LEGALZOOM.COM, INC.
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 4, 2026
LZ$5.24-12.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001286139-26-000031
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0001286139-26-000036
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 168 previous paragraphs and 167 current paragraphs.
105 unchanged; 53 reworded; 8 added; 9 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 32 previous and 32 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
•In September 2026, we entered into an amended partnership agreement (the “Amended Agreement”) with Accounting Fulfillment Services, LLC (“1-800Accountant”), which supersedes the original agreement dated December 15, 2024 (the “Original Agreement”), pursuant to which 1-800Accountant agreed to certain minimum revenue commitments to us across the term of the Original Agreement in exchange for us agreeing to certain obligations to market 1-800Accountant services to our customers, including agreeing to refer a minimum number of our customers to 1-800Accountant. The Amended Agreement extends the initial term through December 31, 2030, after which the Amended Agreement will automatically renew for successive annual terms unless either we or 1-800Accountant provides written notice of non-renewal pursuant to the terms of the Amended Agreement.
Current report
Average order value decreased 12% and 3%, respectively, for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025 primarily due to a decrease in the volume of business formations and related small business transactions.
Current report
Other (expense), net
Current report
Comparison of the Nine Months Ended September 30, 2026 and 2025
Current report
Transaction revenue was flat year-over-year for the nine months ended September 30, 2026 primarily due to an increase in revenue from consumer and IP-related offerings, offset by a decrease in revenue from business formations and related small business transactions.
Current report
The increase in Interest expense was primarily due to an increase in interest accrued in connection with certain sales tax matters during the nine months ended September 30, 2026.
Current report
The change in other income, net, was primarily due to gains recognized in the prior-year period, including a $0.6 million gain from the sale of our investment in LegalVision Pty Ltd and a $0.3 million unrealized gain related to our investment in LawPath.
Current report
Provision for income taxes
Removed paragraphs (9)
Previous report
•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 incur approximately $6.0 million in restructuring charges and related costs, which consist primarily of severance and termination benefits offered to the impacted employees. We expect substantially all of these charges to be cash expenditures and we expect to incur substantially all of these charges in the third quarter of 2026.
Previous report
During the six months ended June 30, 2026, we experienced a 2% increase in business formation transactions compared to the six months ended June 30, 2025 primarily due to the inclusion of a full six months of business formations from Formation Nation, which we acquired on February 10, 2025, and an increase in business formations driven by strategic partnerships, partially offset by the impact of changing customer acquisition dynamics.
Previous report
Average order value decreased 2% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 primarily due to changes in the products comprising our bundled small business offerings, which resulted in an increased allocation of order value shifting to subscription products. This decrease was partially offset by an increase in higher value consumer and IP-related offerings.
Previous report
Average order value increased 1% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily driven by an increase in higher value consumer and IP-related offerings. This increase was partially offset by changes in the products comprising our bundled small business offerings, which resulted in an increased allocation of order value shifting to subscription products.
Previous report
Other (expense) income, net
Previous report
Provision (benefit) for income taxes
Previous report
Comparison of the Six Months Ended June 30, 2026 and 2025
Previous report
Transaction revenue increased 6% year-over-year for the six months ended June 30, 2026 primarily due to a 61% increase in revenue from Annual Report filings within our compliance offerings as a result of filing automation, the inclusion of a full six months of revenue from Formation Nation, which we acquired on February 10, 2025, and an increase in IP-related revenue. The increase in transaction revenue was partially offset by a decrease in revenue from business formations and a decrease in revenue from beneficial ownership report filings following a FinCEN ruling on March 21, 2025 that eliminated this filing requirement for U.S. companies.
Previous report
The change in other income, net, between 2026 and 2025 was primarily due to unfavorable foreign currency exchange activity related to our intercompany loans denominated in British Pound Sterling.
