#1Q1 2023 Investor Presentation May 9, 2023 LLEGALZOOM#2LegalZoom.com, Inc. Disclaimer Forward-Looking Statements This presentation contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained in this presentation may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "forecasts," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. Forward-looking statements contained in this presentation include, but are not limited to, statements regarding our annual guidance and other long-term targets. The forward-looking statements in this presentation are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to the following: the risk that our recent growth may not be indicative of our future growth; our dependence on business formations and fluctuations or declines in the number of business formations; the impact of macroeconomic challenges on our business, including as a result of inflation, global conflict, supply chain issues and recessionary concerns; our ability to provide high-quality services, customer care and customer experience; our ability to sustain our revenue growth rate and remain profitable in the future; our ability to continue to innovate and provide a platform that is useful to our customers and that meets our customers' expectations; our ability to attract and retain customers and, specifically, our ability to maintain subscribers and convert our transactional customers to subscribers; our ability to drive additional purchases and cross-sell to paying customers; our ability to maintain and expand strategic relationships with third parties; our anticipation of increasing expenses in the future; the competitive legal solutions market; our ability to hire and retain top talent and motivate our employees; risks and costs associated with complex and evolving laws and regulations; the risk that the restatement may affect investor confidence and raise reputational issues and may subject us to additional risks and uncertainties; our ability to remediate material weaknesses in our internal control over financial reporting; and other factors discussed in the section titled "Risk Factors" included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, as such risk factors may be amended, updated or superseded from time to time by our subsequent filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based upon information available to us as of the date of this presentation, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. You should read this presentation with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this presentation, whether as a result of any new information, future events or otherwise. Z 2#3LegalZoom.com, Inc. Disclaimer (Continued) About Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures including Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP net income (loss), non-GAAP net income (loss) margin, adjusted gross profit, adjusted gross profit margin, certain non-GAAP expenses (including non-GAAP cost of revenue, Non-GAAP sales and marketing, non-GAAP technology and development, and non-GAAP general and administrative), free cash flow, free cash flow margin, unlevered free cash flow, and unlevered free cash flow margin. To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles, or GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different from similarly titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and liquidity and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We believe that these non-GAAP financial measures provide useful information about our financial performance and liquidity, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important measures used by our management for financial and operational decision-making. We are presenting these non-GAAP measures to assist investors in seeing our financial performance using a management view and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. The tables in the Appendix contain more details on the GAAP financial measures that are most directly comparable to non- GAAP financial measures and the related reconciliations between these financial measures. In addition, please see our earnings release and our filings with the SEC for the definitions of these non-GAAP financial measures and limitations on the use of such non-GAAP financial measures. Z 