Today, and thank you for standing by. Welcome to LegalZoom's Third Quarter 2025 Earnings Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press Star 101 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press Star 101 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Madeleine Crane, Head of Investor Relations. Please go ahead. Thank you, Operator. Welcome to LegalZoom's Third Quarter 2025 Earnings Conference Call. Joining me today is Jeff Stibel, our Chairman and Chief Executive Officer, and Noel Watson, our Chief Operating Officer and 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 factor section of our most recent quarterly report on Form 10-Q 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 Jeff. Good afternoon, Madeleine, and welcome back. I want to thank you all for joining our third quarter earnings conference call. We are very pleased with our performance and the progress we've made against our key focus areas. Our third quarter results both validate the strategic shift we made to our subscription business and exemplify the outstanding execution by the team. The proof points we're seeing across the business give us confidence that we have transitioned beyond stabilizing the business, having now built a strong foundation for accelerated growth. Turning to highlights of our third quarter financial results, we achieved record third quarter revenue of $190 million, an increase of 13% year- over-y ear, well exceeding expectations. Subscription revenue also grew 13%, accelerating from the second quarter and marking our third consecutive quarter of sequential growth. Subscription revenue growth was again led by our compliance offerings, demonstrating the strong demand for our expanding compliance concierge product suite. Further, our compliance offerings continue to show encouraging improvement in first-year retention rates, demonstrating that more established customers are recognizing the incremental value of our premium products. Profitability remains strong, with an adjusted EBITDA margin of 24%, resulting from disciplined execution and continued efficiency gains. This is despite incremental investment in product and AI. We generated solid free cash flow of $47 million in the quarter, further strengthening our balance sheet and financial flexibility. With our strong third-quarter performance and the momentum in our business, we are raising our full-year revenue growth outlook to 10%, effectively doubling our initial full-year guidance. We are maintaining our 23% adjusted EBITDA outlook as well. As we continue to identify cost savings, we plan to redeploy much of these gains into strategic investments that position the business for future growth. Turning now to our three strategic focus areas. When we initially laid out these key focus areas last summer, our objective was to attract quality share by strengthening our subscription business and offering greater value to customers. This strategy not only fueled our turnaround, it has allowed us to attract more established businesses, activating a larger portion of our SAM and helping us accelerate growth. Building on this progress, we are now expanding our focus area beyond business formation to serve existing businesses. We believe we are best positioned to capture this opportunity through our core competencies of technology and AI, supported by our vast data set and large network of attorneys and other experts. We believe this positions us to capture a greater share of our serviceable, addressable market by broadening our customer base and driving higher wallet share. Our goal is to activate the existing SMBs who today do not act on legal and compliance needs due to cost, access, or fear. We expect to achieve this goal through the continued introduction of higher-value products and investments in AI, both in our people and in the tools that enhance productivity and decision-making. This strategy is rooted in integrating human experts into the workflow at critical junctures that AI cannot fully address to ensure accuracy and customer confidence. Importantly, our AI tools will provide a level of customization to help businesses focus on their goals while LegalZoom supports the back end. Turning now to the progress we have made across our three strategic focus areas. Our first focus area is delivering innovation across the subscription business. On our last call, we talked about the early success of our compliance concierge product offering, and we continue to see greater opportunities here. We were also in the testing phase for several new concierge products for SMBs: nonprofit, reinstatement, dissolution, and entity conversion concierge. Each of these high-end products afford customers the ability to offload their business's compliance needs, enabling them to focus on running their businesses. We saw encouraging signs of adoption across these offerings. Notably, we expect these products to carry profit margins at or above those that we typically see with DIY solutions. Additionally, via our sales center, we are testing the bundling of these do-it-for-me services into a subscription-only formation product bundle. We've been testing two offerings. First, business concierge, which serves compliance and business expansion needs, and second, business concierge plus legal concierge, which adds access to our independent attorney network for additional legal guidance. The strong early adoption of these products demonstrates our ability to address the needs of the roughly 36 million existing small businesses with DIFM solutions that provide legal, accounting, and business guidance from professionals at a cost that is significantly lower than that of a traditional offline attorney, accountant, or business manager. As an example, traditional lawyers can charge $500 per hour or more, whereas our DIFM products are typically under $1,000 for an entire year, even when they include access to an attorney. It is also