specific coffee shop or whatever it is. We're finding a lot of success with that. It's a really unique product in that it uses deterministic data. And that's our focus on the performance side is working out where can we offer unique performance, which is driving real world behavior.

Thank you.

Thanks, Stephen. Next, we'd like to open up to Eric Choi from Baron Joey.

Thanks. Thanks, RJ. Hey, sorry, I just had one question on the second half outlook, but had two parts to it, just on the implied MAUs and implied ARP PC growth that you've got in your second half outlook. So sorry to keep harping on MAUs, but you previously mentioned April was still experiencing a bit under a million. It kind of implies May and June must have been doing close to 2 million MAUs a month, maybe a touch under. But the other point is you've also got July data now. So I was just wondering if you could confirm if we say took May to July, that kind of adjusted quarter, is that tracking on pace with say the high fives to 6 million MAU pace you need to hit guidance? And then just on ARP PCs, and so on. So I think that means you're implying ARPPC growth goes back to say 1% to 2% a quarter for the last two quarters. And then, sorry, it's a mouthful, but I just wanted to check that 1% to 2% is basically entirely driven by those US front book price changes. Thanks, guys.

Okay, I'll start us out here and then turn it over to Russell. When we set out and planned the year, we had a glide slope that we believed that we were going to deliver mal on. And what happened early in the year is that got delayed due to the problems that we talked about in Q1. What we saw as we got through the quarters, we got back on that glide slope. So I wouldn't say this is sort of like a major outperformance. It's performing now according to plan, which sets us up well for the back half of the year. But I'll let Russell take it from here.

and Eric, I'll start with a question you didn't ask, but which was why did the USARPPC decline slightly in the quarter? And that's purely sort of mathematical. It's it's the fact that there's 91 days in the quarter versus 90. If if it was normalized, it would have actually increased slightly. And to your question in terms of guidance, You're basically right. We would expect that tick up in ARPPC in both the US and international to come back to that sort of small, sort of lower single digit level. And that takes into account the impact of the price increase for new users in the US. Got it. Thanks, Russell. Thanks, Lauren.

Thanks, Eric. Next, I'd like to open the call up to Chris Savage from Bell Potter.

Thanks, RJ. Thanks for taking my question. It's a good follow-up to Eric's because I guess I'm trying to find the negative, why the market in the US salted off so aggressively. And the only numbers that missed mine in the markets were ARPPC and AMR. So Russell, can you just, like ARPPC has been going up consistently 1-2% per quarter. Was it just the 91 days that caused it to fall slightly or was it also some currency or volatility or seasonality or changing the mix or what was it?

There's a few pieces to that, Chris. One, for international, we are cycling through some of the benefit of the triple-tier territories, so we would expect that to grow a little slower going forward. In the US, we've also been cycling through some of the benefit that we had from and so on, dated sort of legacy holders. So that's pretty small impacts in both respect and amplified by the 91 days versus the 90 days. But we would expect that to normalize going forward. You also asked about ARR and I guess the thing to point out there is that it doesn't include Thanks, Chris. I'd like to open up the call to Annabelle Kuhn from EMP.

Hey guys, can you hear me? We can't. Great. Thanks for taking the question. Maybe sort of a two-parter, would love just to talk a little bit more about the shape of the marketing investment in terms of the margin guidance coming into Q3, how much of that is just sort of draw forward from where you guys sort of pull back a little bit in Q2 and how we should think about in Q4 in terms of sort of what does that marketing investment peak in Q3 versus it's more of just like a larger investment in marketing that we sort of need to drag forward into Q4. and then in terms of marketing as well you guys have been doing a lot of work promoting live 360 ads in conferences and going out there to market maybe could you just still give a little bit more detail on yeah how that marketing is going and like where you're seeing that flow through in terms of interest in products across uplift first place ads versus your on-site off-site thanks

I'll take the first part of that and then Lauren and James can cover the second. What I would say, Annabelle, is that there will be a step up in Q3. Q3 is typically our larger marketing period as we really support this sort of back to school in the northern hemisphere. What is also happening this year is that there is a little bit of a timing swap from Q3 Q2 to Q3 for the US. We did lay off a little in Q2 and have pushed that into Q3 and also in Q3 we wanted to support our international side as we really expand the territories that we're focusing on and wanted to really invest in the growth in those territories. So that will mean that Q3 will be sort of a little more elevated in terms of marketing spend that will come back to a more sort of typical spending Q4.

I can touch on marketing around ads. So a lot of the focus there is getting the Life360 ads brand name known. A lot of people know Nativo. A lot of people know Life360 as a consumer app. So we're really focused on just awareness of us as an ad solution. A lot of that focus is on our differentiated products, our differentiated capabilities. We're getting great reception when people understand the types of ways we can target users, the different customer signals that we are able to capture and are unique. Thanks, Sanibel. We have time for another question from Suraj Ahmed from Citi.

Thanks. Maybe just a question for James. James, in terms of the ad tech, one of the things that we had heard is, you know, the acquisition of Nativo, even with that, you actually, oh, Nativo did not have like an ID spine. So just keen to understand how you, do you now have the capability of an ID spine to take it from the first party data that you have right now and actually offering it to publishers? So just keen to understand that's been built because that was flagged as a gap. in some of the work that we did.

Yeah, the device graph is a key component of this. Being able to capture or address, I think we're at close to 100% of the US addressable ad market now across the platform. So that's using Life360 proprietary data to be able to target users on the Nativa platform. That work is complete and actually in market right now.

And then second thing, there seems to be some restrictions in the U.S. coming in terms of how much location data you can use. Like, for instance, it has to be 100 feet away or something. I don't know the exact restrictions from a particular point. So does that, I'm just wondering if that gives you an advantage being a closed full-text stack here end-to-end or is that, or can you not use the data for advertising in some of these states that are proposing this legislation? Thanks.

Yeah, absolutely. So you're absolutely right. This is an advantage for us, wherein the legislation is really focused on those who buy other people's data for targeting. Ours is all first party, consented, you know, consumers can opt out at any moment they would like. And so we're insulated from any of those risks. And it gives us an advantage as others are unable to use other people's solutions, and they're coming to our door instead.

Great, thanks.

We have time for a final question from Afetani Sotiriu, and after this, we'll conclude the call.

Thank you for the final question. I just wanted to follow up on the Apple Watch beta, and Apple was in the press yesterday. There's reports of this talking about Apple looking to completely relaunch some of its watches and its approach to its watch offering. What are some of the things that your collaboration or working with Apple may entail? Are you pursuing this because of, say, a kid's watch or is it part of the broader senior offering? And is it possible that some, you know, we can say that Disney is working with Apple or has collaborations in place as well. Is it a far-fetched to see something like an Apple Disney watch on my 360?

So our intent with Apple Watch is really about that mission that we have to serve more members at more life stages. And Apple Watch, both for kids and for people who are aging, it provides more options. You know, we see the world evolving to be less phone-centric and to be able to serve people in different ways. And I would say this is the first step for us for being able to be present on different kinds of services. And I would expect to see us in the future working with more device manufacturers in more ways.

And to the Disney, Apple possibility more specifically.

I certainly don't have anything to share.

Okay, thank you.

That concludes the call. I'll turn it over to Lauren to sign off.

Well, thank you all for joining us. This was an exciting quarter. Lots of great momentum and even more exciting stuff coming for Q3. So I look forward to talking with you all again then.

and probably before then.