管理層發言
Greetings, everyone, and welcome to our second quarter 2026 Earnings Conference Call. This call is being conducted as a Zoom audio webinar. We will make forward-looking statements during this call, which are subject to risks and uncertainties. A summary of these risks can be found in the Risk Factors section of our Form 10-K filing with the SEC dated March 2, 2026. 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. 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 disciplined execution paying off. We added 4.6 million active members to reach over 102 million MAU, and we delivered our strongest Q2 Paying Circle growth on record with 185,000 net subscription adds. 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 MAU glide path. International MAU grew 20% year-over-year, with the U.S. 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 4 points in the U.S. 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 9% 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 Pet GPS, we've updated our pricing for new subscribers, and we're shifting into a bundled Pet GPS 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 and are shifting focus to commercializing 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, e-mails, 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 crossed 100 million monthly active users, our disciplined execution has brought our once ambitious targets of 150 million MAU and $1 billion 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 place 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 U.S. 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. U.S. subscription revenue grew 28% and international grew 45% with particular strength in the U.K., 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 of 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 optimization. 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 customer 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've 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 head count, 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 the 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. GAAP 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 3 percentage points higher and operating leverage added 1 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 authorized a multiyear 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 million to $685 million. Within that, we're raising subscription revenue guidance to $475 million to $480 million, up from $470 million to $475 million and lowering hardware revenue guidance to $35 million to $45 million, down from $40 million to $50 million reflecting device pricing and volume shifts. Advertising and other revenue guidance are unchanged at $98 million to $150 million and $42 million to $45 million, respectively. Our full year adjusted EBITDA outlook of $130 million to $140 million also remains unchanged, reflecting operating leverage flow-through offset by advertising mix shifts. A couple of modeling 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 set-up 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 question and answers. 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 Lafitani Sotiriou from MST.
分析師問答
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 Life360 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 sort of couple of quarters in, in what we should expect to see on the advertising front with some big brands?
So 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 emphasize, it is for new subscribers only.
And then going into the brands, I think it's super exciting, the brands that are coming to us and want to work with us in the way that brands are responding to us when we approach them. We do start from a full-company view of what are the ways that we want to work together. For Disney, for example, we put together a vision for how 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 to expand 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?
Yes. 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 into, yes, bigger partners and new partners.
Can I just clarify? So you talked about the platform being in place. Nativo's now all set. How should we look at the ramp-up from here in advertising? Maybe you can even just talk to the seasonality. How much is typically in the fourth quarter in terms of the overall revenue for the advertising part of the business?
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 will answer some of those details though.
Yes. So 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 gone pretty well. A lot of the campaigns just start to show real-world proof points, much like what Lauren spoke about earlier with one of those grocery chains. So again, 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 Q4 as being the seasonally high period in the advertising business. And we've said before that we expect Q4 revenue to be approximately double that of Q1. I should also just further clarify on the price increases that they are for U.S. subscribers only at this point.
Thanks, Laf. 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 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 makes you — 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?
We might have to bounce around a little because there's 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 MAU question. So from the price perspective, our priority has been growing the number of subscribers rather than increasing price per subscriber. 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 it in at the lower tier was the way 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 an equivalent increase on the annual, and then we made adjustments to match that in Gold basically. Russell, do you want to talk about what that means?
Yes. From a technical point of view, Mark, it's 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 subscribers, especially where we're testing that out and perhaps have a holdback group. The larger potential down the road would be 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-over-period, whereas that trajectory was really building up over the quarter. So the exit rate is a bit higher than the average for the quarter.
I'll add that not only did we end the quarter with strong pace, but we have a lot of initiatives planned for the back half of the year. Q3 is when we did 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.
Thanks, Mark. Next, I'd like to open it up to James Bales with Morgan Stanley, please.
I'd like to firstly cover off on MAU. Can you maybe help us understand about what you're seeing on back-to-school performance? And what gives you the confidence in a reacceleration into quarters 3 and 4?
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. One of the factors that is helping to drive some of the good numbers we're seeing is just increased brand awareness, both in the U.S. and in those newer international markets. That makes everything else that we do more effective because customers are more receptive. Russell, if there's more detail you want to add?
No, I don't think there's much more to add on that, so let's leave it at that.
Thanks, James. Next, we'd like to open it up to Andrew Boone from Citizens.
I wanted to go to pet and just understand your progress with pet in the quarter. I'll leave it at that.