worth noting that our 1-800 ACCOUNTANT partnership continues to surpass our expectations. Given the strength of this partnership, we are looking at ways to deepen the relationship. For example, we will begin to test bundling their tax advice with our legal advice to create a seamless, easy-to-navigate, and economical way to support businesses. We expect this offering to fully roll out next year. This provides a competitive advantage because we have learned that many of the questions asked of our legal advisors are actually tax-related and vice versa. This speaks strongly to our ability to diversify our business model and capture more of our SAM by entering near adjacencies such as tax and accounting. This brings us to our second strategic focus area, reorienting our go-to-market strategy. Our go-to-market strategy is focused on positioning LegalZoom as the trusted legal brand for small businesses. We launched a highly successful marketing campaign in May. Technology when you want it, human support when you need it, reinforcing the principle behind AI-augmented expertise. We believe this campaign helped to drive aided and unaided awareness, both of which improved sequentially from the second quarter. We continued to shift our marketing spend away from SEM to brand marketing and other initiatives. By the end of Q3, we delivered a double-digit increase in return on ad spend, or ROAS, as compared to before the launch of the new brand campaign. It is clear that our message is resonating with SMBs and the strategy is working. Building on this momentum, we plan to continue to reinvest cost savings we have realized elsewhere into brand marketing. As we move toward activating a larger portion of our SAM opportunity through diversification, our new campaign scheduled for later this year will hone in on existing SMBs. We are also expanding visibility through strategic partnerships and driving new customers through growth in our channel partner program. As a reminder, last quarter, we announced two collaborations of our legal support with Perplexity and OpenAI. This quarter, we are deepening our relationship with OpenAI and have become the first online legal services provider for SMBs to sign an enterprise deal with the firm. Among other areas, we will be collaborating with OpenAI to further integrate our product experience into their platform, so expect to hear more on this in the near future. Our comprehensive efforts, including the modernization of our affiliate platform, the development of an embedded flow that allows partners to seamlessly integrate LegalZoom's business legal services, and the establishment of new strategic partnerships, have successfully fueled a roughly 25% year-over-year increase in our partner channel for the third quarter. Shifting to our progress in leveraging artificial and human intelligence to deliver expertise to our customers, our strategic priority is to use AI to augment human expertise and create a more personalized experience. Our OpenAI deal mentioned previously is a step in that direction. As were our earlier collaborations with Perplexity and OpenAI. One of the key tenets of this strategy is to leverage AI to create higher-value do-it-for-me offerings that improve compliance and efficiency. This area in particular is critical in our shift to addressing the needs of existing and established SMBs. Last quarter, we talked about introducing the capability to autofile compliance requirements. Our first release was a state annual report product. We've been rolling this out on a state-by-state basis, and we expect to have roughly 80% coverage by the end of the year. We've also developed AI tools to augment our experts and to drive internal efficiencies. Our AI voice training call simulator increases agent efficiency and shortens onboarding time. We also deployed a LegalZoom Salesforce Wizard to reduce customer response times, and our AI trademark classifier now automates processes that were previously manual. In addition, we've worked with 1-800 ACCOUNTANT to launch an AI-driven appointment center, which we'll deploy under our partnership for the upcoming tax year. Lastly, as part of our commitment to our AI strategy, we've made an organizational change that I believe will help us to advance product innovation through the integration of AI and human expertise. As part of this change, we are instituting AI mandatory standards, including training, testing, and utilization across the entire organization. We've also reorganized our teams to ensure that AI sits alongside our human experts and becomes deeply integrated into how we deploy technology and product. To effectuate this, Aaron Steibel now serves as our Chief Business and Customer Officer, where he will oversee technology, product, sales, and service, creating a division at LegalZoom that fully integrates the customer, the expert, and our artificial intelligence work. We believe that under this unified vision, from development to customer delivery, we can leverage Aaron's deep experience and comprehensive track record of building technology platforms that drive a rich customer experience throughout the product cycle. As a reminder, Aaron has held similar previous roles at Dun & Bradstreet, including Divisional Chief Technology Officer and Head of the Small and Medium-Sized Business Unit. As part of this change, our former CTO, Karthik Savoy, is no longer with the company. This was not an easy decision. However, we believe this is the right move to deliver on what we believe is an outstretched opportunity in human and artificial intelligence to transform our business long-term. With our more direct focus on driving AI-specific technology into our products, we are also announcing that Matt Heumann has joined the company as Senior Vice President and Head of Product. Matt joins LegalZoom from Amazon, where he served as head of Alexa subscriptions growth, most recently leading the subscription launch