LegalZoom.com Inc (LZ) 2023 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to LegalZoom's First Quarter 2023 Earnings Conference Call. (Operator Instructions)

美好的一天，謝謝你的支持。歡迎來到 LegalZoom 的 2023 年第一季度收益電話會議。 （操作員說明）

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sarah Bland, Securities Counsel. Please go ahead.

請注意，今天的會議正在錄製中。我現在想把會議交給今天的演講者，證券顧問莎拉·布蘭德 (Sarah Bland)。請繼續。

Thank you, operator. Hello, and welcome to LegalZoom's First Quarter 2023 Earnings Conference Call. Joining me today is Dan Wernikoff, our Chief Executive Officer; and Noel Watson, our Chief Financial Officer.

謝謝你，運營商。您好，歡迎來到 LegalZoom 的 2023 年第一季度收益電話會議。今天加入我的是我們的首席執行官 Dan Wernikoff；和我們的首席財務官 Noel Watson。

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 results or otherwise. In addition, we will also discuss certain non-GAAP financial measures. Our CEO and CFO use these measures in making decisions regarding our business, and we believe these measures provide helpful information to investors.

提醒一下，我們將在此次電話會議上發表前瞻性聲明。這些前瞻性陳述可以通過使用諸如相信、期望、計劃、預期、將、打算和類似表達等詞語來識別，它們不是也不應該被視為對未來業績或結果的保證。此類前瞻性陳述基於管理層的假設和預期以及截至今天我們可獲得的信息。這些前瞻性陳述還受到可能導致實際結果與此類陳述存在重大差異的風險和不確定性的影響。這些風險和不確定性在我們今天發布的新聞稿和我們最近向美國證券交易委員會提交的 10-K 表格年度報告的風險因素部分有所提及。除非法律要求，否則我們不打算公開更新或修改任何前瞻性陳述，無論是由於任何新信息、未來結果或其他原因。此外，我們還將討論某些非 GAAP 財務指標。我們的首席執行官和首席財務官在製定有關我們業務的決策時使用這些衡量標準，我們相信這些衡量標準為投資者提供了有用的信息。

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. The non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP.

我們網站 investors.legalzoom.com 的投資者關係部分列出了所有非 GAAP 措施與最直接可比的 GAAP 措施的調節。非 GAAP 財務指標不應被孤立地考慮或替代根據 GAAP 編制的結果。

Now I'll turn the call over to Dan.

現在我會把電話轉給丹。

Thanks, Sarah, and good afternoon, everyone. I'm excited to share our strong performance as we kick off 2023. I'll start with a brief overview of Q1 results. Revenue came in at $166 million, up 7% year-over-year. Transaction revenue was down 5%, while subscription revenue was up 15%. LegalZoom business formations grew 32% year-over-year to 170,000 units. U.S. Census formation were up 4% to $1.5 million for the quarter. The resulting share gain was 27%, which is the largest gain we've seen since we began tracking it. Adjusted EBITDA was $22 million for the quarter or 13% margin. These results reflect the bulk of traffic going to a premium line of test over the full quarter, and then more specifically, all traffic being directed to the winning lineup at the beginning of March.

謝謝，莎拉，大家下午好。我很高興在 2023 年開始時分享我們的強勁表現。我將首先簡要概述第一季度的結果。收入為 1.66 億美元，同比增長 7%。交易收入下降了 5%，而訂閱收入增長了 15%。 LegalZoom 業務單位同比增長 32% 至 170,000 個單位。本季度美國人口普查形成增長 4% 至 150 萬美元。由此產生的股票收益為 27%，這是我們開始追踪以來的最大收益。本季度調整後的 EBITDA 為 2200 萬美元或 13% 的利潤率。這些結果反映了整個季度大部分流量都流向了優質測試線，然後更具體地說，所有流量都被引導到了 3 月初的獲勝陣容。

We tested this lineup for some time, and there were no surprises in the results once deployed. In March, we were able to better understand the implications of free messaging on traffic, and it exceeded our expectations. Coupled with a stronger-than-anticipated formations macro, we saw strength across the board. This is a significant business model shift and inflection point, providing a step function improvement towards realizing our strategy. Our first strategic pillar is to scale the core formations business. And in this quarter, we saw record formations growth, while improving service levels and reducing cost of revenue per unit on the formations business.

我們對該陣容進行了一段時間的測試，部署後的結果並不令人意外。 3 月，我們能夠更好地了解免費消息傳遞對流量的影響，這超出了我們的預期。再加上強於預期的編隊宏觀，我們看到了全面的力量。這是一個重要的商業模式轉變和轉折點，為實現我們的戰略提供了階梯功能改進。我們的第一個戰略支柱是擴大核心編隊業務。在本季度，我們看到了創紀錄的編隊增長，同時提高了編隊業務的服務水平並降低了單位收入成本。

Our second strategic pillar is to create an ecosystem of subscription services. With this new lineup, we will further leverage the ecosystem by shifting the purchase mix more aggressively towards recurring revenue. And our third strategic pillar is to integrate experts. This new lineup includes a premium SKU that bundles a subscription with access to our network of independent attorneys. The freemium lineup is an accelerant to all of our strategic pillars. To be clear, it's still early innings. And while we're very happy with the initial launch, there are many opportunities to improve our performance across all investment areas. We're excited to build on this new foundation and we have a backlog of improvements that we've already begun to test.

我們的第二個戰略支柱是創建訂閱服務生態系統。有了這個新陣容，我們將通過更積極地將採購組合轉向經常性收入來進一步利用生態系統。我們的第三個戰略支柱是整合專家。這個新系列包括一個高級 SKU，它將訂閱與訪問我們的獨立律師網絡捆綁在一起。免費增值產品線是我們所有戰略支柱的催化劑。需要明確的是，這仍然是早期的局。雖然我們對首次推出感到非常滿意，但仍有很多機會可以提高我們在所有投資領域的業績。我們很高興能夠在這個新的基礎上進行構建，並且我們已經開始測試積壓的改進工作。

Stepping back, our focus is to remove any barrier that stands in the way of someone wanting to launch a business. With this new lineup, we've materially reduced the price of forming a business, which is especially important in today's economic environment. In fact, the formation lineup pricing we have today is lower than it was at our founding in 2001. This focus on making our formations products more accessible, while expanding the type of services we offer beyond just legal and compliance has led us to revisit our mission. Our heritage as a legal disruptor is something we remain both proud of and dedicated to, but we continue to identify additional ways to remove barriers to block entrepreneurs when they form a business.

退後一步，我們的重點是消除阻礙想要開展業務的人的任何障礙。有了這個新陣容，我們大大降低了組建企業的成本，這在當今的經濟環境中尤為重要。事實上，我們今天的陣型陣容定價低於我們 2001 年成立時的價格。這種專注於使我們的陣型產品更容易獲得，同時擴展我們提供的服務類型而不僅僅是法律和合規性，這促使我們重新審視我們的使命。我們作為法律破壞者的傳統是我們引以為豪並致力於的東西，但我們繼續尋找其他方法來消除阻礙創業者組建企業的障礙。

As an early and often the first adviser to small businesses, our customers are looking for us to do much more. Democratizing law is one of many opportunities we have to make expertise more accessible and affordable. As such, 20 years into this journey, we're updating our mission from Democratize law to unleash entrepreneurship. We've already made progress against this new broader mission, and we're excited to share additional product updates in support of it by the end of the year. With this new mission, our top priority is helping small businesses get off the ground.

作為小型企業的早期顧問，而且通常是第一位顧問，我們的客戶期待我們做更多的事情。使法律民主化是我們使專業知識更容易獲得和負擔得起的眾多機會之一。因此，在這段旅程的 20 年裡，我們正在更新我們的使命，從民主化法律到釋放企業家精神。我們已經在實現這一更廣泛的新使命方面取得了進展，我們很高興能在年底前分享更多產品更新以支持它。有了這個新使命，我們的首要任務是幫助小型企業起步。

We mentioned last quarter that small businesses are resilient, determined, and their secular tailwinds point to a strong long-term macro. Many factors such as work from home, the emergence of gig economy platforms, lower capital requirements and increasingly sophisticated digital enablement tools make starting a small business easier and lower risk than it's ever been before. Just as we feel good about the long-term prospects of the macro, we also anticipate growth opportunities as we begin to leverage generative AI.

