LegalZoom.com, Inc. stock research
FY2023 Q2
LegalZoom.com (LZ) Gross Margin — Quarter Ended Jun 30, 2023
Revenue increased compared to both the preceding quarter and the same quarter last year, but gross profit was slightly lower than both periods due to a larger increase in cost of revenue. Consequently, gross margin declined relative to both comparable periods.
Gross margin takeaway
Quarter ended Jun 30, 2023 · FY2023 Q2
Revenue increased compared to both the preceding quarter and the same quarter last year, but gross profit was slightly lower than both periods due to a larger increase in cost of revenue. Consequently, gross margin declined relative to both comparable periods.
- The most observable driver of the margin change is the rise in cost of revenue, which outpaced revenue growth, leading to a compression of gross margin.
- Compared to the preceding quarter, gross margin weakened as cost of revenue increased while gross profit decreased slightly. Compared to the same quarter a year ago, gross margin also declined, with cost of revenue significantly higher while gross profit remained nearly unchanged.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
62.2%
Gross profit
$105.1M
Revenue
$168.9M
Cost of revenue
$63.7M
Quarter-over-quarter change
-1.4 pts
Year-over-year change
-2.6 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $165.9M | $105.5M | $60.4M | 63.6% |
| Jun 30, 2023 | $168.9M | $105.1M | $63.7M | 62.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2023
-1.4 pts
Year-over-year change
Jun 30, 2022
-2.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The most observable driver of the margin change is the rise in cost of revenue, which outpaced revenue growth, leading to a compression of gross margin.
Compared to the preceding quarter, gross margin weakened as cost of revenue increased while gross profit decreased slightly. Compared to the same quarter a year ago, gross margin also declined, with cost of revenue significantly higher while gross profit remained nearly unchanged.
Monitor the trajectory of cost of revenue growth relative to revenue.