Financial Data and Key Metrics Changes - First quarter revenue was $183 million, reflecting a 5% year-over-year increase [6][26] - Adjusted EBITDA for the first quarter was $37 million, representing a 33% year-over-year increase, with an adjusted EBITDA margin of 20% [8][33] - Free cash flow increased to $41 million, up 67% compared to $25 million for the same period in 2024 [34][35] Business Line Data and Key Metrics Changes - Subscription revenue grew by 8% year-over-year to $116 million, driven by compliance pricing initiatives and increased virtual mail subscriptions [28] - Transaction revenue increased by 1% to $67 million, aided by the acquisition of Formation Nation [26] - The number of subscription units rose by 20% to approximately 1.9 million, primarily due to bundling of lower-priced products [29] Market Data and Key Metrics Changes - Business formations decreased by 6% year-over-year, attributed to a softer macroeconomic environment and a 5% decline in Census EIN applications [7][27] - Average order value was $196, down 1% compared to the previous year [27] - Deferred revenue increased by $36 million from Q4, reflecting the benefits of subscription pricing initiatives [30] Company Strategy and Development Direction - The company is focused on driving subscription adoption and optimizing its go-to-market strategy, including a new brand campaign to position itself as a premier provider of online legal services [18][19] - The strategy includes decoupling from business formations and emphasizing higher-value subscriptions, with over 60% of revenue now subscription-based [11][24] - The integration of Formation Nation is aimed at shifting lower-end customers to a separate brand while focusing on higher-value offerings [51][54] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unpredictable macroeconomic environment but expressed confidence in achieving a full-year revenue growth of 5% and an adjusted EBITDA margin of 23% [9][39] - The company is prepared for potential challenges and is focused on areas it can control, emphasizing long-term value for shareholders [13][41] - Management expects double-digit subscription revenue growth by the fourth quarter, supported by recent strategic initiatives [10][38] Other Important Information - The company has a strong cash position of $210 million and remains debt-free, allowing for flexibility in capital allocation [34][35] - The marketing budget has been reallocated to increase Formation Nation's marketing spend by over 30% [21] Q&A Session Summary Question: What contributed to the strong subscription unit growth? - Management highlighted a shift towards quality share, reorienting products and pricing to attract better customers, and bundling lower-priced subscriptions to drive engagement [43][44][47] Question: Can you discuss the integration of Formation Nation? - The integration aims to decouple free products from high-value offerings, allowing for better customer engagement and upselling opportunities [51][54] Question: Should we expect elevated overall marketing spend? - Management clarified that there will be a shift in marketing spend rather than an increase, focusing on efficiency and brand authority [60][64] Question: What is the expected contribution from Formation Nation going forward? - Management indicated that the contribution from Formation Nation will be integrated into overall business performance, with a focus on efficiency and profitability [67][70] Question: How is the company managing macroeconomic pressures? - Management is running various scenarios to adapt to changing conditions and has adjusted expectations for business formations accordingly [80][82] Question: What are the key inputs for achieving double-digit subscription growth? - Management emphasized the importance of attracting quality customers and improving the overall subscription experience to ensure sustainable growth [100][102]

