Life360, Inc.LIF
Life360, Inc. Stock Compensation Disclosure
13. Equity Incentive Plan
2011 Equity Incentive Plan
The Company’s 2011 Stock Plan was originally adopted by the Company’s Board of Directors on July 27, 2011 and the Company’s stockholders on October 11, 2011, and most recently amended and restated, and adopted by the Board of Directors on March 10, 2020 and the Company’s stockholders on July 21, 2020 (as restated, the “Plan”). The Plan allows the Company to grant restricted stock units (“RSUs”), which include time-based, performance-based, and market-based restricted stock units, restricted stock, as well as stock options to employees and consultants of the Company and any of the Company’s parent, subsidiaries, or affiliates, and to the members of the Board of Directors. Options granted under the Plan may be either incentive stock options or nonqualified stock options. Incentive stock options (“ISOs”) may be granted only to employees of the Company or any of the Company’s parent or subsidiaries (including officers and directors who are also employees). Nonqualified stock options (“NSOs”) may be granted to any person eligible for grants under the Plan.
As of December 31, 2025, the Company had 23,521,388 shares reserved for issuance and 15,118,992 shares available for issuance under the Plan.
Time-Based Restricted Stock Units
Time-based restricted stock units (“TRSUs”) generally vest based on continued service over a specified period, which is typically four years. Each TRSU represents the right to receive one share of common stock upon vesting. The fair value of TRSUs is determined based on the closing price of the Company’s common stock on the date of grant. Stock-based compensation expense for these awards is recognized on a straight-line basis over the requisite service period and is offset by actual forfeitures as they occur.
Performance-Based Restricted Stock Units
PRSUs are granted primarily to executive officers and, in limited cases, to certain other senior-level employees. Vesting is based on continued service and the attainment of certain financial performance metrics, including revenue and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization targets, over a one-year performance period, as established and approved by the Board of Directors. The number of shares issued upon vesting may be greater or lesser than the target award amount depending on actual performance, and shares attained over target will be recognized as awards granted in the period earned.
During the years ended December 31, 2025 and 2024, 225,386 and 115,403 PRSUs (“the Target Grant”) were granted with a weighted average grant-date fair value per share of $36.61 and $27.40, respectively. No PRSUs were granted during the year ended December 31, 2023. The fair value of PRSUs is determined based on the closing price of the Company’s common stock on the date of grant. Stock-based compensation expense is recognized on a graded-vesting basis for multi-tranche awards and on a straight-line basis for single-tranche awards, based on the estimated probability of achieving the performance conditions, which is reassessed each period. If achievement of the performance conditions is not considered probable, all previously recognized stock-based compensation expense related to the unvested awards is reversed.
As of December 31, 2025, the performance goals for the PRSU awards granted in 2025 have been achieved. Accordingly, stock-based compensation cost related to these awards is no longer subject to reversal, and vesting is contingent solely upon the continued service conditions. In accordance with the vesting schedule of the awards, no shares related to these awards have vested as of December 31, 2025.
Market-Based Restricted Stock Units
Certain executive officers were granted MRSUs during the year ended December 31, 2025. No MRSUs were granted during the year ended December 31, 2024 or 2023. Vesting is based on continued service and the Company’s total shareholder return during one-year, two-year, and three-year performance periods as measured relative to the group of companies comprising the S&P Software and Services Index. The number of shares issued upon vesting may vary from the target award amount depending on actual performance, and shares attained over the target will be recognized as awards granted in the period earned.
During the year ended December 31, 2025, 59,622 MRSUs were granted with a total weighted average grant-date fair value per share of $114.73. Stock-based compensation expense is recognized on a graded-vesting basis over the requisite service period and is not adjusted for actual performance outcomes.