of Alexa Plus, an AI-driven personal assistant. Matt brings more than 30 years of experience in the software and technology industry, with deep knowledge of AI and customer-centric digital innovation. We believe his expertise will be instrumental in accelerating LegalZoom's ability to leverage AI and human expertise to increase value for customers. In addition to drive our momentum forward, we continue to bolster and expand our sales and service organization. To enhance cross-sell and upsell opportunities while elevating customer engagement, we've appointed Julie Mann as Vice President of Sales and Service. Julie brings nearly 20 years of experience building and scaling high-growth technology-driven teams, having led organizations at companies such as CapJack, Expedia, and Optimizely. She excels at creating systems that drive velocity, operational discipline, and world-class team performance. Her data-driven leadership and expertise at the intersection of human and artificial intelligence will further accelerate our sales momentum. We are very confident that this organizational realignment will both accelerate and broaden our ability to deliver AI-powered technology when customers want it and high-touch human-powered service when they need it. In closing, we've never been more energized about the future of LegalZoom. With a fully aligned organization, a strong balance sheet, and accelerating growth, we are poised for even greater success and to unlock the next chapter of value creation. I'd like to thank the entire team for their efforts. Your dedication continues to drive our success. I'll now turn the call over to Noel to discuss our third quarter results and outlook in more detail. Noel? Thank you, Jeff. Good afternoon, everyone. As Jeff mentioned, we delivered another quarter of strong financial performance and operational execution. We continue to build a solid foundation for sustainable growth and profitability. We once again accelerated growth in our core subscription business while coming in above our expectations across key financial targets. We believe that the work we are doing positions us well to address the needs of existing and established small businesses and will enable us to broaden our customer base and capture greater wallet share. Based on our better-than-expected performance in the third quarter and increased confidence in the remainder of the year, we are raising our 2025 revenue outlook. Before discussing our guidance in more detail, I will review our third quarter financial results. Unless otherwise stated, all comparisons will be on a year-over-year basis. We achieved record third quarter revenue of $190 million, reflecting 13% growth. Subscription revenue also increased 13%, reflecting both accelerating growth and representing the second consecutive quarter of double-digit growth. Subscription revenue benefited from outperformance in our compliance and virtual mail offerings, in addition to contribution from our important 1-800 ACCOUNTANT partnership and the addition of Formation Nation. We ended the quarter with approximately 1.96 million subscription units, a 14% increase as compared to the third quarter of last year. This growth was driven by the bundling of our bookkeeping solution and legal advisory subscription into certain business formation offerings, an increase in virtual mail subscriptions, as well as the inclusion of subscription units from our Formation Nation acquisition. We expect moderation in unit growth in Q4 from lower renewal rates of these initial bundled cohorts. Our PU was $256 for the quarter, down 3% year-over-year, and flat with the second quarter. The year-over-year decrease was driven by a continued mix shift toward lower-priced subscription offerings related to the bundling of forms and e-signature, bookkeeping, and legal advisory subscriptions into our higher-end formation SKUs. Of note, we continue to see our PU gains in our compliance offerings. Transaction revenue increased 12% to $65 million, driven largely by the acquisition of Formation Nation, along with growth in annual report and trademark filings. This was partially offset by the expected decline in BOIR revenue. We expect transaction revenue to grow at a similar rate in the fourth quarter. We recorded a 2% increase in transaction units to 259,000 due to the inclusion of Formation Nation transactions and higher annual report filings, partially offset by a decline in BOIR transactions. We processed 126,000 business formations in the third quarter. The 12% year-over-year increase in business formations was primarily due to our Formation Nation acquisition. Average order value was $251 for the quarter, up 11% versus the same period last year, driven by the elimination of low-value BOIR transactions coupled with a volume increase in our higher-priced concierge services. Finally, deferred revenue decreased by $0.1 million from Q2, reflective of the typical seasonality in our business. Turning to profitability, all of the following metrics are on a non-GAAP basis. Third quarter gross margin was 71%, flat with the prior year. Sales and marketing costs were $61 million, or 32% of revenue, an increase of 40% from prior year. Customer acquisition marketing costs increased $10 million, or 30%. You may recall last year we tested lower performance marketing spend levels to evaluate efficiencies. Non-CAM sales and marketing expenses increased $7 million, or 75%, which is primarily a result of the addition of the Formation Nation sales team. Technology and development costs were $15 million, down 2%. General and administrative expenses were $13 million, a decrease of $2 million, or 11%. Our strong execution drove adjusted EBITDA of $46 million, representing a margin of 24%. Free cash flow was $47 million in the quarter, up 114%, compared to $22 million for the same period in 2024. Our free cash flow improvement was in part due to an improvement in change in deferred