Financial Data and Key Metrics Changes - First quarter revenue was $183 million, reflecting a 5% year-over-year increase [6][26] - Adjusted EBITDA for the first quarter was $37 million, representing a 33% year-over-year increase, with an adjusted EBITDA margin of 20% [8][32] - Free cash flow increased by 67% to $41 million compared to $25 million for the same period in 2024 [33][34] Business Line Data and Key Metrics Changes - Subscription revenue grew by 8% year-over-year to $116 million, driven by compliance pricing initiatives and increased virtual mail subscriptions [28][29] - Transaction revenue increased by 1% to $67 million, attributed to the acquisition of Formation Nation and higher revenue from Beneficial Ownership Information Report filings [26][27] - The number of subscription units rose by 20% to approximately 1.9 million, primarily due to bundling of lower-priced products [29][30] Market Data and Key Metrics Changes - Business formations decreased by 6% year-over-year, with 131,000 formations recorded in the first quarter [27] - Census EIN applications fell by 5% year-over-year, impacting overall business formation trends [7][8] - The average order value was $196, down 1% compared to the previous year [27] Company Strategy and Development Direction - The company is focused on driving subscription adoption and optimizing its go-to-market strategy, including a new brand campaign to enhance its market position [15][18] - LegalZoom aims to decouple from the business formations macro by emphasizing legal and compliance services and increasing subscription offerings [12][24] - The integration of Formation Nation is expected to enhance customer acquisition and improve service offerings, particularly in the lower-end market [55][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a full-year revenue growth of approximately 5% and an adjusted EBITDA margin of 23% despite macroeconomic uncertainties [37][39] - The company anticipates double-digit subscription revenue growth by the fourth quarter, supported by strategic pricing and product bundling initiatives [9][38] - Management acknowledged the challenges posed by a rapidly evolving macroeconomic environment but emphasized the company's resilience and adaptability [14][41] Other Important Information - The company ended the quarter with $210 million in cash and cash equivalents, remaining debt-free [33][34] - A $100 million increase to the share repurchase program was approved by the Board of Directors, with $150 million remaining under authorization [35][36] Q&A Session Summary Question: What contributed to the strong subscription unit growth? - Management highlighted a shift towards quality share, reorienting products and pricing to attract better customers, and implementing a bundling strategy for lower-priced subscriptions [43][45][46] Question: Can you discuss the integration process of Formation Nation? - The integration aims to decouple from free offerings and push lower-end customers to Formation Nation, which focuses on value pricing and higher engagement [52][54][56] Question: Will overall marketing spend be elevated going forward? - Management clarified that there will be a shift in marketing spend rather than an increase, focusing on efficiency and leveraging brand authority [61][62][65] Question: What is the expected contribution from Formation Nation moving forward? - Management indicated that while the initial contribution was approximately $8.6 million, the focus will be on integrated growth rather than segmenting revenues [68][70][72] Question: How is the company addressing macroeconomic pressures on business formations? - Management is modeling various scenarios to navigate uncertainties and has adjusted expectations for business formations to decline mid to high single digits [80][81] Question: What are the key inputs for achieving double-digit subscription growth? - Management emphasized the importance of attracting quality customers and shifting focus from unprofitable formations to higher-value subscriptions [102][104][106]

MAY 2025 Investor Presentation Forward-looking statements disclaimer This presentation contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward- looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained in this presentation may be forward-looking statements. In some cases, you can identify forw ...

