Shares of LegalZoom.com, Inc (NASDAQ:LZ) surged 7.93% in after-hours trading on Wednesday following the company's impressive fourth quarter earnings report and upbeat outlook for 2025.
The online legal services provider reported Q4 2024 revenue of $161.7 million, beating Wall Street's consensus estimate of $160.67 million. Earnings per share of 19 cents also exceeded analysts' expectations of 16 cents. The strong top and bottom-line results were driven by continued momentum in LegalZoom's subscription business, with subscription revenue increasing 6% year-over-year and subscription units growing 14%.
Looking ahead, LegalZoom issued encouraging guidance for the first quarter and full year of 2025. For Q1, the company expects revenue of $175 million to $179 million, above the consensus estimate of $175.3 million. Adjusted EBITDA is projected to range from $33 million to $36 million, surpassing analysts' forecasts of $32.41 million.
For the full year 2025, LegalZoom guided for approximately 5% revenue growth over 2024 levels and an Adjusted EBITDA margin of around 23%, reflecting continued margin expansion.
Additionally, LegalZoom announced the acquisition of Formation Nation after the quarter ended, which is expected to positively contribute to Adjusted EBITDA and be accretive to Non-GAAP earnings per share in the first year.
The strong quarterly results, robust guidance, subscription growth, and accretive acquisition news appear to have fueled investor optimism, driving LegalZoom's stock price higher in extended trading.
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