LZ - Earnings call transcript Q1 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by, and welcome to LegalZoom's First Quarter 2024 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the conference over to your speaker today, Madeleine Crane, Head of Investor Relations. Please go ahead.

Madeleine Crane

Thank you, operator. Welcome to LegalZoom's First Quarter 2024 Earnings Conference Call.

this Dan Chief Chief we Financial making statements is: Noel Officer; will today forward-looking our Watson, Officer.As on me Wernikoff, Executive our and be Joining call. a reminder, results. identified as These forward-looking as expect, future a should and guarantee anticipate, plan, not the expressions or of intend similar not words of believe, and by will, are statements such use be be can and relied performance upon us as Such and are to and on information are assumptions statements management's uncertainties cause actual risks expectations today's forward-looking results materially and of also to statements based statements. could to forward-looking date.These differ available subject such from that most uncertainties with we referred in Factors Exchange and Securities recent These in the on our and Risk are Form XX-K annual issued risks the Commission. report filed today press release the and of to section do Except will measures. result as plan not to as publicly any whether or of addition, law, new events by or statements non-GAAP a financial any discuss future certain otherwise.In required forward-looking we revise update also information, we use regarding and measures decisions these believe to our helpful measures non-GAAP information we provide in investors. business, We making GAAP. for These prepared in isolation substitute measures be in to considered non-GAAP as a accordance are financial or not intended with results call Reconciliations the are over of comparable will to our of measures the most Investor section turn GAAP the Dan. set directly all non-GAAP to measures Relations in investors.legalzoom.com.I forth website now at

Daniel Wernikoff

formations measured recap a year-over-year. XX% Subscription came afternoon, our our in everyone. margin. with X%. down and data million, up I'll million, was financial quick by XX% $XXX a up Census XX% declined revenue LegalZoom of year-over-year, or transaction Good EIN down performance EBITDA Thanks joining QX. at for revenue X%. year-over-year year-over-year start $XX grew Adjusted formations as in Revenue call. were with X% XX%

testing continued mentioned reflects result, our decline partnership fell organization. exit, expected share to our of call, and was EIN the quarter the for rebuild a and last relative sales the As commercialization XX%.As Census on a our share data

in QX pointed of State data Secretary EIN However, Census formations than softer macro data. formations to a

As a well continue the to also to we market the throughout pre-pandemic the share our remains the confident which levels. near-term growth QX in our overstate in long-term believe We're reaccelerate our result, loss. health macro, trend, above the Despite of we believe results year. share ability

market We of focusing the optimized. first we're expect we've at to lapped exit to with fully XX% share that other on the our in our least been efforts yet growth now relative premium year parts our haven't lineup quarter.As rollout, our

the is purchase biggest the the conversion to of of levers decisions number reducing drive One in formation flow.

the drive formations awareness By We ran conversion towards better brand strategy. are needs. with further We're improvements.Share capability marketing prior drive sales conversion. by should compliance working focusing should with performance to higher of a we and at lineup will on which of experience QX, levels end tests favor spend, I'm the to simplifying quarter the while by organization. we supported growth our early expect encouraged be our efficient that by sales better reintroducing our formation increased to also geared and concert back primarily optimization marketing in more traffic be and

new a performance. requirement. monetizing We've required to the took compliance Transparency QX, has this this we with assist had Corporate of came on customers understand post requirements product well saw timing accelerated new FinCEN. a increased advantage of across in over together course our launching the have new the by softened, by focus all requirement with our While macro complexity our Act.We customers opportunity mandates The the of filing strategy to orchestrated the and channels quarter, in ensure formation and this

so guidance macro, profile offset on full the its expectations we as detail. with compliance EBITDA, than our data across with our beating to down strong Even adjusting effort.Overall, maintaining We guidance our the able can meeting despite in scale expected better a pillars to that and us respectively. with our comply a business. the strategic and I'll have been quarter, for customers detail focus year we've our macro on impact a than with strategic performance the first evolve leveraging BOIR.Now anticipated, our weaker revenue today adjusted Beginning and our offering also it business pillar continue minimal performance in we're in was with with more

to X/X convert to the of they sessions the opportunity the continue are has challenge end cross-sold constrained less of design new of majority QX, the optimized of on At form in and sessions. formations product number been solutions the within experience a The mobile deployed focus rate a and We conversion than of factor. at The and one our improve LLC desktop flow. experience. of we reduced both mobile commercialization the

