What happened
LegalZoom (LZ -0.68%) stock was a hot item on the market Wednesday. The legal services and advisory company's share price zoomed 25% higher on the day thanks to quarterly results that put a giant smile on investors' faces.
So what
LegalZoom took the wraps off its first quarter following the close of the market on Tuesday. It revealed that its total revenue was just under $166 million for the period, representing a 7% year-over-year improvement. Of the company's two key income streams, subscriptions were the motor of this growth. They came in at over $97 million, for a 15% rise. Transaction revenue, by contrast, sank 5% to a shade over $62 million.
As for profitability, according to non-GAAP (adjusted) standards, LegalZoom flipped into the black on the bottom line. It booked a net income of slightly under $14 million ($0.07 per share), quite an improvement from the first quarter 2022 loss of $5.4 million.
LegalZoom's headline numbers beat the average analysts' estimates. These were nearly $155.3 million on the top line and $0.06 per share for adjusted net income.
Management attributed the improved metrics to a revamped set of offerings and better effectiveness in convincing clientele to use its services. It quoted CEO Dan Wernikoff as saying, "We rolled out our new lineup and refreshed our marketing messaging, which helped drive to strong market share gains in the quarter."
Now what
LegalZoom also updated its guidance for full-year 2023. It now believes revenue will hit $630 million to $650 million; the 2022 figure was just under $620 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) should come in at $105 million. The company did not provide any net income estimates.