This is something I'm super excited about. We're gearing up for a lot of exciting things later this month. 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 is a new go-to-market. Previously, we sold the device as a standalone. Now we will sell it bundled. We think that's both a better customer experience and good for the business. So it's a win-win. One of the most exciting things is that when we release the Pet GPS, we also introduced the Pet Finder Network. This brings the value of pets to every member and also helps us understand who has pets. Adoption there has really exceeded our expectations; we now have over 8 million pets registered. It made us realize there's a real opportunity to serve pet parents across our base whether or not they get the tracker. We'll do more things that are good for pet parents on the free tier, and those things get even better when you have the paid tier.
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 that 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 Lauren. 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?
Thanks, Julian, and welcome back. I'll cover the tariff refund detail. We had expected that refund in the second half, and that is built into our guidance. The difference is timing: it came into Q2 earlier than planned. That's why we gave specific details of the impact on adjusted EBITDA in Q2 so you could lay that out. On guidance more broadly, in the second half we're seeing a bump in subscription revenue, which is why we increased guidance there, but there are other shifts. For marketing, we reduced marketing a little in Q2 and intentionally pushed that into Q3 to support back-to-school and international expansion. While advertising is building as we expected, there's elevated seasonality in advertising. That creates a bit more risk, and that's why we're leaving revenue and adjusted EBITDA guidance unchanged even though we raised subscription guidance.
I'll take the question on the conversion rate. The main driver of conversion is customers understanding the value in the product. It's partially what we build, but it's also customers discovering that value. We have benefits like roadside assistance that even some paying members don't know about. One of the places we've leveraged AI is to create an engine that takes a member profile, looks at behaviors and family composition, and runs tests to get the right message about our capabilities in front of the right member at the right time. That's a major driver improving conversion. We continue to improve features like Pet GPS, but right now the bigger jump is our ability to show relevant information to members at the right moments.
And how much further does it go, do you think?
It's hard to give an exact target, but there's more runway. We're broadening the technology platform so we can use it not just for revenue but for discoverability, engagement and retention. How do we get free members to use more capabilities so they're more likely to create new circles, bring friends, or stick around? There's a lot of opportunity ahead, but I couldn't give a specific target.
Thanks, Julian. Next, we'd like to open it up to Rob Sanderson from Loop.
Yes. Two questions for me, please. Just a question on the pricing update, just the rationale behind new users only. Do you think 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 wanted to go slow and test the market reaction at the higher prices? Anything you can share on the decision to limit that to new users? And then a question, Russell. On advertising gross margin, you went through a lot of detail on mix implications and everything we should consider as we're modeling. It seems like that's where I was modeling to start with. I'm curious, did something change with that? Or are you just providing incremental color so consensus is more reflective of what you expect with mix dynamics?
I'll take the new-user question. The reason we adjusted price initially was about scaling the pet business. That is about acquiring new subscribers. We wanted to drive new, sticky subscribers rather than optimizing revenue from the existing base today. We're being careful about raising prices on the base because we want many more subscribers. We'll learn from new members and then decide how to apply those learnings to the existing base. The initial decision is motivated by getting more new subscribers.
As far as the margin detail, that's exactly the intention: to provide more detail to help with modeling. We're excited about the full-stack advertising capability from the acquisition; the managed services piece is a real opportunity but has slightly lower margins than other parts of the business. We wanted to lay that out. As we scale, we'll gain leverage on fixed costs and grow margins over time.
If I could add a follow-up to that, Russell, just so it's clear. Your exit rate on Q4, that's obviously a heavy seasonal quarter. So we should expect some seasonality again on the margins as we build through 2027 just from that?
Yes. I would build seasonality into it. Over time, we will be able to increase margins generally as a result of leverage, but there will be seasonality impacts.
Thanks, Rob. Next, we'd like to open it up to Andrew Gillies from Macquarie.
Can you hear me?
Yes.
Just glad the question was asked around the Q4 EBITDA margin. Quick clarification though: does that apply to the whole business? I mean there are a couple of other things going on at the group level. How much is that strong seasonality? Are there any underlying things on the margin side from Q4 that we should be thinking about dragging into 2027? And then I've got a follow-up as well.
What I would say is subscription revenue margins are very stable. We've managed to push them up a couple of points in the last few quarters; they are not really subject to seasonality. The pieces subject to seasonality are the advertising business and the hardware business. Hardware will be particularly affected this period by the Pet GPS device, which will impact margins but give us longer-term subscription benefits.
Perfect. Quick follow-up for Lauren. On the Apple Watch launch, some of the subscription dynamics you've spoken about tie to pets and other things. What are you seeing on the Apple Watch beta and the rationale for how that improves subscription dynamics, particularly in the U.S. but elsewhere as well?