Estate last headwind a remain the has this space fulfillment sales infrastructure our allows front mobile, Despite us them leader and and well. to after our driven leverage have experience is that, The our other created for as the investments minimal in will across simpler formation, unlocking refreshed an side historical to changes customers results platform, early and of We're and formation because benefit able planning has door post-formation a approach changes with in offerings built of now to a the infrastructure While model. monetization we business consumer revenue we've many investment. over these are making decade promising.We're given in new organization. made product around brand our a way the experience pandemic. estate important new recognition to We're that data of MyLZ, planning our this not our strong been new also of multichannel, for relatively business. experience a desktop a is been data close post ecosystem, customer designed make in to combination experience the X years and our a SMB

a update primary for is SMB planning our expect ownership to tax throughout when the the and need these our taken to We've product, the continual planning, to and focus, highly steps comes of partnerships estate continues couple it first to business succession. customers efforts, brand. relevant year.Lastly, to SMB in support While reinvest should you to be product see improvements beginning we're the

As Video, Xx launched our our TV, channels campaign of QX, we and partnership, NBA, Antetokounmpo scale part awareness a spokesperson. brand the with reach In and segments right taking NBA to a new MVP increased as familiarity. spend, to combination approach NBA as leveraging and Online Social, Giannis integrated find our we a champion we're CTV key of and product test-and-learn

first reach CAM increased since as let NBA we ecosystem. year-over-year campaign.Now be the the of QX the the quarter to investment pillar, second to that maximize build the expect align our launching We me meaningfully turn playoffs relevancy and the we to strategic with spend lineup premium our

we experience pressure simplify feel may near-term, by formation of the purchase choices, continue on the complete. our changes logins unnecessary double platform. long benefit we March, is transition, the confident to early formation we're the on eliminating by to MyLZ we subscription experience We us put making our over our had we're the in the As but the million run. in still in we It's saw volume during but formation add-ons engagement after the some X performance flow we excited changes optimize The recent December. the seeing the are in will

of use and new utilization trends out homepage, required the the rolled and to tasks protection to conversion we've ensure offerings. we quarter, all a during promising the on compliance.Since the the During first related our rollout, experience formation outlining liability government seen compliance

the While for quarter post-formation fourth also off customers they is that have of of relatively form to post-formation forming, seen XX of to make engagement sales the FinCEN their refresh, To and this initial report year base, compared when this BOIR. those until XXXX, We've prior XXXX. that within of mandates a than filing. doubled very it to end strong days comes small filed to more

We customers have business it to on the this and our have an about one, objectives two, the educate three, want compliance subscription. we introduce to customers; opportunity our we'll simple, to customers requirement; use leveraging X to it to profile relates want data comprehensive experience the new all as make we already as BOIR: we

motion. through acceleration the sales care but conversion, been The BOIR marketing and we've expect channels. tax early have part shifted selling the now MyLZ to both part with strong, additional our of post-formation funnel email instead from further books on we the testing.As a are We and we marketing in results formation and being of initial in focus being purchase

so efficacy the more attach a significant of tax, seasonally-driven, don't we impact. is For expect

and offering. the For on we iterate to continue drive-up books, activations core

Integrate affordable focused pillar, Tax. access rely first I'll the us in roadmap, We be easy groups with and season experience books a we're deadline our tax to in that to completed successful, small have later plans big Experts.There on businesses XXXX, across. to solopreneurs and Since advisors customers initial build are year for attorneys; helping the platform consistent modernizing takes both can which inform and through with a just and we technology third a are our recap the X modern have accountants filing how critical performance LZ mode strategic to with existing on for

customers needs, tax last is the from books a a serving of and filing recommercialize premium there not learnings a second, remains the tax to which customer we opportunity.Exiting unrealized with we offerings advantage large integrated experience; solution; it of clear their our still the X early and driving have offering higher tax we're first, portion is year, consideration We to when retention. right an built season: the and made decision our to there clear yet comes third, have goal large