3#4(on) GENNA WILLIAMS a Our mission is to unleash entrepreneurship#5We protect businesses, their ideas, and the families that create them BUSINESS FORMATION INTELLECTUAL PROPERTY | COMPLIANCE Legal matters are difficult to navigate on your own Key Pain Points Expertise is expensive and difficult to find Remaining compliant is a complex, evergreen problem 01 5#6LegalZoom The easiest way to form, protect, and keep your business compliant Formation Solutions Formation Package (LLC, INC, Non-Profit) • DBAs and EINS ● ● • Annual Reports, Operating Agreement ● Compliance Solutions Registered Agent / Compliance / Virtual Mail Legal Expertise / Legal Forms & e-Signature • Tax Expertise ● ● ● Intellectual Property Trademarks • Copyrights Patents ● 3.8M 1.5M+ 387K Businesses formed since inception (2003) Active subscribers of compliance & legal solutions at 3/31/23 Trademarks filed since inception (2003) 9:41 Z LEGALZOOM Start your business with confidence &&= Whether you're ready to form or still deciding, we've got your back. Learn if an LLC is right for you-or enter your name to get started. Starts at $0+ filing fees. Happy Candles Check availability 4.5 stars (41712) These costs are often tax deductible. 6#7We have multiple ways to drive growth m Scale the Business Improve marketing efficiency Reimagine current offerings and launch new products Enhance fulfillment and cross-sell of additional services A Build the Ecosystem Build core offerings Expand partner channels Drive greater customer engagement 8 Integrate Experts Assisted tax services Assisted legal services Enhance service delivery 7#8Our management team is experienced in small business and consumer innovation at scale Dan Wernikoff Chief Executive Officer intuit charles SCHWAR Noel Watson Chief Financial Officer TrueCar do Tripadvisor Nicole Miller General Counsel HONEST Cooley GIBSON DUNN Sheily Chhabria Panchal Chief People Officer Service Titan Shrisha Radhakrishna Chief Technology Officer Intuit COVAD ACTIVISION Google BIZAR Rich Preece Chief Operating & Product Officer intuit Kathy Tsitovich Chief Partnerships Officer intuit 8#9Financial Update LLEGAL ZOOM#10Quarterly Q1 2023 Snapshot $166M total revenue +7% yoy 170K business formations +32% yoy $109M adjusted gross profit(¹) 66% margin(1) 308K transaction units +15% yoy (1) This is a non-GAAP financial measure. Refer to the Appendix for a reconciliation of this measure to the most directly comparable GAAP measure. $22M adjusted ebitda(1) 13% margin(1) 1,501K subscription units +10% yoy L 10#11Key Metrics Business Formations (1) 134K 34% YOY Growth % 114K (10%) 103K 129K 12% (2%) 11 113K (16%) 117K 3% 115K 12% 170K 32% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 GAAP Revenue YOY Growth % $150M 36% $148M 12% $142M $155M 16% 15% $163M 8% $155M 5% $147M 3% $166M 7% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Adjusted EBITDA (²) $22M 15% % of Revenue (2) $15M 10% $7M 5% $18M $17M 11% 11% $26M 18% $22M 13% $2M 1% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 (1) We define the number of business formations in a given period as the number of LLC, incorporation, not-for-profit and DBA orders placed through our platform in such period, excluding such orders from our operations in the United Kingdom. (2) This is a non-GAAP measure. Refer to the Appendix for a reconciliation of this measure to the most directly comparable GAAP measure. Z 11#12Transaction Revenue Details Transaction Revenue $73M $67M 45% $57M 5% $65M $65M $58M Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 8% Year-over-year Growth % $51M $62M 6% (11%) (13%) (10%) (5%) Trx Units AOV Transaction Units(1) AOV(2) 260K $282 $291 Q2'21 12% 229K 30% Q3'21 211K 16% $267 (10%) 8% 267K $245 0% 225K 226K Year-over-year Growth % $290 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 10% $258 211K $241 (3%) (13%) (1%) 0% 308K $202 Q1'23 15% 3% (11%) (10%) (18%) (1) We define the number of transaction units in a given period as gross transaction order volume, prior to refunds, on our platform during such period. Refunds, or partial refunds, may be issued under certain circumstances, pursuant to the terms of our customer satisfaction guarantee. (2) We define average order value for a given period as total transaction revenue divided by total number of transactions