LegalZoom.com Inc (LZ) 2023 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the LegalZoom Second Quarter 2023 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Madeleine Crane, Investor Relations. Please go ahead.

美好的一天，感謝您的支持。歡迎參加 LegalZoom 2023 年第二季度收益電話會議。 （操作員指示）請注意，今天的會議正在錄製中。現在，我想將會議交給今天的發言人、投資者關係部門的瑪德琳·克蘭 (Madeleine Crane)。請繼續。

Thank you, operator. Hello, and welcome to LegalZoom's Second 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，接線員。您好，歡迎參加 LegalZoom 2023 年第二季度收益電話會議。今天加入我的是我們的首席執行官 Dan Wernikoff；以及我們的首席財務官諾埃爾·沃森 (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 events or otherwise.

提醒一下，我們將在這次電話會議上做出前瞻性陳述。這些前瞻性陳述可以通過使用“相信”、“期望”、“計劃”、“預期”、“意願”、“打算”和類似表達等詞語來識別，並且不能也不應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期望以及截至今天為止我們可獲得的信息。這些前瞻性陳述還受到風險和不確定性的影響，可能導致實際結果與此類陳述存在重大差異。我們今天發布的新聞稿以及向美國證券交易委員會提交的最新 10-K 表格年度報告的風險因素部分提到了這些風險和不確定性。除法律要求外，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、未來事件還是其他原因。

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 consideration 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.

此外，我們還將討論某些非公認會計準則財務指標。我們使用非公認會計準則衡量標準來製定有關我們業務的決策，我們相信這些衡量標準為投資者提供了有用的信息。這些非公認會計準則財務指標無意單獨考慮或替代根據公認會計準則編制的結果。所有非 GAAP 衡量標準與最直接可比的 GAAP 衡量標準的對賬均在我們網站的投資者關係部分列出，網址為 Investors.legalzoom.com。

I will now turn the call over to Dan.

我現在將把電話轉給丹。

Good afternoon, everyone, and thanks for joining our call. I'm excited to discuss our strong Q2 financial performance and some significant product and platform updates. I'll begin with a brief summary of our financial results. Revenue came in at $169 million, up 4% year-over-year. Adjusted EBITDA was $30 million for the quarter, which equates to an 18% margin. LegalZoom formations for the quarter significantly outperformed the market, growing 42% year-over-year, while U.S. Census formations grew 7%. As a result, share for the quarter rose 33% year-over-year. These results demonstrated continued momentum after a strong Q1 performance.

大家下午好，感謝您加入我們的通話。我很高興討論我們第二季度強勁的財務業績以及一些重要的產品和平台更新。我將首先簡要概述我們的財務業績。收入為 1.69 億美元，同比增長 4%。本季度調整後 EBITDA 為 3000 萬美元，相當於 18% 的利潤率。本季度 LegalZoom 的編隊表現明顯優於市場，同比增長 42%，而美國人口普查編隊則增長 7%。因此，該季度的份額同比增長 33%。這些結果表明，在第一季度表現強勁之後，勢頭依然強勁。

Going deeper into the results. Q2 Subscription revenue of $102 million grew 12% year-over-year, benefiting from both an increase in ARPU and new subscription growth from the premium lineup rollout. Transaction AOV declined 26% year-over-year as a result of the freemium lineup. Q2 represents the trough of lower year-over-year AOV performance and we expect a reversion of this trend in the back half of the year as we lap the new line of rollout.

更深入地研究結果。第二季度訂閱收入為 1.02 億美元，同比增長 12%，受益於 ARPU 的增長以及優質產品系列推出帶來的新訂閱增長。由於免費增值產品陣容，交易 AOV 同比下降 26%。第二季度代表了 AOV 業績同比下降的低谷，我們預計隨著新產品線的推出，這一趨勢將在今年下半年出現逆轉。

Now I'd like to lead with an overview of an important product addition to our portfolio. Last week we announced the launch of LZ Books, which supports all 3 of our strategic pillars to scale the business, build the ecosystem and integrate experts. One of the biggest challenges our customers face when launching their businesses is navigating the complexities of bookkeeping and taxes. After being in the market with LZ Tax for 2 years, we've recognized there's a gap in the market for solopreneurs. These businesses have tax questions at formation that require an expert. They want a simple accounting solution to replace tedious offline methods like storing bank statements and receipts, and they want an integrated and simplified tax experience. Their main alternative today is to navigate complex and expensive accounting software and couple that with an offline accountant. These solopreneurs are a key customer demographic for LegalZoom.

現在我想首先概述一下我們產品組合中新增的重要產品。上週，我們宣布推出 LZ Books，它支持我們擴展業務、構建生態系統和整合專家的所有 3 個戰略支柱。我們的客戶在開展業務時面臨的最大挑戰之一是應對複雜的簿記和稅務問題。在 LZ Tax 進入市場兩年後，我們認識到個體企業家的市場存在空白。這些企業在成立時會遇到稅務問題，需要專家的幫助。他們想要一個簡單的會計解決方案來取代繁瑣的離線方法，例如存儲銀行對賬單和收據，並且他們想要集成且簡化的稅務體驗。如今，他們的主要選擇是使用複雜且昂貴的會計軟件，並將其與離線會計師結合起來。這些個體企業家是 LegalZoom 的關鍵客戶群體。

Based on a recent customer study, roughly 2/3 of our formation customers are solopreneurs, which we define as either single member LLCs or sole proprietors. Over 90% of our formation customers form with us before they consult a business tax professional and only a little over 5% have established a bookkeeping method prior to forming with us. We've built what we believe to be the most well-designed solution for this large market. With LZ Books, you'll be able to create your first proposal with access to an attorney if needed, send it for digital signature, go from invoice to electronic payment, download and auto categorize expenses from your bank account and even more importantly, seamlessly integrate with LZ Tax. During the launch, we'll also be providing free unlimited access to a CPA through the product to introduce and promote the value of our highly vetted network of accountants.

根據最近的一項客戶研究，我們約 2/3 的組建客戶是個體企業家，我們將其定義為單一成員有限責任公司或獨資經營者。超過 90% 的組建客戶在諮詢營業稅務專業人士之前就與我們合作，只有略多於 5% 的客戶在與我們合作之前建立了簿記方法。我們已經為這個龐大的市場構建了我們認為設計最完善的解決方案。借助LZ Books，您將能夠創建您的第一份提案，並在需要時聯繫律師，發送它進行數字簽名，從發票到電子支付，從您的銀行帳戶下載費用並自動分類，更重要的是，無縫地進行與LZ稅務整合。在發布期間，我們還將通過該產品免費提供無限制的註冊會計師資格，以介紹和推廣我們經過嚴格審查的會計師網絡的價值。

LZ Books reaches across all our strategic pillars. Our first strategic pillar is to scale the business and LZ Books represents a new customer entry point for LegalZoom. LZ Books can serve an SMB that formed with us already or someone who has not yet formed, but is looking for a simpler lower-priced alternative to today's bookkeeping solutions.

LZ Books 涵蓋我們所有的戰略支柱。我們的第一個戰略支柱是擴大業務規模，LZ Books 代表了 LegalZoom 的新客戶切入點。 LZ Books 可以為已經與我們一起組建的中小型企業或尚未組建的中小型企業提供服務，但正在尋找一種更簡單、價格更低的替代方案來替代當今的簿記解決方案。

Our second strategic pillar is to build the ecosystem. LZ Books is a tool our customers leverage beyond the point of formation, driving engagement while also opening up a new financial ecosystem of subscription services. Our third strategic pillar is to integrate experts, and LZ Books is designed to cohesively integrate with our expert offerings. Accounting and taxes go hand in hand and LZ Books users who subscribe to LZ Tax will be able to transfer their data to our CPAs to simplify tax time. We believe this represents a meaningful opportunity to naturally upsell our LZ Tax service at the moment of need versus selling LZ Tax to customers that may not be required to file a return at the time of formation.

