Good day, and thank you for standing by, and welcome to LegalZoom's First Quarter Earnings Call. At this time, all participants are on a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Madeleine Crane, Head of Investor Relations. Please go ahead. Thank you, operator. Welcome to LegalZoom's First Quarter 2024 Earnings Conference Call. Joining me today is Dan Wernikoff, our Chief Executive Officer, and Noel Watson, our Chief Financial Officer. As a reminder, we will be making forward-looking statements on this call. These forward-looking statements can be identified by the use of words such as believe, expect, plan, anticipate, will, intend, and similar expressions, and are not and should not be relied upon as a guarantee of future performance or results. Such forward-looking statements are based on management's assumptions and expectations and information available to us as of today's date. These forward-looking statements are also subject to risks and uncertainties that could cause actual results to differ materially from such statements. These risks and uncertainties are referred to in the press release we issued today and in the Risk Factors section of our most recent annual report on Form 10-K, filed with the Securities and Exchange Commission. Except as required by law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future events, or otherwise. In addition, we will also discuss certain non-GAAP financial measures. We use non-GAAP measures in making decisions regarding our business, and we believe these measures provide helpful information to investors. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations of all non-GAAP measures to the most directly comparable GAAP measures are set forth in the Investor Relations section of our website at investors.legalzoom.com. I will now turn the call over to Dan. Good afternoon, everyone, and thanks for joining our call. I'll start with a quick recap of our year-over-year financial performance in Q1. Revenue came in at $174 million, up 5%. Subscription revenue grew 10%, and transaction revenue declined 3%. Adjusted EBITDA was $28 million, up 28% year over year, or a 16% margin. LegalZoom formations were down 18% year over year, with formations as measured by Census EIN data down 2% year over year. As a result, our share for the quarter relative to Census EIN data fell 17%. As mentioned on our last call, a share decline was expected and reflects the partnership exit, continued commercialization testing, and the rebuild of our sales organization. However, Secretary of State formations data pointed to a softer formations macro in Q1 than Census EIN data. As a result, we believe our Q1 results overstate the market share loss. Despite the near term trend, we continue to believe in the long-term health of the macro, which remains well above pre-pandemic levels. We're also confident in our ability to re-accelerate our share growth throughout the year. We expect to exit the year with at least 10% growth in our market share relative to the first quarter. As we've now fully lapped our premium rollout, we're focusing our efforts on other parts of our lineup that haven't yet been optimized. One of the biggest levers to drive conversion is reducing the number of purchase decisions in the formation flow. We are simplifying the experience by focusing primarily on formations and compliance needs. I'm encouraged by tests we ran at the end of the quarter geared towards better lineup optimization that will favor formation conversion improvements. Share growth should further be supported by our sales and marketing strategy. By early Q3, we expect to be back to our prior sales capability with a more efficient organization. We're also reintroducing increased levels of brand spend, which should drive higher awareness and traffic, while working in concert with our performance marketing to drive better conversion. While the macro has softened, compliance requirements have increased in complexity with the Corporate Transparency Act. We took advantage of this opportunity by launching a new product to assist with the filing mandates required by FinCEN. The timing of this new requirement and our focus on monetizing customers post-formation came together in Q1, and over the course of the quarter, we saw accelerated performance. We've had a well-orchestrated strategy across all our channels to ensure our customers understand this new requirement. We continue to evolve the offering with a focus on leveraging the data we have today in our business profile, so that our customers can comply with minimal effort. Overall, it was a strong quarter, with us meeting and beating guidance on revenue and Adjusted EBITDA, respectively, even with a weaker macro than anticipated. We're also maintaining our full year guidance despite adjusting our expectations down for the macro, as we've been able to offset its impact with better performance than expected in compliance and BOIR. Now I'll detail our performance across our strategic pillars in more detail. Beginning with our first strategic pillar, scale the business. We continue to focus on the opportunity to improve the LLC experience. The majority of our product sessions are mobile, and they convert at less than a third of the rate of desktop sessions. The conversion challenge has been one of both design and commercialization within a constrained form factor. At the end of Q1, we deployed a new mobile-optimized experience and reduced the number of solutions cross-sold in the formations flow. While this new formation