This Under-the-Radar Growth Stock Just Earned a Promotion

Life360 (NASDAQ: LIF) has spent the past 18 years helping folks know where their loved ones are through a free mobile platform. Is the stock itself finally ready to be found?

One of this young week's strongest earnings reports came out of Life360 on Monday afternoon. The provider of the namesake family safety and connection app is now serving an audience of 97.8 million monthly active users, a 17% year-over-year jump. This is where the first quarter's story starts, and it gets better from here.

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Life360 was born in the aftermath of Hurricane Katrina. The founders saw a need for a way to locate loved ones during times of uncertainty. The only problem is that there wasn't a cost-effective way for a portable platform to mutually track opt-in users -- until the iOS and Android third-party app marketplaces were born in 2008. Life360 became popular, even though App Store operator Apple (NASDAQ: AAPL) and Google Play parent Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) would eventually roll out comparable built-in applications.

Apple's Find My and Android's Find Hub apps are widely used, but not widely loved. They have abysmal user ratings, unlike Life360. The extensive free features and cross-platform compatibility have made Life360 a staple in one of every seven smartphones in the country. It's also a globetrotter, with 47% of its users located outside the U.S. market.

Almost 97% of Life360 users are perfectly fine with the free version of the app. It offers real-time location sharing, two days of location history, the ability to set two places for arrival alerts, and basic crash detection. Then there are the premium tiers that Life360 calls Paying Circles. These are families willing to pay between $7.99 and $24.99 a month for enhanced versions of the free features, as well as roadside support and medical assistance.

Here's where that 17% jump in active users over the past 12 months starts to improve. Life360 added a record 201,000 Paying Circles through the first three months of 2026. It's now serving 3 million premium accounts, a 27% increase from a year ago.

This is a big business, accounting for 75% of Life360's revenue last year, even though it's just 3 million accounts on a platform approaching 100 million users. Seeing Paying Circles outpace its growth in monthly active users is exciting, but it's not even the fastest-growing lever Life360 has at its disposal.

Things are starting to "ad" up

Life360 acquired Bluetooth tile-tracking pioneer Tile five years ago, and no, this is not the business that's growing faster than Paying Circles. Life360 got a fire-sale price on Tile because Apple had launched a similar AirTag product earlier that year. It accounted for 16% of the revenue mix in 2025, and hardware revenue declined in the first quarter of this year.

This brings us to advertising, which Life360 began breaking out as its own line item in this week's report. The $19.7 million in ad revenue that the platform generated in the first quarter accounts for nearly 14% of the top-line mix. More notably, the ad revenue more than quadrupled over the past year.

The lion's share of that burst was not organic. Life360 closed the purchase of Nativo, a business it acquired in January. It uses AI to help publishers deliver online ads that blend into editorial content. If 97% of your audience is fine with an ad-supported business model, investing in growing that part of the business offers significant upside.

The bottom line on the top line

Put it all together, and first-quarter revenue rose 38%, more than doubling the pace of its monthly active user increase. This is the strongest top-line move for Life360 in nearly three years. It wasn't all organic growth, but Life360 spent just $120 million, or roughly 3% of its market cap, on Nativo.

The news wasn't all great for Life360, though. Margins narrowed, and net income declined as Life360 scales its growing ad business and continues pursuing international expansion. However, it raised its guidance for consolidated revenue and adjusted EBITDA for all of 2026 from its earlier March growth forecast. It sees 33% to 40% improvement on the top line this year.

With its largest business booming and its ad business emerging at a clip that will soon make it a needle mover, Life360 is on the move. Good thing there's an app to track its progress. Could that platform be your portfolio? If you can stomach a highly volatile and obscure, if not misunderstood, growth stock, you may want to do a 180 and take a closer look at Life360.

Rick Munarriz has positions in Alphabet, Apple, and Life360. The Motley Fool has positions in and recommends Alphabet, Apple, and Life360. The Motley Fool has a disclosure policy.