CS Disco, Inc.

Previous wording

We generate substantially all of our revenue from our customers’ actual usage of ourproduct offerings. Customers generally do not commit to purchase a specific amount of usage on ourproduct offerings and their usage can fluctuate based on the number and nature of legal matters they have at any particular time. As a result, our revenue and other financial results can fluctuate from period to period given the inherent unpredictability of the timing, duration and scope of legal casework. We also offer our customers the option to enter into subscriptions based on committed minimum usage on an annual or multi-year basis, which represented 9% and 10% of our revenue for the three and nine months ended September 30, 2025, respectively, and 11% of our revenue in each of thethree and nine months ended September 30, 2024. In addition, we generate revenue from a range of professional services aimed at accelerating the time-to-value for our customers.

Current wording

We generate substantially all of our revenue from our customers’ actual usage of ourproduct offerings. Customers generally do not commit to purchase a specific amount of usage on ourproduct offerings and their usage can fluctuate based on the number and nature of legal matters they have at any particular time. As a result, our revenue and other financial results can fluctuate from period to period given the inherent unpredictability of the timing, duration and scope of legal casework. We also offer our customers the option to enter into subscriptions based on committed minimum usage on an annual or multi-year basis, which represented 9% and 10% of our revenue for the three months ended March 31, 2026 and 2025, respectively. In addition, we generate revenue from a range of professional services aimed at accelerating the time-to-value for our customers.

Previous wording

As of September 30, 2025, we had $28.8 million of cash and cash equivalents and $84.7 million of short-term investments. We generated revenue of $40.9 million and $36.3 million in the three months ended September 30, 2025 and 2024, respectively, representing a period-over-period growth of 13%, and $115.7 million and $107.8 million in the nine months ended September 30, 2025 and 2024, respectively, representing a period-over-period growth of 7%. Our net loss was $13.7 million and $9.2 million for the three months ended September 30, 2025 and 2024, respectively, and $35.9 million and $30.6 million for the nine months ended September 30, 2025 and 2024, respectively.

Current wording

As of March 31, 2026, we had $17.6 million of cash and cash equivalents and $85.4 million of short-term investments. We generated revenue of $41.9 million and $36.7 million in the three months ended March 31, 2026 and 2025, respectively, representing a period-over-period growth of 14%. Our net loss was $9.6 million and $11.4 million for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

We generated Adjusted EBITDA of $(0.3) million and $(4.5) million in the three months ended September 30, 2025 and 2024, respectively, and $(8.1) million and $(14.4) million in the nine months ended September 30, 2025 and 2024, respectively. See the section titled “—Non-GAAP Financial Measure” for the definition of Adjusted EBITDA, as well as a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP.

Current wording

We generated Adjusted EBITDA of $(3.5) million and $(5.1) million in the three months ended March 31, 2026 and 2025, respectively. See the section titled “—Non-GAAP Financial Measure” for the definition of Adjusted EBITDA, as well as a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP.

Previous wording

Unfavorable conditions in the economy, both in the United States and abroad, may negatively affect the growth of our business and our results of operations. For example, negative conditions in the general economy both in the United States and abroad, including conditions resulting from fluctuations in inflation and interest rates, the imposition of tariffs in the United States and abroad, and the Russia-Ukraine war and conflict in the Middle East, have led to economic uncertainty globally. Historically, during periods of economic uncertainty and downturns, businesses may slow spending on information technology, which may impact our business and our customers’ businesses.

Current wording

Unfavorable conditions in the economy, both in the United States and abroad, may negatively affect the growth of our business and our results of operations. For example, negative conditions in the general economy both in the United States and abroad, including conditions resulting from fluctuations in inflation and interest rates, the imposition of tariffs in the United States and abroad, and the Russia-Ukraine war, the war in Iran and the broader conflict and escalating tensions in the Middle East, have led to economic uncertainty globally. Historically, during periods of economic uncertainty and downturns, businesses may slow spending on information technology, which may impact our business and our customers’ businesses.

