LegalZoom.com(LZ) - 2025 Q3 - Quarterly Results

Financial Performance - LegalZoom reported record third quarter revenue of $190.2 million, representing a 13% year-over-year increase[5]. - Subscription revenue reached $125.4 million, also up 13% year-over-year, driven by growth in compliance offerings[5]. - Net income for the quarter was $4.5 million, a decrease of 59% compared to $11.1 million in the same period in 2024, resulting in a net income margin of 2%[6]. - Adjusted EBITDA was $46.3 million, down 2% from $47.1 million in the same period in 2024, with an adjusted EBITDA margin of 24%[6]. - Revenue for the three months ended September 30, 2025, was $190,158,000, representing a 12.5% increase from $168,599,000 in the same period of 2024[29]. - Gross profit for the nine months ended September 30, 2025, was $369,548,000, up from $333,467,000 in 2024, indicating an increase of 10.8%[29]. - Net income for the three months ended September 30, 2025, was $4,509,000, a decrease of 59.1% compared to $11,051,000 in the same period of 2024[29]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $122,300,000, compared to $103,910,000 in 2024, reflecting an increase of 17.6%[33]. - Non-GAAP net income for Q3 2025 was $30,996,000, compared to $29,699,000 in Q3 2024, reflecting a year-over-year increase of 4.4%[35]. - Non-GAAP net income margin for Q3 2025 was 16%, down from 18% in Q3 2024[35]. - Basic Non-GAAP net income per share for Q3 2025 was $0.17, unchanged from Q3 2024[37]. - Diluted Non-GAAP net income per share for Q3 2025 was $0.17, also unchanged from Q3 2024[37]. - The company reported a net income of $4,509,000 for Q3 2025, a decrease from $11,051,000 in Q3 2024, reflecting a decline of 59%[35]. Cash Flow and Liquidity - Cash flow from operating activities was $54.2 million, a 72% increase from $31.6 million in the same period in 2024[6]. - Free cash flow for the quarter was $47.0 million, up 114% from $22.0 million in the same period in 2024[6]. - LegalZoom ended the quarter with cash and cash equivalents of $237.2 million, up from $142.1 million as of December 31, 2024[6]. - Cash and cash equivalents at the end of the period on September 30, 2025, were $237,154,000, up from $142,064,000 at the beginning of the period[31]. - The company reported a net cash provided by operating activities of $144,068,000 for the nine months ended September 30, 2025, compared to $93,053,000 in 2024, an increase of 55%[31]. - Net cash provided by operating activities for the nine months ended September 2025 was $144,068,000, compared to $93,053,000 for the same period in 2024, an increase of 55%[38]. - Free cash flow for Q3 2025 was $46,990,000, significantly higher than $21,975,000 in Q3 2024, representing a 113% increase[38]. Guidance and Future Outlook - LegalZoom expects fourth quarter revenue to be in the range of $182 million to $186 million, indicating a 14% year-over-year growth at the midpoint[8]. - The company raised its full-year 2025 revenue guidance to approximately $748 million to $752 million, reflecting a 10% year-over-year growth at the midpoint[14]. Assets and Liabilities - Total assets increased to $551,104,000 as of September 30, 2025, from $373,883,000 as of December 31, 2024, marking a growth of 47.5%[27]. - Total liabilities rose to $349,183,000 as of September 30, 2025, compared to $280,626,000 at the end of 2024, an increase of 24.4%[27]. - The company’s deferred revenue as of September 30, 2025, was $213,807,000, up from $174,643,000 at the end of 2024, indicating a growth of 22.4%[27]. Expenses - Sales and marketing expenses for the three months ended September 30, 2025, were $67,835,000, a significant increase of 46.6% from $46,287,000 in the same period of 2024[29]. - Total stock-based compensation for the nine months ended September 2025 was $88,763,000, compared to $49,486,000 in the same period of 2024, an increase of 79%[35]. - The company incurred restructuring costs of $88,000 in Q3 2025, down from $5,917,000 in Q3 2024[36]. Subscription Metrics - The number of subscription units at period end was 1,959, a 14% increase compared to 1,717 in the same period in 2024[7]. - LegalZoom reported a net cash provided by operating activities of $144,068,000 for the nine months ended September 30, 2025, compared to $93,053,000 in 2024, an increase of 55%[31].