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]

Financial Data and Key Metrics Changes - The company achieved fourth quarter revenue of $162 million, marking a 2% year-over-year increase, with subscription revenue also growing by 2% due to stronger compliance-related subscriptions [12][39] - Adjusted EBITDA for Q4 was $44 million, representing a 27% margin, which is a 32% year-over-year increase compared to $33 million in the same period last year [16][44] - Full-year adjusted EBITDA was $148 million, reflecting a 25% year-over-year growth, with adjusted EBITDA margins increasing by 380 basis points to 22% [35][36] Business Line Data and Key Metrics Changes - Subscription revenue reached $109 million in Q4, up 2% year-over-year, while transaction revenue was $53 million, also up 2% [39][37] - The company recorded 241,000 transaction units in Q4, a 12% increase, but business formations declined by 15% to 96,000 units [38][39] - Average order value decreased by 9% to $220, driven by a higher mix of lower-priced transactions [40] Market Data and Key Metrics Changes - The company noted a decline in formations faster than the overall US business formations, indicating a strategic shift towards attracting higher-value customers [13] - The average revenue per user (ARPU) was $263 for Q4, down 5% due to pricing changes in compliance-related subscriptions [40] Company Strategy and Development Direction - The company is focusing on optimizing its subscription business, reorienting its go-to-market strategy, and leveraging AI to enhance service delivery [8][9] - A new marketing campaign is set to launch in spring 2025, emphasizing the company's premium positioning in the legal services market [22] - The acquisition of Formation Nation is expected to enhance customer service, expand offerings, and strengthen market position [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 5% year-over-year revenue growth in 2025, with expectations of reaccelerating subscription revenue growth [15][50] - The company anticipates challenges from the beneficial ownership filing requirement and the discontinuation of new customer acquisition related to its tax offering, which may impact revenue growth [51][52] - Management emphasized a focus on quality over quantity in customer acquisition, aiming to build a more sustainable business model [121][122] Other Important Information - The company ended Q4 with cash and cash equivalents of $142 million and remains debt-free [46] - Free cash flow for Q4 was $36 million, significantly exceeding expectations, attributed to improved adjusted EBITDA and working capital changes [45][71] Q&A Session Summary Question: Update on registered agent price change and differentiation - Management highlighted the positive impact of raising the registered agent price from $199 to $249, emphasizing the strength of their service and technology compared to competitors [61][66] Question: Comments on Q4 free cash flow performance - Management noted strong Q4 free cash flow performance due to exceeding adjusted EBITDA expectations and favorable working capital changes, with expectations for continued strong conversion in 2025 [71][75] Question: Details on Formation Nation acquisition impact - Management confirmed that Q1 and full-year guidance includes the impact of Formation Nation, with plans to integrate and shift their business model towards subscriptions [80][82] Question: Subscription net unit adds and drivers - Management attributed strong subscription net unit adds to bundling strategies and improved compliance offerings, with expectations for continued growth in 2025 [100][104] Question: Strategy for partnerships and future growth - Management discussed the importance of diversifying go-to-market strategies and leveraging partnerships to enhance customer acquisition and service offerings [111][115] Question: Market share focus and Formation Nation's role - Management clarified the shift towards quality share over market share, with expectations that Formation Nation will contribute positively to business formation counts [117][124] Question: Long-term vision for AI capabilities - Management outlined plans to leverage AI to augment expertise and improve operational efficiencies, enhancing customer service and product offerings [130][135] Question: Marketing strategy and brand spend - Management detailed a shift in marketing strategy to increase brand spend and focus on education, moving away from a heavy reliance on search marketing [139][142]

Michael Wiggins De Oliveira is an inflection investor. This means buying into cheap companies at the moment when their narrative is changing and the business is on a path toward becoming significantly more profitable over the next year.With a focus on tech and “the Great Energy Transition (including uranium)”, Michael runs a concentrated portfolio with approximately 15 to 20 stocks and an average holding period of 18 months. Through his 10+ years analyzing countless companies, Michael has accumulated outsta ...

FEBRUARY 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 ...

