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Investing.com -- Shares of LegalZoom (NASDAQ: LZ) soared 18% following the release of the company’s robust fourth quarter earnings and optimistic guidance for the upcoming quarter and full fiscal year.
The online legal services provider reported fourth quarter earnings per share (EPS) of $0.19, surpassing analyst expectations by $0.03. Quarterly revenue reached $161.7 million, edging out the consensus estimate of $160.81 million and marking a 2% increase YoY. LegalZoom’s guidance for the first quarter of 2025 is set between $175 million and $179 million in revenue, compared to the consensus of $173.7 million. Adjusted EBITDA is anticipated to be in the range of $33 million to $36 million.
For the full year ending December 31, 2025, LegalZoom forecasts a revenue growth of approximately 5% YoY with an adjusted EBITDA margin of around 23%. The company also highlighted its strong finish to the previous year, with full-year subscription revenue of $436.2 million, a 6% rise YoY, and a significant increase in net income, which jumped 115% YoY to $30.0 million.
In a press release dated Feb. 26, 2025, LegalZoom’s Chairman and CEO, Jeff Stibel, emphasized the company’s focus on long-term sustainable growth, quality customer acquisition, and an emphasis on recurring subscription revenue. The acquisition of Formation Nation, announced post-year-end, is expected to support these growth strategies and contribute positively to adjusted EBITDA.
Raymond (NSE:RYMD) James analyst Josh Beck commented on the results, stating, "LegalZoom posted a quality beat led across transaction and subscription growth and laid out guidance of ~5% revenue growth for 2025." Beck’s assessment reflects the positive market sentiment, although he maintained a Market Perform rating as he looks for more visibility into sustainable double-digit top-line growth.
Investors have responded favorably to the company’s performance and strategic direction, with the stock’s significant movement reflecting confidence in LegalZoom’s ability to drive growth and profitability.
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