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What changed in CS Disco, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CS Disco, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+320 added−315 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-20)

Top changes in CS Disco, Inc.'s 2025 10-K

320 paragraphs added · 315 removed · 242 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

19 edited+4 added−4 removed75 unchanged
Biggest changeOur Growth Strategies We are pursuing multiple levers for future growth: 7 Table of Contents Fuel the DISCO Product-Led Growth Engine • Maintain and Advance Our Innovation and Brand.
Biggest changeIn the year ended December 31, 2025, no customer accounted for more than 10% of our revenue and less than 10% of our revenue was generated from customers outside of the United States. 7 Table of Contents Our Growth Strategies We are pursuing multiple levers for future growth: Fuel the DISCO Product-Led Growth Engine • Maintain and Advance Our Innovation and Brand.
But despite its enormous scale and attractive opportunities for automation and the application of AI to improve lawyer productivity and job satisfaction, the legal industry has lagged behind other industries in digitization and cloud technology adoption. Legal work often requires lawyers to collect and review enterprise data to determine the facts.
But despite its enormous scale and attractive opportunities for automation and the application of AI to improve lawyer productivity and job satisfaction, the legal industry has lagged behind other industries in digitization and cloud technology adoption. Legal work often requires lawyers to collect and review enterprise data to determine facts.
This commonality has created efficiencies in our sales and marketing and product development efforts because we do not need to tailor them to a wide range of different customer use cases. We define a customer as an entity that we have a contract with and from whom we have recognized revenue during the preceding month.
This commonality has created efficiencies in our sales and marketing and product development efforts because we do not need to tailor them to a wide range of different customer and industry use cases. We define a customer as an entity that we have a contract with and from whom we have recognized revenue during the preceding month.
Our market is global and we have a significant opportunity to expand internationally. In the year ended December 31, 2024, less than 10% of our revenue was generated by customers outside of the United States. • Pursue Strategic Acquisitions and Strategic Investments.
Our market is global and we have a significant opportunity to expand internationally. In the year ended December 31, 2025, less than 10% of our revenue was generated by customers outside of the United States. • Pursue Strategic Acquisitions and Strategic Investments.
Our AI models continuously learn from legal work conducted on our product offerings and can be reused across legal matters, which further strengthens our ability to help our customers find evidence and resolve matters faster as they expand usage of our product offerings.
Our AI models continuously learn from legal work conducted using our product offerings and can be reused across legal matters, which further strengthens our ability to help our customers find evidence and resolve matters faster as they expand usage of our product offerings.
This has turned the corporate legal function into a mission-critical, strategic component of the modern enterprise and contributed to the growth in global spend on legal services.
This has turned the corporate legal function into a mission-critical, strategic component of the modern enterprise and contributed to the growth in global spending on legal services.
The principal purposes of our equity and other incentive plans are to attract, retain and motivate selected employees, consultants and directors. As of December 31, 2024, we had 561 full-time employees. 8 Table of Contents Sales and Marketing We sell our product offerings through a direct sales force which is organized based on the stages of our sales motion.
The principal purposes of our equity and other incentive plans are to attract, retain and motivate selected employees, consultants and directors. As of December 31, 2025, we had 577 full-time employees. 8 Table of Contents Sales and Marketing We sell our product offerings through a direct sales force which is organized based on the stages of our sales motion.
Additionally, our product development process and roadmap are informed by the continuous feedback we receive from customers who use our software as well as our employees who use our software as part of our DISCO Review offering and in our support and professional services organization. As of December 31, 2024, we had 163 employees in our research and development organization.
Additionally, our product development process and roadmap are informed by the continuous feedback we receive from customers who use our software as well as our employees who use our software as part of our DISCO Review offering and in our support and professional services organization. As of December 31, 2025, we had 166 employees in our research and development organization.
In addition, we are subject to regulations and laws specifically governing the internet and the collection, storage, processing, transfer and other use of personal information and other customer data.
In addition, we are subject to regulations and laws specifically governing 10 Table of Contents the internet and the collection, storage, processing, transfer and other use of personal information and other customer data.
By contrast, our simple, all-in pricing model and flexible terms align with our customers’ needs, are easy to understand and guarantee costs for our customers, allowing legal departments to improve cost predictability and budget planning.
By contrast, our simple, usage-based pricing model and flexible terms align with our customers’ needs, are easy to understand and guarantee costs for our customers, allowing legal departments to improve cost predictability and budget planning.
See the section titled “Risk Factors - Risks related to Litigation, Regulatory Compliance and Governmental Matters - We operate in a highly regulated industry, and either are or may be subject to a wide 10 Table of Contents range of federal, state and local, as well as foreign, laws, rules and regulations and our failure to comply with these laws and regulations may force us to change our operations or harm our business.” Corporate Information We were incorporated in Delaware in December 2013.
For additional information, see “Risk Factors - Risks related to Litigation, Regulatory Compliance and Governmental Matters - We operate in a highly regulated industry and either are or may be subject to a wide range of federal, state and local, as well as foreign, laws, rules and regulations and our failure to comply with these laws and regulations may force us to change our operations or harm our business.” Corporate Information We were incorporated in Delaware in December 2013.
As of December 31, 2024, we had 151 professionals in our sales and marketing organization. Research and Development Our research and development organization is responsible for the design, development, testing and delivery of our cloud-native product offerings and platform.
As of December 31, 2025, we had 149 professionals in our sales and marketing organization. Research and Development Our research and development organization is responsible for the design, development, testing and delivery of our cloud-native product offerings and platform.
As of December 31, 2024, we had 1,478 enterprises, law firms, legal services providers and government organizations as DISCO customers and a dollar-based net retention rate of 96%. As of December 31, 2024 we had 315 large customers, defined as customers with revenue in excess of $100,000 over the previous 12-month period.
As of December 31, 2025, we had 1,549 enterprises, law firms, legal services providers and government organizations as DISCO customers and a dollar-based net retention rate of 98%. As of December 31, 2025 we had 330 large customers, defined as customers with revenue in excess of $100,000 over the previous 12-month period.
Competitors in this category include Nuix Limited, Open Text Corporation, Relativity ODA LLC, or Relativity, RELX PLC and Thomson Reuters Corporation, as well as many other smaller software companies. • Cloud software.
Competitors in this category include Nuix Limited, Open Text Corporation, Relativity ODA LLC, or Relativity, RELX PLC and Thomson Reuters Corporation, as well as many other smaller software companies. • Cloud software. Competitors in this category include Everlaw, Inc., Relativity through its RelativityOne product offering and Reveal Data Corporation as well as many other smaller software companies.
As of December 31, 2024, we held 12 granted U.S. patents and had 20 pending U.S. patent applications. As of December 31, 2024, we held one U.S. trademark, had two pending U.S. trademarks and held eight domain names in U.S. and foreign jurisdictions.
As of December 31, 2025, we held 14 granted U.S. patents and had 21 pending U.S. patent applications. As of December 31, 2025, we held two U.S. trademarks, had two pending U.S. trademarks and held six domain names in U.S. and foreign jurisdictions.
Customers can realize these benefits either by leveraging DISCO Review or using DISCO Ediscovery as the product offerings on which existing law firms and legal services providers conduct legal document review themselves. • Faster Resolution of Legal Matters with Better Outcomes.
Customers can realize these benefits either by leveraging DISCO Review or using DISCO Ediscovery as the product offerings on which existing law firms and legal services providers conduct legal document review themselves. • Faster Resolution of Legal Matters. Our product offerings enable lawyers to determine the facts and use those facts to assess legal matters and produce evidence more quickly.
We have built our product offerings to incorporate the latest advances in automation and AI directly into existing lawyer workflows to multiply lawyer productivity across the ediscovery and legal document review lifecycle.
We have built our product offerings to incorporate the latest advances in automation and AI directly into existing lawyer workflows to multiply lawyer productivity across the ediscovery and legal document review lifecycle. For example, our Cecilia AI platform is a comprehensive suite of features that includes Cecilia Q&A and Cecilia Timelines.
However, effective December 31, 2024, we redefined a customer in which in some cases where legal departments, law firms and service providers that use our product offerings have separate billing terms, we may count those as multiple customers. We have applied this to our reporting for current and prior periods in the Annual Report on Form 10-K.
However, in cases where legal departments, law firms and service providers that use our product offerings have separate billing terms, we count those as multiple customers. We define a large customer as a customer with revenue in excess of $100,000 over the previous 12-month period.
Our Customers As of December 31, 2024, we had 1,478 customers, increasing from 1,463 as of December 31, 2023, and 315 large customers, increasing from 289 large customers as of December 31, 2023.
This new framework follows an industry-standard pricing model based on the size of customer data as it grows over time. Our Customers As of December 31, 2025, we had 1,549 customers, increasing from 1,478 as of December 31, 2024, and 330 large customers, increasing from 315 large customers as of December 31, 2024.
Removed
For example, our Cecilia AI platform, which was released publicly in the fourth quarter of 2023 in the United States and in the third quarter of 2024 in Europe, is a comprehensive suite of features that includes Cecilia Q&A and Cecilia Timelines.
Added
Auto Review is a generative AI-powered document review that automates the first-pass review for our customers, evaluating documents and applying AI-driven tag suggestions and explanations based on document criteria.
Removed
Our product offerings enable lawyers to determine the facts and use those facts to assess legal matters and produce evidence more quickly.
Added
In 2026, we announced a further evolution to our commercial framework to better align our pricing architecture with the increasing value of our integrated AI-enabled platform. This evolution focuses on accelerating AI adoption by including our Cecilia AI platform and DISCO Case Builder in all legal matters for one per gigabyte rate.
Removed
We define a large customer as a customer with revenue in excess of $100,000 over the previous 12-month period. In the year ended December 31, 2024, no customer accounted for more than 10% of our revenue and less than 10% of our revenue was generated from customers outside of the United States.
Added
New technology such as generic large language models (“LLMs”), generative AI and general-purpose agents are evolving rapidly and may significantly alter how technology is developed, distributed and consumed. In the future, we may face increased competition from these offerings evolving to address a broad range of business needs.
Removed
Competitors in this category include Everlaw, Inc., Relativity through its RelativityOne product offering and Reveal Data Corporation (which recently acquired another competitor, Logik Systems, Inc. d/b/a Logikcull) as well as many other smaller software companies.
Added
As we attempt to sell our product offerings to new and existing customers, we may need to demonstrate that our product offerings are superior to other available solutions, including existing and any new competitors.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

153 edited+60 added−39 removed365 unchanged
Biggest changeNumerous other factors, many of which are out of our control, may now or in the future impact our ability to acquire new customers, including, but not limited to: • competitive offerings; • potential customers’ commitments to other providers; • real or perceived costs of switching to our product offerings; • our failure to expand, retain and motivate our sales and marketing personnel; • our failure to develop or expand relationships with potential customers and our partner ecosystem; • failure by us to help our customers to successfully deploy our product offerings; • negative media or industry or financial analyst commentary regarding us or our product offerings; • changes in personnel; • negative perceptions about the reliability of cloud-based legal solutions; • litigation activity; and • deteriorating general economic conditions. 21 Table of Contents If the legal market and the demand for legal services decline, customers may decide not to adopt our product offerings and our existing customers may cease using our product offerings to reduce costs.
Biggest changeNumerous other factors, many of which are out of our control, may now or in the future impact our ability to acquire new customers, including, but not limited to: • our ability to introduce new product offerings and enhance functionality of our existing product offerings in response to changes in customer demands; • competitive offerings, including sensitivity to current or future prices offered by us or our competitors; • potential customers’ commitments to other providers; • real or perceived costs of switching to our product offerings; • the introduction of products and technologies that serve as a replacement or substitute for, or represent an improvement over, our product offerings; • technological innovations or new standards that our product offerings do not address; • our customers’ development of their own proprietary solutions; • our inability to release enhanced versions of our product offerings on a timely basis; • our failure to expand, retain and motivate our sales and marketing personnel; • our failure to develop or expand relationships with potential customers and our partner ecosystem; • failure by us to help our customers to successfully deploy our product offerings; • negative media or industry or financial analyst commentary regarding us or our product offerings; • changes in personnel; • negative perceptions about the reliability of cloud-based legal solutions; • declines in litigation activity and reduced levels of regulatory enforcement; and • deteriorating general economic conditions.
