MOUNTAINVIEW,Calif.,Nov.07,2023(GLOBENEWSWIRE)--LegalZoom.com,Inc.(Nasdaq:LZ),theNo.1choiceinonlinesmallbusinessformations,todayannouncedresultsforitsthirdquarterendedSeptember30,2023,includingthefollowinghighlights:
“Wehadanotherstrongquarteroffinancialperformance,butequallyimportant,wecontinuetodemonstrateincreasedproductvelocitywiththereleaseofBusinessLicensesandthecontinuedevolutionofLegalForms,”saidDanWernikoff,LegalZoom’sChiefExecutiveOfficer.
NoelWatson,LegalZoom’sChiefFinancialOfficeradded,“Ourthirdquarterresultsoutperformedourexpectationsandreflectstronggrowthinbusinessformationsaswellasstrengthinoursubscriptionsbusiness.This,combinedwithourcontinuedfocusonprofitability,drovethirdquarterAdjustedEBITDAof$33.7million,doubletheprior-yearperiod.”
KeyBusinessMetricsandNon-GAAPFinancialMeasures
(unaudited,inthousandsexceptAOV,ARPUandpercentages)
StockholderReturnActivity
DuringthethirdquarterendedSeptember30,2023,LegalZoomrepurchasedapproximately4.7millionsharesofitscommonstockinconnectionwithaconcurrentsecondaryequityofferingatapricepershareof$9.55,foratotalof$45.1million.ThisrepurchaseexhaustedLegalZoom’sexisting$150millionstockrepurchaseprogramthatwasauthorizedonMarch1,2022.FromMarch1,2022throughSeptember30,2023,LegalZoomrepurchasedapproximately15.1millionsharesofitscommonstockatanaveragecostof$9.92pershare,foratotalof$150.0million.
Today,LegalZoomannounceditsboardofdirectorshasauthorizedanewstockrepurchaseprogramofupto$100.0millionofitscommonstockwithnoexpirationdate.
FinancialGuidanceandOutlook
OurguidanceforthefourthquarterendingDecember31,2023isasfollows:
OurguidanceforthefullyearendingDecember31,2023isupdatedasfollows:
WebcastandConferenceCallInformation
Forward-LookingStatements
Thispressreleasecontainsforward-lookingstatements.Weintendsuchforward-lookingstatementstobecoveredbythesafeharborprovisionsforforward-lookingstatementscontainedinSection27AoftheSecuritiesActof1933andSection21EoftheSecuritiesExchangeActof1934.Allstatementsotherthanstatementsofhistoricalfactscontainedinthispressreleasemaybeforward-lookingstatements.Insomecases,youcanidentifyforward-lookingstatementsbytermssuchas“may,”“will,”“should,”“expects,”“plans,”“anticipates,”“could,”“intends,”“targets,”“projects,”“contemplates,”“believes,”“estimates,”“forecasts,”“predicts,”“potential”or“continue”orthenegativeofthesetermsorothersimilarexpressions.Forward-lookingstatementscontainedinthispressreleaseinclude,butarenotlimitedto,statementsregardingourquarterlyandannualguidance.
Youshouldreadthispressreleasewiththeunderstandingthatouractualfutureresults,levelsofactivity,performanceandachievementsmaybemateriallydifferentfromwhatweexpect.Wequalifyallofourforward-lookingstatementsbythesecautionarystatements.Exceptasrequiredbyapplicablelaw,wedonotplantopubliclyupdateorreviseanyforward-lookingstatementscontainedinthispressrelease,whetherasaresultofanynewinformation,futureeventsorotherwise.