experience is designed for mobile, a simpler experience will benefit our desktop customers as well....We're able to make these changes because of the combination of our new customer data platform, our post-formation experience in MyLZ, and a new sales organization. We're now unlocking a multi-channel, data-driven approach to monetization after formation. The early results are promising. We're also making changes in the consumer side of our business. Estate planning is an important front door to our ecosystem, and many of the infrastructure investments we've made around our SMB experience and fulfillment infrastructure have been built in a way that allows us to leverage them across other offerings with relatively minimal investment. The estate planning product has not been refreshed for close to a decade and has created a revenue headwind over the last three years post-pandemic. Despite that, we remain a leader in the space, given our strong brand recognition and historical business model. While SMB continues to be our primary focus, estate planning is a highly relevant need for our SMB customers when it comes to tax planning, business partnerships, and ownership succession. We've taken the first couple steps to update the product, and you should expect to see continual improvements throughout the year. Lastly, to support these product efforts, we're beginning to reinvest in the brand. As we scale our brand spend, we're taking a test-and-learn approach to find the right channels to reach key segments and increase awareness and product familiarity. In Q2, as part of our NBA partnership, we launched a new integrated campaign with a combination of TV, social, CTV, and online video, leveraging two-time NBA MVP and NBA champion, Giannis Antetokounmpo, as our spokesperson. We expect Q2 to be the first quarter that we meaningfully increase CAM spend year-over-year since launching the freemium lineup, as we align our investment with the NBA playoffs to maximize reach and the relevancy of the campaign. Now let me turn to our second strategic pillar, build the ecosystem. As we simplify the formation experience by eliminating unnecessary purchase choices, we continue to optimize the experience after the formation is complete. The recent changes to our formation flow may put some pressure on the performance of our subscription add-ons in the near term, but we feel confident the changes we are making will benefit us in the long run. It's still early in the transition, but we're excited by the engagement we're seeing on our platform. We had over 1 million MyLZ logins during March, double the volume we saw in December. During the quarter, we rolled out a new first-use experience on the homepage, outlining all the tasks required during formation to ensure liability, protection, and government compliance. Since the rollout, we've seen promising trends related to the conversion and utilization of our compliance offerings. While off of a relatively small base, post-formation sales more than doubled compared to the fourth quarter of 2023. We've also seen very strong post-formation engagement when it comes to BOIR. To refresh, FinCEN mandates that this report is filed within 90 days of forming, and for those customers that formed prior to 2024, they have until the end of this year to make their initial filing. We have three objectives as it relates to BOIR. One, we want to educate all our customers about this new requirement. Two, we want to make the experience simple, leveraging the business profile data we already have on the customers. And three, we'll use it as an opportunity to introduce customers to our comprehensive compliance subscription. We are now selling BOIR in MyLZ through email marketing and in our sales and care channels. The early results have been strong, but we expect further acceleration with additional testing. As we focus the formation funnel on conversion, we've shifted both tax and books from being a part of the initial purchase to instead being part of the post-formation marketing motion. For tax, the efficacy of attach is more seasonally driven, so we don't expect a significant impact. For books, we continue to drive up activations and iterate on the core offering. We have big plans for books later in the year and are in a build mode with existing customers helping to inform the roadmap, which takes us to our third strategic pillar, integrate experts. There are two critical advisors that small businesses rely on to be successful, accountants and attorneys, and we're focused on modernizing how solopreneurs can have affordable and easy access to both groups through a modern technology platform with a consistent experience across. Since we just completed the initial filing deadline for tax season 2023, I'll first recap our performance with LZ Tax. We had three clear learnings from the season. First, we've built the right premium filing experience. Second, there is a clear advantage offering an integrated books to tax solution. And third, there remains a large portion of our customers we're not yet serving when it comes to their early tax needs, which is still a large and unrealized opportunity. Exiting last year, we made the decision to re-commercialize our tax offerings with the goal of driving higher customer consideration and retention. As we narrowed our audience to focus on the most relevant tax customers, we invested heavily in improving the experience, moving to an integrated filing experience all within our platform. As expected, our subscriber count in tax was down year