Our employees and personnel use generative AI technologies to perform their work, and the disclosure and use of personal information in generative AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating generative AI.
Our employees and personnel use generative AI technologies to perform their work, and the disclosure and use of personal information in AI technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws regulating AI technologies.
In addition, we expect to continue to expend substantial financial and other resources on: • our technology infrastructure, including systems architecture, scalability, availability, performance and security; • sales and marketing, including any future expansion of our sales organization to engage existing and prospective customers, increase brand awareness and drive adoption of our product offerings; • product development, including investments in our development team and the development of new functionality for our product offerings and in the protection of our intellectual property rights related to our product development; • services and support for the benefit and assistance of customers using our product offerings; • acquisitions or strategic investments; • international expansion; and • general administration, including the legal and accounting expenses associated with being a public company.
In addition, we expect to continue to expend substantial financial and other resources on: • our technology infrastructure, including systems architecture, scalability, availability, performance and security; • sales and marketing, including any future expansion of our sales organization to engage existing and prospective customers, increase brand awareness and drive adoption of our product offerings; • product development, including investments in our development team and the development of new product offerings and functionality for our existing product offerings and in the protection of our intellectual property rights related to our product development; • services and support for the benefit and assistance of customers using our product offerings; • acquisitions or strategic investments; • international expansion; and • general administration, including the legal and accounting expenses associated with being a public company.
These operating expenses and assets are denominated in foreign currencies and are subject to fluctuations due to changes in foreign currency exchange rates. While we do not currently engage in hedging efforts, if we do not successfully hedge against the risks associated with currency fluctuations as our international operations and customer base grow, our business may be harmed.
These assets and operating expenses are denominated in foreign currencies and are subject to fluctuations due to changes in foreign currency exchange rates. While we do not currently engage in hedging efforts, if we do not successfully hedge against the risks associated with currency fluctuations as our international operations and customer base grow, our business may be harmed.
For example, in September 2023 and November 2023, purported stockholder class action lawsuits were filed against us and certain of our current and former officers alleging violation of the federal securities laws for allegedly making materially false or misleading statements.
For example, in September 2023 and November 2023, purported stockholder class action lawsuits were filed against us and certain of our current and former officers alleging violation of the federal securities laws for allegedly making materially false or misleading statements.
For example, in September 2023 and November 2023, purported stockholder class action lawsuits were filed against us and certain of our current and former officers alleging violation of the federal securities laws for allegedly making materially false or misleading statements.
For example, in September 2023 and November 2023, purported stockholder class action lawsuits were filed against us and certain of our current and former officers alleging violation of the federal securities laws for allegedly making materially false or misleading statements.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our Board of Directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our Board of Directors that may be senior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our Board of Directors, the chairperson of our Board of Directors or our Chief Executive Officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our Board of Directors; • establish that our Board of Directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed for cause only upon the vote of at least 66 2/3 % of our outstanding shares of voting stock; 42 Table of Contents • provide that vacancies on our Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum; and • require the approval of our Board of Directors or the holders of at least 66 2/3 % of our outstanding shares of voting stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our amended and restated certificate of incorporation and amended and restated bylaws include provisions that: • authorize our Board of Directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights and preferences determined by our Board of Directors that may be senior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our Board of Directors, the chairperson of our Board of Directors or our Chief Executive Officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our Board of Directors; 43 Table of Contents • establish that our Board of Directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed for cause only upon the vote of at least 66 2/3 % of our outstanding shares of voting stock; • provide that vacancies on our Board of Directors may be filled only by a majority of directors then in office, even though less than a quorum; and • require the approval of our Board of Directors or the holders of at least 66 2/3 % of our outstanding shares of voting stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our financial results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to: • the timing of our customers’ usage of our product offerings, which is impacted by the inception and completion of litigation, investigations and other legal matters, particularly in the case of usage of our DISCO Review offering; • the level of demand for or pricing of our product offerings; • our ability to grow or maintain usage by our existing customers and acquire new customers; • the timing and success of new functionality, features, integrations, capabilities and enhancements by us to our product offerings, or by our competitors to their products, or any other changes in the competitive landscape of our market; • the timing and amount of our investments to expand the capacity of our third-party cloud infrastructure providers; • changes in our customers’ budgets and in the timing of their budget cycles and purchasing decisions; • changes in regulatory or legal environments that may cause us to incur, among other elements, expenses associated with compliance; • negative media or industry or financial analyst commentary regarding us or our product offerings; • changes in personnel; • general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate; • the cyclical nature of the e-discovery industry; • changes in the volume of acquisitions, reorganizations, bankruptcies and other organizational changes affecting our customer base and resulting in litigation; • the effects of potential acquisitions and their integration; • the impact of new accounting pronouncements; • changes in the competitive dynamics of our market, including consolidation among competitors or customers; 24 Table of Contents • significant security breaches of, technical difficulties with or interruptions to the delivery and use of our product offerings; • awareness of our brand and our reputation in our target markets; • errors in our forecasting of the demand for our product offerings, which would lead to lower revenues, increased costs, or both; and • our ability to control costs, including research and development and sales and marketing expenses.
Our financial results may fluctuate due to a variety of factors, many of which are outside of our control and may be difficult to predict, including, but not limited to: • the timing of our customers’ usage of our product offerings, which is impacted by the inception and completion of litigation, investigations and other legal matters, particularly in the case of usage of our DISCO Review offering; • the level of demand for or pricing of our product offerings; • our ability to grow or maintain usage by our existing customers and acquire new customers; • the timing and success of new functionality, features, integrations, capabilities and enhancements by us to our product offerings, or by our competitors to their products, or any other changes in the competitive landscape of our market; • the timing and amount of our investments to expand the capacity of our third-party cloud infrastructure; • changes in our customers’ budgets and in the timing of their budget cycles and purchasing decisions; • changes in regulatory or legal environments that may cause us to incur, among other elements, expenses associated with compliance or impact our customers’ purchasing decisions; • negative media or industry or financial analyst commentary regarding us or our product offerings; • changes in personnel; • general economic conditions, both domestically and internationally, as well as economic conditions specifically affecting industries in which our customers participate; • the cyclical nature of the e-discovery industry; 23 Table of Contents • changes in the volume of acquisitions, reorganizations, bankruptcies and other organizational changes affecting our customer base and resulting in litigation; • the effects of potential acquisitions and their integration; • the impact of new accounting pronouncements; • changes in the competitive dynamics of our market, including consolidation among competitors or customers; • significant security breaches of, technical difficulties with or interruptions to the delivery and use of our product offerings; • awareness of our brand and our reputation in our target markets; • errors in our forecasting of the demand for our product offerings, which would lead to lower revenues, increased costs, or both; and • our ability to control costs, including research and development and sales and marketing expenses.
In particular, usage of DISCO Review, our AI-powered document review offering, decreases and increases more significantly with the completion and inception of litigation, investigations and other legal matters than with our other offerings, and as a result can have a material impact on our quarter-to-quarter revenue fluctuations, even though revenues from such offering currently constitute a small proportion of our overall annual revenues.
In particular, usage of DISCO Review, our AI-powered document review offering, decreases and increases more significantly with the completion and inception, respectively, of litigation, investigations and other legal matters than with our other offerings, and as a result can have a material impact on our quarter-to-quarter revenue fluctuations, even though revenues from such offering currently constitute a small proportion of our overall annual revenues.
The CCPA gives California residents rights to access and require deletion of their personal information, opt out of certain personal information sharing and data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services.
The CCPA gives California residents certain rights, such as the right to access and require deletion of their personal information, opt out of certain personal information sharing and data processing activities, such as targeted advertising, profiling, and automated decision-making. The exercise of these rights may impact our business and ability to provide our products and services.
In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) personal information, client information, and other sensitive information, including proprietary and confidential business information, trade secrets, intellectual property, and sensitive third-party data.
In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, “process”) personal information, client information, and other sensitive information, including proprietary and confidential business information, trade secrets, intellectual property, and sensitive third-party data.
Any inability to license necessary third-party technology in the future, or maintain sufficient rights or reasonable terms under existing third-party technology that we rely upon, could have an adverse effect on our business or operating results and adversely affect our ability to compete.
Any inability to maintain sufficient rights or reasonable terms under existing third-party technology arrangements that we rely upon, or license necessary third-party technology in the future, could have an adverse effect on our business or operating results and adversely affect our ability to compete.
Furthermore, we have in the past and may in the future make downward revisions of our previously announced guidance. If we withdraw our previously announced guidance, or if our publicly announced guidance of future operating results fails to meet expectations of securities analysts, investors or other interested parties, the price of our common stock may decline.
Furthermore, we have in the past and may in the future make downward revisions of our previously announced guidance. If we withdraw or lower our previously announced guidance, or if our publicly announced guidance of future operating results fails to meet expectations of securities analysts, investors or other interested parties, the price of our common stock may decline.
Additionally, where an AI/ML model ingests personal information and makes inferences using such data, those technologies may reveal other personal or sensitive information generated by the model. Moreover, AI/ML models may create flawed, incomplete, or inaccurate outputs, some of which may appear correct.
Additionally, where an AI model ingests personal information and makes inferences using such data, those technologies may reveal other personal or sensitive information generated by the model. Moreover, AI models may create flawed, incomplete, or inaccurate outputs, some of which may appear correct.
This may happen if the inputs that the model relied on were inaccurate, incomplete or flawed (including if a bad actor “poisons” the AI/ML with bad inputs or logic), or if the logic of the AI/ML is flawed (a so-called “hallucination”). We may use AI/ML outputs to make certain decisions.
This may happen if the inputs that the model relied on were inaccurate, incomplete or flawed (including if a bad actor “poisons” the AI with bad inputs or logic), or if the logic of the AI is flawed (a so-called “hallucination”). We may use AI outputs to make certain decisions.
Generative AI features may be difficult to deploy successfully due to operational issues inherent to the nature of such technologies, including the development and maintenance of the technology used, and our customers’ reluctance or failure to adopt or implement our new products and features as intended.
AI features may be difficult to deploy successfully due to operational issues inherent to the nature of such technologies, including the development and maintenance of the technology used, and our customers’ reluctance or failure to adopt or implement our new products and features as intended.
In connection with such expansion, we may face difficulties, including costs associated with expansion, varying seasonality patterns, potential adverse movement of currency exchange rates, longer payment cycle difficulties in collecting accounts receivable in some countries, increased management, travel, infrastructure and legal compliance costs associated with having operations and developing our business in multiple jurisdictions, different technical standards, existing or future regulatory and certification requirements and required features and functionality, political and economic conditions and uncertainty in each country or region in which we operate and general economic and political conditions and uncertainty around the world, tariffs 31 Table of Contents and trade barriers, a variety of regulatory or contractual limitations on our ability to operate, adverse tax events, reduced protection of intellectual property rights in some countries and a geographically and culturally diverse workforce and customer base.
In connection with such expansion, we may face difficulties, including costs associated with expansion, varying seasonality patterns, potential adverse movement of currency exchange rates, longer payment cycle difficulties in collecting accounts receivable in some countries, increased management, travel, infrastructure and legal compliance costs associated with having operations and developing our business in multiple jurisdictions, different technical standards, existing or future regulatory and certification requirements and required features and functionality, political and economic conditions and uncertainty in each country or region in which we operate and general economic and political conditions and uncertainty around the world, tariffs and trade barriers, a variety of regulatory or contractual limitations on our ability to operate, adverse tax events, reduced protection of intellectual property rights in some countries and a geographically and culturally diverse workforce and customer base.