我們在上個季度提到，小型企業具有韌性、決心，它們的長期順風指向強勁的長期宏觀。在家工作、零工經濟平台的出現、較低的資本要求和日益複雜的數字支持工具等許多因素使得創辦小型企業比以往任何時候都更容易，風險也更低。正如我們對宏觀的長期前景感到樂觀一樣，隨著我們開始利用生成人工智能，我們也期待增長機會。

The most exciting opportunity we see is eliminating inefficiencies in the contract drafting and review process. This was the key thesis of the Revv acquisition and the forms reinvestment we announced at the end of last year, where we see less opportunity, and therefore, we consider the product highly defensible is within our core filing solution. Let me go ahead and expand on both. There are 2 parts to our core formation process. The first is providing context and confidence around what's required to form.

我們看到的最令人興奮的機會是消除合同起草和審查過程中的低效率。這是我們去年年底宣布的 Revv 收購和形式再投資的關鍵論點，我們認為機會較少，因此，我們認為該產品在我們的核心歸檔解決方案中具有高度的防禦性。讓我繼續並擴展兩者。我們的核心形成過程分為兩部分。首先是圍繞需要形成的內容提供背景和信心。

We believe generative AI is a meaningful evolution to current search solutions when providing content and context and we'll work to integrate those capabilities. Although it's worth noting that much of this content has been widely available for some time through traditional search and there is a high bar around confidence in the source as well as regulations that advice to be delivered through a credentialed expert. But once a customer has the necessary context, the formation process is a complex workflow. This requires data collection, mapping the data set to proprietary unstructured forms and the last mile connection to over 3,000 counties, 50 states and several federal agencies. These agencies do not have APIs. Instead our IP here is the combination of the scale workflow, numerous RPA bots to automate filing and last mile capabilities that sometimes require human intervention.

我們相信，在提供內容和上下文時，生成式 AI 是對當前搜索解決方案的有意義的演變，我們將努力整合這些功能。儘管值得注意的是，這些內容中的大部分已經通過傳統搜索廣泛提供了一段時間，而且對來源的信心以及建議通過有資質的專家提供的法規存在很高的門檻。但是一旦客戶有了必要的背景，形成過程就是一個複雜的工作流程。這需要收集數據，將數據集映射到專有的非結構化形式，並在最後一英里連接到 3,000 多個縣、50 個州和幾個聯邦機構。這些機構沒有 API。相反，我們這裡的 IP 是規模化工作流程、眾多用於自動歸檔的 RPA 機器人和有時需要人工干預的最後一英里功能的組合。

In many ways, we act as an API on top of all government agencies and likely have an opportunity to be a plug-in through ChatGPT. We do, however, believe generative AI will revolutionize the legal document space and therefore is an untapped growth opportunity. You can already see large investments being made in national consulting and legal practices to build internal tools that serve enterprise clients. What isn't addressed by that investment is smaller, independent firms that can't afford to make similar investments. These are the firms that typically serve small businesses.

在許多方面，我們充當所有政府機構之上的 API，並且可能有機會通過 ChatGPT 成為插件。然而，我們確實相信生成式 AI 將徹底改變法律文件領域，因此是一個尚未開發的增長機會。您已經可以看到在國家諮詢和法律實踐方面進行了大量投資，以構建為企業客戶服務的內部工具。該投資沒有解決的是無力進行類似投資的較小的獨立公司。這些是通常為小型企業服務的公司。

According to the ABA roughly half of practicing lawyers are in firms of 1 to 10 attorneys. One of our strategic pillars is to integrate experts. As part of that strategy, we're building an expert platform that enables smaller firms within our ecosystem to compete by driving new business, managing administrative burdens, enabling efficiencies and leveraging new technologies.

根據 ABA 的數據，大約一半的執業律師在 1 到 10 名律師的公司工作。我們的戰略支柱之一是整合專家。作為該戰略的一部分，我們正在構建一個專家平台，使我們生態系統中的小型公司能夠通過推動新業務、管理管理負擔、提高效率和利用新技術來競爭。

We've hinted multiple times that you should expect new product releases in the back half of this year that will provide clarity on our strategy with attorneys. And the foundation for this is a new contract and forms platform that will leverage AI. It's worth noting that while technology will continue to make attorneys more efficient due to regulations related to unauthorized practice of law, attorneys will still play a prominent role in the delivery of legal services and this is yet another area where we differentiate ourselves from most of our online competition with a large network of independent attorneys already operating in our ecosystem and ready to consume these services.

我們已多次暗示您應該期待今年下半年的新產品發布，這將使我們與律師的戰略更加清晰。而這一切的基礎是一個利用人工智能的新合同和表格平台。值得注意的是，儘管由於與未經授權的法律執業有關的法規，技術將繼續提高律師的效率，但律師仍將在提供法律服務方面發揮重要作用，這是我們與大多數公司區別開來的另一個領域與已經在我們的生態系統中運營並準備使用這些服務的大型獨立律師網絡進行在線競爭。

Beyond generative AI, there are many growth opportunities across all our strategic pillars. With the new line of rolled out and parallel progress on tech investments to streamline fulfillment, we continue to improve efficiencies as we scale volume. We're about halfway through our automation investment and have opportunities to drive higher margin for multiple years. These investments will also serve to improve the customer experience by lowering the error rate and increasing our speed to file. In addition to efficiency gains, we're focused on improvements in how we commercialize our service through the formation of workflow.

除了生成 AI 之外，我們所有的戰略支柱都有許多增長機會。隨著新系列的推出和技術投資的並行進展以簡化履行，我們在擴大規模的同時繼續提高效率。我們的自動化投資已經進行到一半，並且有機會在未來幾年內推動更高的利潤率。這些投資還將通過降低錯誤率和提高我們的歸檔速度來改善客戶體驗。除了提高效率，我們還專注於改進我們如何通過工作流程的形成將我們的服務商業化。

Right after we deployed our winning test, we were in market testing ongoing improvements to the new lineup. And in the coming months, we have additional tests queued up on our attached products and services. Similar to virtual mail, we moved quickly to integrate forms and e-signature through MyLZ. This is the third ecosystem subscription launched within the last 2 years. We aim to be the simplest and e-signature, provider offering a low-cost service tailored specifically to small businesses needs. We're currently working to reimagine the entire end-to-end experience starting with form and contract creation through the collaboration with an attorney and culminating with a process to get a digital signature and securely store your documents.

在我們部署獲勝測試後，我們立即在市場上測試對新產品系列的持續改進。在接下來的幾個月裡，我們還會對附加的產品和服務進行額外的測試。與虛擬郵件類似，我們迅速採取行動，通過 MyLZ 集成表單和電子簽名。這是過去 2 年內推出的第三個生態系統訂閱。我們的目標是成為最簡單的電子簽名提供商，提供專為小型企業需求量身定制的低成本服務。我們目前正在努力重新構想整個端到端體驗，從通過與律師合作創建表格和合同開始，到最終獲得數字簽名和安全存儲您的文檔的過程。

In addition to deploying a lineup that included an attorney subscription bundle, we continue to make progress on our third strategic pillar, integrating experts. While tax season is extended this year with grace periods for filing in California, we're far enough along through the year to understand our performance and begin applying learnings towards next season.

除了部署包括律師訂閱包在內的陣容外，我們還在第三個戰略支柱——整合專家方面繼續取得進展。雖然今年的報稅季延長了加州的報稅寬限期，但我們在這一年裡已經足夠了解我們的表現並開始將所學知識應用到下一季。

For the year, we expect to double the total number of returns filed compared to 2022, benefiting from the product investments we made before the tax season. We're still just a couple of years into creating this service and believe there are opportunities to drive stronger growth through a better return experience, which will then translate to better retention rates. In our first tax season, we were largely an off-line provider. That changed this year as we built onboarding, intake, document upload and accountant scheduling into MyLZ. In turn, those investments drove significant improvements. But with any new product experience, we continue to receive valuable feedback that will be incorporated into postseason releases. Outside of the filing experience, we are still constructively dissatisfied with active usage and retention rates.

今年，我們預計與 2022 年相比，提交的申報表總數將增加一倍，這得益於我們在稅收季節之前進行的產品投資。我們創建這項服務還只有幾年的時間，我們相信有機會通過更好的退貨體驗來推動更強勁的增長，然後轉化為更好的保留率。在我們的第一個納稅季，我們主要是一家線下供應商。今年情況發生了變化，因為我們在 MyLZ 中構建了入職、錄取、文件上傳和會計安排。反過來，這些投資推動了重大改進。但是對於任何新產品體驗，我們都會繼續收到有價值的反饋，這些反饋將被納入季后賽發布中。除了歸檔體驗之外，我們仍然對活躍使用率和保留率持建設性的不滿。

While we expected lower retention for those seeking pure advisory as their needs may be more episodic, especially right after they form and pre-revenue. We have not seen the level of ongoing active engagement expected for those entitled to a tax return. We have many insights in this area. And as was the case last year, we're building and we'll be testing improvements in anticipation of next tax season. On the whole, this was a big quarter at LegalZoom, and I want to thank the legal Zoom employees for all their hard work and dedication. We made considerable progress against our new mission of unleashing entrepreneurship, and as a result, we're raising both top and bottom line guidance for the year, which Noel will detail in a few moments. I'm very encouraged by the progress we've seen in the market, demonstrating significant share gains, while accelerating our shift to recurring subscription revenue.