[LegalZoom First Quarter 2025 Results](index=1&type=section&id=LegalZoom%20First%20Quarter%202025%20Results) [Financial & Performance Highlights](index=1&type=section&id=First%20Quarter%202025%20Highlights) LegalZoom reported strong Q1 2025 results, exceeding expectations with 5% year-over-year revenue growth to $183.1 million, driven by an 8% increase in subscription revenue to $116.3 million Q1 2025 Key Financial Metrics (vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | % Change (YoY) | | :--- | :--- | :--- | :--- | | Total Revenue | $183.1M | $174.2M | 5% | | Subscription Revenue | $116.3M | $107.9M | 8% | | Transaction Revenue | $66.9M | $66.3M | 1% | | Net Income | $5.1M | $4.7M | 8% | | Adjusted EBITDA | $37.0M | $27.9M | 33% | | Adjusted EBITDA Margin | 20% | 16% | +400 bps | | Diluted Net Income per Share | $0.03 | $0.02 | 50% | | Free Cash Flow | $41.3M | $24.7M | 67% | - Subscription units at period end increased by **20%** year-over-year, reaching **1.924 million**[11](index=11&type=chunk) - Business formations decreased by **6%** year-over-year, while the average order value (AOV) saw a slight decline of **1%** to **$196**[9](index=9&type=chunk) [Operational Highlights & Strategic Initiatives](index=2&type=section&id=First%20Quarter%202025%20Operational%20Highlights) During the quarter, LegalZoom acquired Formation Nation, which contributed $8.6 million in revenue, appointed a new Chief Technology Officer, sold an office property, and increased its share repurchase authorization - Acquired Formation Nation on February 10, 2025, which contributed **$8.6 million** in revenue for the quarter post-acquisition[10](index=10&type=chunk) - Appointed Pratik Savai as Chief Technology Officer to spearhead technology advancements, including the use of generative AI[10](index=10&type=chunk) - Sold an office property, receiving net cash proceeds of approximately **$37.1 million**[10](index=10&type=chunk) - The Board of Directors approved a **$100.0 million** increase in its share repurchase program, leaving an aggregate of approximately **$150.0 million** for future repurchases[10](index=10&type=chunk) [Financial Outlook](index=3&type=section&id=Financial%20Outlook) LegalZoom reiterated its full-year 2025 guidance, projecting approximately 5% revenue growth and $165 million in Adjusted EBITDA, while providing Q2 2025 revenue and Adjusted EBITDA ranges Q2 2025 Outlook | Metric | Guidance Range (in millions) | | :--- | :--- | | Revenue | $181M - $185M | | Adjusted EBITDA | $37M - $41M | Full Year 2025 Outlook | Metric | Guidance | | :--- | :--- | | Revenue Growth (YoY) | ~5% | | Adjusted EBITDA | ~$165M | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to $532.7 million from $373.9 million at year-end 2024, primarily driven by a rise in cash and goodwill, leading to a doubling of total stockholders' equity Balance Sheet Summary (in thousands) | Account | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $209,973 | $142,064 | | Goodwill | $141,131 | $63,318 | | Total Assets | $532,666 | $373,883 | | Total Liabilities | $345,454 | $280,626 | | Total Stockholders' Equity | $187,212 | $93,257 | [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, revenue increased to $183.1 million, with gross profit improving to $116.6 million, and a significant gain on asset sale boosting net income to $5.1 million Statement of Operations Summary (in thousands) | Account | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Revenue | $183,110 | $174,214 | | Gross Profit | $116,550 | $105,830 | | Gain on sale of assets | $14,337 | $0 | | Income from Operations | $8,966 | $5,055 | | Net Income | $5,127 | $4,744 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash from operating activities significantly increased to $50.7 million, with investing activities reflecting an acquisition offset by an asset sale, resulting in a net cash increase of $67.9 million Cash Flow Summary (in thousands) | Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $50,703 | $34,194 | | Net cash used in investing activities | ($20,450) | ($9,477) | | Net cash provided by (used in) financing activities | $37,604 | ($22,271) | | Net increase in cash and cash equivalents | $67,909 | $2,410 | | Cash and cash equivalents, at end of period | $209,973 | $228,129 | [Non-GAAP Financial Measures & Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Reconciliation of Net Income to Adjusted EBITDA](index=8&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin) The company reconciled its Q1 2025 net income of $5.1 million to an Adjusted EBITDA of $37.0 million, primarily by adding back stock-based compensation and depreciation, and subtracting a gain on asset sale Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net income | $5,127 | $4,744 | | Stock-based compensation | $29,756 | $14,856 | | Depreciation and amortization | $10,406 | $7,670 | | Gain on sale of assets held for sale | ($14,337) | — | | **Adjusted EBITDA** | **$37,012** | **$27,902** | [Reconciliation of Net Income to Non-GAAP Net Income](index=9&type=section&id=Non-GAAP%20Net%20Income%2C%20Non-GAAP%20Net%20Income%20Margin%20and%20diluted%20Non-GAAP%20Net%20Income%20Per%20Share) Non-GAAP net income for Q1 2025 increased 30% to $23.8 million, reconciled from GAAP net income by adjusting for stock-based compensation and an asset sale gain, resulting in a diluted Non-GAAP EPS of $0.13 Reconciliation of Net Income to Non-GAAP Net Income (in thousands) | Line Item | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net income | $5,127 | $4,744 | | Stock-based compensation | $29,756 | $14,856 | | Gain on sale of assets held for sale | ($14,337) | — | | **Non-GAAP net income** | **$23,822** | **$18,344** | Non-GAAP Net Income Per Share | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Non-GAAP net income per share — diluted | $0.13 | $0.09 | [Reconciliation to Free Cash Flow](index=10&type=section&id=Free%20Cash%20Flow) Free cash flow for Q1 2025 surged 67% to $41.3 million, derived from net cash provided by operating activities less purchases of property and equipment Free Cash Flow Calculation (in thousands) | Line Item | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $50,703 | $34,194 | | Purchase of property and equipment | ($9,378) | ($9,477) | | **Free cash flow** | **$41,325** | **$24,717** |

Core Insights - LegalZoom reported strong first quarter results with a revenue of $183.1 million, reflecting a 5% year-over-year growth, driven by an 8% increase in subscription revenue to $116.3 million [5][6][29] - The company achieved an Adjusted EBITDA of $37.0 million, marking a 33% increase year-over-year, with an Adjusted EBITDA margin of 20% [5][6][34] - LegalZoom reiterated its full-year revenue outlook of 5% year-over-year growth, despite macroeconomic uncertainties [2][5] Financial Performance - First quarter net income was $5.1 million, an 8% increase from the previous year, maintaining a net income margin of 3% [5][6][29] - Non-GAAP net income for the quarter was $23.8 million, up 30% year-over-year, with a Non-GAAP net income margin of 13% [6][34] - Cash and cash equivalents at the end of the quarter totaled $210.0 million, up from $142.1 million at the end of 2024 [5][6][26] Operational Highlights - The company experienced a 20% increase in subscription units year-over-year, indicating successful subscription growth initiatives [5][6][7] - LegalZoom's acquisition of Formation Nation contributed $8.6 million in revenue since the acquisition date [8] - The company announced a $100 million increase in its share repurchase authorization, bringing the total to approximately $150 million [5][8] Key Business Metrics - Transaction revenue was $66.9 million, a 1% increase year-over-year, with transaction units also up by 1% [6][7] - Average revenue per subscription unit (ARPU) decreased by 7% to $252 [7] - Free cash flow for the quarter was $41.3 million, a significant increase of 67% year-over-year [6][37]

