CS Disco, Inc. (LAW) Market Cap
CS Disco, Inc. has a market capitalization of $271M.
Financials based on reported quarter end 2025-12-31
Price: $4.28
▲ 0.01 (0.23%)
Market Cap: 271.05M
NYSE · time unavailable
CEO: Eric Friedrichsen
Sector: Technology
Industry: Software - Application
IPO Date: 2021-07-21
Website: https://www.csdisco.com
CS Disco, Inc. (LAW) - Company Information
Market Cap: 271.05M · Sector: Technology
CS Disco, Inc., a legal technology company, provides cloud-native and artificial intelligence-powered legal solutions for ediscovery, legal document review, and case management for enterprises, law firms, legal services providers, and governments. The company offers DISCO Ediscovery, a solution that automates ediscovery process and saves legal departments from manual tasks associated with collecting, processing, enriching, searching, reviewing, analyzing, producing, and using enterprise data that is at issue in legal matters. It also provides DISCO Review, an AI-powered document review solution, which consistently delivers legal document reviews; and DISCO Case Builder, a solution that allows legal professionals to collaborate with teams to build a compelling case by offering a single place to search, organize, and review witness testimony and other legal data. The company's tools are used in various legal matters comprising litigation, investigation, compliance, and diligence. CS Disco, Inc. was founded in 2012 and is headquartered in Austin, Texas.
Analyst Sentiment
Based on 11 ratings
Analyst 1Y Forecast: $9.00
Average target (based on 3 sources)
Consensus Price Target
Low
$8
Median
$9
High
$10
Average
$9
Potential Upside: 110.3%
Price & Moving Averages
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Fundamentals Overview
📊 AI Financial Analysis
Powered by StockMarketInfo"LAW reported revenue of $41.2M for the fiscal year ending December 31, 2025, but posted a net loss of $8.5M. The company's financial metrics show a total asset base of $173.6M with liabilities of $45.5M, resulting in total equity of $128.1M and a favorable net debt position of -$19.7M. Operating cash flow stood at $762k with capital expenditures of $507k, leading to a free cash flow of $255k, although dividends were not distributed. The stock has underperformed significantly, with a one-year change of -12.42%, amidst a broader market decline of 45.89% year-to-date. Price targets suggest potential upside, with a consensus target of $9, indicating a possible recovery. However, a net negative income and a declining stock price raise concerns regarding growth and profitability, suggesting challenges ahead for the company in maintaining positive momentum."
Revenue Growth
Revenue of $41.2M shows potential but lacks previous growth context.
Profitability
Net income is negative, indicating ongoing unprofitability.
Cash Flow Quality
Positive free cash flow of $255k provides some stability but is limited.
Leverage & Balance Sheet
Strong balance sheet with net debt of -$19.7M indicates financial strength.
Shareholder Returns
Negative stock performance and no dividends diminish shareholder returns.
Analyst Sentiment & Valuation
Mixed analyst sentiment with a consensus price target suggesting some recovery potential.
Disclaimer:This analysis is AI-generated for informational purposes only. Accuracy is not guaranteed and this does not constitute financial advice.
So What?: Management is clearly upbeat—Q4 showed accelerating growth (+11% total revenue, +14% software), improving profitability (-$2.2M adjusted EBITDA, -5% margin vs -12% a year ago), and strong commercial momentum (330 customers at >$100k, 76% of revenue from them). The key operational lever is the packaging/pricing reset: Cecilia AI becomes included on every matter and pricing shifts toward data-growth-based contracting to reduce friction and discounting. In the Q&A, management reiterated that the “why now” is customer demand to sell into partner/corporate teams that previously faced pricing friction. The CFO also anchored guidance ranges in usage-based predictability—but admitted services/Auto Review is still less predictable. Analyst pressure focused on intermediate growth trajectory and competitive displacement by general AI/LLMs; management responded that customers were not using frontier models for e-discovery and positioned CS Disco as purpose-built, court-mandated workflow technology. Net: optimistic tone is supported by margin bps improvements, but the excerpt still flags services transition as a near-term headwind.
Growth Catalysts
- Acceleration in adoption of generative AI capabilities (Cecilia/Auto Review) with 41% growth attributable to GenAI features
- Record highs in total terabytes on the platform; double-digit growth in multi-terabyte matters
- Revenue growing over 30% from multi-terabyte matters year over year in Q4
- Increasing customers contributing >$100k revenue (330 customers) and higher $100k+ revenue concentration (76% of total revenue in 2025)
Business Development
- Osborne Clark: more than doubled matters with CS Disco across 2025 after expanding beyond smaller cases
- Auto Review prompting model where customers move to prompt processes (repeat usage cited; transition reduces CS Disco services support over time)
Financial Highlights
- Q4 total revenue: $41.2M (+11% YoY) and above the high end of guidance range; software revenue: $35.1M (+14% YoY)
- Full-year 2025 total revenue: ~$157.0M (+8% YoY) vs full-year software revenue: ~$134.0M (+12% YoY)
- Q4 gross margin: 77%; full-year 2025 gross margin: 76% vs 75% in 2024
- Adjusted EBITDA: -$2.2M in Q4 (margin -5%) vs -12% in Q4 prior year (improvement of 700 bps in margin)
- Full-year 2025 adjusted EBITDA: -$10.2M (margin -7%) vs -13% in 2024 (improvement of 600 bps in margin)
- Services revenue decline: Q4 -3% YoY to $6.0M; full-year services revenue -8% YoY to $22.8M, attributed to decline in traditional review business
- Net loss: Q4 -$2.5M (-6% of revenue) vs -$4.3M (-12% of revenue) prior year; full-year net loss: -$10.7M (-7% of revenue) vs -$17.2M (-12% of revenue) prior year
- Capital-less balance sheet: ended Q4 with $114.6M cash/cash equivalents/short-term investments and no debt
Capital Funding
- Cash runway: $114.6M at Q4 close
- Debt: none (no debt reported)
Strategy & Ops
- Packaging/pricing overhaul: all Cecilia AI included on every matter starting general availability (announced as generally available 'starting today')
- Switch to pricing based on size of customer data over time (per-gigabyte rate + data-growth-based approach) to reduce discounting pressure versus initial-load-based discounts
- Consolidation: combine CS Disco e-discovery + Cecilia AI into a single offering with updated pricing and contracting
- Operational hurdle acknowledged: pricing friction previously faced in selling into partner teams/corporate teams due to uniqueness of prior pricing approach
Market Outlook
- Q1 2026 guidance: total revenue $39.0M to $41.5M; software revenue $33.75M to $35.25M; adjusted EBITDA -$6.0M to -$4.0M
- FY 2026 guidance: total revenue $167.0M to $177.0M; software revenue $145.5M to $152.5M; adjusted EBITDA -$8.5M to -$4.5M
- Profitability target: 'on track' for adjusted EBITDA breakeven by 2026 (management attributes Q1 drag to non-recurring sales kickoff/marketing/professional services one-time expenses)
Risks & Headwinds
- Traditional review contraction: Q4 services revenue -3% YoY and full-year -8% YoY, tied to decline in traditional review business (mitigation implied via Auto Review growth partially offsetting decline)
- Revenue model visibility remains less predictable in services/Auto Review versus pure software (CFO commentary) leading to continued use of guidance ranges
- Competition/LLMs: management stated they have not observed customers utilizing general AI/frontier models for e-discovery; risk to tech-stack not quantified in provided excerpt
Sentiment: POSITIVE
Note: This summary was synthesized by AI from the LAW Q4 2025 earnings transcript. Financial data is complex; please verify all metrics against official SEC filings before making investment decisions.