LegalZoom.com Inc at William Blair Growth Stock Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Matt Pfau - William Blair & Company - Analyst : And so this year, you made a pretty significant change to the business model moving to more of a freemium model with the free business formation tier, perhaps talk about the significance of that move. And Dan, I think also perhaps your background is pretty applicable towards sort of understanding how to manage this type of transition.

Question: Matt Pfau - William Blair & Company - Analyst : And so a big part of making this move is attaching more subscription products on. Since you've came on board, you've already expanded the product mix. Maybe just talk about what are some of the products that you'd highlight as you're excited about? And then how do you think about the product roadmap going forward?

Question: Matt Pfau - William Blair & Company - Analyst : And that engagement is something that's relatively newer, right? When you came on board, you didn't really have that ability to sort of engage with the customer base go back and cross sell, correct? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 08, 2023 / 1:40PM, LZ.OQ - LegalZoom.com Inc at William Blair Growth Stock Conference

Question: Matt Pfau - William Blair & Company - Analyst : And so you talked a little bit about LZ Tax. But let's dig into that a little bit more because I think that's a pretty exciting opportunity. What does the business tax preparation space look like currently? And why haven't some of the other players tried to address this? Like, I'm thinking about your previous employer, Intuit. They're trying to get into it a little bit now, but it's historically been an area that they haven't really tried to address.

Question: Matt Pfau - William Blair & Company - Analyst : Now I'll ask you something that I'm sure no one's asked. So generative AI. How does that -- how do you think about that in terms of the threats and opportunities within your business? What are you doing with generative AI? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 08, 2023 / 1:40PM, LZ.OQ - LegalZoom.com Inc at William Blair Growth Stock Conference

Question: Matt Pfau - William Blair & Company - Analyst : Yeah, and I think you make a good point that it's navigating the legal landscape and providing advice is quite difficult and vary state by state.

Question: Matt Pfau - William Blair & Company - Analyst : And the attorneys have written the laws such that to protect their own business and you have sort of navigated around that over time, correct?

Question: Matt Pfau - William Blair & Company - Analyst : Let's move on to the macro. I think it's perhaps maybe surprised some people that business formations have been fairly strong this year, especially considering they're growing off of a very large comp from the COVID era. What are you seeing within your own business in terms of business formation and demand? And why do you think that business formations have been relatively strong this year?

Question: Matt Pfau - William Blair & Company - Analyst : So you've mentioned partners a little bit. I think that's an area where you've made some major changes since you all took over the business. Talk about what you've done there and what your sort of vision for the partner program is longer term?

Question: Matt Pfau - William Blair & Company - Analyst : Let's talk about margins a little bit. So when you went public, margins went down and now they're going back up. And we're seeing -- expecting a nice increase this year. What's driving that and how are you think about the -- managing the profitability of the business longer term?

Question: Matt Pfau - William Blair & Company - Analyst : And so, Noel, your point on the freemium model of the free business formation tier, that almost acts as a supplement for marketing or advertising expense, because it's bringing customers in the door, right?

Question: Matt Pfau - William Blair & Company - Analyst : I'll pause there and see if anybody from the audience has any questions. Unidentified Participant I'm wondering what is the size of the company? What kind of threat do you have where -- that comes a point where people outgrow your services? What are you doing to stop that?

Question: Matt Pfau - William Blair & Company - Analyst : Anyone else? Unidentified Participant Can you dig into that free premium thing a little bit?

Question: Matt Pfau - William Blair & Company - Analyst : Maybe -- Unidentified Participant Do you have to sign a subscription to get the freemium?

Question: Matt Pfau - William Blair & Company - Analyst : Great. I think that's about time. So Dan, Noel, thanks so much for joining us. There is a breakout in Burnham B upstairs. Hopefully, some of you can join us. Thank you.