Reworded paragraphs (53)
Previous wording
•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 that Google is making, including changes in search algorithms and the prioritization of AI-generated summaries within the search experience, as well as the ways in which Google chooses to enforce its policy regarding the advertisement of federal filings, are reshaping how potential customers find and engage with LegalZoom. We have seen these changes result in a reduction in organic traffic and a higher emphasis on paid search, and we expect these customer acquisition dynamics to continue to evolve. In response, we are continuing to optimize our go-to-market and customer acquisition strategy, including by diversifying our marketing investments across media channels and increasing our level of brand marketing, which may result in an increase in our marketing costs. We are also expanding beyond traditional search through strategic partnerships and collaborations, including with AI platforms and other emerging channels. Over time, we expect partnership-driven and AI-platform channels to represent a greater share of customer acquisition, and we are investing accordingly. As a result, our operating results depend on the continuation of new business formations in the U.S. and even more so, on our ability to attract new and existing businesses to our platform via various acquisition channels.
Current wording
•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 that Google is making, including changes in search algorithms and the prioritization of AI-generated summaries within the search experience, as well as the ways in which Google chooses to enforce its policy regarding the advertisement of federal filings, are reshaping how potential customers find and engage with LegalZoom. We have seen these changes result in a reduction in organic traffic and a higher emphasis on paid search, and we expect these customer acquisition dynamics to continue to evolve. In response, we are continuing to optimize our go-to-market and customer acquisition strategy, including by diversifying our marketing investments across media channels and increasing our level of brand marketing, which has resulted and may continue to result in an increase in our marketing costs. We are also expanding beyond traditional search through strategic partnerships and collaborations, including with AI platforms and other emerging channels. Over time, we expect partnership-driven and AI-platform channels to represent a greater share of customer acquisition, and we are investing accordingly. As a result, our operating results depend on the continuation of new business formations in the U.S. and even more so, on our ability to attract new and existing businesses to our platform via various acquisition channels.
Previous wording
•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 testing various commercialization and pricing strategies for our offerings and introducing new, higher value, full-service do-it-for-me (“DIFM”) subscription offerings, including our business manager (formerly concierge) suite of offerings. As a result, we have experienced and we expect to continue to experience increased volatility across our key business metrics.
Current wording
•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 testing various commercialization and pricing strategies for our offerings and introducing new, higher value, full-service do-it-for-me (“DIFM”) subscription offerings, including our business manager
Previous wording
The below table sets forth the number of business formations for the three and six months ended June 30, 2026 and 2025:
Current wording
The below table sets forth the number of business formations for the three and nine months ended September 30, 2026 and 2025:
Previous wording
During the three months ended June 30, 2026, we experienced a 5% decrease in business formation transactions compared to the three months ended June 30, 2025 primarily due to the impact of changing customer acquisition dynamics partially offset by an increase in business formations driven by strategic partnerships.
Current wording
During the three and nine months ended September 30, 2026, we experienced a 13% and 3% decrease, respectively, in business formation transactions compared to the three and nine months ended September 30, 2025 primarily due to the impact of changing customer acquisition dynamics partially offset by an increase in business formations driven by strategic partnerships.
Previous wording
The below table sets forth the number of transactions for the three and six months ended June 30, 2026 and 2025:
Current wording
The below table sets forth the number of transactions for the three and nine months ended September 30, 2026 and 2025:
Previous wording
We experienced a 1% increase in the number of transactions during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to an increase in Annual Report filings within our compliance offerings as a result of filing automation, partially offset by the decrease in business formations.
Current wording
We experienced a 4% decrease in the number of transactions during the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to a decrease in business formations and related small business transactions, partially offset by an increase in Annual Report filings within our compliance offerings as a result of filing automation.
Previous wording
We experienced a 6% increase in the number of transactions during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to an increase in Annual Report filings within our compliance offerings as a result of filing automation and an increase in business formations, partially offset by a decrease in beneficial ownership information report filings following a Financial Crimes Enforcement Network (“FinCEN”) ruling on March 21, 2025 that eliminated this filing requirement for U.S. companies.
Current wording
We experienced a 3% increase in the number of transactions during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to an increase in Annual Report filings within our compliance offerings as a result of filing automation, partially offset by a decrease in beneficial ownership information report filings following a Financial Crimes Enforcement Network (“FinCEN”) ruling on March 21, 2025 that eliminated this filing requirement for U.S. companies.