If we, or the third parties with whom we work, experience a security incident or are perceived to have experienced a security incident, we may experience material adverse consequences, which could include: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; breach of our customer contracts, restrictions on processing information (including personal information); litigation (including class action claims); indemnification obligations; negative publicity; reputational harm; loss of customers; monetary fund diversions; diversion of management attention; restrict our ability to engage with new customers; interruptions in or the cessation of our operations (including availability of data); financial loss; competitive disadvantage; and other similar harms.
If we, or the third parties with whom we work, experience a security incident or are perceived to have experienced a security incident, we may experience material adverse consequences, which could include: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; breach of our customer contracts, restrictions on processing information (including personal information); litigation (including 15 Table of Contents class action claims); indemnification obligations; negative publicity; reputational harm; loss of customers; monetary fund diversions; diversion of management attention; restrict our ability to engage with new customers; interruptions in or the cessation of our operations (including availability of data); financial loss; competitive disadvantage; and other similar harms.
If we fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
If we fail to maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
Additionally, sensitive data of the Company or our customers could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of generative AI technologies.
Additionally, sensitive data of the Company or our customers could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of AI technologies.
Logikcull). In addition, we expect to expand our product offerings to address additional areas of the legal function and we likely face further competition from existing companies in such areas.
In addition, we expect to expand our product offerings to address additional areas of the legal function and we likely face further competition from existing companies in such areas.
Risks Related to Our Business and Industry 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.
Risks Related to Our Business and Industry Our business depends on customers increasing their usage of our product offerings and any loss of customers or decline in their use of our product offerings could harm our business.
We have hired, and need to continue to hire, additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404. Management has concluded that our internal control over financial reporting was effective as of December 31, 2024.
We have hired, and need to continue to hire, additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404. Management has concluded that our internal control over financial reporting was effective as of December 31, 2025.
We compete on the basis of a number of factors, including: • our product offerings’ functionality, scalability, performance, ease of use, reliability, security, availability and cost-effectiveness relative to that of our competitors’ products and services; • our ability to utilize new and proprietary technologies to offer services and features previously not available in the marketplace; • our ability to identify new markets, applications and technologies; • our ability to attract and retain customers; • our brand, reputation and trustworthiness; • perceptions about the security, privacy and availability of our product offerings relative to competitive products and services; • the quality of our customer support; • our ability to recruit software developers and sales and marketing personnel; and • our ability to protect our intellectual property.
We compete on the basis of a number of factors, including: • our product offerings’ functionality, scalability, performance, ease of use, reliability, security, availability and cost-effectiveness relative to that of our competitors’ products and services; 26 Table of Contents • our ability to utilize new and proprietary technologies to offer services and features previously not available in the marketplace; • our ability to identify new markets, applications and technologies; • our ability to attract and retain customers; • our brand, reputation and trustworthiness; • perceptions about the security, privacy and availability of our product offerings relative to competitive products and services; • the quality of our customer support; • our ability to recruit software developers and sales and marketing personnel; and • our ability to protect our intellectual property.
Negative conditions in the general economy both in the United States and abroad, including conditions resulting from a global or domestic recession or the fear thereof, fluctuations in inflation and interest rates, changes in gross domestic product growth, financial and credit market fluctuations, political turmoil, natural catastrophes, lower corporate earnings, reduction in business confidence and activity, warfare and terrorist attacks on the United States, Europe, the Asia-Pacific region, or elsewhere, could cause a decrease in business investments, including spending on information technology, which would harm our business.
Negative conditions in the general economy both in the United States and abroad, including conditions resulting from a global or domestic recession or the fear thereof, fluctuations in inflation and interest rates, the imposition of tariffs in the United States and abroad, changes in gross domestic product growth, financial and credit market fluctuations, political turmoil, natural catastrophes, lower corporate earnings, reduction in business confidence and activity, warfare and terrorist attacks on the United States, Europe, the Asia-Pacific region, or elsewhere, could cause a decrease in business investments, including spending on information technology, which would harm our business.
Additional factors that may influence the length and variability of our sales cycle include: • the effectiveness of our sales force, particularly new salespeople, as we increase the size of our sales force and train our new salespeople to sell to enterprise customers; • the discretionary nature of customers’ purchasing decisions and budget cycles; • customers’ procurement processes, including their evaluation of competing products and services; • economic conditions and other factors affecting customer budgets; • the regulatory environment in which our customers operate; • customers’ familiarity with cloud computing solutions; • evolving customer demands; and • competitive conditions.
Additional factors that may influence the length and variability of our sales cycle include: • the effectiveness of our sales force, particularly new salespeople, as we increase the size of our sales force and train our new salespeople to sell to enterprise customers; • the discretionary nature of customers’ purchasing decisions and budget cycles; • customers’ procurement processes, including their evaluation of competing products and services; • economic conditions and other factors affecting customer budgets; • the regulatory environment in which our customers operate; • customers’ familiarity with cloud computing solutions; 28 Table of Contents • evolving customer demands; and • competitive conditions.
The use of generative AI technology and processes at scale is relatively new and may lead to challenges, concerns and risks that are significant or that we may not be able to predict, especially if our use of these technologies in our products and services becomes more important to our operations over time.
The use of AI technologies and processes at scale is relatively new and may lead to challenges, concerns and risks that are significant or that we may not be able to predict, especially if our use of these technologies in our products and services becomes more important to our operations over time.
This risk is presently heightened by the uncertain economic impact of fluctuations in inflation and interest rates, the potential imposition of tariffs in the United States and abroad and other macroeconomic pressures in the U.S. and the global economy, as well as the impact of the Russia-Ukraine war and conflict in the Middle East and the related political and economic response.
This risk is presently heightened by the uncertain economic impact of fluctuations in inflation and interest rates, the imposition of tariffs in the United States and retaliatory tariffs abroad and other macroeconomic pressures in the U.S. and the global economy, as well as the impact of the Russia-Ukraine war and conflict in the Middle East and the related political and economic response.
Under current law, our federal NOLs generated in tax years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOL carryforwards in a taxable year is limited to 80% of taxable income in such year. In addition, under Section 382 of the U.S.
Our federal NOLs generated in tax years beginning after December 31, 2017 may be carried forward indefinitely, but the deductibility of such federal NOL carryforwards in a taxable year is limited to 80% of taxable income in such year. In addition, under Section 382 of the U.S.
Further, as of December 31, 2024, holders of a substantial number of shares of our capital stock had rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
Further, as of December 31, 2025, holders of a substantial number of shares of our capital stock had rights, subject to some conditions, to require us to file registration statements covering the sale of their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
If we face such problems and attempt or are required to re-engineer our product offerings to mitigate them, it could require significant additional research and development resources and we may not be able to complete it successfully or in a timely manner.
If we face such problems and attempt or are required to re-engineer our product offerings to mitigate them, it could require significant additional research and development resources and we may not be able to complete this process successfully or in a timely manner.
Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences including negative publicity, which may cause our customers or prospective 16 Table of Contents customers to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach.
Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences including negative publicity, which may cause our customers or prospective customers to lose confidence in the effectiveness of our security measures and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach.
In such circumstances, regulators may enjoin our operations, subject us to rules governing conflicts of interests, require registration, seek to impose punitive fines or sanctions or take other disciplinary actions against us, our employees or our customers, any of which may inhibit our ability to do business in those jurisdictions, adversely impact our reputation, increase our operating expenses and adversely affect our financial condition and results of operations.
In such circumstances, regulators may enjoin our operations, subject us to rules governing conflicts of interests, require 36 Table of Contents registration, seek to impose punitive fines or sanctions or take other disciplinary actions against us, our employees or our customers, any of which may inhibit our ability to do business in those jurisdictions, adversely impact our reputation, increase our operating expenses and adversely affect our financial condition and results of operations.
In addition, any incident affecting our third-party hosting services’ infrastructure that may be caused by cyber-attacks, natural disasters, fire, flood, severe storm, earthquake, power loss, telecommunications failures, outbreaks of contagious diseases, terrorist or other attacks and other similar events beyond our control could negatively affect our cloud-based platform.
In addition, any incident affecting our third-party hosting services’ infrastructure that may be caused by cyber-attacks, natural disasters, fire, flood, severe storm, 22 Table of Contents earthquake, power loss, telecommunications failures, outbreaks of contagious diseases, terrorist or other attacks and other similar events beyond our control could negatively affect our cloud-based platform.
While we may be entitled to damages if the third-party with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
While we may be entitled to damages if the third parties with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
Our competitors include (i) legal services providers, including large dedicated legal services providers such as Consilio LLC, Epiq Systems, Inc. and KLDiscovery Inc., the legal services divisions of large professional firms such as Deloitte & Touche LLP, Ernst and Young LLP, KPMG LLP and PricewaterhouseCoopers LLP, as well as a large number of smaller regional and local services companies and certain law firms providing in-house ediscovery and document review solutions; (ii) legacy on-premise software providers, such as Nuix Limited, Open Text Corporation and Relativity ODA LLC, or Relativity, RELX PLC and Thomson Reuters Corporation; and (iii) cloud software providers, such as Everlaw, Inc., Relativity through its RelativityOne offering, and Reveal Data Corporation (recently acquired Logik Systems, Inc. - d.b.a.
Our competitors include (i) legal services providers, including large dedicated legal services providers such as Consilio LLC, Epiq Systems, Inc. and KLDiscovery Inc., the legal services divisions of large professional firms such as Deloitte & Touche LLP, Ernst and Young LLP, KPMG LLP and PricewaterhouseCoopers LLP, as well as a large number of smaller regional and local services companies and certain law firms providing in-house ediscovery and document review solutions; (ii) legacy on-premise software providers, such as Nuix Limited, Open Text Corporation and Relativity ODA LLC, or Relativity, RELX PLC and Thomson Reuters Corporation; and (iii) cloud software providers, such as Everlaw, Inc., Relativity through its RelativityOne offering, and Reveal Data Corporation.
Our statements regarding our AI-supported features and use of generative AI can subject us to potential government or legal action if they are found to be deceptive, unfair, or misrepresentative of our actual practices.
Our statements regarding our AI-supported features and use of AI technologies can subject us to potential government or legal action if they are found to be deceptive, unfair, or misrepresentative of our actual practices.
In the aftermath of the departure of Kiwi Camara, our former Chief Executive Officer, and media reporting on the circumstances of his departure, we determined that certain aspects of our corporate culture need to be reassessed.
In the aftermath of the departure of Kiwi Camara, our former Chief Executive Officer, and media reporting on the circumstances of his departure, we determined that certain aspects of our corporate culture needed to be reassessed.
These obligations may make it harder for us to conduct our business using AI/ML, lead to regulatory fines or penalties, require us to change our business practices, retrain our AI/ML, or prevent or limit our use of AI/ML.
These obligations may make it harder for us to conduct our business using AI technologies, lead to regulatory fines or penalties, require us to change our business practices, retrain our AI technologies, or prevent or limit our use of AI technologies.
Accordingly, information regarding the size of our addressable market opportunity should not be taken as indicative of our future growth. If we fail to develop, maintain and enhance our brand, our ability to expand our customer base will be impaired and our business, results of operations and financial condition may suffer.
Accordingly, information regarding the size of our addressable market opportunity should not be taken as indicative of our future growth. 27 Table of Contents If we fail to develop, maintain and enhance our brand, our ability to expand our customer base will be impaired and our business, results of operations and financial condition may suffer.
Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations. Provisions in various agreements to which we are party potentially expose us to substantial liability for intellectual property infringement, data protection and other losses.
Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations. 35 Table of Contents Provisions in various agreements to which we are party potentially expose us to substantial liability for intellectual property infringement, data protection and other losses.
We must develop and maintain strong relations with our partner ecosystem and convince our partners of the value of our product offerings so that they drive adoption of our product offerings by their customers. Additionally, our platform allows our customers to add other legal industry participants as non-paying users of our platform.