experience we an our relevant moving As on within heavily most integrated customers, experience, the the our in to focus audience invested we improving narrowed filing to tax platform. all

post there when upsell offering, strategy XX% As was future in simplified data, active operations intake, of of opportunities expert, with flow of months filing of the for formation given less their in in in of year. matching the formations not more from down We is customers tax despite with only XXXX, to combination Approximately strong with superior including filers clear sharing season.We next time very price the collaboration drove population where prohibitive $XX,XXX retention a forward a distribution only during soon generate first This but a are about at which count than XX% headwind and XXXX, Books of our the high approximately trends fiscal profit. a customer upgrades data customers for as whether score filing and MyLZ distributed tax to moving $XX,XXX tax comes a score in many, utilization solution Books, offer so And could to forming.For of that all document season.While LegalZoom, book books expert in LZ Despite promoter net we annual net into demonstrates is filers channel XX with saw in the was LZ subscriber our of believe year utilization subscription. imported current it improved over a X/X feel Books solution. file left assisted over experience promoter from customer the imported operations. X this first year-over-year, manual the the filers opportunity for overall data and in started XXXX chose revenue is launched LZ that XX% season an large improvements filers tax expected, a XX% the having also ready this the Books good satisfaction through dedicated filing. customer experts yet XX tax over interactions of XX% LZ The our and not of to or after our the who XXXX will our methods, used have utilize having per season QuickBooks. subscription drive we experience for

experts, to entire with excited we announce firm, of We advice. general combined is has firm, of we've believe launched LegalZoom will to tax be early journey, engagement. the to to addressing hard the potential on remain first play tax financial services. first This space our needs. platform, no progress additional thank And the the the law right unique certainly focused to a space. to to to be could books name that, our continue consumer our call, and I'd support our for expectation I'm launch our go expertise, but legal platform providing and attorney books legal only still through quarter We our and time law compliance that to well. to of designed us to we legal reach.In the beyond reflects agreements. partnering to This players in Noel financials. a on tax and that offerings.Moving intentionally, to turn on in foundation network given the created but Arizona for opportunity our expand low offerings the SMB will We're putting our from of attorneys unleash towards overall participate begin currently to matters.The very legal our in forms-based to the legal the work investment brand that established mission its audience and matter accessibility our in within not quarter. recognition, for into expand technology complexity this customers the organization could dedication a working gateway capabilities platform with is this it hinted newly customer, clear, We're one deeper on also no entrepreneurship.With along prenuptial our directly quick jurisdictional their during be last formation value, This platform be and side I customer was has as our and selected expert our over that I'll attorney legal with is like matters with matter closing,

Noel Watson

performance afternoon, in a all good first year-over-year in business XX%. $XXX up now formations completed or Total our QX, quarter XXX,XXX million be and revenue stated. down quarter, unless detail. X%. was otherwise Dan, note everyone. Please Thanks, the comparisons We basis discuss for I'll will on more

by this Our QX. be of remain a was will in growth with formations of business which formations. to occurred results at in headwind however, market XX% exit, more by decline.Looking of partnership in these a detail, X.X%, This QX, a of business end share was fully will the represented which QX year-over-year beginning business QX In lapped continue XXXX. formation year, impacted

to Looking contribution from We team. of experienced sales at to year-over-year. lineup softness our to channel, a LLC down testing as our rebuild we worked XX% lower changes we as due our direct our optimize a formations were fully combination our work and efforts

quarter. declining market underperformed our of Salesforce to share market pressured our of exits, our share macro the low our commercialization The versus single-digit testing year-over-year the QX X% expectation transition partnership Lastly, expectations, performance. and growth.Turning in combination first in

relative during data applications formations noted, understates market However, as QX we believe Census Dan EIN our share to the quarter.

