Slides
Page 1
Investor Presentation November 2025
Page 2
Forward-looking statements disclaimer This presentation contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward- looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained in this presentation may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this presentation include, but are not limited to, statements regarding our annual and quarterly guidance. The forward-looking statements in this presentation are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to the following: our dependence on business formations; our dependence on customers expanding the use of our platform, including converting our transactional customers to subscribers and our subscribers renewing their subscriptions with us; the impact of macroeconomic challenges or uncertainty on our business; our ability to remain profitable in the future; our ability to provide high-quality products and services, customer care and customer experience; our ability to continue to innovate and provide a platform that is useful to our customers and that meets our customers’ expectations; the competitive legal solutions market; our dependence on our brand andreputation; our ability to maintain and expand strategic relationships with third parties; our ability to hire and retain top talent and motivate our employees; our ability to effectively integrate Formation Nation, Inc. into our existing operations; risks and costs associated with complex and evolving laws and regulations; our ability to maintain effective internal control over financial reporting; and other factors discussed in the section titled “Risk Factors” included in our most recently filed Annual Report on Form 10-K or Quarterly Report on Form 10-Q as well as any factors in our subsequent filings with the Securities and Exchange Commission. The forward-looking statements in this presentation are based upon information available to us as of the date of this presentation, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. You should read this presentation with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this presentation, whether as a result of any new information, future events or otherwise. 2
Page 3
About non-GAAP financial measures This presentation includes certain non-GAAP financial measures including Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP net income (loss), non-GAAP net income (loss) margin, non-GAAP gross profit, Non-GAAP gross profit margin, certain non-GAAP expenses (including non-GAAP cost of revenue, non-GAAP sales and marketing, non-GAAP technology and development, and non-GAAP general and administrative), free cash flow and free cash flow margin. We use these non- GAAP financial measures to better understand and evaluate our core operating performance. We believe that these non-GAAP financial measures provide investors with useful information about our financial performance and liquidity, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important measures used by our management for financial and operational decision-making. We also believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multipleperiods with other companies in our industry. These non-GAAP measures should not be considered in isolation of, or as a substitute or an alternative to, measures prepared and presented in accordance with GAAP. The tables in the Appendix contain more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures. In addition, please see our earnings release and our filings with the Securities and Exchange Commission for the definitions of certain of these non-GAAP financial measures and limitations on the use of such non-GAAP financial measures. Third party information This presentation includes market data and certain other statistical information and estimates that are based on reports and other publications from independent third-party sources, as well as management's own good faith estimates and analyses. We believe these third-party reports to be reputable, but have not independently verified the underlying data sources, methodologies, or assumptions. The reports and other publications referenced are generally available to the public and were not commissioned by LegalZoom. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances reflected in this information. On February 10, 2025, we acquired 100% of the equity interests of Formation Nation, Inc. The results of Formation Nation, Inc. are included in our results of operations since the date of acquisition. Prior periods have not been recast. Acquisition of Formation Nation 3
Page 4
About LegalZoom
Page 5
To be the guardian of people’s aspirations, lives, and legacies Our vision Transforming how people navigate the legal system Our mission 5
Page 6
LegalZoom investment highlights 6 ● Category Leader in a Large, Fragmented Market Leading online legal services provider. ● Efficient Growth Engine with Significant White Space Scalable, data-driven customer acquisition model with meaningful greenfield opportunity. ● Sticky, High-Value Subscription Model Premium, solutions-based subscription offerings deliver predictable recurring revenue. ● Artificial and Human Intelligence Differentiated model leverages artificial and human intelligence to deliver expertise to our customers. ● Disciplined Financial Profile Strong balance sheet with ample cash reserves, zero debt, and attractive free cash flow conversion. ● Experienced and Execution-Focused Leadership Proven management team with a track record of driving innovation, scale, and shareholder value.
Page 7
Third quarter at a glance (Comparisons YoY) 7 Revenue $190M +13% $5M -59% Net Income $125M +13% Subscription Revenue $31M +4% Non-GAAP Net Income(1) $65M +12% Transaction Revenue $46M 24% margin -400 bps Adjusted EBITDA(1) (1) This is a non-GAAP financial measure. Refer to the Appendix for a reconciliation of this measure to the most directly comparable GAAP measure.