We must develop and maintain strong relations with our partner ecosystem and convince our partners of the value of our product 20 Table of Contents offerings so that they drive adoption of our product offerings by their customers. Additionally, our platform allows our customers to add other legal industry participants as non-paying users of our platform.
Additionally, many anti-bribery and anti-corruption laws, including the FCPA, have long-arm statutes that can expand the applicability of these laws to our operations worldwide. Accordingly, we must incur significant operational costs to support our ongoing 35 Table of Contents compliance with anti-bribery and anti-corruption laws at all levels of our business.
Additionally, many anti-bribery and anti-corruption laws, including the FCPA, have long-arm statutes that can expand the applicability of these laws to our operations worldwide. Accordingly, we must incur significant operational costs to support our ongoing compliance with anti-bribery and anti-corruption laws at all levels of our business.
Our response to such slowdowns or interruptions may not be sufficient to address all aspects or any unanticipated consequence or incidents and our insurance may not be sufficient to compensate us for the losses that could occur. Our customers use our product offerings to manage critical aspects of their businesses and operations.
Our response to such slowdowns or interruptions may not be sufficient to address all aspects or any unanticipated consequence or incidents and our insurance may not be sufficient to compensate us for the losses that could occur. 21 Table of Contents Our customers use our product offerings to manage critical aspects of their businesses and operations.
If our product offerings do not allow us or our customers to comply with the latest regulatory requirements, our existing customers may decrease their usage on our product offerings and new customers will be less likely to adopt our product offerings. 25 Table of Contents A limited number of customers represent a substantial portion of our revenue.
If our product offerings do not allow us or our customers to comply with the latest regulatory requirements, our existing customers may decrease their usage on our product offerings and new customers will be less likely to adopt our product offerings. A limited number of customers represent a substantial portion of our revenue.
Our financial statements could fail to reflect adequate reserves to cover such a contingency. Our results of operations may be harmed if we are required to collect sales or other related taxes for our subscriptions in jurisdictions where we have not historically done so.
Our financial statements could fail to reflect adequate reserves to cover such a contingency. Our results of operations may be harmed if we are required to collect sales or other related taxes for our product offerings in jurisdictions where we have not historically done so.
Overall growth of our revenue depends on a number of factors, including our ability to: • price our product offerings effectively so that we are able to attract new customers and expand sales to our existing customers; • expand the functionality of our product offerings; • maintain and expand the rates at which customers use our product offerings; • provide our customers with support that meets their needs; • maintain or increase customer satisfaction with our product offerings; • continue to introduce and sell our product offerings to new markets; • continue to develop new functionality within our product offerings and successfully further optimize our product offerings, including continued innovation of our artificial intelligence system for legal documents; • successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our product offerings; • recruit, hire, train, manage, and retain sufficient qualified developers, professionals and sales and marketing personnel; and • increase awareness of our brand on a global basis and successfully compete with other companies.
Overall growth of our revenue depends on a number of factors, including our ability to: • price our product offerings effectively so that we are able to attract new customers and expand sales to our existing customers; • maintain and expand the rates at which customers use our product offerings; • introduce new product offerings that are responsive to changes in customer demands; • provide our customers with support that meets their needs; • maintain or increase customer satisfaction with our product offerings; • continue to introduce and sell our product offerings to new markets; • expand the functionality within our product offerings and successfully further optimize our product offerings, including continued innovation of our AI system for legal documents; • successfully identify and acquire or invest in businesses, products or technologies that we believe could complement or expand our product offerings; • recruit, hire, train, manage, and retain sufficient qualified developers, professionals and sales and marketing personnel; and • increase awareness of our brand on a global basis and successfully compete with other companies.
We have and may in the future experience a security incident or significant vulnerability, including without limitation, those resulting from acts, errors or omissions of our personnel (including those caused by our, or our vendors’, employees or contractors), including inadvertent storage or disclosure of personal information, our confidential information, or our customers’ confidential information, or coding errors, defects and bugs, or accidentally providing a customer with access to or copies of another customer’s confidential information.
We have and may in the future experience a security incident or significant vulnerability, including without limitation, those resulting from acts, errors or omissions of our personnel (including those caused by our, or our vendors’, employees or contractors), including inadvertent storage or disclosure of personal information, our confidential information, or our customers’ confidential information, or coding errors, defects and bugs, accidentally providing a customer with access to or copies of another customer’s confidential information, or unauthorized and exfiltration of customer data generally.
We cannot accurately predict customers’ usage given the uncertain timing and duration of legal matters and the diversity of our customer base across industries, geographies and size and other factors.
Given the uncertain timing and duration of legal matters and the diversity of our customer base across industries, geographies and size and other factors, we cannot accurately predict our customers’ usage of our products and services.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations 40 Table of Contents of securities analysts and investors, resulting in a decline in the trading price of our common stock.
The market for technology stocks and the stock market in general have recently experienced significant price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies, including our own. These fluctuations have often been unrelated or disproportionate to the operating performance of these companies.
The market for technology stocks and the stock market in general have experienced significant price and volume fluctuations in recent years that have affected and continue to affect the market prices of equity securities of many companies, including our own. These fluctuations have often been unrelated or disproportionate to the operating performance of these companies.
Even if we are successful in establishing and maintaining these relationships with law firms and other legal services providers, we cannot assure you that these relationships will result in increased customer usage of our product offerings or increased revenue to us.
Even if we are successful in 25 Table of Contents establishing and maintaining these relationships with law firms and other legal services providers, we cannot assure you that these relationships will result in increased customer usage of our product offerings or increased revenue to us.
Changes in our product offerings or future changes in export and import regulations may create delays in the introduction of our product offerings in international markets, prevent our customers with international operations from deploying our product offerings globally, or, in some cases, prevent the export or import of our product offerings to certain countries, governments or persons altogether.
Changes in our product offerings or future changes in export and import regulations may create delays in the introduction of our product offerings in international markets, prevent our customers with international operations from deploying our product offerings globally, or, in some cases, prevent 38 Table of Contents the export or import of our product offerings to certain countries, governments or persons altogether.
European regulators have issued significant fines in certain circumstances where the regulators alleged that appropriate consent was not obtained in connection with targeted advertising activities. It is anticipated that the ePrivacy Regulation and national implementing laws will replace the current national laws implementing the ePrivacy Directive, which may require us to make significant operational changes.
European regulators have issued significant fines in certain circumstances where the regulators alleged that appropriate consent was not obtained in connection with targeted advertising activities. It is anticipated that the ePrivacy Regulation and national implementing laws 13 Table of Contents will replace the current national laws implementing the ePrivacy Directive, which may require us to make significant operational changes.
Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale 41 Table of Contents of additional equity securities.
Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.
Because our decision to issue securities in future offerings will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future 19 Table of Contents issuances of debt or equity securities.
Because our decision to issue securities in future offerings will depend on numerous considerations, including factors beyond our control, we cannot predict or estimate the amount, timing or nature of any future issuances of debt or equity securities.
For all of these reasons, we may not be able to compete successfully 27 Table of Contents and competition could result in the failure of our product offerings to achieve or maintain market acceptance, any of which could harm our business.
For all of these reasons, we may not be able to compete successfully and competition could result in the failure of our product offerings to achieve or maintain market acceptance, any of which could harm our business.
A successful assertion by a state, country, or other jurisdiction that we should have been or should be collecting additional sales, use, or other taxes could, among other things, result in substantial tax payments, create significant administrative burdens for us, discourage potential customers from subscribing to our product offerings due to the incremental cost of any such sales or other related taxes, or otherwise harm our business.
A successful assertion by a state, country, or other jurisdiction that we should have been or should be collecting additional sales, use, or other taxes could, among other things, result in substantial tax payments, create 39 Table of Contents significant administrative burdens for us, discourage potential customers from utilizing our product offerings due to the incremental cost of any such sales or other related taxes, or otherwise harm our business.
Further, governmental and highly regulated entities may demand contractual terms that differ from our standard arrangements and are less favorable than terms agreed with private sector customers, including preferential pricing or “most favored nation” terms and conditions or are contract provisions that are otherwise time-consuming and expensive to satisfy and 36 Table of Contents monitor.
Further, governmental and highly regulated entities may demand contractual terms that differ from our standard arrangements and are less favorable than terms agreed with private sector customers, including preferential pricing or “most favored nation” terms and conditions or are contract provisions that are otherwise time-consuming and expensive to satisfy and monitor.
However, the regulatory framework for privacy and data protection worldwide is unclear and evolving rapidly, and is likely to remain uncertain, for the foreseeable future. We expect that there will continue to be new laws, regulations and industry standards concerning privacy, data protection and information security proposed and enacted in various jurisdictions.
However, the regulatory framework for privacy and data protection worldwide is unclear and evolving rapidly, and is likely to remain uncertain, for the foreseeable future. We expect that there 11 Table of Contents will continue to be new laws, regulations and industry standards concerning privacy, data protection and information security proposed and enacted in various jurisdictions.
For example, during the year ended December 31, 2024, we recorded an impairment charge of $15.2 million related to the acquisition of our primary law intangible asset in 2023 and the related capitalized development costs.
For example, during the year ended December 31, 2024, we recorded an impairment charge of $15.2 million related to our primary law intangible asset and the related capitalized development costs.
If new technologies emerge that enable our competitors to deliver competitive products, services and applications at lower prices, more efficiently, more conveniently or more securely, such technologies could adversely impact our ability to compete.
If new technologies emerge that enable our competitors to deliver competitive products, services and applications at lower prices, more efficiently, more conveniently or more securely than our product offerings, such technologies could adversely impact our ability to compete.
We employ a pricing model that subjects us to various challenges, and given our limited history with our pricing model, we may not be able to accurately predict the optimal pricing necessary to attract new customers and retain existing customers. We generally charge our customers for their usage of our product offerings across a variety of dimensions of usage.
We employ a pricing model that subjects us to various challenges and we may not be able to accurately predict the optimal pricing necessary to attract new customers and retain existing customers. We generally charge our customers for their usage of our product offerings across a variety of dimensions of usage.
Our market is developing and may develop differently than we expect. Market opportunity estimates and growth forecasts that we may make from time to time are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.
Our market is developing and may develop differently than we expect. Market opportunity estimates and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.
While the class action lawsuit filed in November 2023 was dismissed in January 2024, the September 2023 matter remains pending, and we may be the target of additional litigation of this type in the future.
While the class action lawsuit filed in November 2023 was dismissed in January 2024, the September 2023 matter remains pending, and we may be the target of additional 42 Table of Contents litigation of this type in the future.
Risks Related to Information Technology and Cybersecurity The unavailability of or change in the terms or nature of access to third-party technology could harm our business. We license certain software from third parties and incorporate or integrate such components into and with our product offerings. Certain third-party software has become central to the operation and delivery of our product offerings.
The unavailability of or change in the terms or nature of access to third-party technology could harm our business. We license certain software from third parties and incorporate or integrate such components into and with our product offerings. Certain third-party software has become central to the operation and delivery of our product offerings.
As we grow and our resources become more globally dispersed, we may find it 29 Table of Contents increasingly difficult to maintain our corporate culture. If we fail to continue building and sustain our corporate culture, or if we are unable to retain or hire key personnel, our business and competitive position may be harmed.
As we grow and our resources become more globally dispersed, we may find it increasingly difficult to maintain our corporate culture. If we fail to continue building and sustain our corporate culture, or if we are unable to retain or hire key personnel, our business and competitive position may be harmed.
In addition, particularly if we grow rapidly, new members of our sales force will have relatively little experience working with us, our product offerings and our business 26 Table of Contents model.
In addition, particularly if we grow rapidly, new members of our sales force will have relatively little experience working with us, our product offerings and our business model.
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We are currently an “emerging growth company,” as defined in the JOBS Act, and we take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Our ability to attract new customers depends in part on our ability to convert the non-paying users. Our success also depends in part on our ability to offer compelling product offerings and the effectiveness of our sales organization.
Our ability to attract new customers depends in part on our ability to convert these non-paying users. Our success also depends in part on our ability to provide compelling product offerings and the effectiveness of our sales organization.
