LegalZoom Reports 13% Revenue Growth to $206.8 Million in Q1 2026

LegalZoom.com, Inc. reported its financial results for the first quarter of 2026, revealing a total revenue of $206.8 million, a 13% increase from $183.1 million in the same period last year. The growth was driven by a 15% rise in transaction revenue, which reached $76.6 million, and a 12% increase in subscription revenue, totaling $130.2 million. Despite the revenue growth, the company experienced a decline in net income, which fell to $1.1 million from $5.1 million in the prior year, resulting in a net income per share of $0.01, down from $0.03.

The company's operating expenses increased significantly, totaling $129.5 million compared to $107.6 million in the previous year, primarily due to a 28% rise in sales and marketing expenses, which reached $78.7 million. This increase was attributed to higher customer acquisition costs and an expanded marketing strategy. General and administrative expenses also decreased by 20% to $31.2 million, largely due to reduced stock-based compensation expenses. The overall increase in operating expenses outpaced revenue growth, contributing to the decline in net income.

LegalZoom's customer engagement metrics showed positive trends, with a reported 142,000 business formations in the first quarter, an 8% increase year-over-year. The total number of transactions also rose by 10% to 375,341, reflecting increased activity in compliance offerings and business formations. However, the number of subscription units remained flat at 1.92 million, indicating challenges in growing this segment. The average revenue per subscription unit increased by 4% to $263, driven by pricing initiatives.

In terms of strategic developments, LegalZoom completed the acquisition of Formation Nation, Inc. in February 2025, which contributed to the revenue growth in the current quarter. The company also continued its stock repurchase program, repurchasing 5.3 million shares for $43.5 million during the quarter, leaving approximately $126 million available for future repurchases. LegalZoom's cash and cash equivalents decreased to $183.2 million from $203.1 million at the end of 2025, primarily due to cash used in financing activities.

Looking ahead, LegalZoom anticipates that its available cash and cash equivalents, along with cash generated from operations, will be sufficient to meet its operational needs for at least the next twelve months. The company remains focused on enhancing customer lifetime value through new product offerings and optimizing its subscription business. However, it acknowledges potential challenges from macroeconomic factors and competition in the small business services market.