CEO Jeffrey Stibel, CFO Noel Watson. So thank you both for joining us today. Thank you for having us. So Jeffrey, you've been in your new role as CEO for several months now. You're, of course, not new to LZ. You spent quite an amount of time on the board, but new to the role. What have been the few positive surprises for you? And on the other hand, what have been some of the areas that are more challenging than you previously anticipated when you came into the seat? Sure. On the positives, the two things I would say: first, the team, and the quality therein. This wasn't a situation where I had to come in and revamp and rebuild the team, which is important to me because it means we can move that much quicker. The second thing that I would say was the value and quality of the core products and how important it is in the ecosystem that we play in, particularly in small and medium-sized businesses. These are products that people need and need desperately, and we offer the broadest and best range of products that are out there. On the challenge side, working off of that core, I think we have spent less time than we probably should, making sure that those products remain up to standards and that we continue to look as if we are the experts that we are in the space. So leaning more in on technology and service and core legal services. Okay. So strengths being the quality of the team, quality of the base of the product, but maybe some more opportunity to innovate on the product side. I think that's exactly right. Okay. Great. On the recent three key results, you outlined some of your key goals going forward. There's a clear focus on driving durable, predictable results with an emphasis on shifting to a more subscription-based model. That's not new to the LZ story. But you're also aiming to re-accelerate that subscription revenue growth down the road and drive better profitability. Can you expand upon all that and share some of the initial steps that you're taking to drive that shift towards subscription? Sure. When you look at our business, we are the only legal services, online legal services company at scale. And we're building this business profitably. And I think we owe it to our investors to do that in a defensible way. So first and foremost is making sure that our growth is predictable, it's consistent, and that it's built off of the foundation. And that comes from building a defensible core in our business. And as we look at what we're going to do on a go-forward basis, the main focus, the priority is to drive defensibility here. So we stabilize the business. We build around that business to make sure that it is defensible. From there, we can then go after the broader ecosystem. It's a huge market of which we've only penetrated a small amount, and no other technology player has come even close to what we've done thus far. Okay. And obviously, transactions is still part of the story here. At present, at least one-third of revs is transaction, two-thirds subscription. What does that mix look like in your ideal world down the road? And what does the profitability look like from each of those segments? Is transactions going to be just a small sliver of the profit or perhaps even loss leader to drive into that more durable subscription business? So in my ideal world, so in theory, not in practice, transaction is a function of the subscription. So it's two sides of the same coin. It's a lead-in. And the reality is whether we're talking about incorporating one of our customers or getting them a will or a trust or doing estate planning, these are all recurring products. They come with recurring needs and things that customers are going to need as they grow and build their businesses or their lives. So we need to first reframe the definition of what is transactional versus what is recurring. And all of these products are recurring products, and there are recurring needs. From there, we can fit the business model to that. So our expectation is you will see subscription as a percentage of total revenue growing. It will not be at the expense of transactional revenues or transactional products, but it will be reorienting those products to be more features of an overall product suite. Got it. And some of those transactional products, at least historically, could be more subscription in nature, like estate planning type? 100%. And from my standpoint, I think all of them can be. And to the extent that they're not, we're just looking at them in a too simplistic way. They are a feature of what is likely a larger product. Got it. And we're very focused on LTV as well, which obviously subscription lends itself to. It's either the way you price it or being able to extend the relationship with the customer or in how you deliver it, right? And especially with our mature subscription products, we've been able to deliver them with fairly high margins. And so the more we're able to shift towards subscription, that gives us greater confidence in our ability to expand margins as we move forward. Okay. Exactly right. That's helpful. Just a quick one on partnerships. That was de-emphasized earlier in the year. Jeffrey, how are you thinking about the importance of partnerships going forward, if at all? Are there any opportunities to drive post-formation engagement with LZ of certain services that perhaps you don't need to own in-house at LZ? I think partnerships are critically important. And I think we have always looked at them as important. Earlier in the year, I think things were in flux in terms of what we were doing with partners. But we're going to continue to lean in on partners and lean in aggressively for the right reasons and right respects. Where someone does