Core Insights - LegalZoom reported a record third quarter revenue of $190.2 million, reflecting a 13% year-over-year growth, driven by a strong performance in subscription revenue [5][6][7] - The company is optimistic about its strategic shift, focusing on expanding services to the existing 36 million small businesses in the U.S. by integrating AI and technology with human expertise [2][5] - LegalZoom has raised its full-year 2025 revenue guidance, anticipating approximately 10% year-over-year growth at the midpoint [2][9] Financial Performance - Revenue for the third quarter was $190.2 million, up 13% from $168.6 million in the same period last year [5][7] - Subscription revenue reached $125.4 million, also a 13% increase year-over-year, primarily due to growth in compliance offerings [5][6] - Net income for the quarter was $4.5 million, a decline from $11.1 million in Q3 2024, resulting in a net income margin of 2% compared to 7% in the previous year [5][6][7] - Adjusted EBITDA was $46.3 million, down from $47.1 million in Q3 2024, with an adjusted EBITDA margin of 24% compared to 28% in the same period last year [5][6][7] Cash Flow and Liquidity - LegalZoom ended the quarter with cash and cash equivalents of $237.2 million, an increase from $142.1 million at the end of 2024 [5][6] - The company generated $54.2 million in cash from operating activities, significantly up from $31.6 million in Q3 2024 [6][7] - Free cash flow for the quarter was $47.0 million, compared to $22.0 million in the same period last year, indicating a 114% increase [6][7] Business Metrics - Transaction revenue was $64.8 million, a 12% increase year-over-year, while total transaction units grew by 2% [6][7] - Average order value (AOV) increased to $251, up 11% from $227 in Q3 2024 [7] - Subscription units at the end of the period reached 1,959, a 14% increase from 1,717 in the previous year [7] Future Outlook - For Q4 2025, LegalZoom expects revenue in the range of $182 million to $186 million, representing a 14% year-over-year growth at the midpoint [9] - The full-year revenue guidance is now set between $748 million to $752 million, reflecting a 10% year-over-year growth at the midpoint [9]