Page 8
The largest digital formations player leveraging our capabilities for estate planning services Large SAM(1), significant opportunity During and post-business formation, we offer a set of important services to operate a business We offer access to experts to help handle the most complex business matters and life events Life & Business Planning $13B Business Management $15B Expert Assistance $23B ● Entity Creation ● Estate Planning ● Entity Compliance ● Bookkeeping ● Business Licenses ● Business Address – Virtual Mail ● Forms / eSignature(2) ● Insurance / Banking / Websites(3) ● Intellectual Property ● Contracts and Legal Forms ● Business Tax Returns(3) ● Other Legal Matters (1) Total SAM as of February 2024. U.S. Census Bureau; U.S. Small Business Administration; internal company estimates. (2) Not included in Business management SAM. (3) Reflects partnership ecosystem. 8
Page 9
$51B -61 35% ~4% SAM(1) Offline Attorney NPS(2) of solo practitioners don’t have a website(3) legal services delivered online in the U.S.(4) Significant growth opportunity as largest digital player 4.9M Businesses formed since inception 4.4M Estate planning solutions delivered since inception The Largest Digital Player Advantaged NPS(7)Brand Advantage(6)Efficient Payback(5) Unless otherwise noted, all information is as of September 30, 2025. (1) Total SAM as of February 2024. U.S. Census Bureau; U.S. Small Business Administration; internal company estimates. (2) Net promoter score (NPS) in 2024, according to Clio Legal Trends Report. (3) In 2023, according to the American Bar Association. (4) In 2022, according to IBISWorld. (5) Estimated total net bookings per customer less cost of revenue to customer acquisition cost ratiofor 2024 customer cohort. (6) Source: Dynata (LegalZoom vs. category competitors) as of December 31, 2024. (7) Source: Internalcustomer data as of December 31, 2024. Our market +75 LegalZoom Attorney NPS >1.5x Aided Brand Awareness <1 yr Gross profit positive Our leadership Little product innovation Low digital penetration Low tech adoption 2.0M Active legal & compliance subscriptions 1,000+ Independent attorney network servicing all 50 states 9 We believe LegalZoom is uniquely positioned to capitalize on the large and fragmented online legal services market with a customer offering tailored to meet the varied needs of new and existing SMBs
Page 10
We solve important problems for our customers… Entity creation and compliance is complicated, time-consuming and expensive to navigate on your own Small business owners have a fear of navigating complex regulatory matters, but the cost of experts isn’t accessible Consumers need legal help to protect their families, but the cost of experts isn’t accessible (1) 2017 NSBA Small Business Regulations Survey. (2) LegalZoom Magid customer study as of July 2023. (3) Caring.com 2024 Wills and Estate Planning Survey. 96% Haven’t consulted an attorney at formation(2) 92% Haven’t consulted a tax professional at formation(2) 44% Of small businesses spend >40 hours each year dealing with regulations(1) 10% Of small businesses are fined for regulatory noncompliance(1) 64% Of Americans say having a will is important, but fewer than 32% have one(3) 16% Of Americans believe they cannot afford to create a will(3) 10
Page 11
Small business services Business formation Business compliance Legal advice Business management(1) Tax prep, banking, insurance & websites(2) Trademark & IP (1) Services include virtual mail, legal forms, eSignature and bookkeeping. (2) Represents partner ecosystem. 11 Consumer services Estate planning Legal advice Real estate …through our innovative legal technology platform
Page 12
1 Optimize our subscription business 2 Reorient go-to- market strategy 3 Leverage AI to deliver expertise Three key focus areas 12
Page 13
● Execute premium solutions-based subscription model ● Expanding suite of Do-It-For-Me (“DIFM”) customizable offerings that cater to high quality customers ● Deepen customer engagement and drive higher life-time value Optimize our subscription business 13 Create scalable solutions that deliver impactful outcomes Compliance Concierge is one example of our recent DIFM launches already signaling strong adoption
Page 14
Reorient go-to-market strategy 14 Integration Update Position LegalZoom as the trusted legal brand for small businesses to drive awareness and consideration Marketing Efforts: ● Driving higher ROAS in conjunction with continued investment in brand marketing ● Plan to continue to reinvest cost savings realized in other areas of the business into brand marketing ● Marketing spend is guardrail driven, automatically fluctuating with demand, and no upfront commitments 14
Page 15