雖然我們預計那些尋求純粹諮詢的人的保留率會較低，因為他們的需求可能更偶發，尤其是在他們形成和收入前。我們還沒有看到那些有權獲得納稅申報表的人的持續積極參與程度。我們在這方面有很多見解。和去年一樣，我們正在建設，我們將在下一個稅收季節的預期中測試改進。總的來說，這是 LegalZoom 的一個重要季度，我要感謝法律 Zoom 員工的辛勤工作和奉獻精神。我們在釋放企業家精神的新使命方面取得了相當大的進展，因此，我們提高了今年的頂線和底線指導，Noel 將在稍後詳細介紹。我對我們在市場上看到的進步感到非常鼓舞，展示了顯著的份額增長，同時加速了我們向經常性訂閱收入的轉變。

What gets me even more excited, though, is what I see in our product pipeline and the advances we continue to make in building out a new and novel SMB ecosystem.

不過，更讓我興奮的是我在我們的產品線中看到的，以及我們在構建全新的 SMB 生態系統方面不斷取得的進步。

With that, I'll turn it over to Noel.

有了這個，我會把它交給諾埃爾。

Thanks, Dan, and good afternoon, everyone. I'll begin by echoing Dan's excitement with regards to our start to the year. The combination of our new lineup, alongside refresh marketing messaging, drove impressive market share growth in business formation, a key focus of ours as we look to drive more customers into our subscription ecosystem. Importantly, this combination has also led to improved traffic trends and marketing efficiencies as we've been able to significantly reduce our marketing spend year-over-year, while driving the higher volumes. We continue to see increasing benefits from automation within our operations where improving productivity levels allowed us to fulfill orders faster than anticipated in the quarter. We also saw reductions in the number of customer care contacts per order and in the related cost per contact. We believe there is still a significant opportunity to improve the efficiency and effectiveness of our operations and are maintaining the investments needed to realize these gains.

謝謝，丹，大家下午好。我將首先回應 Dan 對我們開年的興奮之情。我們的新陣容與更新的營銷信息相結合，推動了業務形成方面的市場份額顯著增長，這是我們希望吸引更多客戶進入我們的訂閱生態系統的一個重點。重要的是，這種結合還改善了流量趨勢和營銷效率，因為我們能夠逐年大幅減少營銷支出，同時推動更高的銷量。我們繼續看到我們運營中自動化帶來的好處越來越多，生產力水平的提高使我們能夠比本季度預期更快地完成訂單。我們還看到每個訂單的客戶服務聯繫人數量和每次聯繫人的相關成本都有所減少。我們相信仍有很大的機會來提高我們運營的效率和有效性，並維持實現這些收益所需的投資。

Cost discipline remains focus. As we look to balance our goals of reaccelerating revenue growth and improving margins. We remain confident in our ability to drive significant margin improvement year-over-year and see our Q1 results as an important indication of our progress. One of the key factors in our performance this quarter was the macro where its performance exceeded our forecast and was the first quarter of formation growth reported by the Census in over a year. As a result, we're increasing our formations macro expectation for the second quarter. Despite this strength and aligned with our focus on controlling expenses, at this time, we are not adjusting our macro assumptions for the back half of the year. We will continue to manage to the expectation of a recession with the one exception being the continued acceleration of our investment in product and technology.

成本紀律仍然是重點。當我們尋求平衡重新加速收入增長和提高利潤率的目標時。我們仍然相信我們有能力推動利潤率同比顯著提高，並將我們的第一季度業績視為我們取得進展的重要標誌。我們本季度業績的關鍵因素之一是宏觀，其業績超出了我們的預期，並且是一年多來人口普查報告的第一季度編隊增長。因此，我們提高了對第二季度的宏觀預期。儘管有這種實力並且與我們對控制費用的關注相一致，但目前我們不會調整我們對下半年的宏觀假設。我們將繼續應對經濟衰退的預期，唯一的例外是繼續加速我們對產品和技術的投資。

I'll now provide you with a review of our performance in the first quarter and end with our outlook for Q2 and the full year 2023. Total GAAP revenue in the period came in at $166 million, up 7% year-over-year and above the top end of our guidance range. Transaction revenue was down 5% year-over-year at $62 million. Average order value declined 18% year-over-year, while total transaction units were up 15% year-over-year. Reduction in average order value was driven by the full rollout of our new lineup. We completed 170,000 business formations in Q1, up 32% compared to the same period last year. Our formations growth well outperformed the market, which was up 4% during the period as measured by U.S. Census data, enabling us to grow our market share by 27% versus the same period last year. The successful share gain can largely be attributed to our new lineup, and we, therefore, expect the year-over-year growth in share gains to moderate in the second half of this year as we start to lap the initial testing and expanding rollout of our free products. Transaction units were 308,000 in Q1, up 15% year-over-year and increasing business formation transaction was offset by a decline in intellectual property and consumer transactions.

現在，我將向您回顧我們第一季度的業績，並以我們對第二季度和 2023 年全年的展望結束。該期間的 GAAP 總收入為 1.66 億美元，同比增長 7%，高於我們指導範圍的上限。交易收入同比下降 5% 至 6200 萬美元。平均訂單價值同比下降 18%，而總交易量同比增長 15%。新產品系列的全面推出推動了平均訂單價值的下降。一季度我們完成了170,000個業務創建，比去年同期增長了32％。我們的編隊增長表現優於市場，根據美國人口普查數據，在此期間市場增長了 4%，使我們的市場份額比去年同期增長了 27%。成功的份額增長在很大程度上歸功於我們的新產品線，因此我們預計今年下半年隨著我們開始進行初步測試和擴大推出我們的免費產品。第一季度的交易單位為 308,000，同比增長 15%，增加的業務形成交易被知識產權和消費者交易的下降所抵消。

Average order value came in at $202 in the first quarter, down sequentially from the fourth quarter and down 18% year-over-year, again, driven by the rollout of our new lower-priced lineup. As mentioned earlier, we did see increasing benefits from automation within our fulfillment operations and improving productivity levels allowed us to fulfill orders faster and recognize more revenue than anticipated in the quarter. Subscription revenue was $97 million in the quarter, up 15% year-over-year due to a 10% increase in the number of subscriptions and continued improvement in ARPU. We saw revenue growth in the quarter across our core compliance, LZ Tax and virtual mail subscription products.

第一季度的平均訂單價值為 202 美元，環比第四季度下降，同比下降 18%，再次受到我們推出新的低價產品系列的推動。如前所述，我們確實看到我們的履行業務中的自動化帶來的好處越來越多，生產力水平的提高使我們能夠更快地履行訂單並確認比本季度預期更多的收入。本季度訂閱收入為 9700 萬美元，同比增長 15%，這歸因於訂閱數量增長 10% 以及 ARPU 的持續改善。我們在本季度的核心合規、LZ Tax 和虛擬郵件訂閱產品中看到了收入增長。

I remind you that Q1 is a stronger quarter for revenue recognition in LZ Tax, given the higher tax preparation volumes and unutilized tax preparation entitlements. ARPU came in at $259, up 6% year-over-year and flat sequentially from the fourth quarter. The increase was primarily due to the increased mix of higher-priced LZ Tax subscriptions within our total subscription base. We expect year-over-year ARPU growth to moderate through the remainder of the year. Partnership revenue was up 11% year-over-year in the first quarter at $6 million. Now turning to expenses and margins, where all of the following metrics are on a non-GAAP basis. Gross margin came in at approximately 66% of revenue in the first quarter, up from 65% in Q1 of last year. The improvement was driven by efficiency gains from cost reduction initiatives implemented in the second half of last year. We expect gross margin to slightly decline in 2023 as a result of higher filing fees as a percentage of revenue due to higher business formation volumes.

