LegalZoom.com, Inc. reported a revenue of $183.1 million for the first quarter of 2025, marking a 5% increase from $174.2 million in the same period of the previous year. The company's net income also rose to $5.1 million, compared to $4.7 million in the first quarter of 2024. This growth in revenue was primarily driven by an 8% increase in subscription revenue, which accounted for 63% of total revenue, while transaction revenue saw a modest 1% increase. The company attributed the rise in subscription revenue to a boost in compliance-related subscriptions and the addition of revenue from its recent acquisition of Formation Nation, which contributed approximately $5.9 million to transaction revenue.
LegalZoom's financial position showed significant changes compared to the previous fiscal period. Total assets increased to $532.7 million as of March 31, 2025, up from $373.9 million at the end of 2024. This growth was largely due to the acquisition of Formation Nation, which added $77.8 million in goodwill and $17.3 million in intangible assets. The company’s cash and cash equivalents also rose to $210 million, a substantial increase from $142.1 million at the end of 2024, primarily due to proceeds from stock option exercises and the sale of its operational headquarters.
Operationally, LegalZoom reported a decrease in the number of business formations, which fell by 6% year-over-year to 131,000, reflecting broader trends in the U.S. business formation landscape. However, the total number of transactions increased by 1% to 341,000, aided by the inclusion of Formation Nation's transactions. The company also saw a 20% increase in subscription units, reaching 1.9 million, driven by the bundling of new products into business formation offerings. The average revenue per subscription unit declined by 7% to $252, attributed to a shift towards lower-priced subscription offerings.
Looking ahead, LegalZoom's management expressed optimism about future growth, emphasizing the importance of enhancing customer lifetime value through new product integrations and improved customer experiences. The company plans to continue investing in sales and marketing to drive revenue growth and expand its market share. Additionally, LegalZoom's board of directors recently approved a $100 million increase to its stock repurchase program, bringing the total authorized amount to $315 million, which reflects the company's commitment to returning value to shareholders while maintaining a strong liquidity position.
About LEGALZOOM.COM, INC.
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