Q2 2025 CS Disco Inc Earnings Call

All of US are in a listen only mode. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question press the pound key.

I now like to hand, the conference over to your first speaker today head of Investor Relations.

Speaker #1: Ladies and gentlemen, thank you for standing by and welcome to CS Disco's second quarter fiscal year 2025 conference call. At this time, all participants are in a listen-only mode.

Aleksey lots of carve. Please go ahead.

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question press star followed by the number one on your telephone keypad.

Good afternoon, and thank you for joining us on today's conference call to discuss the financial results for <unk> second quarter of fiscal year 2025 with me on todays call are Eric Friedrichsen, physical Chief Executive Officer, and Michael look there this was chief financial Officer.

Speaker #1: If you would like to withdraw your question, press the pound key. I would like to now like to hand the conference over to your first speaker today, head of investor relations, Aleksey Lakchakov.

Today's call will include forward looking statements within the meaning of the Safe Harbor provisions of the private Securities Litigation Reform Act of 1095, including but not limited to statements regarding our financial outlook and future performance or future capital expenditures market opportunity and market position product and go to market strategies and growth opportunities in the <unk>.

Speaker #1: Please go head.

Speaker #2: Good afternoon and thank you for joining us on today's conference call to discuss the financial results for Disco's second quarter of fiscal year 2025.

<unk> of our product offerings and developments in the legal technology industry. In addition to our prepared remarks, our earnings press release, SEC filings and a replay of today's call can be found on our Investor Relations website at IR <unk> Dot com.

Speaker #2: With me on today's call are Eric Friedrichsen, Disco's chief executive officer, and Michael Lafair, Disco's ief financial officer. Today's call will include forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding our financial outlook and future performance, our future capital expenditures, market opportunity, market position, product and go-to-market strategies, and growth opportunities, and the benefits of our product offerings and developments in the legal technology industry.

Forward looking statements involve known and unknown risks and uncertainties that may cause our actual results performance or achievements to be materially different from those expressed or implied by the forward looking statements forward looking statements represent our management's beliefs and assumptions only as of the date made information on factors that could affect the company's financial results as <unk>.

<unk> and its filings with the SEC from time to time, including the section titled Risk factors in the company's annual report on Form 10-K for the year ended December 31 2024.

Speaker #2: In addition to our prepared remarks, our arnings press release, SEC filings, and a replay of today's call can be found on our investor relations website at ir.csdisco.com.

Filed with the SEC on February 28, 2025.

Speaker #2: Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements.

The companys upcoming quarterly report on Form 10-Q for the quarter ended June 32025.

In addition, during today's call we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP.

Speaker #2: Forward-looking statements represent our management's beliefs and assumptions only as of the date made. Information on factors that could affect the company's financial results is included in its filings with the SEC from time to time, including the section settled risk factors in the company's annual report on Form 10K for the year ended December 31st, 2024, filed with the SEC on February 20th, 2025, and the company's upcoming quarterly report on Form 10Q for the quarter ended June 30th, 2025.

Conciliation between GAAP, and non-GAAP financial measures and a discussion of the limitations of using non-GAAP measures versus their closer to GAAP equivalent is available in our earnings release and with that I'd like to turn the call over to Eric.

Good afternoon, everyone I'm very happy to report <unk> second quarter of fiscal year 2025 results.

Speaker #2: In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and at a substitute for or superior to measures of financial performance prepared in accordance with GAAP.

Over the past few quarters, we have discussed the changes that we're making to accelerate growth and achieve sustainable profitability for desktop.

And we are now starting to see some of the benefits from those changes.

Speaker #2: For reconciliations between GAAP and non-GAAP financial measures and a discussion of the limitations of using non-GAAP measures versus their closest GAAP equivalent is available in our arnings release.

Software revenue in Q2 was $32 $7 million up 12% year over year.

Total revenue in Q2 was $38 1 million up 6% year over year.

Speaker #2: And with that, I'd like to turn the call over to Eric.

Speaker #3: Good afternoon, everyone. I'm very happy to report Disco's second quarter of fiscal year 2025 results. Over the past few quarters, we have discussed the changes that we're making to accelerate growth and achieve sustainable profitability for Disco.