in such period. Z 12#13Subscription Revenue Details Subscription Revenue $69M $73M 29% $81M $84M $91M $91M $91M Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 $97M Year-over-year Growth % 24% 29% 29% 32% 25% 13% 15% Subscription Units(1) ARPU (2) 1,215K $230 Q2'21 Sub Units ARPU 3% 25% 1,264K $231 $236 Q3'21 21% 1,329K 5% 1,394K 1,415K 1,441K 1,362K $244 6% Q4'21 Q1¹22 Q2'22 Q3'22 Q4'22 Q1'23 Year-over-year Growth % 22% 19% $252 $259 $258 $259 8% 15% 12% 10% 1,501K 12% 8% 9% 10% 6% (1) We define the number of subscription units in a given period as the paid subscriptions that remain active at the end of such period, including those that are not yet 60 days past their subscription order dates, excluding subscriptions from our employer group legal plan and small business concierge subscription service, for which we ceased acquiring new subscribers in October 2020. Refunds, or partial refunds, may be issued under certain circumstances pursuant to the terms of our customer satisfaction guarantee. (2) We define average revenue per subscription unit, or ARPU, as of a given date as subscription revenue for the 12-month period ended on such date, or LTM, divided by the average number of subscription units at the beginning and end of the LTM period, excluding revenue and subscription units from our employer group legal plan and small business concierge subscription services, for which we ceased acquiring new subscribers in October 2020. Z 13#14Non-GAAP Expenses(¹) $M by Spend Category Cost of Revenue Sales & Marketing $128M 11 10 59 48 $133M $135M 11 14 12 11 65 45 64 46 $153M 15 13 72 54 Technology & Development General & Administrative $145M 13 11 66 54 $138M 15 13 62 48 $120M 16 14 46 44 $144M 15 15 57 57 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 % of Revenue by Spend Category 85% 8% 7% 39% 32% 90% 7% 8% 44% 30% 95% (1) These are non-GAAP financial measures. Refer to the Appendix for a reconciliation of these measures to the most directly comparable GAAP measures. 10% 8% 45% 99% 9% 8% 46% 89% 8% 7% 41% 35% 32% 33% 89% 10% 8% 40% 82% 11% 9% 31% 31% 30% 87% 9% 9% 35% 34% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Z 14#15Non-GAAP Sales & Marketing Detail(¹) $M by Category Customer Acquisition Media "CAM" Other Sales & Marketing $59M 44 14 $65M 50 15 $64M 47 17 $72M 54 18 $66M 44 22 $62M 45 17 $46M 32 14 $57M 41 17 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 % YoY Growth by Category 61% 35% 73% 46% 46% 33% (1) This is a non-GAAP financial measure. Refer to the Appendix for a reconciliation of this measure to the most directly comparable GAAP measure. 13% 0% 53% (1%) 16% (10%) (16%) (33%) (8%) (24%) Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Z 15#16Profitability Metrics Adjusted EBITDA(1) % of Revenue (1) $22M 15% $15M 10% $7M 5% $2M $18M $17M 11% 11% $26M 18% $22M 13% 1% Q2¹21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Free Cash Flow(1) % of Revenue (1) $6M $9M $6M Aidil 14% 6% 3% 4% $17M 11% Q2'21 Q3'21 (1) These are non-GAAP financial measures. Refer to the Appendix for a reconciliation of these measures to the most directly comparable GAAP measures. -7% $21M ($9M) $16M $22M 11% 13% Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Z 16#17Q2 and FY23 Guidance Commentary Q2 2023 Total Revenue Adj. EBITDA(1) FY 2023 Total Revenue Adj. EBITDA(1) $166M - $168M $27M - $29M $630M - $650M $105M ● ● Commentary We continue to navigate a fluid macro environment and have increased our Q2 macro assumption while maintaining a mid-single-digit decline expectation in the second half of FY 2023 We remain confident in our target of growing market share by 15% while also expanding our Adjusted EBITDA margin to 16% in FY 2023 (1) This is a non-GAAP financial measure. The company has not reconciled this non-GAAP measure to the most comparable GAAP measure because we are unable to provide a meaningful calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that would impact the most directly comparable forward-looking GAAP financial measure that have not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. Z 17#18GAAP and Non-GAAP Long-term Financial Goals GAAP and Non-GAAP Measures Revenue Growth Gross Margin (GAAP) Customer Acquisition Marketing "CAM" OpEx (excl. CAM)(¹) Adj. EBITDA Margin(¹) '20A 15% 67% 25% 25% 