Life360 Shares Rocket 10% to Top ASX 200 as Investors Snap Up Bargains After Brutal Post-Earnings Sell-Off

SYDNEY — Shares of Life360 Inc. jumped more than 10% on Wednesday, making the location-sharing app maker the best performer on the S&P/ASX 200. Investors bought back in a day after the stock's sharp fall following its third-quarter results.

Life360 shares rose A$1.90, or 10.05%, to A$20.81, closing at their high for the day after trading as low as A$19.50. About 3.1 million shares changed hands, and the company was valued at about A$3.6 billion.

The rebound followed a 15.3% drop on Tuesday, when the shares closed at A$18.91 after the San Francisco-based company released its quarterly update. Even after Wednesday's gain, the stock is down about 55% from a year ago.

The quarterly figures were strong. Revenue rose 40% from a year earlier to US$174.1 million. Adjusted EBITDA increased 41% to US$34.6 million, a margin of about 20%, above the company's guidance. Adjusted earnings per share were 38 U.S. cents, compared with Wall Street forecasts of about 24 cents.

Monthly active users reached about 107.7 million, up 17% from a year earlier, while paying circles, the company's main subscription measure, grew 26% to about 3.4 million. Advertising revenue rose 250% to US$25.4 million, helped by the purchase of ad-tech company Nativo.

Life360 also raised its full-year 2026 revenue guidance to between US$665 million and US$681 million, from US$650 million to US$685 million.

Why the shares fell on Tuesday

Investors focused on management's comments about the fourth quarter. On the earnings call, executives said monthly active users were trending "toward the lower end of the range," and noted that the fourth quarter is "always generally a little bit lower than Q3."

Management also said U.S. net paying circle additions in the fourth quarter were "likely to be around half" of earlier expectations, because recent price increases would slow sign-ups. The company also cut its advertising outlook, and advertising gross margins narrowed after the Nativo integration.

Some analysts became more cautious. BofA Securities downgraded the Nasdaq-listed shares to Neutral from Buy and cut its price target to US$45 from US$60, saying advertising revenue missed its estimate of US$29 million. Macquarie also downgraded the stock to Neutral on Wednesday morning, arguing there was no clear earnings catalyst left in the fourth quarter.

Why the shares bounced

Other analysts said the sell-off was overdone. RBC Capital Markets said Life360's adjusted EBITDA beat its internal forecasts by about 11%, according to The Motley Fool Australia.

Life360 is also buying back its own stock. The company had about US$465 million in cash and US$181 million left under its US$225 million buyback program at the end of the quarter, after repurchasing US$31 million of shares during the period.

Technology stocks led the Australian market's recovery on Wednesday, after an early sell-off linked to hotter-than-expected U.S. inflation data. Life360 led the gains, while mining stocks lagged.

The stock has repeatedly fallen after earnings this year: about 10% after its first-quarter report, 18% after the second and 15% after the third. That pattern has made Life360 one of the most volatile large-cap technology stocks on the ASX.

Life360 is dual-listed on the Nasdaq and the ASX. Its app lets families share their locations and offers driving safety and emergency features. The company is trying to build advertising into a second revenue source alongside subscriptions.

Analysts are watching whether subscription growth holds up after the U.S. price increases and whether advertising can contribute more without squeezing margins. The company's next quarterly report is due in early 2027.