Legalzoom.com 2025 Q3 Earnings Record Revenue and Strategic Shift Validates Growth

Legalzoom.com (LZ) reported fiscal 2025 Q3 earnings on Nov 6, 2025, with revenue rising 12.8% to $190.16 million, exceeding expectations. The company raised full-year revenue guidance to $748–$752 million, reflecting confidence in its strategic shift toward AI-driven solutions and subscription growth.

Revenue

Subscription revenue led with $125.36 million, while transaction revenue added $64.80 million, bringing the total to $190.16 million. Subscription units grew 14% year-over-year, underscoring the segment’s role as a key growth driver.

Earnings/Net Income

Legalzoom.com’s EPS declined 50% to $0.03, and net income fell 59.2% to $4.51 million. Despite these declines, the company achieved its highest net income in eight years, driven by disciplined cost management and margin expansion.

Post-Earnings Price Action Review

The strategy of buying LZ shares on revenue-raise announcements has historically yielded strong returns, with a 35.5% year-to-date gain as of Nov 2025. Following the Q3 report, shares rose 2.62% in after-hours trading to $9.92. Subscription and transaction revenue growth, coupled with a 14% increase in subscription units, reinforced investor confidence. Institutional support, including AlphaQuest LLC’s 777.5% stake increase, and positive market sentiment further bolster the stock’s long-term outlook.

CEO Commentary

Jeff Stibel, CEO, emphasized the strategic shift toward AI and human expertise to serve 36 million U.S. small businesses. He highlighted momentum in subscription growth and the potential of AI-driven solutions to unlock long-term value.

Guidance

Legalzoom.com raised full-year 2025 revenue guidance to $748–$752 million (10% growth at the midpoint) and Q4 revenue to $182–$186 million. Adjusted EBITDA guidance for 2025 is $168–$170 million, with a 23% margin at the midpoint.

Additional News

1. AI Partnership: Legalzoom.com partnered with Design.com to offer AI-generated logos and integrated trademark services, enhancing its branding solutions.

2. Enterprise Deal with OpenAI: A new partnership aims to integrate advanced AI into operations, improving cost efficiency and market reach.

3. Stock Buyback: The company repurchased 1.8 million shares for $17.6 million, averaging $9.91 per share, signaling confidence in its valuation.