Previous wording
The below table sets forth the average order value for the three and six months ended June 30, 2026 and 2025:
Current wording
The below table sets forth the average order value for the three and nine months ended September 30, 2026 and 2025:
Previous wording
We consider the number of subscription units to be an important metric since subscriptions enable us to increase the lifetime value of a customer through deeper, longer-term relationships. In addition, as we continue to innovate our product line-up, including by testing varying price points for our products and evaluating our commercialization strategy, we believe the number of subscription units, when viewed together with the number of business formations during a particular period, provides insight into the effectiveness of our efforts to drive growth in our subscription business.
Current wording
We consider the number of subscription units to be an important metric since subscriptions enable us to increase the lifetime value of a customer through deeper, longer-term relationships. In addition, as we continue to innovate our product line-up, including by testing various commercialization and pricing strategies, we believe the number of subscription units, when viewed together with the number of business formations during a particular period, provides insight into the effectiveness of our efforts to drive growth in our subscription business.
Previous wording
We experienced a 3% decrease in subscription units from June 30, 2025 to June 30, 2026 due to a decrease in forms and eSignature subscriptions as well as accounting solutions and a decrease in registered agent subscriptions, partially offset by an increase in legal advisory subscriptions from the bundling of this subscription into certain business formation offerings, as well as increases in compliance subscriptions and virtual mail subscriptions.
Current wording
We experienced a 5% decrease in subscription units from September 30, 2025 to September 30, 2026 due to a decrease in accounting solution subscriptions, as well as lower forms and eSignature and registered agent subscriptions, partially offset by an increase in legal advisory subscriptions, as well as increases in compliance subscriptions and virtual mail subscriptions. The decrease in accounting solution subscriptions and the increase in legal advisory subscriptions were both due to changes in our business formation bundles as we continue to test various commercialization strategies for our offerings.
Previous wording
On a sequential basis, the number of subscription units decreased 1% as of June 30, 2026 compared to March 31, 2026.
Current wording
On a sequential basis, the number of subscription units decreased 2% as of September 30, 2026 compared to June 30, 2026.
Previous wording
ARPU increased 5% as of June 30, 2026 compared to June 30, 2025 benefiting from pricing initiatives on our registered agent subscriptions, partially offset by a shift in mix towards our lower priced subscription offerings, including forms and eSignature and accounting solutions, due to the bundling of these products into certain business formation offerings.
Current wording
ARPU increased 9% as of September 30, 2026 compared to September 30, 2025 benefiting from pricing initiatives on our registered agent subscriptions and an increase in higher-value legal advisory subscriptions.
Previous wording
On a sequential basis, ARPU as of June 30, 2026 increased 3% compared to March 31, 2026.
Current wording
On a sequential basis, ARPU as of September 30, 2026 increased 4% compared to June 30, 2026.
Previous wording
For transaction and subscription revenue, we generally collect payments and fees at the time orders are placed and prior to services being rendered. We record amounts collected for services that have not been performed as deferred revenue on our unaudited condensed consolidated balance sheet. The transaction price that we record is generally based on the contractual amounts and is reduced for estimated sales allowances for price concessions, charge-backs, sales credits and refunds, which are accounted for as variable consideration when estimating the amount of revenue to recognize.
Current wording
The timing of revenue recognition, billings and cash collections results in accounts receivable and contract assets. For transaction and subscription revenue, we generally collect payments and fees at the time orders are placed and prior to services being rendered. We record amounts collected for services that have not been performed as deferred revenue on our unaudited condensed consolidated balance sheet. We record amounts recognized as revenue but not yet billed as contract assets within accounts receivable on our unaudited condensed consolidated balance sheets. The transaction price that we record is generally based on the contractual amounts and is reduced for estimated sales allowances for price concessions, charge-backs, sales credits and refunds, which are accounted for as variable consideration when estimating the amount of revenue to recognize.
Previous wording
Other (expense) income, net consists of realized and unrealized foreign currency gains and losses.
Current wording
Other (expense) income, net consists primarily of realized and unrealized foreign currency gains and losses, changes in fair value of investments, and other non-operating gains and losses.
Previous wording
Our provision for (benefit from) income taxes consists of current and deferred federal, state and foreign income taxes.
