LegalZoom.com (NASDAQ:LZ) Issues Quarterly Earnings Results

Key Points

• LegalZoom beat revenue expectations with $207M (+13% YoY) but missed EPS at $0.12 vs. $0.13 consensus; management raised full‑year revenue guidance to $810M–$830M and adjusted EBITDA guidance to $190M–$200M.
• The company is shifting to higher‑value subscriptions and expert‑led offerings — subscription revenue was $130M (+12% YoY), ARPU rose 4%, the Concierge Suite delivers over three times average ARPU, and partnerships plus AI (GoDaddy, LinkedIn, Chase, ChatGPT integrations) are scaling acquisition and efficiency.
• Shares fell about 6.4% to $6.28 after the report; the board authorized a $100M buyback and analysts remain mixed, with an average target near $9.42.

LegalZoom.com (NASDAQ:LZ - Get Free Report) posted its earnings results on Wednesday. The company reported $0.12 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.13 by ($0.01), FiscalAI reports. The company had revenue of $206.78 million during the quarter, compared to analysts' expectations of $202.14 million. LegalZoom.com had a net margin of 2.04% and a return on equity of 6.35%. LegalZoom.com's revenue for the quarter was up 12.9% on a year-over-year basis. During the same quarter last year, the firm earned $0.13 EPS.

Here are the key takeaways from LegalZoom.com's conference call:

• LegalZoom beat expectations in Q1 with $207M revenue (+13% YoY) and $36M adjusted EBITDA (18% margin)$810M–$830M and adjusted EBITDA to $190M–$200M.
• The business is shifting to higher-value subscriptions — subscription revenue was $130M (+12% YoY) (fourth consecutive quarter of double-digit subscription growth), ARPU rose 4%, and subscription units remained ~1.92M reflecting mix upgrade.
• Expert-led offerings are accelerating (revenue grew >2x the company rate), with the Concierge Suite delivering over three times average ARPU and demand consistently exceeding expectations as a strategic entry to higher‑value customers.
• Partnerships and AI channels are scaling acquisition — partner-driven orders rose to 10% of total (from 4%), with new relationships including GoDaddy (exclusive), LinkedIn, and Chase, plus early integrations with ChatGPT and Claude to capture intent.
• AI is materially improving operations and expected margins — LegalZoom cites a 55% reduction in trademark classification time, 30% faster patent drafting, AI resolving ~40% of chat interactions end‑to‑end, and AI coaching cutting missed sales ~33%, which management says will drive back‑half margin expansion.

LegalZoom.com Stock Down 6.4%

Shares of LZ traded down $0.43 during mid-day trading on Wednesday, hitting $6.28. 3,300,382 shares of the company traded hands, compared to its average volume of 2,407,154. The company has a market capitalization of $1.09 billion, a PE ratio of 78.51, a price-to-earnings-growth ratio of 1.45 and a beta of 1.33. The business has a 50 day moving average of $6.26 and a 200 day moving average of $8.25. LegalZoom.com has a 1-year low of $5.28 and a 1-year high of $12.40.

Wall Street Analysts Forecast Growth

A number of research firms have recently weighed in on LZ. UBS Group lowered their price target on shares of LegalZoom.com from $12.00 to $8.00 and set a "neutral" rating on the stock in a report on Friday, February 20th. Barclays reissued an "underweight" rating and set a $6.00 target price (down from $9.00) on shares of LegalZoom.com in a research report on Wednesday, March 4th. Zacks Research upgraded shares of LegalZoom.com from a "strong sell" rating to a "hold" rating in a research note on Monday, February 23rd. Weiss Ratings lowered shares of LegalZoom.com from a "hold (c-)" rating to a "sell (d+)" rating in a report on Monday, April 6th. Finally, JPMorgan Chase & Co. reduced their price target on LegalZoom.com from $14.00 to $11.00 and set an "overweight" rating on the stock in a research report on Wednesday, February 18th. Three research analysts have rated the stock with a Buy rating, four have issued a Hold rating and three have given a Sell rating to the company's stock. Based on data from MarketBeat, the company presently has an average rating of "Hold" and an average target price of $9.42.

Insider Buying and Selling

In other LegalZoom.com news, insider Nicole Miller sold 23,325 shares of the firm's stock in a transaction on Thursday, February 26th. The shares were sold at an average price of $6.63, for a total value of $154,644.75. Following the completion of the transaction, the insider owned 813,033 shares of the company's stock, valued at approximately $5,390,408.79. This trade represents a 2.79% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, CFO Noel Bertram Watson sold 15,000 shares of LegalZoom.com stock in a transaction on Wednesday, February 18th. The stock was sold at an average price of $6.96, for a total transaction of $104,400.00. Following the sale, the chief financial officer owned 1,480,860 shares of the company's stock, valued at $10,306,785.60. The trade was a 1.00% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 5.90% of the stock is owned by company insiders.

Hedge Funds Weigh In On LegalZoom.com

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in LZ. EP Wealth Advisors LLC grew its stake in LegalZoom.com by 2.8% during the 2nd quarter. EP Wealth Advisors LLC now owns 41,352 shares of the company's stock valued at $368,000 after purchasing an additional 1,139 shares during the last quarter. Prelude Capital Management LLC raised its stake in shares of LegalZoom.com by 11.6% in the third quarter. Prelude Capital Management LLC now owns 14,185 shares of the company's stock worth $147,000 after purchasing an additional 1,470 shares during the last quarter. The Manufacturers Life Insurance Company lifted its holdings in shares of LegalZoom.com by 2.9% during the fourth quarter. The Manufacturers Life Insurance Company now owns 59,862 shares of the company's stock worth $594,000 after purchasing an additional 1,705 shares during the period. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its position in LegalZoom.com by 3.0% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 74,980 shares of the company's stock valued at $646,000 after buying an additional 2,161 shares during the last quarter. Finally, Dynamic Technology Lab Private Ltd boosted its position in LegalZoom.com by 9.0% in the fourth quarter. Dynamic Technology Lab Private Ltd now owns 29,602 shares of the company's stock valued at $294,000 after buying an additional 2,441 shares during the last quarter. Hedge funds and other institutional investors own 81.99% of the company's stock.

LegalZoom.com declared that its board has initiated a stock buyback plan on Thursday, February 19th that authorizes the company to buyback $100.00 million in outstanding shares. This buyback authorization authorizes the company to reacquire up to 8.1% of its stock through open market purchases. Stock buyback plans are usually an indication that the company's leadership believes its stock is undervalued.

About LegalZoom.com

LegalZoom.com, Inc NASDAQ: LZ operates as a leading online legal technology company that provides a broad range of legal and business services to individuals, families and small businesses. Through its digital platform, the company offers customized legal documents and filing services, including business formation (LLCs, corporations and nonprofits), estate planning (wills and trusts), intellectual property protection (trademarks and copyrights), and ongoing compliance support. LegalZoom also connects customers with independent attorneys for consultations on matters such as family law, immigration and real estate.

Founded in 2001 by entrepreneurs Brian Lee, Brian P.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.