Adjusted EBITDA for Q2 was negative $2 $7 million.

Representing an adjusted EBITDA margin of negative 7%, which.

Which is a $2 million improvement over Q2 of 2024.

Speaker #3: And are now starting to see some of the benefits from those changes. Software revenue in Q2 was 32.7 million, up 12% year over year.

We finished the quarter with $114 $5 million of cash and short term investments.

And no debt.

We are pleased with the acceleration of growth this quarter.

Speaker #3: And total revenue in Q2 was 38.1 million, up 6% year over year. Adjusted EBITDA for Q2 was negative 2.7 million, representing an adjusted EBITDA margin of negative 7%.

As we have mentioned previously we are focused on targeting customers with larger ediscovery wallets and larger matters and that focus is starting to pay off.

We saw strong growth stemming from increased usage on our platform and expansion of multi terabyte matters.

Speaker #3: Which is a $2 million improvement over Q2 of 2024. We finished the quarter with 114.5 million of cash and short-term investments, and no debt.

We ended Q2 with 323 customers, who each contributed more than $100000 in total revenue over the last 12 months.

Up 6% year over year.

The story this quarter continues to be the execution of our strategy.

Speaker #3: We are pleased with the acceleration of growth this quarter. As we have mentioned previously, we are focused targeting customers with larger e-discovery wallets and larger matters and that focus is starting to pay off.

Based on the changes that we made to the business. We are pleased to see the type of results that we're reporting today.

Notably the growth of multi terabyte matters.

Speaker #3: We saw strong growth stemming from increased usage on our platform and expansion of multi-terabyte matters. We ended Q2 with $323 customers who each contributed more than $100,000 in total revenue over the last 12 months.

However, this is only the start of what I believe is a much broader improvement.

I believe that the value proposition that we're bringing to the market in with you. In every case is a chief reason for our improved results.

Speaker #3: Up 6% year over year. The story this quarter continues to be the execution of our strategy. Based on the changes that we made to the business, we are pleased to see the type of results that we're reporting today.

To remind you with you in every case captures the essence of how <unk> is shaping the future of litigation.

Our industry, leading platform equips legal teams with tools not previously available to the legal world.

Speaker #3: Notably, the growth of multi-terabyte matters. However, this is only the start of what I believe is a much broader improvement. I believe that the value proposition that we'll bring into the market in with you in every case is a chief reason for our improved results.

And when paired with our expert services team, we're enabling customers to tackle the most complex high stakes matters with confidence.

This value proposition is embedded in our marketing sales product and operations, ensuring that our customers understand the full value of what <unk> can offer them.

Speaker #3: To remind you, with you in every case captures the essence of how Disco is shaping the future of litigation. Our industry-leading platform equips legal teams with tools not previously available to the legal world.

To that end, we believe with you in every case is enabling faster revenue growth of our E discovery and adjacent products.

Growth of large customers.

Speaker #3: And when paired with our expert services team, we're abling customers to tackle the most complex, high-stakes matters with confidence. This value proposition is embedded in our marketing, sales, products, and operations, ensuring that our customers understand the full value of what Disco can offer them.

And increasing the number of multi terabyte matters on our platform.

Also.

It's enabling improved operations.

Allowing us to be faster more adaptable and business friendly with few organizational silos.

All of this ultimately allows us to provide a better product to our customers and drive revenue in a more efficient manner.

Speaker #3: To that end, we believe with you in every case is enabling faster revenue growth of our e-discovery and adjacent products, growth of large customers, and increasing the number of multi-terabyte matters on our platform.

Let me touch on that with a bit more detail.

This quarter, we saw strong growth in both the quantity of multi terabyte matters as well as software revenue generated from these matters.

These are some of the most complex litigation matters in the world and require exceptional enterprise grade performance from our product and complete trust in our services and customer support teams.

Speaker #3: Also, it's enabling improved operations, allowing us to be faster, more adaptable, and business-friendly with few organizational silos. All of this ultimately allows us to provide a better product to our customers and drive revenue in a more efficient manner.

One example, I want to highlight is the work we did for a chambers recognized national full service law firm.

This customer approached us with a complex and urgent issue.

Speaker #3: Let me touch on that with a bit more detail. This quarter, we saw strong growth in both the quantity of multi-terabyte matters as well as software revenue generated from these matters.