Current wording
Our provision for income taxes consists of current and deferred federal, state and foreign income taxes.
Previous wording
Stock-based compensation expense decreased for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, primarily due to lower expense from performance stock units (“PSUs”), including certain awards with market conditions granted in prior periods, as well as lower expense from time-based restricted stock units (“RSUs”). See Note 8 to our unaudited condensed consolidated financial statements and Note 14 to our consolidated financial statements included in our 2025 Annual Report on Form 10-K for additional information.
Current wording
Stock-based compensation expense decreased for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025, primarily due to lower expense from performance stock units (“PSUs”), including certain PSUs with market conditions granted in prior periods, as well as lower expense from time-based restricted stock units (“RSUs”). See Note 8 to our accompanying unaudited condensed consolidated financial statements and Note 14 to our consolidated financial statements included in our 2025 Annual Report on Form 10-K for additional information.
Previous wording
The increase in total revenue for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was driven by continued growth in subscription revenue. Subscription revenue represented 65% and 62% of total revenue for the three months ended June 30, 2026 and 2025, respectively. Transaction revenue represented 35% and 38% of total revenue for the three months ended June 30, 2026 and 2025, respectively.
Current wording
The increase in total revenue for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was driven by continued growth in subscription revenue. Subscription revenue represented 72% and 66% of total revenue for the three months ended September 30, 2026 and 2025, respectively. Transaction revenue represented 28% and 34% of total revenue for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
Transaction revenue decreased 1% year-over-year for the three months ended June 30, 2026 due to a decrease in revenue from small business transactions, partially offset by higher consumer and IP-related revenue.
Current wording
Transaction revenue decreased 14% year-over-year for the three months ended September 30, 2026 due to a 17% decrease in revenue from business formations and related small business transactions.
Previous wording
Subscription revenue increased 12% year-over-year for the six months ended June 30, 2026 primarily due to a 37% increase in revenue from our legal advisory subscriptions from the bundling of this subscription into certain business formations, a 14% increase in revenue from our registered agent subscriptions due to pricing initiativesfor these subscriptionsand an increase in revenue from our compliance offerings. The increase in subscription revenue was partially offset by our prior discontinuation of new customer acquisition for our tax offering.
Current wording
Subscription revenue increased 11% year-over-year for thethree months ended September 30, 2026 primarily due to a 33% increase in revenue from our legal advisory subscriptions due to the bundling of this subscription into certain business formation offerings, as well as a 14% increase in revenue from our compliance offerings due to certain pricing initiatives, and strength in our virtual mail subscription offering. The increase in subscription revenue was partially offset by a decrease in revenue from accounting solution subscriptions due to changes in the commercialization of certain business formation bundles, as well as lower revenue from forms and eSignature subscriptions.
Previous wording
Cost of revenue for the three months ended June 30, 2026 decreased by $2.0 million primarily due to a $1.3 million decrease in payroll and related benefits, largely driven by a lower average headcount, a $1.0 million decrease in depreciation and amortization expense and an $0.8 million decrease in filing fees. These decreases were partially offset by a $0.7 million increase in credit card fees and a $0.6 million increase in sales and use tax expense.
Current wording
Cost of revenue for the three months ended September 30, 2026 decreased by $5.2 million compared to the three months ended September 30, 2025, primarily due to a $2.5 million decrease in filing fees, a $1.8 million decrease in payroll and related benefits, largely driven by a lower average headcount, and a $1.3 million decrease in depreciation and amortization expense.
Previous wording
Gross profit for the three months ended June 30, 2026 increased by $14.8 million compared to the three months ended June 30, 2025 due to a $12.8 million increase in revenue and a $2.0 million decrease in cost of revenue.
Current wording
Gross profit for the three months ended September 30, 2026 increased by $10.2 million compared to the three months ended September 30, 2025 due to a $5.0 million increase in revenue and a $5.2 million decrease in cost of revenue.