something better than us because it is their core competency, we're going to lean on a partnership. If it's something that's our core competency, we're going to do it in-house or ultimately we'll acquire. But that's the way you should build partnership channels. And it'll either drive revenues because we're sending leads to partners, or better, we're leaning on partners to drive our core business by bringing leads to us. Okay, so it sounds like maybe going forward, we might see more on the partnership side over the medium term. I mean, it's really important to us to continue to offer a broad set of services to our customers. And having strong partnerships is a way to deliver on that. They don't necessarily need to own all of the products that we bring to market. And that's been a vital part of our strategy just because it allows us to stay with customers as they grow and evolve. But also it gives us an opportunity to better kind of personalize the experience for our entrepreneurs. And really, because we have different products and services to bear, we can be more specific and targeted as we learn more about the customer as they come through our flow by putting the right products and services in front of them at the right time. I mean, you've got to remember, our customers come to us at the earliest stage on the business side of their business, which means there's a huge host of products and services that we can offer them and that they're going to demand. And if we don't have that, they will go somewhere else. So it would be naive of us to think that we could build all of these in-house. So the closest adjacencies, we'll look hard at whether it is better to partner or to build. The core competency, we will build. And the further off adjacencies, we'll partner. That makes a lot of sense, and you both kind of alluded to it in your answer to that question. Your approach, going from kind of a one-size-fits-all approach for SMBs to more micro-segmentation, I think was the language you used, perhaps one of many revelations that you've had as you strive to better understand customers' needs. Explain what you mean by that approach and how it'll translate into financial results down the road. Sure. By micro-segmentation, all we mean is segmentation, but to emphasize the point that you take 27, 28 million small businesses in the U.S. and you treat them as a category, you're not doing any justice to that category. Because in that category, you've got a pizza shop owner, a chiropractor, someone in Atlanta, Georgia, out in Wisconsin, in LA, completely different needs, completely different objectives, completely different sizes of business, time they were in business, likelihood of risk, number of employees. In a perfect world, what we mean by micro-segmentation, treat each business as if it is its own business, and that small business is as important to that owner as they see it. In reality, what you're doing is you're trying to figure out what are the smallest concentrated buckets of customers where we can target, we can learn, and we can identify ways to personalize our approach. It is incredibly important in any small business ecosystem. We've started testing along those lines already. I think I have identified some categories where just making copy changes and talking to the customer in their language, right? If you're coming through and you're a restaurateur or you're a truck driver, there's different language that makes it feel like they understand me. There's different stats you can show, right? 78% of business owners in your industry selected this product. Being able to just get really micro at that will help conversion. It gives them that confidence that we're providing the right thing that they know that they will need. Right. The right thing for their needs. For their specific needs. Ultimately, you're going to be offering them different products depending on who the customer is and where they are in their life cycle. We have a large segment in the services space. They're going to get a different set of products than people in the restaurant category. That makes a lot of sense. Let's hit on business formation trends a little bit here. For a few quarters now, we've heard you call out the decline in market share of business formations. And that's expected as you were focusing more on quality. Noel, you mentioned focus on LTV is really important. Is that trend of share losses within overall business formations expected to continue? And is that quality focus resulting in better attach, better engagement with the platform? Y I'll start with where the trend is going because that's an easy one. I don't know. It's completely out of our control, which means we can't rely on it and we shouldn't rely on it. And that's why we've shifted from market share to quality share. Because wherever share goes, LegalZoom will go with it. That's pretty obvious we're the market leader. But what we can do in a declining market is we can focus on quality of customer. And if you look at what we have been doing chasing share, to some extent, we've been bringing in the wrong types of customers. Customers who don't have a high propensity to spend, don't have a high propensity to upsell, have a higher likelihood of business failure. So what we're focused on now is quality share, trying to bring people in, educate them more, restricting the funnel so that once we have someone in our ecosystem, we know we have a really good customer who wants to grow alongside us. And that's the real focus. And just to double down with an example, and I think we've given this stat before, but Jeff just gave examples of why LTV drivers, right? Customers that can spend more with us initially that