我提醒您，鑑於更高的稅務準備量和未使用的稅務準備權利，第一季度是 LZ Tax 收入確認的強勁季度。 ARPU 為 259 美元，同比增長 6%，與第四季度持平。增加的主要原因是我們總訂閱基數中價格較高的 LZ Tax 訂閱的組合增加。我們預計 ARPU 的同比增長將在今年剩餘時間內放緩。第一季度合作夥伴收入同比增長 11%，達到 600 萬美元。現在轉向費用和利潤，其中所有以下指標均基於非 GAAP 基礎。第一季度毛利率約為收入的 66%，高於去年第一季度的 65%。這一改善是由去年下半年實施的成本削減舉措帶來的效率提升推動的。我們預計 2023 年毛利率將略有下降，原因是業務形成量增加導致申請費佔收入的百分比增加。

Sales and marketing costs were $57 million in the quarter with 35% of revenue, down 11 points from Q1 of last year. Customer acquisition marketing came in at $41 million, down 24% year-over-year. In Q2, we continue to expect a significant year-over-year decline in customer acquisition marketing, although to a lesser extent than our Q1 results. Technology and development expenses were $14 million in Q1, up $1 million year-over-year as our primary hiring focus remains in product and engineering. General and administrative expenses were $15 million in Q1, up $1 million year-over-year. Adjusted EBITDA was above our guidance range at $22 million for the quarter compared to $2 million in the first quarter of 2022 and our base of deferred revenue increased $17 million in the period.

本季度銷售和營銷成本為 5700 萬美元，佔收入的 35%，比去年第一季度下降 11 個百分點。客戶獲取營銷收入為 4100 萬美元，同比下降 24%。在第二季度，我們繼續預計客戶獲取營銷將同比大幅下降，儘管幅度小於我們第一季度的結果。第一季度的技術和開發費用為 1400 萬美元，同比增長 100 萬美元，因為我們的主要招聘重點仍然是產品和工程。第一季度的一般和行政費用為 1500 萬美元，同比增長 100 萬美元。本季度調整後的 EBITDA 為 2200 萬美元，高於我們的指導範圍，而 2022 年第一季度為 200 萬美元，我們的遞延收入基數在此期間增加了 1700 萬美元。

In the first quarter, we continued to execute on our $150 million share repurchase authorization. We repurchased a total of 771,000 shares of our common stock at an average price of $8.78 per share for a total repurchase of $7 million. Since inception, we have completed $102 million in buyback with a total of 10 million shares repurchased. As of March 31, 2023, we had cash and cash equivalents of $204 million and no debt outstanding. I'll now provide guidance for the second quarter and full year 2023. For the second quarter of 2023, we expect total revenue of $166 million to $168 million, a 3% year-over-year growth at the midpoint. We expect adjusted EBITDA of $27 million to $29 million or 17% of revenue at the midpoint. For the full year of 2023, we are raising our total revenue to $630 million to $650 million or 3% year-over-year growth at the midpoint. As a result, we now expect adjusted EBITDA to increase to $105 million or 16% of revenue.

第一季度，我們繼續執行 1.5 億美元的股票回購授權。我們以每股 8.78 美元的平均價格回購了總計 771,000 股普通股，回購總額為 700 萬美元。自成立以來，我們已經完成了 1.02 億美元的回購，共回購了 1000 萬股股票。截至 2023 年 3 月 31 日，我們擁有 2.04 億美元的現金和現金等價物，沒有未償債務。我現在將提供 2023 年第二季度和全年的指導。對於 2023 年第二季度，我們預計總收入為 1.66 億美元至 1.68 億美元，中點同比增長 3%。我們預計調整後的 EBITDA 為 2700 萬美元至 2900 萬美元，佔中點收入的 17%。對於 2023 年全年，我們將把總收入提高到 6.3 億至 6.5 億美元，即中點同比增長 3%。因此，我們現在預計調整後的 EBITDA 將增至 1.05 億美元或收入的 16%。

And with that, let's please open the call for questions.

有了這個，讓我們打開問題的電話。

(Operator Instructions) And our first question comes from the line of Andrew Boone with JMP Securities.

（操作員說明）我們的第一個問題來自 Andrew Boone 與 JMP Securities 的合作。

Congrats on a strong set of share gains. Can you talk a little bit about how LOMs may change the competitive dynamic for business formation? What are the risks you see out there as people are more utilizing more generative AI models, what do you see there? And then can you talk a little bit about the cadence of the quarter? So understood for you really went live in March. Can you give us some more recent update in terms of what you guys saw on attach as well as maybe how March compared to January and February.

祝賀您獲得大量的股票收益。您能談談 LOM 如何改變企業形成的競爭動態嗎？隨著人們越來越多地使用更俱生成性的 AI 模型，您看到了哪些風險？您在那裡看到了什麼？然後你能談談這個季度的節奏嗎？所以理解你真的在三月份上線了。您能否根據你們在 attach 上看到的內容以及 3 月與 1 月和 2 月相比的情況，向我們提供一些最新的更新。

Thanks for the question, Andrew. Let me start up on the question with generative AI. I mean, maybe I'll just start by saying, this isn't all that new news for us. I mean if you go back and think through the pandemic when GPT-3 was released, we saw a pretty significant demonstration of some of the incredible capabilities that you get from LLM and from generative AI. If you think about some of them, it's legal text to plain English, summary briefs, just all of the distilling capabilities that it has and even more complex drafting. So when ChatGPT came out, that was just a little bit more about fine-tuning on a model of conversational UI. But those capabilities have been in place for a little time now. So if you step back, the generative piece of this it's going to change how people write almost like photos changed art, and bad writers will be somewhat overnight pretty good writers and we all know attorneys are amazing writers that effectively get paid by the word, which is a proxy of time. So there's going to be an impact on the industry.

謝謝你的問題，安德魯。讓我從生成人工智能的問題開始。我的意思是，也許我會先說，這對我們來說並不是什麼新鮮事。我的意思是，如果你回顧一下 GPT-3 發佈時的大流行，我們會看到一個非常重要的演示，展示了你從 LLM 和生成 AI 中獲得的一些令人難以置信的能力。如果您考慮其中的一些，它是簡單英語的法律文本、摘要摘要，只是它具有的所有提煉功能，甚至更複雜的起草。因此，當 ChatGPT 出來時，只是對對話 UI 模型進行了更多的微調。但是這些功能已經存在了一段時間了。所以如果你退後一步，它的生成部分將改變人們的寫作方式，就像照片改變藝術一樣，糟糕的作家會在一夜之間變成非常好的作家，我們都知道律師是了不起的作家，他們實際上是靠文字來賺錢的，這是時間的代表。因此，這將對行業產生影響。

What I don't think everybody fully appreciates is that our whole purpose for the first 20 years of our existence has been to leverage tech to make legal services accessible. The issue isn't in my mind, disruption of the online players. This is all about getting to the problem of nonconsumption through broader digital reach. And just about every estimate we see by every expert says that the majority of the U.S. population leaves their legal needs unmet. And anything that can stimulate that demand is a good thing in my mind. So what do I mean by that? So on our business, less than 5% of our revenue comes from forms and contracts, including our state planning business as well.

我認為每個人都沒有完全理解的是，我們存在的頭 20 年的全部目標一直是利用技術來提供法律服務。這個問題不在我的腦海中，在線播放器的中斷。這一切都是為了通過更廣泛的數字覆蓋範圍解決非消費問題。我們看到的每一位專家的幾乎每一項估計都表明，大多數美國人的法律需求沒有得到滿足。在我看來，任何可以刺激這種需求的東西都是好事。那我的意思是什麼？因此，在我們的業務中，只有不到 5% 的收入來自表格和合同，包括我們的州規劃業務。

We announced our acquisition of Revv in Q4 last year, pre the ChatGPT release. Our intent there was twofold. We've talked about e-signatures and actually, we've deployed that already, but part of this was to reimagine our forms and our contract offerings. Because we hadn't invested them in that business in 10 years despite the fact that, that's where we got started, we really haven't had a significant investment there for some time. So in diligence, when we were out looking at potential acquisitions, Revv one of the things that attracted to us to them was the fact that they had some pretty novel features leveraging machine learning. And I've been through these shifts a couple of times before. What I'd say, typically, the pattern news is the most disruptive technologies start horizontally and then they get tuned vertically. And we're in a really unique position to not only leverage ChatGPT, but to also couple it with our attorney network to bridge its shortfalls.

在 ChatGPT 發布之前，我們在去年第四季度宣布收購了 Revv。我們的意圖是雙重的。我們已經討論過電子簽名，實際上，我們已經部署了它，但其中一部分是重新構想我們的表格和我們的合同產品。因為我們已經 10 年沒有向他們投資該業務了，儘管事實上，那是我們開始的地方，我們確實已經有一段時間沒有在那裡進行重大投資了。因此，在盡職調查中，當我們尋找潛在的收購對象時，Revv 吸引我們的其中一件事是他們擁有一些利用機器學習的非常新穎的功能。我以前經歷過幾次這樣的轉變。我要說的是，通常情況下，模式新聞是最具顛覆性的技術，從橫向開始，然後垂直調整。我們處於一個非常獨特的位置，不僅可以利用 ChatGPT，還可以將其與我們的律師網絡相結合以彌補其不足。

And there's a couple of those, such as technical issues like hallucinations but also regulatory issues like unauthorized practice of law. So I view ChatGPT as expanding our addressability. Of course, that means we have to be innovative in the space, but we are the market leader, so you should expect that. I certainly do. So we're excited about where we are, and we have a couple of things that we talked about as we get towards the end of the year, and we're in a pretty good spot for that.