Core Insights - LegalZoom reported revenue of $161.71 million for the quarter ended December 2024, reflecting a year-over-year increase of 1.9% and an EPS of $0.19 compared to $0.13 a year ago, with no surprise against the Zacks Consensus Estimate of $161.7 million [1] - The company achieved an EPS surprise of +18.75%, with the consensus EPS estimate being $0.16 [1] Performance Metrics - Average revenue per subscription unit (ARPU) was $0.26 million, slightly below the average estimate of $0.27 million [4] - The number of subscription units reached 1,766, exceeding the average estimate of 1,723 [4] - Average Order Value was $220, surpassing the average estimate of $211.02 [4] - The number of transaction units was 241, compared to the average estimate of 235 [4] - The number of business formations was 96, below the average estimate of 107 [4] - Subscription revenue totaled $108.75 million, slightly below the average estimate of $110.78 million, representing a year-over-year change of +1.9% [4] - Transaction revenue was $52.96 million, exceeding the average estimate of $49.48 million, with a year-over-year change of +2% [4] Stock Performance - LegalZoom shares returned -2.7% over the past month, compared to the Zacks S&P 500 composite's -2.3% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - LegalZoom reported quarterly earnings of $0.19 per share, exceeding the Zacks Consensus Estimate of $0.16 per share, and up from $0.13 per share a year ago, representing an earnings surprise of 18.75% [1] - The company posted revenues of $161.71 million for the quarter ended December 2024, matching the Zacks Consensus Estimate and showing an increase from $158.66 million year-over-year [2] - LegalZoom's shares have increased approximately 19.8% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $173.01 million, and for the current fiscal year, it is $0.60 on revenues of $693.85 million [7] - The estimate revisions trend for LegalZoom is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Industrial Services industry, to which LegalZoom belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact LegalZoom's stock performance [5]

Subscription Business - The company aims to optimize its subscription business, focusing on customer lifetime value and accelerating subscription revenue growth over the long term[28]. - As of December 31, 2024, the company had approximately 1.8 million subscription units outstanding, with a mix of annual and monthly terms[35]. - The recent acquisition of Formation Nation is expected to enhance cross-sell opportunities and attract higher value customers, positioning the company as a premium brand[29]. Technology and Customer Experience - The company plans to leverage artificial intelligence to improve customer experience and drive growth and efficiencies in its business[32]. - The company has invested significantly in its technology platform to process thousands of customer orders daily and enhance customer interactions[41]. - The company has a strong focus on customer care, providing support through multiple channels and monitoring service levels to maintain high customer satisfaction[52]. Customer Acquisition and Market Strategy - The company has a diverse customer acquisition strategy, testing various marketing channels to expand its reach beyond business formations[29]. - The company has registered agent locations covering all 50 states, providing critical business document management for small businesses[35]. Workforce and Culture - The company employs 964 employees and engages approximately 600 contractors globally, with a strong emphasis on a pay-for-performance culture[59]. Regulatory Environment - The company operates in a complex legal and regulatory environment, subject to various state and federal laws related to internet activities and consumer protection[66]. - The regulatory environment in the U.S. is evolving slowly, with only a few states approving regulatory reform for non-lawyers to co-own law firms[67]. - The company is subject to numerous foreign and domestic laws regarding privacy and data security, which are continuously developing[69]. - Compliance with applicable government laws and regulations is not expected to materially affect the company's earnings or competitive position[70]. Financial Performance - As of December 31, 2024, the company had cash and cash equivalents of $142.1 million, down from $225.7 million in 2023[347]. - The company recognized a foreign currency transaction loss of $0.6 million for the year ended December 31, 2024[349]. - A 10% adverse change in foreign exchange rates would have resulted in a $0.5 million increase in reported foreign currency loss for the year ended December 31, 2024[349]. - The company has no outstanding debt subject to interest rate risk as of December 31, 2024 and 2023[348]. - The company does not currently believe that inflation has had a material effect on its business, but future inflationary pressures could impact operations[350]. - The company operates both within the U.S. and the U.K., exposing it to market risks including interest rate fluctuations and foreign currency exchange risks[346].