LegalZoom.com (NASDAQ:LZ) Issues Earnings Results, Misses Expectations By $0.01 EPS

LegalZoom.com (NASDAQ:LZ) issued its earnings results on Wednesday. The company reported $0.12 EPS for the quarter, missing analysts’ consensus estimates of $0.13 by ($0.01), FiscalAI reports. LegalZoom.com had a net margin of 1.46% and a return on equity of 10.88%. The business had revenue of $206.78 million during the quarter, compared to analyst estimates of $202.14 million. During the same quarter last year, the company earned $0.13 earnings per share. LegalZoom.com’s quarterly revenue was up 12.9% on a year-over-year basis.

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 Price Performance

LZ traded down $0.04 on Friday, hitting $6.03. The company had a trading volume of 1,582,950 shares, compared to its average volume of 3,197,303. The company’s fifty day moving average price is $6.25 and its 200 day moving average price is $8.22. The stock has a market cap of $1.04 billion, a price-to-earnings ratio of 100.93, a price-to-earnings-growth ratio of 1.35 and a beta of 1.33. LegalZoom.com has a 1-year low of $5.28 and a 1-year high of $12.40.

Insider Activity at LegalZoom.com

In other LegalZoom.com news, CFO Noel Bertram Watson sold 15,000 shares of the company’s stock in a transaction dated Wednesday, February 18th. The stock was sold at an average price of $6.96, for a total value of $104,400.00. Following the sale, the chief financial officer owned 1,480,860 shares in the company, valued at approximately $10,306,785.60. The trade was a 1.00% decrease in their position. The transaction was disclosed in a filing with the SEC, which is accessible through this link. Also, insider Nicole Miller sold 23,325 shares of the stock in a transaction that occurred on Thursday, February 26th. The stock was sold at an average price of $6.63, for a total value of $154,644.75. Following the completion of the sale, the insider directly 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 SEC filing for this sale provides additional information. Insiders own 5.90% of the company’s stock.

Institutional Investors Weigh In On LegalZoom.com

A number of large investors have recently added to or reduced their stakes in the company. Brighton Jones LLC bought a new stake in shares of LegalZoom.com in the fourth quarter worth about $185,000. Focus Partners Wealth grew its holdings in LegalZoom.com by 33.4% in the third quarter. Focus Partners Wealth now owns 16,515 shares of the company’s stock worth $171,000 after purchasing an additional 4,139 shares during the last quarter. Campbell & CO Investment Adviser LLC purchased a new position in LegalZoom.com in the fourth quarter worth $158,000. Prelude Capital Management LLC grew its holdings in 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. Finally, Voleon Capital Management LP purchased a new position in LegalZoom.com in the third quarter worth $136,000. Hedge funds and other institutional investors own 81.99% of the company’s stock.

Wall Street Analyst Weigh In

A number of research analysts recently issued reports on LZ shares. UBS Group decreased their price target on shares of LegalZoom.com from $8.00 to $7.00 and set a “neutral” rating for the company in a research note on Thursday. Zacks Research raised shares of LegalZoom.com from a “strong sell” rating to a “hold” rating in a report on Monday, February 23rd. Weiss Ratings cut shares of LegalZoom.com from a “hold (c-)” rating to a “sell (d+)” rating in a report on Monday, April 6th. JPMorgan Chase & Co. cut their price objective on shares of LegalZoom.com from $14.00 to $11.00 and set an “overweight” rating on the stock in a report on Wednesday, February 18th. Finally, Barclays reaffirmed an “underweight” rating and issued a $6.00 target price (down from $9.00) on shares of LegalZoom.com in a report on Wednesday, March 4th. Three equities research analysts have rated the stock with a Buy rating, four have issued a Hold rating and three have issued a Sell rating to the company. According to data from MarketBeat, the company currently has an average rating of “Hold” and an average target price of $9.25.

LegalZoom.com declared that its board has initiated a share repurchase program on Thursday, February 19th that permits the company to buyback $100.00 million in outstanding shares. This buyback authorization permits the company to repurchase up to 8.1% of its shares through open market purchases. Shares buyback programs are usually an indication that the company’s leadership believes its shares are undervalued.

LegalZoom.com Company Profile

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.