CS Disco (NYSE:LAW) Posts Earnings Results, Misses Expectations By $0.06 EPS

CS Disco (NYSE:LAW) posted its quarterly earnings results on Wednesday. The company reported ($0.08) EPS for the quarter, missing analysts’ consensus estimates of ($0.02) by ($0.06), Zacks reports. The firm had revenue of $45.34 million for the quarter, compared to analysts’ expectations of $44.78 million. CS Disco had a negative net margin of 24.20% and a negative return on equity of 26.58%.

Here are the key takeaways from CS Disco’s conference call:

• Revenue growth accelerated: Q3 revenue was $45.3 million, up 15% year over year excluding a prior-year contingent matter, the company’s strongest growth in four years. DISCO raised its FY2026 revenue outlook to $176.1 million–$178.1 million.
• Profitability improved ahead of plan: Adjusted EBITDA was approximately $79,000 in Q3, one quarter earlier than expected. Management expects Q4 Adjusted EBITDA to be between break-even and $1.5 million.
• AI adoption and usage grew: Revenue from generative and agentic AI capabilities increased more than 200% year over year, while Auto Review revenue grew more than fourfold. Advanced Research represented 91% of Cecilia Q&A usage in Q3, according to management.
• The 20%+ growth goal remains an aspiration: Q3 revenue growth was 15%, and management did not specify when the core business might reach its target. Despite the quarterly EBITDA milestone, DISCO still guides to a FY2026 Adjusted EBITDA loss of $5.3 million–$6.8 million.

CS Disco Stock Up 10.9%

NYSE:LAW traded up $0.56 on Wednesday, hitting $5.73. The stock had a trading volume of 742,274 shares, compared to its average volume of 208,631. The stock has a market cap of $372.06 million, a price-to-earnings ratio of -9.10 and a beta of 1.80. The business’s 50-day simple moving average is $4.47 and its two-hundred day simple moving average is $4.21. CS Disco has a 52-week low of $2.45 and a 52-week high of $9.11.

Insider Transactions at CS Disco

In other CS Disco news, EVP Richard Crum sold 7,426 shares of the company’s stock in a transaction dated Monday, August 17th. The stock was sold at an average price of $4.18, for a total value of $31,040.68. Following the completion of the sale, the executive vice president owned 335,183 shares in the company, valued at $1,401,064.94. This represents a 2.17% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Susan Garcia sold 6,840 shares of the firm’s stock in a transaction dated Monday, August 17th. The stock was sold at an average price of $4.18, for a total value of $28,591.20. Following the completion of the transaction, the insider directly owned 139,109 shares in the company, valued at $581,475.62. This trade represents a 4.69% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders sold a total of 31,267 shares of company stock worth $130,696 over the last three months. 16.80% of the stock is currently owned by insiders.

Analysts Set New Price Targets

Separately, Weiss Ratings restated a “sell (d-)” rating on shares of CS Disco in a research note on Tuesday, September 29th. Two investment analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of “Hold” and an average target price of $8.00.

CS Disco Company Profile

CS Disco, Inc (NYSE: LAW) is a legal technology company that provides cloud-based software and services for law firms, corporations and government organizations. Its platform is designed to help legal teams manage litigation and investigations, organize large volumes of data and streamline document-intensive legal workflows.

The company’s products support electronic discovery, including the collection, processing, hosting, review and analysis of electronically stored information. DISCO’s technology uses automation and artificial intelligence to assist with tasks such as document review, information retrieval and case preparation.