Apple Watch has not yet launched; it is in beta. We want to ensure it's a great experience. It's intended to be part of our free tier and is not intended to be a direct subscription driver. The idea is to allow more families to join our map. We know families that are more engaged and include more people are more likely to stay and to convert to subscribers. So we won't monetize the watch directly; we expect indirect benefit by making the product more valuable earlier in the customer lifecycle and increasing the likelihood of them becoming subscribers.
Thanks, Andrew. Next we would like to open up to Nitin Bansal from Bank of America.
So in Q2, there was a step-up in both R&D expenses and SBC. Can you help us understand what drove the increase? Is it primarily 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?
Nitin, thanks. For R&D, the step-up came from two pieces. One is head count increases, a combination of normal hiring and the additional heads from the Nativo acquisition, and some increases in tech costs on the cloud operations side. On AI specifically, we have seen those costs increase as we adopt it aggressively and encourage employees to use it. We've managed those costs relative to overall head count for R&D. Regarding stock-based compensation, we saw a step-up in Q2 for a couple reasons: head count growth and performance equity grants approved at our AGM in May. Once approved, those grants are backdated to the beginning of the year and under U.S. GAAP are expensed a bit faster than normal grants. That means Q2 will be the highest quarter for SBC costs this year, and we expect it to normalize in Q3 and Q4.
Thanks, Nitin. Like to open up to Siraj Ahmed from Citi.
Maybe first for Lauren. In terms of MAU cadence, pretty strong Q2 and a good improvement. Given you left the guidance range unchanged, how are you thinking about Q3 and Q4 because you had discussed wanting record quarters in Q3 and Q4 previously? How are you thinking about it? And do you think 20% is achievable? Also, you now disclose passive users in the appendix at about 19 million. Any reason for that? Do you expect that to convert into MAU through initiatives?
We left a wide guidance range on purpose because we had a slow start to the year. We feel good about our pace coming out of that and believe we're on track to be within that range. Regarding passive users, we sometimes look at them and try to activate them, but we wanted to give a fuller picture of our user base. We have a narrow definition of active users—you must open the app to count as active—even though members may be sharing location and receiving notifications. We wanted transparency because these passive users affect our growth and monetization opportunities.
Got it. Quick one for Russell. On your guidance with Q3 at about an 18% adjusted EBITDA margin and the full year unchanged: to get to the midpoint of EBITDA guidance, you'd need a significantly higher margin in Q4. Is that where you think you're trending, given advertising and hardware gross margin pressures? Also, wouldn't Q4 include the highest negative drag from Pet tracker gross margin given shopping seasonality? Keen to understand that and implications into next year.
There are a few parts. We specifically said Q4 adjusted EBITDA margin will be considerably higher than Q4 last year. I'm not saying we'll reach the 30% number that might be implied by a simple back-of-envelope. We do not need that to deliver the guidance we've discussed. Regarding the Pet GPS device, hardware revenue is a smaller piece of the overall business as subscription grows strongly, so the hardware impact will be more than offset by subscription growth based on current visibility. We're keeping our margin guidance intact.
Thanks, Siraj. Like to open the call up to Stephen Ju from UBS.
While we have you on this call, James, I wanted to ask about onboarding spend from brand advertisers. Given the location data, there's an opportunity to drive more performance ad budgets on the platform as well. Where does that sit in product priorities and what ad verticals are working well? And Lauren, more broadly, some subscription companies have rolled out advertising as a supplementary stream and that sometimes enables an ad-sponsored subscription model. Is that something to contemplate longer term?
When we brought ads into the app, our priority was to continue delivering member delight and to remain a platform that families trust with their data. We decided not to follow peers who use ads to push people into subscribing. Our intent is to deliver value to members—ads that feel like value-add, similar to the best examples in the market. We'll see how close we can get to that; we're off to a good start with partners, but that's not our plan to use ads to annoy users into subscriptions.
On verticals, the most success is in real-world categories like automotive, QSR, travel and retail. We differentiate with our Uplift product—our measurement solution that helps determine if exposure influences in-store behavior. It uses deterministic data, and that's the focus on performance: where can we offer unique performance driving real-world behavior?
Thanks, Stephen. Next, we'd like to open it up to Eric Choi from Barrenjoey.
Sorry, I had a question on the second half outlook with two parts. On implied MAUs and implied ARPPC growth in the second half, you previously mentioned April was still experiencing issues from Q1. If April was a bit under 1 million, that implies May and June were close to 2 million MAUs per month. You also have July data now. Can you confirm whether May to July is tracking on pace with the high 5s to 6 million MAU pace needed to hit guidance? On ARPPCs, to get to your subscription guidance, it looks like you need subscription revenue to grow about 7.5% quarter-on-quarter in the last two quarters. Subscriptions are growing about 6% quarter-on-quarter, so that implies ARPPC growth of 1% to 2% a quarter for the last two quarters. Is that primarily driven by the U.S. front-book price changes?
