Legalzoom.com, Inc. · NASDAQ:LZ
Legalzoom.com — Q4 2024 Earnings Presentation
30 slides from Legalzoom.com's earnings presentation, Feb 26, 2025
Slide 1: Investor Presentation
FEBRUARY 2025 Investor Presentation
Slide 2: Forward-looking statements disclaimer
Forward-looking statements disclaimer This presentation contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward- looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Slide 3: About non-GAAP financial measures
About non-GAAP financial measures This presentation includes certain non-GAAP financial measures including Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP net income (loss), non-GAAP net income (loss) margin, adjusted gross profit, adjusted gross profit margin, certain non-GAAP expenses (including
Slide 4: About LegalZoom
About LegalZoom LEGALZ900M
Slide 5: Our vision and mission
Our vision To be the guardian of people’s aspirations, lives, and legacies Our mission Transforming how people navigate the legal system 5
Slide 6: Online legal and compliance is a big opportunity
Online legal and compliance is a big opportunity Our market Our leadership The Largest Digital Player Little product innovation $51B -61 1,000+ SAM(1) Offline Attorney NPS(2) 4.6M 4.3M 1.8M Businesses Estate planning Active legal Independent formed since solutions delivered & compliance attorney net
Slide 7: We solve important problems for our customers
We solve important problems for our customers… Small business owners have a fear Entity creation and compliance is Consumers need legal help to of navigating complex regulatory complicated, time-consuming and protect their families, but the cost matters, but the cost of experts expensive to navigate
Slide 8: Innovative legal technology platform
…through our innovative legal technology platform Small business services Consumer services Business Business Legal Estate Family formation compliance advice planning planning Tax prep, banking, Trademark & IP Business Legal Real insurance & management(1) advice estate websites(2) 8 (1) Services inc
Slide 9: Large SAM, significant opportunity
Large SAM(1), significant opportunity Life & Business Planning Business Management Expert Assistance $13B $15B $23B The largest digital formations During and post-business formation, We offer access to experts to help player, with ~9% market share(2), we offer a set of important services handle the
Slide 10: Experienced management team
Experienced management team Jeff Stibel Noel Watson Nicole Miller Chief Executive Officer Chief Operating Officer & Chief Legal Officer Chief Financial Officer Sheily Chhabria Panchal Kathy Tsitovich Daniel Lysaught Aaron Stibel Chief People Officer Chief Corporate Development Chief Marketing Office
Slide 11: Three key focus areas
Three key focus areas 1 2 3 Optimize our Leverage AI to Reorient go-to- subscription deliver market strategy business expertise 11
Slide 12: Formation Nation acquisition overview
Formation Nation acquisition overview ● Closed February 10, 2025 ● Nevada based small business services company About ● Seasoned leadership team with 30+ years of experience in business formation and compliance ● 140+ small business service experts Formation Nation Flagship brand, “do it yourself” b
Slide 13: LegalZoom investment highlights
LegalZoom investment highlights The largest digital player Attractive and efficient Leadership team focused on in a large and fragmented business model, shifting to growth and profitability market subscriptions ● Ability to operate at scale in a ● Building an engaging ecosystem of ● Opportunities to
Slide 14: Financial update
Financial update LEGALZ900M
Slide 15: FY 2024 snapshot
FY 2024 snapshot GAAP Revenue Non-GAAP Gross Profit(1) Adjusted EBITDA(1) +3% YoY $661M $682M +6% YoY $467M $439M +25% YoY $148M $119M 2023 2024 2023 2024 2023 2024 % of Revenue(1) % of Revenue(1) 66% 68% 18% 22% (1) This is a non-GAAP financial measure. Refer to the Appendix for a reconciliation of
Slide 16: Q4 2024 snapshot
Q4 2024 snapshot GAAP Revenue Adjusted Gross Profit(1) Adjusted EBITDA(1) +2% YoY $159M $162M +6% YoY $115M $108M +32% YoY $44M $33M Q4'23 Q4'24 Q4'23 Q4'24 Q4'23 Q4'24 % of Revenue(1) % of Revenue(1) 68% 71% 21% 27% (1) This is a non-GAAP financial measure. Refer to the Appendix for a reconciliatio