Previous wording
Sales and marketing expenses for thethree months ended June 30, 2026 increased by $9.3 million primarily due to a $5.9 million increase in customer acquisition marketing spend. Customer acquisition marketing spend was $52.6 million and $46.7 million for the three months ended June 30, 2026 and 2025, respectively, reflecting increased spending due to diversification of investments in brand and partnerships. Additionally, there was a $1.1 million increase in payroll and related benefits largely due to an increase in sales and marketing headcount, and a $0.8 million increase in depreciation and amortization.
Current wording
Sales and marketing expenses for thethree months ended September 30, 2026 increased by $9.1 million compared to the three months ended September 30, 2025, primarily due to a $6.9 million increase in customer acquisition marketing spend. Customer acquisition marketing spend was $51.1 million and $44.2 million for the three months ended September 30, 2026 and 2025, respectively, reflecting changes in the mix of investments across customer acquisition channels. Additionally, there was a $1.4 million increase in consulting costs and a $1.1 million increase in depreciation and amortization.
Previous wording
Technology and development expenses for the six months ended June 30, 2026 decreased by$3.3 million primarily due to a$6.7 million decrease in payroll and related benefits, largely driven by a reduction in technology and development headcount. These decreases were partially offset by a$4.2 million decrease in capitalized software development costs and a$0.9 million increase in technology licensing costs.
Current wording
Technology and development expenses for the three months ended September 30, 2026 decreased by$5.2 million compared to the three months ended September 30, 2025, primarily due to a$7.8 million decrease in payroll and related benefits driven by a reduction in technology and development headcount. These decreases were partially offset by a$2.0 million increase in expense resulting from a decrease in capitalized software development costs.
Previous wording
General and administrative expenses for the three months ended June 30, 2026 decreased by$6.6 million compared to the three months ended June 30, 2025. The decrease was primarily due to a$5.4 million decrease in stock-based compensation expense driven by lower expense from PSUs, including awards with market conditions granted in prior periods, as well as a reduction in expense from RSUs.
Current wording
General and administrative expenses for the three months ended September 30, 2026 decreased by$0.8 million compared to the three months ended September 30, 2025. The decrease was primarily due to a$6.9 million decrease in stock-based compensation expense driven by lower expense from PSUs, including PSUs with market conditions granted in prior periods, as well as a reduction in expense from RSUs. This decrease was partially offset by a$5.7 million increase in restructuring costs, primarily related to the restructuring activity completed during the three months ended September 30, 2026.
Previous wording
The change in interest income was primarily due to lower average interest-earning cash balances during the three months ended June 30, 2026.
Current wording
The change in interest income was primarily due to lower dividend income from money market investments during the three months ended September 30, 2026.
Previous wording
The change in other (expense) income, net, was primarily due to unfavorable foreign exchange activity during the three months ended June 30, 2026.
Current wording
The change in other (expense) income, net, was primarily due to a $0.1 million loss on debt extinguishment recognized during the three months ended September 30, 2025, in connection with our Amended Revolving Facility, compared to foreign currency-related expenses recognized during the three months ended September 30, 2026.
Previous wording
There was a $7.2 million increase in the provision for income taxes for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The change was primarily due to higher pre-tax income and decreased excess tax benefits from stock-based compensation for the three months ended June 30, 2026.
Current wording
There was a $2.9 million increase in the provision for income taxes for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily due to higher pre-tax income and decreased excess tax benefits from stock-based compensation for the three months ended September 30, 2026.
Previous wording
The increase in total revenue for the six months ended June 30, 2026 was primarily driven by an increase in subscription revenue. Subscription revenue was 64% and 63% of total revenue for the six months ended June 30, 2026 and 2025, respectively, and transaction revenue was 36% and 37% of total revenue for the six months ended June 30, 2026 and 2025, respectively.
Current wording
The increase in total revenue for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily driven by an increase in subscription revenue. Subscription revenue was 66% and 64% of total revenue for the nine months ended September 30, 2026 and 2025, respectively, and transaction revenue was 34% and 36% of total revenue for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Subscription revenue increased 11% year-over-year for thethree months ended June 30, 2026 primarily due to a 39% increase in revenue from our legal advisory subscriptions due to the bundling of this subscription into certain business formation offerings, an 11% increase in revenue from our registered agent subscriptions due certain pricing initiatives for these subscriptions and an increase in revenue from our compliance offerings. Subscription revenue growth was partially offset by our prior discontinuation of new customer acquisition for our tax offering.