revenue, lower capital expenditures, lower severance costs versus the third quarter of 2024, where we executed a restructuring, and lower cash taxes from the impact of the One Big Beautiful Bill Act. We ended the quarter with cash and cash equivalents of $237 million. Our cash position increased by $20 million versus Q2 2025, benefiting from strong free cash flow generation, partially offset by share repurchases. During Q3, we repurchased approximately 1.8 million shares at an average price of $9.91 per share for a total of $17.6 million. As the quarter ended, we had approximately $112 million remaining under our authorization. Our $100 million revolving credit facility remains undrawn. With our strong cash position and healthy free cash flow generation, we plan to continue investing into our business in areas with strong growth potential while also evaluating strategic M&A opportunities. Now turning to our outlook. We are pleased to have outperformed our third quarter expectations. As a result of our performance over the year and momentum in the business, we are increasing our full-year revenue outlook for the second consecutive quarter. For the full year 2025, we now expect revenue between $748-$752 million, representing growth of 10% at the midpoint of the range. For the same period, we expect to achieve adjusted EBITDA in the range of $168-$170 million, which reflects approximately a 23% margin at the midpoint. For the fourth quarter, we expect revenue between $182-$186 million, representing growth of 14% at the midpoint of the range. For the same period, we expect to achieve adjusted EBITDA in the range of $46-$48 million, which reflects approximately a 26% margin at the midpoint. In closing, we continue to demonstrate progress against our three focus areas as we set the foundation for future growth. We have effectively repositioned our business to drive predictability, sustainability, and profitable growth. We continue to be excited by the long-term potential of our business as we now focus our efforts towards serving both new and established small businesses. Thank you for your time today. I will now turn the call over to the operator for Q&A. Operator? Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you need to press star 101 on your telephone and wait for your name to be announced. To withdraw your question, please press star 101 again. Please stand by while I compile the Q&A roster. Our first question comes from Ella Smith from JPMorgan Chase. Please go ahead. Good evening, Jeff, Noel, and Madeleine. Welcome back, Madeleine. Thank you for taking my question. First, I was hoping to ask about pricing and bundling. To what extent is pricing and bundling contributing to your subscription growth, and how important of a lever is that as you think about your forward growth? I'll take that, Ella. It is an important lever. It is by no means the only lever, but it's a contributor. It's something that we're pleased with because it is in our control. Candidly, we have started to act like market leaders again. As we look at even what's happening in the competitive landscape, we're seeing pricing going up with our competitors now as well. They're following in our footsteps. We feel like we are doing our job as leaders in this space and continue to drive both price and value in the right place. Got it. That's very helpful. Thank you. Maybe we're throwing in a question about the—oh, sorry, did I cut you off? No, I said thank you. Okay. Great. Thank you. For my second question, I was hoping to ask about the White Glove concierge offering since it's newer. You employ and have a network of combination of attorneys, accountants, and lawyers. Can you tell us how all these different players factor into the offering? Yeah. It's a great question and a broad one that starts with us really coming into our SAM and TAM. The idea here is we've got this massive addressable market, and we have been so myopically focused on a small piece of it. Those customers who are new formers, who want to do everything themselves. What we've done with these concierge-like products and our do-it-for-me offerings is we've started to reorient the conversation around how do we solve the last mile for technology in a cost-effective way. Whether you're coming in through traditional means, through search, through our brand advertising, organically, or now through artificial intelligence, as you gain increasing sophistication in terms of what you need done, at the end, you're going to want some type of expertise. It's that combination of human and artificial intelligence that is going to be driving our products forward faster. Artificial intelligence giving us leverage and scale, and human intelligence giving us the difference maker that allows us to satisfy our customers over and over and over again in our current revenue model. Where we're seeing strength, back to the specifics of your question, isn't just with concierge, but a concierge suite of products. Finding those areas where things either are too expensive for a small business to use a lawyer or too difficult to do with technology alone. We launched our first product, which was concierge, revolving around compliance, compliance concierge. It had great success over the last couple of quarters and have now launched a series of others in that same category: nonprofit concierge, reinstatement, dissolution, entity conversion, and we're in the process of doing one with tax in partnership with 1-800 ACCOUNTANT as well, which will launch likely next year so that we can embed their experts into our product line. The idea here is to give customers excess value at a reasonable but higher price than our typical ARPU. Great. Thank you so much. Thank you. Our next question comes from Patrick McIlwee from William Blair. Please go ahead. Hi, team. Great results this quarter, and thanks for taking my questions. Jeff, I believe your prior connection with OpenAI was deemed