Previous wording

Further, unfavorable conditions in the legal industry may negatively affect the growth of our business and our results of operations. For example, in March 2025, President Trump issued executive orders against certain law firms with whom we partner, which could have the effect of restricting the ability of such firms to practice law in matters involving the federal government or under the jurisdiction of the federal court system. While we have not to date observed any adverse impact to our revenue from these law firm partners as a result of the executive orders, the validity of certain of these executive orders continues to be litigated in the federal court system and we cannot be certain that there will be no future adverse impact on our law firm partners’ usage of our product offerings or that our law firm partners’ clients will continue to engage such firms for their legal services. Additionally, under President Trump, certain federal agencies have decreased their levels of enforcement under President Trump. Finally, as of October 20, 2025, U.S. Federal courts are operating in a limited capacity until the lapse in government funding resulting from the U.S. government shutdown is resolved and operations are being determined on a court-by-court basis. To the extent the current government shutdown continues, or future shutdowns of the U.S. government occur, there may be delays in the advancement of litigation in the Federal courts government investigations or enforcement actions. Any of these factors could have the effect of reducing the volume of major legal matters experienced and, therefore, the usage of our product offerings.

Current wording

Further, unfavorable conditions in the legal industry may negatively affect the growth of our business and our results of operations. For example, in March 2025, President Trump issued executive orders against certain law firms with whom we partner, which could have the effect of restricting the ability of such firms to practice law in matters involving the federal government or under the jurisdiction of the federal court system. While we have not to date observed any adverse impact to our revenue from these law firm partners as a result of the executive orders, the validity of certain of these executive orders continues to be litigated in the federal court system and we cannot be certain that there will be no future adverse impact on our law firm partners’ usage of our product offerings or that our law firm partners’ clients will continue to engage such firms for their legal services. Additionally, under President Trump, certain federal agencies have decreased their levels of enforcement. Finally, as a result of any future shutdowns of the U.S. government, there may be delays in the advancement of litigation in the Federal courts government investigations or enforcement actions. Any of these factors could have the effect of reducing the volume of major legal matters experienced and, therefore, the usage of our product offerings.

Previous wording

Our success depends in part on our ability to maintain and advance our innovation and brand. We have a strong history of innovation, demonstrated by our DISCO Hold, DISCO Request, DISCO Ediscovery, DISCO Review and DISCO Case Builder offerings, and have built a research and development process that reliably produces features for these product offerings. We intend to continue combining our deep legal domain expertise and commitment to world-class software engineering to continue delivering features and introducing new product offerings to address more areas of legal work, such as our ediscovery chatbot, Cecilia, which was released in the fourth quarter of 2023 in the United States and in the third quarter of 2024 in Europe. Our future success is dependent on our ability to successfully develop, market and sell our product offerings to both new and existing customers.

Current wording

Our success depends in part on our ability to maintain and advance our innovation and brand. We have a strong history of innovation, demonstrated by our DISCO Hold, DISCO Request, DISCO Ediscovery, DISCO Review and DISCO Case Builder offerings, and have built a research and development process that reliably produces features for these product offerings. We intend to continue combining our deep legal domain expertise and commitment to world-class software engineering to continue delivering features and introducing new product offerings to address more areas of legal work, such as our ediscovery chatbot, Cecilia. Our future success is dependent on our ability to successfully develop, market and sell our product offerings to both new and existing customers.

Previous wording

We believe that our technology, and especially our approach to automation and AI, is applicable to a wider range of legal processes outside of our current core offerings. We intend to leverage our technology to introduce further offerings that increase lawyer productivity across more and more areas of legal work over time. We may expend significant resources in the development of additional offerings. For example, our ediscovery chatbot, Cecilia, which was released in the fourth quarter of 2023 in the United States and in the third quarter of 2024 in Europe. Our ability to successfully develop, market and sell new offerings will depend on a number of factors, including the availability of capital to invest in innovation, our customers’ satisfaction with such offerings, competition, pricing and overall changes in our customers’ spending levels.

