The following is a summary of the CS Disco, Inc. (LAW) Q3 2024 Earnings Call Transcript:

Financial Performance:

• CS Disco reported a total Q3 2024 revenue of $36.3 million, reflecting a 4% year-over-year increase.

• Software revenue for Q3 2024 stood at $30.2 million, up 6% compared to the previous year.

• The company reported a negative adjusted EBITDA of $4.5 million, representing a negative 12% EBITDA margin.

Business Progress:

• CS Disco continues to focus on expanding within larger customers and industries with significant eDiscovery needs.

• There were strategic additions to the sales team to accelerate market penetration among larger law firms and corporate customers.

• New product capabilities and continuous enhancement of Cecilia AI are underway to maintain leadership in legal technology solutions.

Opportunities:

• CS Disco is capturing more long-term and larger wallet share from significant annual eDiscovery spenders, including Fortune 500 companies and large practice firms.

• The positive reception of Disco's product line by new and restructuring legal teams in large organizations is generating multiyear contractual commitments.

• Enhanced AI platform 'Cecilia' is recognized for its superiority over competitors, anticipated to drive future adoption and penetration in conservative legal sectors.

Risks:

• CS Disco's shift to focus more on larger clients and deals has led to restructuring, including lay-offs, and refocusing which pose risks if the larger market strategic alignment and execution falter.

• The negative adjusted EBITDA and continued operational losses indicate financial health risks if growth and cost management strategies do not materialize as planned.

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