a collaboration, but this quarter, you mentioned that you signed an enterprise deal with the company. I know you said more detail to come on that, but would you be willing to elaborate at all on how that partnership has developed or any indications of what that deal entails? Sure. Good question, and thank you for the kudos on the quarter. We're pleased as well. Appreciate it. I'll break it up into two areas in terms of where we think this can head and why we're so excited. I will caveat it by saying we signed that this week, so it's new, and we're going to build off of it. It is an archetype for how we're thinking about these partnerships going forward. The general idea is really twofold. First and foremost, we want artificial intelligence to be ingrained in everything we do at this company. We are making a statement and mandating that all of our employees are using AI deeply. At the same time, we want to be tracking tangible returns and results. Importantly, some of the things that we plan on doing with OpenAI and with others is doing integrated product launches. And that was what I was referring to with respect to more to come. We need to deliver results both on cost efficiency internally as we hand over. Some of that AI throughput to our experts, to Ella's point, as well as be able to drive products that actually allow us to expand our go-to-market and expand TAM by embedding into some of these engines of growth and, in general, TAM expanders as more and more small businesses grow more sophisticated about what it means to run and build a business. So it is those two areas that we're really excited about. Again, we're in the early innings, but we're now partnering with some of the best and brightest and becoming more integrated. I've spent time over at OpenAI. We've had people come. And sit down and work with us, and we've got our teams working together more and more closely. And I expect to see more things to come. Okay. Great. That's very helpful. Thanks, Jeff. And while we're on the topic, just can you share how the early indicators of traffic and/or volume coming through those partnerships with Perplexity and OpenAI, and I think for Perplexity, their pro users are actually being offered discounted access to LegalZoom products? Can you talk a bit more about how exactly that works, what products they have access to discounts for, and if you've seen any interesting disparity between the two, given that I think one's discounted and the other is not? Sure. And what I'll do is, rather than speaking to any one partnership, I'm going to speak to the strategy and impetus, and then I'll provide some breadcrumbs in terms of the success that we're having. Effectively, what we're doing is we're looking at the trends and seeing a massive shift, A, in traffic, and then B, in terms of quality of traffic coming from traditional means such as search to these more generative and agentic technologies. And what it is doing, and this is very much in line with what we are trying to do with our service and sales folks, is it's moving from a search and answer to an education model. What we're doing with these partnerships is we're trying to get deeper and deeper embedded and build relationships with the variety of groups that we know we can drive real traffic that is qualified and that can turn into both sales, and then ultimately higher quality customers that are staying with us longer. What I will say is we have seen a significant shift in terms of our growth of traffic from these AI engines, as well as conversion rate. The customers that are coming to us are, in our parlance, better customers than we see that are coming from traditional sources. They have a higher propensity to pay. We believe that they have a higher propensity to stay longer. They are better educated so that when they get to us, they need us to complete the last mile, not the first mile. We are starting to see customers come who have already formed, who have existing businesses, but are looking for us to solve problems. Across the board, in effect, what we do as we sprinkle our opportunities across that broad mandate, we're actually able to push to a broad number of sources, which allows us to diversify our go-to-market. All very interesting. Thanks for the thoughts, Jeff. You bet. Thank you. Thank you. Our next question comes from. Trevor Young from Barclays. Please go ahead. Great. Thanks. First one for Noel, can you share the Formation Nation contribution to revenues in both subscription and transaction revenues, respectively? Yes, absolutely. So Formation Nation, first, I should say. We're really happy with the results that Formation Nation is helping to drive in our overall equation. And we've made a lot of effort to integrate them quickly and really think about it as part of the LegalZoom brand and ecosystem. And we're sharing knowledge, and we're making decisions between the two operations that help drive the overall growth. And so one of the things we've been spending up in marketing there, making some operational investments as well. And so during the quarter, they were able to drive approximately $9 million of revenue on the transaction side and a little over $5.5 million on the subscription side. So nice sequential improvement there. They're meeting the expectations that we had for them as part of our acquisition thesis and even exceeding that. So it's a nice contribution, but it's certainly driven by the collaboration. The nice thing, just to add one important piece as we get back to diversification, which helps to insulate us from risks, you see that strategy working well, which is our value-oriented program now. Outside of that, we're also seeing strong organic growth. We're seeing wins come from both channels now. Appreciate all that color. Jeff, one for you. On the deeper integration with 1-800 ACCOUNTANT, that partnership and the bundling that you alluded to next year, how do you envision the economics