Legalzoom.com 2025 Q2 Earnings Beats Expectations, Net Loss Widens by 120%

Legalzoom.com (LZ) reported its fiscal 2025 Q2 earnings on Aug 07th, 2025. The company exceeded revenue expectations and raised its full-year guidance, reflecting strong performance in core operations despite a net loss.

Legalzoom.com’s total revenue reached $192.51 million in Q2 2025, an 8.5% year-over-year increase. The company’s subscription-based model continues to gain traction, with recurring revenue streams contributing significantly to the top-line growth.

Subscription revenue stood at $119.9 million, showing a 10% year-over-year increase, highlighting the expansion of LegalZoom’s recurring revenue business. The company also reported strong Adjusted EBITDA of $39.0 million, up 35% from $28.9 million in the prior year, with a margin improvement from 16% to 20%. This reflects the effectiveness of cost discipline and operational leverage.

Legalzoom.com reported a net loss of $266,000 in Q2 2025, a 120.2% deterioration from a net income of $1.31 million in the prior year. While the EPS remained at $0.00, the net loss reflects a meaningful shift in profitability. The earnings summary indicates a mixed financial performance, with notable revenue growth offset by a sharp decline in net income.

The stock price of Legalzoom.com has declined across all timeframes, with a 3.24% drop during the latest trading day, a 6.90% decline over the most recent week, and a 7.10% fall month-to-date. The market appears to be reacting to the net loss and weak post-earnings performance.

The strategy of buying LegalZoom shares after a revenue increase quarter-over-quarter on the report date and holding for 30 days performed poorly, with a CAGR of -2.68%, a maximum drawdown of 58.19%, and an excess return of -56.43%. The negative returns significantly underperformed the benchmark return of 48.81%, suggesting limited investor confidence post-earnings. Additionally, the Sharpe ratio of -0.05 indicates a high level of risk and volatility.

Jeff Stibel, Chairman and CEO, expressed optimism about the company’s performance, emphasizing the third consecutive quarter of accelerated revenue growth and double-digit subscription growth ahead of plan. The commentary highlights momentum in strategic execution and confidence in the company’s long-term positioning.

Legalzoom.com raised its full-year 2025 revenue growth guidance from 5% to 8%, maintaining its Adjusted EBITDA margin target of approximately 23%. For Q3, the company expects revenue of $182–$184 million (9% year-over-year growth at the midpoint) and Adjusted EBITDA of $44–$46 million (25% margin at the midpoint).

In related news, LegalZoom.com Inc reported Q2 2025 revenue of $192.5 million, exceeding analyst estimates of $182.7 million. The company emphasized its leadership in the online legal services market and a focus on subscription growth. LegalZoom closed the quarter with $217 million in cash and cash equivalents, up from $142.1 million at the end of 2024. The company also generated $39.1 million in operating cash flow and $31.6 million in free cash flow, supporting its strategic initiatives and financial stability.