Current wording

We believe that our technology, and especially our approach to automation and AI, is applicable to a wider range of legal processes outside of our current core offerings. We intend to leverage our technology to introduce further offerings that increase lawyer productivity across more and more areas of legal work over time. We may expend significant resources in the development of additional offerings, such as our ediscovery chatbot, Cecilia. Our ability to successfully develop, market and sell new offerings will depend on a number of factors, including the availability of capital to invest in innovation, our customers’ satisfaction with such offerings, competition, pricing and overall changes in our customers’ spending levels.

Previous wording

Our market is global and we believe there is a significant opportunity to expand our international customer base, particularly in the United Kingdom, and further expand our operations internationally, particularly in India. In the three and nine months ended September 30, 2025, less than 10% of our revenue was generated by customers outside of the United States. Operationally, we expect to continue to expand our global employee headcount in India.

Current wording

Our market is global and we believe there is a significant opportunity to expand our international customer base, particularly in the United Kingdom, and further expand our operations internationally, particularly in India. In the three months ended March 31, 2026, 11% of our revenue was generated by customers outside of the United States. Operationally, we expect to continue to expand our global employee headcount in India.

Previous wording

In the three and nine months ended September 30, 2025, usage-based revenue represented 91% and 90% of total revenue, respectively, and subscription revenue fees represented 9% and 10% of total revenue, respectively. In the three and nine months ended September 30, 2024, usage-based revenue represented 89% of total revenue and subscription revenue fees represented 11% of total revenue.

Current wording

In the three months ended March 31, 2026 and 2025, usage-based revenue represented 91% and 90% of total revenue, respectively, and subscription revenue fees represented 9% and 10% of total revenue, respectively.

Previous wording

Research and development expenses consist primarily of personnel-related costs for our development team, including salaries, benefits, bonuses, stock-based compensation expenses and allocated overhead costs. Research and development expenses also include contractor or professional services fees and third-party cloud infrastructure expenses incurred in developing our product offerings. We expect that our research and development expenses will increase in absolute dollars but may fluctuate as a percentage of our revenue over time. In addition, research and development expenses that qualify as capitalized software development costs are capitalized, the amount of which may fluctuate significantly from period to period.

Current wording

Research and development expenses consist primarily of personnel-related costs for our development team, including salaries, benefits, bonuses, stock-based compensation expenses and allocated overhead costs. Research and development expenses also include contractor or professional services fees and third-party cloud infrastructure expenses incurred in developing our product offerings. We expect that our research and development expenses will remain relatively flat in absolute dollars but may fluctuate as a percentage of our revenue over time. In addition, research and development expenses that qualify as capitalized software development costs are capitalized, the amount of which may fluctuate significantly from period to period.

Previous wording

Sales and marketing expenses consist primarily of personnel-related costs directly associated with our sales and marketing staff, including salaries, benefits, bonuses, commissions, stock-based compensation and allocated overhead costs. Sales and marketing expenses also include advertising costs and other expenses associated with our marketing and business development programs. In addition, sales and marketing expenses consist of travel-related expenses, software services dedicated for use by our sales and marketing organizations and outside services contracted for sales and marketing purposes. We expect that our sales and marketing expenses will increase in absolute dollars and will continue to be our largest operating expense for the foreseeable future as we grow our business. Our sales and marketing expenses may fluctuate as a percentage of our revenue over time.

Current wording

Sales and marketing expenses consist primarily of personnel-related costs directly associated with our sales and marketing staff, including salaries, benefits, bonuses, commissions, stock-based compensation and allocated overhead costs. Sales and marketing expenses also include advertising costs and other expenses associated with our marketing and business development programs. In addition, sales and marketing expenses consist of travel-related expenses, software services dedicated for use by our sales and marketing organizations and outside services contracted for sales and marketing purposes. We expect that our sales and marketing expenses will remain relatively flat in absolute dollars and will continue to be our largest operating expense for the foreseeable future as we grow our business. Our sales and marketing expenses may fluctuate as a percentage of our revenue over time.