Reorient go-to-market strategy: Driving visibility through strategic partnerships 1515 August 2025: OpenAI collaboration shows how AI-powered agents can provide personalized access to legal guidance June 2025: Launched a tailored legal support program for Perplexity Pro users October 2025: LegalZoom’s partners can integrate our legal services directly into their own platforms October 2025: LegalZoom customers can access Design.com’s AI-powered logo generator directly in LegalZoom’s platform
Page 16
Augmented AI to deliver expertise 16 Customer-Centric Augmentation ● Access to both AI and our experts provides customers affordable empowerment at scale, with the expertise pure tech platforms can’t match Augmented Legal Expertise ● AI empowers our experts to do more, delivering legal services to our customers that are faster and smarter Operational Efficiency & Cost Discipline ● AI is unlocking operating efficiencies while simultaneously expanding customer-facing “expert capacity” Platform Evolution & Small Business (SMB) Expansion ● Focused on creating AI-first legal products with conversational interfaces and customer-facing legal assistants as the trusted guardian for SMBs navigating complexity
Page 17
Experienced management team Jeff Stibel Chief Executive Officer Noel Watson Chief Financial & Operating Officer Nicole Miller Chief Legal Officer Sheily Chhabria Panchal Chief People Officer Kathy Tsitovich Chief Corporate Development & Partnerships Officer Aaron Stibel Chief Business & Customer Officer Daniel Lysaught Chief Marketing Officer 17
Page 18
Financial update
Page 19
Q3 2025 snapshot 19 Revenue Non-GAAP Gross Profit(1) Adjusted EBITDA(1) % of Revenue(1) 71% 71% % of Revenue(1) 28% 24% +12% YoY (2%) YoY +13% YoY (1) This is a non-GAAP financial measure. Refer to the Appendix for a reconciliation of this measure to the most directly comparable GAAP measure. $47M $46M Q3'24 Q3'25 $169M $190M Q3'24 Q3'25 $120M $135M Q3'24 Q3'25
Page 20
$359M $413M $436M 2022 2023 2024 Subscription revenue(1) 20 Subscription KPIs Subscription Units(2) 1,717K 1,766K 1,924K 1,955K 1,959K ARPU(3) $264 $263 $252 $256 $256 Subscription KPIs 1,441K 1,545K 1,766K $259 $277 $263 (1) Beginning in the fourth quarter of 2023, we no longer present partner revenue on a standalone basis and partner revenue is now included within transaction and subscription revenue. This change had no impact on total revenue. Prior period disclosures and amounts have been conformed to the current period presentation. (2) We define the number of subscription units in a given period as the paid subscriptions that remain active at the end of such period, including those that are not yet 60 days past their subscription order dates, excluding subscriptions from our employer group legal plan. Refunds, or partial refunds, may be iss ued under certain circumstances pursuant to the terms of our customer satisfaction guarantee. (3) We define average revenue per subscription unit, or ARPU, as of a given date as subscription revenue for the 12-month period ended on such date, or LTM, divided by the average number of subscription units at the beginning and end of the LTM period. +13% YoY +6% YoYSubscription revenue is primarily comprised of registered agent and compliance packages, attorney advice, virtual mail, bookkeeping, legal forms, and e- signature services. $111M $109M $116M $120M $125M Q3'24 Q4'24 Q1'25 Q2'25 Q3'25
Page 21
$261M $248M $246M 2022 2023 2024 $62M $58M $65M Q3'23 Q3'24 Q3'25 Transaction revenue(1) 21 (1) Beginning in the fourth quarter of 2023, we no longer present partner revenue on a standalone basis and partner revenue is now included within transaction and subscription revenue. This change had no impact on total revenue. Prior period disclosures and amounts have been conformed to the current period presentation. (2) We define the number of business formations in a give n period as the number of LLC, incorporation, not-for-profit and DBA orders placed through our platform in such period. (3) We define the number of transaction units in a given period as gross transaction order volume, prior to refunds, on our platform during such period. Transactions may include one or more services purchased at the same time. Refunds, or partial refunds, may be issued under certain circumstances, pursuant to the terms of our customer satisfaction guarantee. (4) We define average order value for a given period as total transaction revenue divided by total number of transactions in such period. Transaction KPIs Business Formations(2) 137K 113K 126K Total Transaction Units(3) 237K 255K 259K AOV(4) $262 $227 $251 Transaction KPIs 474K 581K 482K 929K 1,043K 1,123K $281 $238 $219 12% YoY (1%) YoY Transaction revenue is primarily generated from business formations services as well as other small business and consumer transactions including annual reports, trademark filings, and estate planning solutions. In the first quarter of 2023, we launched a free business formation filing SKU.