We work with third-parties to provide other products, services, parts, or otherwise to operate our business. Our ability to monitor these third parties’ information security practices is 15 Table of Contents limited, and these third parties may not have adequate information security measures in place.
We work with third parties to provide other products, services, parts, or otherwise to operate our business. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees.
These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our 44 Table of Contents directors, officers and other employees.
Any sensitive information (including confidential, competitive, proprietary, or personal information) that we input into a third-party generative AI / machine learning, or ML, platform could be leaked or disclosed to others, including if sensitive information is used to train the third parties’ AI/ML model.
Any sensitive information (including confidential, competitive, proprietary, or personal information) that we input into a third-party AI platform could be leaked or disclosed to others, including if sensitive information is used to train the third parties’ AI model.
The success of our business will depend, in part, on our ability to adapt and develop or acquire enhancements for our product offerings that respond effectively to these changes on a timely basis and in a user-friendly manner.
The success of our business will depend, in part, on our ability to adapt and develop or acquire new product offerings or enhancements for our existing product offerings that respond effectively to these changes on a timely basis and in a customer-friendly manner.
We and the third parties with whom we work 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.
Risks Related to Information Technology and Cybersecurity We and the third parties with whom we work 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.
Our business and operations could be negatively affected as a result of currently ongoing securities litigation or if we become subject to any stockholder activism. 43 Table of Contents Our business and operations could be negatively affected as a result of currently ongoing securities litigation against us or if we become subject to stockholder activism, which could cause us to incur significant expenses, hinder the execution of our business and growth strategy and impact the price of our common stock.
Our business and operations could be negatively affected as a result of securities litigation against us or if we become subject to stockholder activism, which could cause us to incur significant expenses, hinder the execution of our business and growth strategy and impact the price of our common stock.
Other evolving threats to our information systems and data include, but are not limited to, social engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (credential stuffing), credential harvesting, personnel misconduct or error, and supply-chain attacks.
Other evolving threats to our information systems and data include, but are not limited to, social engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, personnel misconduct or error, supply-chain attacks, infrastructure failures or operational errors resulting in breaches of service level agreements.
Our future growth in revenue and ability to achieve and sustain profitability depends in part on our ability to identify, establish and retain successful strategic partner relationships in the United States and internationally, which will take significant time and resources and involve significant risk.
Our future growth in revenue and ability to achieve and sustain profitability depends in part on our ability to identify, establish and retain successful strategic partner relationships in the United States and internationally, which requires significant time and resources and involves significant risk.
Significant judgments, estimates and assumptions used in preparing our consolidated financial statements include, or may in the future include, those related to revenue recognition, stock-based compensation expense, income taxes, goodwill and intangible assets. Risks Related to Being a Public Company Our management team has limited experience managing a public company.
Significant judgments, estimates and assumptions used in preparing our consolidated financial statements include, or may in the future include, those related to revenue recognition, capitalization and amortization of capitalized software development costs, stock-based compensation expense, income taxes, goodwill and intangible assets. Risks Related to Being a Public Company Our management team has limited experience managing a public company.
We do not know whether our current or potential customers or the market in general will continue to accept this pricing model going forward and, if it fails to gain acceptance, our business could be harmed.
We do not know whether our current or potential customers or the market in general will continue to accept this pricing model going forward, including in connection with our recently announced evolution to our pricing model, and, if it fails to gain acceptance, our business could be harmed.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee receives regular reports from various individuals that are part of the Cybersecurity Function concerning our significant cybersecurity threats and risk and the processes we have implemented to address them. The Audit Committee and the full Board also has access to various reports, summaries or presentations related to cybersecurity threats, risk, and mitigation.
Biggest changeIn addition, our incident response and vulnerability management processes include reporting to the Audit Committee for certain cybersecurity incidents. The Audit Committee receives regular reports from various individuals that are part of the Cybersecurity Function concerning our significant cybersecurity threats and risks and the processes we have implemented to address them.
Various individuals that are part of the Cybersecurity Function help identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and risk profile using various methods including, for example: manual tools, internal and/or external audits, automated tools, conducting threat assessments for internal and external threats, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and actors, conducting vulnerability assessments to identify vulnerabilities, conducting scans of the threat environment, use of external intelligence feeds, evaluating our and our industry’s risk profile, third-party-conducted red/blue team testing and tabletop incident response exercises, and evaluating threats reported to us.
Various individuals that are part of the Cybersecurity Function help identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment and risk profile using various methods including, for example: manual tools, internal and/or external audits, automated tools, conducting threat assessments for internal and external threats, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and threat actors, conducting vulnerability assessments to identify vulnerabilities, conducting scans of the threat environment, use of external intelligence feeds, evaluating our and our industry’s risk profile, third-party-conducted red/blue team testing and tabletop incident response exercises, and evaluating threats reported to us.
Our Vice President, Global Head of Information Technology and Chief Information Security Officer and our Security Steering Committee (which includes our Chief Financial Officer, Chief Product and Technology Officer, Senior Vice President of Engineering, and General Counsel and Chief Compliance Officer), identify, assess and manage the Company’s cybersecurity threats and risks (the “Cybersecurity Function”).
Our Vice President, Global Head of Information Technology and Chief Information Security Officer and our Security Steering Committee (which includes our Chief Financial Officer; Chief Product, Technology, and Strategy Officer; Senior Vice President of Engineering; and General Counsel and Chief Compliance Officer), identify, assess and manage the Company’s cybersecurity threats and risks (the “Cybersecurity Function”).
Our cybersecurity incident response and vulnerability management processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including various management personnel that are part of the Cybersecurity Function, and our General Counsel, Chief Financial Officer and Chief Executive Officer.
Our cybersecurity incident response and vulnerability management processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including various management personnel that are part of the Cybersecurity Function, and our General Counsel and Chief Compliance Officer, Chief Financial Officer, and Chief Executive Officer.
Risk Factors in this Annual Report on Form 10-K, including the section referred to as: “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 comprised or affected by a cybersecurity incident, we could experience adverse consequences, including, but not limited to, additional costs, loss of revenue, significant liabilities, harm to our brand, material disruption of our operations and other adverse consequences.” Governance Our Board of Directors addresses our cybersecurity risk management as part of its general oversight function.
Risk Factors in this Annual Report on Form 10-K, including the section referred to as: “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 comprised or affected by a cybersecurity incident, we could experience adverse consequences, including, but not limited to, additional costs, loss of revenue, significant liabilities, harm to our brand, material disruption of our operations and other adverse consequences.” Governance Our Board of Directors addresses our cybersecurity risk management as part of its general oversight function.
Depending on the particular environment and systems, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: incident response plan and/or incident response policy, asset management, tracking and disposal, incident detection and response, systems monitoring, vulnerability management policy, vendor management program, disaster recovery/business continuity plans, employee training, risk assessments, penetration testing, cybersecurity insurance, encryption of data, dedicated cybersecurity staff/officer, network security controls, asset management, tracking and disposal, data segregation, and access controls.
Depending on the particular environment and systems, we implement and maintain various technical, physical, and organizational measures, processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our Information Systems and Data, including, for example: an incident response plan and/or incident response policy, 45 Table of Contents asset management, tracking and disposal, incident detection and response, systems monitoring, vulnerability management policy, vendor management program, disaster recovery/business continuity plans, employee training, risk assessments, penetration testing, cybersecurity insurance, encryption of data, dedicated cybersecurity staff/officer, network security controls, asset management, tracking and disposal, data segregation, and access controls.
Our current Vice President, Global Head of Information Technology and Chief Information Security Officer has over a decade of IT management experience, over nine years of cybersecurity management experience and is currently an ISACA Certified Information Security Manager (CISM). He reports directly to our Chief Financial Officer.
Our current Vice President, Global Head of Information Technology and Chief Information Security Officer has over a decade of IT management experience and cybersecurity management experience and is currently an ISACA Certified Information Security Manager (CISM). He reports directly to our Chief Financial Officer.
For example, the security organization works with management to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business, and our senior 44 Table of Contents management evaluates material risks from cybersecurity threats against our overall business objectives and reports to the Audit Committee of the Board of Directors, which evaluates our overall enterprise risk.
For example, the security organization works with management to prioritize our risk management processes and mitigate cybersecurity threats that are more likely to lead to a material impact to our business, and our senior management evaluates material risks from cybersecurity threats against our overall business objectives and reports to the Audit Committee of the Board of Directors, which evaluates our overall enterprise risk.
Various individuals that are part of the Cybersecurity Function, and our General Counsel, Chief Financial Officer and Chief Executive Officer, work with our incident response team to help mitigate and remediate cybersecurity incidents of which they are notified. In addition, our incident response and vulnerability management processes include reporting to the Audit Committee for certain cybersecurity incidents.
Various individuals that are part of the Cybersecurity Function, and our General Counsel and Chief Compliance Officer, Chief Financial Officer and Chief Executive Officer, work with our incident response team to help mitigate and remediate cybersecurity incidents of which they are notified.
Added
The Audit 46 Table of Contents Committee and the full Board also has access to various reports, summaries or presentations related to cybersecurity threats, risks and mitigation.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our headquarters are located in Austin, Texas, where we lease approximat ely 46,000 square feet pursuant to a lease that expires in July 2028. We have another office lease located in New York, New York that expires in January 2028. These offices 45 Table of Contents are leased, and we do not own any real property.
Biggest changeItem 2. Properties Our headquarters are located in Austin, Texas, where we lease approximat ely 46,000 square feet pursuant to a lease that expires in July 2028. We have another office lease located in New York, New York that expires in January 2028. These offices are leased, and we do not own any real property.
Removed
We may lease or purchase additional space as needed to accommodate our needs.
Added
We may lease or purchase additional space as needed to accommodate our needs. Item 3. Legal Proceedings The information called for by this item is incorporated herein by reference to Note 8, “Commitments and Contingencies” in our consolidated financial statements of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures None. 47 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Our common stock has been listed on the New York Stock Exchange under the symbol “LAW” since July 21, 2021.
Biggest changeItem 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders Our common stock has been listed on the New York Stock Exchange under the symbol “LAW” since July 21, 2021. As of February 15, 2026, we had 31 holders of record of our common stock.
We do not anticipate paying cash dividends on our common stock for the foreseeable future.
We do not anticipate paying cash dividends on our common stock for the foreseeable future. Use of Proceeds from Registered Securities None. Item 6. Reserved
Removed
On February 14, 2025, the last reported sale price of our common stock on the New York Stock Exchange was $5.31. As of February 14, 2025, we had 33 holders of record of our common stock.
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Use of Proceeds from Registered Securities On July 23, 2021, we completed our IPO in which we issued and sold 7,700,000 shares of our common stock at the IPO price of $32.00 per share, including the full exercise by the underwriters of their option to purchase up to an additional 500,000 shares of common stock from us and 200,000 shares of common stock from the selling stockholder named in the final prospectus, or the Prospectus, for our IPO, filed with the SEC on July 22, 2021 pursuant to Rule 424(b)(4) under the Securities Act, resulting in net proceeds to us of approximately $223.2 million, after deducting underwriting discounts and commissions.
Removed
We did not receive any of the proceeds from the sale of shares by the selling stockholder.
Removed
The offer and sale of all of the shares of our common stock in the IPO were registered under the Securities Act pursuant to our Registration Statement on Form S-1 (File No. 333-257435), which was declared effective by the SEC on July 20, 2021.