我們的第二個戰略支柱是構建生態系統。 LZ Books 是我們的客戶超越形成點所利用的工具，可推動參與度，同時還開闢了訂閱服務的新金融生態系統。我們的第三個戰略支柱是整合專家，LZ Books 旨在與我們的專家產品緊密結合。會計和稅務是相輔相成的，訂閱 LZ Tax 的 LZ Books 用戶將能夠將他們的數據傳輸給我們的註冊會計師，以簡化納稅時間。我們相信，這是一個有意義的機會，可以在需要時自然地追加銷售我們的 LZ Tax 服務，而不是向在成立時可能不需要提交申報表的客戶出售 LZ Tax。

In addition to our LZ Books announcement, we also continue to make significant progress across our entire subscription ecosystem. On prior calls, I've noted the lack of an integrated post formation experience. In line with our second pillar to build the ecosystem, the creation of a cohesive experience within MyLZ has been a top priority. Along with the launch of LZ Books, we launched a complete redesign of the MyLZ experience. This is important for a couple of reasons. First, many of our solutions are more valuable together than apart, like forms and e-signatures or proposals in attorney consults and now books to taxes. And so the experience needs to be fluid across offerings. But equally important, as we're creating a central hub for small business complaints, our goal is to drive engagement that will enable post formation discovery and cross-sell. Our formations channel is incredibly powerful. And over time we believe we can expand our relationship post formation through the MyLZ experience.

除了 LZ Books 的公告之外，我們還在整個訂閱生態系統中繼續取得重大進展。在之前的電話中，我注意到缺乏綜合的後形成經驗。根據我們構建生態系統的第二個支柱，在 MyLZ 內創建有凝聚力的體驗一直是首要任務。隨著 LZ Books 的推出，我們對 MyLZ 體驗進行了徹底的重新設計。這很重要，原因有幾個。首先，我們的許多解決方案組合在一起比單獨使用更有價值，例如律師諮詢中的表格和電子簽名或建議，以及現在的稅務簿。因此，不同產品的體驗需要保持流暢。但同樣重要的是，在我們創建小型企業投訴中心時，我們的目標是推動參與，從而實現形成後發現和交叉銷售。我們的陣型通道非常強大。隨著時間的推移，我們相信我們可以通過 MyLZ 體驗擴大我們在組建後的關係。

I'm excited by the significant redesign and by the realization of our goal of creating a new software category, serving small businesses legal, compliance and financial needs in a single destination, which is something that doesn't exist anywhere else today. And while it's a meaningful first step, we'll continue to invest, and our customers can expect ongoing enhancements as we continue to build out the experience.

我對重大重新設計以及我們創建新軟件類別、在單一目的地滿足小型企業法律、合規和財務需求的目標的實現感到興奮，這是當今其他任何地方都不存在的。雖然這是有意義的第一步，但我們將繼續投資，隨著我們繼續打造體驗，我們的客戶可以期待持續的增強。

Turning to our core business and our first strategic pillar, scale the business. In Q2, we drove impressive market share gains while also improving operational efficiencies in our core formation business. We're benefiting from our infrastructure investments to streamline fulfillment, which are lowering the cost per formation unit while helping us fulfill orders quicker for our customers. In the near term, these efficiencies will continue to be offset by higher filing fee costs and the scale of a LZ Tax and virtual mail.

談到我們的核心業務和我們的第一個戰略支柱，擴大業務。第二季度，我們取得了令人矚目的市場份額增長，同時還提高了核心形成業務的運營效率。我們受益於我們的基礎設施投資，以簡化履行，這降低了每個形成單元的成本，同時幫助我們更快地為客戶履行訂單。短期內，這些效率將繼續被較高的申請費用以及 LZ 稅和虛擬郵件的規模所抵消。

Our freemium offering continues to resonate in the market. In Q2, CAM was down 18%, with traffic improving and almost all marketing efficiency measures showing strong results. Overall user session growth was strong, up 13% for the quarter, a better measure to assess health and intensive SMB product sectors, which was up more than 2x our user session growth. This metric strips out the consumer side of the business as well as lower intent educational traffic and focuses solely on people that begin the product purchase world. As a result of increasing traffic, we believe there are more opportunities to improve conversion as we refine the offering to fit this new expanded audience.

我們的免費增值服務繼續在市場上引起共鳴。第二季度，CAM 下降了 18%，流量有所改善，幾乎所有營銷效率措施都顯示出強勁的成果。總體用戶會話增長強勁，本季度增長 13%，這是評估健康和密集型中小企業產品領域的更好衡量標準，該領域的用戶會話增長是我們的 2 倍多。該指標剔除業務的消費者方面以及較低意向的教育流量，僅關注開始購買產品的人們。由於流量增加，我們相信，隨著我們改進產品以適應新的擴大的受眾，有更多機會提高轉化率。

Finally, regarding our third strategic pillar, integrated experts, we continue to make steady progress. In our first tax season, our focus was on understanding our customers' needs while beginning to build out an online experience. In our second season, we rolled out enhancements to the LZ Tax product and platform, improved commercialization and increased service levels. As a result, we remain on track to double the number of tax returns we filed in 2023. But as I mentioned in our last earnings call, we remain constructively dissatisfied with the retention rate of this service.

最後，關於我們的第三個戰略支柱——綜合專家，我們繼續穩步前進。在我們的第一個納稅季節，我們的重點是了解客戶的需求，同時開始構建在線體驗。在第二季中，我們推出了 LZ Tax 產品和平台的增強功能，改善了商業化並提高了服務水平。因此，我們仍有望在 2023 年將提交的納稅申報表數量增加一倍。但正如我在上次財報電話會議中提到的那樣，我們仍然對該服務的保留率不滿意。

In anticipation of our third tax season, we've identified a clear set of opportunities within our control to make sure that we're getting the right experience to the right customers and retaining them for longer. Our actions here will focus on driving higher customer consideration of our tax products. As we narrow in on the right audience, the resulting impact will likely be a period of lower attach rates while still experience higher attrition rates from our existing base. We expect this will drive long-term positive results but will be a headwind to revenue into 2024 as we work to implement these changes. We remain confident in the long-term opportunities surrounding LZ Tax especially as you consider the most important feature of taxes as integrated bookkeeping, which we now offer.

展望第三個納稅季節，我們在我們的控制範圍內確定了一系列明確的機會，以確保我們為正確的客戶提供正確的體驗並更長時間地保留他們。我們在此採取的行動將側重於提高客戶對我們稅務產品的考慮。當我們縮小目標受眾範圍時，所產生的影響可能是一段時期的附加率較低，但我們現有基礎的流失率仍然較高。我們預計這將帶來長期的積極成果，但在我們努力實施這些變革時，這將成為 2024 年收入的阻力。我們對圍繞 LZ Tax 的長期機會仍然充滿信心，尤其是當您認為稅收最重要的功能是我們現在提供的綜合簿記功能時。

We're also hard at work to integrate experts with a generative AI-powered product. By the end of the year, we expect to have a reimagined product and platform that will help small businesses review, understand and collaborate with experts on legal documents. As I've said before, generative AI can't replace attorney advice given challenges with accuracy as well as regulations around the unauthorized practice of law. We believe that only when coupled with access to an attorney in the full power of gen AI be realized.

我們還努力將專家與人工智能驅動的生成產品相結合。到今年年底，我們預計將擁有一個重新設計的產品和平台，幫助小型企業審查、理解法律文件並與專家合作。正如我之前所說，鑑於準確性以及未經授權的法律實踐的法規方面的挑戰，生成式人工智能無法取代律師建議。我們相信，只有與擁有 gen AI 全部權力的律師結合起來，這一目標才能實現。

LegalZoom stands apart from our competitors as a platform with an established network of independent attorneys available to unlock this opportunity. We believe this platform will drive many growth opportunities. Recall that legal documents are a very small portion of our business today. As the brand and market leader in the SMB legal services space, this is an unrealized opportunity that we feel like is ours to win. In addition, it will leverage the power of our ecosystem. Our attorney network and e-signature offering are core components needed to bring legal forms to life through a very contextual cross-sell. We look forward to providing more details on our efforts here in the coming quarters.