One of their matters involved a large volume of data from their clients corrupted email environment.

There was no readily available software that could recover the data and the original software vendor had been long out of business.

Speaker #3: These are some of the most complex litigation matters in the world and require exceptional enterprise-grade performance from our product and complete trust in our services and customer support teams.

To add to that issue of the data was in a nonstandard format.

The customer approach other providers have told them that the data was not salvageable a disco took this on as a challenge.

Speaker #3: One example I want to highlight is the work we did for a Chambers-recognized national full-service law firm. This customer approached us with a complex and urgent issue.

Our engineering forensics and data operations teams work together to recover the data establish a solution capable of supporting the dataset identified a method to access this data for them, including supporting decades old software and.

Speaker #3: One of their matters involved a large volume of data from their client's corrupted email environment. There was no readily available software that could recover the data and the original software vendor had been long out of business.

And migrated it into a fully searchable and modern functional environment within disco.

Speaker #3: To add to that issue, the data was in a non-standard format. The customer approached other providers who told them that the data was not salvageable.

The result was a client that found a solution to a seemingly insurmountable problem and a 10 terabyte 43 million document matter added to disco.

Speaker #3: But Disco took this on as a challenge. Our engineering forensics and data operations teams worked together to recover the data and established a solution capable of supporting the data set identified a method to access this data for them including supported decades-old software and migrated it into a fully searchable and modern functional environment within Disco.

Another example is our success with an am law 100 firms.

Historically this firm leaned on one of our competitors for E discovery.

We had a limited relationship with them going back to 2022, and 2023 that changed this year.

Our sales and project management teams engaged closely with multiple groups within the firm demonstrating the power of our platform, particularly in large complex matters and showcasing the differentiated value of our generative AI offerings, including Cecilia and order review.

Speaker #3: The result was a client that found a solution to a seemingly insurmountable problem and a 10-terabyte 43 million document matter added to Disco. Another example is our success with an AMLAW 100 firm.

Along with our broader services capabilities.

Speaker #3: Historically, this firm leaned on one of our competitors for e-discovery. While we had a limited relationship with them going back to 2022 and 2023, that changed this year.

As a result, the expanded adoption of disco launching several new matters to leverage our AI capabilities.

Given the volume of high Stakes litigation involved we see this as the beginning of a strategic partnership with a meaningful long term potential.

Speaker #3: Our sales and project management teams engaged closely with multiple groups within the firm demonstrating the power of our platform, particularly in large, complex matters and showcasing the differentiated value of our generative AI offerings including Cecilia and AutoReview, along with our broader services capabilities.

Each of these is an example of our team collaborating across multiple departments in unison to deliver an amazing outcome for our customer showcasing that disco is truly with you in every case.

Supporting our customers in this matter is key to achieving our goals.

Speaker #3: As a result, they expanded adoption of Disco launching several new matters to leverage our AI capabilities. Given the volume of high-stakes litigation involved, we see this as beginning of a strategic partnership with a meaningful long-term potential.

We have continued to tighten operations across all areas.

Within sales and marketing, we continued to enhance our talent pool and allocate resources to customers with the highest wallet share opportunity and within our ideal customer profile.

Speaker #3: Each of these is an example of our team collaborating across multiple departments in unison to deliver an amazing outcome for our customer. Showcasing that Disco is truly with you in every case supporting ur customers in this matter is key to achieving our goals.

I am very pleased by the talent that we've attracted to disco in the past few months, particularly reps with a history of selling successfully to enterprise grade customers.

We further continue to invest in our customer success teams, including bringing on a new highly experienced leader for that organization as well as experienced talent.

Speaker #3: We have continued to tighten operations across all areas. Within sales and marketing, we continue to enhance our talent pool and allocate resources to customers with the highest wallet share opportunity and within our ideal customer profile.

And finally, we've made changes to our lead generation teams.

Shifting from a focus on account qualification to a more strategically aligned territory based account orchestration model.

Speaker #3: I am very pleased by the talent that we've attracted to Disco in the past few months. Particularly reps with a history of selling successfully to enterprise-grade customers.

This quarter, we saw very concrete progress and our strategic approach.

