CS Disco (NYSE:LAW) Releases Earnings Results, Misses Expectations By $0.06 EPS

by · The Markets Daily

CS Disco (NYSE:LAW – Get Free Report) announced its earnings results on Wednesday. The company reported ($0.08) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.02) by ($0.06), Zacks reports. CS Disco had a negative return on equity of 26.58% and a negative net margin of 24.20%. The company had revenue of $45.34 million for the quarter, compared to analyst estimates of $44.78 million.

Here are the key takeaways from CS Disco’s conference call:

  • Revenue growth accelerated: Q3 revenue was $45.3 million, up 15% year over year excluding a prior-year contingent matter, the company’s strongest growth in four years. DISCO raised its FY2026 revenue outlook to $176.1 million–$178.1 million.
  • Profitability improved ahead of plan: Adjusted EBITDA was approximately $79,000 in Q3, one quarter earlier than expected. Management expects Q4 Adjusted EBITDA to be between break-even and $1.5 million.
  • AI adoption and usage grew: Revenue from generative and agentic AI capabilities increased more than 200% year over year, while Auto Review revenue grew more than fourfold. Advanced Research represented 91% of Cecilia Q&A usage in Q3, according to management.
  • The 20%+ growth goal remains an aspiration: Q3 revenue growth was 15%, and management did not specify when the core business might reach its target. Despite the quarterly EBITDA milestone, DISCO still guides to a FY2026 Adjusted EBITDA loss of $5.3 million–$6.8 million.

CS Disco Price Performance

NYSE LAW traded up $0.86 on Wednesday, hitting $6.03. 438,510 shares of the stock were exchanged, compared to its average volume of 308,139. CS Disco has a 52-week low of $2.45 and a 52-week high of $9.11. The company has a market capitalization of $391.47 million, a price-to-earnings ratio of -9.60 and a beta of 1.80. The company’s 50-day moving average price is $4.43 and its two-hundred day moving average price is $4.22.

Insider Buying and Selling

In other news, EVP Karen Herckis sold 8,487 shares of the stock in a transaction on Monday, August 17th. The stock was sold at an average price of $4.18, for a total value of $35,475.66. Following the completion of the sale, the executive vice president owned 181,824 shares in the company, valued at $760,024.32. This represents a 4.46% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, EVP Melanie Antoon sold 8,514 shares of the firm’s stock in a transaction dated Monday, August 17th. The stock was sold at an average price of $4.18, for a total value of $35,588.52. Following the sale, the executive vice president owned 267,507 shares of the company’s stock, valued at $1,118,179.26. The trade was a 3.08% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last three months, insiders have sold 31,267 shares of company stock valued at $130,696. 16.80% of the stock is currently owned by company insiders.

Analyst Ratings Changes

Separately, Weiss Ratings reissued a “sell (d-)” rating on shares of CS Disco in a research note on Tuesday, September 29th. Two equities research analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the company’s stock. According to MarketBeat, CS Disco has a consensus rating of “Hold” and a consensus price target of $8.00.

Check Out Our Latest Research Report on CS Disco

CS Disco Company Profile

(Get Free Report)

CS Disco, Inc (NYSE: LAW) is a legal technology company that provides cloud-based software and services for law firms, corporations and government organizations. Its platform is designed to help legal teams manage litigation and investigations, organize large volumes of data and streamline document-intensive legal workflows.

The company’s products support electronic discovery, including the collection, processing, hosting, review and analysis of electronically stored information. DISCO’s technology uses automation and artificial intelligence to assist with tasks such as document review, information retrieval and case preparation.

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