Life360 (ASX:360) reported 2025 fourth-quarter results slightly above guidance and provided 2026 revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA) targets in line with consensus, with the share price decline seen as an overreaction to temporary first-quarter softness, according to a Wednesday report by Jefferies.

On Tuesday, the company reported earnings of $1.51 per share in the fourth quarter of 2025 on revenue of $146 million, compared with earnings of $0.10 on revenue of $115.5 million a year earlier.

The company expects its 2026 consolidated revenue to range from $640 million to $680 million, with adjusted EBITDA projected between $128 million and $138 million.

The firm noted that first-quarter monthly active users growth came in below the 20% target, largely due to softness in international markets, but robust US performance and stronger paying-user conversion continue to support an expected 30% revenue increase.

The firm added that first-quarter margins were lower for strategic reasons, including higher marketing spend, retail exits for Tiles hardware, and Pet GPS discounts to drive subscription growth.

The company's advertising business is accelerating, powered by the Nativo acquisition, which expanded its reach to over 10,000 publishers and drove advertising revenue to $13 million in the fourth quarter of 2025 from single-digit millions a year earlier.

Jefferies maintained the company's buy rating on Life360 but lowered its price target to AU$31 from AU$33.