LegalZoom.com Inc

LegalZoom delivered a mixed but largely encouraging third quarter for fiscal 2025, posting revenue of $190.16 million — a 12.8% year-over-year gain that cleared the $183.27 million consensus by 3.76% — while earnings per share of $0.17 fell short of the $0.1867 analyst estimate by 8.94%. The EPS shortfall traced directly to a strategic investment surge: sales and marketing spend jumped to $67.83 million from $46.29 million a year earlier, and stock-based compensation nearly doubled to $28.37 million, compressing GAAP net income to $4.51 million from $11.05 million in Q3 2024. Subscription revenue was the standout engine, climbing 13% year-over-year to $125.36 million as subscription units grew 14% to nearly 1.96 million, validating CEO Jeff Stibel's pivot toward serving the roughly 36 million existing U.S. small businesses rather than relying solely on business formations. Free cash flow surged 114% to $46.99 million, underscoring the underlying business health. Management responded with a raised full-year revenue outlook of $748 million to $752 million, implying roughly 10% growth, with Q4 guidance of $182 million to $186 million.