Slide 17: Subscription revenue
Subscription revenue(1) Subscription revenue is primarily comprised of registered agent and compliance packages, attorney +6% YoY advice, virtual mail, bookkeeping, legal forms, and e- $436M signature services. $413M $359M +2% YoY $107M $108M $109M $111M $109M Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 2022 2023
Slide 18: Transaction revenue
Transaction revenue(1) Transaction revenue is primarily generated from business formations services as well as other small business and consumer transactions including beneficial ownership information reports, annual reports, trademark filings, and estate planning solutions. (1%) YoY $261M $248M $24
Slide 19: Sales & marketing
Sales & marketing(1) Customer Acquisition Media “CAM” $246M Other Sales & Marketing (2%) YoY 72M $199M $196M 54M 38M 1% YoY 175M 145M 158M $46M $43M $44M 14M 10M 8M 32M 33M 36M Q4'22 Q4'23 Q4'24 2022 2023 2024 % of Revenue % of Revenue Total Sales & Marketing 31% 27% 27% 40% 30% 29% CAM 22% 21% 22%
Slide 20: Non-GAAP expenses
Non-GAAP expenses(1) (2%) YoY Cost of Revenue Sales & Marketing $556M $542M $534M Technology & Development 59M 60M 60M 51M General & Administrative 60M 62M 246M 199M 196M (6%) YoY $120M $125M $118M 16M 15M 13M 200M 222M 215M 46M 14M 43M 16M 44M 13M 44M 51M 47M Q4'22 Q4'23 Q4'24 2022 2023 2024 % of R
Slide 21: Q1 and FY25 guidance
Q1 and FY25 guidance(1) Q1 2025 FY 2025 FY 2025 Guidance Commentary ● Revenue growth of approximately 5% YoY Total Revenue Total Revenue o Assumes flat macro vs. 2024(3) $175M - $179M ~5% YoY Growth o Expect to exit the year with double-digit subscription revenue growth in Q4 2025 ● Commitment to Ad
Slide 22: Appendix
Appendix LEGALZ900M
Slide 23: Reconciliation of GAAP expenses to non-GAAP expenses
Reconciliation of GAAP expenses to non-GAAP expenses FYE Dec 31, $K 2022 2023 2024 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Cost of revenue $211,095 $239,263 $240,093 $47,448 $60,395 $63,749 $59,123 $55,907 $68,384 $63,609 $54,715 53,385 Stock-based compensation(1) 2,931 4,318 5,833 726
Slide 24: Reconciliation of GAAP expenses to non-GAAP expenses, % of revenue
Reconciliation of GAAP expenses to non-GAAP expenses on a % of revenue basis FYE Dec 31, $K 2022 2023 2024 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Cost of revenue 34% 36% 35% 32% 36% 38% 35% 35% 39% 36% 32% 33% Stock-based compensation(1) 0% 1% 1% 0% 1% 1% 1% 1% 1% 1% 1% 1% Depreciatio
Slide 25: Reconciliation of GAAP expenses to non-GAAP expenses, year-over-year %
Reconciliation of GAAP expenses to non-GAAP expenses on a year-over-year % basis FYE Dec 31, $K 2022 2023 2024 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Cost of revenue 11% 13% 0% (2%) 7% 12% 18% 18% 13% (0%) (8%) (5%) Stock-based compensation(1) 76% 47% 35% 391% 216% (17%) 87% 69% 82% 5
Slide 26: Reconciliation of GAAP gross profit to non-GAAP gross profit
Reconciliation of GAAP gross profit to non-GAAP gross profit FYE Dec 31, $K 2022 2023 2024 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 $408,884 $421,464 $441,788 $ 99,178 $105,541 $105,106 $108,061 $102,756 $105,830 $113,753 $113,884 $108,321 Gross profit Cost of revenue stock-based compen
Slide 27: Reconciliation of GAAP net income to Adjusted EBITDA
Reconciliation of GAAP net (loss) income to Adjusted EBITDA FYE Dec 31, $K 2022 2023 2024 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Net (loss) income ($48,733) $13,953 $29,963 $1,744 ($2,358) $1,395 $7,534 $7,382 $4,744 $1,314 $11,051 $12,854 Interest (income) expense, net (1,543) (8,814
Slide 28: Reconciliation of GAAP net income to non-GAAP net income
Reconciliation of GAAP net (loss) income to non-GAAP net (loss) income FYE Dec 31, $K 2022 2023 2024 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Net (loss) income ($48,733) $13,953 $29,963 $1,744 ($2,358) $1,395 $7,534 $7,382 $4,744 $1,314 $11,051 $12,854 Amortization of acquired intangibl
Slide 29: Reconciliation of operating cash flow to free cash flow
Reconciliation of net cash provided by operating activities to free cash flow FYE Dec 31, $K 2022 2023 2024 Q4’22 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Net cash provided by operating activities $73,837 $124,308 $135,639 $21,822 $29,208 $45,165 $27,441 $22,495 $34,194 $27,245 $31,613 $42,58
Slide 30: LEGALZ90m
LEGALZ90m