還有一些問題，例如幻覺之類的技術問題，還有未經授權的法律實踐之類的監管問題。所以我認為 ChatGPT 擴展了我們的可尋址性。當然，這意味著我們必須在該領域進行創新，但我們是市場領導者，所以你應該期待這一點。我當然知道。因此，我們對我們所處的位置感到興奮，並且在接近年底時我們討論了一些事情，我們處於一個非常好的位置。

On the cadence in the quarter, I would say we didn't see any surprises in the launch. And part of that is a reflection of just how much we tested before we released the winning lineup. And so if anything, we saw the predictable conversion improvements, we saw the reduction in AOV. The one thing that we were able to get a new read on in March was marketing efficiency and just what the impact of free messaging would be. And I can say that, that exceeded our expectations a bit. And we're just getting started there, too. So there's a lot of tuning that has to happen on the line up itself. But the early indication is that the free messaging is resonating, you can see it in the share performance. I mean the 27% share gain is probably the best indication in general. On the attach side, we did not have any surprises there.

關於本季度的節奏，我想說我們在發佈時沒有看到任何驚喜。這部分反映了我們在發布獲勝陣容之前進行了多少測試。因此，如果有的話，我們看到了可預測的轉換改進，我們看到了 AOV 的減少。我們在 3 月份能夠獲得新閱讀的一件事是營銷效率以及免費消息傳遞的影響。我可以說，這有點超出了我們的預期。我們也才剛剛開始。因此，生產線本身必須進行大量調整。但早期跡象表明，免費信息正在引起共鳴，您可以在股票表現中看到這一點。我的意思是 27% 的份額增長可能是總體上最好的指標。在附件方面，我們沒有任何意外。

It played out exactly how we saw it in our tests, where we're seeing slightly lower attach rates, but that's overcome by the fact that you have much more units. And so overall, it's going to be an acceleration in the subscription business, increasing mix and driving longer lifetime revenue. And all of that is in combination with lower CAM expenses and better CAM efficiencies. So it really was pretty clean exactly what we had expected.

它的表現與我們在測試中看到的完全一樣，我們看到附加率略低，但由於您擁有更多的單元而克服了這一點。因此，總的來說，這將加速訂閱業務，增加組合併推動更長的生命週期收入。所有這些都與更低的 CAM 費用和更高的 CAM 效率相結合。所以它確實非常乾淨，正是我們所期望的。

And Andrew, just one thing that builds on the trajectory of the quarter. We did see some strength in March as we fully rolled out. I mean, we were largely rolled out throughout the quarter. So it was a slight improvement. We also saw a stronger macro in March. That's kind of normalized in April. And so while we've increased our assumptions and forecast for the macro in Q2, our projections are not as strong as what we actualized in Q1. And then per our commentary, we also noted that in the back half of the year, we continue to take a really conservative approach to the macro. So as you think about Q2 from a business formation standpoint, what we saw in Q1 should be a fair expectation for our performance in Q2 from a year-over-year growth standpoint, and still staying conservative on the macro in the back half of the year.

而安德魯，只是建立在本季度軌跡上的一件事。當我們全面推出時，我們在 3 月份確實看到了一些力量。我的意思是，我們在整個季度都在很大程度上推出。所以這是一個輕微的改進。我們還看到了 3 月份更強勁的宏觀經濟。這在四月份已經正常化了。因此，雖然我們增加了對第二季度宏觀經濟的假設和預測，但我們的預測不如我們在第一季度實現的那樣強。然後根據我們的評論，我們還注意到在今年下半年，我們繼續對宏觀採取非常保守的方法。因此，當你從業務形成的角度考慮第二季度時，從同比增長的角度來看，我們在第一季度看到的應該是對我們第二季度業績的合理預期，並且在後半段仍然對宏觀保持保守年。

And the next question comes from the line of Matthew Pfau with William Blair.

下一個問題來自 Matthew Pfau 和 William Blair 的台詞。

Wanted to ask on LZ Tax. Just sort of to clarify, how did that perform in its second year relative to your expectations? And you're thinking about areas of improvement, maybe what would some of those look like? Where do you think there's additional opportunities with that product?

想問LZ Tax。只是澄清一下，相對於您的預期，它在第二年的表現如何？你正在考慮改進的領域，也許其中一些會是什麼樣子？您認為該產品的其他機會在哪裡？

Yes. Thanks for the question, Matt. Yes. Just to refresh, I mean, our tax business is pretty unique because we serve a segment of customers that a lot of people don't yet serve, which is someone who's even pre-formation and free operations. So people have questions about what type of entity they should have. And then even if they've created an entity sometimes it means that they're not yet in operation and we give them a lot of tax advice. So it's a pretty unique business through a unique channel because, again, we have -- we can identify them, whereas other people would have to do performance marketing or brand marketing to acquire these customers. The progress here has been pretty amazing. I mean one thing I reflect on is it's a practice that's less than 2 years old, and so we just finished our second tax season and the scaling that we're doing plus service improvements is phenomenal.

是的。謝謝你的問題，馬特。是的。只是為了刷新，我的意思是，我們的稅務業務非常獨特，因為我們為很多人尚未服務的客戶群提供服務，這些客戶甚至是預成型和免費運營的人。所以人們對他們應該擁有什麼類型的實體有疑問。然後，即使他們創建了一個實體，有時也意味著他們還沒有開始運營，我們會給他們很多稅務建議。因此，通過獨特的渠道，這是一項非常獨特的業務，因為我們再次擁有 - 我們可以識別它們，而其他人則必須進行績效營銷或品牌營銷才能獲得這些客戶。這裡的進展非常驚人。我的意思是我反思的一件事是，這是一種不到 2 年的做法，所以我們剛剛結束了第二個稅收季節，我們正在做的擴展和服務改進是驚人的。

But that said, I wouldn't say I'm disappointed, but I'm very satisfied in that we still see retention rates that we believe we should be doing better. We -- part of that is issues that we've identified ourselves just in the process of filing and some of the capabilities that we want to have on an ongoing basis as a tax service beyond filing itself. And we basically keep learning these things as we get out to market. And if you think what our philosophy is here is we're trying to balance speed of growth and scale and then also kind of listening to our customers and evolving the service itself. So it continues to be a strong performing service, and yet I feel like there's a lot of upside here as we continue to refine the end-to-end experience for our customers.

但話雖如此，我不會說我很失望，但我很滿意我們仍然看到我們認為我們應該做得更好的保留率。我們——其中一部分是我們在申報過程中發現的問題，以及我們希望在持續的基礎上作為一項超越申報本身的稅務服務而擁有的一些能力。當我們進入市場時，我們基本上會不斷學習這些東西。如果你認為我們的理念是什麼，我們正在努力平衡增長速度和規模，然後也在聽取客戶的意見並改進服務本身。因此，它仍然是一項性能強勁的服務，但隨著我們繼續為客戶改進端到端體驗，我覺得這裡還有很多好處。

Got it. And then in terms of the share gains you're seeing, I mean, my guess would be, a lot of that is coming from more of the price-sensitive consumer. What are you doing then to address the large portion of the market that's still paying a much higher fee to go to a bricks-and-mortar attorney to do a business formation?

知道了。然後就您所看到的份額收益而言，我的意思是，我的猜測是，其中很多來自更多對價格敏感的消費者。那麼您正在做什麼來解決仍然支付更高費用去實體律師進行業務組建的大部分市場？

Yes, that's one of the really fun parts of the lineup that we deployed is it both solves for the price sensitive at the low end with a free offering, but our premium SKU actually comes bundled with access to an attorney. And so the benefit there is we're introducing a lot of people to the idea of you can get access to an attorney through technology to handle some of the early questions that you have as you're forming and then you can decide from there whether or not you're going to renew the service. And so that really is an entree into starting to disrupt the higher end of the market. Super early innings here. And actually, the volume that we're seeing coming in from this lineup is, again, what we're going to learn from and keep evolving the service, but the early read is quite positive. And that was the lineup that won overall in terms of both thinking about conversion as well as lifetime value.