Removed
There has been no material change in the planned use of proceeds from our IPO from those disclosed in the Prospectus. Item 6. Reserved

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations The following tables set forth our results of operations and such data as a percentage of our revenue for each of the periods presented (in thousands): Year Ended December 31, 2024 2023 Revenue $ 144,841 $ 138,090 Cost of revenue (1) 37,414 34,948 Gross profit 107,427 103,142 Operating expenses: Research and development (1)(2) 51,511 51,623 Sales and marketing (1)(2) 61,377 68,132 General and administrative (1)(2) 41,049 33,232 Impairment of intangible asset and capitalized development 15,213 — Total operating expenses 169,150 152,987 Loss from operations (61,723) (49,845) Other income (expense): Interest and other income 6,837 8,306 Interest and other expense (556) (168) Total other income (expense) 6,281 8,138 Loss from operations before income taxes (55,442) (41,707) Income tax provision (332) (443) Net loss attributable to common stockholders $ (55,774) $ (42,150) ______________ (1) Includes stock-based compensation expense as follows (in thousands): Year Ended December 31, 2024 2023 Cost of revenue $ 1,715 $ 1,036 Research and development 7,709 7,767 Sales and marketing 4,676 5,366 General and administrative 8,169 1,989 Total $ 22,269 $ 16,158 (2) Includes restructuring charges as follows (in thousands): Year Ended December 31, 2024 2023 Research and development $ — $ 1,510 Sales and marketing — 648 General and administrative — 432 Total $ — $ 2,590 52 Table of Contents Year Ended December 31, 2024 2023 Consolidated Statement of Operations and Comprehensive Loss as a percentage of revenue:** Revenue 100 % 100 % Cost of revenue 26 25 Gross profit 74 75 Operating expenses: Research and development 36 37 Sales and marketing 42 49 General and administrative 28 24 Impairment of intangible asset and capitalized development 11 — Total operating expenses 117 111 Loss from operations (43) (36) Other income (expense): Interest and other income 5 6 Interest and other expense * * Total other income (expense) 4 6 Loss from operations before income taxes (38) (30) Income tax provision * * Net loss attributable to common stockholders (39) % (31) % ______________ * Less than 0.5% of revenue. ** Columns may not add up to 100% due to rounding.
Biggest changeResults of Operations The following tables set forth our results of operations and such data as a percentage of our revenue for each of the periods presented (in thousands): Year Ended December 31, 2025 2024 Revenue $ 156,849 $ 144,841 Cost of revenue (1) 39,425 37,414 Gross profit 117,424 107,427 Operating expenses: Research and development (1) 56,596 51,511 Sales and marketing (1) 60,042 61,377 General and administrative (1) 48,910 41,049 Impairment of intangible asset and capitalized development — 15,213 Total operating expenses 165,548 169,150 Loss from operations (48,124) (61,723) Interest and other income, net 4,495 6,281 Loss from operations before income taxes (43,629) (55,442) Income tax provision (743) (332) Net loss attributable to common stockholders $ (44,372) $ (55,774) ______________ (1) Includes stock-based compensation expense as follows (in thousands): Year Ended December 31, 2025 2024 Cost of revenue $ 2,192 $ 1,715 Research and development 8,232 7,709 Sales and marketing 5,593 4,676 General and administrative 8,447 8,169 Total $ 24,464 $ 22,269 53 Table of Contents Year Ended December 31, 2025 2024 Consolidated Statement of Operations and Comprehensive Loss as a percentage of revenue:** Revenue 100 % 100 % Cost of revenue 25 26 Gross profit 75 74 Operating expenses: Research and development 36 36 Sales and marketing 38 42 General and administrative 31 28 Impairment of intangible asset and capitalized development — 11 Total operating expenses 106 117 Loss from operations (31) (43) Interest and other income, net 3 4 Loss from operations before income taxes (28) (38) Income tax provision * * Net loss attributable to common stockholders (28) % (39) % ______________ * Less than 0.5% of revenue. ** Columns may not add up to 100% due to rounding.
W e e xpect that our sales and marketing expenses will increase in absolute dollars and continue to be our largest operating expense for the foreseeable future as we grow our business. Our sales and marketing expenses may fluctuate as a percentage of our revenue over time.
W e e xpect that our sales and marketing expenses will increase in absolute dollars and will continue to be our largest operating expense for the foreseeable future as we grow our business. Our sales and marketing expenses may fluctuate as a percentage of our revenue over time.
For example, negative conditions in the general economy both in the United States and abroad, including conditions resulting from fluctuations in inflation and interest rates, the potential imposition of tariffs in the United States and abroad, and the Russia-Ukraine war and conflict in the Middle East, have led to economic uncertainty globally.
For example, negative conditions in the general economy both in the United States and abroad, including conditions resulting from fluctuations in inflation and interest rates, the imposition of tariffs in the United States and abroad, and the Russia-Ukraine war and conflict in the Middle East, have led to economic uncertainty globally.
Impairment of intangible asset and capitalized development Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) Impairment of intangible asset and capitalized development $ 15,213 $ — $ 15,213 100 % Percentage of revenue 11 % — % During the fourth quarter of the year ended December 31, 2024, we identified a triggering event related to our primary law intangible asset, and the capitalized software development costs associated with the integration of our primary law intangible asset into our product offerings as it was no longer probable of being completed.
Impairment of Intangible Asset and Capitalized Development Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) Impairment of intangible asset and capitalized development $ — $ 15,213 $ (15,213) (100 %) Percentage of revenue — % 11 % During the fourth quarter of the year ended December 31, 2024, we identified a triggering event related to our primary law intangible asset and the capitalized software development costs associated with the integration of our primary law intangible asset into our product offerings, as it was no longer probable of being completed.
We define Adjusted EBITDA as net loss, adjusted to exclude: depreciation and amortization expense; income tax provision; interest and other, net; stock-based compensation expense; payroll tax expense on employee stock transactions; restructuring charges; acquisition revaluation expense; expenses associated with stockholder litigation; impairment of intangible asset and capitalized development; and other one-time, non-recurring items, when applicable.
We define Adjusted EBITDA as net loss, adjusted to exclude: depreciation and amortization expense; income tax provision; interest and other, net; stock-based compensation expense; payroll tax expense on employee stock transactions; acquisition revaluation expense; expenses associated with stockholder litigation; impairment of intangible asset and capitalized development; and other one-time, non-recurring items, when applicable.
Macroeconomic Considerations 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.
Macroeconomic and Industry Considerations 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.
Other Income (Expense), Net Other income (expense), net consists primarily of interest income, income related to non-operating activities, interest expense, gains and losses from foreign currency transactions and remeasurements of foreign currency-denominated monetary assets and liabilities to the U.S. dollar. 51 Table of Contents Income Tax Provision Income tax provision consists primarily of income taxes related to foreign and state jurisdictions in which we conduct business.
Interest and Other Income, Net Interest and other income, net consists primarily of interest income, income related to non-operating activities, interest expense, gains and losses from foreign currency transactions and remeasurements of foreign currency-denominated monetary assets and liabilities to the U.S. dollar. 52 Table of Contents Income Tax Provision Income tax provision consists primarily of income taxes related to foreign and state jurisdictions in which we conduct business.
Legal departments that use our product offerings and use many law firms across their legal matters, as well as law firms and service providers that use our product offerings for multiple clients, are generally treated as one customer. However, in some cases where they have separate billing terms, we may count these as multiple customers.
Legal departments that use our product offerings and use many law firms across their legal matters, as well as law firms and service providers that use our product offerings for multiple clients, are generally treated as one customer. However, in cases where they have separate billing terms, we count these as multiple customers.
In the near term, w e expect that our research and development expenses will increase in absolute dollars but may fluctuate as a percentage of our revenue over time. In addition, research and development expenses that qualify as capitalized software development costs are capitalized, the amount of which may fluctuate significantly from period to period.
W e expect that our research and development expenses will increase in absolute dollars but may fluctuate as a percentage of our revenue over time. In addition, research and development expenses that qualify as capitalized software development costs are capitalized, the amount of which may fluctuate significantly from period to period.
Treasury securities with maturities of more than three months but less than one year at the date of purchase. We believe our existing cash and cash equivalents and short-term investments will be sufficient to fund anticipated cash requirements for the next 12 months.
Treasury securities and corporate debt securities with maturities of more than three months but less than one year at the date of purchase. We believe our existing cash and cash equivalents and short-term investments will be sufficient to fund anticipated cash requirements for the next 12 months.
Our future capital requirements will depend on many factors, including our revenue growth rate, usage of our product offerings, billing frequency, the timing and extent of spending to support further sales and marketing and research and development efforts, and the continuing market acceptance of our product offerings.
Our future capital requirements will depend on many factors, including our revenue growth rate, usage of our product offerings, billing frequency, the timing and extent of spending to support further sales and marketing and research and 57 Table of Contents development efforts, and the continuing market acceptance of our product offerings.
As enterprises continue their digital transformation journeys and the demand for differentiation in the competitive market for legal services continues to grow, we expect more and more companies will struggle with existing legal solutions and ultimately will adopt an integrated, easy-to-use platform like DISCO to improve productivity and legal outcomes.
As enterprises continue their digital transformation journeys and the demand for differentiation in the competitive market for legal services continues to grow, we expect more and more companies will struggle with existing legal solutions and ultimately will 50 Table of Contents adopt an integrated, easy-to-use platform like DISCO to improve productivity and legal outcomes.
Expand Internationally Our market is global and we believe there is a significant opportunity to expand our international customer base, particularly in the United Kingdom, and further expand our operations internationally, particularly in India. In the year ended 2024 , less than 10% of our revenue was generated by customers outside of the United States.
Expand Internationally Our market is global and we believe there is a significant opportunity to expand our international customer base, particularly in the United Kingdom, and further expand our operations internationally, particularly in India. In the year ended December 31, 2025 , less than 10% of our revenue was generated by customers outside of the United States.
See the section titled “—Non-GAAP Financial Measure” for the definition of Adjusted EBITDA, as well as a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP.
See the section titled “Non-GAAP Financial Measure” for the definition of Adjusted EBITDA, as well as a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP.
We provide legal departments with the ability to centralize legal data into a single platform, improving security and privacy for our customers, enabling transparent collaboration with other legal industry 47 Table of Contents participants and allowing customers to reuse data and lawyer work product across legal matters.
We provide legal departments with the ability to centralize legal data into a single platform, improving security and privacy for our customers, enabling transparent collaboration with other legal industry participants and allowing customers to reuse data and lawyer work product across legal matters.
Our ability to attract 49 Table of Contents new customers will depend on a number of factors, including the effectiveness and pricing of our products, the offerings of our competitors and the effectiveness of our sales and marketing efforts.
Our ability to attract new customers will depend on a number of factors, including the effectiveness and pricing of our products, the offerings of our competitors and the effectiveness of our sales and marketing efforts.
We believe our market leadership and differentiated product offerings will enable us to efficiently acquire new customers across all channels. As of December 31, 2024, we had 1,478 customers, increasing from 1,463 customers as of December 31, 2023.
We believe our market leadership and differentiated product offerings will enable us to efficiently acquire new customers across all channels. As of December 31, 2025, we had 1,549 customers, increasing from 1,478 customers as of December 31, 2024.
Impairment of intangible asset and capitalized development Impairment of intangible asset and capitalized development consists of a one-time non-cash full impairment charge of our primary law intangible asset and the related capitalized software development costs as it is no longer probable of being completed.
Impairment of Intangible Asset and Capitalized Development Impairment of intangible asset and capitalized development consists of a one-time non-cash full impairment charge of our primary law intangible asset and the related capitalized software development costs in 2024 as it was no longer probable of being completed.
Some of these limitations include that: (i) it does not properly reflect capital commitments to be paid in the future; (ii) although depreciation and amortization expense is a non-cash charge, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures; (iii) it does not consider the impact of stock-based compensation expense and payroll tax expense on employee stock transactions; (iv) it does not reflect other non-operating expenses, including interest expense; (v) it does not consider the impact of any contingent consideration liability valuation adjustments; and (vi) it does not reflect tax payments that may represent a reduction in cash available to us.
Some of these limitations include that: (i) it does not properly reflect capital commitments to be paid in the future; (ii) although depreciation and amortization expense is a non-cash charge, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures; (iii) it does not consider the impact of stock-based compensation expense and payroll tax expense on employee stock transactions; (iv) it does not consider the impact of any contingent consideration liability valuation adjustment; (v) it does not reflect other non-operating expenses, including interest expense; (vi) it does not consider the impact of expenses associated with the stockholder litigation; (vii) it does not consider the impact of impairment charges; and (viii) it does not reflect tax payments that may represent a reduction in cash available to us.