will buy more over time as they grow and evolve, they stay around longer. So we know that customers, for example, that form with us and they spend $500-$750 on their initial formation, we retain them for more than 10% longer than customers that initially spent $100-$250 in their formation. They're more invested, they're more financially viable, and therefore sustainable. That makes sense. And they bought more of our services that will help them along the way. Right. And they clearly see that value in the services. Got it. Jeffrey, I heard you mention it a few times here already, kind of the market leadership position that you have. And that's a bit of a realization for you being in the seat. You want to lead through being that trusted resource to advise among SMBs, but also leading on price, I think, is part of the approach here. Can you talk about each of those, your market leadership as well as your focus on pricing and the higher value products and how you can actually drive better financial outcomes for LZ, such as those higher intent customers? I think you addressed that pretty well, but also lower churn and so forth. Sure, and it starts with where we started as LegalZoom. In 2001, we created this category, online legal services. We fast forward today, have a brand that has two times the unaided awareness of any of our competitors, and we've seen a lot of competitors come and go. They spend into our market, they burn themselves out, and they leave. Because what we've built over the last 25 some odd years is a product set that is both broad and deep in legal services, so we have not just an incorporation, but every type of incorporation. We don't just incorporate, but we can also provide a registered agent. We can provide compliance services. We have a strong and robust legal network. It is that composite that gives us real defensibility. Over time, as we build more and more technology, we start leveraging generative AI to augment, but not replace lawyers. We'll be able to do a better job for our customers than they will get going to other technology providers. And we will be able to do it more cost-effectively than they would get if they were going to a lawyer or to a law firm. And in between those two things is our competitive moat. And that's the real focus. So as an example, when we talk about price and doing better on price, we don't mean lowering price. We mean value. We mean ascribing value to the price that we offer so that people compare us to lawyers, not to an online form. And as part of your leadership in educating some of your customers, one area that's come up this year is the beneficial ownership information reports. And probably a good point to hit on now, particularly as recently a Texas court has put in place a temporary injunction on some of that overarching legislation. Any preliminary thoughts on what that means going forward? Because obviously the BOIR has been pretty impactful this year. You're trying to help customers navigate, do I need to file this, do I not? When do I need to file it? When do I need to update it? Just any thoughts on how that's evolving? I mean, putting aside the financial impact, which Noel can speak to if he wants to. Which I won't. I mean, this is a perfect example of the types of things we're trying to do. And way before that ruling, we came out publicly and said, BOIR is a transactional product to some people or a feature to us. And we don't believe that BOIR should ever be sold as a standalone other than very sophisticated customers. It's like going to buy an iPhone and saying, I'm just going to buy the power button because that's what the iPhone is because that's the button I have to turn the thing on. So we have been for months reorienting BOIR into our compliance product, something we call total compliance. In this case, we did it at the same price as BOIR because we wanted to point out the absurd. You can have your beneficial ownership form done by us, or you can have Total Compliance done by us always for everything. And we had been migrating more and more towards that. It's not to say that this doesn't create headwinds because we market with it. And we do have that as a standalone product. But it speaks to what we have been saying, which is these need to be recurring products because how can a small business know what a judge in Texas says and then what FinCEN says and maybe the president and maybe a senator? Leave that to us. And it might change daily for us, but we will make sure that you're always covered along the way. Part of bundling it into that broader compliance product, it doesn't really matter if it goes away or not over the medium term because you're still going to be covering those overarching things. If it goes away, something else will come in its place. Because in order to be compliant over time as a business and business owner, you've got to meet the minimum standards on the state and national regulatory side. I was going to say, if anything, it speaks to the complexity of maintaining compliance, right? Like today you have to do it, tomorrow you don't, the next day you might. And so we can certainly leverage that messaging. And that's what we've been doing to Jeffrey's point on really surfacing our compliance offering alongside BOIR to make sure that folks understand, this is one item, but you really want to be covered overall. And this is the product that will help you do that. And so certainly some headwinds. I think a lot still to be understood about where it goes from here. And so I won't speak to any specifics now, but we'll certainly update as we know more. The appeal process has to work its way through too. Absolutely. Okay. So Noel, this is one maybe for