Current wording
Subscription revenue increased 12% year-over-year for the nine months ended September 30, 2026 primarily due to a 28% increase in revenue from our legal advisory subscriptions from the bundling of these subscriptions into certain business formation offerings, and an increase in revenue from our registered agent and compliance subscriptions due to pricing initiatives. The increase in subscription revenue was partially offset by our prior discontinuation of new customer acquisition for our tax offering.
Previous wording
Cost of revenue for the six months ended June 30, 2026 increased by $5.9 million mainly due to a $7.9 million increase in filing fees and a $1.7 million increase in credit card fees primarily due to a full six months of revenue from Formation Nation, which we acquired on February 10, 2025. These increases were partially offset by a $1.8 million decrease in depreciation and amortization expense, a $1.3 million decrease in third party fees for customer care which were replaced by tax and attorney services, and a $1.1 million decrease in payroll and related benefits due to a decrease in average headcount.
Current wording
Cost of revenue for the nine months ended September 30, 2026 increased by $0.7 million compared to the nine months ended September 30, 2025, mainly due to a $5.4 million increase in filing fees and a $2.2 million increase in credit card fees. These increases were partially offset by a $3.1 million decrease in depreciation and amortization expense, a $2.5 million decrease in payroll and related benefits due to a decrease in average headcount and a $1.7 million decrease in third party fees for customer care.
Previous wording
The increase in gross profit was driven by a $36.5 million increase in revenue partially offset by a $5.9 million increase in cost of revenue.
Current wording
The increase in gross profit was driven by a $41.4 million increase in revenue partially offset by a $0.7 million increase in cost of revenue.
Previous wording
Sales and marketing expenses for the six months ended June 30, 2026 increased by $26.6 million primarily due to a $16.8 million increase in customer acquisition marketing spend. Customer acquisition marketing spend was $107.7 million and $90.9 million for the six months ended June 30, 2026 and 2025, respectively, reflecting increased spending due to diversification of investments in brand and partnerships. Sales and marketing expenses also increased as a result of a $5.6 million increase in payroll and related benefits due to an increase in average headcount and a $2.3 million increase in amortization and depreciation.
Current wording
Sales and marketing expenses for the nine months ended September 30, 2026 increased by $35.6 million compared to the nine months ended September 30, 2025, primarily due to a $23.6 million increase in customer acquisition marketing spend. Customer acquisition marketing spend was $158.8 million and $135.2 million for the nine months ended September 30, 2026 and 2025, respectively, reflecting changes in the mix of investments across customer acquisition channels. Sales and marketing expenses also increased due to a $5.2 million increase in payroll and related benefits, reflecting a $7.2 million increase in salaries and payroll-related costs, primarily due to higher average headcount during most of the period and a $3.3 million increase in amortization and depreciation, partially offset by a $1.9 million decrease in stock-based compensation expense.
Previous wording
Technology and development expenses for the three months ended June 30, 2026 decreased by$1.6 million primarily due to a$3.5 million decrease in payroll and related benefits driven by a reduction in technology and development headcount. These decreases were partially offset by a $1.8 million decrease in capitalized software development costs.
Current wording
Technology and development expenses for the nine months ended September 30, 2026 decreased by$8.5 million compared to the nine months ended September 30, 2025, primarily due to a$14.6 million decrease in payroll and related benefits, largely driven by a reduction in technology and development headcount. These decreases were partially offset by a$6.3 million decrease in capitalized software development costs.
Previous wording
General and administrative expenses for the six months ended June 30, 2026 decreased by$14.6 million compared to thesix months ended June 30, 2025. The decrease was primarily due to a$13.0 million decrease in stock-based compensation expense driven by lower expense from PSUs, including awards with market conditions granted in prior periods, as well as a reduction in expense from RSUs. The decrease was also due to a $2.4 million reduction in consulting costs, primarily due to transaction-related costs incurred during the prior-year period.
