The ASX tech share Life360 Inc (ASX: 360) has soared 87% in the past year, significantly outperforming the S&P/ASX 200 Index (ASX: XJO), which has only risen approximately 6.25% in the same time period.
Past performance is not a guarantee of future performance, but it can also be a mistake to think that some businesses are finished rising if they are still growing operationally at a good pace.
Despite seeing strong gains, fund manager Blackwattle is still bullish on the prospects of Life360 shares for a few different reasons.
The fund manager said it's drawn to the ASX tech share's 80 million global users, which are mostly in developed markets. Other positives that Blackwattle highlighted about the business include its recurring revenue from subscriptions and data services.
Blackwattle believes Life360 possesses a "substantial first-party data asset" with applications across marketing, urban planning, insurance, and mobility analytics.
The fund manager pointed out that the company is expanding beyond parental tracking into aged care and pet tracking. Blackwattle believes that as society grows more comfortable with digital transparency, adoption of family tracking services will become mainstream.
Discussing the company's attractiveness and growth potential, the Blackwattle investment team said:
Among ASX 200 companies, few match Life360's global growth potential and scalable revenue model, particularly with its upcoming advertising initiative. We also believe a transition to cashflow profitability in 2025 will be well received by the market.
The latest update from the business was for the first three months of 2025.
In that quarterly update, revenue rose 32% year over year to US$103.6 million, with total subscription revenue up 33% year over year to US$81.9 million. Annualised monthly revenue (AMR) increased 38% to US$393 million.
Global paying circles grew 26% to 2.4 million, and the average revenue per paying circle (ARPPC) increased 8% to US$133.42, primarily because of US price increases for new and existing subscribers, a shift in product mix toward higher-priced offerings, and legacy price increases.
The profit numbers were also positive. Operating cash flow grew 13% year over year to US$12.1 million, adjusted operating profit (EBITDA) increased US$11.6 million year over year to US$15.9 million, and net profit reached US$4.4 million.
The ASX tech share is clearly growing well, and experts think there is plenty more long-term growth potential.
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