LegalZoom.com Inc Q1 2025 Earnings Call Transcript

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

Question: Ella Smith - JPMorgan - Analyst : Good afternoon. Thank you so much for taking my question. So, Noelle and Jeff, first, I was hoping to ask about the strong subscription unit growth. Could you speak to, again, what the puts and takes are that contributed to the strong subscription unit growth number?

Question: Ella Smith - JPMorgan - Analyst : That makes a lot of sense. Thank you so much. As a quick follow-up, I want to ask about Formation Nation. Can you speak to the process of integrating that business and your vision to drive that business forward?

Question: Ella Smith - JPMorgan - Analyst : Makes a lot of sense. Thank you both so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 07, 2025 / 8:30PM, LZ.OQ - Q1 2025 LegalZoom.com Inc Earnings Call

Question: Pat McEwee - William Blair - Analyst : Hi, team, and thanks for taking my questions. My first question, you talked about launching a new brand campaign, some SEO, and also stepping up marketing spend at Formation Nation this year. So my question really is, should we expect to see overall marketing spend elevated going forward, or are there any offsets we should be thinking about there?

Question: Pat McEwee - William Blair - Analyst : Right, okay. Got it. Very clear. Thank you both. And then the second is just more quantitative. You shared in the press release that Formation Nation contributed right about $1,000,000 8 million and a half million dollars in revenue this quarter. Given the mid quarter close to that, is that fair to kind of assume that type of run rate contribution going forward? Or should we expect that to grow? And then also kind of the mix between transactional and subscription changing going forward?

Question: Pat McEwee - William Blair - Analyst : Okay, great. Thank you both for the color.

Question: Andrew Bone - Citizens JMP - Analyst : Thanks very much.

Question: Andrew Bone - Citizens JMP - Analyst : Great question, Jake.

Question: Andrew Bone - Citizens JMP - Analyst : Thanks so much for taking the questions. Jeff, I wanna go to subscription guidance and talk about the double digit subscription growth rate as we think about exiting 2025. Can you talk about the the key inputs there to ensure that you guys hit that target? And then going back to some of the the conversation around formation nation and and business formations, Jeff, you you came on board in July of twenty four. And as we think about exiting '25, how do we think about continued share loss? Should should we expect you guys to kind of be in line with the market as we set up the end of twenty five and into '26? How should we think about your guys' progress in terms of getting rid of the empty calorie business formations that are on the platform? Thanks so much.

Question: Andrew Bone - Citizens JMP - Analyst : Makes sense. Thanks, Chuck.

Question: Andrew Bone - Citizens JMP - Analyst : Thank you. You bet.

Question: Elizabeth Porter - Morgan Stanley - Analyst : Great. Thank you much for the question. I wanted to follow-up on some of the pricing changes. Where you noted some better than expected retention in elastic demand, which is really encouraging to see. So just given some of the positive reaction to pricing, does this increase your confidence to expand pricing changes to other parts of the portfolio? And how should we think about it as a lever going forward?

Question: Elizabeth Porter - Morgan Stanley - Analyst : Great. And then just as my follow-up, I wanted to get an update on just the progress of one-eight hundred Accountant. I know that initially it was an expectation that that could partially offset some of the headwind from taking your own product out of the lineup. So just one, how is that performing versus expectations? And then second, could you elaborate on how the partner strategy may be shifting the go to market top of funnel in the core business rather than LegalZoom just referring customers to solutions? Are you starting to see new customers kind of referred in?

Question: Elizabeth Porter - Morgan Stanley - Analyst : Great. Thank you.

Question: Steven Ju - UBS - Analyst : Alright. Great. Thank you. Hi, Jeff. Noel. Hi. Just building on your earlier comments, it sounds like Formation Nation's customer lifetime value is realized basically on the first transaction, so you're one and done. But there seems to be this open opportunity to upsellcross sell. So is there a way to characterize what the incremental customer LTV unlock or uplift could be over time? I get that you guys have owned this asset for three months, but any type of color would be interesting. And I guess there's other sort of different considerations because the user base for Formation Nation is probably different versus the LegalZoom user. So any type of help there in terms of how much sort of, I guess, LTV you can unlock going forward? And I guess and as you refine the process for Information Nation in terms of upsellcross sell, should we be looking for you to be getting a little bit more aggressive on the customer acquisition spend? So theoretically, you should be in a better position to outbid your competitors in the paid media channels. Thanks.

Question: Steven Ju - UBS - Analyst : Thank you.