LZ Earnings Prediction
The chart below shows how LZ performed 10 days before and after its earnings report, based on data from the past quarters. Typically, LZ sees a +5.14% change in stock price 10 days leading up to the earnings, and a +4.35% change 10 days following the report. On the earnings day itself, the stock moves by +2.45%. This data can give you a slight idea of what to expect for the next quarter's release.
LZ Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
161.71M
1.92%
-4.09%
Gross Margin
66.99%
3.44%
-0.83%
Operating Margin
7.76%
14.96%
-41.03%
Net Margin
7.95%
70.97%
21.37%
EPS
0.07
75.00%
16.67%
No Data Available
LZ Earnings Analysis
LegalZoom.com Inc Corporation (LZ.O) Earnings Conference Call
Positive
Strong Q4 Revenue Performance: LegalZoom achieved fourth quarter revenue of $162 million, at the high end of guidance, indicating strong performance.
Subscription Revenue Turnaround: Subscription revenue grew 2% year-over-year, driven by strength in compliance-related subscriptions, marking a turning point after four quarters of deceleration.
Customer Package Transition Success: The company successfully shifted over 10% more customers to pro and premium packages year-over-year, enhancing customer value and revenue potential.
Strong EBITDA Margin: LegalZoom's adjusted EBITDA for Q4 was $44 million, representing a 27% margin, showcasing strong margin performance and ongoing cost efficiencies.
EBITDA Growth and Efficiency: The full-year adjusted EBITDA grew 25% year-over-year, reflecting the impact of automation and operational efficiencies.
Acquisition Impact on EBITDA: The acquisition of Formation Nation is expected to positively contribute to adjusted EBITDA in the first year, enhancing customer service and expanding offerings.
Increased Brand Marketing Spend: LegalZoom plans to increase brand marketing spend by more than double in 2025, aiming to improve brand awareness and attract high-value customers.
AI-Enhanced Customer Experience: The company is leveraging AI to enhance customer experience, with early positive results from AI-powered tools like the estate plan assistant.
Strong Financial Position: LegalZoom ended the quarter with $142 million in cash and no debt, indicating a strong financial position to support growth initiatives.
Negative
Subscription Revenue Stagnation: Subscription revenue growth was only 2% year-over-year, indicating a lack of significant momentum in this key area.
Customer Acquisition Challenges: LegalZoom formations declined faster than overall US business formations, suggesting challenges in attracting new customers.
Average Order Value Decline: The average order value decreased by 9%, which may indicate a shift towards lower-priced transactions and could impact overall revenue.
Customer Acquisition Pause Impact: The company paused new customer acquisition for its tax offering, which negatively affected revenue from that segment.
Beneficial Ownership Uncertainty: The outlook for beneficial ownership filing requirements remains uncertain, with expectations that it may not be a federal requirement in 2025, potentially impacting compliance-related revenue.
Revenue Growth Headwinds: The company anticipates a headwind of over 4 points to revenue growth in 2025 due to changes in the LZ Tax commercialization strategy and beneficial ownership filing assumptions.
Revenue Predictability Challenges: Despite a strong adjusted EBITDA margin of 27%, the company is still facing challenges in revenue predictability and growth, which may affect investor confidence.
LZ FAQs
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LZ Earning Call Sentiment
LegalZoom.com, Inc. (LZ) Q4 2024 Earnings Call Transcript
LZ.O
-3.41%Positive
The earnings call reveals strong financial performance with increased revenue, EBITDA, and margins, alongside effective cost management. Shareholder returns are robust, with significant repurchases. Although business formations declined, subscription revenue grew, and free cash flow was strong. The Q&A section highlights optimism about AI and subscription growth, despite uncertainties around the Formation Nation acquisition. Given the company's small market cap, the positive financials and shareholder returns are likely to result in a positive stock price movement.