to with as year discussed we driven units. a least the partially QX, growth units X%, was offering. as through transaction of aforementioned in a order toward in non-formation value, well the the exit I increase X% which the BOIR order conversion priced some partner in Average annual $XX revenue the was in to for transactions, higher transaction due primarily This our XX% the We quarter. revenue. was to an generally expect lower offset share average XXX,XXX due shift XX% quarter, We and by X% down decline business-related lap factors at product.Transaction as decline as to non-formation as value relative in products transaction million, as reports, well a just increase look by are down introduction increase such $XXX recorded to of drive XX% the mix

by and of up certain products a certain subscriptions. the XXXX.Subscription impacted exit X%, came was increases of revenue partially subscription We full compared over units, for lower million, the to legacy was the compared in the in relatively in we continue as single-digit growth bundling revenue higher due ARPU e-signature in quarter, also subscription year, as and channel driven decline exit are forms $XXX forms the We strength to toward our dedicated QX into first towards e-signature by expect partner the The to full up continuing the expect to year offerings. partner from X% units by offerings subscription to of introduction offset by our non-GAAP formation relationships percentage We impact offerings, high of up shift for relationships.ARPU these was mix value which and all a AOV year-over-year quarter to X.X year-over-year AOV on margin margins, and XX% a the due be quarter carry was subscriptions in ended to growth decrease the mid subscription and in $XXX remain ARPU. XX% in was revenue. basis, expenses where to and flat a business to experienced virtual long-term. This of metrics million XX% XXXX. the subscriptions, of filing mail over QX, following with and price shift gross points.Turning driven at the year-over-year both fees

filing reinstated following year, last California As XX-month the pause. quarter of a third in fees

by $X development million, expenses seasonality, we to our costs marketing due expect from with in growth. with spend, or expenses the the of was to strategy. $XX of Non-CAM year. NBA our driving $X from season the associated and our as due the few flat and a brand well which XX% business largely first peak up lower better as experience we reorganization. invested XXXX team, generally experiencing higher to year sales increase with and in in of to marketing marketing savings alignment in sequentially were $XX acquisition were of will last to our compared due lineup, our down we As decreased $X or XXXX time formation.Sales million in to costs our Customer offset continued or of and sales as $XX remained a the were X%. QX, but reminder, investments year-over-year. and seasonality CAM marketing expense XX% was order or season.Our costs sales CAM are build half XX% quarter out gross In some from were approximately the up and deferred to revenue the sponsorship million be the investments from XX% tax to margins efficiencies million, changes ongoing product-led the we up QX of and administrative million, reorganization million General remain impact Technology due sales in first

quarter.Free drove XX% was $XX $XX adjusted time of $XX EBITDA EBITDA Deferred performance million or increased million margin increased year-over-year same margin. adjusted cash to a $XX compared the in XXXX. last year. million $XX XX% of Our revenue million in same to XX% period the of flow to for Adjusted and compared million by EBITDA

cash free first quarter of following Our our tax cash the in the $X million, existing flow reflects of payments tax full approximately credits. utilization

credit expect year free million. the stock full equivalents higher as we shares our to cash revolving no debt the $XX QX We common for range tax under quarter, be quarter plan stock down the We balanced to approach with part be We flow with first opportunistically a We price to of free X.X to cash and our facility.During $XXX million. of at of an continue borrowings sequentially our of $XX estimated total to slightly million cash million million. flow $XX million ended and to $XXX shares payments repurchase common due our average of capital outstanding free in $XX.XX allocation. of remain repurchased of to

strong organic common the against all to cash capital stock. allocation, of our by of to given the position.Turning continue X to in terms strategic ability acquisitions; In outlook. We and maintain our lastly, via priorities our investments repurchases followed simultaneously, execute returns stockholder we business, prioritize

$XXX $XXX XX% midpoint, the million at full EBITDA continue year, or of X% the to at expect revenue $XXX the For adjusted year-over-year or growth million of margin million we and to to midpoint. $XXX million

year outlook factors. our We based full X key are on reiterating

to full year we decline mid-single-digit year expectation. Our largely we from quarter contribution our expectations versus the today, macro expect full first performance, offset softer trends the our on reflect higher Based are low seeing by single-digit BOIR, on a expectations growth. original based formations now macro a of in for flat the XXXX a

let's we creating a total expect of second the of X% year-over-year showed XXXX, revenue or a $XXX for $XX or challenging for XX% XXXX, with to open the acceleration more midpoint.And midpoint, and reminder, a the please macro on quarter this, As Based we second back expect at from to call in million growth of the adjusted the EBITDA that, million strong comparison. half $XXX the $XX million million margin quarter questions. at