是的，這是我們部署的陣容中真正有趣的部分之一，它既通過免費提供解決了低端的價格敏感問題，但我們的優質 SKU 實際上捆綁了律師的訪問權。因此，我們向很多人介紹了這樣的好處，即您可以通過技術獲得律師的幫助，以處理您在組建過程中遇到的一些早期問題，然後您可以從那裡決定是否您是否要續訂服務。因此，這確實是開始擾亂高端市場的一個入口。超級早局在這裡。實際上，我們從這個陣容中看到的數量再次是我們要從中學習並不斷發展服務的東西，但早期閱讀是非常積極的。這就是在考慮轉化率和生命週期價值方面總體上獲勝的陣容。

The other thing I'd add just in the value that we bring is the fact that it's a full suite of solutions and services that we provide either directly or through partners, which is a better customer experience. We're also improving our overall customer experience. We also mentioned this in our remarks around the automation wins that we've had in terms of the delivery of our services. And so we've been able to deliver a faster and better experience to our customers, which makes us better choice overall.

我要補充的另一件事是我們帶來的價值是，它是我們直接或通過合作夥伴提供的全套解決方案和服務，這是更好的客戶體驗。我們也在改善我們的整體客戶體驗。我們在關於我們在服務交付方面取得的自動化勝利的評論中也提到了這一點。因此，我們能夠為客戶提供更快更好的體驗，這使我們成為整體上更好的選擇。

(Operator Instructions) And our next question comes from the line of Mario Lu with Barclays.

（操作員說明）我們的下一個問題來自 Mario Lu 與 Barclays 的對話。

This is Jack Butler on for Mario. My first question was surrounding the partnership side of things. When should we expect to see a meaningful uplift from these new partnerships such as Chase, is there any time line you may be able to put behind that?

這是馬里奧的傑克巴特勒。我的第一個問題是圍繞事物的伙伴關係方面。我們什麼時候應該期望看到這些新的合作夥伴關係（例如大通銀行）帶來有意義的提升，您是否有任何時間表可以推遲？

So there's 2 forms of partnerships on our side just to back it up and provide some context. On one hand, we have partners where we're marketing their service through our formation workflow. And then on the other hand, we have the partnership channel, where some of the partners that we have are actually marketing our formation service as well. And so I think your question was more on the services that we're marketing through our platform. And I'd say that that's actually a lot of moving parts. We've talked about we exited another partnership on the uncontested divorce side last quarter. So that's a bit of a headwind, while at the same time, we're really ramping up our partnership with Wix. We added Chase as a banking partner and I'd say NEXT insurance is another meaningful partner for us.

因此，我們這邊有兩種形式的合作夥伴關係，只是為了支持它並提供一些背景信息。一方面，我們有合作夥伴，我們通過我們的組建工作流程營銷他們的服務。另一方面，我們有合作夥伴渠道，我們擁有的一些合作夥伴實際上也在營銷我們的形成服務。所以我認為你的問題更多是關於我們通過我們的平台營銷的服務。我會說那實際上有很多活動部件。我們已經討論過上個季度我們在無爭議離婚方面退出了另一家合夥企業。所以這有點不利，但與此同時，我們確實在加強與 Wix 的合作夥伴關係。我們將大通銀行添加為銀行合作夥伴，我想說 NEXT 保險對我們來說是另一個有意義的合作夥伴。

Those are all growing very healthy. And I'd expect that, that starts to -- that continues to accelerate. But again, it's just lapping some other things that we're exiting. And we've -- if you think about it, if you can go back further a couple of years. That has been a consistent theme of ours as we're trying to build out an ecosystem that has an integrated experience for customers. At times, that means something we feel like is directly in the compliance space. We should have more ownership over that experience and we brought some of those things in-house because as you guys remember, tax used to be a partnership, and now it's what we're offering our customers as well.

這些都長得非常健康。我預計，這將開始——繼續加速。但同樣，它只是在重複我們正在退出的其他一些事情。我們已經 - 如果你考慮一下，如果你可以再往前幾年。這一直是我們的一貫主題，因為我們正在努力構建一個為客戶提供綜合體驗的生態系統。有時，這意味著我們覺得某些東西直接在合規空間中。我們應該對這種體驗擁有更多的所有權，我們將其中的一些東西帶到了內部，因為你們記得，稅收曾經是一種夥伴關係，現在這也是我們為客戶提供的。

On the partnership channel, it's kind of similar. We have some partners where we feel like it's a very symbiotic relationship, where we're marketing their service and then in turn, they're marketing our service. And then in some cases, we have a legacy of almost acting as a vendor -- as a very low-cost vendor to alternative providers. And so in the case of the bilateral side, we love it. We want to have partnerships where we feel like it's symbiotic, and we're both helping each other. On the vendor side, we feel like that's probably not what we want to be doing longer term. And we think those economics don't fit aligned with what we're trying to do from a lifetime value perspective. So there's going to be places where there's puts and takes where we're exiting partnerships from a channel perspective.

在合作夥伴渠道上，它有點相似。我們有一些合作夥伴，我們覺得這是一種非常共生的關係，我們在其中營銷他們的服務，然後反過來，他們也在營銷我們的服務。然後在某些情況下，我們擁有幾乎充當供應商的傳統——作為替代供應商的低成本供應商。因此，就雙邊而言，我們喜歡它。我們希望在我們認為是共生的地方建立夥伴關係，我們都在互相幫助。在供應商方面，我們覺得這可能不是我們長期想要做的事情。我們認為，從終生價值的角度來看，這些經濟學與我們正在努力做的事情不符。因此，從渠道的角度來看，在某些地方我們將退出合作夥伴關係。

Great. That's helpful. And then in terms of customer acquisition marketing, I know you indicated earlier on the call that you would expect to see a decline in that in 2Q on a year-over-year basis. Is that largely as a result of your shifting towards product and maybe weaning off after season with heightened marketing on LZ Tax or is there some other factor at play maybe you could call out?

偉大的。這很有幫助。然後在客戶獲取營銷方面，我知道你早些時候在電話會議上表示，你預計第二季度的銷量會同比下降。這主要是因為你轉向產品，並且可能在 LZ Tax 加強營銷後在賽季結束後斷奶，或者是否有其他因素在起作用，也許你可以大聲疾呼？

Yes, there's a couple of different factors here. I mean we've really scaled down our brand spend. And that's a reflection of thinking relatively to our competition, our awareness is just extremely high, and we have a strong lead. And in this environment, we didn't feel like that's a place to commit and have long-term investments. So we backed off on the brand side a bit. But it's also just gotten more efficient when you start to think about the performance side given the free messaging that we're using, some of the channel shifts that we're doing within performance marketing. And then even beyond that, sales and marketing, so thinking about the OpEx side, we adjusted as well. And sales, for instance, has come down as an expense. So it's -- when you think about the headcount side, that's down 8% for the quarter. So came down 24%, the sales and marketing headcount expense down 8% with the program dollar in there as well. It's sort of across the board a reduction as we become more and more efficient to align with our new strategy, which is a lower AOV product.

是的，這裡有幾個不同的因素。我的意思是我們真的縮減了品牌支出。這反映了相對於我們的競爭而言，我們的意識非常高，而且我們有很強的領先優勢。在這種環境下，我們覺得那不是一個承諾和進行長期投資的地方。所以我們在品牌方面有所退讓。但是，考慮到我們正在使用的免費消息傳遞，以及我們在績效營銷中所做的一些渠道轉變，當你開始考慮績效方面時，它也會變得更有效率。然後甚至除此之外，銷售和營銷，所以考慮到 OpEx 方面，我們也進行了調整。例如，銷售額作為一項費用已經下降。所以它 - 當你考慮員工人數方面時，本季度下降了 8%。所以下降了 24%，銷售和營銷人員費用下降了 8%，其中也有計劃美元。隨著我們越來越有效地與我們的新戰略保持一致，這是一種全面的減少，這是一種較低的 AOV 產品。

Our next question comes from the line of Ron Josey with Citi.

我們的下一個問題來自花旗銀行的 Ron Josey。

Dan, I wanted to follow up on a question or a comment you had earlier. The most disruptive tech, I think you said gets announced horizontally and then tuned vertically. Talk to us about how that might impact LegalZoom or how you're thinking about LegalZoom from a verticalized LLM support perspective. And then I know we talked about freemium on the call here, and forgive me this has already been answered, but asked -- but I know we got insights on how the quarter progressed. But talk to just about less to learn here in terms of demand and more importantly, I really want to focus on the upsell process and driving awareness of everything else that LegalZoom has to offer.