Page 22
35M 34M 44M 13M 9M 17M$48M $43M $61M Q3'23 Q3'24 Q3'25 % of Revenue Total Sales & Marketing 29% 26% 32% CAM 21% 20% 23% Other Sales & Marketing 8% 6% 9% % of Revenue 40% 30% 29% 28% 22% 23% 12% 8% 6% Sales & marketing(1) 22(1) These are non-GAAP financial measures. Refer to the Appendix for a reconciliation of these measures to the most directly comparable GAAP measures. (2%) YoY Customer Acquisition Media “CAM” Other Sales & Marketing 40% YoY 175M 145M 158M 72M 54M 38M $246M $199M $196M 2022 2023 2024
Page 23
Non-GAAP expenses(1) 23(1) These are non-GAAP financial measures. Refer to the Appendix for a reconciliation of these measures to the most directly comparable GAAP measures. % of Revenue Total Non-GAAP Expense 80% 72% 76% Cost of Revenue 33% 29% 29% Sales & Marketing 29% 26% 32% Tech. & Dev. 9% 9% 8% G&A 9% 9% 7% % of Revenue 90% 82% 78% 32% 34% 32% 40% 30% 29% 8% 9% 9% 10% 9% 9% 18% YoY (2%) YoY Cost of Revenue Sales & Marketing Technology & Development General & Administrative
Page 24
Q4 and FY25 guidance(1) $182M - $186M Total Revenue $46M - $48M Adjusted EBITDA(1) Q4 2025 $748M - $752M Total Revenue $168M - $170M Adjusted EBITDA(1) FY 2025 ● Revenue growth of approximately 10% YoY ● Commitment to Adjusted EBITDA expansion o Expect to achieve Adjusted EBITDA margin of approximately 23%(1) FY 2025 Guidance Commentary (1) This is a non-GAAP financial measure. The Company has not reconciled this forward-looking non-GAAP measure to the most comparable GAAP measure because it is unable to provide a meaningful calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that would impact the most directly comparable forward-looking GAAP financial measure that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted. 24
Page 25
Appendix
Page 26
Reconciliation of GAAP expenses to non-GAAP expenses FYE Dec 31, $K 2022 2023 2024 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 Cost of revenue $211,095 $239,263 $240,093 $59,123 $55,907 $68,384 $63,609 $54,715 $53,385 $66,560 $67,398 $62,271 Stock-based compensation(1) 2,931 4,318 5,833 1,115 1,224 1,593 1,747 1,165 1,328 1,260 1,478 1,421 Depreciation and amortization 8,581 12,772 18,902 3,307 3,832 4,467 4,618 4,828 4,989 5,115 5,313 5,343 Certain non-recurring items(2) — — — — — — — — — — — — Non-GAAP cost of revenue 199,583 222,173 215,358 54,791 50,851 62,324 57,244 48,722 47,068 60,185 60,607 55,507 Sales and marketing 263,884 210,872 207,684 51,071 46,126 53,753 60,130 46,287 47,514 61,378 69,580 67,835 Stock-based compensation(1) 10,144 6,096 8,077 1,623 1,494 1,579 1,906 1,864 2,728 3,767 4,473 4,445 Depreciation and amortization 7,014 5,286 3,736 1,400 1,275 799 889 960 1,088 1,715 2,454 2,513 Certain non-recurring items(2) 400 — — — — — — — — — — — Non-GAAP sales and marketing 246,326 199,490 195,871 48,048 43,357 51,375 57,335 43,463 43,698 55,896 62,653 60,877 Customer Acquisition Marketing(3) 174,636 145,338 157,578 35,441 33,131 40,563 47,119 33,975 35,921 44,215 46,713 44,227 Technology and development 70,434 83,181 89,584 21,491 22,107 23,957 25,798 23,179 16,650 21,322 21,635 19,485 Stock-based compensation(1) 16,574 18,899 19,573 4,706 4,998 5,703 6,525 6,179 1,166 4,024 4,658 2,893 Depreciation and amortization 2,834 4,184 7,688 1,168 1,317 1,477 1,841 2,150 2,220 2,220 2,158 2,081 Certain non-recurring items(2) — — — — — — — — — — — — Non-GAAP technology and