LegalZoom.com (LZ) Q4 2024 earnings summary

Executive summary

• Largest digital player in a $51B U.S. legal and compliance market, with 4.6M businesses formed and 1.8M active subscriptions as of December 31, 2024.

• Achieved Q4 revenue of $162M, at the high end of guidance, and delivered strong Adjusted EBITDA margin performance.

• FY 2024 GAAP revenue grew 3% year-over-year to $682M; Adjusted EBITDA up 25% to $148M.

• Strategic acquisition of Formation Nation in February 2025, expected to be accretive to non-GAAP EPS and Adjusted EBITDA, expanding offerings and market reach.

• Launched new AI-powered tools and entered partnership with 1-800Accountant to enhance customer experience and core offerings.

Financial highlights

• Q4 2024 revenue was $162M, up 2% year-over-year; full-year revenue was $682M, up 3%.

• Q4 Adjusted EBITDA was $44M (27% margin), up 32% year-over-year; full-year Adjusted EBITDA was $148M, up 25% year-over-year, with a 22% margin.

• Free cash flow for Q4 was $36M, up from $14M in Q4 2023; full-year free cash flow was $99.9M.

• Ended 2024 with $142M in cash and no debt; repurchased $165M in shares, reducing share count by 10%.

• FY 2024 non-GAAP gross profit was $467M, up 6% year-over-year, with margin improving from 66% to 68%.

Outlook and guidance

• FY 2025 revenue expected to grow 5% year-over-year, with Q1 2025 revenue guidance of $175M–$179M.

• Full-year 2025 Adjusted EBITDA margin expected at 23%, with double-digit subscription revenue growth exiting Q4 2025.

• Guidance assumes flat macro for business formations and voluntary beneficial ownership filing requirements.