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Morning Research Notes - 22.07.24
Friday saw a software glitch in Crowdstrike’s system triggering a global technical outage, shaking various industries and causing U.S. stocks to slump. Brent (oil) traded 3% lower, with the current price per barrel sitting at $82.59. Spot gold also fell 1.8%, with the current price per ounce standing at $2400.83. Volatility, as measured by the VIX index, increased by 3.9% to $16.52.
A software glitch in cybersecurity firm Crowdstrike’s software caused a global technical outage, disrupting multiple industries and leading to a slump in U.S. stocks. Despite the deployment of fixes, some services continue to face issues. This incident led to an 11.1% slide in Crowdstrike shares, while shares of rival firms Palo Alto Networks and SentinelOne advanced. All major U.S. stock indexes ended in negative territory, with the Dow Jones Industrial Average being the most affected. The market volatility index reached its highest level since late April, indicating high investor anxiety. The second-quarter earnings season ended its first full week, with 83% of the 70 companies in the S&P 500 that reported beating consensus. Analysts now see an aggregate year-on-year S&P 500 earnings growth of 11.1%.
The ASX 200 fell by 0.81% on Friday, with the market experiencing a downward trend, with Utilities decreasing by (0.88%), Materials by (1.71%), Financials by (0.79%), Information Technology by (0.11%), and Health Care by (0.31%). The commodity market also saw a downward trend. Zinc decreased by (0.73%), Copper fell by (1.37%), Aluminium dropped by (0.99%), Nickel declined by (0.62%), and Iron Ore fell by (1.0%).
In other news, Woodside to buy Gulf Coast LNG group for $US900m, South32 on track to deliver FY24 operating unit cost guidance, Big tech reporting this week: Alphabet and Tesla. (Source: AFR)
Chart of the day
For the 12 months ended 31 December, Life360 reported a 33% increase in revenue to US$305 million. This was in the middle of its guidance range of US$300 million to US$310 million.
A key driver of this growth was its core Life360 subscription revenue, which came in at US$200 million. This was up 52% year on year and ahead of guidance for a ~50% increase.
Underpinning its subscription growth was a 21% increase in Global Paying Circles to 1.8 million and significant price increases. Management believes this underscores the value its subscribers perceive in Life360's services.
Global monthly active users (MAU) grew nearly 13 million or 26% to 61.4 million in FY 2023. This was driven by its ongoing investment in its core location sharing experience. International MAU grew 7 million or 40% to 24.6 million after the company increased the speed and responsiveness of its app. This meant it achieved international feature parity with the U.S.
The highlight of the result was arguably Life360's adjusted EBITDA. It was US$20.6 million for the year, which was comfortably ahead of its guidance range of US$12 million to US$16 million.
And while the company recorded a net loss of US$28.2 million, this was a massive US$63.5 million improvement from FY 2022.
Also improving materially was Life360's operating cash flow, which came in at US$7.5 million. This is a US$64.6 million improvement versus FY 2022. At the end of the period, the company had cash and equivalents of US$70.7 million. This is up from US$63.7 million at the end of the third quarter.
Source: News and Insights, Stocks, Morningstar
Source: asx.com.au
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