丹，我想跟進你之前提出的問題或評論。最具顛覆性的技術，我想你說的是橫向發布然後縱向調整。與我們談談這可能如何影響 LegalZoom，或者您如何從垂直化 LLM 支持的角度考慮 LegalZoom。然後我知道我們在這裡的電話會議上談到了免費增值，請原諒我已經回答了這個問題，但我知道我們已經了解了本季度的進展情況。但是，就需求而言，在這裡少談學習，更重要的是，我真的想專注於追加銷售過程，並提高人們對 LegalZoom 必須提供的其他一切的認識。

Yes. Thank you for the question, Ron. Yes. So LLM and verticalization, I mean, it's just -- it's almost like another form of saying fine-tuning, where if you think about LLMs and you think about ChatGPT, it does a little of everything, and it doesn't do anything perfect. And if you think about that, some of it can be related to the data sources, where those models might not have access to things that are analogous to the segments of customers that we're serving. So I'll give you an example.

是的。謝謝你的問題，羅恩。是的。所以 LLM 和垂直化，我的意思是，這幾乎就像是另一種形式的微調，如果你考慮 LLM 和 ChatGPT，它會做所有事情，但它不會做任何完美的事情.如果你考慮一下，其中一些可能與數據源有關，這些模型可能無法訪問類似於我們所服務的客戶群的東西。所以我給你舉個例子。

You may be able to go and scrap terms of service from every site that exists on the web and immediately be knowledgeable in drafting terms of services and really calling out anomalies in services. But do you have access to small business vendor contracts? Or do you have access to some geographically based terms tied to a lease. And that's where volume players will have a little bit of an advantage. And that's when you start to think beyond API-driven platforms on the LLM side and to more open source and where you have the ability to fine-tune with your own data set. So it's such early innings. We get really excited here, though, because we also have lots of data and we have a way to accumulate data that other people don't. That's also why having your own expert platform becomes really important because that is the step that you train the models on. And so you'll see more and more investment from there over the coming quarters.

您可以從網絡上存在的每個站點上刪除服務條款，並立即了解起草服務條款並真正指出服務中的異常情況。但是您可以訪問小型企業供應商合同嗎？或者您是否可以訪問與租約相關的一些基於地理的條款。這就是批量播放器將具有一點優勢的地方。那就是當你開始思考 LLM 端的 API 驅動平台之外的問題時，你會考慮更多的開源，並且你有能力使用自己的數據集進行微調。所以這是這麼早的局。不過，我們在這裡真的很興奮，因為我們也有很多數據，而且我們有辦法積累其他人沒有的數據。這也是為什麼擁有自己的專家平台變得非常重要的原因，因為這是您訓練模型的步驟。因此，在接下來的幾個季度裡，你會看到越來越多的投資。

On the second question, lessons learned on the lineup and how we drive demand. I mean I think here, we get so much testing going into deployment of the lineup that we really understood all the commercialization challenges. But to your point, the thing that we hadn't yet fully understood was what was going to be an impact on the marketing side and how we drive demand. There are some sub channels. There's new channels that we've identified that we haven't really participated in, and I don't want to get into the details of that. But that's one big learning that I think we pulled out. The other thing here is we're just really getting a sense of how you apply free messaging and where you specifically apply it.

關於第二個問題，陣容中的經驗教訓以及我們如何推動需求。我的意思是我認為在這裡，我們在陣容部署中進行瞭如此多的測試，以至於我們真正了解所有商業化挑戰。但就你的觀點而言，我們尚未完全理解的是什麼將對營銷方面產生影響以及我們如何推動需求。有一些子頻道。我們發現了一些我們還沒有真正參與的新渠道，我不想詳細介紹。但這是我認為我們退出的一項重大學習。這裡的另一件事是我們真正了解您如何應用免費消息傳遞以及您具體應用它的地方。

In some ways, it has the effect of bringing down AOV, the more you amplify the free message, which we knew it was going to do. So you have to find that right balance of how do you make sure it's there for the customers who are price sensitive. But at the same time that you're not over-indexing on all the free messaging as well. And I'd say this is a place where we are just getting started. I think there's a lot of opportunity for improvement as we go throughout the year because we really didn't have a chance to test it. And so that's all happening in market right now.

在某些方面，它具有降低 AOV 的效果，你越放大免費信息，我們知道它會這樣做。因此，您必須找到正確的平衡點，以確保它適合對價格敏感的客戶。但與此同時，您也不會過度索引所有免費消息。我想說這是我們剛剛開始的地方。我認為我們全年都有很多改進的機會，因為我們真的沒有機會測試它。所以這一切現在都在市場上發生。

And our next question will come from the line of Brent Thill with Jefferies.

我們的下一個問題將來自 Brent Thill 與 Jefferies 的對話。

This is Sang for Brent Thill. 2 questions. One on the freemium. Wondering if you could talk about the pace, once they kind of come in through that door, how quickly do they end up buying a paid product and typically which products get attached? And then second, on your decision to keep your recession or macro outlook the same for the second half. Just wondering what you're seeing? I mean, it looks like last quarter, you mentioned January, February are pretty good and obviously, Q1 turned on very well, but just wanted to see your thinking behind that thought process of the guidance around the macro assumption.

這是 Brent Thill 的 Sang。 2 個問題。一個在免費增值。想知道您是否可以談談速度，一旦他們從那扇門進來，他們最終購買付費產品的速度有多快，通常會附加哪些產品？其次，你決定在下半年保持經濟衰退或宏觀前景不變。只是想知道你看到了什麼？我的意思是，看起來上個季度，你提到 1 月、2 月非常好，顯然，Q1 的表現非常好，但只是想看看你在圍繞宏觀假設的指導思想過程背後的想法。

Yes. Thanks for the question. So on attach rates on this new cohort of customers, it's actually been relatively predictable, again, through testing. We saw what customers were attaching. And there are a set of standard solutions that we offer, one we call a pack of essential docs, which is things like an operating agreement, EINs, helping them with business licenses. And then separately, the compliance subscriptions like registered agents, and we have a compliance subscription that does all your annual filings as well. Those are pretty standard and they attach very well because when you get down to it, they're sort of required still. And so that not only -- they're not only kind of value add from a perspective of thinking through like what is relevant as you form, they're actually required. So they still attach pretty strong.

是的。謝謝你的問題。因此，關於這一新客戶群體的依附率，它實際上是相對可預測的，再次通過測試。我們看到了客戶所附加的內容。我們提供了一套標準解決方案，我們稱之為一套基本文件，就像經營協議、EIN 一樣，幫助他們獲得營業執照。然後單獨地，像註冊代理這樣的合規訂閱，我們有一個合規訂閱，它也可以處理你所有的年度申報。這些是非常標準的，它們附著得很好，因為當你開始使用它時，它們仍然是必需的。因此，不僅 - 從思考的角度來看，它們不僅是一種增值，就像你形成的相關內容一樣，它們實際上是必需的。所以他們仍然非常重視。

What I'd say is we haven't really commercialized these products in any way to adjust to the new segments that are coming in. So when you think about a very price-sensitive customer, they may not be looking for as much as broad a feature set or as rich of a product and they might be looking for something that's a little bit more simple, which gives us the opportunity to consider commercializing it slightly different to drive those attach rates up. But again, like the really interesting thing here, and I'm just going to keep saying it, we were extremely happy with the launch of freemium. There were zero surprises. And what I'd say coming out of it is we have a somewhat under-optimized lineup now where we haven't tested a bunch of the add-on subscriptions or add-on products and transactional products. And so there's opportunities that we're going to start identifying. We have a whole queue of tests that are kind of sitting there waiting to be run that have been sitting behind this freemium line for quite some time.

我要說的是，我們還沒有以任何方式真正將這些產品商業化以適應即將到來的新細分市場。因此，當您考慮對價格非常敏感的客戶時，他們可能不會尋找廣泛的產品功能集或豐富的產品，他們可能正在尋找更簡單的東西，這讓我們有機會考慮將其商業化，以略微不同的方式提高這些附加率。但是，就像這裡真正有趣的事情一樣，我要一直說下去，我們對免費增值的推出感到非常高興。沒有驚喜。我要說的是，我們現在的產品陣容有點不夠優化，我們還沒有測試一堆附加訂閱或附加產品和交易產品。因此，我們將開始尋找機會。我們有一整排測試等待運行，這些測試已經在這條免費增值線後面等待了很長一段時間。

And on your question with regards to the macro, we feel like we're being appropriately conservative there. We're obviously still in the midst of an uncertain macro environment, kind of high inflation, increasing interest rate environment. So there's a general expectation that the economy will slow. We also, from a historical CAGR standpoint, look at the historical growth rates in macro formation and do some triangulation there and what the new slope could look like over an extended period given that we think the slope has shifted more favorably given all the tailwinds as it relates to forming and getting a business operational. So we factor in a lot of different things, but overall, believe that it's appropriate to stay conservative as we look out farther and we'll start to -- we'll normalize our forecast to whatever we're seeing for the upcoming quarter based on what we're seeing. But for now, as you look out at extended quarters, we're going to continue to stay conservative.