When we planned the year, we had a glide slope we expected to follow, and earlier in the year that got delayed due to the issues we discussed. As we moved through the quarters, we got back on that glide slope. I wouldn't call this a major outperformance; it's performing according to plan, which sets us up well for the back half of the year. That said, I'll let Russell take the ARPPC detail.
Eric, on the U.S. ARPPC decline in the quarter, part of it is mathematical: there are 91 days in the quarter versus 90. If normalized, it would have increased slightly. For guidance, you're broadly right: we expect a small tick-up in ARPPC in both the U.S. and international markets, which incorporates the impact of the price increase for new users in the U.S.
Thanks, Eric. Next, we'd like to open the call up to Chris Savage from Bell Potter.
A follow-up to Eric because I'm trying to find what caused the market reaction in the U.S. The only numbers that missed were ARPPC and AMR. Russell, ARPPC has been increasing 1% to 2% per quarter. Was it just the 91 days that caused a slight fall? Or was there also currency, volatility, seasonality or mix changes? What drove it?
There are a few pieces. International is cycling through some of the benefit from triple-tier territory expansions, so we expect it to grow a bit slower. In the U.S., we're cycling through some benefit from dated legacy holders—small impacts in both respects—amplified by the 91 vs. 90 days. We would expect normalization going forward. You also asked about ARR: it excludes advertising, so it's becoming a less comprehensive measure of our business, but we still achieved 29% year-over-year growth on that measure, reflecting strength in the core subscription business.
Thanks, Chris. Like to open up the call to Annabel Khun from E&P.
Can you hear me? Two-part question. First, talk more about the shape of the marketing investment in terms of margin guidance coming into Q3. How much is just draw-forward from what you pulled back in Q2 and how should we think about Q4—does marketing peak in Q3 or is it a larger ongoing investment? Second, on marketing for ads, you've been promoting Life360 Ads at conferences and events. How is that marketing going and where is that flowing through in terms of interest in products across Uplift versus Place Ads versus your on-site and off-site offerings?
I'll take the first part. There will be a step-up in Q3; Q3 is typically our larger marketing period to support back-to-school in the Northern Hemisphere. This year there's a timing swap from Q2 to Q3: we reduced marketing in Q2 and pushed some of it into Q3, and we also want to support international expansion. So Q3 will be a bit more elevated and will return to a more typical spend level in Q4.
On marketing around ads, the focus is on getting the Life360 Ads brand known. Many people knew Nativo and many know Life360 as a consumer product; we need awareness of Life360 as an ad solution. We focus on our differentiated products and capabilities. We're getting strong reception when people understand the types of targeting signals we capture and our unique formats and experiences. That generates pipeline for back-to-school and holiday periods. We're seeing good reception and momentum in pipeline creation.
Thanks, Annabel. We have time for another question from Siraj Ahmed from Citi.
Maybe just a question for James. In terms of the ad tech stack, one thing we heard is the Nativo acquisition did not include an ID spine. Do you now have the capability of an ID spine to take your first-party data and offer it to publishers? Is that being built? That was flagged as a gap in some prior work we saw.
The device graph is a key component. We're now close to 100% of the U.S. addressable ad market across the platform. We're using Life360 proprietary data to address and target users on the Nativo platform. That work is complete and in market right now.
Second, there are proposed restrictions in some U.S. states around how location data can be used. Does that give you an advantage being a closed full tech stack end-to-end, or are there cases where you cannot use the data for advertising in some states?
Yes. This is an advantage for us. Legislation is focused on those who buy third-party data for targeting. Our model is first-party, consented data; consumers can opt out at any time. We're insulated from many of those regulatory risks, which gives us an advantage as others who rely on third-party data become constrained and may come to our door instead.
We have time for a final question from Lafitani Sotiriou. After this, we'll conclude the call.
I wanted to follow up on the Apple Watch beta. Apple was in the press yesterday with reports about relaunching some of its watch offerings. What are some of the things your collaboration or work with Apple may entail? Are you pursuing this because of kids' watches or is it part of a broader offering for seniors? Is it possible to see Apple or Disney launch with Life360? Is that far-fetched?
Our intent with Apple Watch is to serve more members at more life stages. Apple Watch provides options for kids and for people who are aging, allowing us to serve people in ways that are less phone-centric. This is the first step for us to be present on different device types and services. I expect we'll work with more device manufacturers in more ways in the future.
And on the Disney-Apple possibility more specifically?
I don't have anything to share on that.
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. A lot of great momentum and even more exciting stuff coming for Q3. I look forward to talking to you all again then and probably before then.