development 51,026 60,098 62,323 15,617 15,792 16,777 17,432 14,850 13,264 15,078 14,819 14,511 General and administrative 116,057 106,352 108,939 25,243 27,669 23,065 26,679 28,149 31,046 39,221 36,996 34,074 Stock-based compensation(1) 50,820 36,702 38,027 8,138 7,294 5,981 8,737 6,507 16,802 20,705 20,029 19,610 Depreciation and amortization 3,316 3,141 4,601 780 898 927 1,078 1,257 1,339 1,356 1,414 1,436 Certain non-recurring items(2) 2,593 6,234 6,096 1,247 4,252 321 425 5,917 (567) 2,221 88 88 Non-GAAP general and administrative 59,328 60,275 60,215 15,078 15,225 15,836 16,439 14,468 13,472 14,939 15,465 12,940 26 (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback program that concluded in 2022. (2) Includes acquisition-related expenses, restructuring expenses, legal reserves and settlements, and IPO-related costs and other transaction related expenses, as detailed in Reconciliation of Net (Loss) Income to Non-GAAP Net (Loss) Income elsewhere in the appendix. (3) Customer Acquisition Marketing is a component of both GAAP and Non-GAAP sales and marketing expense.
Page 27
Reconciliation of GAAP expenses to non-GAAP expenses on a % of revenue basis (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback program that concluded in 2022. (2) Includes acquisition-related expenses, restructuring expenses, legal reserves and settlements, and IPO-related costs and other transaction related expenses, as detailed in Reconciliation of Net (Loss) Income to Non-GAAP Net (Loss) Income elsewhere in the appendix. (3) Customer Acquisition Marketing is a component of both GAAP and Non-GAAP sales and marketing expense. FYE Dec 31, $K 2022 2023 2024 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 Cost of revenue 34% 36% 35% 35% 35% 39% 36% 32% 33% 36% 35% 33% Stock-based compensation(1) 0% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% Depreciation and amortization 1% 2% 3% 2% 2% 3% 3% 3% 3% 3% 3% 3% Certain non-recurring items(2) — — — — — — — — — — — — Non-GAAP cost of revenue 32% 34% 32% 33% 32% 36% 32% 29% 29% 33% 31% 29% Sales and marketing 43% 32% 30% 31% 29% 31% 34% 27% 29% 34% 36% 36% Stock-based compensation(1) 2% 1% 1% 1% 1% 1% 1% 1% 2% 2% 2% 2% Depreciation and amortization 1% 1% 1% 1% 1% 0% 1% 1% 1% 1% 1% 1% Certain non-recurring items(2) 0% — — — — — — — — — — — Non-GAAP sales and marketing 40% 30% 29% 29% 27% 29% 32% 26% 27% 31% 33% 32% Customer Acquisition Marketing(3) 28% 22% 23% 21% 21% 23% 27% 20% 22% 24% 24% 23% Technology and development 11% 13% 13% 13% 14% 14% 15% 14% 10% 12% 11% 10% Stock-based compensation(1) 3% 3% 3% 3% 3% 3% 4% 4% 1% 2% 2% 2% Depreciation and amortization 0% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% Certain non-recurring items(2) — — — — — — — — — — — — Non-GAAP technology and development 8% 9% 9% 9% 10% 10% 10% 9% 8% 8% 8% 8% General and administrative 19% 16% 16% 15% 17% 13% 15% 17% 19% 21% 19% 18% Stock-based compensation(1) 8% 6% 6% 5% 5% 3% 5% 4% 10% 11% 10% 10% Depreciation and amortization 1% 0% 1% 0% 1% 1% 1% 1% 1% 1% 1% 1% Certain non-recurring items(2) 0% 1% 1% 1% 3% 0% 0% 4% (0%) 1% 0% 0% Non-GAAP general and administrative 10% 9% 9% 9% 10% 9% 9% 9% 8% 8% 8% 7% 27
Page 28