19% '21A 18% 22% 67% 34% 26% 8% '22A 7% 8% 66% 28% 29% 10% I 8% I I I I I 1 I 1 I I T I I 1 I I I 1 I I I I Long-Term Target(2) I 24% + FCF Margin(¹) (1) This is a non-GAAP financial measure. Refer to the Appendix for a reconciliation of this measure to the most directly comparable GAAP measure for the historical periods provided above. The company has not reconciled this non-GAAP measure to the most comparable GAAP measure because we are unable to provide a meaningful calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that would impact the most directly comparable forward-looking GAAP financial measure that have not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. (2) These are not projections; they are goals and are forward-looking, subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond the control of the company and its management, and are based upon assumptions with respect to future decisions, which are subject to change. Actual results will vary and those variations may be material. Please see the LegalZoom.com, Inc. Disclaimer slide at the beginning of this presentation. Nothing in this presentation should be regarded as a representation by any person that these goals will be achieved and the company undertakes no duty to update its goals. 71-73% 18-22% 21-23% 30% + 25% + Z 18#19Appendix LLEGAL ZOOM#20Reconciliation of GAAP Expenses to Non-GAAP Expenses 2020 2021 2022 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 $154,563 $189,364 $211,095 $49,859 $47,267 $48,278 $56,182 $57,151 $50,314 $47,448 $60,395 2,931 707 779 148 277 1,331 597 726 8,581 1,398 1,403 1,951 2,070 2,184 1,966 2,361 199,583 47,754 53,835 53,636 47,751 44,361 279,281 263,884 65,431 72,572 69,917 76,874 71,721 67,369 47,920 15,721 10,144 5,151 6,364 4,040 3,125 3,536 2,972 511 6,017 7,014 1,323 1,401 1,818 1,875 1,879 1,754 1,506 400 400 257,543 246,326 58,957 64,807 64,059 71,874 66,306 62,243 44,497 49,739 47,495 53,769 44,137 44,755 31,975 40,745 18,213 17,959 16,197 6,205 4,298 4,148 652 726 692 FYE Dec 31, $K Cost of revenue Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP cost of revenue Sales and marketing Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP sales and marketing Customer Acquisition Marketing(3) Technology and development Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP technology and development General and administrative Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP general and administrative 108 8,324 146,131 171,390 923 6,913 163,554 ― 1,662 6,430 36,613 181,272 - 45,085 46,179 10,276 119,226 195,383 174,636 41,863 84,003 70,434 28,426 26,865 2,450 38,726 16,574 17,566 14,459 2,800 2,361 2,834 584 538 42,916 51,026 11,868 11,356 51,017 106,584 116,057 33,845 28,192 31,382 29,488 28,969 30,103 27,497 9,413 56,487 50,820 21,374 16,539 15,478 14,165 13,832 12,352 10,471 2,060 1,878 3,316 358 433 661 723 784 840 969 3,181 2,577 2,593 635 222 1,720 70 1,083 1,440 36,363 45,642 59,328 11,478 10,998 13,523 14,530 13,270 15,471 16,057 - - - 12,935 11,357 45,903 57,361 17,457 18,821 3,857 4,271 694 722 - 874 2,622 12,906 13,828 56,899 60,150 1,532 1,257 19,683 4,320 858 - 14,505 26,504 9,741 832 628 15,303 (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback program that concluded in 2022. (2) Includes acquisition-related expenses, restructuring expenses, legal reserves and settlements, and other IPO-related costs and other transaction related expenses, as detailed in Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss) below. (3) Customer Acquisition Marketing is a component of both GAAP and Non-GAAP sales and marketing expense. Z 20#21Reconciliation of GAAP Expenses to Non-GAAP Expenses on a % of Revenue Basis FYE Dec 31, $K Cost of revenue Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP cost of revenue Sales and marketing Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP sales and marketing Customer Acquisition Marketing (3) Technology and development Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP technology and development General and administrative Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP general and administrative 2020 33% 0% 2% 31% 36% 0% 1% 35% 25% 9% 1% 1% 8% 11% 2% 0% 1% 8% 2021 33% 0% 1% 32% 49% 3% 1% 45% 34% 15% 7% 0% 7% 19% 10% 0% 0% 8% 2022 34% 0% 1% 32% 43% 2% 