Life360 2Q26 preview: Strong high-frequency data creates upside risk for MAUs and Paying Circles

Overview

This report is Goldman Sachs' preview of Life360 Inc.'s 2Q26 results. It believes that 2Q26 high-frequency data provides a favorable backdrop for user growth, particularly with potential upside surprises in MAUs and Paying Circles; however, profitability could come under pressure if growth is driven by higher sales and marketing spending. Goldman Sachs is not currently changing its earnings estimates and continues to maintain its Buy rating.

Core views

The core views are as follows: First, the funnel-top user growth most closely watched by investors showed clear signs of improvement in 2Q26, with Sensor Tower data indicating +9.4m net new MAUs, including +4.6m in the US and +4.8m internationally. Second, historically, sequential additions to Paying Circles in 1Q and 2Q have generally been roughly flat, while after +201k additions in 1Q26, Goldman Sachs models only +147k additions in 2Q26, leaving room for a positive surprise. Third, sales and marketing spending is a key validation point; if MAU upside is driven by higher customer acquisition investment, margins could be affected. Fourth, advertising remains an important but opaque part of the investment thesis, with attention needed on Nativo integration, revenue, and gross margin trends.

Analysis framework

The report analyzes company guidance, high-frequency Sensor Tower MAU data, seasonal patterns in Paying Circles, historical MAU customer acquisition costs, employee growth data, advertising revenue and gross margin assumptions, and a valuation framework weighted between SOTP and M&A valuation.

Methodology notes

• Valuation methodssum-of-the-parts valuation

  Sum-of-the-parts valuation

  Goldman Sachs assigns an 85% weighting to the SOTP method, valuing each business component using 12-month forward EV/GP multiples, corresponding to A$27.65/CDI.

• Valuation methodsM&A valuation

  M&A valuation component

  Goldman Sachs incorporates M&A valuation at a 15% weighting, referencing Life360's peak EV/GP NTM multiple over the past 12 months, corresponding to A$62.35/CDI.

• factor_analysisGS Factor Profile

  Goldman Sachs factor profile

  GS Factor Profile compares the stock with Goldman Sachs-covered stocks and industry peers across four dimensions: growth, financial returns, valuation multiples, and composite metrics.

• high_frequency_dataSensor Tower MAU regression

  High-frequency MAU signals and regression analysis

  The report uses Sensor Tower MAU data to assess upside risk to Life360's actual MAUs, noting that historical correlation is relatively low for US data but stronger for international data.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Life360 Inc. (360.AX)

  Research subject; report maintains a Buy rating

  Strengths

  Strong 2Q26 high-frequency MAU data, upside potential for Paying Circles, and potential incremental contributions from the advertising business and Nativo integration.

  Weaknesses

  User growth may depend on higher sales and marketing investment; advertising business transparency is limited, and profitability requires validation through results.

  Comparison

  Sensor Tower shows that 2Q26 net new MAUs accelerated significantly from 1Q26 and set records for both the US and the group; international data has a higher correlation with actual MAU performance than US data.

  Risks

  A decline in consumer spending, intensifying competition, rising churn or slowing subscription growth, Apple/Google platform risks, and higher-than-expected sales and marketing expenses.

Key data

• 2Q26 earnings release date2026-08-11 AEDTLife360 plans to announce its 2Q26 results on this date.
• 2Q26 Sensor Tower net new MAUs+9.4mUS +4.6m, international +4.8m; significantly above +2.4m in 1Q26.
• 1Q26 Sensor Tower net new MAUs+2.4mUS +1.0m, international +1.4m.
• Net new MAUs required to reach the midpoint of guidanceApproximately 16mThe report states that approximately 16m net additions from 2Q through 4Q are required to reach the midpoint of the 17%-20% guidance range.
• Goldman Sachs 2Q26 MAU upside risk+4.8mThe report indicates upside risk relative to GSe.
• Market consensus 2Q26 MAU upside risk+4.6mThe report indicates upside risk relative to Consensus.
• 1Q26 net new Paying Circles+201kThe report describes this level as exceptionally strong.
• Goldman Sachs 2Q26 modeled net new Paying Circles+147kPaying Circles could exceed expectations due to seasonality and MAU upside risk.
• Advertising revenue assumptionApproximately $23mGoldman Sachs models total 2Q26 advertising revenue of approximately $23m, with a GP% of 65%.
• 2Q26 adjusted EBITDA model$26mThis implies an incremental margin of approximately 13%, which the report believes could absorb some higher sales and marketing spending.
• Historical net MAU CAC rangeApproximately $4-8mThe report states that sales and marketing investment will be a key area to monitor if MAUs exceed expectations.
• US short interestApproximately 43% of free floatSlightly down from the April high of approximately 46%, but still at an extremely elevated level.
• Target priceA$32.85/CDIGoldman Sachs maintains its Buy rating and corresponding 12-month target price.

Impact & implications

If 2Q26 results validate the strong MAU trend indicated by Sensor Tower, the market may raise its confidence in Life360's user growth and paid conversion, supporting the Buy thesis. However, if growth relies primarily on higher customer acquisition investment, sales and marketing expenses exceeding expectations could offset the benefits of revenue and user growth, resulting in adjusted EBITDA or margins below expectations.

Risks

• Sales and marketing expenses may exceed expectations, weighing on profitability.
• Historical correlation for Sensor Tower US MAU data is relatively weak, potentially resulting in misleading signals.
• Advertising business transparency is limited, and Nativo integration and the second-half revenue/margin trajectory still require validation.
• US short interest remains approximately 43% of free float, creating a high risk of share-price volatility.
• A decline in consumer spending, intensifying competition, rising churn, or subscription growth below expectations.
• Changes in Apple/Google platform rules or ecosystems could affect the company's business.

What to watch

• Actual 2Q26 MAUs and Paying Circles reported on August 11, 2026 AEDT.
• Whether MAU upside is accompanied by a significant increase in sales and marketing expenses.
• Whether 2Q26 adjusted EBITDA approaches Goldman Sachs' $26m model and the performance of incremental margins.
• Advertising revenue, the 65% GP% assumption, progress on Nativo integration, and 2H26 revenue/margin guidance.
• Whether LinkedIn employee growth continues to support the assumption of sequentially flat operating expenses.
• Changes in US short interest and their impact on share-price volatility.