Life360, Inc.LIF

Life360, Inc. Earnings Per Share Disclosure

10-KFiled Feb 27, 20252 min read
17. Net Loss Per Share
Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding for the fiscal period. Diluted net loss per share reflects the potential dilution that could occur if options, RSUs, PRSUs, warrants, or other securities that could result in the issuance of common stock were exercised or converted to common stock using the treasury-stock method. The dilutive effect of the outstanding September 2021 Convertible Notes and July 2021 Convertible Notes are reflected in diluted net loss per share by application of the if-converted method for the years ended December 31, 2023 and 2022.
The following table presents the calculation of basic and diluted net loss per share (in thousands, except share and per share data):

Year Ended December 31,
202420232022
Numerator:
Net loss$(4,555)$(28,171)$(91,629)
Denominator:
Weighted-average shares used in computing net loss per share, basic72,125,571 66,748,542 62,209,545 
Net loss per share, basic$(0.06)$(0.42)$(1.47)
Year Ended December 31,
202420232022
Numerator:
Net loss$(4,555)$(28,171)$(91,629)
(Gain)/loss attributable to September 2021 Convertible Notes— — (1,786)
(Gain)/loss attributable to July 2021 Convertible Notes— — (1,295)
Interest attributable to July 2021 and September 2021 Convertible Notes— — 515 
Adjusted net loss for diluted earnings per share(4,555)(28,171)(94,195)
Denominator:
Weighted-average shares used in computing net loss per share, basic72,125,571 66,748,542 62,209,545 
Effect of dilutive securities:
September 2021 Convertible Notes— — 453,626 
July 2021 Convertible Notes— — 176,422 
Adjusted weighted-average shares used in computing net loss per share, diluted72,125,571 66,748,542 62,839,593 
Net loss per share, diluted$(0.06)$(0.42)$(1.50)

The potential shares of common stock that were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive are as follows:
Year Ended December 31,
202420232022
Issuances under stock incentive plan, stock options5,673,947 6,625,812 8,180,840 
Issuances upon exercise of common stock warrants7,761 137,658 137,658 
Issuances upon vesting of restricted stock units5,091,601 6,182,543 6,779,892 
Issuances upon conversion of convertible notes— 325,981 — 
Total
10,773,309 13,271,994 15,098,390 

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About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.

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