Companies /Industrials

LegalZoom.com Inc

NASDAQ: LZ Specialty Business Services
$6.05
â–² $0.15 (+2.54%) today
Markets closed · 5:56pm ET

Q1 2025 Earnings

Reported May 7, 2025, 12:02pm ET · SEC source
$0.13
Beat +0.85%
EPS · est. $0.13
$183.1M
Beat +3.56%
Revenue · est. $176.8M
−3.3%
Trailing market
LZ vs S&P since report
1 quarter
Consecutive EPS beats

Market Reaction

% change · around the report
0+10%+20%+30%May 7May 8report 12:02pm ETearnings+0.9%+24.4%
0+10%+20%+30%May 7May 8earnings+0.9%+24.4%
LZ +24.4%S&P 500 +0.9%
0+10%+20%+30%May 7May 8report 12:02pm ETearnings+1.5%+22.6%
0+10%+20%+30%May 7May 8earnings+1.5%+22.6%
LZ +22.6%NASDAQ +1.5%
0+10%+20%+30%May 6May 15report 12:02pm ETearnings+5.1%+27.9%
0+10%+20%+30%May 6May 15earnings+5.1%+27.9%
LZ +27.9%S&P 500 +5.1%
0+10%+20%+30%May 6May 15report 12:02pm ETearnings+8.0%+27.9%
0+10%+20%+30%May 6May 15earnings+8.0%+27.9%
LZ +27.9%NASDAQ +8.0%
+23.59%
Day of report
+0.78%
Next session
+2.68%
One week
+3.46%
30 days

S&P 500 over the same 30 days: +6.73%.

Did LZ Beat Earnings? Q1 2025 Results

LegalZoom posted a solid first quarter for 2025, with revenue of $183.11 million — up 5% year-over-year and ahead of the high end of its own outlook — while non-GAAP EPS of $0.13 reflected a 44% improvement from the $0.09 earned a year ago. The headline driver was accelerating subscription momentum: subscription revenue grew 8% to $116.26 million as subscription units surged 20% to approximately 1.924 million, underscoring the company's ongoing push to convert one-time customers into recurring subscribers. Gross margin expanded to 64% from 61%, and Adjusted EBITDA climbed 33% to $37.01 million, lifting margin by 400 basis points to 20%. The February acquisition of Formation Nation contributed $8.60 million in partial-quarter revenue and broadens LegalZoom's reach across both premium and value-oriented formation customers. <a href="https://247wallst.com/investing/2025/08/08/here-are-some-of-todays-biggest-analyst-calls-2/">analysts have been watching</a> how the company navigates macroeconomic uncertainty, and management reiterated full-year guidance of approximately 5% revenue growth with Adjusted EBITDA of roughly $165 million, while targeting double-digit subscription revenue growth by Q4 2025.

Key Takeaways
  • Subscription unit growth of 20% year-over-year to 1.924 million units
  • Subscription revenue growth of 8% YoY driven by subscription initiatives
  • Gross margin expansion to 64% from 61% year-over-year
  • Cost discipline contributing to 400 basis point Adjusted EBITDA margin expansion
  • Formation Nation acquisition contributing $8.6 million in revenue for the partial quarter
  • Gain on sale of office property of $14.3 million

“Our first quarter results reflect accelerating subscription growth and solid progress towards our goal of double-digit subscription revenue growth in the fourth quarter. While no company is immune to today's volatile environment, our first quarter results exceeded our expectations based on the success of our subscription initiatives, the early rollout of higher value products and solid progress from our Formation Nation integration. We are confident in our ability to execute, and are reiterating our full year revenue outlook of 5% year-over-year growth.”

LegalZoom CEO, on the earnings call

Forward Guidance & Outlook

For Q2 2025, LegalZoom expects revenue of $181 million to $185 million (approximately 3% YoY growth at the midpoint) and Adjusted EBITDA of $37 million to $41 million (21% margin at midpoint). For the full year 2025, the company reiterated approximately 5% YoY revenue growth and Adjusted EBITDA of approximately $165 million, reflecting an Adjusted EBITDA margin of approximately 23%. Management targets double-digit subscription revenue growth by Q4 2025.

LZ YoY Financials

Revenue$183.1M
Gross Profit$116.6M
Operating Income$9.0M
Net Income$5.1M

LZ Revenue by Segment

Subscription Revenue$116.3M+8.0%
Transaction Revenue$66.9M+1.0%

Figures from SEC filings and company reports. Not investment advice.