LegalZoom 與我們的競爭對手不同，它是一個擁有成熟的獨立律師網絡來釋放這一機會的平台。我們相信這個平台將帶來許多增長機會。回想一下，法律文件只占我們當今業務的一小部分。作為中小企業法律服務領域的品牌和市場領導者，這是一個尚未實現的機會，我們認為我們應該贏得這個機會。此外，它將利用我們生態系統的力量。我們的律師網絡和電子簽名產品是通過上下文交叉銷售將法律形式變為現實所需的核心組成部分。我們期待在未來幾個季度提供有關我們努力的更多細節。

Last quarter, we unveiled our new mission to unleash entrepreneurship and it's clear we're making significant progress against this goal. We're setting ourselves apart as the sole online platform providing the solution small businesses need right at the time of formation and beyond, all under 1 roof. Product innovation is what drives long-term growth. I've been mentioning product velocity as a focus over the last couple of quarters, and I'm energized by the pipeline. There's still more to come this year, both in terms of our LZ Books road map and other new product releases in the queue.

上個季度，我們公佈了釋放創業精神的新使命，很明顯，我們正在朝著這一目標取得重大進展。我們將自己打造成唯一的在線平台，為小企業在成立時及以後提供所需的解決方案，所有這些都在同一個屋簷下。產品創新是推動長期增長的動力。在過去的幾個季度中，我一直在提到產品速度作為焦點，並且我對管道充滿了活力。今年還有更多內容，無論是我們的 LZ Books 路線圖還是其他新產品發布。

In closing, I'm extremely pleased with our second quarter results. During Q2, we demonstrated solid performance with record share gains and continued fiscal discipline. I'm excited about the talent we have in place, the customer growth we're achieving and most importantly, the pace of our innovation. I'm also excited for what's to come as we're still in the early innings of our product evolution. I'd like to acknowledge and thank all of our LegalZoom employees for their hard work and dedication towards helping unleash entrepreneurship.

最後，我對我們第二季度的業績非常滿意。在第二季度，我們展現了穩健的業績，創紀錄的股票收益和持續的財政紀律。我對我們擁有的人才、我們正在實現的客戶增長以及最重要的是我們的創新步伐感到興奮。我也對即將發生的事情感到興奮，因為我們仍處於產品發展的早期階段。我要感謝所有 LegalZoom 員工為幫助釋放創業精神所做的辛勤工作和奉獻精神。

And 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'm pleased to discuss our continued strong performance. We remain focused on reaccelerating revenue growth and improving profitability. In the second quarter, we significantly expanded our adjusted EBITDA margin year-over-year through continued marketing efficiency and cost discipline while also growing our top line.

謝謝丹，大家下午好。我很高興討論我們持續強勁的表現。我們仍然專注於重新加速收入增長和提高盈利能力。在第二季度，我們通過持續的營銷效率和成本控制，大幅擴大了調整後的 EBITDA 利潤率，同時也提高了我們的營收。

Looking at our second quarter results in more detail. Total GAAP revenue in the period was $169 million, up 4% year-over-year and exceeded the top end of our guidance range. Transaction revenue was $60 million, down 7% year-over-year. We experienced strong growth in transaction units, offset by a reduction in average order value driven by the full rollout of our new premium lineup in Q1.

更詳細地查看我們第二季度的業績。該期間 GAAP 總收入為 1.69 億美元，同比增長 4%，超出了我們指導範圍的上限。交易收入為 6000 萬美元，同比下降 7%。我們經歷了交易量的強勁增長，但被第一季度全面推出新高端產品線導致的平均訂單價值下降所抵消。

Transaction units were 283,000, up 26% year-over-year, led by the increase in business formation transactions and partially offset by a decline in consumer and intellectual property transactions. We completed 161,000 business formations in Q2, up 42% compared to the same period last year. Our market share of business formations increased 33% year-on-year to 11.4% due to the new lineup. Looking ahead, while we expect to achieve at least a 15% year-over-year increase in market share for the full year, we do expect year-over-year growth in share gains to moderate in the back half of 2023 as we begin to lap the initial testing and expanding rollout of our free product and wind down certain channel partnerships.

交易單位為 283,000 個，同比增長 26%，主要由企業組建交易的增加帶動，但部分被消費者和知識產權交易的下降所抵消。第二季度我們完成了 161,000 家企業組建，比去年同期增長 42%。由於新的陣容，我們的業務形態市場份額同比增長33%至11.4%。展望未來，雖然我們預計全年市場份額將實現至少 15% 的同比增長，但我們確實預計，從 2023 年下半年開始，份額增幅的同比增長將放緩完成我們免費產品的初步測試和擴大推廣，並結束某些渠道合作夥伴關係。

Average order value was $214 in the second quarter, up sequentially from the first quarter and down 26% year-over-year, driven by our lower priced lineup. We expect the year-over-year decline in average order value to improve to low single-digit declines by the end of 2023 as we lap our freemium rollout and exits our historical partnerships. Subscription revenue was $102 million in the quarter, up 12% year-over-year due to an 11% increase in the number of subscriptions and continued improvement in ARPU. Looking ahead, we expect subscription revenue growth to decelerate slightly through the remainder of the year as a result of headwinds in LZ Tax and to a lesser extent, the aforementioned changes in our partnership channel.

第二季度平均訂單價值為 214 美元，比第一季度環比增長，但在我們低價產品陣容的推動下，同比下降 26%。我們預計，隨著我們完成免費增值服務並退出歷史合作夥伴關係，到 2023 年底，平均訂單價值的同比下降將改善至個位數的低降幅。該季度訂閱收入為 1.02 億美元，同比增長 12%，得益於訂閱數量增長 11% 以及 ARPU 持續改善。展望未來，由於 LZ 稅的不利因素以及我們合作夥伴渠道的上述變化，我們預計今年剩餘時間訂閱收入增長將略有放緩。

ARPU came in at $259, up 3% year-over-year and flat sequentially from the first quarter. The year-over-year increase can primarily be attributed to the increased mix of higher-priced tax and virtual mail subscriptions within the total subscription base and pricing improvement in our consumer subscription. Looking ahead to the back half of 2023, we expect year-over-year ARPU growth to remain in the low to mid-single digits. However, as we launch new products and continue to test and optimize our lineup, we are focused first on solving the best overall outcome from a customer experience and lifetime value standpoint. Partnership revenue was $6 million, up 2% year-over-year.

ARPU 為 259 美元，同比增長 3%，與第一季度持平。同比增長主要歸因於總訂閱基數中價格較高的稅收和虛擬郵件訂閱的組合增加以及我們的消費者訂閱的定價改善。展望 2023 年下半年，我們預計 ARPU 同比增長將保持在中低個位數。然而，當我們推出新產品並繼續測試和優化我們的產品線時，我們首先專注於從客戶體驗和終身價值的角度解決最佳整體結果。合作夥伴收入為 600 萬美元，同比增長 2%。

Turning to expenses and margins, where all of the following metrics are on a non-GAAP basis. Second quarter gross profit margin was 65% compared to 67% in Q2 of last year. The decline was driven by higher filing fees as a percentage of revenue as a result of increased business formation volumes as well as an increase in revenue mix from LZ Tax and LZ Virtual Mail, which are still subscale in an investment mode.

談到費用和利潤，以下所有指標均基於非公認會計原則。第二季度毛利率為 65%，而去年第二季度為 67%。造成這一下降的原因是，由於業務形成量增加，以及LZ Tax 和LZ Virtual Mail 的收入組合增加，申請費佔收入的比例上升，而LZ Tax 和LZ Virtual Mail 的收入組合在投資模式中仍處於小規模。

Sales and marketing costs were $51 million in the second quarter or 30% of revenue and [11 point] improvement from Q2 of last year. This includes an 18% reduction in customer acquisition and marketing costs year-over-year. We expect sequential declines in CAM spend in each Q3 and Q4 as we remain focused on marketing efficiency gains.

第二季度的銷售和營銷成本為 5100 萬美元，佔收入的 30%，比去年第二季度提高了 [11 點]。這包括客戶獲取和營銷成本同比降低 18%。我們預計第三季度和第四季度的 CAM 支出將連續下降，因為我們仍然專注於營銷效率的提高。

Technology and development expenses were $14 million in Q2, up $3 million or 25% year-over-year. We expect similar year-over-year growth in this line in the back half as we invest in product and engineering talent.