over year, but utilization improved, with approximately 20% more filers per active subscription. The combination of simplified customer intake, matching to a dedicated tax expert, and utilization of MyLZ for document sharing and expert collaboration, drove a net promoter score of 59 for the overall tax filing experience and a Net Promoter Score of 87 for interactions with our experts during the season. While the channel strategy is a headwind to subscription revenue in 2024, we believe the superior experience of this season will drive retention improvements moving forward into next year. This was our first tax season where a customer could utilize LZ Books. Despite only having launched Books in the formations flow with three months left in fiscal 2023, 17% of our 1040 filers imported data from LZ Books this season. We also saw clear trends in the data, including strong upgrades from customers with over $10,000 in annual profit. We feel very good about the future upsell opportunities, given that a third of the 1040 filers that imported data chose a book solution distributed through LegalZoom, whether LZ Books or QuickBooks. Over 50% of all filers use manual methods, which demonstrates the distribution opportunity for LZ Books post-filing. Despite having high customer satisfaction when it comes to our current tax offering, there is a large population of customers who are not ready to file so soon after forming. For many, the price is prohibitive as we only offer an assisted filing solution. Approximately 40% have not yet started operations at the time of formation, and over 35% generate less than $10,000 in their first year in operations. We continue to believe Books is the right gateway to tax services. We're working to expand the potential audience of Books customers, along with addressing the accessibility of our tax offerings. Moving on to the legal side of expertise. On our last call, I hinted that our newly designed expert platform could support not only tax experts, but could also be the foundation for attorney offerings as well. This investment in our platform, combined with our Arizona law firm, has created a unique opportunity for us to expand beyond providing general legal advice. I'm excited to announce that through our law firm, we will be partnering with our network of attorneys to participate directly in legal matters. The first legal matter we've launched is prenuptial agreements. This matter was selected intentionally, given its quick time to value, low jurisdictional complexity, and forms-based engagement. We're still very early in our journey, but to be clear, our expectation is that we begin to launch additional legal matters on this platform within the consumer and SMB space. This will be a platform play in a space that currently has no established players, and certainly no one with the brand name recognition, technology capabilities, and attorney reach. In closing, I'd like to thank the entire LegalZoom organization for their hard work during the quarter. We remain focused on putting the customer first, from formation and compliance to financial and legal needs, and our progress this quarter reflects our dedication towards our customers and our overall mission to unleash entrepreneurship. With that, I'll turn it over to Noel to go deeper into the financials. Thanks, Dan, and good afternoon, everyone. I'll now discuss our first quarter performance in more detail. Please note, all comparisons will be on a year-over-year basis, unless otherwise stated. Total revenue was $174 million for the quarter, or up 5%. We completed 139,000 business formations in Q1, down 18%. Our market share of business formations was 9.3%, which represented a 17% year-over-year decline. Looking at these results in more detail, beginning with business formations. In Q1, business formation growth was impacted by a partnership exit, which occurred in Q3 of 2023. This will continue to remain a headwind in Q2 of this year, however, will be fully lapped by the end of Q3. Looking at our LLC direct channel, our formations were down 12% year-over-year. We experienced softness due to a combination of testing changes as we work to fully optimize our lineup and a lower contribution from our sales efforts as we work to rebuild our team. Lastly, the macro underperformed our expectations, declining 2% year-over-year in Q1 versus our expectation of low single digit growth. Turning to market share performance. The combination of our partnership exits, commercialization testing, and sales force transition pressured our market share in the first quarter. However, as Dan noted, we believe Q1 census data understates our formations market share relative to EIN applications during the quarter. We expect to exit the year with at least 10% share growth relative to Q1 as we lap some of the factors I just discussed and look to drive higher conversion through the product. Transaction revenue was $66 million, down 3%, driven by a 10% decline in average order value, partially offset by a 9% increase in transaction units. We recorded 336,000 transaction units in the quarter. This 9% increase was primarily due to an increase in non-formation business-related transaction products, such as annual reports, as well as the introduction of our BOIR offering. Average order value was $198 for the quarter, down 10% due to the aforementioned mix shift toward non-formation transactions, which are generally lower priced, as well as a decline in partner revenue. We expect AOV to be relatively flat year over year in Q2, and continue