But it is only the start I am optimistic that the steps we are taking operationally, we will continue to accelerate our revenue growth.

Speaker #3: We further continue to invest in our customers' success team including bringing on a new highly experienced leader for that organization as well as experienced talent.

Within the product side, we remain focused on releasing AI and core capabilities that help customers with their complex matters.

Speaker #3: And finally, we've made changes to our lead generation team, shifting from a focus on account qualification to a more strategically aligned, territory-based account orchestration model.

We are starting to see some nice uplift and growth.

In these products.

This quarter, we are proud to have brought disco autumn review capabilities to the EU and UK markets.

Speaker #3: This quarter, we saw very concrete progress in our strategic approach. But it's only the start. I am optimistic that the steps we are taking operationally will continue to accelerate our revenue growth.

Where we are already seeing strong interest.

With auto review clients are now capable of reviewing up to 32000 documents per hour.

At that rate Auto review can tag as many documents in a single day as what would take a 20 person review team over three months to accomplish.

Speaker #3: Within the product side, we remain focused on releasing AI and core capabilities that help customers with their complex matters. We are starting to see some nice uplift and growth in these products.

And it's not only fast it's accurate.

Our review has been delivering precision and recall metrics exceeding 90% in many cases much better than the industry standard of 75% for recall.

Speaker #3: This quarter, we are proud to have brought Disco AutoReview capabilities to the EU and UK markets. Where we are already seeing strong interest. With AutoReview, clients are now capable of reviewing up to 32,000 documents per hour.

We have seen several clients experienced the power of this technology and practice and are excited for the future growth of this capability.

Speaker #3: At that rate, AutoReview can tag as many documents in a single day as what would take a 20-person review team over three months to accomplish.

We launched <unk> in 2023 as the first to market solution capable of answering lawyer questions in real time based on the data and their proprietary databases.

Speaker #3: And it's not only fast, it's accurate. AutoReview has been delivering precision and recall metrics exceeding 90% in many cases. Much better than the industry standard of 75% for recall.

In the first half of the year, we saw 150% growth in multi terabyte matters, leveraging Cecilia from where we ended 2024.

We've observed that the largest matters are also finding the most use of this product and for good reason.

Speaker #3: We have seen several clients experience the power of this technology in practice. And are excited for the future growth of this capability. We launched Cecilia in 2023 as the first to market solution capable of answering lawyer questions in real time based on the data in their proprietary databases.

The largest matters often have the largest legal teams and the most sensitive and complex topics.

We're a solution like to see it can make a lawyer job much easier and more effective.

While we are seeing lawyers use affiliate defined key documents and received fast case related answers. We're also seeing them use of Celia and more unique situations like during a live trial to help question a witness for.

Speaker #3: In the first half of the year, we saw 150% growth in multi-terabyte matters leveraging Cecilia from where we ended 2024. We've observed that the largest matters are also finding the most use of this product and for good reason.

Preparing for depositions or.

We're helping understand unfamiliar terms and concepts.

Speaker #3: The largest matters often have the largest legal teams and the most sensitive and complex topics. Where a solution like Cecilia can make a lawyer's ob much easier and more effective.

I also want to highlight our core E discovery capability, we launched into crawl called searchable Avi transcriptions.

This capability allows customers to automatically convert audio and video files into searchable renewable taxed.

Speaker #3: While we are seeing lawyers use Cecilia to find key documents and receive fast case-related answers, we are also seeing them use Cecilia in more unique situations.

This streamlines the review process.

Reduces manual error and empowers attorneys to quickly identify relevant facts.

Speaker #3: Like during a live trial to help question a witness, preparing for depositions, or helping understand unfamiliar terms and concepts. I also want to highlight a core e-discovery capability we launched into Crawl called Searchable AV Transcriptions.

Reviewers can view transcribed content side by side with original media.

Integrated with Cecelia dock summaries and Q&A.

And as targeted questions to drive faster more accurate analysis.

We continue to release capabilities like this and others every quarter, allowing our customers to find key evidenced quickly and efficiently and to make <unk> the ideal platform for managing large complex matters.

Speaker #3: This capability allows customers to automatically convert audio and video files into searchable, reviewable text. This streamlines the review process, reduces manual error, and empowers attorneys to quickly identify relevant facts.

