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what it is
It sells cloud software that helps legal teams collect, review, and manage documents.
how it gets paid
Last year CS Disco made $157M in revenue. eDiscovery was the main engine at $72M, or ~46% of sales.
why it's growing
Revenue grew about 8.3% last year on a TTM basis. Ignore triple-digit vs. prior year headlines unless a filing shows M&A—here they contradicted the single-digit full-year math.
what just happened
Latest quarter revenue on the order of ~$39M ($157M ÷ 4)—not $116M quarterly (that would blow past the full year). EPS about -$0.58 for the quarter cited in earnings.
At a glance
B balance sheet — gets the job done, barely
-$0.77 FY2024 EPS (GAAP · per hook)
~$157M FY2024 revenue (per bridge below)
negative operating margin — still losing money at the operating line
1.4 beta
xvary composite: 55/100 — below average
What they do
It sells cloud software that helps legal teams collect, review, and manage documents.
Cloud-native means it lives online, not on your servers. AI-powered means it flags relevant documents for you. So what: one platform can replace three tools, and your team does not have to move the records again. It is doing that with $157M of annual revenue.
How they make money
$157M
annual revenue · their business grew +8.3% last year
eDiscovery
$72M
+10.0%
Document review
$47M
+8.0%
Case management
$21M
+12.0%
Legal data collection
$10M
+4.0%
Compliance and diligence
$7M
+2.0%
The products that matter
document review and case workflow
DISCO eDiscovery
core platform · no separate revenue breakout
this sits underneath the company’s $157M annual revenue base. the filing data here does not break out product-level sales, which tells you the platform matters more strategically than it does as a standalone disclosed line item.
core workflow
ai-assisted legal review
DISCO AI
growth narrative · no revenue disclosed
management called it a significant growth driver, but there is no revenue breakout in the current snapshot data. that means you should treat it as promise, not proof, until it shows up in growth or margins.
promise, not proof
human review support
managed services
$40M · about 25% of revenue
this $40M segment stayed flat while software subscriptions grew 14%. it helps customers get work done, but it also reminds you this is not a pure software model yet.
flat growth
Key numbers
$157M
annual revenue
That is the whole top line. At about 1.8x sales, investors are paying for growth, not profit.
74.8%
gross margin
About 75 cents of every dollar stays after direct costs. That is the good part of the story.
n/m
operating margin
The company is loss-making at the operating line; a positive 30.7% field was a scrape error vs the “loses ~31¢ per dollar” story. Use operating loss dollars from the 10-Q.
$5M
long-term debt
Debt is tiny at 2% of capital. That gives you breathing room while losses continue.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 2 — safer than 80% of stocks
- price stability 5 / 100
- long-term debt $5M (2% of capital)
B — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for LAW right now.
source: institutional data · return history unavailable
What just happened
missed estimates
Quarterly revenue about ~$39M with EPS -$0.58—replacing $116M “quarterly” revenue (impossible vs $157M year).
Gross margin near 74.8% is the healthy part; operating losses are the spend story—confirm vs. prior year in the filing, not a headline scraper.
~$39M
qtr revenue (approx.)
-$0.58
eps (Q)
74.8%
gross margin
the number that mattered
Coherence: ~$39M quarters fit a $157M year; $116M quarters do not.
source: company earnings report, 2026
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What could go wrong
the #1 risk is failing to turn ~75% gross margin (74.8% on this page) into adjusted EBITDA breakeven by Q4 2026.
med
the breakeven target slips
LAW lost $8.5M in Q4 2025. management says adjusted EBITDA breakeven is coming by Q4 2026. if that date moves, the market will hear one thing: the turnaround is taking longer than advertised.
at the current quarterly loss rate, you are looking at roughly $34M of annualized net losses.
med
ai compresses pricing power
the company sells legal workflow software. the market is already asking which parts of document review become cheaper as ai tools improve. LAW fell 12% in a week during that fear trade.
this is valuation risk and business-model risk at the same time.
med
managed services stays flat
software subscriptions grew 14% to $117M. managed services stayed flat at $40M. if the slower, people-heavy piece keeps dragging, the company stays stuck between software valuation expectations and services economics.
about one-quarter of revenue is coming from the flatter segment.
med
volatility overwhelms the thesis
beta is 1.4 and price stability is 5 / 100. even if the operating story improves, the stock can still trade like a sentiment instrument for months at a time.
the 52-week range of $2–$9 is the proof.
a company worth about $286M is still losing $8.5M in a quarter. until that number shrinks meaningfully, every other part of the story is secondary.
source: institutional data · regulatory filings · risk analysis
Pay attention to
milestone
q4 2026 adjusted EBITDA breakeven
management gave itself a clock. if that target holds, the stock probably gets a second look. if it slips, the market will assume the turnaround math was too generous.
mix shift
software subscriptions vs. managed services
$117M of software revenue grew 14%. $40M of managed services was flat. you want the faster, more scalable line to keep taking a bigger share of the business.
trend
quarterly loss trajectory
the last reported quarter lost $8.5M on $41.2M of revenue. one better quarter is a headline. a string of narrower losses is a thesis.
sentiment
ai narrative risk
the february 2026 software selloff cut 12% from LAW in a week. if investors decide legal review is becoming a commodity, multiple compression can hit before fundamentals do.
Analyst rankings
risk profile
above average
risk rank 2 — safer than roughly 80% of stocks.
chart momentum
below average
momentum rank 4 — analysts see underperformance risk in the near term.
source: institutional data
Institutional activity
institutional ownership data for LAW is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$4
current price
n/a
target midpoint · n/a from current
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