AboutNon-GAAPFinancialMeasures
WedefineAdjustedEBITDAasNetincome(loss)adjustedtoexcludeinterestincome(expense),net,provisionfor(benefitfrom)incometaxes,depreciationandamortization,otherexpense(income),net,stock-basedcompensation,impairmentofgoodwill,long-livedandotherassets,legalexpenses,restructuringexpenses,transaction-relatedexpensesandcertainothernon-recurringincomeandexpensesfromtimetotime.OurAdjustedEBITDAfinancialmeasurediffersfromGAAPinthatitexcludescertainitemsofincomeandexpense.WedefineAdjustedEBITDAmarginasAdjustedEBITDAasapercentageofrevenue.
AdjustedEBITDAisoneoftheprimaryperformancemeasuresusedbyourmanagementandourboardofdirectorstounderstandandevaluateourfinancialperformanceandoperatingtrends,includingperiod-to-periodcomparisons,prepareandapproveourannualbudget,developshortandlong-termoperationalplansanddetermineappropriatecompensationplansforouremployees.Accordingly,webelievethatAdjustedEBITDAprovidesusefulinformationtoinvestorsandothersinunderstandingandevaluatingourresultsofoperationsinthesamemannerasourmanagementteamandboardofdirectors.Inassessingourperformance,weexcludecertainexpensesthatwebelievearenotcomparableperiodoverperiodorthatwebelievearenotindicativeofourunderlyingoperatingperformance.AdjustedEBITDAshouldnotbeconsideredinisolationof,orasanalternativeto,measurespreparedandpresentedinaccordancewithGAAP.ThereareanumberoflimitationsrelatedtotheuseofAdjustedEBITDAratherthannetincome(loss),whichisthenearestGAAPequivalentofAdjustedEBITDA.Someoftheselimitationsincludethatthenon-GAAPfinancialmeasure:
WedefineNon-GAAPnetincomeasnetincome(loss)adjustedtoexcludeamortizationofacquiredintangibleassets,stock-basedcompensationexpense,certaintransaction-relatedexpenses,andcertainothernon-recurringincomeandexpensesfromtimetotime,netofrelatedincometaximpacts.OurNon-GAAPnetincomefinancialmeasurediffersfromGAAPinthatitexcludescertainitemsofincomeandexpense.WedefineNetincome(loss)marginasnetlossasapercentageofrevenue.WedefineNon-GAAPnetincome(loss)marginasNon-GAAPnetincome(loss)asapercentageofrevenue.WedefineNon-GAAPnetincome(loss)pershareattributabletocommonstockholdersasNon-GAAPnetincome(loss)dividedbybasicanddilutedweighted-averagecommonstock.WebelieveNon-GAAPnetincome(loss)andNon-GAAPnetincome(loss)pershareattributabletocommonstockholdersareoperatingperformancemeasuresthatprovideinvestorsandanalystswithusefulsupplementalinformationaboutthefinancialperformanceofourbusiness.
Freecashflowisaliquiditymeasureusedbymanagementinevaluatingthecashgeneratedbyouroperationsafterpurchasesofpropertyandequipmentincludingcapitalizedinternal-usesoftware.WeconsiderFreecashflowtobeanimportantmeasurebecauseitprovidesusefulinformationtomanagementandinvestorsabouttheamountofcashgeneratedbyourbusinessthatcanbeusedforstrategicopportunities,includinginvestinginourbusinessandstrengtheningourbalancesheet.Onceourbusinessneedsandobligationsaremet,cashcanbeusedtomaintainastrongbalancesheetandinvestinfuturegrowth.TheusefulnessofFreecashflowasananalyticaltoolhaslimitationsbecauseitexcludescertainitemsthataresettledincash,doesnotrepresentresidualcashflowavailablefordiscretionaryexpenses,doesnotreflectourfuturecontractualcommitments,andmaybecalculateddifferentlybyothercompaniesinourindustry.Accordingly,itshouldnotbeconsideredinisolationorasasubstituteforanalysisofotherGAAPfinancialmeasures,suchasnetcashusedinorprovidedbyoperatingactivities.