to work there, and how do you think about kind of the shared burden of cost to serve as well as customer acquisition costs, for example? It's a good question that. Is Is more complicated to answer than just give you a direct one because I think it depends on the product offering and the launch and the way that we're going about it. But the core business, we've thought about it as a minimum so that we know that we have a certain threshold of revenues and profitability coming in and then a rev share on top. And then some of these ancillary products we're looking at on a case-by-case basis. Most of these tend to be highly accretive to the bottom line. So it's really a function of making sure that we participate on the accelerated growth where we have these deeper integrations. Not lost on you, I'm sure. This is part and parcel to the knowledge we gained when we launched our own tax products, both the success and the challenges that we had. And I think we're taking the best of both worlds as we integrate these new products. So I suspect we will see us getting closer and closer to 1-800 and any other partner, frankly, where we have the kind of success that tells us this is what our customers are looking for. Great. Thank you. Thank you. Our next question comes from Michael McGovern from Bank of America. Please go ahead. Hi, thanks. And congrats on the great quarter. There have been some headlines this week, even up to the extent that LLMs will provide legal advice or services based on their current terms of service. Do you have any insight into the future of that and how your products can help balance meeting customers where they're at versus potentially needing some level of additional certification or credential when customers receive legal advice produced generatively? Thank you for that because it's probably the most strategically important question for us and one we have thought about deeply, one that has driven some of our organizational changes and one that's been informed by talking to and working with some of the partners that we have, as well as some really bright minds in this space. The short answer is, we also believe that will happen. We expect it to happen, and we're embracing that happening. It is part and parcel to our go-to-market and go forward strategy. The idea here is just like why we thought in the beginning we needed to have our salespeople owned and operated and why we need a broader base of experts. The most important thing we can do as a community is to educate these customers. These small and medium-sized businesses need to be educated about their legal needs. So as. LLMs make these potential customers more sophisticated, it effectively massively expands the market because what ends up happening when you look at the questions that are coming into LLMs is people are coming in thinking that they are asking a non-legal question and leaving and going, "I have a legal problem. I have a legal matter." Some of that can be solved through Q&A with technology if people are patient and willing to do it and know whether they have something that is an. Aberration or phantom or whether it is actual, real, strong advice. But most of it needs some type of validation, and that's where we come in. So when we talk about solving the last-mile problem, what we mean is the connective tissue between the Q&A and the intelligence that is needed to. Solve a legal problem is narrowing with technology. But. That gap will not close. You will still have some need for service, whether that's an expert, a paralegal, a lawyer. Or some type of integrated LLM product that can be backstopped by those experts so that there is oversight. That's where we come in. And that's why most of the AI and LLM community is embracing us because whether it's agentic or generative, there still needs to be some sort of feedback loop that has human intervention. And that's where LegalZoom can play and where I think we are differentiated to a point where no one can compete with us because we have always been technology native and technology forward. And we are sitting on an expert war chest of thousands of partner lawyers and owned and operated law firm, experts in our sales and service team. And we are expanding into other categories where. The. Legal to, whether it's accounting or business manager or business expert, bridge starts to blur so that we can provide broad-based advice. Because half of the time, someone comes in with an accounting question, and it ends up being a legal question and vice versa. Got it. Thank you. You bet. It's the most exciting opportunity we have. Thank you. Our next question comes from Matthew Condon from Citizens. Please go ahead. Thank you so much for taking my questions. My first one, just obviously over the past several months, the business formation environment in general has just been a very healthy environment. Jeff, you've obviously been driving on subscriptions and trying to decouple from the macro environment. But just can you help us understand how much of the outperformance over the past couple of quarters has been just macro-driven versus the things that you guys are doing internally to really drive performance? So on small business starts, you've heard this repeatedly from us. We are weaning our way off of that as the dominant form of how we take in, in particular, new businesses. And. This is. All focused on our ability to not just grow our business, but to grow in a diversified and insulated way. That doesn't mean we're not still highly dependent on small business formations. We will be for. Some time, if not for a very long time. It will be a key component of our strategy. And to the extent that the macro is up significantly or down significantly, right now, of course, we don't know. But. Where we have tailwind, we're going to use it to our advantage. Where we have headwind, we're going to start diversifying. But the key thing here is we're working on