Current wording
General and administrative expenses for the nine months ended September 30, 2026 decreased by$15.4 million compared to thenine months ended September 30, 2025. The decrease was primarily due to a$19.8 million decrease in stock-based compensation expense driven by lower expense from PSUs, including PSUs with market conditions granted in prior periods, as well as a reduction in expense from RSUs. The decrease was also due to a $0.8 million reduction in consulting costs, primarily due to transaction-related costs incurred during the prior-year period. These decreases were partially offset by a $5.9 million increase in restructuring costs, primarily related to the restructuring activity completed during the three months ended September 30, 2026.
Previous wording
Gain on sale of assets held for sale for thesix months ended June 30, 2025 was$14.3 million due to the sale of our operational headquarters on March 31, 2025.
Current wording
Gain on sale of assets held for sale for thenine months ended September 30, 2025 was$14.3 million due to the sale of our operational headquarters on March 31, 2025.
Previous wording
The change in interest income was primarily due to lower average cash balances during the six months ended June 30, 2026.
Current wording
The change in interest income was primarily due to lower dividend income earned on money market investments during the nine months ended September 30, 2026 compared to the prior-year period.
Previous wording
There was a $4.5 million increase in the provision for income taxes for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The change was primarily due to higher pre-tax income and decreased excess tax benefits from stock-based compensation for the six months ended June 30, 2026.
Current wording
There was a $7.4 million increase in the provision for income taxes for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The change was primarily due to higher pre-tax income and decreased excess tax benefits from stock-based compensation for the nine months ended September 30, 2026.
Previous wording
We fund our operations and capital expenditures from cash flows from operating activities. Our primary requirements for liquidity and capital are to finance working capital, capital expenditures and general corporate purposes. As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents of $167.2 million, which consisted of cash on deposit with banks and money market funds, of which approximately $4.2 million related to our foreign subsidiaries. Our cash and cash equivalents decreased by $35.9 million from December 31, 2025 to June 30, 2026, primarily as a result of cash used in financing activities, including repurchases of common stock, shares surrendered for settlement of minimum statutory tax withholding as well as the payment of deferred consideration for the Formation Nation acquisition partially offset by cash provided by operating activities.
Current wording
We fund our operations and capital expenditures from cash flows from operating activities. Our primary requirements for liquidity and capital are to finance working capital, capital expenditures and general corporate purposes. As of September 30, 2026, our principal sources of liquidity were cash and cash equivalents of $181.7 million, which consisted of cash on deposit with banks and money market funds, of which approximately $4.7 million related to our foreign subsidiaries. Our cash and cash equivalents decreased by $21.4 million from December 31, 2025 to September 30, 2026, primarily as a result of cash used in financing activities, including repurchases of common stock, shares surrendered for settlement of minimum statutory tax withholding and the payment of deferred consideration for the Formation Nation acquisition, as well as capital expenditures partially offset by cash provided by operating activities.
Previous wording
In October 2023, our board of directors approved a stock repurchase program authorizing repurchases of our common stock with no fixed expiration. In February 2026, our board of directors approved a $100.0 million increase in our stock repurchase program, bringing the aggregate amount authorized to $415.0 million. Approximately$80.4 million remained available for future repurchases under the stock repurchase program as of June 30, 2026. For additional information regarding our stock repurchase program, refer to Note 7 to our unaudited condensed consolidated financial statements.
Current wording
In October 2023, our board of directors approved a stock repurchase program authorizing repurchases of our common stock with no fixed expiration. In February 2026, our board of directors approved a $100.0 million increase in our stock repurchase program, bringing the aggregate amount authorized to $415.0 million. Approximately$65.8 million remained available for future repurchases under the stock repurchase program as of September 30, 2026. For additional information regarding our stock repurchase program, refer to Note 7 to our unaudited condensed consolidated financial statements.
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Current report — wording carried from elsewhere
(formerly concierge) suite of offerings. As a result, we have experienced and we expect to continue to experience increased volatility across our key business metrics.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Interest expense consists primarily of interest incurred on the deferred cash consideration associated with the acquisition of Formation Nation as well as amortization of debt issuance costs related to our Revolving Facility as well as our Amended Revolving Facility.