第二季度技術和開發費用為 1400 萬美元，同比增加 300 萬美元，即 25%。隨著我們對產品和工程人才的投資，我們預計下半年該產品線將出現類似的同比增長。

General and administrative expenses were $50 million in Q2, up $1 million year-over-year. Our solid revenue results and continued focus on profitability drove stronger-than-expected adjusted EBITDA of $30 million for the quarter, reflecting an 18% margin. This compares to adjusted EBITDA of $18 million or 11% margin in the second quarter of 2022. Our deferred revenue decreased $2 million from the prior period.

第二季度一般及管理費用為 5000 萬美元，同比增加 100 萬美元。我們穩健的收入業績和對盈利能力的持續關注推動本季度調整後 EBITDA 強於預期，達到 3000 萬美元，利潤率為 18%。相比之下，2022 年第二季度調整後 EBITDA 為 1800 萬美元，利潤率為 11%。我們的遞延收入比上一季度減少了 200 萬美元。

In the second quarter, we continued to execute on our $150 million share repurchase authorization. We repurchased a total of 378,000 shares of our common stock at an average price per share of $8.04 for a total repurchase of $3 million. Since inception, we have completed approximately $105 million in buybacks with a total of 10.4 million shares repurchased. As of June 30, 2023, we had cash and cash equivalents of $239 million and no debt outstanding.

第二季度，我們繼續執行 1.5 億美元的股票回購授權。我們以每股 8.04 美元的平均價格總共回購了 378,000 股普通股，回購總額為 300 萬美元。自成立以來，我們已完成約 1.05 億美元的回購，總共回購了 1,040 萬股股票。截至 2023 年 6 月 30 日，我們擁有現金和現金等價物 2.39 億美元，沒有未償債務。

I'll now provide guidance for the third quarter and full year 2023. Macro conditions remain a key factor in our performance and outlook. Census business formations remained healthy in the second quarter and have been steady year-to-date. We've adjusted our outlook to reflect current trends. Based on these factors, we currently expect third quarter total revenue of $159 million to $161 million or 3% year-over-year growth at the midpoint. And third quarter adjusted EBITDA of $26 million to $28 million or 17% of revenue at the midpoint.

我現在將提供 2023 年第三季度和全年的指導。宏觀條件仍然是我們業績和前景的關鍵因素。人口普查業務結構在第二季度保持健康，並且今年迄今一直保持穩定。我們調整了前景以反映當前趨勢。基於這些因素，我們目前預計第三季度總收入為 1.59 億美元至 1.61 億美元，中間值同比增長 3%。第三季度調整後的 EBITDA 為 2600 萬美元至 2800 萬美元，佔收入中點的 17%。

For the full year of 2023, we are raising and narrowing our guidance for total revenue to $642 million to $652 million or 4% year-over-year growth at the midpoint. As a result, we are also raising our full year adjusted EBITDA to a range of $105 million to $110 million or 17% of revenue at the midpoint.

對於 2023 年全年，我們將總收入指引上調並縮小至 6.42 億美元至 6.52 億美元，即同比增長 4%。因此，我們還將全年調整後 EBITDA 提高至 1.05 億至 1.1 億美元，即收入中點的 17%。

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

現在，讓我們開始提問。

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

（操作員指令）我們的第一個問題來自 JMP 證券的 Andrew Boone。

Two please, on LZ Books. I'd like to step back and think about becoming more of a system of record business. Dan, what does that unlock in like 3 to 5 years? What does this enable you to do as you guys become -- just have higher touch points with consumers? And then secondly, near term, how do we think about LZ Books in '23 and '24? What do we think about in terms of timing?

請給我兩本，LZ書上的。我想退後一步，考慮變得更像一個記錄業務系統。丹，這會在 3 到 5 年內解鎖什麼？這能讓你們做什麼——只是與消費者有更高的接觸點？其次，從近期來看，我們如何看待 LZ Books 在 23 年和 24 年的表現？我們在時間方面考慮什麼？

Yes. Thanks for the question, Andrew. Yes. LZ Books is a big bet for us. I mean, I think it's probably worth just stepping back and explaining why we entered the space first and then get to the question on engagement. But first principles is we go where our customers take us. And we just haven't found a solution that maps really well to the core segment of customers that we have that are solopreneurs. And these are smaller businesses, single member LLCs, sole props, typically don't have employees. And what we've seen is that most providers use a simple SKU more as a teaser to move a customer up the lineup than to really solve that very specific need. And what that means is one of a couple of things happens, either they're sort of limited in terms of the functionality to drive people up the lineup or over time, it just gets bloated, it gets feature-rich and if it gets successful, it gets over monetized. And so again, 2/3 of our base are these types of customers, and we just haven't found something that's been purpose built for them.

是的。謝謝你的提問，安德魯。是的。 LZ Books 對我們來說是一個很大的賭注。我的意思是，我認為可能值得退一步解釋為什麼我們首先進入這個領域，然後再討論參與度問題。但首要原則是我們去客戶帶我們去的地方。我們只是還沒有找到一種解決方案，能夠很好地適應我們擁有的核心客戶群體，即個體企業家。這些都是規模較小的企業，單一成員有限責任公司，唯一的支柱，通常沒有員工。我們發現，大多數供應商使用簡單的 SKU 更多的是作為引導客戶升級產品線的手段，而不是真正解決特定的需求。這意味著會發生以下幾種情況之一，要么它們在推動人們升級的功能方面受到限制，要么隨著時間的推移，它會變得臃腫，功能變得豐富，如果它獲得成功，它已經過度貨幣化了。同樣，我們 2/3 的客戶群是此類客戶，但我們只是還沒有找到專門為他們打造的產品。

So -- when we think about our channel, 95% of our customers, they come in without an accounting solution. We know that a lot of people come in with tax questions and they don't need a full-time account, but they have very specific tax questions that they want to ask, and 2/3 of them have never even spoke to an accountant about their business. So -- this is a group that's being introduced to finances, introduced to taxes. And so we felt like we have to be there to get them established right in their books. And if you want to do that, you have to do it in a way that's going to get to the ultimate integration with doing taxes as well.

因此，當我們考慮我們的渠道時，95% 的客戶在進來時都沒有會計解決方案。我們知道很多人帶著稅務問題進來，他們不需要全職賬戶，但他們有非常具體的稅務問題想要問，其中 2/3 甚至從未與會計師交談過關於他們的業務。因此，這是一個正在了解財務、稅收的群體。所以我們覺得我們必須在那裡讓他們在他們的書中得到正確的體現。如果你想做到這一點，你就必須以一種能夠最終與納稅相結合的方式來做。

One of the things that we've been talking about from the beginning is we have this extremely powerful formations channel but post-formations, historically, there haven't been as big of an investment. We're now making that investment. And the key opportunity there is to drive ongoing engagement, which then also opens up the opportunity to expand our relationship with customers in a way that's more organic and natural for them. So even if you take an example of LZ Tax, I've mentioned this before, almost half of our customers, they're non-operational when they come to us. And yes, we market in the formations channel to them because we traditionally haven't had a place to market post formation.

我們從一開始就一直在談論的一件事是，我們擁有這個極其強大的編隊渠道，但從歷史上看，編隊後並沒有如此大的投資。我們現在正在進行這項投資。其中的關鍵機會是推動持續的參與，這也為我們以一種對客戶來說更加有機和自然的方式擴大與客戶的關係提供了機會。所以即使你以 LZ Tax 為例，我之前也提到過，我們幾乎一半的客戶來找我們時都處於非運營狀態。是的，我們在編隊渠道中向他們進行營銷，因為我們傳統上沒有地方在編隊後進行營銷。

So something like LZ Books really provides ongoing value and engagement and then in a much more natural way as it becomes tax time, and we've helped you with your books, we can introduce you to an account, we can introduce you to LZ Tax in a way that's going to be much more of an expansion of the relationship. And that goes well beyond just books and taxes. I mean that goes into forms turning into e-signatures. It goes into legal dock reviews turning into attorney consults. Most of our products want to work together. And so that's what we're really trying to do is drive that engagement on an ongoing basis.

