LegalZoom outlines $795M-$805M 2026 revenue outlook as Google AI search shift drives channel diversification push

LegalZoom reported Q2 2026 results that beat on profitability but showed a tougher demand backdrop from Google’s AI-driven search changes. Revenue rose 7% year over year to $205 million and adjusted EBITDA increased 18% to $46 million, helped by a 250 bps gross margin expansion to 71% and strong free cash flow of $34 million. However, management said AI-powered search is reducing top-of-funnel traffic and increasing paid acquisition costs, pressuring business formations and transaction revenue. The company cut its workforce by about 13% to simplify operations and expects about $7 million of net in-year savings. For 2026, LegalZoom lowered its revenue outlook to $795 million-$805 million and forecast Q3 revenue of $192 million-$196 million, implying a high-single-digit to low-double-digit decline in transaction revenue. The quarter also showed continued progress in partnerships, which rose to 11% of orders from 4% a year ago, and subscription revenue grew 11% to $133 million.