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

LegalZoom.com (NASDAQ:LZ) announced 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 business had revenue of $206.78 million for the quarter, compared to the consensus estimate of $202.14 million. LegalZoom.com had a net margin of 2.04% and a return on equity of 6.35%. The business’s quarterly revenue was up 12.9% compared to the same quarter last year. During the same quarter last year, the firm posted $0.13 earnings per share.

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%

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

Analyst Ratings Changes

Several brokerages recently issued reports on LZ. Barclays restated 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. UBS Group cut their target price on shares of LegalZoom.com from $12.00 to $8.00 and set a “neutral” rating for the company in a research report on Friday, February 20th. Weiss Ratings downgraded shares of LegalZoom.com from a “hold (c-)” rating to a “sell (d+)” rating in a report on Monday, April 6th. Zacks Research raised shares of LegalZoom.com from a “strong sell” rating to a “hold” rating in a report on Monday, February 23rd. Finally, JPMorgan Chase & Co. lowered their price target 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. Three investment analysts have rated the stock with a Buy rating, four have assigned a Hold rating and three have given a Sell rating to the company’s stock. According to data from MarketBeat, the stock presently has a consensus rating of “Hold” and an average price target of $9.42.

Insider Buying and Selling at LegalZoom.com

In other news, insider Nicole Miller sold 23,325 shares of the business’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 transaction, the insider owned 813,033 shares of the company’s stock, valued at approximately $5,390,408.79. The trade was a 2.79% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, CFO Noel Bertram Watson sold 15,000 shares of the business’s 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 completion of the transaction, the chief financial officer directly owned 1,480,860 shares in the company, valued at $10,306,785.60. This trade represents a 1.00% decrease in their position. The SEC filing for this sale provides additional information. 5.90% of the stock is currently owned by insiders.

Hedge Funds Weigh In On LegalZoom.com

Hedge funds have recently modified their holdings of the stock. Osaic Holdings Inc. lifted its holdings in shares of LegalZoom.com by 477.3% in the second quarter. Osaic Holdings Inc. now owns 4,555 shares of the company’s stock worth $41,000 after buying an additional 3,766 shares in the last quarter. EverSource Wealth Advisors LLC lifted its holdings in shares of LegalZoom.com by 976.4% in the second quarter. EverSource Wealth Advisors LLC now owns 4,564 shares of the company’s stock worth $41,000 after buying an additional 4,140 shares in the last quarter. Parallel Advisors LLC lifted its holdings in shares of LegalZoom.com by 8,589.8% in the third quarter. Parallel Advisors LLC now owns 5,127 shares of the company’s stock worth $53,000 after buying an additional 5,068 shares in the last quarter. Kemnay Advisory Services Inc. purchased a new position in shares of LegalZoom.com in the fourth quarter worth $74,000. Finally, Parkside Financial Bank & Trust lifted its holdings in shares of LegalZoom.com by 91.4% in the fourth quarter. Parkside Financial Bank & Trust now owns 7,433 shares of the company’s stock worth $74,000 after buying an additional 3,550 shares in the last quarter. Hedge funds and other institutional investors own 81.99% of the company’s stock.

LegalZoom.com declared that its Board of Directors has authorized a stock repurchase plan on Thursday, February 19th that permits the company to buyback $100.00 million in outstanding shares. This buyback authorization permits the company to reacquire up to 8.1% of its shares through open market purchases. Shares buyback plans are typically a sign that the company’s board of directors believes its shares are 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.