1% 0% 40% 28% 11% 3% 0% 8% 19% 8% 1% 0% 10% Q2'21 Q3'21 Q4'21 33% 32% 34% 1% 1% 0% 1% 32% 43% 3% 1% 39% 30% 19% 12% 0% 7% 22% 14% 0% 0% 8% 30% 49% 4% 1% 44% 34% 18% 10% 0% 8% 19% 11% 0% 0% 7% 0% 1% 32% 49% 3% 1% 45% 33% 13% 4% 0% 8% 22% 11% 0% 1% 10% Q1'22 Q2'22 36% 35% 1% 1% 0% 1% 35% 49% 2% 1% 46% 35% 12% 3% 0% 8% 19% 9% 0% 0% 9% - 33% 44% 2% 1% 41% 27% 10% 3% 0% 7% 18% 9% 0% 1% 8% Q3'22 Q4'22 Q1'23 32% 32% 36% 0% 0% 1% 2% 31% 43% 2% 1% 0% 40% 29% 11% 2% 0% 8% 19% 8% 1% 1% 10% 30% 33% 0% 1% 31% 22% 13% 3% 0% - 9% 19% 7% 1% 1% 2% 34% 36% 1% 1% 35% 25% 12% 3% 1% 9% 16% 6% 1% 0% 9% 11% (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback that concluded in 2022. (2) Includes acquisition-related expenses, restructuring expenses, legal reserves and settlements, and other IPO- related costs and other transaction related expenses, as detailed in Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss) below. (3) Customer Acquisition Marketing is a component of both GAAP and Non-GAAP sales and marketing expense. Z 21#22Reconciliation of GAAP Expenses to Non-GAAP Expenses on a Year-over-Year % Basis FYE Dec 31, $K Cost of revenue Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP cost of revenue Sales and marketing Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP sales and marketing Customer Acquisition Marketing (3) Technology and development Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP technology and development General and administrative Stock-based compensation(¹) Depreciation and amortization Other non-recurring items(²) Non-GAAP general and administrative 2020 2021 13% 23% (7%) 1,439% 23% (23%) 12% 48% 38% 7% 50% 77% 3% (12%) 158% 24% (2%) (79%) (2%) 63% 1,603% (13%) 13% 101% 232% 1,481% 165% (16%) 57% 64% 17% 109% 500% (9%) (19%) 26% 2022 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 11% 39% 8% 76% 2,519% 2,497% 33% 21% 429% (28%) (26%) (23%) 28% 889% 23% 15% 88% 56% 10% 41% 19% (6%) 63% 55% 71% (35%) 7,054% 5,434% 2,786% 17% (25%) 2% (6%) 9% (10%) 77% 1% 30% 54% 61% 8% (4%) (11%) (16%) 180% 146% 78% 71% (57%) 3,291% 2,633% 1,066% 767% 20% (12%) (18%) (21%) 24% 14% 168% 764% (23%) 892% 19% 43% 46% 24% 22% 65% 170% 712% 73% 28% 105% (9%) 572% 1% (69%) (16%) 53% 31% 27% 8% 1783% 27% 3% 0% 37% 124% 358% 70% 0% 51% Q3'22 Q4'22 6% (2%) (23%) 391% 40% 21% (4%) 10% (7%) (31%) (31%) (53%) (87%) 42% 25% (17%) (4%) (28%) (10%) (33%) (35%) 3% (73%) (31%) 29% 11% 12% 12% (1%) (43%) (76%) 18% 11% 6% 9% 22% (14%) 7% (35%) (25%) (32%) 119% 94% 47% 71% 549% (100%) 16% 41% 19% Q1'23 7% 216% 27% 6% (22%) (51%) (33%) (20%) (24%) 10% 1% 18% 12% (12%) (10%) (31%) 15% 797% 5% (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback program that concluded in 2022. (2) Includes acquisition-related expenses, restructuring expenses, legal reserves and settlements, and other IPO-related costs and other transaction related expenses, as detailed in Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss) below. (3) Customer Acquisition Marketing is a component of both GAAP and Non-GAAP sales and marketing expense. Z 22#23Reconciliation of Gross Profit to Non-GAAP Gross Profit FYE Dec 31, $K Gross profit Cost of revenue stock-based compensation (¹) Cost of revenue depreciation & amortization Cost of revenue other non-recurring items (2) Non-GAAP gross profit(³) Gross profit margin(3) Non-GAAP gross profit margin(3) 2020 2021 2022 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 $316,073 $385,716 $408,884 $100,573 $100,612 $93,859 $99,245 $105,498 $104,963 $ 99,178 $105,541 108 707 779 148 277 1,331 597 726 874 1,662 6,430 2,931 8,581 1,398 1,403 1,951 2,070 8,324 67% 69% $324,505 $393,808 $420,396 $102,678 $102,794 $95,958 $101,592 $109,013 $107,526 $ 102,265 $109,037 66% 68% 68% 70% 67% 68% 66% 68% 67% 68% 68% 70% 2,184 1,966 64% 65% 65% 67% 2,361 2,622 68% 69% 64% 66% (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback program that concludes in 2022. (2) Includes acquisition-related expenses, restructuring expenses, legal reserves and settlements, and other IPO-related costs and other transaction related expenses, as detailed in Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss) below. (3) We define non-GAAP gross profit as gross profit adjusted to exclude amortization of acquired intangible assets from our business combinations, non-cash