CS Disco, Inc. (LAW) Bundle
A Brief History of CS DISCO, INC.
CS DISCO, INC. has established itself as a prominent player in the legal technology sector, focusing on software solutions tailored for law firms and legal departments. As of 2024, the company has navigated significant changes in its operational and financial landscape.
Financial Performance Overview
For the nine months ended September 30, 2024, CS DISCO reported total revenue of $107.8 million, marking a 5% increase from $102.3 million in the same period of 2023. This growth was primarily driven by a $6.4 million increase in revenue from software offerings, offset by a $0.9 million decline in service offerings.
| Financial Metrics | 2024 (9 months) | 2023 (9 months) | Change (%) |
|---|---|---|---|
| Total Revenue | $107,842,000 | $102,348,000 | 5% |
| Cost of Revenue | $27,880,000 | $26,255,000 | 6% |
| Gross Profit | $79,962,000 | $76,093,000 | 4% |
| Net Loss | $(30,574,000) | $(36,310,000) | 16% |
| Net Loss per Share | $(0.51) | $(0.61) | 16% |
Operating Expenses
Operating expenses for the nine months ended September 30, 2024 totaled $115.6 million, a slight decrease from $118.3 million in 2023. This reduction was influenced by a significant drop in sales and marketing expenses, which decreased by 14% to $46.3 million from $53.8 million year-over-year.
| Operating Expenses | 2024 (9 months) | 2023 (9 months) | Change (%) |
|---|---|---|---|
| Research and Development | $37,724,000 | $41,095,000 | (8%) |
| Sales and Marketing | $46,294,000 | $53,821,000 | (14%) |
| General and Administrative | $31,537,000 | $23,345,000 | 35% |
Cash Flow and Investment Activities
CS DISCO experienced a net cash outflow of $83 million for the nine months ended September 30, 2024, compared to $45.6 million in the previous year. The primary drivers for this cash decrease included significant investments in short-term investments totaling $49.9 million and cash used in operations of $10.8 million.
| Cash Flow Summary | 2024 (9 months) | 2023 (9 months) | Change (%) |
|---|---|---|---|
| Cash Used in Operating Activities | $(10,837,000) | $(28,706,000) | 62% |
| Cash Used in Investing Activities | $(52,157,000) | $(18,766,000) | 178% |
| Cash Provided by Financing Activities | $(20,008,000) | $1,880,000 | (1,164%) |
| Net Decrease in Cash | $(83,002,000) | $(45,592,000) | 82% |
Stockholder Equity Changes
As of September 30, 2024, CS DISCO's total stockholders' equity stood at $167.3 million, a decrease from $200.3 million at the end of the previous fiscal year. The decline was primarily due to net losses incurred during the period.
| Stockholders' Equity | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Total Stockholders' Equity | $167,259,000 | $200,335,000 | (16.5%) |
| Accumulated Deficit | $(272,230,000) | $(240,379,000) | 13.3% |
Market Position and Strategic Outlook
CS DISCO continues to refine its market strategy, focusing on expanding its customer base and enhancing product offerings. The legal technology market remains competitive, and the company's ability to innovate and reduce operating costs will be crucial for its future performance.
A Who Owns CS Disco, Inc. (LAW)
Major Shareholders
As of September 30, 2024, CS Disco, Inc. had a total of 59,910 shares of common stock outstanding. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Shares Owned | Ownership Percentage |
|---|---|---|
| Kiwi Camara (Co-Founder and CEO) | 4,366,966 | 7.5% |
| Institutional Investors | Approximately 12,000,000 | 20% |
| Other Individual Shareholders | 43,542,034 | 72.5% |
Institutional Ownership
Institutional investors play a significant role in the ownership structure of CS Disco, Inc. As of September 30, 2024, the company reported that institutional investors collectively held approximately 20% of the total shares outstanding. Key institutional investors include:
- Vanguard Group
- BlackRock, Inc.
- State Street Corporation
Executive Compensation and Stock Options
Executive compensation is a crucial aspect of ownership structure. Kiwi Camara, the CEO, received a performance award consisting of options to purchase approximately 4.37 million shares, which represents 7.5% of total shares as of the grant date. The exercise price for these options is set at $32.00 per share.