因此，像LZ Books 這樣的東西確實提供了持續的價值和參與度，然後以一種更自然的方式，當納稅時間到來時，我們已經幫助您處理您的書籍，我們可以向您介紹一個帳戶，我們可以向您介紹LZ Tax在某種程度上，這將更多地擴大這種關係。這遠遠超出了書籍和稅收的範疇。我的意思是，這會轉化為電子簽名的形式。它進入法律碼頭審查，變成律師諮詢。我們的大多數產品都希望能夠協同工作。因此，我們真正想做的就是持續推動這種參與。

And then, Noel, do you want to take the second one on the revenue?

然後，諾埃爾，你想拿第二份收入嗎？

Yes. If that's a forecast question, Andrew -- for 2023, we don't have anything in the forecast for it right now. We're really just focused on the user experience and learning over the next few months and then that will help to shape some of our assumptions around it from a monetization standpoint moving forward.

是的。安德魯，如果這是一個預測問題，那麼我們現在還沒有任何關於 2023 年的預測。我們實際上只是關注未來幾個月的用戶體驗和學習，然後這將有助於從未來的貨幣化角度形成我們圍繞它的一些假設。

We really do want to learn from our customers there. I mean, it definitely is a business in and of itself, but we also feel like one of the real benefits, again, is going to be retention on the LZ Tax solution and subscription, where -- people we've seen come in, they get a couple of questions answered, but they don't necessarily have any more, and it's 6 months from tax season. And so we see higher attrition as a result of that. The idea of driving that ongoing engagement, we think will definitely lead to a better LZ Tax retention rate as well. But we really, to Noel's point, that's not something that we're necessarily focused on initially in terms of driving revenue necessarily. It's much more, let's learn from our customers and then let's build off of that.

我們確實想向那裡的客戶學習。我的意思是，這本身絕對是一項業務，但我們也覺得真正的好處之一是保留 LZ 稅務解決方案和訂閱，我們見過的人進來了，他們得到了幾個問題的答案，但他們不一定還有更多問題，而且距離報稅季還有6 個月。因此，我們看到了更高的人員流失率。我們認為，推動持續參與的想法肯定會帶來更好的 LZ 稅收保留率。但就諾埃爾的觀點而言，我們確實最初並不一定要關注這是否會增加收入。更重要的是，讓我們向客戶學習，然後以此為基礎。

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

我們的下一個問題來自花旗銀行的 Ron Josey。

Maybe a little bit more on the here now. And can you just talk a little bit more, Dan and Noel, around just business formation. It looks like in June, there was a same trajectory overall from what we saw in May. And so any thoughts on the updated broader macro picture, I'm sure you do in terms of how you think about SMB formations and where we stand overall? And then maybe just on the trends in the quarter. Insights on just the subscription upsell, right? We're seeing benefits in terms of greater share gains. Talk to us about these newer freemium customers. What are they buying? How are they acting? Things along those lines.

也許現在這裡還有更多內容。丹和諾埃爾，你們能否再多談談企業組建的問題。看起來 6 月的總體軌跡與 5 月的軌跡相同。因此，對於更新後的更廣泛的宏觀圖景，我相信您對中小企業的形成以及我們的總體立場有何看法？然後也許只是本季度的趨勢。僅針對訂閱追加銷售的見解，對嗎？我們看到了更大的份額收益方面的好處。與我們討論這些新的免費增值客戶。他們在買什麼？他們表現如何？事情就是這樣的。

Thanks, Ron. This is Noel. Just I'll take the first half and then maybe pass the second half to Dan. So on the macro, yes, you called it the macro has really been steady year-to-date and consistent, which is great. We did see some improvement in Q2. And as we said on our prior call, we had updated our expectations for the macro for the second quarter relative to the trends that we were seeing. And we're doing the same thing here with our third quarter guide. Looking at the recent performance, factoring that in and then raising our Q4 expectations as well. So we're overall a bit more bullish, just given the length of the consistency that we're seeing there. We are still leaving some room and embedding some room in terms of caution in our -- particularly in our fourth quarter expectation for the macro just as we've done year-to-date, just being cautious as we know things can soften and we know there's still some prognostication around the overall economy slowing. But overall, we've taken up our expectations for the macro.

謝謝，羅恩。這是諾埃爾。只是我會上半場，然後也許會把下半場傳給丹。因此，在宏觀方面，是的，你稱其為今年迄今為止的宏觀確實穩定且一致，這很棒。我們確實看到第二季度有所改善。正如我們在之前的電話會議中所說，相對於我們所看到的趨勢，我們更新了對第二季度宏觀經濟的預期。我們在第三季度指南中也做了同樣的事情。看看最近的表現，考慮到這一點，然後提高我們對第四季度的預期。因此，考慮到我們所看到的一致性的持續時間，我們總體上更加樂觀。我們仍然留有一些空間，並在我們的謹慎方面嵌入一些空間，特別是在我們對宏觀經濟的第四季度預期中，就像我們今年迄今所做的那樣，只是保持謹慎，因為我們知道情況可能會軟化，我們我知道仍然存在一些關於整體經濟放緩的預測。但總體而言，我們已經接受了對宏觀的預期。

Yes. And maybe just a quick add on the macro. I think macro is -- we've talked about there's the historical growth in the macro and whether or not there's a little bit of a trajectory change post-COVID. And I think we've given the data before, it's just simple to start a business, there's little risk of capital, lots of platforms. There's tech that can make -- reduce barriers, get you sort of into a market much quicker at a lower cost. All that's really pretty incredible, and we think durable.

是的。也許只是快速添加宏。我認為宏觀經濟是——我們已經討論過宏觀經濟的歷史增長，以及新冠疫情后是否會出現一些軌跡變化。而且我想我們之前也給過數據，創業很簡單，資金風險很小，平台很多。有些技術可以減少障礙，讓您以更低的成本更快地進入市場。這一切真的非常令人難以置信，而且我們認為是持久的。

The thing that I think is newer is the work-from-home dynamic. And one of the studies that we recently just put out on our own base showed that over half of our customers started their business with -- while they were working in their prior employer and a good portion, we're -- obviously working from home as well. And if you think about the dynamic of people going back to work, a lot of that is part-time going back to work versus sort of more like a hybrid model. And we think that, that's a pretty durable trend as well. So the macro feels like it's strong, it's remain stronger than we expected. And yet at the same time, we're just cautious. That's just kind of how we've been managing it.

我認為更新的是在家工作的動態。我們最近剛剛在自己的基礎上進行的一項研究表明，超過一半的客戶是在他們之前的雇主工作時開始他們的業務的，而我們的很大一部分顯然是在家工作以及。如果你考慮一下人們重返工作崗位的動態，就會發現其中很多都是兼職重返工作崗位，而不是更像是混合模式。我們認為，這也是一個相當持久的趨勢。因此，宏觀經濟感覺很強勁，而且仍然強於我們的預期。但與此同時，我們只是保持謹慎。這就是我們一直以來的管理方式。

On the subscription attach for new customers, I'd say it's doing exactly what we'd expect it to do. The core subscriptions that we look at are the compliance subscriptions as well as our attorney assist subscription, and they continue to attach at a nice rate. The rate, again, is slightly lower than what it was in the past, but it's overwhelmed by the fact that you're seeing such significant formation growth as well. And we're also really starting to track to the retention dynamics of those customers, and they look relatively stable relative to the prior cohorts that we have. Although the one thing we'd say is, we're going to be kind of cautious in thinking about what that looks like when we get to annual renewal because that's where the bulk of our customers actually renew. And we're conscious of their many different types of customers in our base, and so we'll watch that closely.

關於新客戶的訂閱附件，我想說它的作用正是我們所期望的。我們關注的核心訂閱是合規訂閱以及我們的律師協助訂閱，並且它們繼續以不錯的價格附加。再次，該比率略低於過去，但您也看到瞭如此顯著的地層增長，這一事實令其不知所措。我們也真正開始跟踪這些客戶的保留動態，相對於我們之前的客戶群體，他們看起來相對穩定。儘管我們要說的一件事是，我們會謹慎地思考當我們進行年度續訂時會是什麼樣子，因為這是我們大部分客戶實際續訂的地方。我們意識到我們的基地中有許多不同類型的客戶，因此我們將密切關注。

Our next question comes from the line of Matt Pfau from William Blair.