Finally, being a customer focused organization means breaking down silos to create efficiency across our operations.

Speaker #3: Reviewers can view transcribed content side by side with original media. Integrate it with Cecilia doc summaries and Q&A and ask targeted questions to drive faster and more accurate analysis.

And our legal department, we assessed our contracting approach and slimmed, our standard contract by more than 50%, while maintaining standard risk in other terms for disco.

Speaker #3: We continue to release capabilities like this and others every quarter allowing our ustomers to find key evidence quickly and efficiently and to make Disco the ideal platform for managing large, complex matters.

While this may not sound revolutionary simplifying legal contracts has significantly reduced bottlenecks in the sales process and help to minimize friction points for customers.

These kinds of changes make us a more approachable efficient company to do business with.

Speaker #3: Finally, being a customer-focused organization means breaking down silos to create efficiency across our operations. And our legal department, we assessed our contracting approach and slimmed our standard contract by more than 50%.

And human resources remain meaningful progress in several areas, including automating HR processes related to the year end compensation and performance reviews.

Any of these legacy processes were time consuming a distracting to our teams.

Speaker #3: While maintaining standard risk in other terms for Disco. While this may not sound revolutionary, simplifying legal contracts has significantly reduced bottlenecks in the sales process.

By making administrative tasks faster.

And the overall year end process more transparent we are reducing distractions from the business.

Speaker #3: And helped minimize friction points with customers. These kinds of changes make us a more approachable, efficient company to do business with. In human resources, we made meaningful progress in several areas.

In summary, this quarter was about execution of our strategy.

We saw meaningful acceleration in our software business.

We are seeing continued adoption of Cecilia.

We are excited about the traction of auto reviews.

Speaker #3: Including automating HR processes related to the year-end compensation and performance reviews. Many of these legacy processes were time-consuming and distracting to our teams. By making administrative tasks faster and the overall year-end process more transparent, we are reducing distractions from the business.

The strategic changes that we made in recent quarters across nearly every area of the business from how do we go to market, how we support our customers to how we operate internally are starting to bear fruit.

We are confident in the strategy that we have set and the alignment that we've achieved across our teams.

Speaker #3: In summary, this quarter was about execution of our strategy. We saw meaningful acceleration in our software business. We are seeing continued adoption of Cecilia and we are excited about the traction of AutoReview.

While there's more work ahead, we are confident in our ability to execute.

And at the foundation that we're laying today will drive sustainable growth and increase efficiency going forward.

Before I turn it over to Michael to go over the financials I'd like to take a moment to address the news that we shared in our earnings press release that Michael will be stepping down from his role as CFO at the end of this year.

Speaker #3: The strategic changes that we made in recent quarters across nearly every area of the business from how do we go to market to how we support our customers to how we operate internally are starting to bear fruit.

We have initiated a search for our next CFO and Michael will remain at the helm until the end of the year unless a successor is appointed sooner.

Speaker #3: We are confident in the strategy that we have set and the alignment that we've ieved across our teams. While there's more work ahead, we are confident in our ability to execute and that the foundation that we're laying today will drive sustainable growth and increased efficiency going forward.

Since joining the company in 2018, Michael has played a critical role in transforming disco from an early stage startup to a successful public company, leading disco through multiple private funding rounds.

Speaker #3: Before I turn it over to Michael to go the financials, I'd like to take a moment to address the news that we shared in our earnings press release that Michael will be stepping down from his role as CFO at the end of this year.

Our IPO and our secondary offering.

I cannot thank Michael enough for all he has done so far for disco.

Speaker #3: We have initiated a search for our next CFO and Michael will remain at the helm until the end of the year unless a successor is appointed sooner.

Im looking forward to continuing to work with him over the next several months as we complete the search and transition process.

With that I'll now turn it over to Michael.

Speaker #3: Since joining the company, in 2018, Michael has played a critical role in transforming Disco from an early-stage startup to a successful public company. Leading Disco through multiple private funding rounds, our IPO, and our secondary offering.

Michael.

Thanks, Eric.

Tiny Cisco has been an amazing journey and it is a privilege to work alongside such a talented and dedicated team.

