LegalZoom Q3 Revenue Expected to Reach $182M-$184M, Adjusted EBITDA $44M-$46M.

LegalZoom expects Q3 revenue of $182M-$184M, beating the consensus estimate of $177.09M. The company also sees Q3 adjusted EBITDA of $44M-$46M.

LegalZoom Inc. (NASDAQ: LZ) reported its second-quarter 2025 financial results, showcasing a 9% year-over-year (YoY) revenue increase to $192.5 million, which surpassed analyst expectations. While adjusted earnings per share (EPS) met estimates, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) missed expectations. The company raised its 2025 revenue growth outlook from 5% to 8% [1].

Subscription revenue, a key driver of growth, increased by 10% YoY to $119.9 million. This growth was fueled by initiatives to expand the subscription business, which now accounts for 62% of total revenue [2]. LegalZoom expects Q3 revenue to be between $182 million and $184 million, with Q3 adjusted EBITDA projected to be between $44 million and $46 million [2].

The company's strong performance is reflected in its improved profitability metrics. Adjusted EBITDA jumped 35% to $39.0 million, with margins expanding 400 basis points to 20%. Free cash flow nearly doubled to $31.6 million, indicating improved operational efficiency [2]. LegalZoom ended Q2 with $217.0 million in cash and cash equivalents, up from $142.1 million at year-end 2024 [2].

Despite the minor net loss of $0.3 million compared to net income of $1.3 million in Q2 2024, the adjusted metrics paint a more positive picture. The company's balance sheet remains strong, with significant cash on hand and share repurchases totaling $20.4 million during the quarter [2].

LegalZoom's strategic execution and focused strategy have driven this growth. The company's subscription-first approach provides more predictable, recurring revenue streams compared to transaction-based models. This strategy is paying off, with subscription units growing 22% to nearly 2 million units, despite a 6% decline in average revenue per user (ARPU) to $256 [2].

The company's improved outlook suggests that its investments in subscription growth are bearing fruit, while maintaining discipline on costs. LegalZoom's strong Q2 results, combined with accelerating growth and improved profitability, signal a promising future for the company.

References:
[1] https://www.indexbox.io/blog/legalzoom-set-to-announce-earnings-amidst-steady-expectations/
[2] https://www.marketscreener.com/news/legalzoom-q2-revenue-beats-expectations-ce7c5edcd980f221
[3] https://www.stocktitan.net/news/LZ/legal-zoom-reports-strong-second-quarter-2025-financial-results-7c0f7jei6bl4.html