我們的下一個問題來自威廉·布萊爾 (William Blair) 的馬特·普福 (Matt Pfau)。

I wanted to ask around the commentary on the LZ Tax changes. I think just some more detail there in terms of what you're doing and why it's going to create some additional churn this year would be helpful to understand that dynamic a bit better.

我想問問LZ關於稅改的評論。我認為，就您正在做的事情以及為什麼今年會造成一些額外的客戶流失提供更多詳細信息，將有助於更好地理解這種動態。

Yes. Thanks for the question, Matt. I've said this before, tax is just such a unique business because you get 1 swing every season. And our first season was one where we relied on people to be the glue and didn't really have a lot of software in place to make the process efficient and also make it delightful. And I think in the second season, we made a lot of changes, a lot of updates and improve the experience. We're seeing filing increase, which is great because we know that ties to better retention. But we still have a lot of work to do there.

是的。謝謝你的提問，馬特。我之前說過，稅收是一項獨特的業務，因為每個賽季你都會有一次揮桿。在我們的第一個賽季中，我們依靠人員作為粘合劑，並沒有真正擁有大量軟件來提高流程效率並使其令人愉快。我認為在第二季中，我們做了很多改變、很多更新並改善了體驗。我們看到申請量有所增加，這很好，因為我們知道這與更好的保留率有關。但我們還有很多工作要做。

And if you step back, what I'd say is interesting to reflect on, I mean this is a very fast-growing business. Probably in some ways, it grew faster than I think we were capable of supporting that business as we went through that scale with an incredible experience. And now we're sort of rightsizing that experience. We're continuing to invest in it. We're also starting to tamp down attach in a way like we want to get the attach lower because we keep finding that our customers, they know they have a tax question but they aren't really sure what it is. And so they sign up for the service, and then they may ask that question and then they realize they either don't have more questions or they don't have a return to file. And so we see higher attrition. And that churn is something that is expensive for us to support, but it's also not a great customer experience because they have to go through a cancellation process.

如果你退一步，我想說的是值得反思的，我的意思是這是一個非常快速增長的業務。也許在某些方面，它的增長速度比我認為我們有能力支持該業務的速度要快，因為我們以令人難以置信的經歷經歷了這一規模。現在我們正在調整這種體驗。我們將繼續對其進行投資。我們還開始以某種方式壓製附加稅，就像我們希望降低附加稅一樣，因為我們不斷發現我們的客戶，他們知道他們有稅務問題，但他們不太確定它是什麼。因此，他們註冊了該服務，然後他們可能會問這個問題，然後他們意識到他們要么沒有更多問題，要么沒有返回文件。因此我們看到了更高的流失率。對於我們來說，支持這種流失的成本很高，但這也不是很好的客戶體驗，因為他們必須經歷取消流程。

And so what you'll start to see us do is make the purchase a little bit more considered. So we've done this as a monthly subscription. We're testing things like doing an annual subscription. You might see us pull it out of specific segments of customers, not really offered as cross-sell. And the great news there is we now have other products that we can cross-sell that are more relevant like LZ Books. And we also have a post formation experience where we can actually cross-sell with [2 and engage] customer. But the reality is what that means is in the short term, our attach rates will come down for newer customers. And in the near term as well, we'll still have those higher attrition rates until the new channels pick up and the new motion it hardens.

因此，您將開始看到我們所做的就是在購買時更加考慮周到。所以我們將其作為每月訂閱來完成。我們正在測試諸如年度訂閱之類的事情。您可能會看到我們將其從特定的客戶群中拉出來，而不是真正作為交叉銷售提供。好消息是，我們現在擁有其他可以交叉銷售的更相關的產品，例如 LZ Books。我們還擁有組建後的經驗，實際上我們可以與[2並吸引]客戶進行交叉銷售。但現實是，這意味著在短期內，我們對新客戶的附加費率將會下降。在短期內，我們仍將擁有較高的流失率，直到新的渠道出現並且新的運動得到加強。

So I would say that we're extremely excited about LZ Tax, especially when we have LZ Books in the mix as well. And it's been a fast grower but in some ways we're taking this opportunity as well to make sure that we create the right experience and we're focused on long-term durable growth versus more episodic growth tied to that -- the churning customers.

所以我想說，我們對 LZ Tax 感到非常興奮，尤其是當我們還有 LZ Books 時。它的增長速度很快，但在某些方面，我們也利用這個機會來確保我們創造正確的體驗，我們專注於長期持久的增長，而不是與之相關的間歇性增長——客戶流失。 。

Great. And then just was hoping to follow up on the other component of the deceleration in subscription growth in the back half of the year, the channel partner component. Maybe just a little bit more commentary on that would be helpful.

偉大的。然後只是希望跟進今年下半年訂閱增長放緩的另一個部分，即渠道合作夥伴部分。也許對此進行更多評論會有所幫助。

Yes. I mean I think one of the things we've said for a couple of quarters here is that, given the share gains that we're starting to realize, we felt like this was the right time to reset on some of our partnerships where they weren't bilateral and instead they were vendor-like relationships where, in most cases, they're dilutive to economics. And so that's what we're doing. We committed at the beginning of the year, if you remember at the middle of last year, we committed for this year to have a 15% share gain while also getting to 15% EBITDA margin. We take both of the commitments really seriously and we're going to achieve both, we expect to achieve both. And so I think -- in some ways, that share tied to those partners didn't really fit within that profitability goal. And so that's all we're doing. We're cleaning that up. I think in a lot of ways, hopefully, you've seen us multiple times really manage our portfolio and take an opportunity when we have some strength to work through something that we don't necessarily feel like is a long-term strategy, and that's exactly what we're doing here.

是的。我的意思是，我認為我們幾個季度以來所說的一件事是，考慮到我們開始實現的份額收益，我們認為現在是重新調整我們的一些合作夥伴關係的最佳時機它們不是雙邊關係，而是類似供應商的關係，在大多數情況下，它們會稀釋經濟。這就是我們正在做的事情。如果你還記得去年年中的話，我們在年初就承諾，今年我們將實現 15% 的份額增長，同時實現 15% 的 EBITDA 利潤率。我們非常認真地對待這兩項承諾，我們將實現這兩​​項承諾，我們期望實現這兩項承諾。所以我認為，在某些方面，與這些合作夥伴相關的份額並不真正符合盈利目標。這就是我們所做的一切。我們正在清理它。我認為，在很多方面，希望你已經多次看到我們真正管理我們的投資組合，並在我們有一定實力來完成一些我們不一定認為是長期戰略的事情時抓住機會，並且這正是我們在這裡所做的。

Our next question comes from the line of Jackson Ader from MoffettNathanson.

我們的下一個問題來自 MoffettNathanson 的 Jackson Ader。

Great. Dan, you touched on this a little earlier, but can you remind us the mechanics or maybe some numbers around that first year retention rate that you have traditionally seen in the past from business formation and maybe subscription customers? And then -- yes -- just any color you think about as we look to '24, and we start to renew this kind of much larger 2023 cohort, what we should be expecting from the different segments?

偉大的。丹，你早些時候談到過這個問題，但你能否提醒我們一些機制，或者可能是你過去從業務組建和訂閱客戶中看到的第一年保留率的一些數字？然後 - 是的 - 當我們展望 24 年時，你想到的任何顏色，我們開始更新這種更大的 2023 年隊列，我們​​應該從不同的細分市場期待什麼？

Yes. We don't share any cohorted retention numbers for our subscriptions at this point. And I think we talked about before, one of the challenges we have. We have a portfolio of subscriptions, how they attach their relative nature, all of that plays into what we see at the individual level of subscriptions. And so we've recently provided more like an annual churn number, which is slightly improved for the quarter. What I have said in the past is, we obviously are serving small businesses that almost merge on the side of -- like a consumer behavior in that -- a good portion, almost half of the businesses that form with us are not yet in operation. And then at the same time, the stats are out there that about 30% of businesses fail in the first year. And so you can almost assume that just on the failure side alone, that's sort of the ceiling that you can reach of probably a little bit below 70% on retention.

