CS Disco (NYSE:LAW) Releases Earnings Results, Beats Expectations By $0.02 EPS

Key Points

• CS Disco beat Q1 estimates with EPS of ($0.07) versus ($0.09) expected, posted revenue up 14% YoY to $41.9M, improved adjusted EBITDA to -$3.5M, and exited the quarter with $103M in cash and no debt.
• The DISCO Platform launch and bundled AI features (Cecilia, AutoReview) drove early adoption, larger multi‑year deals and accelerated wallet‑share gains—customers with >$100K in trailing 12‑month revenue rose to 347, contributing $124M (77% of trailing revenue).
• Management raised FY2026 revenue guidance to $169.25M–$178.75M and reiterated a path to adjusted EBITDA profitability in Q4, signaling confidence in durable AI‑driven growth.

CS Disco (NYSE:LAW - Get Free Report) released its earnings results on Wednesday. The company reported ($0.07) earnings per share (EPS) for the quarter, beating analysts' consensus estimates of ($0.09) by $0.02, FiscalAI reports. The business had revenue of $41.88 million for the quarter, compared to the consensus estimate of $40.30 million. CS Disco had a negative return on equity of 26.13% and a negative net margin of 28.29%.

Here are the key takeaways from CS Disco's conference call:

• DISCO reported stronger-than-expected Q1 results with total revenue up 14% YoY to $41.9M, software revenue up 12% to $34.7M, adjusted EBITDA improving to -$3.5M (beat guidance), and $103M in cash with no debt.
• The DISCO Platform launch outperformed expectations and drove early adoption, larger matters, multi-year deals, and increased committed revenue driven by bundled AI capabilities like Cecilia and AutoReview.
• Wallet-share gains at large customers accelerated—customers with >$100K in trailing 12‑month revenue rose to 347, contributing $124M (77% of trailing revenue), indicating stronger expansion within core accounts.
• AutoReview and AI offerings are accelerating uptake but currently span both software and services (some manual prompt engineering), creating potential near-term revenue mix variability as customers migrate to the platform.
• Management raised FY2026 revenue guidance to $169.25M–$178.75M, reiterated a path to adjusted EBITDA profitability in Q4, signaling confidence in durable AI-driven growth.

CS Disco Stock Performance

Shares of LAW stock traded down $0.97 during trading on Wednesday, hitting $3.67. The company had a trading volume of 639,887 shares, compared to its average volume of 366,142. The firm has a market capitalization of $232.10 million, a P/E ratio of -5.13 and a beta of 1.95. The stock's 50-day moving average price is $4.01 and its 200 day moving average price is $5.71. CS Disco has a one year low of $2.45 and a one year high of $9.11.

Wall Street Analysts Forecast Growth

A number of research firms recently commented on LAW. Weiss Ratings upgraded CS Disco from a "sell (e+)" rating to a "sell (d-)" rating in a report on Wednesday, April 29th. Canaccord Genuity Group reduced their price target on CS Disco from $9.00 to $6.00 and set a "buy" rating for the company in a report on Thursday, February 26th. Wall Street Zen upgraded CS Disco from a "hold" rating to a "buy" rating in a report on Saturday, April 25th. Finally, Needham & Company LLC reiterated a "buy" rating and set a $10.00 price target on shares of CS Disco in a report on Thursday, February 26th. Two research analysts have rated the stock with a Buy rating, one has issued a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat, CS Disco presently has a consensus rating of "Hold" and an average target price of $8.00.

Insiders Place Their Bets

In related news, CEO Eric Friedrichsen purchased 15,500 shares of the business's stock in a transaction that occurred on Friday, February 27th. The stock was acquired at an average cost of $2.90 per share, for a total transaction of $44,950.00. Following the completion of the purchase, the chief executive officer owned 1,508,172 shares in the company, valued at approximately $4,373,698.80. This represents a 1.04% increase in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, EVP Karen Herckis sold 8,171 shares of the business's stock in a transaction that occurred on Tuesday, February 17th. The shares were sold at an average price of $3.07, for a total value of $25,084.97. Following the completion of the sale, the executive vice president owned 132,259 shares of the company's stock, valued at approximately $406,035.13. This trade represents a 5.82% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders purchased 1,090,200 shares of company stock valued at $3,475,943 and sold 27,711 shares valued at $85,073. 16.10% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On CS Disco

Institutional investors have recently made changes to their positions in the stock. Tower Research Capital LLC TRC raised its position in CS Disco by 87.1% during the second quarter. Tower Research Capital LLC TRC now owns 9,968 shares of the company's stock valued at $44,000 after purchasing an additional 4,639 shares in the last quarter. Algert Global LLC acquired a new position in CS Disco during the third quarter valued at approximately $70,000. Mercer Global Advisors Inc. ADV acquired a new position in CS Disco during the fourth quarter valued at approximately $99,000. CIBC Asset Management Inc acquired a new position in CS Disco during the fourth quarter valued at approximately $102,000. Finally, BNP Paribas Financial Markets raised its position in CS Disco by 242.5% during the third quarter. BNP Paribas Financial Markets now owns 13,450 shares of the company's stock valued at $87,000 after purchasing an additional 9,523 shares in the last quarter. 58.05% of the stock is currently owned by institutional investors.

About CS Disco

CS Disco, Inc is a provider of cloud-native, artificial intelligence-driven legal applications designed to streamline e-discovery, document review and compliance processes for law firms and corporate legal departments. The Austin, Texas–based company offers a unified platform that automates labor-intensive tasks using machine learning and predictive analytics, enabling legal professionals to process, search and review large volumes of data with greater speed and accuracy.

At the core of CS Disco's product suite is its flagship e-discovery application, which supports early case assessment, data processing, review analytics and production workflows.

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