Editor’s Note: From time to time, ComplexDiscovery highlights publicly available or privately purchasable announcements, content updates, and research from cyber, data, and legal discovery providers, research organizations, and ComplexDiscovery community members. While ComplexDiscovery regularly highlights this information, it does not assume any responsibility for content assertions.

To submit recommendations for consideration and inclusion in ComplexDiscovery’s cyber, data, and legal discovery-centric service, product, or research announcements, contact us today.


Background Note: The following announcement shares the 4Q and FY 2022 financial results for eDiscovery provider DISCO and may be of interest to legal, business, and information technology professionals operating or investing in the eDiscovery ecosystem. Additionally, a recent post (August 2022) by Tomasz Tunguz, a venture capitalist with Redpoint, provides an interesting consideration that may be of relevance regarding the value of public software companies. The post, titled Growth is No Longer the Best Predictor of a Software Company’s Value, notes that profitability has surged as the most significant correlate and predictor of a public software company’s value. 

Press Announcement Extract (February 23, 2023)

DISCO Announces Fourth Quarter and Fiscal Year 2022 Financial Results

Fiscal Year 2022 Total Revenue of $135.2 Million, a Year over Year Increase of 18%

CS Disco, Inc. (“DISCO”) (NYSE: LAW) today announced financial results for its fourth quarter and fiscal year ended December 31, 2022.

“Over DISCO’s first 10 years in business, it has been exciting to observe the hundreds of DISCOvians who helped build this company from a lawyer’s side-hustle into a leading legal technology company,” said Kiwi Camara, Co-Founder and CEO of DISCO. “We are excited to embark on our next 10 years as we continue to innovate the legal technology industry and transform the practice of law.”

Fourth Quarter 2022 Financial Highlights:

  • Total revenue was $32.5 million, down 4% compared to the fourth quarter of 2021.
  • GAAP net loss was $18.7 million, compared to $9.1 million in the fourth quarter of 2021.
  • Adjusted EBITDA was ($11.2) million, compared to ($5.3) million in the fourth quarter of 2021.

Fiscal Year 2022 Financial Highlights:

  • Total revenue was $135.2 million, up 18% compared to fiscal year 2021.
  • GAAP net loss was $70.8 million, compared to $24.3 million in fiscal year 2021.
  • Adjusted EBITDA was ($44.5) million, compared to ($16.3) million in fiscal year 2021.

Recent Business Highlights:

  • Built In Best Places to Work 2023: DISCO was recognized for the second consecutive year by Built In Austin in the categories of Austin Best Places to Work, Austin Best Midsize Companies to Work For and Austin Best Paying Companies.
  • DISCO Earns Momentum Leader Status in G2 Winter Report: DISCO was recognized as a leader in G2’s Momentum Grid for eDiscovery. G2 reports are determined directly by user feedback and DISCO was identified as a high performer in multiple categories.
  • DISCO Named Leader in IDC MarketScape: DISCO was recognized as a leader in the IDC MarketScape: Worldwide eDiscovery Review Software 2022 Vendor Assessment. IDC MarketScape identified strengths in DISCO’s scalability and ease-of-use for its customers.

First Quarter and Full Year 2023 Financial Outlook

As of February 23, 2023, DISCO is issuing the following outlook for the first quarter of 2023 and fiscal year 2023:

First quarter of 2023:

  • Revenue in the range of $30.5 – $32.5 million.
  • Adjusted EBITDA in the range of ($16.5) – ($14.5) million.

Fiscal year 2023:

  • Revenue in the range of $135.0 – $145.0 million.
  • Adjusted EBITDA in the range of ($42.0) – ($38.0) million.

DISCO’s first quarter and fiscal year 2023 financial outlook is based on a number of assumptions that are subject to change and many of which are outside of its control. If actual results vary from these assumptions, these expectations may change. There can be no assurance that DISCO will achieve these results.

Reconciliation of Adjusted EBITDA on a forward-looking basis to net loss, the most directly comparable GAAP measure, is not available without unreasonable efforts due to the high variability and complexity and low visibility with respect to the charges excluded from this non-GAAP measure; in particular, the effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in DISCO’s stock price. DISCO expects the variability of the above charges to have a significant, and potentially unpredictable, impact on its future GAAP financial results.

Conference Call Information

DISCO will host a conference call and webcast at 4:00 p.m. CT (5:00 p.m. ET) today, February 23, 2023, to discuss its fourth quarter and fiscal year 2022 financial results and business highlights. The conference call can be accessed by dialing (888) 300-4030 from the United States or +1 (646) 970-1443 internationally with conference ID 8394292. The live webcast of the conference call and other materials related to DISCO’s financial performance can be accessed from DISCO’s investor relations website at ir.csdisco.com.

Following the completion of the call until 10:59 p.m. CT (11:59 p.m. ET) on Thursday, March 16, 2023, a telephone replay will be available by dialing (800) 770-2030 from the United States, +1 (647) 362-9199 internationally with conference ID 8394292. A webcast replay will also be available at ir.csdisco.com for 12 months.

About DISCO

DISCO (NYSE: LAW) provides a cloud-native, artificial intelligence-powered legal solution that simplifies legal hold, legal request, ediscovery, legal document review and case management for enterprises, law firms, legal services providers and governments. Our scalable, integrated solution enables legal departments to easily collect, process and review enterprise data that is relevant or potentially relevant to legal matters.

References to “DISCO,” the “Company,” “our” or “we” in this press release refer to CS Disco, Inc. and its subsidiaries on a consolidated basis.

Read the original announcement.


Complete Announcement with Tables (PDF) – Mouseover to Scroll

DISCO Announces Fourth Quarter and Fiscal Year 2022 Financial Results


Additional Reading

Source: ComplexDiscovery

The post Side-Hustling? DISCO Announces Fourth Quarter and Fiscal Year 2022 Financial Results appeared first on ComplexDiscovery.