是的。目前，我們不分享任何訂閱的群組保留數字。我想我們之前談到過我們面臨的挑戰之一。我們有一個訂閱組合，它們如何附加其相對性質，所有這些都會影響我們在訂閱的個人級別上看到的內容。因此，我們最近提供了更像年度流失數據的數據，該數據在本季度略有改善。我過去說過的是，我們顯然正在為幾乎合併的小型企業提供服務——就像消費者行為一樣——很大一部分，與我們一起組建的企業中幾乎一半尚未運營。與此同時，統計數據顯示，大約 30% 的企業在第一年就失敗了。因此，您幾乎可以假設，僅在失敗方面，您可以達到的保留率可能略低於 70%。

Okay. All right. Got it. And then just on LZ Tax and LZ Books and compliance and turning -- all these things that are kind of like -- I think some of these like you're becoming more of a system of record. And I'm curious whether -- just strategically, whether you're thinking at the moment, it's like a bunch of different separate offerings, right? Like $99 -- $9.99 a month for this and then a separate thing for this. Any thoughts on just one big broad bundle or something or like a package, a bunch of different stuff together that might drive additional stickiness?

好的。好的。知道了。然後就 LZ 稅務和 LZ 書籍以及合規性和轉向 - 所有這些有點像 - 我認為其中一些就像你正在變得更像是一個記錄系統。我很好奇，從戰略上講，你現在是否在想，這就像一堆不同的獨立產品，對吧？比如 99 美元——每月 9.99 美元，然後是一個單獨的東西。對於一個大的捆綁包或其他東西或像一個包裹，一堆不同的東西放在一起可能會增加額外的粘性有什麼想法嗎？

Yes, it's a really good question. And actually, like -- if you think about one of the big announcements we have this quarter, it's a complete redesign of the experience post formation. And we called it internally Project (inaudible) but externally, it's really just our my MyLZ Experience, which had been almost a launch of multiple different applications that had very different experiences across.

是的，這是一個非常好的問題。事實上，如果你想想我們本季度發布的一項重大公告，那就是對組建後體驗的徹底重新設計。我們在內部將其稱為項目（聽不清），但在外部，這實際上只是我們的 MyLZ 體驗，這幾乎是多個不同應用程序的啟動，這些應用程序具有非常不同的體驗。

What you'll see now, if you go into the account experience in MyLZ is a uniform experience. And that's the first step of starting to think about how we commercialize all the post formation applications that we have a little bit differently. So that they maybe over time, instead of selling in LZ Books and an LZ Tax solutions separately with e-signature, maybe there's a package very specifically is sort of like a premium SKU tied to books to tax and it includes something like signature. Or maybe there's something where you sort of have a good, better, best lineup that gets into your simple legal needs, more complex and then premium needs.

如果您進入 MyLZ 中的帳戶體驗，您現在將看到的是統一的體驗。這是開始思考如何將我們擁有的所有後形成應用商業化的第一步，這些應用略有不同。因此，隨著時間的推移，他們可能不再在LZ 圖書和LZ 稅務解決方案中單獨銷售帶有電子簽名的產品，而是有一個非常具體的套餐，有點像與圖書稅務相關的高級SKU，其中包含諸如簽名之類的內容。或者也許有些東西你有一個好的、更好的、最好的陣容，可以滿足你簡單的法律需求、更複雜的、然後是高級的需求。

So the first step in being able to even approach commercialization differently than how we've done it historically is to make the experiences uniform so that these are -- they can become integrated solutions and can be packaged differently and that's what we did with this release. So I encourage everybody to go log in, it's a bit night and day. I mean, it's a complete redesign of the product, and it looks more like a traditional SaaS application.

因此，能夠以不同於我們過去的方式實現商業化的第一步是使體驗統一，這樣它們就可以成為集成的解決方案，並且可以以不同的方式打包，這就是我們在這個版本中所做的。所以我鼓勵大家都去登錄，這有點日日夜夜。我的意思是，這是對產品的徹底重新設計，它看起來更像是傳統的 SaaS 應用程序。

Our next question comes from the line of Mario Lu from Barclays.

我們的下一個問題來自巴克萊銀行的 Mario Lu。

This is Jack Butler on for Mario. Starting out regarding the freemium model, so you've had a great amount of success the past couple of quarters with 27% share gains in Q1. I think you said you had around 33% share gains in Q2. Given the strong performance you have demonstrated these past few quarters, are you seeing any signs that the competitive landscape could be changing for the freemium offering moving forward? Or anything like that? And then just unrelated, I know you've talked about this a bit on prior calls, had 1 announcement earlier on this call about it. But in terms of generative AI, I was just wondering whether there was any update to how you were thinking about the role that gen AI might play in the business, whether the focus might be on improving current offerings you have or if there's a way -- further ways I could expand your offering suite or just maybe anything else about how the strategy is evolving?

這是馬里奧的傑克·巴特勒。從免費增值模式開始，您在過去幾個季度取得了巨大的成功，第一季度的份額增長了 27%。我想你說過你在第二季度的份額增長了大約 33%。鑑於您在過去幾個季度所表現出的強勁表現，您是否看到任何跡象表明免費增值產品的競爭格局可能會發生變化？或者類似的東西？然後就無關緊要了，我知道您在之前的電話會議上已經討論過這個問題，並且在本次電話會議早些時候就此事發布了 1 個公告。但就生成式人工智能而言，我只是想知道您對生成式人工智能可能在業務中扮演的角色的看法是否有任何更新，重點是否可能是改進您現有的產品，或者是否有辦法 - -我可以擴展您的產品套件的進一步方法，或者只是有關策略如何發展的其他信息？

Yes. Okay. Thanks for the question, Jack. First one on competition. I think we have seen competitors adjusting price down in response to our new lineup and all of that is great for all small businesses. So we encourage prices down, especially on the formation side. It's worth noting, though, one thing we haven't seen from competition is a heavy investment in their product experience and launching new subscriptions and creating that ecosystem, which is what, in our case, is helping us fund that reduction in pricing. So I think it's probably impacting them disproportionately relative to us.

是的。好的。謝謝你的提問，傑克。第一個是關於競爭的。我認為我們已經看到競爭對手為了響應我們的新產品線而調整價格，所有這些對所有小型企業來說都是好事。因此，我們鼓勵價格下降，尤其是在形成方面。但值得注意的是，我們在競爭中沒有看到的一件事是對他們的產品體驗、推出新訂閱和創建生態系統的大量投資，就我們而言，這正在幫助我們為價格的降低提供資金。所以我認為相對於我們來說，這對他們的影響可能不成比例。

We haven't seen a big change in marketing spend levels by competition. And I think one of the things I would say that is probably it goes without saying is the biggest opportunity for us is a little bit more around nonconsumption and going to attracting customers that typically have gone to the secretary of the state site themselves and kind of muddled through the experience. We know that, that has had a strong negative Net Promoter Score associated with it. And we also know that the customers that visit us have disproportionately visited the Secretary of [State site] before us, much more so than any of our competitive alternatives.

我們還沒有看到競爭導致營銷支出水平發生重大變化。我認為我要說的一件事可能是不言而喻的，對我們來說最大的機會是更多地圍繞非消費，並吸引那些通常自己去國務卿網站的客戶，經歷過混亂。我們知道，這會產生與之相關的強烈的負淨推薦值。我們還知道，訪問我們的客戶在我們之前訪問過 [國務卿網站] 的客戶比例不成比例，比我們的任何競爭性替代方案都要多得多。

So I think a lot of what we're doing on the pricing side is actually pulling from people who may have tried to navigate those sites on their own, get all their questions answered, done a lot of research in different disparate spots. We've just made that whole experience much more simple and taken the decision point away by reducing that price so that they could form with us. And then when they form with us, they're being introduced to a lot of new subscriptions. So I think that's probably the bulk of the trend that we're seeing.