stock-based compensation expense, losses from impairments of goodwill, long-lived and other assets, and other non-recurring expenses associated with our cost of revenue. Our non-GAAP gross profit financial measure differs from GAAP in that it excludes certain items of income and expense. We define gross profit margin as gross profit as a percentage of revenue. We define non-GAAP gross profit margin as non-GAAP gross profit as a percentage of revenue. Z 23#24Reconciliation from Net Income (Loss) to Adjusted EBITDA 2020 2021 2022 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 $9,896 ($108,664) ($48,733) ($38,395) ($39,675) ($20,771) ($25,753) ($12,743) ($11,981) $1,744 ($2,358) 35,504 27,984 (1,543) 9,312 9,957 61 53 (29) (535) (1,032) (1,581) 2,429 (10,951) 1,060 1,995 (5,908) (4,102) (920) (639) (223) 2,842 3,837 20,097 16,686 21,745 3,663 3,775 5,082 5,394 5,539 5,254 5,558 5,569 (1,193) 4,477 (420) 368 (893) 1,544 2,022 2,536 (1,625) (694) 44,798 38,141 25,871 21,865 22,847 19,778 15,979 16,467 7,748 493 (3,713) 12,894 112,596 80,469 7,748 924 FYE Dec 31, $K Net income (loss) Interest expense (income), net Provision for (benefit from) income taxes Depreciation and amortization Other (income) expense, net Stock-based compensation(¹) Loss on debt extinguishment Impairment of goodwill, long-lived & other assets Impairment of available-for-sale debt securities Impairment of other equity security (2) Acquisition or transaction related expenses Restructuring costs (3) Legal reserves and settlements (4) IPO-related costs & other transaction-related expenses(5) Certain other non-recurring expenses(6) Adjusted EBITDA(7) Revenue 1,105 4,818 132 2,524 525 1,764 $87,975 470,636 19% - 1,356 237 3,000 758 1,795 40 379 852 217 400 5 369 $47,707 $63,705 $21,967 $15,121 575,080 8% 635 - 52 1,356 1 | 8 | 8 | | | 30 40 92 991 - 237 636 804 3,000 628 364 400 $7,020 $2,253 $18,080 $16,906 $26,466 $21,868 619,979 150,432 147,879 142,137 155,427 162,649 155,277 146,626 165,936 10% 15% 10% 5% 1% 11% 11% 18% 13% Adjusted EBITDA margin(8) (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback program that concluded in 2022. (2) In December 2022, we fully impaired our investment in Mylo and incurred a loss of $3.0 million as the fair value of our investment was determined to be zero based upon an observable sale of their common equity. (3) Restructuring expenses relate to certain one-time severance events for different components of our business. Such expenses are not expected to recur in the near or longer term. Due to continued decline in the business performance of Beaumont, our conveyancing business in the United Kingdom, we conducted a phased restructuring during 2019. In the fourth quarter of 2019, we restructured our United Kingdom Research and Development team, as part of the reset of our product strategy. In the first half of 2020, we restructured our United Kingdom business, mainly in our leadership and technology team. In the fourth quarter of 2020, we incurred $2.0 million in severance costs related to a reduction in headcount in our U.S. workforce. In the second quarter of 2022, we incurred $1.0 million in severance costs related to a reduction in our U.S. workforce. In the third quarter of 2022, we incurred $0.8 million in severance costs related to a reduction in our U.S. workforce. In the first quarter of 2023, we in curred $0.6 million in restructuring expenses related to the reduction of our U.K. headcount. (4) Legal reserves and settlements include costs accrued or paid for potential litigation settlements, and are net of insurance recoveries, if any. (5) IPO-related costs and other transaction-related expenses includes certain non-recurring expenses, which occurred in connection with our IPO in 2021. (6) In the second quarter of 2020, we incurred a loss on sale from the disposal of Beaumont of $1.8 million. In 2021, we incurred expenses related to early termination of our U.K. lease agreement. In the third quarter of 2022, $0.4 million of compensation expense was recorded in sales and marketing expenses related to the departure of a member of management. (7) Adjusted EBITDA, a primary performance measure used by management and board of directors to understand and evaluate financial performance, operating trends including period-to-period