to expect a mid-single digit decline in AOV for the full year compared to the full year 2023. Subscription revenue was $108 million, up 10% due to increases in both subscription units and ARPU. We remain dedicated to continuing to shift our revenue towards subscriptions over the long term. We ended the quarter with over 1.6 million subscription units, up 7% year-over-year, as we experienced strength in eSignature subscriptions due to the bundling of these products into certain business formation offerings and growth in virtual mail subscriptions. This growth was partially offset by the impact from the exit of legacy partner relationships. ARPU came in at $272 for the quarter, up 5%, driven by a mix shift toward our high-value subscription offerings. ARPU was also impacted by the exit of certain channel partner relationships and the introduction of eSignature subscription offerings, which carry lower price points.... Turning to expenses and margins, where all of the following metrics are on a non-GAAP basis. First quarter gross margin was 64%, compared to 66% in Q1 2023. The year-over-year decrease was driven by higher filing fees as a percentage of revenue, as California restated filing fees in the third quarter of last year, following a 12-month pause. As a reminder, we generally experience lower gross margins in the first half of the year due to the seasonality associated with tax season and business formation. Sales and marketing costs were $51 million, or 29% of revenue, and decreased 10% from last year. Customer acquisition marketing costs were up sequentially due to seasonality, but remained flat year-over-year. In Q2, we expect CAM expenses to increase approximately $5 million compared to the first quarter of 2024, due to higher brand spend, some of which was deferred from Q1 in order to better time our investments with new changes to our lineup, continued build-out of our sales team, and the alignment of our NBA sponsorship with the peak season. Our investments in CAM in 2024 will largely be offset by the savings we are experiencing from our sales reorganization. Non-CAM sales and marketing expense was down $6 million, or 35%, due to the impact from the sales reorganization, as well as ongoing efficiencies in our marketing strategy. Technology and development costs were $17 million, up $2 million, or 16%, as we remain invested in driving product-led growth. General and administrative expenses were $16 million, or up 3%. Our performance drove adjusted EBITDA of $28 million, or a 16% margin. Adjusted EBITDA increased 28% year-over-year, compared to adjusted EBITDA of $22 million and a margin of 13% the same time last year. Deferred revenue increased by $20 million in the quarter. Free cash flow was $25 million, compared to $22 million for the same period in 2023. Our free cash flow in the first quarter reflects cash tax payments of approximately $4 million, following the full utilization of our existing tax credits. We expect Q2 free cash flow to be slightly down sequentially due to higher estimated tax payments and full year free cash flow to be in the range of $85 million-$95 million. We ended the quarter with cash and equivalents of $228 million. We remain debt free, with no outstanding borrowings under our $150 million revolving credit facility. During the first quarter, we repurchased 1.2 million shares of our common stock at an average price of $10.91, for a total of $13 million. We plan to continue to opportunistically repurchase shares of our common stock as part of our balanced approach to capital allocation. In terms of capital allocation, we continue to prioritize organic investments in the business, followed by strategic acquisitions, and lastly, stockholder returns via repurchases of our common stock. We maintain the ability to execute against all three priorities simultaneously, given our strong cash position. Turning to our outlook. For the full year, we continue to expect revenue of $700 million-$720 million, or 7% year-over-year growth at the midpoint, and adjusted EBITDA of $135 million-$145 million, or 20% margin at the midpoint. We are reiterating our full year outlook based on two key factors. Our expectations reflect a higher full year contribution from BOIR based on our first quarter performance, largely offset by a softer macro expectation. Based on the trends we are seeing today, we now expect a mid-single digit decline in the formations macro for the full year 2024, versus our original expectations of flat to low single digit growth. As a reminder, the macro showed strong acceleration in the back half of 2023, creating a more challenging comparison. Based on this, for the second quarter of 2024, we expect total revenue of $172 million-$176 million, or 3% year-over-year growth at the midpoint, and we expect second quarter Adjusted EBITDA of $25 million-$27 million, or 15% margin at the midpoint. With that, let's please open the call for questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes from Ron Josey from Citi. Your line is now open. Hey, thanks, guys. This is Jake on for Ron. First question on the formation share. Could you double click on the assumptions and moving pieces that give you confidence in that 10% share expectation for 2024? And maybe specifically on the simplified flow, anything specific you could share about what you're doing there to increase conversion rates? And then second, just on integrating experts, really great to hear about the prenup initiative. Anything you could share in terms of, one, where you're leveraging