Company Overview - LegalZoom.com, Inc. is a leading online platform for legal services, transforming how individuals and small businesses navigate the legal system [2][3] - The company combines intuitive technology with access to experienced attorneys, offering tools and guidance for business formations, compliance, estate planning, and ongoing legal support [2] Upcoming Investor Conferences - LegalZoom management will participate in the Jefferies 2025 Software & Internet Conference on May 28, 2025, with a fireside chat led by CEO Jeff Stibel and CFO Noel Watson [4] - The company will also participate in the William Blair 45th Annual Growth Stock Conference on June 4, 2025, with CFO Noel Watson hosting a fireside chat and investor meetings on June 3 and 4 [4] Investor Relations - A live audio webcast and replay of the presentations from these conferences will be available on the LegalZoom Investor Relations website [1]

Core Viewpoint - LegalZoom.com, Inc. is set to report its financial results for the first quarter of 2025 on May 7, 2025, after market close, indicating a focus on transparency and communication with investors [1]. Group 1: Financial Reporting - The financial results for the first quarter ended March 31, 2025, will be announced on May 7, 2025 [1]. - A conference call and webcast will be hosted by the CEO and CFO at 4:30 p.m. ET on the same day to discuss the results [1]. Group 2: Company Overview - LegalZoom is a leading online platform for legal services, aimed at transforming how individuals and small businesses navigate the legal system [3]. - The company combines technology with access to experienced attorneys, providing tools for business formations, compliance, estate planning, and ongoing legal support [3]. - With over two decades of experience and millions of customers served, LegalZoom helps clients manage their legal needs confidently [4].

Core Insights - LegalZoom.com, Inc. has appointed Pratik Savai as the new Chief Technology Officer to enhance its technology ecosystem and leverage emerging technologies like generative AI to simplify legal processes for users [1][2] - Pratik Savai has a strong background in technology leadership, having previously served as CTO at Elation Health and held significant roles at Cornerstone OnDemand, contributing to substantial revenue growth and team scaling [2][3] - The company aims to reshape access to legal services through innovative technology solutions, enhancing efficiency, accessibility, and customer experience in the legal industry [3] Company Overview - LegalZoom is a prominent online platform that assists individuals and small businesses in navigating the legal system by combining technology with access to experienced attorneys [4] - The platform has served millions of customers over two decades, providing tools and guidance for various legal needs, including business formation, compliance, and estate planning [5]

Core Viewpoint - LegalZoom.com, Inc. has appointed Pratik Savai as the new Chief Technology Officer to enhance its technology ecosystem and leverage emerging technologies like generative AI to simplify legal processes for users [1][2]. Company Overview - LegalZoom is a leading online platform that transforms how individuals and small businesses navigate the legal system by combining intuitive technology with access to experienced attorneys [4]. - The company has served millions of customers over two decades, providing tools and guidance for various legal needs, including business formation, compliance, and estate planning [5]. Leadership and Expertise - Pratik Savai is recognized as an innovative leader with extensive technical expertise, having previously served as CTO at Elation Health, where he led teams to create transformative solutions for small businesses and large health providers [2]. - His prior experience includes a 16-year tenure at Cornerstone OnDemand, where he focused on workforce agility and contributed to building businesses with over $840 million in recurring subscription revenues [2]. Vision and Goals - Pratik Savai expressed excitement about joining LegalZoom at a pivotal time, emphasizing the company's role in reshaping access to legal services and creating opportunities for businesses and individuals [3]. - He aims to collaborate with the technology team to drive innovation and enhance efficiency, accessibility, and customer experience in the legal industry [3].

Group 1 - The article emphasizes the importance of exploring smaller-cap stocks during volatile market conditions to identify potential investment opportunities [1] - It highlights the experience of Gary Alexander, who has a background in technology companies and has been involved with startups, indicating a strong understanding of current industry trends [1] - The article mentions that Gary Alexander has been a contributor to Seeking Alpha since 2017 and has been featured in various web publications, showcasing his credibility in the investment community [1] Group 2 - There is a focus on the need for investors to look beyond conventional stocks to achieve better market performance [1] - The article suggests that smaller-cap stocks may offer significant upside potential compared to larger, more established companies [1]