comparisons, prepare and approve of our annual budget, develop short- and long-term operational plans and determine appropriate compensation plans for our employees. Limitations to this non-GAAP financial measure include, among other things, the following: a) does not reflect interest expense, or the cash requirements necessary to service interest or principal payments, which reduces cash available to us; b) does not reflect provision for income taxes that may result in payments that reduce cash available to us; c) excludes depreciation and amortization and, although these are non-cash expenses, the assets being depreciated may be replaced in the future; d) does not reflect foreign currency exchange or other gains or losses, which are included in other income, net; e) excludes stock-based compensation expense, which has been, and will continue to be, a significant recurring expense for our business and an important part of our compensation strategy; f) excludes losses from impairments of goodwill, long-lived and other assets and available-for-sale debt securities; g) excludes acquisition related expenses, which reduce cash available to us; h) excludes restructuring expenses, which reduce cash available to us; and i) does not reflect certain other non-recurring expenses that are not considered representative of our underlying performance, which reduce cash available to us. We define Adjusted EBITDA as net income adjusted to exclude interest expense, net, provision for income taxes, depreciation and amortization, other income, net, stock-based compensation, losses from impairments of goodwill, long-lived and other assets, impairments of available-for-sale debt securities, acquisition related expenses, restructuring expenses, legal reserves and settlements, and certain other non-recurring expenses. (8) We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of revenue. Z 24#25Reconciliation of Net Income (Loss) to Non-GAAP Net Income (Loss) FYE Dec 31, $K Net income (loss) Amortization of acquired intangible assets Stock-based compensation(¹) Loss on debt extinguishment Impairment of goodwill, long-lived & other assets Impairment of available-for-sale debt securities Impairment of other equity security (2) Acquisition or transaction related expenses Restructuring costs(3) Legal reserves and settlements (4) IPO-related costs & other transaction-related expenses(5) Certain other non-recurring expenses(6) Income tax effects 2020 2021 2022 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 $9,896 ($108,664) ($48,733) ($38,395) ($39,675) ($20,771) ($25,753) ($12,743) ($11,981) 2,826 1,039 3,532 52 52 662 670 790 781 12,894 112,596 80,469 44,798 38,141 25,871 21,865 22,847 19,778 7,748 7,748 924 493 Non-GAAP net income (loss)(7) Net income (loss) margin(7) Non-GAAP net income (loss) margin(7) 1,105 4,818 - 132 2,524 525 1,356 1,764 (4,148) $32,336 2% 7% 237 3,000 758 1,795 40 379 52 635 ││ 1,356 1 30 40 92 991 I 237 364 (2,575) (2,277) (2,406) $4,959 ($5,425) $9,571 (15%) (17%) (8%) 4% (3%) 6% 636 804 852 217 369 400 (10,519) (10,243) $5,701 $31,255 (19%) (8%) 1% 5% 5 (2,880) (4,399) $4,589 $2,582 (26%) (27%) 3% 2% (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback program that concluded in 2022. (2) In December 2022, we fully impaired our investment in Mylo and incurred a loss of $3.0 million as the fair value of our investment was determined to be zero based upon an observable sale of their common equity. (3) Restructuring expenses relate to certain one-time severance events for different components of our business. Such expenses are not expected to recur in the near or longer term. Due to continued decline in the business performance of Beaumont, our conveyancing business in the United Kingdom, we conducted a phased restructuring during 2019. In the fourth quarter of 2019, we restructured our United Kingdom Research and Development team, as part of the reset of our product strategy. In the first half of 2020, we restructured our United Kingdom business, mainly in our leadership and technology team. In the fourth quarter of 2020, we incurred $2.0 million in severance costs related to a reduction in headcount in our U.S. workforce. In the second quarter of 2022, we incurred $1.0 million in severance costs related to a reduction in our