you. Just any early thoughts on how to tie together the building blocks of revenue in terms of customer growth versus ARPUs over the next few years? Any sort of quantification you share at this point? Or perhaps weightings of those components in a P times Q framework? Is it more customer growth? Is it more getting those larger subscription products rolled out? I think that the quality share comment is more, it's quality. It's not necessarily quantity on the customer side. Again, we're LTV-focused, and those are all kind of building blocks that sit under LTV, and we're otherwise willing to make some trade-offs there. I would say online, on balance, we are testing some higher price points on products kind of in that initial flow. We haven't done any meaningful price increases on our base for a number of years now, so we'll be testing some opportunities there as well. Both of those lean toward kind of RPU, but otherwise, we're always doing lots of different commercialization, bundling things in different ways and testing price points that create trade-offs on conversion versus attach versus RPU. Okay. You alluded to some of the uncertainty specific to the BOIR question. With the election now settled, maybe macro marginally less volatile, any updated views on the environment for business formation specifically as we look into 2025? And relatedly, any early views on whether or how the new administration might reshape the regulatory environment for businesses? I mean, I think from our vantage, I'll reiterate what I said earlier. It's very hard to tell. It tends to seem like a pretty pro-business administration. Pro-business tends to be good for small businesses, which tends to be good for us. So we're encouraged by that. But that's not our focus because it's out of our control. Okay. And do you think you can still put up solid results even if the business formation environment doesn't improve from current trend? We do. We do. And I will say it's been a softer environment this year for macro from a small business starts standpoint. We did feel like just with the change in administration, either direction, there's an immediate need and focus on small businesses. Small businesses are the lifeblood of the country. The vast majority of businesses in the country are small business. Employees, nearly half the country is employed into small businesses. So it's really where we thought either administration would want to make an early point and be very supportive of. So we do think that should be more favorable. But from a planning standpoint, we're triangulating from different angles, but really going to plan around something that's much more neutral from an expectation standpoint. Got it. So kind of plan for the worst and then if you get some macro improvement. We'll take it. We'll take it. That'll be upside. Exactly. Got it. Jeffrey, since taking the helm, has there been any sort of attitude shift at the company? Is momentum building internally that there's kind of this clear path ahead for the company? Employees know what they need to do to execute against the plan, clear benchmarks to measure success and so forth? Or is it still kind of too early in your role to have ironed all that out and that's more of the '25 story? I would argue it's deliberately too early in one respect. And that is that we want to make sure that there's a groundswell before we completely come together so that some of this comes bottoms up. That said, there's a clear direction, there's a clear message where we're driving towards fundamentals that we control. You saw us in our last earnings report talk about where we thought margins could go, that is controllable. You saw that we had a reduction in force earlier, again, controllable within our business. And part of that thinking was we can do more with less by focusing. And then the notion of really getting our handle on how we are the best in online legal services and reorienting product to be a calculus of technology plus service. And I think those things are crystallized and people are beating to the same drum in that respect. As we evolve and start doing more, particularly on AI and in some other areas, I think we'll see even more alignment from a cultural standpoint. Okay, and since you mentioned the prior restructuring and you also early in our conversation here mentioned the strength of the talent at LegalZoom, how do you feel about the current resourcing within the organization? Are staffing levels appropriate and specifically in the right areas? Or is there more work to do in terms of getting some hiring in certain pockets? Maybe that's managing attrition elsewhere. How do you think about staffing levels from here? I think we're adequately staffed. I think we've got to figure out where we position our teams to make sure that we can be in a position to win. And this is a function of not going after quick wins, but going after the wins that are going to be defensible. And this is moving to subscription-oriented products, moving to our core competencies, and moving to things that are defensible. Okay. Got it. One area where we've historically heard some debate from investors is on the strategy of utilizing outside sales. At present, do you think that that still is the right strategy for LegalZoom? And if so, why? I mean, look, if you look at that outside sales force right now, they have grown more and more efficient each quarter. We have reduced costs significantly, and they are learning more and more about our business, so we're actually pleased with that outsourced sales force. That is not to say that we can't benefit from having inside sales, sorry, as well, and I think some combination is probably warranted. By the way, we