Reconciliation of GAAP expenses to non-GAAP expenses on a year-over-year % basis (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback program that concluded in 2022. (2) Includes acquisition-related expenses, restructuring expenses, legal reserves and settlements, and IPO-related costs and other transaction related expenses, as detailed in Reconciliation of Net (Loss) Income to Non-GAAP Net (Loss) Income elsewhere in the appendix. (3) Customer Acquisition Marketing is a component of both GAAP and Non-GAAP sales and marketing expense. FYE Dec 31, $K 2022 2023 2024 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 Cost of revenue 11% 13% 0% 18% 18% 13% (0%) (8%) (5%) (3%) 6% 14% Stock-based compensation(1) 76% 47% 35% 87% 69% 82% 58% 4% 8% (21%) (15%) 22% Depreciation and amortization 33% 49% 48% 68% 62% 70% 53% 46% 30% 15% 15% 11% Certain non-recurring items(2) — — — — — — — — — — — — Non-GAAP cost of revenue 10% 11% (3%) 15% 15% 10% (4%) (11%) (7%) (3%) 6% 14% Sales and marketing (6%) (20%) (2%) (24%) (4%) (11%) 12% (9%) 3% 14% 16% 47% Stock-based compensation(1) (35%) (40%) 32% (45%) 192% 3% 32% 15% 83% 139% 135% 138% Depreciation and amortization 17% (25%) (29%) (20%) (15%) (36%) (34%) (31%) (15%) 115% 176% 162% Certain non-recurring items(2) — (100%) — (100%) — — — — — — — — Non-GAAP sales and marketing (4%) (19%) (2%) (23%) (6%) (10%) 13% (10%) 1% 9% 9% 40% Customer Acquisition Marketing(3) (11%) (17%) 8% (21%) 4% (0%) 31% (4%) 8% 9% (1%) 30% Technology and development (16%) 18% 8% 23% 17% 22% 30% 8% (25%) (11%) (16%) (16%) Stock-based compensation(1) (57%) 14% 4% 22% 17% 32% 34% 31% (77%) (29%) (29%) (53%) Depreciation and amortization 20% 48% 84% 68% 82% 72% 119% 84% 69% 50% 17% (3%) Certain non-recurring items(2) — — — — — — — — — — — — Non-GAAP technology and development 19% 18% 4% 21% 14% 16% 23% (5%) (16%) (10%) (15%) (2%) General and administrative 9% (8%) 2% (16%) 1% (13%) (1%) 12% 12% 70% 39% 21% Stock-based compensation(1) (10%) (28%) 4% (34%) (30%) (39%) (24%) (20%) 130% 246% 129% 201% Depreciation and amortization 77% (5%) 46% (7%) (7%) 11% 71% 61% 49% 46% 31% 14% Certain non-recurring items(2) 1% 140% (2%) (13%) — (49%) 297% 374% (113%) 592% (79%) (99%) Non-GAAP general and administrative 30% 2% (0%) (2%) (5%) 3% 12% (4%) (12%) (6%) (6%) (11%) 28
Page 29
Reconciliation of GAAP gross profit to non-GAAP gross profit (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback program that concluded in 2022. (2) We define non-GAAP gross profit as gross profit adjusted to exclude amortization of acquired intangible assets from our business combinations, non-cash stock-based compensation expense, losses from impairments of goodwill, long-lived and other assets, and other non-recurring expenses associated with our cost of revenue. Our non-GAAP gross profit financial measure differs from GAAP in that it excludes certain items of income and expense. We define gross profit margin as gross profit as apercentage of revenue. We define non-GAAP gross profit margin as non-GAAP gross profit as a percentage of revenue. FYE Dec 31, $K 2022 2023 2024 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 Gross profit $408,884 $421,464 $441,788 $108,061 $102,756 $105,830 $113,753 $113,884 $108,321 $116,550 $125,111 $127,887 Cost of revenue stock-based compensation(1) 2,931 4,318 5,833 1,115 1,224 1,593 1,747 1,165 1,328 1,260 1,478 1,421 Cost of revenue depreciation & amortization 8,581 12,772 18,902 3,307 3,832 4,467 4,618 4,828 4,989 5,115 5,313 5,343 Non-GAAP gross profit(2) $420,396 $438,554 $466,523 $112,483 $107,812 $111,890 $120,118 $119,877 $114,638 $122,925 $131,902 $134,651 Gross profit margin(2) 66% 64% 65% 65% 65% 61% 64% 68% 67% 64% 65% 67% Non-GAAP gross profit margin(2) 68% 66% 68% 67% 68% 64% 68% 71% 71% 67% 69% 71% 29