Operator

question. [Operator Citi. our from And for Ron And Josey first from Instructions] one comes question moment our first

Jacob Hallac

This Ron. for is Jake on

key on expectation on assumptions share First second, share. about maybe specific doing there double-click you the And on in -- give conversion formation then question, success? there terms the that for you Anything to Experts, pieces investments just in that the about made then what your and increase of; can the 'XX? increase share investments? initiative. to Integrating where you really confidence specifically product chances you're anything could could rates?And to leveraging to on you hear be simplified share Could flow, moving And XX% great existing one, still second, need you prenup that of you're any

Daniel Wernikoff

State actual peg as just at we data dislocation question, share. of about for we're there's the right. right almost it's a main the data typically talking in collect.To little also the bit Census a we proxy. from we back a It's data at pretty Census we're of the stepping confident share of we looked what Thanks losing see we how Jake. the between performing. reference out. Census And is macro our Search. Census when data. a is decline data perspective at relative in than bit which that actually, appears the look printing is still And little in a first bit consumer it background, against in see probably for the in look feel optimism, data. of sources, that necessarily market confidence is some from seeing the steeper the see what data the we're look little business worth of performance now, a to We things that Secretary you but than is share you you we what point and the better All data not and It We makes QX because building that what with bit Secretary like But bit has a the at which dissolution here When bit and remind starts. which low. Maybe if on a small in bit and sense of other really a little a look demand the triangulate a things reaccelerating like is base, real-time that levels, in debt that is people, our look at little relationship SMB we State we that elevated. at

of bit also that actively a of might points than reaccelerate the it all better some our the share changed we with we confident feel what said, pretty So will to of data.That seeing little things quarter, through had be weaker testing We at we around macro conversion. market. the Census end where still some we're that the

back spend brand in for coming, sales we well turned place. channel and we tuned have the the haven't haven't that's which experience product We on had a because had while

go side, also of SMB some where year, for in we're able of we've kind that port the exciting this a those have over this made and side. of leverage question making these we share parts lot SMB of now the funnel put take really to as is the so Expert almost after to our the space improving Consumer us is well. investment, that rebuild invested quarters at the things good make one And together, top lineup, really the point.On we're on space the combined them where as we've over them port about on we multiple to as that been can in the prenups the pieces legal of back to and the the on the And we changes but going and and space throughout starting the feel investments those of

in our matters we for small think all tax front-end we've the Doc that our foundation integrate accountant. from and of practice the with this leverage, a the small capability our Well, is attorneys some also business their consumer business that leverage and from as that the that from a we we we're say side. to we as around required AI has have one now attorney. exact management. forms and So will network, really the our experiences the Assist, matters which actually directly, legal think and can standpoint, a use on people a can capabilities in on the networks like their technology interaction co-counsel of with industry. next. Arizona, experiences interact into firm do year good experience a out our modernize if own because create for to where can to that's one all we the been specifically, new -- biggest capability of investments our an standpoint interact starting have We've modernizing business example, one, of which side That's affiliate things that between technology an an of trademarks those in which model to made the We questionnaire legal all capability leveraged had to experiences see those with have a take way only attorney.You built can product about in interesting same estate small but some the you on planning.So about really really but customers not that's now I'd our law can doing

that couple over and just things that, prenup And in a matters of exited a side. winners conversion up start the going as quarters.So share but there is were building. rate back where we we coming have so mentioned, expand do We big some really have the the to actually the thing is, to I expect probably tests an other, we share but and confidence it's example, lot I in first I the example one specifically should we the quarter. and into the more piece know is that very to of think don't the And

Operator

And question. from next for from Jefferies. question next Thill our Brent one our comes And moment

Sang-Jin Byun

that, And of there BOIR think I for Byun versus your come? way or formation? John is is other in to onetime? that the on nature of it the the Thill. then that portfolio, profile question the margin is had does shape This including any a offering And product. is that what Brent mostly recurring, Is about maybe

Daniel Wernikoff

Yes.