existing investments? And then second, any key product investments that still need to be made there to increase your chances of success? Thanks a lot. All right, thanks for the questions, Jake. Maybe first on the confidence in reaccelerating share. It's almost worth just stepping back a bit here and talking about what we're seeing in the market, because we feel pretty confident that we're not l osing share necessarily right now, but there's a little bit of a dislocation between the census data that we typically peg against and what we see from the actual Secretary of State data that we also collect. You know, to remind people, the census data is a bit of a real-time proxy, but in the background, we really look at the Secretary of State data as the main point of reference of how we're performing. When we looked at Q1 and, you know, that data is still building out, it appears that the decline in the macro is a little bit steeper than what you see in the census data. Actually, our performance from a share perspective is probably a little bit, you know, better than what is printing when you look at it relative to census data. And this makes sense if you look at some other data sources, you know, we triangulate for things like, you know, the demand that we see in search. We look at things like dissolution in our base, which is a little bit elevated. We look at, you know, consumer and small business debt levels. That has a relationship with starts. You know, SMB optimism, which is a little bit low. So all of that points to a little bit weaker macro than what we might be seeing with the census data. That said, we're also still actively testing the market, and we had some things that we changed around at the end of the quarter, where we feel pretty confident it will reaccelerate some of our share through better conversion. We have brand spend that's coming, which we haven't had turned on for a while because we haven't had the product experience well-tuned and the sales channel, you know, back in place. And so now, as we put those parts back together, we're starting to rebuild the top of the funnel as well. And those things combined really make us feel good about, you know, the share improving as we go throughout the year, after making some of these changes, in the lineup, that have been going on for multiple quarters at this point. On the question on prenups and kind of where we've invested, and where can we leverage our investment, this is one of the exciting pieces of the SMB side, is that, we're able to take a lot of the investments that we've made in the SMB space and really almost port them over to the consumer space and also, port them over to the expert space on the legal side. So if you think about tax as an example this year, we had built out practice management. That's really the interaction model between a small business and their accountant. We've now leveraged that to use that as our foundation for legal matters, where a small business can interact with an attorney. You think about some of the investments that we've made in modernizing all of our experiences, from a questionnaire standpoint and all the front-end experiences that our customers have on the small business side. Well, that's actually the exact same capability required to modernize the experiences on the consumer side around estate planning. So we're starting to see really good leverage from a technology standpoint from one product to the next. I'd say on legal matters specifically, that's a really interesting one, because not only do we have some of those technology capabilities that we can leverage, but we now have our own law firm in Arizona, which has been, you know, doing trademarks directly, but can also co-counsel with our affiliate network, which is one of the biggest networks of attorneys in the industry. We can, you know, take things like our forms capability and our AI capability in DocAssist, and we can integrate those all into an experience which will create a new way for people to interact with their attorney. And so prenup is an example of that, and it's really just the very first example, but we expect to expand into a lot of matters over the coming quarters. So a couple big things in there, and you know, the other, the one thing I don't think I mentioned, but I probably should is, you know, the back to the share side, we do have some tests that we know were winners as we exit the quarter, and that piece specifically is where we start to have more confidence in the conversion rate going up and the share actually building. Okay, thanks a lot. Appreciate it. Thank you. One moment for our next question. Our next question comes from Brent Thill from Jefferies. Your line is now open. Hi, thank you. This is John again for Brent Thill. I had a question on the BOIR product. Is the nature of that mostly recurring or is it one time? In what shape does that come? And then, what do you think about the margin profile of that offering versus other in your portfolio, including maybe the formation? Thank you. Yeah. So backing up on BOIR, you know, it's a little bit of both. There's a component of the requirement, which is, you know, requires anybody who formed a business before 2024, to actually file in their initial filing by the end of this year, and that's sort of a one-time catch-up. We mentioned on the last earnings call, that anybody who is a subscriber to our compliance solution, was entitled. We just basically made them entitled to that filing, so we don't expect that to be the biggest part of the