Large customers accounted for approximately 76%, and 75% of our revenue for the years ended December 31, 2024 and 2023, respectively. Our go-to-market strategy is focused on acquiring new customers and driving continued use and increased usage of our product offerings for existing customers.
Large customers accounted for approximately 76% of our revenue for each of the years ended December 31, 2025 and 2024. Our go-to-market strategy is focused on acquiring new customers and driving continued use and increased usage of our product offerings for existing customers.
We intend to leverage our technology to introduce further offerings that increase lawyer productivity across more and more areas of legal work over time. We may expend significant resources in the development of additional offerings.
We intend to leverage our technology to introduce further offerings that increase lawyer productivity across more and more areas of legal work over time. We may expend significant resources in the development of additional offerings, such as our ediscovery chatbot, Cecilia.
This change was primarily driven by a $1.5 million increase in costs for cloud hosting as a result of increased usage of our software product offerings and a $1.7 million increase in salary and benefits costs. This increase was partially offset by a $0.9 million decrease in outsourced staffing vendor fees.
This change was primarily driven by a $2.2 million increase in costs for cloud hosting as a result of increased usage of our software product offerings and a $1.5 million increase in salary and benefits costs. These changes were partially offset by a $2.0 million decrease in outsourced staffing vendor fees.
Revenue generated from our software product offerings increased by $7.9 million, or 7%, for the year ended December 31, 2024 compared to the same period in 2023 due to increases in usage of our software product offerings.
Revenue generated from our software product offerings increased by $13.9 million, or 12%, for the year ended December 31, 2025 compared to the same period in 2024 due to increases in usage of our software product offerings.
If, however, economic uncertainty increases or the global economy worsens, our business, financial condition and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events on our business, financial condition, and operating results, see the section titled “Risk Factors”.
If, however, economic uncertainty increases, the global economy worsens or unfavorable conditions in the legal industry persist or worsen, our business, financial condition and results of operations may be harmed. For further discussion of the potential impacts of macroeconomic events and legal industry conditions on our business, financial condition, and operating results, see the section titled “Risk Factors”.
As of December 31, 2024, we had 1,478 customers, increasing from 1,463 customers as of December 31, 2023. As of December 31, 2024 we had 315 large customers, defined as customers with revenue in excess of $100,000 over the previous 12-month period, increasing from 289 large customers as of December 31, 2023.
As of December 31, 2025, we had 1,549 customers, increasing from 1,478 customers as of December 31, 2024. As of December 31, 2025 we had 330 large customers, defined as customers with revenue in excess of $100,000 over the previous 12-month period, increasing from 315 large customers as of December 31, 2024.
In each of the years ended December 31, 2024 and 2023, usage-based revenue represented 89% of total revenue and subscription revenue fees represented 11% of total revenue. 50 Table of Contents Cost of Revenue Cost of revenue consists primarily of third-party cloud infrastructure expenses incurred in connection with our customers’ use of our product offerings.
In the years ended December 31, 2025 and 2024, usage-based revenue represented 91% and 89% of total revenue, respectively, and subscription revenue fees represented 9% and 11% of total revenue, respectively. 51 Table of Contents Cost of Revenue Cost of revenue consists primarily of third-party cloud infrastructure expenses incurred in connection with our customers’ use of our product offerings.
As of December 31, 2024, our principal sources of liquidity were cash and cash equivalents and short-term investments, totaling $52.8 million and $76.4 million, respectively. Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. Short-term investments consist of highly-rated U.S.
As of December 31, 2025, our principal sources of liquidity were cash and cash equivalents and short-term investments, totaling $19.7 million and $94.9 million, respectively. Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. Short-term investments consist of highly-rated U.S.
Financing Activities Net cash used in financing activities for the year ended December 31, 2024 was $20.0 million, a change of $21.9 million from net cash provided by financing activities of $1.9 million for the year ended December 31, 2023.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2025 was nominal, a change of $20.0 million from net cash used in financing activities of $20.0 million for the year ended December 31, 2024.
As of December 31, 2024 and 2023, our dollar-based net retention rate was 96% and 92%, respectively.
As of December 31, 2025 and 2024, our dollar-based net retention rate was 98% and 96%, respectively.
The change was primarily related to a decrease of $4.2 million in personnel costs, including stock-based compensation and variable compensation, for our sales personnel. In addition, marketing expenses decreased $1.0 million and software related costs decreased $0.5 million.
The change was primarily related to a decrease of $0.9 million in marketing expenses and a $0.3 million decrease in professional services costs. In addition, personnel costs decreased $0.2 million, including stock-based compensation and variable compensation, for our sales personnel.
Our net loss was $55.8 million and $42.2 million for the years ended December 31, 2024 and 2023, respectively. We generated Adjusted EBITDA of $(18.7) million and $(25.9) million for the years ended December 31, 2024 and 2023, respectively.
Our net loss was $44.4 million and $55.8 million for the years ended December 31, 2025 and 2024, respectively. We generated Adjusted EBITDA of $(10.2) million and $(18.7) million for the years ended December 31, 2025 and 2024, respectively.
We recorded no such impairment charges in the year ended December 31, 2023. Non-GAAP Financial Measure We report our financial results in accordance with generally accepted accounting principles, or GAAP. However, management believes that Adjusted EBITDA, a non-GAAP financial measure, provides investors with additional useful information in evaluating our performance.
Non-GAAP Financial Measure We report our financial results in accordance with generally accepted accounting principles, or GAAP. However, management believes that Adjusted EBITDA, a non-GAAP financial measure, provides investors with additional useful information in evaluating our performance.
In the near term, we expect that our general and administrative expenses will remain relatively consistent in absolute dollars but may fluctuate as a percentage of total revenue from period to period.
Excluding the impact of the stockholder litigation, we expect that our general and administrative expenses will increase in absolute dollars but may fluctuate as a percentage of total revenue from period to period.
We intend to continue combining our deep legal domain expertise and commitment to world-class software engineering to continue delivering features and introducing new product offerings to address more areas of legal work, such as our ediscovery chatbot, Cecilia, which was released in the fourth quarter of 2023 in the United States and in the third quarter of 2024 in Europe.
We intend to continue combining our deep legal domain expertise and commitment to world-class software engineering to continue delivering features and introducing new product offerings to address more areas of legal work, such as our ediscovery chatbot, Cecilia.
As of December 31, 2024, we had $52.8 million of cash and cash equivalents and $76.4 million of short-term investments. We generated revenue of $144.8 million and $138.1 million in the years ended December 31, 2024 and 2023, respectively, representing a period-over-period growth of 5%.
As of December 31, 2025, we had $19.7 million of cash and cash equivalents and $94.9 million of short-term investments. We generated revenue of $156.8 million and $144.8 million in the years ended December 31, 2025 and 2024, respectively, representing a period-over-period growth of 8%.
The following table presents a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP, for the periods presented (in thousands): Year Ended December 31, 2024 2023 Net loss $ (55,774) $ (42,150) Depreciation and amortization expense 3,926 4,159 Income tax provision 332 443 Interest and other, net (6,281) (8,138) Stock-based compensation expense 22,269 16,158 Payroll tax expense on employee stock transactions 537 470 Restructuring charges — 2,590 Acquisition revaluation expense 303 500 Expenses associated with stockholder litigation 757 74 Impairment of intangible asset and capitalized development 15,213 — Adjusted EBITDA $ (18,718) $ (25,894) Liquidity and Capital Resources We have financed operations primarily through customer payments and net proceeds from sales of equity securities, including our IPO in July 2021.
We expect Adjusted EBITDA to improve over the long term as we achieve greater scale in our business and efficiencies in our operating expenses. 56 Table of Contents The following table presents a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP, for the periods presented (in thousands): Year Ended December 31, 2025 2024 Net loss $ (44,372) $ (55,774) Depreciation and amortization expense 3,658 3,926 Income tax provision 743 332 Interest and other, net (4,495) (6,281) Stock-based compensation expense 24,464 22,269 Payroll tax expense on employee stock transactions 600 537 Acquisition revaluation expense — 303 Expenses associated with stockholder litigation 9,169 757 Impairment of intangible asset and capitalized development — 15,213 Adjusted EBITDA $ (10,233) $ (18,718) Liquidity and Capital Resources We have financed operations primarily through customer payments and net proceeds from sales of equity securities, including our IPO in July 2021.
Operating Expenses Research and Development Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) Research and development $ 51,511 $ 51,623 $ (112) — % Percentage of revenue 36 % 37 % Research and development expenses decreased by $0.1 million, or less than 1%, for the year ended December 31, 2024 compared to the same period in 2023.
Operating Expenses Research and Development Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) Research and development $ 56,596 $ 51,511 $ 5,085 10 % Percentage of revenue 36 % 36 % Research and development expenses increased by $5.1 million, or 10%, for the year ended December 31, 2025 compared to the same period in 2024.
Although fluctuations in general macroeconomic conditions, including conditions resulting from fluctuations in inflation and interest rates, the potential 56 Table of Contents imposition of tariffs in the United States and abroad, and the Russia-Ukraine war and conflict in the Middle East, have not materially impacted our liquidity to date, we plan to continue to evaluate aspects of our spending, including capital expenditures, discretionary spending, and strategic investments throughout 2025.
Although fluctuations in general macroeconomic and industry conditions, including conditions resulting from fluctuations in inflation and interest rates, the imposition of tariffs in the United States and abroad, the recent U.S. government shutdown, the executive orders issued by President Trump, and the effects of global events, such as the Russia-Ukraine war and conflict in the Middle East, have not materially impacted our liquidity to date, we plan to continue to evaluate aspects of our spending, including capital expenditures, discretionary spending and strategic investments throughout 2026.
Sales and Marketing Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) Sales and marketing $ 61,377 $ 68,132 $ (6,755) (10 %) Percentage of revenue 42 % 49 % Sales and marketing expenses decreased by $6.8 million, or 10%, for the year ended December 31, 2024 compared to the same period in 2023.
Sales and Marketing Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) Sales and marketing $ 60,042 $ 61,377 $ (1,335) (2 %) Percentage of revenue 38 % 42 % Sales and marketing expenses decreased by $1.3 million, or 2%, for the year ended December 31, 2025 compared to the same period in 2024.
Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial measures, including our net loss and other results stated in accordance with GAAP. We expect Adjusted EBITDA to improve over the long term as we achieve greater scale in our business and efficiencies in our operating expenses.
Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial measures, including our net loss and other results stated in accordance with GAAP.
We also offer our customers the option to enter into subscriptions based on committed minimum usage on an annual or multi-year basis, which represented 11% of our revenue in each of the years ended December 31, 2024 and 2023. In addition, we generate revenue from a range of professional services aimed at accelerating the time-to-value for our customers.
We also offer our customers the option to enter into subscriptions based on committed minimum usage on an annual or multi-year basis, 48 Table of Contents which represented 9% and 11% of our revenue in the years ended December 31, 2025 and 2024, respectively.
Net cash used in operating activities for the year ended December 31, 2024 was $8.7 million, a decrease of $16.8 million from net cash used in operating activities of $25.5 million for the year ended December 31, 2023.
Net cash used in operating activities for the year ended December 31, 2025 was $14.9 million, an increase of $6.2 million from net cash used in operating activities of $8.7 million for the year ended December 31, 2024.
In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business and evaluating our operating performance, as well as for internal planning and forecasting purposes. 55 Table of Contents Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.
In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business and evaluating our operating performance, as well as for internal planning and forecasting purposes.
Our customers include a diverse set of enterprises across a broad set of industries, as well as law firms, legal services providers of all sizes and government organizations.
As the amount of enterprise data in our product offerings increases, the strategic value and stickiness of our product offerings within an organization is enhanced. Our customers include a diverse set of enterprises across a broad set of industries, as well as law firms, legal services providers of all sizes and government organizations.
