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Z LEGALZOOM LegalZoom Reports Third Quarter 2021 Results November 10 , 2021 Revenue of $ 147.9 Million , an increase of 12 % year - over - year GLENDALE , Calif . , Nov. 10 , 2021 ( GLOBE NEWSWIRE ) -- LegalZoom.com , Inc. ( NASDAQ : LZ ) , today announced results for its third quarter ended September 30 , 2021 , including the following highlights : • Revenue was $ 147.9 million , up 12 % year - over - year . o Transaction revenue was $ 66.9 million , up 5 % year - over - year driven by business formations of 106,000 , down 9 % year - over - year and a 16 % improvement in average order value . o Subscription revenue was $ 73.3 million , up 24 % year - over - year . We had 1,264,000 subscription units as of September 30 , 2021 , with 49,000 net units added in the quarter . o Partner revenue was $ 7.7 million , down 8 % year - over - year . • Gross margin was 68 % for the quarter , up from 67 % in the third quarter of 2020 as the revenue mix shifted toward subscription revenue . • Net loss was $ 39.7 million compared to a net income of $ 9.4 million in the third quarter of 2020 . • Non - GAAP net income was $ 2.6 million compared to a Non - GAAP net income of $ 12.4 million in the third quarter of 2020 . • Adjusted EBITDA was $ 15.1 million , or 10 % of revenue , compared to $ 27.4 million , or 21 % of revenue , in the third quarter of 2020 . • Cash and cash equivalents were $ 310.7 million as of September 30 , 2021. On July 2 , 2021 we raised $ 666.9 million net of underwriting discounts and commissions from our IPO and private placement and repaid in full $ 521.6 million of our 2018 Term Loan . • Cash flows provided by operating activities decreased from $ 32.7 million in the three months ended September 30 , 2020 to $ 19.5 million in the three months ended September 30 , 2021. Cash flows provided by operating activities decreased from $ 82.1 million in the nine months ended September 30 , 2020 to $ 60.2 million in the nine months ended September 30 , 2021 . • Free cash flow was $ 17.0 million for the three months ended September 30 , 2021 compared to $ 29.4 million for the three months ended September 30 , 2020. Free cash flow was $ 51.7 million for the nine months ended September 30 , 2021 compared to $ 74.3 million for the nine months ended September 30 , 2020 . • Basic and diluted net loss per share was $ ( 0.20 ) and diluted Non - GAAP net income per share attributable to common stockholders was $ 0.01 for the third quarter of 2021 . " We're pleased by the results in the quarter with revenue coming in above the top end of our guidance range . " said Dan Wernikoff , LegalZoom's Chief Executive Officer . " Our transition to subscription continues to outperform as we aggressively build out an ecosystem of products and services to help our customers stay compliant after forming their business . " Noel Watson , the Company's Chief Financial Officer added , " We are committed to making the right strategic investments to capitalize on the large market opportunities that exist within the legal and compliance vertical . We are patient operators and will continue to make decisions aligned to our long - term , growth - oriented mindset . ” Key Business Metrics and Non - GAAP Financial Measures ( unaudited , in thousands except AOV , ARPU and percentages ) Revenue Business formations Transaction units $ Average order value ( AOV ) Subscription units Average revenue per subscription unit ( ARPU ) $ $ Three Months Ended September 30 , 2021 147,879 106 229 291 1,264 231 $ $ $ 2020 131,595 117 254 251 1,043 221 % Growth ( Decline ) YOY 12 % $ ( 9 ) % ( 10 ) % 16 % $ 21 % 5 % $ Nine Months Ended September 30 , 2021 432,943 351 765 263 1,264 231 $ $ $ 2020 348,397 290 696 227 1,043 221 % Growth ( Decline ) YOY 24 % 21 % 10 % 16 % 21 % 5 %