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Sep 30, 2025
LegalZoom Q3 2025 Earnings Report
LegalZoom reported strong third quarter 2025 financial results, exceeding revenue outlook and raising full-year revenue growth expectations.
Key Takeaways
LegalZoom delivered record third quarter revenue of $190.2 million, up 13% year-over-year, driven by strong subscription revenue growth. Net income decreased to $4.5 million, while Adjusted EBITDA remained strong at $46.3 million. The company also generated significant free cash flow and ended the quarter with a robust cash position.
Revenue reached a record $190.2 million, a 13% increase year-over-year, surpassing the high end of the company's outlook.
Subscription revenue grew by 13% year-over-year to $125.4 million, primarily due to growth in compliance offerings.
Net income for the quarter was $4.5 million, a decrease from $11.1 million in the same period last year, with net income margin at 2%.
Adjusted EBITDA was $46.3 million, with an Adjusted EBITDA margin of 24%, slightly down from 28% in the prior year.
Revenue by Segment
Forward Guidance
LegalZoom is increasing its full-year 2025 revenue outlook while maintaining its Adjusted EBITDA margin outlook, reflecting confidence in continued growth.
Positive Outlook
- Fourth quarter 2025 revenue is expected to be in the range of $182 million to $186 million, representing 14% year-over-year growth at the midpoint.
- Full-year 2025 revenue guidance has been raised to a range of $748 million to $752 million, indicating approximately 10% year-over-year growth at the midpoint.
- Adjusted EBITDA for the fourth quarter is projected between $46 million and $48 million, with an Adjusted EBITDA margin of approximately 26% at the midpoint.
- Full-year 2025 Adjusted EBITDA is expected to be in the range of $168 million to $170 million, maintaining an Adjusted EBITDA margin of approximately 23% at the midpoint.
- The company's strategic shift and momentum in the subscription business are key drivers for the raised revenue outlook.
Challenges Ahead
- No specific negative forward guidance points were explicitly stated in the report.
- The report does not provide specific negative outlooks for future performance.
Revenue & Expenses
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Historical Earnings Impact
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Avg. Return Before/After Earnings
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