Background: Life360 is a US-based company that launched in 2008, but listed on the ASX in 2019 and then the Nasdaq in 2024. It offers family location sharing and was one of the first apps to make “tracking your child’s every move” feel more love-based than lawsuit-worthy.

What happened: Life360’s CEO reckons that its tracking product has become a “daily essential” for families — morning coffee, bin day reminders and… tracking when your child crossed the street. And the numbers kinda agree with him after Life360's revenue jumped over 32% for the March quarter. And its paying subscribers grew 43% as well.

‍What else: The only hiccup was in its hardware sales from products like Tile, which dropped 13%. But, investors didn’t care one bit because Life360’s revenue mix is looking a lot more juicy.

What's the key learning?

💡Not all revenues are created equally. Life360 has consistently shifted its revenue mix over the past few years towards software subscriptions as its core revenue stream.

💡Investors love subscription-based business because they’re predictable and recurring revenue. Life360, has 2.4 million paying customers which means a consistent stream of income, month after month. And, even if its hardware sales dips, the recurring revenue cushions the blow.

💡Investors also love subscription models because they scale well. Once a platform is up and running, it generally costs peanuts to add more users. So it's no surprise Life360's share price jumped over 25% since providing this update.