LZ · Technology(services-computer processing & data preparation) · 10 years of annual accounts filed with the SEC · latest fiscal year ended 2025-12-31
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LEGALZOOM.COM, Inc. reported revenue of $756.0 million in fiscal 2025, after growing 7.1% a year over the previous 9 years. Its operating margin narrowed from 11.3% in 2019 to 3.3%. Of the $711.9 million its operations generated over 10 years, 56.5% went to buybacks and 22.5% back into the business; the share count rose 43.7%. On the accounting screens, it passes 5 of 8 Piotroski tests and its Altman Z'' of -7.35 is in the distress zone; 1 of the six cross-checks between its statements fires.
Revenue, fiscal 2025756.0M+7.1% a year over 9 years
Operating margin3.3%gross margin 65.9%
Return on invested capital—
Free cash flow after stock pay34.2M4.5% of revenue
Net debt ÷ EBITDA—net debt —
Piotroski F-score5/8tests of improvement passed
Is it growing?
Revenue and the operating income it turns into. Growth that does not reach operating income is growth bought with margin.
RevenueOperating income
-250.0M0250.0M500.0M750.0M1.0B
2019Revenue 408.4MOperating income 46.3M
2020Revenue 470.6MOperating income 48.9M
2021Revenue 575.1MOperating income -85.1M
2022
2022
2022
2022Revenue 620.0MOperating income -41.7M
2023Revenue 660.7MOperating income 21.1M
2024Revenue 681.9MOperating income 35.6M
2025Revenue 756.0MOperating income 25.0M
2019202020212022202220222022202320242025
Compound growth a year
3 yrs
5 yrs
9 yrs
Revenue
+6.8%
—
+7.1%
Operating income
—
—
-6.6%
Net income
—
—
+8.4%
Earnings per share
—
—
+4.2%
Free cash flow per share
+44.7%
—
+13.0%
Shares
-1.9%
+293.4%
+4.1%
Falling shares are buybacks: each remaining share owns more of the company.
Does it earn more than its capital costs?
Margins say how much of each sale is kept; return on invested capital says how much the business earns on the money it needs to operate. Growth only creates value when that return is above the cost of the capital.
Needs a cost of capital, which comes from the valuation below.
Return on equity
9.0%
Return on assets
3.0%
Asset turnover
1.48×
Is the profit cash, and where does the cash go?
Net income is an accounting opinion; free cash flow is what was left in the bank after investing. Stock-based pay does not leave the bank — shareholders pay it through dilution — so it is shown taken off as well.
Net incomeFree cash flowAfter stock-based pay
-200.0M-100.0M0100.0M200.0M
2019Net income 7.4MFree cash flow 34.3MAfter stock-based pay 29.2M
2020Net income 9.9MFree cash flow 82.5MAfter stock-based pay 69.6M
2021Net income -108.7MFree cash flow 42.4MAfter stock-based pay -70.2M
2022
2022
2022
2022Net income -48.7MFree cash flow 51.7MAfter stock-based pay -28.7M
2023Net income 14.0MFree cash flow 92.7MAfter stock-based pay 26.7M
2024Net income 30.0MFree cash flow 99.9MAfter stock-based pay 28.4M
2025Net income 15.4MFree cash flow 147.9MAfter stock-based pay 34.2M
2019202020212022202220222022202320242025
Where 10 years of operating cash went, 2019–2025
711.9M generated by the business. Each band is its share of that total.
Reinvested in the business 23%160.3M
Acquisitions 16%113.5M
Dividends 0%0
Share buybacks 56%401.9M
Kept, or used to pay down debt 5%36.2M
Over the same years it paid 462.4M in stock. The share count rose 43.7%. The buybacks did not even cover what was handed out in stock.
Per share
Earnings per shareFree cash flow per shareDividend per share
$-1.00$-0.50$0.00$0.50$1.00
2019Earnings per share $0.06Free cash flow per share $0.27
2020Earnings per share $0.08Free cash flow per share $0.65
2021Earnings per share $-0.67Free cash flow per share $0.26
2022
2022
2022
2022Earnings per share $-0.25Free cash flow per share $0.26
2023Earnings per share $0.07Free cash flow per share $0.48
2024Earnings per share $0.16Free cash flow per share $0.55
2025Earnings per share $0.08Free cash flow per share $0.80
2019202020212022202220222022202320242025
Shares outstanding
Diluted shares
050.0M100.0M150.0M200.0M
2019Diluted shares 128.5M
2020Diluted shares 127.3M
2021Diluted shares 161.4M
2022Diluted shares 198,599
2022Diluted shares 196,076
2022Diluted shares 193,848
2022Diluted shares 195.8M
2023Diluted shares 194.4M
2024Diluted shares 182.9M
2025Diluted shares 184.7M
2019202020212022202220222022202320242025
How strong is the balance sheet?
