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

Generated by AI AgentDaily EarningsReviewed byTianhao Xu
Thursday, Nov 6, 2025 6:25 pm ET1min read
Aime RobotAime Summary

- Legalzoom.com reported 12.8% revenue growth to $190.16M in Q3 2025, exceeding expectations and raising full-year guidance to $748–$752M via AI and subscription strategies.

- Subscription revenue led with $125.36M (14% YoY growth), while net income hit an 8-year high of $4.51M despite a 50% EPS decline, driven by cost discipline.

- Shares rose 2.62% post-earnings, supported by institutional buying (e.g., AlphaQuest LLC’s 777.5% stake increase) and AI partnerships with Design.com and OpenAI.

- CEO Jeff Stibel emphasized AI and human expertise for 36M U.S. small businesses, with Q4 revenue guidance at $182–$186M and 2025 adjusted EBITDA of $168–$170M.

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.

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