LegalZoom.com, Inc. (NASDAQ:LZ) Q1 2023 Results Conference Call May 9, 2023 4:30 PM ET

Company Participants

Sarah Bland - Securities Counsel

Dan Wernikoff - CEO

Noel Watson - CFO

Conference Call Participants

Andrew Boone - JMP Securities

Matthew Pfau - William Blair

Jack Butler - Barclays

Ron Josey - Citi

Sang-Jin Byun - Jefferies

Jackson Ader - SVB MoffetNathanson

Elizabeth Porter - Morgan Stanley

Operator

Good day, and thank you for standing by. Welcome to LegalZoom's First Quarter 2023 Earnings Conference Call. [Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sarah Bland, Securities Counsel. Please go ahead.

Sarah Bland

Thank you, operator. Hello, and welcome to LegalZoom's First Quarter 2023 Earnings Conference Call. Joining me today is Dan Wernikoff, our Chief Executive Officer; and Noel Watson, our Chief Financial Officer.

As a reminder, we will be making forward-looking statements on this call. These forward-looking statements can be identified by the use of words such as believe, expect, plan, anticipate, will, intend, and similar expressions and are not and should not be relied upon as a guarantee of future performance or results. Such forward-looking statements are based on management's assumptions and expectations and information available to us as of today's date. These forward-looking statements are also subject to risks and uncertainties that could cause actual results to differ materially from such statements. These risks and uncertainties are referred to in the press release we issued today and in the Risk Factors section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission. Except as required by law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future results or otherwise. In addition, we will also discuss certain non-GAAP financial measures. Our CEO and CFO use these measures in making decisions regarding our business, and we believe these measures provide helpful information to investors.

Reconciliations of all non-GAAP measures to the most directly comparable GAAP measures are set forth in the Investor Relations section of our website at investors.legalzoom.com. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

Now I'll turn the call over to Dan.

Dan Wernikoff

Thanks, Sarah, and good afternoon, everyone. I'm excited to share our strong performance as we kick off 2023. I'll start with a brief overview of Q1 results. Revenue came in at $166 million, up 7% year-over-year. Transaction revenue was down 5%, while subscription revenue was up 15%. LegalZoom business formations grew 32% year-over-year to 170,000 units. U.S. Census formation were up 4% to $1.5 million for the quarter. The resulting share gain was 27%, which is the largest gain we've seen since we began tracking it. Adjusted EBITDA was $22 million for the quarter or 13% margin. These results reflect the bulk of traffic going to a premium line of test over the full quarter, and then more specifically, all traffic being directed to the winning lineup at the beginning of March.