Wearenotprovidingareconciliationforournon-GAAPoutlookonaforward-lookingbasis(includingtheinformationunder“FinancialGuidanceandOutlook”above),asweareunabletoprovideameaningfulcalculationorestimationofreconcilingitemsandtheinformationisnotavailablewithoutunreasonableeffort.Thisisduetotheinherentdifficultyofforecastingthetimingoramountofvariousitemsthatwouldimpactthemostdirectlycomparableforward-lookingGAAPfinancialmeasurethathavenotyetoccurred,areoutofLegalZoom’scontroland/orcannotbereasonablypredicted.Forward-lookingnon-GAAPfinancialmeasuresprovidedwithoutthemostdirectlycomparableGAAPfinancialmeasuresmayvarymateriallyfromthecorrespondingGAAPfinancialmeasures.
ThetablesinthispressreleasecontainmoredetailsontheGAAPfinancialmeasuresthataremostdirectlycomparabletonon-GAAPfinancialmeasuresandtherelatedreconciliationsbetweenthesefinancialmeasures.
LegalZoom
LegalZoomistheleadingonlineplatformforbusinessformationintheUnitedStates.Drivenbyamissiontounleashentrepreneurship,LegalZoomdeliverscomprehensivelegal,taxandcomplianceproductsandexpertiseforsmallbusinessownersthrougheasy-to-usetechnology.Fromfreebusinessformationstobusinessmanagementsolutionsandprofessionaladvisoryservices,LegalZoomsupportsmillionsofsmallbusinessownersandtheirfamiliesthroughouttheentrepreneurialjourney.Foundedonthebeliefthateveryoneshouldhaveaffordableaccesstolegalandfinancialexpertise,LegalZoomempowersentrepreneurstomaketheirdreamareality.TolearnmoreaboutLegalZoom,visitwww.legalzoom.com.
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AdjustedEBITDAandAdjustedEBITDAMargin
Thefollowingtablepresentsareconciliationofnetincome(loss)toAdjustedEBITDAforeachoftheperiodsindicated(unaudited):
(1)For2023,restructuringexpensesrelatedtothereductionofourU.K.headcount,whichisexpectedtobesubstantiallycompletebyDecember31,2023.For2022,restructuringexpensesrelatedtoaphasedseveranceeventtoreducetheU.S.headcountinJuneandAugust2022.Restructuringexpensesincludesalaryandbenefitsfortheimpactedemployeesandareincludedingeneralandadministrativeexpensesintheaccompanyingunauditedcondensedconsolidatedstatementsofoperations.
(2)For2023,certainothernon-recurringexpensesincludedcostsincurredbytheCompanyinconjunctionwiththesecondaryofferingof16,100,000sharesofourcommonstockbyasellingstockholderduringthethreemonthsendedSeptember30,2023.For2022,certainothernon-recurringexpensesincludedcostsrelatedtothedepartureofamemberofmanagement.
Non-GAAPNetIncome,Non-GAAPNetIncomeMarginanddilutedNon-GAAPNetIncomePerShare
Thefollowingtablepresentsareconciliationofnetincome(loss)toNon-GAAPnetincomeforeachoftheperiodsindicated(unaudited):
(1)For2023,certainothernon-recurringexpensesincludedcostsincurredbytheCompanyinconjunctionwiththesecondaryofferingof16,100,000sharesofourcommonstockbyasellingstockholderduringthethreemonthsendedSeptember30,2023.For2022,certainothernon-recurringexpensesincludedcostsrelatedtothedepartureofamemberofmanagement.
(2)Theestimatedincometaxeffectofthenon-GAAPpre-taxadjustmentsisdeterminedbyapplyingthestatutoryrateoftheoriginatingjurisdiction,ifapplicable.
ThefollowingtableshowsthecomputationofbasicanddilutedNon-GAAPnetincomepershareattributabletocommonstockholders(unaudited):
FreeCashFlow
Thefollowingtablepresentsareconciliationofnetcashprovidedbyoperatingactivitiestofreecashflow(unaudited):