U.S. workforce. In the third quarter of 2022, we incurred $0.8 million in severance costs related to a reduction in our U.S. workforce. In the first quarter of 2023, we in curred $0.6 million in restructuring expenses related to the reduction of our U.K. headcount. (4) Legal reserves and settlements include costs accrued or paid for potential litigation settlements, and are net of insurance recoveries, if any. (5) IPO-related costs and other transaction-related expenses includes certain non-recurring expenses, which occurred in connection with our IPO in 2021. (6) In the second quarter of 2020, we incurred a loss on sale from the disposal of Beaumont of $1.8 million. In 2021, we incurred expenses related to early termination of our U.K. lease agreement. In the third quarter of 2022, $0.4 million of compensation expense was recorded in sales and marketing expenses related to the departure of a member of management. (7) We define non-GAAP net income (loss) as net income (loss) adjusted to exclude amortization of acquired intangible assets from our business combinations, non-cash stock-based compensation expense, losses from impairments of goodwill, long-lived and other assets, impairments of available-for-sale debt securities, acquisition related expenses, restructuring expenses, IPO- related costs and other transaction-related expenses and certain other non-recurring expenses, net of the related income tax impacts. Our non-GAAP net income (loss) financial measure differs from GAAP in that it excludes certain items of income and expense. We define net income (loss) margin as net loss as a percentage of revenue. We define non-GAAP net income (loss) margin as non-GAAP net income (loss) as a percentage of revenue. Q4'22 Q1'23 $1,744 ($2,358) 1,291 15,979 3,000 1,291 16,467 628 400 (2,550) (3,010) (2,030) $8,105 $19,004 $13,998 (8%) 1% (1%) 5% 13% 8% 1 25#26Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow FYE Dec 31, $K Net cash provided by (used in) operating activities Purchase of property and equipment Free cash flow(1) Cash interest paid Unlevered free cash flow(²2) Operating cash flow margin(3) Free cash flow margin(³) Unlevered free cash flow margin(3) 2020 2021 2022 Q2¹21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 $93,049 $54,152 $73,837 $9,281 $19,460 ($6,004) $13,737 $11,020 $27,258 $21,822 $29,208 (10,587) (11,740) (22,098) (3,093) (2,496) (3,240) (4,911) (5,468) (6,062) (5,657) 82,462 42,412 51,739 6,188 16,964 (9,244) 8,826 5,552 21,196 16,165 27,864 12,284 6,086 133 110,326 54,696 51,739 12,274 17,097 20% 12% 6% 13% 9% 18% 7% 8% 4% 11% 23% 10% 8% 8% 12% (9,244) (4%) (7%) (7%) 8,826 9% 6% 6% 5,552 21,196 7% 18% 3% 14% 3% 14% 16,165 15% 11% 11% (7,428) 21,780 21,780 18% 13% 13% (1) We define free cash flow as cash generated by operations after purchases of property and equipment including capitalized internal-use software. Free cash flow is a liquidity measure used by management in evaluating the cash generated by our operations after purchases of property and equipment including capitalized internal-use software. We consider free cash flow to be an important metric because it provides useful information to management and investors about the amount of cash generated by our business that can be used for strategic opportunities, including investing in our business and strengthening our balance sheet. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. The usefulness of free cash flow as an analytical tool has limitations because it excludes certain items, which are settled in cash, does not represent residual cash flow available for discretionary expenses, does not reflect our future contractual commitments, and may be calculated differently by other companies in our industry. Accordingly, it should not be considered in isolation or as a substitute for analysis of other GAAP financial measures, such as net cash provided by operating activities. (2) We define unlevered free cash flow as free cash flow plus cash interest paid. (3) We define operating cash flow margin as net cash provided by operating activities as a percentage of revenue. We define free cash flow margin as free cash flow as a percentage of revenue. We define unlevered free cash flow margin as unlevered free cash flow as a percentage of revenue. Z 26#27L LEGALZOOM