-- Strong execution with record third quarter revenue exceeding the high end
of outlook range
-- Revenue of $190.2 million, up 13% year-over-year
-- Subscription revenue of $125.4 million, an increase of 13% year-over-year,
led by growth in our compliance offerings
-- Net income of $4.5 million, compared to net income of $11.1 million in
the same period in 2024. Third quarter net income margin of 2%, compared
to net income margin of 7% in the same period in 2024
-- Adjusted EBITDA of $46.3 million, compared to $47.1 million in the same
period in 2024. Adjusted EBITDA margin of 24%, compared to 28% in the
same period in 2024
-- Ended the quarter with cash and cash equivalents of $237.2 million,
delivered $54.2 million in cash from operating activities and
$47.0 million in free cash flow
MOUNTAIN VIEW, Calif., Nov. 05, 2025 (GLOBE NEWSWIRE) -- LegalZoom.com, Inc. (Nasdaq: LZ) today announced results for its third quarter ended September 30, 2025.
"Our results further validate the strategic shift we made in our business. Importantly, the proof points we're seeing across the business give us confidence that we've built a strong foundation for our next phase of growth," said Jeff Stibel, Chairman and Chief Executive Officer of LegalZoom. "We are more energized than ever to build on our momentum--expanding our focus beyond business formation to unlock new opportunities with the roughly 36 million U.S. existing small businesses, through a differentiated approach that combines AI and technology with human expertise. We are excited to unlock LegalZoom's next chapter of long-term value creation."
Noel Watson, LegalZoom's Chief Operating Officer and Chief Financial Officer said, "We delivered record third quarter revenue as we execute on our strategic priorities and position our business for long-term growth. With continued momentum in our subscription business, we are raising our full-year 2025 revenue guidance and now anticipate approximately 10% year-over-year growth at the midpoint."
Third Quarter 2025 Highlights
-- Revenue was $190.2 million for the quarter, up 13% year-over-year:
-- Transaction revenue of $64.8 million increased 12% year-over-year.
-- Subscription revenue of $125.4 million grew 13% year-over-year.
-- Net income was $4.5 million for the quarter, or 2% of revenue, compared
to net income of $11.1 million, or 7% of revenue, for the same period in
2024.
-- Non-GAAP net income was $31.0 million for the quarter compared to
Non-GAAP net income of $29.7 million in the same period in 2024.
-- Adjusted EBITDA was $46.3 million for the quarter, or 24% of revenue,
compared to $47.1 million, or 28% of revenue, for the same period in
2024.
-- Cash flow provided by operating activities was $54.2 million for the
quarter compared to $31.6 million for the same period in 2024.
-- Free cash flow was $47.0 million for the quarter compared to
$22.0 million for the same period in 2024.
-- Repurchased 1.8 million shares of common stock for a total cost of $17.6
million, at an average price of $9.91 per share.
-- Cash and cash equivalents were $237.2 million as of September 30, 2025
compared to $142.1 million as of December 31, 2024.
Key Business Metrics and Non-GAAP Financial Measures
(unaudited, in thousands except AOV, ARPU and percentages)
Three Months Ended Nine Months Ended September
September 30, % Growth 30, % Growth
(Decline) (Decline)
-----------
2025 2024 YOY 2025 2024 YOY
------- ------- --- ----------- ------- ------- --- -----------
Total revenue $190,158 $168,599 13% $565,777 $520,175 9%
Transaction
revenue $ 64,799 $ 57,879 12% $204,263 $192,733 6%
Subscription
revenue $125,359 $110,720 13% $361,514 $327,442 10%
Gross profit $127,887 $113,884 12% $369,548 $333,467 11%
Gross margin 67% 68% (1%) 65% 64% 2%
Net Income $ 4,509 $ 11,051 (59%) $ 9,370 $ 17,109 (45%)
Net income
margin 2% 7% (71%) 2% 3% (33%)
Net Income per
share --
basic: $ 0.03 $ 0.06 (50%) $ 0.05 $ 0.09 (44%)
Net Income per
share --
diluted: $ 0.02 $ 0.06 (67%) $ 0.05 $ 0.09 (44%)
Net cash
provided by
operating
activities $ 54,226 $ 31,613 72% $144,068 $ 93,053 55%
Non-GAAP
Financial
Measures
Non GAAP net
income $ 30,996 $ 29,699 4% $ 83,147 $ 66,853 24%
Non GAAP net
income per
share --
basic: $ 0.17 $ 0.17 --% $ 0.46 $ 0.37 24%
Non GAAP net
income per
share --
diluted: $ 0.17 $ 0.17 --% $ 0.45 $ 0.36 25%
Adjusted EBITDA $ 46,323 $ 47,096 (2%) $122,300 $103,910 18%
Adjusted EBITDA
margin 24% 28% (14%) 22% 20% 10%
Free cash flow $ 46,990 $ 21,975 114% $119,924 $ 64,064 87%
Key Business
Metrics
Transaction
units 259 255 2% 878 883 (1%)
Business
formations 126 113 12% 388 386 1%
Average order
value (AOV) $ 251 $ 227 11% $ 233 $ 218 7%
Subscription
units at period
end 1,959 1,717 14% 1,959 1,717 14%
Average revenue
per
subscription
unit (ARPU) at
period end $ 256 $ 264 (3%) $ 256 $ 264 (3%)
Certain percentages may not recalculate due to rounding.
Financial Outlook
For the fourth quarter ending December 31, 2025, LegalZoom expects:
-- Revenue in the range of $182 million to $186 million, or 14%
year-over-year growth at the midpoint
-- Adjusted EBITDA in the range of $46 million to $48 million, reflecting an
Adjusted EBITDA margin of approximately 26% at the midpoint
LegalZoom is increasing its revenue outlook and maintaining its Adjusted EBITDA margin outlook for the full year ending December 31, 2025 as follows:
-- Revenue in the range of $748 million to $752 million, or 10%
year-over-year growth at the midpoint
-- Adjusted EBITDA in the range of $168 million to $170 million, reflecting
an Adjusted EBITDA margin of approximately 23% at the midpoint
Webcast and Conference Call Information
A webcast and conference call to discuss third quarter 2025 results is scheduled for today, November 5, 2025, at 4:30 p.m. Eastern time/1:30 p.m. Pacific time. Those interested in participating in the conference call are invited to register Here.
A live audio webcast of the event will be available on the LegalZoom Investor Relations website: https://investors.legalzoom.com. An archived replay of the webcast also will be available shortly after the live event.
Forward-Looking Statements
This press release 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 press release may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "forecasts," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. Forward-looking statements contained in this press release include, but are not limited to, statements regarding our quarterly and annual guidance.
The forward-looking statements in this press release are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to the following: our dependence on business formations; our dependence on customers expanding the use of our platform, including converting our transactional customers to subscribers and our subscribers renewing their subscriptions with us; the impact of macroeconomic challenges or uncertainty on our business; our ability to sustain our revenue growth rate and remain profitable in the future; our ability to provide high-quality products and services, customer care and customer
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November 05, 2025 16:01 ET (21:01 GMT)