因此，我認為我們在定價方面所做的很多工作實際上是從那些可能嘗試自己瀏覽這些網站、回答所有問題、在不同不同地點進行大量研究的人們那裡獲得的。我們只是讓整個體驗變得更加簡單，並通過降低價格來取消決策點，以便他們可以與我們一起形成。然後當他們與我們一起組建時，他們就會被介紹給很多新的訂閱者。所以我認為這可能是我們所看到的大部分趨勢。

On the generative AI side, we talked about this last call, we don't want to foreshadow product releases before they're out there. I think the thing I'd say is that we're making steady progress. We're trying to do something a little bit different than, I think, most of the alternatives in the market in that -- we wanted to serve small businesses directly. You're seeing a lot of gen AI products that are built very specifically for attorneys and law firms. And so there's some things that we need to work through to make that possible. But it will most likely be integrated in a way where you start to think about how people interact with docs, how they interact with their attorneys through documents and how they get insights out of their documents. And so it's very similar to what I said last quarter, making good progress and you'll hear some announcements in the next quarter or 2.

在生成人工智能方面，我們談到了最後一次電話會議，我們不想在產品發布之前就預示它們的發布。我想我想說的是我們正在穩步取得進展。我認為，我們正在嘗試做一些與市場上大多數替代方案略有不同的事情——我們希望直接為小型企業提供服務。你會看到很多專門為律師和律師事務所打造的新一代人工智能產品。因此，我們需要解決一些問題才能實現這一目標。但它很可能會以一種方式進行整合，讓你開始思考人們如何與文檔互動，他們如何通過文檔與律師互動，以及他們如何從文檔中獲得見解。因此，這與我上個季度所說的非常相似，取得了良好的進展，您將在下一個或兩個季度聽到一些公告。

Our next question comes from the line of Brent Thill from Jefferies.

我們的下一個問題來自 Jefferies 的 Brent Thill。

This is John for Brent Thill. The question, obviously, you've done very well with the [formation] of freemium product, very high growth, 42%. Transaction units also very fast with 26%. But obviously, there's a delta. I'm wondering how you're thinking about that delta, is that according to your expectations? How do you expect lot of those that don't actually end up attaching to convert over time if there's a certain cadence. And then second, I'm wondering how you're managing the weight on the gross margin from the free filing fees?

我是布倫特·希爾的約翰。顯然，問題是，你們在免費增值產品的[形成]方面做得非常好，增長非常高，達到了 42%。交易單位也非常快，達到 26%。但顯然，存在一個三角洲。我想知道您如何看待這個三角洲，這符合您的預期嗎？如果有一定的節奏，你如何期望許多實際上最終沒有附著的人隨著時間的推移進行轉換。其次，我想知道你們如何管理免費申請費對毛利率的影響？

Yes. Great. Great questions, John. On the first one, what weighs down some of the aggregate transaction growth is really the consumer side of the business. And we've been clear that we've been prioritizing pretty aggressively on the small business side relative to consumer. One of the interesting things, though, is that the foundation of our consumer business are forms and so the nice thing about making the investment that we're currently making that is both an integration of gen AI capabilities as well as attorneys directly onto a new forms platform should ultimately translate into reinvigorating of our consumer side of our business. And we have nothing new to announce at this point or any -- this year, I would say, on the consumer side. But I will say that it's the first time there's been an investment there in probably almost a decade. And so I would expect that we'll start to turn that corner, hopefully in the next year or so.

是的。偉大的。很好的問題，約翰。首先，拖累總交易增長的實際上是消費者方面的業務。我們已經明確表示，相對於消費者，我們一直非常積極地優先考慮小企業方面。不過，有趣的事情之一是，我們消費者業務的基礎是形式，因此我們目前正在進行的投資的好處在於，它既是將新一代人工智能能力以及律師直接整合到新的表單平台最終應該轉化為重振我們消費者方面的業務。我想說，今年，在消費者方面，我們目前或任何時候都沒有什麼新消息要宣布。但我要說的是，這可能是近十年來首次在那裡進行投資。因此，我預計我們將開始扭轉局面，希望在明年左右。

On the margin side, do you want to take that, Noel?

在邊緣方面，你想接受嗎，諾埃爾？

Sure. Yes. On the margin side, so as you mentioned, I think at the beginning of your question, John, the business formation growth that we saw in the quarter are 42%, that higher volume is driving higher filing fees. And so that's what we're seeing impact margins as filing fees as a percentage of revenue have increased. We also have 2 businesses that are growing fast, that are still subscale in tax and virtual mail that have a slightly different margin profile. And as those kind of take up a bigger share, it weighs on margins a bit. We are excited about the fact that we continue to make progress on the core business in terms of the efficiencies that we're driving in delivering the services. So over time, as those businesses, the faster-growing businesses start to get to scale and we get more leverage, we'll see some margin improvement in support of the efficiencies we're driving on the core side of our margin profile.

當然。是的。在利潤方面，正如你所提到的，約翰，我認為在你的問題開始時，我們在本季度看到的業務增長為 42%，更高的交易量正在推動更高的申請費用。這就是我們看到的影響利潤率，因為申請費佔收入的百分比有所增加。我們還有兩家業務正在快速增長，但在稅收和虛擬郵件方面仍處於規模較小，利潤率略有不同。隨著這些產品佔據更大的份額，它對利潤率造成了一些壓力。令我們感到興奮的是，我們在核心業務上不斷取得進展，提高了提供服務的效率。因此，隨著時間的推移，隨著這些業務、增長更快的業務開始規模化，我們獲得更多的槓桿，我們將看到一些利潤率的提高，以支持我們在利潤率概況的核心方面推動的效率。

Our next question comes from the line of Elizabeth Porter from Morgan Stanley.

我們的下一個問題來自摩根士丹利的伊麗莎白·波特。

This is Fiona Hynes on for Elizabeth Porter. I wanted to ask on the channel partner side of the business. Where are we in resetting that side of the business? Any view on what inning more currently in? And longer term, sort of what the vision is for that part of the business on a go-forward basis?

我是菲奧娜·海因斯 (Fiona Hynes) 為伊麗莎白·波特 (Elizabeth Porter) 配音。我想詢問業務的渠道合作夥伴方面。我們在哪裡重置這方面的業務？對目前哪一局有什麼看法嗎？從長遠來看，這部分業務的未來願景是什麼？

Just for clarity, do you mean the -- like the partnerships where we're marketing third parties or the partnerships where we're distributing our service through a channel?

為了清楚起見，您的意思是——比如我們營銷第三方的合作夥伴關係，還是我們通過渠道分發服務的合作夥伴關係？

I guess an update on both would be very helpful.

我想兩者的更新都會非常有幫助。

Okay. Yes, on the partner channel side, we mentioned it upfront that we're currently exiting a couple of relationships because -- they are -- they have dilutive economics, and we're not just focused on share, but we're also focused on profitability. And so that will lead to a deceleration in growth in the back half on share gains. But on the partner side, where we're distributing third parties through our platform, that's going extremely well. And there's a couple of moving parts there. We've exited some partnerships that we talked about at the beginning of the year while at the same time, we have newer partnerships where we're actually seeing growth that is exceeding the growth of our core business. It's just on a very, very small base at this time. So we're excited about it over time. Again, we have an incredibly powerful channel and our customers are quite actively asking us what are best-in-breed solutions. And we're getting better and better at targeting what we offer specific customers. So we'd expect that to continue to accelerate. But again, off a much smaller base than the core business.

好的。是的，在合作夥伴渠道方面，我們預先提到，我們目前正在退出一些關係，因為它們具有稀釋性經濟，我們不僅關注份額，而且我們也關注關於盈利能力。因此，這將導致下半年股市增長放緩。但在合作夥伴方面，我們通過我們的平台分銷第三方，進展非常順利。那裡有幾個活動部件。我們已經退出了今年年初討論過的一些合作夥伴關係，同時，我們建立了新的合作夥伴關係，我們實際上看到了超過我們核心業務增長的增長。目前它的基礎非常非常小。所以隨著時間的推移，我們對此感到興奮。同樣，我們擁有非常強大的渠道，我們的客戶非常積極地詢問我們什麼是最佳解決方案。我們在為特定客戶提供服務方面做得越來越好。因此，我們預計這一趨勢將繼續加速。但同樣，其基礎遠小於核心業務。

This concludes today's conference call. Thank you for participating. You may now disconnect.

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。