CS Disco, Inc. Reports Fourth Quarter and Fiscal Year 2024 Financial Results

CS Disco, Inc. has released its financial results for the fourth quarter and fiscal year ending December 31, 2024. The company, known for its cloud-native, AI-powered legal product offerings, reported a modest increase in revenue but faced significant challenges in terms of net losses.

Financial Highlights

For the fourth quarter of 2024, DISCO reported total revenue of $37.0 million, marking a 4% increase compared to the same period in 2023. Software revenue for the quarter was $30.8 million, up 5% year-over-year. However, the company experienced a GAAP net loss of $25.2 million, a substantial increase from the $5.8 million loss reported in the fourth quarter of 2023. Adjusted EBITDA for the quarter was $(4.3) million, compared to $(1.0) million in the previous year.

For the full fiscal year 2024, total revenue was $144.8 million, a 5% increase from 2023. Software revenue for the year was $120.1 million, up 7% year-over-year. The GAAP net loss for the year was $55.8 million, compared to $42.2 million in 2023. Adjusted EBITDA improved to $(18.7) million from $(25.9) million in the previous year.

Business and Operational Highlights

DISCO reported having 315 large customers, defined as those contributing more than $100,000 in revenue over the past 12 months, up from 289 large customers as of December 31, 2023. The company also introduced new product features, including Reproductions and document-level Bates numbering, aimed at enhancing user experience and operational efficiency.

Strategic Initiatives and Corporate Developments

During the fiscal year, DISCO focused on expanding its product offerings and improving its operational rigor. The company also repurchased common stock worth $20.1 million as part of its share repurchase program.

Management's Perspective

Eric Friedrichsen, DISCO's CEO, commented, "Our customer-focused strategy and improving operational rigor are beginning to show results as we reported a strong end to 2024. We continue to make progress in growing the reach of our platform and extending our relationships with top-tier law firms and corporations."

Future Outlook

For the first quarter of 2025, DISCO expects software revenue to be in the range of $30.1 million to $31.1 million and total revenue to be between $35.0 million and $37.0 million. Adjusted EBITDA is projected to be between $(8.0) million and $(6.0) million. For the full fiscal year 2025, the company anticipates software revenue to range from $124.0 million to $131.0 million, total revenue to be between $145.5 million and $157.5 million, and adjusted EBITDA to be between $(19.0) million and $(15.0) million.

SEC Filing: CS Disco, Inc. [ LAW ] - 8-K - Feb. 20, 2025