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

CS Disco (NYSE:LAW) released its earnings results on Wednesday. The company reported ($0.08) earnings per share 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 firm 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 Stock Up 16.6%

CS Disco stock traded up $0.86 during trading hours on Wednesday, hitting $6.03. The stock had a trading volume of 438,510 shares, compared to its average volume of 308,139. The company has a 50-day moving average of $4.43 and a two-hundred day moving average of $4.22. CS Disco has a fifty-two week low of $2.45 and a fifty-two week high of $9.11. The company has a market cap of $391.47 million, a PE ratio of -9.60 and a beta of 1.80.

Wall Street Analyst Weigh In

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

Insider Activity at CS Disco

In other news, EVP Richard Crum sold 7,426 shares of the business’s stock in a transaction that occurred on Monday, August 17th. The stock was sold at an average price of $4.18, for a total transaction of $31,040.68. Following the sale, the executive vice president directly owned 335,183 shares in the company, valued at approximately $1,401,064.94. The trade was a 2.17% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, EVP Karen Herckis sold 8,487 shares of the company’s stock in a transaction on Monday, August 17th. The shares were sold at an average price of $4.18, for a total value of $35,475.66. Following the completion of the transaction, the executive vice president owned 181,824 shares of the company’s stock, valued at $760,024.32. The trade was a 4.46% 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. Insiders have sold 31,267 shares of company stock worth $130,696 in the last three months. Company insiders own 16.80% of the company’s stock.

CS Disco Company Profile

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.