關於你關於宏觀的問題，我們覺得我們在那裡是適當保守的。我們顯然仍處於不確定的宏觀環境中，有點高通脹，利率上升的環境。因此，人們普遍預期經濟會放緩。我們還從歷史 CAGR 的角度來看宏觀形成的歷史增長率，並在那裡進行一些三角測量，以及新的斜率在較長時期內會是什麼樣子，因為我們認為斜率已經發生了更有利的變化，因為所有的順風都是它涉及到企業的形成和運作。因此，我們考慮了很多不同的因素，但總的來說，相信保持保守是合適的，因為我們看得更遠，我們將開始——我們將根據我們對即將到來的季度所看到的任何情況進行標準化預測關於我們所看到的。但就目前而言，當你展望延長季度時，我們將繼續保持保守。

Yes. In April, as an example, because the census publishes weekly data, you can see it, it stayed pretty healthy as well. And -- but yes, to Noel's point, we really want to control the things that we can, and we feel like the discipline of assuming a negative macro is healthy to how we manage the headcount. It's healthy to how we think about how we're spending and we want to be as conservative as possible in this environment.

是的。舉個例子，4 月份，因為人口普查每週發布數據，你可以看到，它也保持相當健康。而且 - 但是，是的，就 Noel 的觀點而言，我們真的想控制我們可以控制的事情，我們覺得假設負宏觀的紀律對我們管理員工人數的方式是健康的。這對我們如何看待我們的支出方式是健康的，我們希望在這種環境下盡可能保守。

And our next question comes from the line of Jackson Ader with SVB MoffetNathanson.

我們的下一個問題來自 Jackson Ader 與 SVB MoffetNathanson 的對話。

Actually, just one from our side. The -- is there like a different contemplation for the lifetime value of a customer that kind of matches the willingness to accept the lower upfront price. Maybe that might impact either the long-term model or the long-term margin profile?

實際上，只有我們這邊的一個。 -- 是否有對客戶終生價值的不同考慮，這種考慮與接受較低預付價格的意願相匹配。也許這可能會影響長期模型或長期利潤率？

Yes, I want to make sure I understand your question. Are you asking whether or not we should expect a different LTV for the customers coming in through this lineup?

是的，我想確保我理解你的問題。你是在問我們是否應該為通過這個陣容進入的客戶期望一個不同的 LTV？

Yes. Because I'm just thinking like if we think back to the IPO a couple of years ago, your long-term model probably just contemplated like certainly a different upfront price for most of the transaction units and then also a different price for the subscription units that would be attached. And so I'm just wondering like this new -- the new product offering, how that interacts with your long-term margin profile that, I think, mostly unchanged since you guys came out.

是的。因為我只是在想，如果我們回想幾年前的 IPO，您的長期模型可能只是考慮了對大多數交易單位肯定有不同的前期價格，然後對訂閱單位也有不同的價格那將被附加。所以我只是想知道這個新產品 - 新產品，它如何與你的長期利潤率相互作用，我認為自你們出來以來基本沒有變化。

Yes. Well, it's somewhat unknowable as you start to get to the out years, what the LTV impact will be of this customer base, but I think what we're -- the way we're looking at this is on a relative basis to what the CAM spend is. And when we look at the AOV reduction, for instance, if we look at the total cart value reduction that is happening due to this new lineup, we actually see the CAM cost per customer going down at a faster rate than the actual cart value. So that should lead to a bit of an expansion, but it also just depends a little bit on what we're talking about in year 2 behavior, year 3 behavior. Of course, we're shifting more to subscription, so it stand a reason that the margin profile improves. But it really depends on some retention rates. And that data is just unknowable right now.

是的。好吧，當你開始進入未來幾年時，這有點不可知，這個客戶群的 LTV 影響是什麼，但我認為我們是什麼 - 我們看待這個問題的方式是相對於什麼CAM 支出是。當我們查看 AOV 減少時，例如，如果我們查看由於這個新陣容而發生的總購物車價值減少，我們實際上看到每個客戶的 CAM 成本下降速度比實際購物車價值更快。所以這應該會導致一些擴展，但它也只是有點取決於我們在第 2 年的行為、第 3 年的行為中談論的內容。當然，我們正在更多地轉向訂閱，因此這也是利潤率改善的一個原因。但這實際上取決於某些保留率。而這些數據現在是不可知的。

And our next question comes from the line of Elizabeth Porter with Morgan Stanley.

我們的下一個問題來自 Elizabeth Porter 與 Morgan Stanley 的對話。

I wanted to touch on the share gains in business formations. The 27% is very impressive in Q1 and while you expect that to moderate in the year, how should we think about the trend versus your original target to achieve about a 12% improvement this year? And has that target changed at all just given the strong Q1 performance?

我想談一談商業組織的份額收益。第一季度的 27% 令人印象深刻，雖然您預計今年會放緩，但我們應該如何考慮這一趨勢與您最初的目標，以實現今年約 12% 的改善？鑑於第一季度的強勁表現，這個目標是否有任何改變？

Actually, when we talk about moderating, that's moderation of the growth rate, which is really just starting to lap the testing that would happen in the back half of the year. So that -- what we're really trying to drive is increased share throughout the year. And I talked about this a little bit earlier. There might be things that we decide that we think are not -- it's share that we don't want because it's not the right value associated with that share. And there's places where we know today there's incremental investments that we can make that can drive more share. So an example there is we still only optimize the LLC portion of formations, but that's 3/4 of the formations transactions roughly, but there's still a quarter of them that we're still traditionally priced. So this is -- it was a very strong results, and we're super happy with it. We feel like it sets us up to now optimize more and start to build off of it as we go throughout the year.

實際上，當我們談論放緩時，就是增長率放緩，這實際上才剛剛開始應對今年下半年將要進行的測試。所以——我們真正想要推動的是全年增加份額。我之前談過這個。可能有些事情我們認為我們認為不是——這是我們不想要的份額，因為它不是與該份額相關的正確價值。我們今天知道，在某些地方，我們可以進行增量投資，以推動更多的份額。舉個例子，我們仍然只優化 LLC 部分的編隊，但大約佔編隊交易的 3/4，但仍有四分之一的傳統定價。所以這是 - 這是一個非常強勁的結果，我們對此非常滿意。我們覺得它讓我們現在可以優化更多，並在我們全年進行時開始構建它。

And one thing I'll just add there Elizabeth. We had stated that our goal was to grow market share by 15% this year. And we're still highly confident that we are going to drive at least 15% growth.

還有一件事我要補充一下，伊麗莎白。我們曾表示，我們的目標是今年將市場份額增長 15%。我們仍然非常有信心我們將推動至少 15% 的增長。

Got it. And then I believe you noted about half the work so far has been done on the automation of filings. So when could we see that other half completed? Is this a driver that is more likely to come kind of beyond 2023 or something that's more of a near-term dynamic?

知道了。然後我相信你注意到到目前為止，大約一半的工作是在歸檔自動化方面完成的。那麼我們什麼時候才能看到另一半完成呢？這是一個更有可能在 2023 年之後出現的驅動因素，還是更近期的動態？

Yes. So the way automation works is, we really prioritize based off of the number of transactions that are occurring. And as you can imagine, because we do a lot of different types of transaction types. You get to a place of diminishing return eventually, and it becomes a little bit more of a like a long tail of smaller improvements. What I would say is we expect some significant improvements by the end of this year that should drive incremental efficiencies. And then at that point, we start to move to transaction types that have a little less impact thereafter. But there are parts of our products, for instance, that I mentioned before that we really haven't touched in many years. Even like when you think about consumer business, that still has a lot of manual processes underneath it. And most of what we've talked about on the automation side has really been on the small business side. So still opportunities. A lot of larger improvements should happen over the next 6 months and then it starts to moderate.

是的。所以自動化的工作方式是，我們真正根據正在發生的交易數量來確定優先級。正如您可以想像的那樣，因為我們做了很多不同類型的交易類型。你最終會到達一個收益遞減的地方，它變得有點像一條長長的小改進尾巴。我要說的是，我們預計到今年年底會有一些重大改進，這將推動效率的提高。然後在這一點上，我們開始轉向影響較小的交易類型。但是，例如，我之前提到的我們產品的某些部分，我們確實已經很多年沒有碰過了。即使當您考慮消費者業務時，它仍然有很多手動流程。我們在自動化方面討論的大部分內容實際上都是針對小型企業的。所以還是機會。在接下來的 6 個月內應該會發生很多更大的改進，然後它開始緩和。

I'm currently showing no further questions at this time. This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.

目前我沒有進一步提問。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。每個人，祝你有美好的一天。