contribution. The other part, though, is that, you know, this is a filing that's required right after formation, so within 90 days of formation. So that component is recurring as much as you have, you know, incremental formations every year. You'll have customers that are required to do that filing. I'd say the one thing that's more strategic though for us is if you back up, you know, one of the reasons we went free on formations was specifically because the biggest adjacency we have is compliance, and those are actually through subscriptions. So, you know, this is things that are required at the city, county, state, federal level, and it's not just about keeping your entity compliant, it's also about licenses and insurance so that you can, you know, operate as a business. So by the nature of solving multiple of these problems today, we're pretty much advantaged when any new compliance requirement pops up. What we're trying to do is drive our customers into the subscription itself, which gives them the ability to stay compliant with all of these different requirements. BOIRs is a really big opportunity because it's something that's new, it's confusing to small businesses, and if anything, it just shows the overall value proposition of the full compliance subscription. A lot of the testing that we're doing right now is putting them side by side and driving customers up into that ongoing recurring service. On the second one, I wasn't sure I got the... If there was an additional question in there. Yeah, is there a way to think about the- The margin profile. Yeah. Thank you. Yeah. The margin profile there is relatively high. If you think about it on a transactional basis, as you start to move more into the complete subscription, it's still a much higher margin product than when you think about a formation transaction. But there are costs when you start to bundle it with things like business licenses and other filings, potentially, where, you know, we actually—the margin will come down slightly, but in all cases, it's higher than the transactional side of the business. Obviously, John, the more success we can have in moving, shifting some of the volume into our compliance subscription, then the recurring nature of that is beneficial for us from an LTV standpoint. So we've learned a lot on the BOIR front in the first quarter, but still lots of testing happening that could flex the recognition between our transaction and subscription line. It's very helpful. Thank you. And thank you. One moment for our next question. Our next question comes from Trevor Young from Barclays. Your line is now open. Great, thanks. On the new free cash flow guide, it implies down a little bit year-over-year at the midpoint, meanwhile, EBITDA growing kind of mid-high teens at the midpoint. Can you just talk through some of the puts and takes there on cash flow and, you know, working capital items influencing that? And is some of that delta, some of the incremental tax burden that I think Noel talked to? Thanks. Yeah, thanks for the question, Trevor. You hit the nail on the head. It's, you know, the free cash flow conversion from Adjusted EBITDA is down year-over-year, and that's primarily due to high- or increased expectation for estimated cash tax payments. And it really stems from having moved through, you know, NOLs, interest expense deductions from previously held debt, R&D credits, and Section 174, impacting our structurally, our cash tax expectations. So that's the biggest driver of the variance year-over-year. Obviously, there's a lot of timing and estimation in there that could influence the ultimate outcome, and we'll refine estimates as we move forward, but we did wanna to call out the higher tax obligation. Okay, that's helpful. Presumably, over time, we start to migrate more towards kind of a statutory, you know, corporate rate? Over the long term, that's what we would, what we would expect, yes. Okay, great. Thank you. Thank you. One moment for our next question. Our next question comes from Matt Condon from Citizens JMP. Your line is now open. Thank you guys for taking my question. My first one is just, can you talk about the progress you're making with MyLZ and just getting buyers back on the platform? And then also, secondly, just big picture, what's the opportunity with your attorney network and extending experts beyond what's currently, what currently exists in the platform? Thank you. Yeah, thanks for the questions, Matt. Well, there's been a lot of progress with MyLZ, especially as we look back over the last six months. And let's start with the outcomes that we're just driving a lot more of our customers to MyLZ itself to have their account serviced, to ask questions, you know, fulfill compliance requirements directly through it. In fact, you know, that's where most of our BOIR leads are coming and actually fulfilling the order. So they're coming right now after formation. You know, all of our tax filing was done through MyLZ. In the prior season, we leveraged some third parties as well, and you can see what that did from a net promoter standpoint.... So we continue to think of it as a pretty strategic property and one that still has not been fully realized. We mentioned in the upfront comments that, you know, we've doubled the post-formation monetization, you know, off a relatively small base. We keep looking at MyLZ as the main point of contact to have with customers and introduce them to all of those services and do it in a way which is essentially taking the burden off our formations flow for