I'm immensely proud of what we've been able to achieve to this point I feel that <unk> is in a great position for this transition and I am looking forward to working with Eric and the team over the next few months to deliver great results and to complete the search for and transition to my successor and now for our Q2 financial results.

Speaker #3: I cannot thank Michael enough for all he has done so far for Disco and I looking forward to continuing to work with him over the next several months as we complete the search and transition process.

Speaker #3: With that, I'll now turn it over to Michael. Michael?

In Q2, 2025 total revenues were $38 1 million up 6% year over year.

Speaker #4: Thanks, Eric. My time at Disco has been an amazing journey. And it is a privilege to work alongside such a talented and dedicated team.

Software revenues were $32 7 million up 12% year over year and software we saw strong growth stemming from net new usage on our platform and expansion of multi terabyte matters.

Speaker #4: I'm immensely proud of what we have been able to achieve to this point. I feel that Disco is in a great position for this transition and I'm looking forward to working with Eric and the team over the next few months to deliver great results and to complete the search for and transition to my successor.

Our software performance exceeded the high end of our guidance, while total revenue came in towards the top end of our guidance. The big drivers. This quarter were our E discovery product, where we saw growth largely from a net increase of multi terabyte matters and contribution from Cecilia, which is starting to have a nice uplift.

Speaker #4: And now for our Q2 financial results. In Q2 2025, total revenues were 38.1 million up 6% year over year. Software revenues were 32.7 million up 12% year over year.

On our software growth, especially as case teams with larger matters tend to be stronger consumers of Cecilia.

Speaker #4: In software, we saw strong growth stemming from net new usage on our platform and expansion of multi-terabyte matters. Our software performance exceeded the high end of our guidance.

Services revenues, which include disco manager review and professional services were $5 4 million, we continue to see softness in our review business. However, we are starting to see growth within auto review, where we remain optimistic.

Speaker #4: While total revenue came in towards the top end of our guidance. The big drivers this quarter were our e-discovery product where we saw growth largely from a net increase of multi-terabyte matters in contribution from Cecilia, which is starting to have a nice uplift on our software growth, especially as case teams with larger matters tend to be stronger consumers of Cecilia.

In discussing the remainder of the income statement. Please note that unless otherwise specified all references to our gross margin operating expenses and net loss are on a non-GAAP basis.

Adjusted EBITDA is also a non-GAAP financial measure.

Speaker #4: Services revenues, which include Disco manager review and professional services, were 5.4 million. We continue to see softness in a review business. However, we are starting to see growth within AutoReview where we remain optimistic.

Our gross margin in Q2 was 76% as we mentioned before our gross margins fluctuate from period to period based on the nature of our customers' usage for example, the amount and types of data ingested and managed on our platform.

Speaker #4: In discussing the remainder of the income statement, please note that unless otherwise specified, all references to our gross margin, operating expenses, and net loss are on a non-GAAP basis.

Sales and marketing expense for Q2 was $13 8 million or 36% of revenue compared to 40% of revenue in Q2 of the prior year.

The year over year dollar decline is predominantly due to lower employee and marketing expenses.

Speaker #4: Adjusted EBITDA is also a non-GAAP financial measure. Our gross margin in Q2 was 76%. As we mentioned before, our gross margins fluctuate from period to period based on the nature of our customers' usage, for ample, the amount and types of data ingested and managed on our platform.

Research and development expense for Q2 was $11 7 million or 31% of revenue compared to 30% of revenue in Q2 of the prior year. This increase was primarily driven by an increase in research and development talent to support our innovation.

Speaker #4: Sales and marketing expense for Q2 was 13.8 million, or 36% in revenue compared to 40% of revenue in Q2 of the prior year. The year-over-year dollar decline is predominantly due to lower employee and marketing expenses.

General and administrative expense in Q2 was $7 2 million or 19% of revenue compared to 22% of revenue in Q2 of the prior year.

Operating loss in Q2 was $3 8 million, representing an operating margin of negative 10% compared to negative 17% in Q2 of the prior year. Adjusted EBITDA was negative $2 7 million in Q2, representing an adjusted EBITDA margin of negative 7% compared to an adjusted EBITDA margin of negative.