more of the TAM than we ever have before. And this is how we drive into our serviceable market. So when you think about what we're doing on diversification. We're now starting to do brand marketing, not just performance marketing. We're now leveraging partnerships to drive subscribers, not just revenues. We're now leaning in on existing businesses, not just new businesses. We're leveraging AI in a way that we weren't a year ago, not just search to deliver new business. And we're building out product suites on the DIFM side, not just DIY. So I think that this is really critical to understand. We're not ignoring the macro. What we're saying is it will no longer be an excuse for us. We will have enough levers and leverage in the business so that we can manage through macro uncertainty as we're in right now or negative macro situations, whether it's the small business formations one that plagued us previously or the next one that comes up as we diversify and become more dependent on AI or something else for growth. We're managing our business as a diversified, insulated, growth-oriented business now that we have stabilized it. Maybe just double-clicking on one thing you said there, just going after the existing businesses. Just are there any things you could call out today that you see that are working? And just maybe just talk about the strategy more broadly and how do you bring those businesses onto LegalZoom platform? Sure. I actually think using our Concierge products, in particular Compliance Concierge, is probably the perfect case study. We launched this as an MVP. We started going after existing businesses that were in our ecosystem. We started to listen to our service folks, and they told us which products were of need for our customers. We effectively built a broad matrix that we looked at for determining what next products that we would launch. We went from Compliance to Nonprofit, Reinstatement, Dissolution, Entity Conversion. We're now launching something in tax, all because the demand was there on the high end and for the most part because these were subscription. We're now pushing this over to Kathy and our team on the BizDev side to say, "Go to existing partners and figure out where we can solve and satisfy their needs. Let's listen. Let's learn from their customers and start going. Into those channels." And then Daniel and our marketing team and saying, "Where can we go to market directly and start marketing to existing businesses?" Whether that's through AI, through some of our brand campaign, which we're going to be shifting towards the latter part of this year to speak to existing businesses. And ultimately, you can imagine we're going to go further and further down that path because these are businesses that are more stable, that are more insulated from risks of recession, and ultimately have and are willing to give us a higher share of wallet. Thank you. You bet. Thank you. Our next question comes from Ron Josey from Citi. Please go ahead. Guys, this is Jake Osborne. I'm in the great quarter, so I just created the question. So. First First was really just on the partner channel. The 25% growth seemed like a strong acceleration. How much of that was driven by the new embedded flow. Versus a traditional affiliate platform? And maybe just spend a moment on that flow. I mean, it was a pretty recent. Launch. Could you elaborate on what the economic model looks like? Is that kind of part of your strategy to target existing established businesses? Thanks. Sure. Happy to take that. Jake, and thanks for the kudos on the quarter. I'm going to start to sound like a broken record. This strategy is about diversification across the board. We want to make sure that we're insulated. So first off, that 25% year-over-year growth, we put that number out there because we think that that is a new baseline and that we can continue to grow it. We're very pleased about what our partnership team and business development team have done to date. But it is underwhelming, in my opinion, compared to what they're going to deliver in the future. And the reason is because. We are now launching products for partners. And we're listening to what their needs are. Embedded is a key need. And yes, that drove a portion of that growth. Leaning in on our affiliate channels and treating these partners not just as low-level affiliates, but as true partners and building out solutions for them was another key thing. The deeper integrations that we've done with companies like Design.com is another good example of a success point that we will continue to lean in on, as well as working with some of our existing longer-term partners who we continue to think highly of. And they've been moving mountains to help us, such as Wix, as an example. And then, of course, what we've done in. Our AI ecosystem. So when you look at this. The percentage increase is coming from a myriad of sources. And each one of these is working to a varying degree. Not everyone will ultimately be successful. But the idea here is we're trying to put out multiple singles and doubles and triples. We're not looking for grand slam home runs. If we get one, we'll take it. I'm not adverse to getting a little bit lucky. But we will acknowledge when we're lucky and get back to work. Awesome. Thank you. Thank you. One moment for our next question. Our next question comes from Elizabeth Porter from Morgan Stanley. Please go ahead. Hey, guys. This is Lucas Serasola at Morgan Stanley on for Elizabeth Porter. Thanks for the time. You spoke to the success of the new brand campaign earlier this year and the double-digit ROAS. What other impacts have you seen so far, both in terms of. Awareness and conversion metrics? And what learnings are you carrying into early next year when new business formation activity typically picks up seasonally? So really, across the board, we've seen success in this brand campaign. So. Both aided and unaided awareness