Ann: Quarterly Activities/Appendix 4C Cash Flow Report, page-3

MS likes it:

Life360 delivered a very strong 2Q and is tracking ahead of US$110-120m AMR guidance.

Key positives:

- Total MAU 32.3m +4.2 in 2Q closing in fast on FY21 MSe of 33.8m

- US MAU +2.1m to 20.3m appears on track vs MSe FY21e of 23.3m

- 1H21 revenue of A$48m plus 2H annualisation of US$106m AMR puts secured revenue at >US$100m vs MSe US$106m

- Added US$16m AMR in 1H21, requires a further US$16m in seasonally stronger 2H to hit MSe

- Cash burn US$1.9m in 2Q vs $3m in 1Q Key concerns:

- Flagged Covid variants may limit 2H21 upside, but still can deliver upper end of guidance

- Management pointed to harder reinvestment and EBITDA losses >$15m (MSe already -US$18m)

We see the top of funnel (MAU) and subscriber growth as the key drivers of the stock and expect these data points to be well received.

We are OW 360.