Page 30
Reconciliation of GAAP net (loss) income to Adjusted EBITDA (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback program that concluded in 2022. (2) In December 2022, we fully impaired our investment in Mylo and incurred a loss of $3.0 million as the fair value of our investment was determined to be zero based upon an observable sale of their common equity. (3) Restructuring costs relateto certain one-time severance events for different components of our business. For 2022, we incurred restructuring costs related to the reduction of our U.S. headcount. For 2023, restructuring expenses related to the reduction of our U.K. headcount, which was substantially complete by December 31, 2023. For 2024 and 2025, restructuring expenses related to the reduction of our U.S. headcount. (4) Legal reserves and settlements include costs accrued or paid for potential litigation settlements, and are net of insurance recoveries, if any. (5) In 2022, certain non-recurring expenses consisted of compensation expense was recorded in sales and marketing expenses related to the departure of a member of management. In 2023, certain non-recurring expenses included costs incurred by the Company in conjunction with the secondary offerings by a selling stockholder in September 2023 and November 2023. FYE Dec 31, $K 2022 2023 2024 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 Net (loss) income ($48,733) $13,953 $29,963 $7,534 $7,382 $4,744 $1,314 $11,051 $12,854 $5,127 ($266) $4,509 Interest (income) expense, net (1,543) (8,814) (7,404) (2,623) (2,457) (2,826) (2,203) (1,273) (1,102) (1,301) (1,904) (1,987) Provision for (benefit from) income taxes 1,060 17,541 13,120 4,463 3,114 3,230 2,046 8,232 (388) 5,487 (278) 3,869 Depreciation and amortization 21,745 25,383 34,927 6,655 7,322 7,670 8,426 9,195 9,636 10,406 11,339 11,373 Other expense (income), net 4,477 (1,621) (98) 882 (1,185) (93) (11) (1,741) 1,747 (347) (652) 102 Stock-based compensation(1) 80,469 66,015 71,510 15,582 15,010 14,856 18,915 15,715 22,024 29,756 30,638 28,369 Impairment of goodwill, long-lived & other assets 237 — — — — — — — — — — — Impairment of other equity security(2) 3,000 — — — — — — — — — — — Acquisition or transaction-related expenses 758 — — — — — — — — 1,543 — — Gain on sale of assets held for sale — — — — — — — — — (14,337) — — Restructuring costs(3) 1,795 4,666 6,096 68 3,863 321 425 5,917 (567) 678 88 88 Legal reserves and settlements(4) 40 — — — — — — — — — — — Certain non-recurring expenses(5) 400 1,568 — 1,179 389 — — — — — — — Adjusted EBITDA $63,705 $118,691 $148,114 $33,740 $33,438 $27,902 $28,912 $47,096 $44,204 $37,012 $38,965 $46,323 Revenue 619,979 660,727 681,881 167,274 158,663 174,214 177,362 168,599 161,706 183,110 192,509 190,158 Adjusted EBITDA margin 10% 18% 22% 20% 21% 16% 16% 28% 27% 20% 20% 24% 30
Page 31
