LegalZoom.com Results Presentation Deck
Reconciliation 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
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