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Mar 31, 2025
LegalZoom Q1 2025 Earnings Report
Reported Strong First Quarter 2025 Financial Results, Reiterated 2025 Guidance
Key Takeaways
LegalZoom reported strong first-quarter 2025 results, exceeding the high end of their outlook range, driven by accelerating subscription growth and solid progress on strategic initiatives. Revenue increased 5% year-over-year to $183.1 million, and Adjusted EBITDA rose significantly by 33% to $37.0 million, expanding the margin to 20%. The company also delivered strong free cash flow and ended the quarter with a healthy cash balance.
First quarter revenue reached $183.1 million, a 5% increase compared to the previous year.
Subscription revenue grew by 8% year-over-year to $116.3 million, indicating progress in subscription growth initiatives.
Adjusted EBITDA saw a substantial 33% year-over-year increase, totaling $37.0 million, with the Adjusted EBITDA margin expanding by 400 basis points to 20%.
Net income increased by 8% year-over-year to $5.1 million, maintaining a net income margin of 3%.
Revenue by Segment
Forward Guidance
For the second quarter ending June 30, 2025, LegalZoom expects revenue between $181 million and $185 million and Adjusted EBITDA between $37 million and $41 million. The company reiterated its full-year 2025 guidance of approximately 5% revenue growth and approximately $165 million in Adjusted EBITDA.
Positive Outlook
- Reiterated full-year 2025 revenue growth guidance of approximately 5%.
- Reiterated full-year 2025 Adjusted EBITDA guidance of approximately $165 million.
- Midpoint of Q2 2025 revenue guidance implies continued year-over-year growth (3%).
- Midpoint of Q2 2025 Adjusted EBITDA guidance implies continued strong profitability ($39 million), with a 21% margin.
- Confidence in achieving profitability targets based on strong execution and cost discipline.
Challenges Ahead
- Guidance implies a potential slight sequential dip in Q2 revenue compared to Q1.
- Macroeconomic uncertainty is acknowledged as a potential challenge.
- Guidance is provided without a reconciliation to the most directly comparable GAAP financial measures due to forecasting difficulty.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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