Previous wording

General and administrative expenses consist of personnel-related costs associated with our finance, legal, human resources and administrative personnel, including salaries, benefits, bonuses, stock-based compensation and allocated overhead costs. General and administrative expenses also include external legal, accounting and other professional services fees, software services dedicated for use by our general and administrative functions, insurance and other corporate expenses. Excluding the impact of the stockholder litigation, we expect that our general and administrative expenses will increase in absolute dollars but may fluctuate as a percentage of total revenue from period to period.

Current wording

General and administrative expenses consist of personnel-related costs associated with our finance, legal, human resources and administrative personnel, including salaries, benefits, bonuses, stock-based compensation and allocated overhead costs. General and administrative expenses also include external legal, accounting and other professional services fees, software services dedicated for use by our general and administrative functions, insurance and other corporate expenses. We expect that our general and administrative expenses will remain relatively flat in absolute dollars but may fluctuate as a percentage of total revenue from period to period.

Previous wording

Total revenue increased by $7.8 million, or 7%, for the nine months ended September 30, 2025 compared to the same period in 2024. Revenue related to new customers added since September 30, 2024 contributed $10.6 million, which was offset by a $2.8 million decrease in revenue from customers that existed as of September 30, 2024. The change in revenue from existing customers was driven by a $4.1 million decrease in usage of our product offerings, partially offset by contingent revenue recognized of $1.3 million.

Current wording

Total revenue increased by $5.2 million, or 14%, for the three months ended March 31, 2026 compared to the same period in 2025. Revenue related to new customers added since March 31, 2025 contributed $6.8 million, which was offset by a $1.6 million decrease in revenue from customers that existed as of March 31, 2025. The change in revenue from existing customers was driven by decreases in usage of our service offerings by several of our existing customers.

Previous wording

Revenue generated from our software product offerings increased by $5.1 million, or 17%, for the three months ended September 30, 2025 compared to the same period in 2024. Of this change, $3.9 million is attributable to increased usage of our software product offerings and $1.2 million is attributable to the favorable resolution of a contingent matter. Revenue generated from our services product offerings decreased by $0.4 million, or 7%, for the three months ended September 30, 2025 compared to the same period in 2024. This change was driven by decreases in usage of our services product offerings within managed review.

Current wording

Revenue generated from our software product offerings increased by $3.8 million, or 12%, for the three months ended March 31, 2026 compared to the same period in 2025 due to increases in usage of our software product offerings. Revenue generated from our services product offerings increased by $1.5 million, or 25%, for the three months ended March 31, 2026 compared to the same period in 2025 due to an increase in usage of our services product offerings.

Previous wording

Total cost of revenue increased by $0.3 million, or 3%, for the three months ended September 30, 2025 compared to the same period in 2024. This change was primarily driven by a $0.6 million increase in costs for cloud hosting as a result of increased usage of our software product offerings and a $0.4 million increase in salary and benefits costs. These changes were partially offset by a $0.7 million decrease in outsourced staffing vendor fees.

Current wording

Total cost of revenue increased by $1.3 million, or 14%, for the three months ended March 31, 2026 compared to the same period in 2025. This change was primarily driven by a $0.7 million increase in costs for cloud hosting as a result of increased usage of our software product offerings and a $0.5 million increase in salary and benefits costs as a result of increased headcount.

Previous wording

Research and development expenses increased by $0.7 million, or 5%, for the three months ended September 30, 2025 compared to the same period in 2024. The change was primarily driven by an increase of $1.1 million in personnel costs, including stock-based compensation, partially offset by a $0.3 million increase in capitalized software development.

Current wording

Research and development expenses increased by $0.4 million, or 3%, for the three months ended March 31, 2026 compared to the same period in 2025. The change was primarily driven by an increase of $0.5 million in personnel costs due to increased headcount, partially offset by a $0.2 million increase in capitalized software development.

