LZ — what changed in the latest 10-Q

Text added vs the prior filing · source: 10-Q · 2026-08-05

• •In August 2026, we committed to a restructuring plan that will reduce the size of our workforce by approximately 13%. This restructuring plan was made as part of our ongoing organizational evolution towards becoming a more agile, AI-native company with a simpler operating structure. We expect to in…

• •Our share of small and medium-sized businesses (SMBs). Business formations act as an entrance point for many customers to the LegalZoom ecosystem, where they then often purchase a mix of transaction and subscription offerings alongside and after the initial formation transaction. However, changes t…

• •Ability to enhance customer lifetime value. Our future performance depends on our ability to integrate new products and services into our LegalZoom ecosystem and to increase recurring revenue through subscription offerings. We are continuing to optimize our subscription business, including by testi…

• •Ability to integrate augmented legal expertise. We believe that the future of legal and small business services involves a combination of scaling AI while strategically integrating our human-in-the-loop offerings to provide the judgment and trust that customers need. These offerings have two layers…

• The below table sets forth the number of business formations for the three and six months ended June 30, 2026 and 2025:

Text removed vs the prior filing · source: 10-Q · 2026-05-06

• •Macroeconomic factors. Adverse changes in, or uncertainty with respect to, general macroeconomic, political, regulatory and market conditions can negatively impact consumer spending patterns, the success of existing small businesses and the formation of new small businesses. While we continue to ac…

• •Our share of small and medium-sized businesses (SMBs). In the three months ended March 31, 2026 and 2025, business formations represented the largest share of our total transaction orders. Business formations act as an entrance point for many customers to the LegalZoom ecosystem, where they then of…

• •Ability to enhance customer lifetime value. Our future performance depends on our ability to integrate new products and services into our LegalZoom ecosystem and to increase recurring revenue through subscription offerings. We are continuing to optimize our subscription business, including by testi…

• •Ability to integrate augmented legal expertise. We believe that the future of legal and small business services involves a combination of AI and human expertise. We aim to utilize AI to drive efficiency and scale, while relying on our team of concierge managers and our independent network of attorn…

• Furthermore, we believe our definition of the number of business formations is most closely aligned with U.S. Census reporting of new applications for Employer Identification Numbers (“EINs”), which we believe to be the most relevant source of publicly available U.S. market data.

Text added vs the prior filing · source: 10-Q · 2026-08-05

• payable balances and intercompany loans that are denominated in currencies other than the U.S. Dollar. The foreign currency transaction loss was immaterial during the six months ended June 30, 2026. A 10% adverse change in foreign exchange rates on foreign-denominated accounts, including intercompan…

Text removed vs the prior filing · source: 10-Q · 2026-05-06

• denominated sales and expenses increase, our results of operations may be more greatly affected by fluctuations in the exchange rates of the currencies in which we do business. At this time, we do not, but we may in the future, enter into derivatives or other financial instruments in an attempt to h…

Text added vs the prior filing · source: 10-Q · 2026-08-05

• Our future quarterly results of operations may fluctuate significantly

• We will need to generate and sustain increased revenue levels in future periods to maintain or increase our level of profitability. If our revenue and gross profits do not grow at a greater rate than our operating expenses, we will not be able to maintain or increase profitability and our business m…

• incur significant losses in the future for a number of reasons, including due to the risks and uncertainties described herein. Even if we are profitable, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to achieve sustained profitability would depre…

• In addition, because our platform is available over the internet and on mobile networks, we need to regularly modify and enhance our platform to keep pace with changes in internet-related hardware, software, communications and database technologies and standards. We expect the number of people who a…

• We operate in a very competitive industry. We face intense competition from law firms, solo attorneys, online legal document services, legal plans, secretaries of state and other service providers. The online legal solutions market is evolving rapidly and is becoming increasingly competitive. New ma…

Text removed vs the prior filing · source: 10-Q · 2026-05-06

• Failure to effectively manage our growth could adversely impact our business

• In the past, we have experienced significant growth in both operations and headcount, which placed increased demands on our management team and our administrative, operational and financial infrastructure. Our management team has developed a strategy to continue growing our business. In addition, we…

• Our ability to achieve our growth strategy also impacts our ability to forecast our future operating results. If the assumptions regarding the growth of our business are incorrect or change, our results of operations and financial condition could differ materially from our expectations, our business…

• Our future quarterly results of operations may fluctuate significantly due to a wide range of factors, which makes our future results difficult to predict

• We will need to generate and sustain increased revenue levels in future periods to maintain or increase our level of profitability. If our revenue and gross profits do not grow at a greater rate than our operating expenses, we will not be able to maintain or increase profitability and our business m…