LegalZoom Q2 revenue slightly misses estimates; to cut 13% workforce

LegalZoom.com

05/08/2026 21:20

Overview
US online legal services firm's Q2 revenue rose 7% yr/yr, slightly missing analyst expectations
Adjusted net income for Q2 slightly missed consensus
Adjusted EBITDA for Q2 beat analyst expectations
Company completed $45.5 mln share repurchases and announced 13% workforce reduction

Outlook
LegalZoom sees 2026 revenue at $795 mln-$805 mln, down from $810 mln-$830 mln prior
Company expects 2026 adjusted EBITDA of $190 mln-$195 mln, down from $190 mln-$200 mln prior
LegalZoom sees Q3 revenue at $192 mln-$196 mln and adjusted EBITDA at $49 mln-$51 mln

Result Drivers
SUBSCRIPTION GROWTH - Co said 11% yr/yr increase in subscription revenue was driven by strength in human-in-the-loop offerings and pricing initiatives
SHIFT IN CUSTOMER ACQUISITION - Co cited industry-wide move away from traditional search and said it is building new acquisition channels, including partnerships with AI companies
COST MANAGEMENT - Co said margin improvement reflects disciplined cost management and a 13% workforce reduction

Company press release: ID:nGNXbQ6LW2

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Revenue
Slight Miss*
$205.30 mln
$205.84 mln (8 Analysts)
Q2 EPS
 
$0.03
 
Q2 Adjusted Net Income
Slight Miss*
$27.44 mln
$27.58 mln (7 Analysts)
Q2 Adjusted EBITDA
Beat
$45.90 mln
$40.92 mln (8 Analysts)
Q2 Free Cash Flow
 
$33.70 mln
 
*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the online services peer group is "buy"
Wall Street's median 12-month price target for LegalZoom.com, Inc. is $8.25, about 1.8% below its August 4 closing price of $8.40
The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 8 three months ago

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For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)