LegalZoom.com (NASDAQ:LZ) Releases Earnings Results, Beats Expectations By $0.01 EPS

LegalZoom.com (NASDAQ:LZ) announced its quarterly earnings data on Wednesday. The company reported $0.16 earnings per share for the quarter, beating the consensus estimate of $0.15 by $0.01, FiscalAI reports. LegalZoom.com had a net margin of 1.46% and a return on equity of 11.53%. The business had revenue of $205.29 million for the quarter, compared to analyst estimates of $205.83 million. During the same period in the prior year, the business posted $0.15 earnings per share. LegalZoom.com’s revenue was up 6.6% compared to the same quarter last year.

Here are the key takeaways from LegalZoom.com’s conference call:

• Q2 revenue rose 7% to $205 million and adjusted EBITDA increased 18% to $46 million, exceeding the high end of guidance. Adjusted EBITDA margin expanded to 22%, while free cash flow reached $34 million.
• Higher-value, human-in-the-loop offerings continued to gain traction: related subscription revenue grew approximately 20% year over year, represented 65% of subscription revenue, and legal-plan utilization increased more than 35%. Subscription revenue rose 11%, supported by pricing, stable retention, and greater adoption of legal, compliance, and expert services.
• LegalZoom is diversifying customer acquisition beyond Google Search. Partnership orders increased to 11% of total orders from 4% a year ago, while traffic from AI platforms grew more than 250% sequentially and reached roughly 3% of LLC formation traffic in June.
• Google’s shift toward AI-generated search answers reduced informational-search clicks, increased paid-search costs, and contributed to a 5% decline in business formations and a 1% decline in transaction revenue. Management expects this pressure to persist through year-end, guiding Q3 revenue growth to roughly 2% and full-year revenue growth to approximately 6% at the midpoint.
• The company announced a company-wide workforce reduction of approximately 13%, following a 5% reduction earlier in the year. The actions are expected to generate about $7 million in net 2026 savings and $14 million annually, but will result in roughly $6 million of restructuring charges, primarily in Q3.

LegalZoom.com Price Performance

NASDAQ LZ traded down $0.30 on Wednesday, reaching $8.10. The company had a trading volume of 2,261,928 shares, compared to its average volume of 2,379,321. The firm has a market cap of $1.39 billion, a price-to-earnings ratio of 135.02, a P/E/G ratio of 1.40 and a beta of 1.28. LegalZoom.com has a fifty-two week low of $5.22 and a fifty-two week high of $12.40. The business has a 50 day moving average of $6.76 and a two-hundred day moving average of $6.75.

Analyst Upgrades and Downgrades

Several research analysts have recently issued reports on LZ shares. UBS Group reduced their price target on LegalZoom.com from $8.00 to $7.00 and set a “neutral” rating on the stock in a research report on Thursday, May 7th. Weiss Ratings reissued a “sell (d+)” rating on shares of LegalZoom.com in a research note on Thursday, July 2nd. Wall Street Zen upgraded LegalZoom.com from a “hold” rating to a “buy” rating in a report on Tuesday, July 28th. JPMorgan Chase & Co. decreased their target price on LegalZoom.com from $11.00 to $8.00 and set an “overweight” rating for the company in a research report on Wednesday, June 24th. Finally, Citigroup lowered their price target on LegalZoom.com from $8.50 to $7.50 and set a “neutral” rating for the company in a research note on Friday, May 22nd. Three analysts have rated the stock with a Buy rating, three have issued a Hold rating and three have issued a Sell rating to the stock. Based on data from MarketBeat, LegalZoom.com currently has an average rating of “Hold” and an average price target of $8.25.

Insider Buying and Selling at LegalZoom.com

In other LegalZoom.com news, insider Nicole Miller sold 19,199 shares of the firm’s stock in a transaction that occurred on Tuesday, May 19th. The shares were sold at an average price of $6.58, for a total transaction of $126,329.42. Following the completion of the transaction, the insider owned 1,119,222 shares in the company, valued at approximately $7,364,480.76. This trade represents a 1.69% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Jeffrey M. Stibel acquired 125,000 shares of LegalZoom.com stock in a transaction dated Monday, May 11th. The stock was purchased at an average cost of $6.15 per share, for a total transaction of $768,750.00. Following the completion of the purchase, the chief executive officer owned 2,955,609 shares in the company, valued at approximately $18,176,995.35. The trade was a 4.42% increase in their position. The disclosure for this purchase is available in the SEC filing. Corporate insiders own 7.40% of the company’s stock.

Institutional Trading of LegalZoom.com

A number of large investors have recently bought and sold shares of LZ. EP Wealth Advisors LLC increased its holdings in LegalZoom.com by 2.8% in the 2nd quarter. EP Wealth Advisors LLC now owns 41,352 shares of the company’s stock worth $368,000 after acquiring an additional 1,139 shares in the last quarter. Prelude Capital Management LLC grew its stake in LegalZoom.com by 11.6% during the 3rd quarter. Prelude Capital Management LLC now owns 14,185 shares of the company’s stock valued at $147,000 after acquiring an additional 1,470 shares in the last quarter. The Manufacturers Life Insurance Company increased its stake in shares of LegalZoom.com by 2.9% in the 4th quarter. The Manufacturers Life Insurance Company now owns 59,862 shares of the company’s stock worth $594,000 after acquiring an additional 1,705 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its position in shares of LegalZoom.com by 3.0% during the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 74,980 shares of the company’s stock valued at $646,000 after buying an additional 2,161 shares during the period. Finally, Dynamic Technology Lab Private Ltd raised its position in LegalZoom.com by 9.0% in the fourth quarter. Dynamic Technology Lab Private Ltd now owns 29,602 shares of the company’s stock valued at $294,000 after purchasing an additional 2,441 shares during the period. 81.99% of the stock is currently owned by institutional investors and hedge funds.

LegalZoom.com Company Profile

LegalZoom.com, Inc (NASDAQ: LZ) operates as a leading online legal technology company that provides a broad range of legal and business services to individuals, families and small businesses. Through its digital platform, the company offers customized legal documents and filing services, including business formation (LLCs, corporations and nonprofits), estate planning (wills and trusts), intellectual property protection (trademarks and copyrights), and ongoing compliance support. LegalZoom also connects customers with independent attorneys for consultations on matters such as family law, immigration and real estate.

Founded in 2001 by entrepreneurs Brian Lee, Brian P.