Historically, during periods of economic uncertainty and downturns, businesses may slow spending on information technology, which may impact our business and our customers’ businesses. 48 Table of Contents The effect of macroeconomic conditions may not be fully reflected in our results of operations until future periods.
Historically, during periods of economic uncertainty and downturns, businesses may slow spending on information technology, which may impact our business and our customers’ businesses. Further, unfavorable conditions in the legal industry may negatively affect the growth of our business and our results of operations.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) Cash used in operating activities $ (8,749) $ (25,531) $ 16,782 (66) % Cash used in investing activities (78,035) (20,035) (58,000) 289 % Cash (used in) provided by financing activities (19,996) 1,873 (21,869) (1,168) % Net decrease in cash and cash equivalents $ (106,780) $ (43,693) $ (63,087) 144 % Operating Activities Our largest source of operating cash is payments received from our customers.
Cash Flows The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) Cash used in operating activities $ (14,936) $ (8,749) $ (6,187) 71 % Cash used in investing activities (18,196) (78,035) 59,839 (77) % Cash provided by (used in) financing activities 16 (19,996) 20,012 (100) % Net decrease in cash and cash equivalents $ (33,116) $ (106,780) $ 73,664 (69) % Operating Activities Our largest source of operating cash is payments received from our customers.
Revenue related to new customers added since December 31, 2023 contributed $11.3 million, which was partially offset by a $4.6 million decrease in revenue from customers that existed as of December 31, 2023. The change in revenue from existing customers was driven by decreases in usage of our product offerings by several of our existing customers.
Revenue related to new customers added since December 31, 2024 contributed $13.7 million, which was partially offset by a $1.7 million decrease in revenue from customers that existed as of December 31, 2024.
Cost of Revenue Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) Cost of revenue $ 37,414 $ 34,948 $ 2,466 7 % Percentage of revenue 26 % 25 % Total cost of revenue increased by $2.5 million, or 7%, for the year ended December 31, 2024 compared to the same period in 2023.
This change was driven by decreases in usage of our services product offerings within DISCO Review. 54 Table of Contents Cost of Revenue Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) Cost of revenue $ 39,425 $ 37,414 $ 2,011 5 % Percentage of revenue 25 % 26 % Total cost of revenue increased by $2.0 million, or 5%, for the year ended December 31, 2025 compared to the same period in 2024.
Upon the conclusion of the measurement period, any subsequent adjustments are recorded to operating expense in the consolidated statements of operations and comprehensive loss. Recent Accounting Pronouncements See Recently Adopted Accounting Pronouncements in Note 2, “Summary of Significant Accounting Policies,” in our consolidated financial statements of this Annual Report on Form 10-K for more information.
Accounting Pronouncements Adopted During the Current Year See “Accounting Pronouncements Adopted During the Current Year” in Note 2, “Summary of Significant Accounting Policies,” in our consolidated financial statements of this Annual Report on Form 10-K for more information.
Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was $78.0 million, an increase of $58.0 million from net cash used in investing activities of $20.0 million for the year ended December 31, 2023. The change in cash used in investing activities was primarily related to purchases of short-term investments of $87.9 million.
The change in cash used in investing activities was primarily related to an increase in maturities of short-term investments of $178.3 million during the year ended December 31, 2025. This was partially offset by an increase of $118.2 million in purchases of short-term investments during the year ended December 31, 2025.
Revenue generated from our services product offerings decreased $1.1 million, or 4%, for the year ended December 31, 2024 compared 53 Table of Contents to the same period in 2023. This change was driven by decreases in usage of our services product offerings by several of our existing customers, particularly within managed review.
Revenue generated from our services product offerings decreased $1.9 million, or 8%, for the year ended December 31, 2025 compared to the same period in 2024.
Further, $0.6 million of the decrease was also due to nonrecurring restructuring charges related to our reductions in force in January and May 2023. 54 Table of Contents General and Administrative Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) General and administrative $ 41,049 $ 33,232 $ 7,817 24 % Percentage of revenue 28 % 24 % General and administrative expenses increased by $7.8 million, or 24%, for the year ended December 31, 2024 compared to the same period in 2023.
General and Administrative Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) General and administrative $ 48,910 $ 41,049 $ 7,861 19 % Percentage of revenue 31 % 28 % General and administrative expenses increased by $7.9 million, or 19%, for the year ended December 31, 2025 compared to the same period in 2024.
Cloud platform and other purchase commitments are expensed as incurred as services are performed and are in the normal course of business.
Other purchase commitments primarily encompass non-cancellable software agreements to support our internal functions. These expenses are incurred as services are performed and are in the normal course of business.
The following table summarizes our quarterly revenue by groups of similar offerings (in thousands): Year Ended December 31, 2024 2023 Software $ 120,134 $ 112,267 Services 24,707 25,823 Total revenue $ 144,841 $ 138,090 Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, 2024 2023 Change % Change (dollars in thousands) Revenue $ 144,841 $ 138,090 $ 6,751 5 % Total revenue increased by $6.8 million, or 5%, for the year ended December 31, 2024 compared to the same period in 2023.
Comparison of the Years Ended December 31, 2025 and 2024 Revenue Year Ended December 31, 2025 2024 Change % Change (dollars in thousands) Revenue $ 156,849 $ 144,841 $ 12,008 8 % Total revenue increased by $12.0 million, or 8%, for the year ended December 31, 2025 compared to the same period in 2024.
After using and realizing the benefits of our product offerings , our customers can increase usage of our product offerings to cover additional legal matters and adopt more of our offerings. As the amount of enterprise data in our product offerings increases, the strategic value and stickiness of our product offerings within an organization is enhanced.
In addition, we generate revenue from a range of professional services aimed at accelerating the time-to-value for our customers. After using and realizing the benefits of our product offerings , our customers can increase usage of our product offerings to cover additional legal matters and adopt more of our offerings.
These decreases were partially offset by a reduction in capitalized software development of $1.5 million and an increase in software costs of $0.5 million.
The change was primarily driven by an increase of $5.3 million in personnel costs, including stock-based compensation, partially offset by a $0.3 million increase in capitalized software development.
The change in cash flows was primarily related to cash paid for the 2024 share repurchase program of $20.1 million, as well as $0.5 million in cash paid in 2024 for the acquisition of legal workflow products from Congruity.
This change was primarily related to cash paid for the 2024 share repurchase program of $20.1 million. 58 Table of Contents Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with GAAP.
The change in cash flow used in operations was primarily due to an increase in net loss of $13.6 million offset by an impairment charge of $15.2 million related to our primary law intangible asset and the capitalized software development costs associated with the integration of such asset into our product offerings.
The change in cash flow used in operations was primarily due to a decrease in net loss, offset by an impairment charge in 2024 and working capital charges, primarily related to accounts receivable due to timing of collection from our customers, accrued legal loss, and the insurance recoverable receivable related to the accrued legal loss.
Removed
For example, our ediscovery chatbot, Cecilia, which was released in the fourth quarter of 2023 in the United States and in the third quarter of 2024 in Europe.
Added
For example, in March 2025, President Trump issued executive orders against certain law firms with whom we partner, which could have the effect of restricting the ability of such firms to practice law in matters involving the federal government or under the jurisdiction of the federal court system.
Removed
The change was primarily driven by a decrease of $0.4 million in personnel costs, including stock-based compensation, as a result of the expansion of our operations to lower-cost international locations, and a $1.5 million decrease in nonrecurring restructuring charges related to our reductions in force in January and May 2023.
Added
While we have not to date observed any adverse impact to our revenue from these law firm partners as a result of the executive orders, the validity of certain of these executive orders continues to be litigated in the federal court system and we cannot be certain that there will be no future adverse impact on our law firm partners’ usage of our product offerings or that our law firm partners’ clients will continue to engage such firms for their legal services.
Removed
This change was primarily attributable to a $7.9 million increase in personnel costs, including stock-based compensation, as a result of the $7.7 million reversal of stock-based compensation related to the 10-year performance award previously granted to our former CEO (the “CEO Performance Award”) that was cancelled in 2023.
Added
Additionally, under President Trump, certain federal agencies have decreased their levels of enforcement. Finally, as a result of any future shutdowns of the U.S. government, there may be delays in the advancement of litigation in the 49 Table of Contents Federal courts, government investigations or enforcement actions.
Removed
Additionally, professional services increased $1.3 million, of which $0.7 million was due to legal fees related to the stockholder litigation. These increases were partially offset by a $0.6 million decrease in insurance expense and a $0.4 million decrease in nonrecurring restructuring charges related to our reductions in force in January and May 2023.
Added
Any of these factors could have the effect of reducing the volume of major legal matters experienced and, therefore, the usage of our product offerings. The effect of macroeconomic and legal industry conditions may not be fully reflected in our results of operations until future periods.
Removed
We have contractual commitments consisting of operating and finance lease obligations of $10.2 million due over the next four years, as disclosed in Note 7, “Commitments and Contingencies,” in our consolidated financial statements of this Annual Report on Form 10-K .
Added
The change in revenue from existing customers was driven by a $3.0 million decrease in usage of our product offerings, partially offset by contingent revenue recognized of $1.3 million as one of our customers under a contingent arrangement experienced a favorable resolution to their legal matter.
Removed
We also have $18.0 million of non-cancellable cloud platform purchase commitments due in less than one year to support our software. Other purchase commitments include non-cancellable software agreements to support our internal functions. Other purchase commitments are not material.
Added
This change was primarily attributable to an increase of $7.4 million in professional services costs primarily related to legal fees and a legal loss contingency accrual for the securities litigation. In addition, personnel costs 55 Table of Contents increased $2.1 million, including stock-based compensation.
Removed
Additional offsets include the change in stock-based compensation which increased $6.1 million primarily related to the cancellation of the CEO Performance Award in 2023 and the change in accounts receivable which increased $8.5 million related to increased collections from customers.
Added
These increases were partially offset by a $0.8 million decrease in insurance expense and a $0.3 million decrease in acquisition revaluation expense.
Removed
This increase in cash used was partially offset by maturities of short-term investments of $12.7 million and a reduction of purchases in property, equipment, and capitalized development costs of $2.1 million.
Added
Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.
Removed
This was further offset by cash paid in 2023 for the primary law intangible asset of $14.0 million and $1.2 million for the acquisition of legal workflow products from Congruity360, LLC (“Congruity”).
Added
The following table presents our material cash requirements for future periods as of December 31, 2025: Payments Due by Period Less than 1 Year 2-3 Years 4-5 Years Thereafter Total (in thousands) Operating lease commitments (a) $ 2,917 $ 4,403 $ — $ — $ 7,320 Finance lease commitments (b) 47 75 — — 122 Cloud platform purchase commitments (c) 21,990 44,280 11,070 — 77,340 Other purchase commitments (d) 2,574 1,984 — — 4,558 Total $ 27,528 $ 50,742 $ 11,070 $ — $ 89,340 a.
Removed
Additionally, there was a decrease in proceeds from 57 Table of Contents exercises of stock options of $0.5 million due to a decrease in option exercise activity, and a decrease in net proceeds received from the issuance of common stock under the ESPP of $0.9 million. Critical Accounting Estimates Our consolidated financial statements have been prepared in accordance with GAAP.
Added
We occupy certain facilities under non-cancelable lease arrangements. Our New York lease agreement is set to expire in January 2028 and our Austin lease agreement is set to expire in July 2028. We may lease or purchase additional space as needed to accommodate our needs. b. We lease certain furniture and fixtures classified as a finance lease.
Removed
Stock-Based Compensation We account for stock-based compensation in accordance with the authoritative guidance on stock compensation.
Added
The leased furniture is amortized on a straight-line basis over the shorter of the life of the lease or 5 years and is included in depreciation and amortization expense. c. Cloud platform and service purchase commitments encompass non-cancellable agreements to support our software. These expenses are incurred as services are performed and are in the normal course of business. d.

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