doing attach. So it's very strategic. As we think about expanding our attorney network, we actually don't need to necessarily expand our attorney network. This is much more of a different business model so that we can participate in specific legal matters, by having a co-counsel model through our own law firm and partnering with the existing network that we have. Over time, I anticipate as we get into much more specialized matters or different matters that go beyond some of the conversations that our customers have around generalized advice today, we can keep adding to it, and that's not really a concern for us because the value proposition for attorneys is extremely high. So today, we're really focused on how do we leverage the network that we have? How do we expand and learn as much as we can in the matters that are, like, deeply adjacent? You know, and think about things like employment matters, think about immigration, think about things like prenup and divorce. These are all things that happen off estate plannings or formations, so they're just really strong adjacent matters that the attorneys that we have today already support. So it's, that's one of the most exciting parts, by the way, of the strategy. I mean, this is one of the things that gets me very excited. You can look across just about every industry at this point, and there's a tech-enabled service or a tech-enabled expert other than legal, which is mind-blowing. And if you think about what we bring to the table with the highest brand recognition in the space, an existing attorney network, all the tech capabilities, like, this feels really good, and this is obviously just the first step, but we know what we're doing here, and it's just gonna be more about how do we expand into different matters and keep refining the opportunity. And so this is gonna be one to watch over the next couple quarters. Very helpful. Thank you. Thank you. One moment for our next question. Our next question comes from Josh Beck from Raymond James. Your line is now open. Hi there, this is Kishan Patel on for Josh Beck. Thanks for taking our question. How do you think about managing expenses as a function of the macro environment, should conditions improve or worsen through the balance of the year? And then how should we think about the relative growth rates of transaction versus subscription revenues in 2024 and maybe the years beyond? Hi, this is Noel. Thanks for the question. You know, I would say, I'll mention that we reiterated our guidance for the full year for both top and bottom line. You know, we feel pretty confident in terms of our forecast and the visibility we have into it related to the bottom line in particular. And we're gonna watch that very closely and be very prudent around managing expenses to give ourselves the best chance to meet or exceed both our revenue guide as well as our profitability. But we feel like we have some levers in the business, and if the macro is much softer than we expect or much stronger than we expect moving forward, there's a healthy portion of our P&L that adjusts naturally. Our performance marketing is a really big line item, and that's ROI-based, and so that'll adjust to the macro itself. And then we'll obviously watch headcount and some of the other more discretionary spend items to make sure we match it to what we're seeing on the overall performance of the business. On the relative growth of transaction versus subscription, you know, what I think you'll see here depends a little bit on how well we can commercialize the opportunity on BOIR into subscriptions. And, you know, if we're able to do that, we would continue to expect that subscriptions would be outpacing transactions. There is the potential, and I think, you know, it's more likely that we see transactions with more strength towards the end of this year because a portion won't upgrade into compliance. Of course, we're gonna drive as much as we can, but we also expect LLCs to see more strength on a year-over-year basis as we get to the end of the year. But as you look longer term, the strategy hasn't changed. We want the mix to be, more heavily towards, subscribers, and we, we'd expect that mix to improve. You know, we've, we've kind of flipped the model from being, you know, 40-60, subscription and transaction to being the inverse over the past five years, and we, we wanna drive that further as we, as we go forward. One last thing I'd say also on the, on the expense side, you know, it's, it's worth mentioning is even though we're reintroducing some brand spend, you know, the overwhelming majority of our marketing spend is, is really performance-based, and it's, you know, high variable expense, where we can move it up and down, but we're ROI-driven, and so we can, we can pretty much react to any macro, direction that we see. And we've said this before, as the macro gets weaker, we almost become a little bit stronger in the industry because of our balance sheet, and, you know, we, we, we could be a little bit more aggressive than a lot of our competition. So that, that still feels like it's a good opportunity either direction the macro goes. ... Got it. Thank you very much. Thank you. One moment for our next question. Our next question comes from Elizabeth Porter with MS. Your line is now open. Great, thank you very much. This is Elizabeth from Morgan Stanley. I think last call, you know, we talked about the consumer and the estate plan coming back into focus. I just wanted to get an update of where you are on kind of refocusing towards