Financial Performance Metrics
As of September 30, 2024, CS Disco, Inc. reported the following financial metrics:
- Cash and Cash Equivalents: $76.5 million
- Short-term Investments: $50.2 million
- Revenue for Q3 2024: $36.3 million
- Net Loss for Q3 2024: $9.2 million
Stock Performance
The stock performance of CS Disco, Inc. has been influenced by its financial results and market conditions. As of September 30, 2024, the closing stock price was approximately $15.00 per share, reflecting a market capitalization of around $898 million.
Recent Developments
In the fiscal year ending September 30, 2024, CS Disco, Inc. faced a net loss of $30.6 million. The company has implemented several strategies to optimize operational efficiency and improve revenue growth amidst challenging macroeconomic conditions.
Future Expectations
Looking ahead, the company anticipates recognizing approximately $24.1 million of revenue from remaining performance obligations, with $9.9 million expected over the next 12 months.
CS Disco, Inc. (LAW) Mission Statement
As of 2024, CS Disco, Inc. aims to revolutionize the legal industry through advanced technology, focusing on providing innovative software solutions that enhance efficiency and effectiveness in legal processes. The company's mission emphasizes the integration of artificial intelligence with legal workflows to empower legal professionals and firms in their operations.
Core Values
- Innovation: Continuous improvement and cutting-edge technology development.
- Customer Focus: Prioritizing client needs and delivering exceptional service.
- Integrity: Upholding ethical standards in all business practices.
- Collaboration: Fostering teamwork and partnerships within the legal ecosystem.
Financial Overview
CS Disco, Inc. reported significant financial metrics as of the third quarter of 2024:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Revenue | $36.3 million | $34.9 million | 4% |
| Net Loss | $(9.2) million | $(1.0) million | +790% |
| Gross Profit | $26.5 million | $26.0 million | 2% |
| Operating Expenses | $37.4 million | $28.9 million | 29% |
| Adjusted EBITDA | $(4.5) million | $(4.5) million | 0% |
Market Position
CS Disco, Inc. operates within the legal technology sector, which is experiencing rapid growth. The company has positioned itself as a leader in e-discovery and legal workflow solutions. Key competitive advantages include:
- Comprehensive product suite, including DISCO Hold, DISCO Request, DISCO Ediscovery, and DISCO Review.
- Strong customer base with increased revenue from new customers totaling $11.4 million in 2024.
- Robust infrastructure supporting scalability to meet client demands.
Operational Metrics
Operational performance metrics highlight the company's efficiency and growth trajectory:
| Metric | Value |
|---|---|
| Cash and Cash Equivalents | $76.5 million |
| Short-term Investments | $50.2 million |
| Weighted Average Shares Outstanding | 59.7 million |
| Subscription Revenue Percentage | 11% |
| Usage-based Revenue Percentage | 89% |
Future Outlook
Looking ahead, CS Disco, Inc. is focused on enhancing its technological capabilities and expanding its market reach. The company anticipates continued revenue growth driven by:
- Increased adoption of AI-driven legal solutions.
- Expansion into international markets.
- Strategic partnerships with law firms and corporate legal departments.
Overall, the mission statement of CS Disco, Inc. reflects a commitment to driving innovation in the legal sector, supported by strong financial performance and a strategic focus on growth and customer satisfaction.
How CS Disco, Inc. (LAW) Works
Business Model
CS Disco, Inc. generates revenue primarily through two models: usage-based and subscription-based revenue. As of September 30, 2024, usage-based revenue accounted for 89% of total revenue, while subscription revenue represented 11%.
Financial Performance
For the three months ended September 30, 2024, CS Disco reported revenue of $36.3 million, a 4% increase from $34.9 million in the same period of 2023. For the nine months ended September 30, 2024, revenue was $107.8 million, up from $102.3 million in 2023, marking a growth of 5%.