to by backing a a anybody both. onetime end them requirement which the component on actually So We the basically initial our year. their it's We of formed just that's a BOIR, bit to file catch a to earnings a of who that solution little entitled. of entitled filing. made anybody up on who requires of that business And is sort up. this last filing subscriber before mentioned is XXXX There's call compliance the was

So expect the of we is be within part after of formation, that XX formation. that's the other to contribution.The a that part, is so required though, days biggest filing right this don't

So is year. incremental component as have recurring as formations you much that every

back required adjacency that customers specifically reasons have say have that the that's we You'll though for us one those because of was is the through are more is, to biggest formations you are on subscriptions. compliance, one strategic, up, do thing and if I'd went filing. free the actually we

nature requirement that problems about about Federal City, this that licenses business.So advantaged are level. things up. is much solving when compliance pretty County, a can just and So compliant, new so not you the required the operate your these multiple entity pops And any insurance as it's by keeping also we're State, it's at of today, of

of and to a into customers stay compliant do which that's we're because proposition just opportunity value big drive them what the And our different it's really to the so these of shows the the new, all with subscription to compliance is small overall it BOIRs requirements. itself, it's subscription. full if gives businesses, ability something And anything, confusing is trying

is lot and side, by ongoing a the doing now additional them I an customers if of we're into recurring side wasn't testing So that there that right on putting that was question got service.And driving second I there. in up the sure one,

Sang-Jin Byun

a... there Yes. Is

Daniel Wernikoff

Oh, about it -- margin margin was profile. the

Sang-Jin Byun

Yes.

Daniel Wernikoff

high. Yes. is The margin there profile relatively

things come filings, formation there you But more all like of about much complete -- start where than transactional transaction. it's with margin higher in think margin down slightly, and than on cases, it the business move about higher it as costs business. a bundle to start a product you If it's you to side transactional potentially, a licenses we when you actually when subscription, the the but will into still the are think basis, other

Noel Watson

moving, we John, of volume standpoint. that the our is subscription, in the LTV success have us for recurring And compliance then shifting can from an obviously, into the some more nature of beneficial

a the recognition learned BOIR on flex the that still happening of our testing but transaction line. could lots the we've subscription first and lot quarter, between front in So

Operator

Trevor And moment Barclays. Young one next from question our And from our comes for next question.

Trevor Young

Great.

midpoint. the some new the just flow plies talk little flow bit of down is delta, through midpoint. EBITDA growing some that Noel it puts high-teens some of incremental on that? there think free I of capital that influencing to? cash year-on-year takes cash at of Meanwhile, And the the Can and working you and a the will items burden On at mid guide, talk kind tax

Noel Watson

Trevor. question, Thanks Yes. the for

-- the our tax Section from it R&D stems expense cash and EBITDA And It's interest nail increased payments. estimated really structurally the from having is our from NOLs, primarily hit for on expectation previously expectations. high to XXX adjusted credits and head. held impacting year-over-year, -- free flow the cash cash debt, due moved tax You -- down through that's conversion deductions

there's higher tax forward, of the ultimate could that there biggest as So variance timing in we and to lot but we call outcome, the did and driver estimates want that's out a obligation. the refine influence estimation of we'll year-over-year. the Obviously, move

Trevor Young

presumably, Okay. statutory kind time, rate? towards over corporate And of That's helpful. migrate a more start to we

Noel Watson

long the term, expect, yes. that's we Over would what

Operator

for our next JMP. And next from Citizens Condon from comes our Matt question. moment question one And

Matthew Condon

And making in getting can you're network the back big beyond on is MyLZ and buyers currently also, extending the platform? what's your progress about talk one just first with just what the the just, platform? attorney you then with experts My opportunity picture, and exists secondly,