already have some combinations. We don't have zero salespeople on site, so I think we will play with those variables. The more important general point is we have to remain experts in what we do, so whoever is talking to our customers, however our customers interact with us, whether that's chat with the human behind it, AI, or just using our products and services, we have to do a better job than any of our competitors. So that will drive those decisions first and foremost. To be that trusted resource. Got it. So tying all those thoughts together on staffing levels and outside sales and so forth, and also in the context of the ongoing shift towards greater subscription mix, which you mentioned potentially comes with higher margins, how should we think about the EBITDA or free cash flow margin path, both near-term and longer term? I know you're not giving 2025 guide yet, but just directionally, how should we think about it? Up and to the right, I hope. That's an easy one. I think I can drop the mic. I think as Jeffrey said, that's an area where we feel like we've always had pretty good control and visibility into and confidence in, and we continue to feel that way about the path that we're on, and you've seen us progressively improve margin here over the last couple of years, and so that will continue to be a focus. We want to make sure that we can drive that outcome in a pretty wide range of revenue outcomes, and we don't think the path will be complete in 2025, but we will be moving along that journey, and we think that margin can go much higher from here. Okay, so no margin reset as part of how you're rethinking the business. Okay. Super helpful. Last one before we open it up to any questions from the audience. Just any updated thoughts on capital allocation from here? I know you've been very active in the buyback earlier in the year. We've been active for the last couple of years. To your point, we were very active in Q2 and Q3 over $150 million in the combination of those quarters. We like where we're at right now from a cash balance standpoint. It gives us some flexibility to, one, make sure that our organic investments are funded, to have some optionality around M&A and kind of lean in there a bit and be opportunistic. We think activity in general around M&A, there's bigger pipelines right now, and then we'll always keep an eye on also being opportunistic about giving cash back to shareholders. I would think of that more through the lens of relative to future cash flows as opposed to the existing cash on balance sheet now that we're at kind of more of a healthy level that we're comfortable with. Okay. I said that was my last question. Since you mentioned M&A, what's the approach there? Is it to fill certain product gaps? Is it to get certain talent? How should we think about the approach there? And I would imagine tuck-in is more likely than transformative, but correct me if I'm wrong on that. All those things are generally within the framework. We've been pretty consistent. So anytime there's a product out there that we think can enhance our overall offering, that's something we're interested in. Acqui-hires, if we can bring on great talent, and if there is a talent gap that fills a need, that's something we'll look at. And then if there are other opportunities in our space just from a valuation standpoint that looks attractive where we can start to do a little bit more of a roll-up, those are all things that are kind of on the table that our team is regularly looking at. And the last piece is particularly important because when you look at your customer acquisition cost, if there are ways to acquire more cost-effectively through M&A, it's an important thing to look at and take advantage because those tend to be at certain cycles. We are at a cycle where the markets have been relatively punitive to some of our more complementary potential. More opportunity there right now. I think so. Okay. Makes a lot of sense. In our last minute or so here, I do want to open it up if we have any questions from the audience. Looks like actually you covered everything. So thank you both for the time. I'm sorry. There's a question. Oh, there is. Okay. Thanks, guys. Jeffrey, in your many months so far or a few months so far in the new job, I mean, it seems like such a kind of a pivot and transformation in terms of your overall strategy. What's really surprised you to the upside? You do all these tinkering with the sales force and product placement. What are you most excited about in terms of what can really change in 2025? Sure, and it's interesting. I actually don't see it as that transformational, particularly from the product side because the thing that has surprised is probably the wrong word, pleased me the most, is just how defensible our core business is. The reality is, as we've spent significant time, effort, and money building out ancillary services, no one has really taken share of the overall market. They have sort of pinched some share from us in some cases by overspending or reducing price, but when you look at our brand and the products that we offer, it is so robust and it screams expertise relative to everyone else. It just means we're sitting on a really, really strong foundation. And for me, at least, as a long-time operator, that's where I want to be because that gives you the time to be patient and to think strategically about how to build something that is lasting at real scale and not just a quick hit. So that's been the thing that's excited me the most. I won't say it surprised me because I came in expecting it, but I'm pleased. Great. Well, I think we're up on time. Thank you both. Really do appreciate you participating. Thank you.