| Period | Revenue ($ millions) | Net Loss ($ millions) | Adjusted EBITDA ($ millions) |
|---|---|---|---|
| Q3 2024 | 36.3 | (9.2) | (4.5) |
| Q3 2023 | 34.9 | (1.0) | (4.5) |
| 9M 2024 | 107.8 | (30.6) | (14.4) |
| 9M 2023 | 102.3 | (36.3) | (24.9) |
Cost Structure
As of September 30, 2024, the total cost of revenue was $27.9 million, up from $26.3 million in 2023, reflecting a 6% increase. The breakdown of operating expenses is as follows:
| Expense Type | Q3 2024 ($ thousands) | Q3 2023 ($ thousands) | 9M 2024 ($ thousands) | 9M 2023 ($ thousands) |
|---|---|---|---|---|
| Research and Development | 12,757 | 12,065 | 37,724 | 41,095 |
| Sales and Marketing | 14,988 | 16,708 | 46,294 | 53,821 |
| General and Administrative | 9,658 | 128 | 31,537 | 23,345 |
| Total Operating Expenses | 37,403 | 28,901 | 115,555 | 118,261 |
Cash Position
As of September 30, 2024, CS Disco held $76.5 million in cash and cash equivalents, alongside $50.2 million in short-term investments.
Stockholder Equity
The balance sheet as of September 30, 2024 showed total stockholder equity of $167.3 million, with an accumulated deficit of $(272.2 million).
| Category | Amount ($ thousands) |
|---|---|
| Common Stock | 300 |
| Additional Paid-In Capital | 439,128 |
| Accumulated Other Comprehensive Income | 61 |
| Accumulated Deficit | (272,230) |
| Total Stockholder Equity | 167,259 |
Market Conditions and Future Outlook
CS Disco continues to navigate challenging macroeconomic conditions, including inflation and geopolitical tensions, which may impact customer spending on technology. The management anticipates that the growth in revenue will rely heavily on the adoption of their software solutions across various sectors, including law firms and enterprise legal departments.
How CS Disco, Inc. (LAW) Makes Money
Revenue Generation Model
CS Disco, Inc. generates its revenue primarily through two contractual arrangements: usage-based revenue and subscription revenue. For the three months ended September 30, 2024, usage-based revenue represented 89% of total revenue, while subscription revenue accounted for 11%. In the nine months ended September 30, 2024, the figures were similar, with usage-based revenue at 89% and subscription revenue at 11%.
Financial Performance
For the three months ended September 30, 2024, CS Disco, Inc. reported total revenue of $36.3 million, an increase of 4% compared to $34.9 million in the same period of 2023. For the nine months ended September 30, 2024, total revenue reached $107.8 million, up 5% from $102.3 million in 2023.
Revenue Breakdown
| Type of Revenue | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Software | $30.2 million | $28.4 million | $89.4 million | $83.0 million |
| Services | $6.1 million | $6.5 million | $18.5 million | $19.4 million |
| Total Revenue | $36.3 million | $34.9 million | $107.8 million | $102.3 million |
Cost of Revenue
The cost of revenue for CS Disco, Inc. consists mainly of third-party cloud infrastructure expenses, outsourced staffing costs, and personnel costs involved in delivering their product offerings. For the three months ended September 30, 2024, the cost of revenue was $9.7 million, representing 27% of total revenue. For the nine months ended September 30, 2024, the cost of revenue was $27.9 million, also 26% of total revenue.
Operating Expenses
Operating expenses include research and development, sales and marketing, and general and administrative costs. The breakdown for the three months ended September 30, 2024 is as follows:
| Operating Expense Category | Amount (Three Months Ended September 30, 2024) | Amount (Three Months Ended September 30, 2023) |
|---|---|---|
| Research and Development | $12.8 million | $12.1 million |
| Sales and Marketing | $15.0 million | $16.7 million |
| General and Administrative | $9.7 million | $0.1 million |
| Total Operating Expenses | $37.5 million | $29.0 million |
For the nine months ended September 30, 2024, total operating expenses were $115.6 million, compared to $118.3 million for the same period in 2023.
Net Loss
CS Disco, Inc. reported a net loss of $9.2 million for the three months ended September 30, 2024, compared to a net loss of $1.0 million in the same period of 2023. For the nine months ended September 30, 2024, the net loss was $30.6 million, a decrease from $36.3 million in 2023.
Cash and Investments
As of September 30, 2024, CS Disco, Inc. held $76.5 million in cash and cash equivalents, and $50.2 million in short-term investments.
Future Revenue Expectations
As of September 30, 2024, the company expects to recognize approximately $24.1 million from remaining performance obligations (RPO) in future periods.
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Resources:
- CS Disco, Inc. (LAW) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of CS Disco, Inc. (LAW)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View CS Disco, Inc. (LAW)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.