CS Disco, Inc. (LAW) SEC Filings & Earnings Calls

Adjusted EBITDA worsened YoY despite revenue growth; profitability still negative.

“Adjusted EBITDA was $(3.4) million, compared to $(2.7) million in the second quarter of 2025.” · word for word

Guidance implies continued adjusted EBITDA losses for Q3 and FY2026.

“Q3 2026 adjusted EBITDA range $(1.75)M-$(0.25)M; FY2026 range $(8.0)M-$(5.0)M.”

Customer Concentration

“A limited number of customers represent a substantial portion of our revenue. If we fail to retain these customers, our revenue could decline significantly.” · word for word

Usage-based Revenue Volatility

“Our business model is usage-based and there is inherent unpredictability in the timing, duration and scope of our customers’ legal matters requiring use of our product offerings.” · word for word

Cybersecurity Risk

“If our information technology systems or data, including the personal information and other sensitive information we process, or the information technology systems or data of third parties with whom we work, are or were compromised or affected by a cybersecurity incident, we could experience adverse consequences.” · word for word

Macroeconomic and Legal Industry Headwinds

“Unfavorable conditions in the economy, both in the United States and abroad, may negatively affect the growth of our business and our results of operations.” · word for word

Litigation Risk

“Any currently ongoing or future litigation against us could be costly and time-consuming to defend.” · word for word

Continued GAAP net loss and negative adjusted EBITDA indicate ongoing unprofitability

“GAAP net loss was $9.6 million; Adjusted EBITDA was $(3.5) million”

Usage-Based Revenue Volatility

“A significant majority of our revenue is directly correlated with our customers’ usage of our product offerings, which in turn is dependent on the timing of and activity driven by litigation, investigations and other legal matters.” · word for word

Ongoing Net Losses and Cash Burn

“Net loss attributable to common stockholders $ (9,618)” · word for word

Customer Concentration

“We derive a substantial portion of our revenue from sales to our top 10% of customers.” · word for word

Stockholder Litigation

“On September 19, 2023, a purported stockholder class action lawsuit was filed against the Company ... alleging violations under Sections 10(b) and 20(a) of the Exchange Act.” · word for word

Key person risk from CFO departure

“Mr. Lafair stepped down from his role as our Executive Vice President, Chief Financial Officer, effective as of the earlier of the appointment of his successor or the close on business on December 31, 2025, which was later extended to January 11, 2026.”

Continued GAAP net losses and negative adjusted EBITDA indicate ongoing cash burn.

“GAAP net loss of $8.5M in Q4 2025 and $44.4M for FY2025; Adjusted EBITDA negative for both periods.”

Guidance implies potential sequential revenue decline in Q1 2026 (software $33.75-35.25M vs Q4 2025 $35.1M).

“Q1 2026 software revenue guidance midpoint $34.5M vs Q4 2025 actual $35.1M.”

Dependence on AI adoption and new commercial model for future growth.

“AI revenue growth of 600% from a small base; new per-gigabyte pricing model may face adoption risks.”

Cybersecurity Breach Risk

“If our information technology systems or data, including the personal information and other sensitive information we process, or the information technology systems or data of third parties with whom we work, are or were compromised or affected by a cybersecurity incident, we could experience adverse consequences.” · word for word

AI Model Risk

“AI models may create flawed, incomplete, or inaccurate outputs, some of which may appear correct.” · word for word

Data Privacy Regulation Compliance

“We are subject to stringent and evolving U.S. and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security.”

Still GAAP net loss and negative adjusted EBITDA

“GAAP net loss $13.7M; adjusted EBITDA still negative at $(0.3)M.”

Cybersecurity risk

“If our information technology systems or data, including the personal information and other sensitive information we process, or the information technology systems or data of third parties upon whom we rely, are or were compromised, we could experience adverse consequences, including, but not limited, to additional costs, loss of revenue, significant liabili” · word for word

Customer concentration and usage dependency

“Our business depends on customers increasing their use of our product offerings and any loss of customers or decline in their use of our product offerings could harm our business.” · word for word

Revenue growth deceleration

“Although our revenues increased year over year, our rate of revenue growth has declined from prior periods and our quarterly revenue within individual product offerings has fluctuated.” · word for word