Previous wording

We have financed operations primarily through customer payments and net proceeds from sales of equity securities, including our IPO in July 2021. As of September 30, 2025, our principal sources of liquidity were cash and cash equivalents and short-term investments, totaling $28.8 million and $84.7 million, respectively. Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. Short-term investments consist of highly-rated U.S. Treasury securities and corporate debt securities with maturities of more than three months but less than one year at the date of purchase. We believe our existing cash and cash equivalents and short-term investments will be sufficient to fund anticipated cash requirements for the next 12 months. We believe we will meet our longer-term expected future cash requirements primarily from a combination of cash flow from operating activities and available cash and cash equivalents and short-term investments. We may also engage in equity or debt financings to secure additional funds.

Current wording

We have financed operations primarily through customer payments and net proceeds from sales of equity securities, including our IPO in July 2021. As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents and short-term investments, totaling $17.6 million and $85.4 million, respectively. Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. Short-term investments consist of highly-rated U.S. Treasury securities and corporate debt securities with maturities of more than three months but less than one year at the date of purchase. We believe our existing cash and cash equivalents and short-term investments will be sufficient to fund anticipated cash requirements for the next 12 months. We believe we will meet our longer-term expected future cash requirements primarily from a combination of cash flow from operating activities and available cash and cash equivalents and short-term investments. We may also engage in equity or debt financings to secure additional funds.

Previous wording

Our future capital requirements will depend on many factors, including our revenue growth rate, usage of our product offerings, billing frequency, the timing and extent of spending to support further sales and marketing and research and development efforts, and the continuing market acceptance of our product offerings. Although fluctuations in general macroeconomic and industry conditions, including conditions resulting from fluctuations in inflation and interest rates, the imposition of tariffs in the United States and abroad, the Russia-Ukraine war and conflict in the Middle East, the executive orders issued by President Trump, and the ongoing U.S. government shutdown, have not materially impacted our liquidity to date, we plan to continue to evaluate aspects of our spending, including capital expenditures, discretionary spending and strategic investments throughout 2025. We have considered the impacts of these factors on our liquidity and capital resources to date, and we do not currently expect them to impact our ability to meet future liquidity needs.

Current wording

Our future capital requirements will depend on many factors, including our revenue growth rate, usage of our product offerings, billing frequency, the timing and extent of spending to support further sales and marketing and research and development efforts, and the continuing market acceptance of our product offerings. Although fluctuations in general macroeconomic and industry conditions, including conditions resulting from fluctuations in inflation and interest rates, the imposition of tariffs in the United States and abroad, the recent U.S. government shutdown, the executive orders issued by President Trump, and the effects of global events, such as the Russia-Ukraine war, the war in Iran and the broader conflict and escalating tensions in the Middle East, have not materially impacted our liquidity to date, we plan to continue to evaluate aspects of our spending, including capital expenditures, discretionary spending and strategic investments throughout 2026. We have considered the impacts of these factors on our liquidity and capital resources to date, and we do not currently expect them to impact our ability to meet future liquidity needs.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2025 was $8.3 million, a decrease of $43.8 million from net cash used in investing activities of $52.2 million for the nine months ended September 30, 2024. The change in cash used in investing activities was primarily related to an increase in maturities of short-term investments of $149.6 million during the nine months ended September 30, 2025. This was partially offset by an increase of $105.5 million in purchases of short-term investments during the nine months ended September 30, 2025.

Current wording

Net cash provided by investing activities for the three months ended March 31, 2026 was $9.6 million, an increase of $17.2 million from net cash used in investing activities of $7.7 million for the three months ended March 31, 2025. The change in cash provided by (used in) investing activities was primarily related to an increase of $5.9 million in maturities of short-term investments and a decrease of $11.6 million in purchases of short-term investments during the three months ended March 31, 2026.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2025 was $0.1 million, a decrease of $20.1 million from net cash used in financing activities of $20.0 million for the nine months ended September 30, 2024. This change was primarily related to cash paid for the 2024 share repurchase program of $20.1 million.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2026 was $0.1 million, an increase of $0.2 million from net cash used in financing activities of $0.1 million for the three months ended March 31, 2025. This change was primarily related to the final cash payment in 2025 for the acquisition of Congruity legal workflow products.