Legalzoom.com, Inc. · NASDAQ:LZ
Legalzoom.com — Q1 2025 Earnings Presentation
32 slides from Legalzoom.com's earnings presentation, May 7, 2025
Slide 1: Investor Presentation
MAY 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: To be the guardian of people's aspirations, lives, and legacies
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) 4.7M 4.3M 1.9M Businesses Estate planning Active legal Independent formed since solutions delivered & compliance attorney net
Slide 7: 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 8: 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 9: …through our 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) 9 (1) Services inc
Slide 10: 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 10
Slide 11: Optimize our subscription business: Compliance coverage enhancements
Optimize our subscription business: Compliance coverage enhancements Compliance status & notifications… Enhancements include Official Compliance status from Secretary of State, ongoing monitoring and built-in- alerts to notify customers of any changes …supported by Attorney-tracked monitoring LegalZ
Slide 12: Reorient go-to-market strategy: Formation Nation acquisition
Reorient go-to-market strategy: Formation Nation acquisition(1) ● 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 Flagship brand, “do it yourself” White-glo
Slide 13: Leverage AI to deliver expertise: Business license alerts
Leverage AI to deliver expertise: Business license alerts AI Enhanced Business Licenses Alerts Leveraging AI enhancements to track ongoing business licensing report requirements across 90,000 jurisdictions, notifying customers when new requirements or This permit is required for ABC Licenses (busine
Slide 14: Proven durable long-term macro; leading market position
Proven durable long-term macro; leading market position Business Formations Macro LegalZoom’s Differentiated LegalZoom’s Unique MarketMarketPosition Position 19-year small business Scale Predictability 4% formation CAGR(1) • >9 million legal milestones completed(3) • >60% subscription revenue • #1 f
Slide 15: Experienced management team
Experienced management team Jeff Stibel Noel Watson Nicole Miller Pratik Savai Chief Executive Officer Chief Financial & Chief Legal Officer Chief Technology Officer Operating Officer Sheily Chhabria Panchal Kathy Tsitovich Aaron Stibel Daniel Lysaught Chief People Officer Chief Corporate Developmen
Slide 16: 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 17: Financial update
Financial update LEGALZ900M
Slide 18: Q1 2025 snapshot
Q1 2025 snapshot GAAP Revenue Adjusted Gross Profit(1) Adjusted EBITDA(1) +5% YoY $183M $174M +10% YoY $123M $112M +33% YoY $37M $28M Q1'24 Q1'25 Q1'24 Q1'25 Q1'24 Q1'25 % of Revenue(1) % of Revenue(1) 64% 67% 16% 20% (1) This is a non-GAAP financial measure. Refer to the Appendix for a reconciliati
Slide 19: 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 +8% YoY $108M $109M $111M $109M $116M Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 2022 2023
Slide 20: 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 21: Sales & marketing
Sales & marketing(1) Customer Acquisition Media “CAM” $246M Other Sales & Marketing (2%) YoY 72M $199M $196M 54M 38M 9% YoY 175M 158M $57M $56M 145M $51M 17M 11M 12M 41M 41M 44M Q1'23 Q1'24 Q1'25 2022 2023 2024 % of Revenue % of Revenue Total Sales & Marketing 35% 29% 31% 40% 30% 29% CAM 25% 23% 24%
Slide 22: Non-GAAP expenses
Non-GAAP expenses(1) Cost of Revenue (2%) YoY Sales & Marketing $556M $542M Technology & Development $534M 59M 60M General & Administrative 60M 51M 60M 62M (0%) YoY 246M 199M 196M $144M $146M $146M 15M 16M 15M 15M 17M 15M 200M 222M 215M 57M 51M 56M 57M 62M 60M Q1'23 Q1'24 Q1'25 2022 2023 2024 % of R
Slide 23: Q2 and FY25 guidance
Q2 and FY25 guidance(1) Q2 2025 FY 2025 FY 2025 Guidance Commentary ● Revenue growth of approximately 5% YoY Total Revenue Total Revenue o Expect to exit the year with double-digit $181M - $185M ~5% YoY Growth o subscription revenue growth in Q4 2025 Guidance assumes mid- to high-single digit declin
Slide 24: Appendix
Appendix LEGALZ900M
Slide 25: Reconciliation of GAAP expenses to non-GAAP expenses
Reconciliation of GAAP expenses to non-GAAP expenses FYE Dec 31, $K 2022 2023 2024 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Cost of revenue $211,095 $239,263 $240,093 $60,395 $63,749 $59,123 $55,907 $68,384 $63,609 $54,715 53,385 66,560 Stock-based compensation(1) 2,931 4,318 5,833 874
Slide 26: Reconciliation of GAAP expenses to non-GAAP expenses on a % of revenue basis
Reconciliation of GAAP expenses to non-GAAP expenses on a % of revenue basis FYE Dec 31, $K 2022 2023 2024 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Cost of revenue 34% 36% 35% 36% 38% 35% 35% 39% 36% 32% 33% 36% Stock-based compensation(1) 0% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% Depreciatio
Slide 27: Reconciliation of GAAP expenses to non-GAAP expenses on a year-over-year % basis
Reconciliation of GAAP expenses to non-GAAP expenses on a year-over-year % basis FYE Dec 31, $K 2022 2023 2024 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Cost of revenue 11% 13% 0% 7% 12% 18% 18% 13% (0%) (8%) (5%) (3%) Stock-based compensation(1) 76% 47% 35% 216% (17%) 87% 69% 82% 58% 4%
Slide 28: Reconciliation of GAAP gross profit to Adjusted gross profit
Reconciliation of GAAP gross profit to Adjusted gross profit FYE Dec 31, $K 2022 2023 2024 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 $408,884 $421,464 $441,788 $105,541 $105,106 $108,061 $102,756 $105,830 $113,753 $113,884 $108,321 $116,550 Gross profit Cost of revenue stock-based compen
Slide 29: Reconciliation of GAAP net (loss) income to Adjusted EBITDA
Reconciliation of GAAP net (loss) income to Adjusted EBITDA FYE Dec 31, $K 2022 2023 2024 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Net (loss) income ($48,733) $13,953 $29,963 ($2,358) $1,395 $7,534 $7,382 $4,744 $1,314 $11,051 $12,854 $5,127 Interest (income) expense, net (1,543) (8,814
Slide 30: Reconciliation of GAAP net (loss) income to non-GAAP net (loss) income
Reconciliation of GAAP net (loss) income to non-GAAP net (loss) income FYE Dec 31, $K 2022 2023 2024 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Net (loss) income ($48,733) $13,953 $29,963 ($2,358) $1,395 $7,534 $7,382 $4,744 $1,314 $11,051 $12,854 $5,127 Amortization of acquired intangibl
Slide 31: Reconciliation of net cash provided by operating activities to free cash flow
Reconciliation of net cash provided by operating activities to free cash flow FYE Dec 31, $K 2022 2023 2024 Q1’23 Q2’23 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Net cash provided by operating activities $73,837 $124,308 $135,639 $29,208 $45,165 $27,441 $22,495 $34,194 $27,245 $31,613 $42,586 $50,70
Slide 32: LEGALZ90m
LEGALZ90m