Reconciliation of GAAP net (loss) income to non-GAAP net (loss) income (1) Stock-based compensation expense excludes amounts paid in cash to certain employees as part of a buyback program that concluded in 2022. (2) In December 2022, we fully impaired our investment in Mylo and incurred a loss of $3.0 million as the fair value of our investment was determined to be zero based upon an observable sale of their common equity. (3) Restructuring costs relateto certain one-time severance events for different components of our business. For 2022, we incurred restructuring costs related to the reduction of our U.S. headcount. For 2023, restructuring expenses related to the reduction of our U.K. headcount, which was substantially complete by December 31, 2023. For 2024 and 2025, restructuring expenses related to the reduction of our U.S. headcount. (4) Legal reserves and settlements include costs accrued or paid for potential litigation settlements, and are net of insurance recoveries, if any. (5) In 2022, certain non-recurring expenses consisted of compensation expense was recorded in sales and marketing expenses related to the departure of a member of management. In 2023, certain non-recurring expenses included costs incurred by the Company in conjunction with the secondary offerings by a selling stockholder in September 2023 and November 2023. FYE Dec 31, $K 2022 2023 2024 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 Net (loss) income ($48,733) $13,953 $29,963 $7,534 $7,382 $4,744 $1,314 $11,051 $12,854 $5,127 ($266) $4,509 Amortization of acquired intangible assets 3,532 5,165 5,082 1,292 1,291 1,270 1,271 1,275 1,266 1,647 2,381 2,163 Stock-based compensation(1) 80,469 66,015 71,510 15,582 15,010 14,856 18,915 15,715 22,024 29,756 30,638 28,369 Impairment of goodwill, long-lived & other assets 237 — — — — — — — — — — — Impairment of other equity security(2) 3,000 — — — — — — — — — — — Acquisition or transaction-related expenses 758 — — — — — — — — 1,543 — — Restructuring costs(3) 1,795 4,666 6,096 68 3,863 321 425 5,917 (567) 678 88 88 Legal reserves and settlements(4) 40 — — — — — — — — — — — Certain non-recurring expenses(5) 400 1,568 — 1,179 389 — — — — (14,337) — — Income tax effects (10,243) (10,892) (13,200) (2,347) (3,801) (2,847) (3,115) (4,259) (2,979) (592) (4,512) (4,133) Non-GAAP net income $31,255 $80,475 $99,451 $23,308 $24,134 $18,344 $18,810 $29,699 $32,598 $23,822 $28,329 $30,966 Net (loss) income margin (8%) 2% 4% 5% 5% 3% 1% 7% 8% 3% (0%) 2% Non-GAAP net income margin 5% 12% 15% 14% 15% 11% 11% 18% 20% 13% 15% 16% 31
Page 32
Reconciliation of net cash provided by operating activities to free cash flow (1) We define free cash flow as cash generated by operations after purchases of property and equipment including capitalized internal-use software. (2) We define operating cash flow margin as net cash provided by operating activities as a percentage of revenue. We define free cash flow margin as free cash flow as a percentage of revenue. We define unlevered free cash flow margin as unlevered free cash flow as a percentage of revenue. FYE Dec 31, $K 2022 2023 2024 Q3’23 Q4’23 Q1’24 Q2’24 Q3’24 Q4’24 Q1’25 Q2’25 Q3’25 Net cash provided by operating activities $73,837 $124,308 $135,639 $27,441 $22,495 $34,194 $27,245 $31,613 $42,586 $50,703 $39,139 $54,226 Purchase of property and equipment (22,098) (31,593) (35,696) (7,993) (8,374) (9,477) (9,873) (9,638) (6,707) (9,378) (7,530) (7,236) Free cash flow(1) 51,739 92,715 99,943 19,448 14,121 24,717 17,372 21,975 35,879 41,325 31,609 46,990 Operating cash flow margin(2) 12% 19% 20% 16% 14% 20% 15% 19% 26% 28% 20% 29% Free cash flow margin(2) 8% 14% 15% 12% 9% 14% 10% 13% 22% 23% 16% 25% 32