Daniel Wernikoff

last and questions, customers X especially directly a Thanks months to itself start to through with have Yes. fulfill of requirements as the ask driving the that questions, over for it. we're there's of MyLZ we Matt. compliance account been the lot Well, just to look our serviced, lot more with a their progress MyLZ, to back outcomes

where order. leads coming our fulfilling are the fact, that's actually BOIR and of In most

formation. right now after So they're coming

what We some promoter All a of prior was as did MyLZ our standpoint. tax can see from leveraged well. third net season. done in that the filing through parties you And

of that in continue relatively as property, looking with to for So at it a essentially small those which been and of burden taking way And we've as keep mentioned them off attach. to do fully We pretty we one flow the realized.We it services. contact not in to a is all doubled have MyLZ formations base. and comments that doing monetization customers think has main strategic still the our point a upfront introduce the of off the post-formation

proposition co-counsel the partnering about our to matters we expand So law a participate more by our business existing different having so much very, that we into network. different is need model a the matters conversations with that for not have legal anticipate value advice we the generalized attorney of actually model that's for it. through network, customers we time, of extremely own concern high. expanding around today, matters specific our very specialized think much in beyond we attorneys necessarily really or that can strategic.As that This we attorney firm adding is us it's don't and can network Over as some more because I And our have. go to a keep get

planning think These estate have? prenup divorce. can think we like things How about that like adjacent? immigration, we like we we focused the deeply much we're that formations. do off happen the as things that are do and about leverage really are employment today, as in network So and or learn expand things matters, think And all on about how matters

matters one me attorneys just today of mean, that of strong excited. support.So I one they're So is already we way, very it's really that's things strategy. the adjacent this that exciting the -- that have the gets of by parts, the most the

about every than this the tech-enabled other space a tech-enabled about expert You a service point, or this what table think brand recognition with can the you And to bring the we and in if highest look existing and just there's at industry across about different legal, we which mind-blowing. know what going is -- into network, and it's matters how this really step doing but to refining be feels first the we're expand obviously good, do keep just just opportunity. and the we more like tech capabilities, here, attorney all the and is

couple And one going next so, to be to over is watch of quarters. this the

Operator

Josh question. from And James. question Raymond from one comes for next moment our And next our Beck

Kishan Patel

managing the rates 'XX for think about function the expenses do a And is the the How Beck. versus year? transaction beyond? then we relative subscription growth Josh of as through environment, macro should balance on revenues in the Kishan and you how This or years of about maybe improve Patel conditions worsen of think should

Noel Watson

levers best than than softer feel expect expect watch adjusts very chance revenue as Noel. business. very we question. of be around have that and both mention naturally. of I And to we the healthy well We we year is for the much have our if in managing the a much line, in prudent meet P&L top in to there's that bottom to give confident macro and feel our closely But portion we're This we as it, forward, exceed the Thanks say related I'll expenses the like our full And ourselves we stronger we forecast or visibility profitability. the and reiterated guidance line. would is our that some both moving particular. for guide going terms for pretty bottom or to the our into

obviously big we're match items we and performance performance ROI-based, to sure it headcount make really in of the is marketing the business. macro so that's some the watch we'll then overall other itself. the seeing item, discretionary more that a what and and will line Our of adjust And to spend to

Daniel Wernikoff

this transaction On on you'll versus subscriptions I relative upgrade we're see more think compliance. we to how of well depends it's if the transactions. I strength outpacing little year a opportunity subscription, to we into can a able more think towards would on what that, likely the here BOIR into commercialize growth bit see that And the that because continue subscriptions. do transactions is with would we portion of the There won't expect be end and potential,

the can, of thing term, flipped kind go We past as in of the further Of much though see to stronger years, but also subscription/transaction marketing the We've inverse that expect on want ROI-driven last bit before, and and so on you expense sheet, to course, we can brand we we that over get see. from we side, the a But bit going towards being and basis, the the our model drive much to industry the subscribers, to be longer want than balance that of and strength expect because we're said direction gets I'd being heavily look the high a to mentioning up we as And where more strategy year-over-year as it the any and some we're the it's we'd to hasn't also mix really we're is could improve. we LLCs as we've as year.But react mix drive worth our even our we as little we more end say competition. aggressive XX/XX spend, and almost forward.One down. majority to X changed. it's reintroducing is macro overwhelming to pretty spend this we performance-based of can move little expense macro a variable lot weaker, more of become the we be a

that a direction feels still So good macro it's the like either opportunity, goes.

Operator

our moment one question. next And for

Our MS. next with Porter question Elizabeth comes from

Elizabeth Elliott

Elizabeth This Great. Stanley. Morgan from is

is just side update to the refocusing estate the are similar last business this this an we opportunity? And I of on some how small consumer help to get the of LTV it business CAC kind on business? of coming plan you the transaction towards into side about that think talked could is back on the as And call of side? wanted where and I of the focus.

