LegalZoom.com (NASDAQ:LZ) Announces Quarterly Earnings Results

LegalZoom.com (NASDAQ:LZ) released its quarterly earnings data on Wednesday. The company reported $0.16 earnings per share for the quarter, beating analysts’ consensus estimates of $0.15 by $0.01, FiscalAI reports. LegalZoom.com had a net margin of 2.13% and a return on equity of 14.78%. The firm had revenue of $205.29 million for the quarter, compared to analyst estimates of $205.83 million. During the same period last year, the firm earned $0.15 earnings per share. The business’s quarterly revenue was up 6.6% compared to the same quarter last year.

Here are the key takeaways from LegalZoom.com’s conference call:

• Q2 revenue rose 7% to $205 million and adjusted EBITDA increased 18% to $46 million, exceeding the high end of guidance. Adjusted EBITDA margin expanded to 22%, while free cash flow reached $34 million.
• Higher-value, human-in-the-loop offerings continued to gain traction: related subscription revenue grew approximately 20% year over year, represented 65% of subscription revenue, and legal-plan utilization increased more than 35%. Subscription revenue rose 11%, supported by pricing, stable retention, and greater adoption of legal, compliance, and expert services.
• LegalZoom is diversifying customer acquisition beyond Google Search. Partnership orders increased to 11% of total orders from 4% a year ago, while traffic from AI platforms grew more than 250% sequentially and reached roughly 3% of LLC formation traffic in June.
• Google’s shift toward AI-generated search answers reduced informational-search clicks, increased paid-search costs, and contributed to a 5% decline in business formations and a 1% decline in transaction revenue. Management expects this pressure to persist through year-end, guiding Q3 revenue growth to roughly 2% and full-year revenue growth to approximately 6% at the midpoint.
• The company announced a company-wide workforce reduction of approximately 13%, following a 5% reduction earlier in the year. The actions are expected to generate about $7 million in net 2026 savings and $14 million annually, but will result in roughly $6 million of restructuring charges, primarily in Q3.

LegalZoom.com Price Performance

LZ stock traded up $0.11 during midday trading on Friday, hitting $5.77. The stock had a trading volume of 6,626,168 shares, compared to its average volume of 3,115,173. The business has a 50-day moving average of $6.75 and a two-hundred day moving average of $6.73. The firm has a market cap of $990.42 million, a price-to-earnings ratio of 64.11, a price-to-earnings-growth ratio of 1.35 and a beta of 1.28. LegalZoom.com has a 52-week low of $5.22 and a 52-week high of $12.40.

Wall Street Analysts Forecast Growth

A number of research analysts have recently weighed in on LZ shares. JPMorgan Chase & Co. restated a “neutral” rating and issued a $7.00 target price (down from $8.00) on shares of LegalZoom.com in a report on Thursday. Citigroup reduced their target price on shares of LegalZoom.com from $8.50 to $7.50 and set a “neutral” rating for the company in a research note on Friday, May 22nd. William Blair lowered LegalZoom.com from an “outperform” rating to a “market perform” rating in a research note on Thursday. Weiss Ratings restated a “sell (d+)” rating on shares of LegalZoom.com in a research note on Thursday, July 2nd. Finally, UBS Group cut their target price on LegalZoom.com from $8.00 to $7.00 and set a “neutral” rating for the company in a research note on Thursday, May 7th. One equities research analyst has rated the stock with a Buy rating, five have issued a Hold rating and three have given a Sell rating to the company. Based on data from MarketBeat, LegalZoom.com presently has an average rating of “Reduce” and an average target price of $8.08.

Insider Buying and Selling

In other LegalZoom.com news, insider Nicole Miller sold 19,199 shares of the company’s stock in a transaction dated Tuesday, May 19th. The shares were sold at an average price of $6.58, for a total value of $126,329.42. Following the sale, the insider owned 1,119,222 shares in the company, valued at approximately $7,364,480.76. This represents a 1.69% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CFO Noel Bertram Watson sold 15,000 shares of LegalZoom.com stock in a transaction that occurred on Monday, May 18th. The shares were sold at an average price of $6.45, for a total transaction of $96,750.00. Following the transaction, the chief financial officer owned 2,041,847 shares of the company’s stock, valued at $13,169,913.15. The trade was a 0.73% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. 7.40% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of LZ. Brighton Jones LLC purchased a new stake in shares of LegalZoom.com during the fourth quarter valued at $185,000. Amundi bought a new stake in shares of LegalZoom.com in the first quarter worth approximately $196,000. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its stake in shares of LegalZoom.com by 3.0% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 74,980 shares of the company’s stock worth $646,000 after acquiring an additional 2,161 shares during the period. Goldman Sachs Group Inc. grew its stake in shares of LegalZoom.com by 9.5% in the first quarter. Goldman Sachs Group Inc. now owns 1,313,429 shares of the company’s stock worth $11,309,000 after acquiring an additional 113,769 shares during the period. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its holdings in shares of LegalZoom.com by 1.7% during the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 275,978 shares of the company’s stock valued at $2,376,000 after purchasing an additional 4,607 shares during the last quarter. Hedge funds and other institutional investors own 81.99% of the company’s stock.

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.