this opportunity and how that could help some of the transaction side of the business. And is LTV to CAC similar on this side of the business as it is on the small business side? Thank you. Great, thanks for the questions, Elizabeth. Yeah, maybe it's worth, again, just reiterating on the consumer side, the first point is that the investment that we're making here is, is relatively low effort, because it's leveraging a lot of the investments that we've made on the, the small business side. But one of the things that, as we step back and think about, the broader opportunity, while it's not a massive revenue component of our business today, it is a pretty material transaction, in terms of it's a third of the size relative to business formations. And most, you know, consumers that are coming through our ecosystem or, or actually I should say all solopreneurs who come through our ecosystem are consumers. And they should be thinking about their estate in the context of forming a business, so it has high relevancy. When we think about the opportunity here, it really reopens some of the brand spend opportunity because it broadens the audience that we can reach. And we also know that a lot of people have, you know, product awareness on the estate planning side with LegalZoom, so it sort of reintroduces that, that component as well. And then the final piece I'd say that's interesting here is that it's just—it's a great intro into other legal matters. If you're helping with the estate plan, you're essentially sort of the, the tip of the spear of all family matters, and so, you know, we wanted to make sure that we create a, a really strong experience. So we've rebuilt a lot of the core product experience. We've refreshed some of the fulfillment capabilities, so it's more efficient. And I think you'll continue to see us introducing improvements in that product over the next couple quarters. On the LTV to CAC side, it's a little bit different than SMB. It has less of a subscription component to it. So we don't spend as high into the category because, you know, we're not trying to get to just a one-year return like we try to do on the small business side, and then we have all the subscriptions thereafter. In this case, we spend, you know, to a component of the first-year revenue. So the LTV to CAC is a little bit different here. Understood. Thank you very much. Thanks, Elizabeth. Thank you. One moment for our next question. Our next question comes from Ella Smith with J.P. Morgan. Your line is now open. Good afternoon. Thank you for taking my question. So first, Dan, I was hoping to ask on the macro. You mentioned that you have confidence in the business formation macro longer term, exceeding pre-pandemic growth. How do you think about, can you remind us your thought process around that, and how do you think about the longer term path reaching 30% volume share? Yeah, and the macro, I mean, if you really step far back and you think about before the pandemic, you know, this year we're still up roughly 50% to that level in FY 2019. And I think, you know, all of those tailwinds that we always talk about, you know, you don't need a lot of capital to start a business. You have access to enterprise-level capabilities and software without a significant cash outlay. You know, there's different industries like people doing businesses off social platforms. You know, you have things like NIL, you have gig platforms that exist. So we think all of that's, you know, still there. We know that post pandemic, there's been some oscillation. You can see, like, there's been high growth rate one year, and then it's sort of regroups, and you'll see, you know, almost like a decline in the following year. And it almost feels like it's just normalizing to what has been a longer term, you know, 4%-5% CAGR in a macro that, you know, we feel like as you even go further out, it's gonna be easier for smaller businesses, you know, solopreneurs to form. So overall, we feel good about it. Obviously, there's some wobbliness in the short term, but the long term looks healthy. That's clear. Thank you, Dan. As a follow-up, do you have any comments about business failures so far this year and maybe how that compares to years past? Yeah. The way we measure it might be a little bit different. You typically see people measure it by bankruptcy rate and you know, maybe a precursor oftentimes or something that's a more simple thing, is someone just shutting their business altogether, and that's a dissolution. We offer dissolution services to our customers, and they were extremely elevated in Q1, you know, almost up 40% year-over-year. But one of the things that we're recognizing is whenever a new compliance requirement is introduced into the industry, and there's a cost associated with it, in many ways, it's kind of healthy because it shakes out businesses that weren't necessarily in operations, and they realize that, "Oh, I need to shut this down, or else I could be held criminally liable, or I have, you know, other fees that I'm gonna have to pay." And so there's a component of the elevation in dissolutions that could be tied to BOIR, and some of the messaging we're doing to our own base. But I would also say that generally speaking, dissolution rates have been a little bit higher than they have historically been as well. Got it. Very clear. Thanks so much. Yeah, thanks, Ella. And thank you. And there are no further questions at this time. This concludes today's conference call. Thank you for participating, and you may now disconnect.