LegalZoom Acquires Virtual Mailbox

Legal technology company LegalZoom has posted its quarterly results and announced the acquisition of Earth Class Mail, a virtual mailbox that allows businesses to access their postal mail online.

The acquisition comes as LegalZoom continues to build out its portfolio of subscription services that will be catered to the businesses that use their services. LegalZoom offers discounts and sign-ups to other services such as Intuit Quickbooks, Brex and Square. 

“We’ve had our eye on the virtual business address space for quite some time,” LegalZoom Chief Executive Dan Wernikoff said in a statement. “As the digital economy continues to fuel new business growth and as many of these businesses have remote-first work environments, small businesses are investing in tools to streamline operations and look more professional. This includes software to manage physical mail.”

LegalZoom customers will soon be able to add the virtual mailbox tool once they form their business and declare a business address. 

The Glendale-based company also announced its third quarter results earlier this week, reporting a net loss of $39.7 million on revenue of $147.9 million. 

On a per-share basis, the company said it had a loss of 20 cents but adjusted for one-time gains and costs, earnings came to 1 cent. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 4 cents a share.

Revenue, however, exceeded expectations. Four analysts surveyed by Zacks expected revenue of $144.5 million.

Subscription revenue was $73.3 million, up 24 percent from a year earlier. LegalZoom had 1,264,000 subscription units as of Sept. 30. In all, 49,000 net units were added in the quarter. Second to subscription revenue was transaction revenue, which accounted for $66.9 million. 

Revenue is expected to be in the range of $575 million to $579 million for the full year. 

“Our transition to subscription continues to outperform as we aggressively build out an ecosystem of products and services to help our customers stay compliant after forming their business,” Wernikoff said. 

Shares of LegalZoom (LZ) closed down 18 cents, or nearly 1 percent, to $19.73 on the Nasdaq on Friday, a day when that exchange closed up 1 percent.