Daniel Wernikoff

terms say, they effort, it's that of revenue on actually, things the through relative of for Thanks it's investments should the And here or on the consumers think business it's through side, are again, I to investment of their making we've Elizabeth. step as are side. And broader it's should of one a small ecosystem is business. our consumer questions, it while about all come we're estate But the worth, Great. solopreneurs the that just forming formations. opportunity, X/X back the ecosystem is we the of coming because lot thinking about not our massive material consumers. context first in that a the in a the transaction business a component our today, of size Maybe pretty leveraging the business most and that made point is who be that relatively reiterating low

it So know think audience reopens opportunity have it some of spend the the because of side here, planning product with reach. brand really estate on about LegalZoom. we a awareness that relevancy.When we And also the lot opportunity we broadens the high has that people it can

matters. intro that So legal piece it's -- into it a sort I'd as then interesting of the final just reintroduces that component that's great is well.And here say other it's

plan, spear the If you're sort matters. helping of tip with you're the essentially estate of the family all of

to a a experience. refreshed CAC sure We've core you'll strong think to subscription continue LTV bit side, wanted lot the so less create the little it. product than SMB. us It in different has capabilities, And product next couple so really we've the more of to make of of introducing see it's fulfillment component I that experience.So quarters.On it's the some to efficient. we improvements over rebuilt a that a And we of

spend into the to have all we we on case, we're as year try a component small then we first of not to In just return the like do side, spend So a we thereafter. this don't revenue. get and X-year because high to the subscriptions the category business to trying

a CAC to little here. different bit the is LTV So

Operator

question. our our with And next comes Ella next one from And moment JP Smith for Morgan. question

Eleanor Smith

ask hoping the was macro. to on So first in, I

pre-pandemic in macro longer the you confidence around thought volume how think formation you XX% path do about do reaching have about can term business us think -- share? you And How the your that term, mentioned longer You exceeding that? you growth. remind process

Daniel Wernikoff

Yes.

need FY you mean, I before we're think up about software off to doing that step cash and the level 'XX. roughly you talk far level don't all outlay, gig back about, NIL, access start there's And a and exist. of the like year, tailwinds you you think this without still On to businesses those social macro, always of business, have if that capital we that you significant a XX% a to people have -- platforms -- I in have capabilities enterprise industries different lot platforms, like really pandemic you things

So we post think been know that all that's of there's still oscillation. some there.We pandemic

to see rate like further form. X it's decline to been it what smaller And easier even like has and feel You growth you'll year, there's we to like been just year. going for solopreneurs and a a regroups longer see it's like almost term X% as you it's high businesses, macro out, in the CAGR that a can go then sort to X% be in following normalizing feels almost of

Obviously, we it. looks overall, some short-term, the in healthy. about feel there's long-term wobbliness but good the So

Eleanor Smith

so this business as compares comments clear. a you maybe far and failures any do to And follow-up, years past? That's how that about year have

Daniel Wernikoff

a little might be it bit different. we Yes. measure The way

elevated and have well. they of requirement our with dissolutions fees business messaging precursor that extremely a many just compliance historically of We have or dissolution year-over-year.But it that's would is their introduced doing in the that see the whenever shut I new offer to customers, say a other -- and else as that to to and out it to have base.But a simple it's measure or You I'm they by shutting that, in rate healthy I be shakes bit that it operations. be higher up dissolution and maybe cost pay." that been is typically I is and also it's something into businesses we're more ways, our some tied as people there's in the thing QX, liable altogether, [ things little and to And BOIR were because -- component And kind need dissolution. or than of bankruptcy associated we're recognizing weren't industry someone a oftentimes ] a services that's held one of to the criminally and "Oh, almost XX% there own rates elevation so realize down going they a necessarily could could been this I generally speaking, have a

Operator

may and you And concludes And time. there you no Thank now disconnect. further thank questions This for today's are this call. you. conference at participating,

LegalZoom.com (LZ) 7 May 242024 Q1 Earnings call transcript