Debt is not bad in itself; debt the business cannot service in a bad year is. Net debt is debt minus cash, and below zero the company holds more cash than it owes.
Net debt
-400.0M-200.0M0200.0M400.0M600.0M
2019
2020Net debt 400.9M
2021Net debt -239.3M
2022
2022
2022
2022
2023
2024
2025
2019202020212022202220222022202320242025
Net debt ÷ EBITDA
—
Interest coverage
19× operating income ÷ interest
Current ratio
0.76 current assets ÷ current liabilities
Cash conversion cycle
— collects in 10d
Three classic screens of the accounts
Each asks a different question of the same statements — is it improving, does it look like a company heading for distress, do the accounts resemble ones that were manipulated. None is a verdict; each shows what moves it.
Piotroski F-score
Is the business improving? Nine yes-or-no tests, this year against last.
5of 8 tests passed
✓ProfitableReturn on assets above zeropassed
✓Cash from operationsOperating cash flow above zeropassed
✕Profitability improvedReturn on assets higher than a year beforefailed
✓Profit backed by cashOperating cash flow above net income (low accruals)passed
–Less long-term debtLong-term debt as a share of assets fell — not reportedno data
✓More liquidCurrent ratio higher than a year beforepassed
✕No new sharesShare count did not growfailed
✓Better gross marginGross margin higher than a year beforepassed
✕Sells more per assetAsset turnover higher than a year beforefailed
Where it misleads: it measures change, not level. An excellent business that stood still for a year scores low; a poor one recovering from a disaster scores high.
Altman Z''-score
Does the balance sheet look like those of companies that went bankrupt?
-7.35distress zone
1.12.6
Working capital ÷ assets -0.15 × 6.56-0.98
Retained earnings ÷ assets -2.22 × 3.26-7.23
Operating income ÷ assets 0.05 × 6.72+0.33
Equity ÷ liabilities 0.51 × 1.05+0.53
Where it misleads: buybacks. A company that returns so much cash that its equity turns small or negative sinks the last two ratios without being anywhere near bankruptcy. Banks and insurers do not fit the model at all.
Beneish M-score
Do the accounts resemble those of companies that manipulated their earnings?
The accounts lack too many of the lines it needs.
Where the statements disagree
Cross-checks between the income statement, the balance sheet and the cash flow for the latest year, each with the benign reading and the worrying one.
Receivables are growing 142% against revenue growing 11%.
Benign
A shift towards larger customers on longer terms, or sales concentrated at the end of the period.
Worrying
Sales are being made on looser credit, or revenue has been booked that may never be collected.
What is it worth, under which assumptions?
A company is worth the cash it will generate, brought back to today. This model projects revenue with growth that fades over the years, applies a free cash flow margin, and discounts the result at the cost of capital. Every assumption says where it came from, and all of them can be changed.
With a free cash flow margin at or below zero in year ten, the business never generates cash for its owners and a DCF says nothing useful. Set a positive margin for year ten to see what it would take.
What it has filed lately
The last twelve months at the SEC, most important first: annual and quarterly reports, events, large holders and insiders.
Every Form 4 filed in the last twelve months, read line by line: 6 filings by 4 people. Open-market purchases and sales are counted apart from awards, option exercises and shares withheld for taxes.
Bought on the open market—none in the period
Sold on the open market$3.4M4 sale(s) by 2 insider(s)
Under pre-arranged plans50%of the sales followed a 10b5-1 plan set months earlier
A Form 4 says what happened, when, how many shares and at what price. It does not say why: a sale can be diversification, a tax bill or a plan fixed months earlier, and an award is pay, not a purchase. Nothing here is a reason to buy or sell anything.
Which large funds report holding it
From the Form 13F of the 28 institutions followed on this site, as of the end of their last reported quarter. A 13F is filed up to 45 days later and shows only long positions in US-listed shares.
Accounts from the company's own SEC filings; lines some companies do not report are shown as a dash rather than estimated. The risk-free rate is the 10-year US Treasury yield. A DCF is a way of making assumptions explicit, not a forecast: it states what the company would be worth if the assumptions held. The scores are screens that point where to look, not verdicts. Nothing here is a recommendation to buy or sell.