The Company estimated the fair value of the MRSUs granted using a Monte Carlo simulation model with the following assumptions:
Tranche 1 | Tranche 2 | Tranche 3 | |||||||||||||||
| Expected volatility | 55.6 | % | 55.6 | % | 55.6 | % | |||||||||||
Risk-free interest rate based on U.S. Treasury yields | 3.8 | % | 3.6 | % | 3.6 | % | |||||||||||
Expected term (years) | 1 | 2 | 3 | ||||||||||||||
| Weighted average grant-date fair value per share | $ | 99.14 | $ | 121.80 | $ | 122.99 | |||||||||||
RSUs, including TRSUs, PRSUs, and MRSUs
RSU activity for the periods presented is as follows:
| Number of Shares | Weighted average grant date fair value | ||||||||||
| Balance as of December 31, 2024 | 5,091,601 | $ | 19.22 | ||||||||
RSUs granted | 2,167,685 | 49.79 | |||||||||
RSUs vested and settled | (2,452,615) | 19.78 | |||||||||
RSUs cancelled/forfeited | (512,304) | 19.79 | |||||||||
| Balance as of December 31, 2025 | 4,294,367 | $ | 34.05 | ||||||||
As of December 31, 2025, there was total unrecognized stock-based compensation expense for outstanding RSUs of $127.7 million to be recognized over a period of approximately 2.8 years. This amount is comprised of unrecognized compensation expense of $116.2 million related to outstanding TRSUs, $5.7 million related to outstanding PRSUs, and $5.8 million related to outstanding MRSUs.
The number of RSUs vested and settled includes shares of common stock that the Company withheld on behalf of employees to satisfy the tax withholding requirements.
RSUs granted during the years ended December 31, 2025, 2024, and 2023 had a weighted average grant date fair value of $49.79, $27.36, and $13.15 per share, respectively. The total fair value of shares vested during the years ended December 31, 2025, 2024, and 2023 was $160.8 million, $101.0 million, and $39.2 million, respectively.
Stock Options
The Company granted no stock options during the years ended December 31, 2025, 2024, and 2023. Outstanding options at December 31, 2025 relate to historical grants under the Plan.
The following summary of stock option activity for the periods presented is as follows (in thousands, except share and per share data):
| Number of Shares Underlying Outstanding Options | Weighted Average Exercise Price per Share | Weighted Average Remaining Contractual Life (in Years) | Aggregate Intrinsic Value | ||||||||||||||||||||
| Balance as of December 31, 2024 | 5,673,947 | $ | 6.16 | 3.9 | $ | 199,239 | |||||||||||||||||
| Options granted | — | — | |||||||||||||||||||||
| Options exercised | (1,545,786) | 7.43 | |||||||||||||||||||||
| Options cancelled/forfeited | (20,132) | 10.30 | |||||||||||||||||||||
| Balance as of December 31, 2025 | 4,108,029 | 5.66 | 2.8 | 240,230 | |||||||||||||||||||
| Exercisable as of December 31, 2025 | 4,064,254 | $ | 5.60 | 2.8 | $ | 237,923 | |||||||||||||||||
As of December 31, 2025, there was total unrecognized compensation cost for outstanding stock options of $0.1 million to be recognized over a period of approximately 0.3 years.
The intrinsic values of outstanding, vested, and exercisable options were determined by multiplying the number of shares by the difference in exercise price of the options and the fair value of the common stock as of December 31, 2025, 2024, and 2023 of $64.14, $41.27, and $15.46 per share, respectively. The intrinsic value of the options exercised represents the difference between the exercise price and the fair market value on the date of exercise. The total intrinsic value of the options exercised during the years ended December 31, 2025, 2024, and 2023 was $88.8 million, $18.2 million, and $7.7 million, respectively.
Stock-Based Compensation
Stock-based compensation expense was allocated as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Cost of subscription revenue | $ | 1,869 | $ | 730 | $ | 651 | |||||||||||
| Cost of hardware revenue | 1,476 | 798 | 1,096 | ||||||||||||||
| Cost of other revenue | 8 | 4 | 43 | ||||||||||||||
| Total cost of revenue | 3,353 | 1,532 | 1,790 | ||||||||||||||
| Research and development | 28,037 | 25,457 | 22,015 | ||||||||||||||
| Sales and marketing | 7,029 | 3,344 | 3,059 | ||||||||||||||
| General and administrative | 17,041 | 11,936 | 11,648 | ||||||||||||||
Total stock-based compensation expense, net of amounts capitalized | $ | 55,460 | $ | 42,269 | $ | 38,512 | |||||||||||
There was $1.3 million and $0.7 million of capitalized stock-based compensation costs during the years ended December 31, 2025 and 2024, respectively. There was an immaterial amount of capitalized stock-based compensation costs during the year ended December 31, 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 23, 2023 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.