and ROAS. I mean, you can run the metrics down from there. Because that means it's going to be helping with conversion. It's going to be helping with traffic. It is going to help our performance campaigns to perform better. And then ultimately, it helps us garner more partners because it reminds the. World that we live in and that we work in that LegalZoom is the dominant brand for new, and this speaks to your next question, existing and established businesses long-term. So first and foremost, it reminds us that we need a diversified approach to marketing. We were highly dependent on performance and, in particular, Google marketing previously. We have significantly diversified away from performance and away from Google into brand, into AI, and into other areas. And that's paid dividends. Second, in terms of those learnings, we've realized that as the brand leader. Building out our brand, strengthening that, reinforces both our messaging, our brand prowess, but also our authority. And authority matters in a big way when you see something like you're seeing with AI happening right now, which is a fundamental platform shift. And you don't see that very often. And to capitalize on that, you've got to get there very early, very aggressively. And you've got to. Maintain market leadership. And that has driven us, I think, to some early wins that we're going to be able to carry forward next year. Got it. Thank you. And then just one more on subscription growth. It's been really solid the last couple of quarters. Thank you for that. Yeah, of course. Comps get pretty tough in the next year. I was hoping if you could touch on what other key factors we should keep in mind for modeling subscription growth from here, in particular, how you're balancing volume growth versus ARPU and whether there's going to be any near-term headwinds from lapping M&A, prior price actions, or product launches. Thanks. So you're wondering if we'll become the victims of our own success. I mean, look, I'm glad that the comps get harder next year. It means we performed this year, and that means we performed worse last year. Our expectations were going to continue to perform, and we're going to continue to accelerate. We are at our heart a growth-oriented business, and we believe that we can deliver results. And on the subscription revenue side, we've continued to see progress both year- over- year and quarter over quarter. And that is a key focus area for us on a go-forward basis. On the unit side, it's a bit of a different story. We've communicated that on the unit side, we're using unit growth through bundling to drive tests. So that will jump around. But when you look at our core products, and I think Noel can speak to this more, we're seeing the right things and the right signs. With our core compliance products, we're seeing subscription growth. We're seeing churn reduction. And we're seeing ARPU head in the right direction. And. Those are all trends that speak to a really solid roll forward as we head into next year. Yeah, that's right. Just to build on that, I mean, these are the trends that Jeff was just speaking to and the initiatives that are driving our current growth. We like what we're seeing. We have high confidence in them, and they represent durable growth opportunities for us. So that, to Jeff's point, is driving performance today, but we'll carry forward into the next year. Thanks, guys. Thank you. Our next question comes from Brent Thiel from Jeffries. Please go ahead. Hi, thank you. This is John Bennett from Brent Thiel. Questions around. The sales side. So I think last quarter, you mentioned you had some reps from Formation Nation moving over and selling some of the core LZ products. Wondering how that worked out, what was the productivity? And then on some of the. Executive change and strategy change that you mentioned earlier in the prepared remarks, I mean, wondering how you're thinking about. How that will translate into. Go to market changes for next year and anything in the sales org or incentive structure. Thank you. Sure. I'll take those in order, and then Noel, feel free to add anything. When I miss it. On. Our sales throughput and velocity as a company, we've seen. Steady progress, and we're actually pretty pleased. We have now taken an entire sales center from Formation Nation and shifted it over to LegalZoom, in part because they have so much embedded knowledge and learnings in terms of how they educate their customers and onboard them. And we're actually very pleased with the progress and success. In the same vein, and this leans to what we've done operationally, we brought Julian because of the ability to really integrate sales and service into everything that we are doing to. Be a customer-centered organization. Speaking to what we can deliver and the organizational changes that we made, I'm not even going to speak to next year. I'll speak to this year. You heard in our prepared remarks, we launched three or four AI products this quarter. We wouldn't have been able to do that if we didn't do this reorganization. We were able to very quickly deliver on those AI products and integrate them into our back office, whether it's to our experts or to our service. Folks. In the same vein, we launched almost a half a dozen concierge products. Again, in the same vein, you wouldn't be able to do that if we didn't have our technology teams sitting hand in hand with our service folks. And then finally, I'll say we're able to lean in on savings that we're generating internally now from technology efficiencies and then port that over to building products, leaning in on AI, and driving our marketing forward as the throughput increases without any margin deterioration. Same thing. Without that operational change, I don't think we would have been able to do that so quickly and so seamlessly. Thank you. Very helpful. You bet. Thank you. 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