Speaker #4: Research and development expense for Q2 was 11.7 million, or 31% of revenue compared to 30% of revenue in Q2 of the prior year. This increase was primarily driven by an increase in research and development talent to support our innovation.

<unk>, 13% in Q2 of the prior year. This represents a beat of the high end of the guidance range, we provided last quarter and $2 million year over year improvement.

Speaker #4: General and administrative expense in Q2 was 7.2 million, or 19% of revenue compared to 22% of revenue in Q2 of the prior year. Operating loss in Q2 was 3.8 million, representing an operating margin of negative 10% compared to negative 17% in Q2 of the prior year.

Net loss in Q2 was $2 8 million or negative 7% of revenue compared to a net loss of $4 4 million or negative 12% of revenue in Q2 of the prior year net loss per share for Q2 was <unk> <unk> compared to <unk> <unk> per share for Q2 of the prior year.

Speaker #4: Adjusted EBITDA was negative 2.7 million in Q2, representing an adjusted EBITDA margin of negative 7% compared to an adjusted EBITDA margin of negative 13% in Q2 of the prior year.

Turning to the balance sheet and cash flow statement, we ended Q2 with $114 $5 million in cash and short term investments and no debt operating cash flow through the first two quarters of 2025 was negative $14 7 million compared to negative 8.01 million in the same period of the year prior.

Speaker #4: This represents a beat of the high end of the guidance range we've provided last quarter and 2 million year over year improvement. Net loss in Q2 was 2.8 million, or negative 7% of revenue compared a net loss of 4.4 million or negative 12% of revenue in Q2 of the prior year.

Turning to the outlook for Q3 2025, we are providing total revenue guidance in the range of $37 5 million $39 $5 million and software revenue guidance in the range of $32 75 million to $33 $75 million, we expect adjusted EBITDA to be in the range of negative.

Speaker #4: Net loss per share for Q2 was 4 cents compared to 7 cents per share for Q2 of the prior year. Turning to the balance sheet and cash flow statement, we ended Q2 with 114.5 million in cash and short-term investments and no debt.

5 million to negative $3 million.

Speaker #4: Operating cash flow for the first two quarters of 2025 was negative 14.7 million, compared to negative 8.0 million in the same period of the year prior.

For fiscal year 2025.

We are providing total revenue guidance in the range of $148 million to $158 million and software revenue guidance in the range of $128 million $234 million, we expect adjusted EBITDA to be in the range of negative $17 million.

Speaker #4: Turning to the outlook, for Q3 2025, we are providing total revenue guidance in the range of 37.5 million and 39.5 million in software revenue guidance in the range of 32.75 million to 33.75 million.

<unk> 13 million.

Our fiscal year 2025 guidance for total revenue.

Speaker #4: We expect adjusted EBITDA to be in the ange of negative 5 million to negative 3 million. For fiscal year 2025, we are providing total revenue guidance in the range of 148 million to 158 million.

Software revenue and adjusted EBITDA represents an increase of 1 million $2 5 million and $1 5 million respectively. At the midpoint from our guidance last quarter now I would like to turn the call over to the operator to open up the line for Q&A operator.

Speaker #4: In software revenue guidance in the range of 128 million to 134 million. We expect adjusted EBITDA to be in the range of negative 17 million to negative 13 million.

Again to ask a question simply press star followed by the number one on your telephone keypad and we'll pause for just a moment to compile the Q&A roster.

Speaker #4: Our fiscal year 2025 guidance for total revenue software revenue and adjusted EBITDA represents an increase of 1 million to 2.5 million and 1.5 million respectively at the midpoint from our guidance last quarter.

Our first question comes from the line of D. J Hynes with Canaccord Genuity. Please go ahead.

Okay.

Congrats on the quarter.

So I know there's been this push for with you in every case and sort of raising the awareness around the holistic offering to the platform and service capabilities.

Speaker #4: Now I'd like to turn the call over to the operator to open up the line for Q&A. Operator?

Are you thinking of services and.

Speaker #1: Again, to ask a estion, simply press star followed by the number one on our telephone keypad. We will pause for just a moment to compile the Q&A roster.

Kind of working with clients is like a tip of the sphere for new customer acquisition or more expansion within the existing restaurants.

Speaker #1: Our first question comes from the line of DJ Hines with Canaccourt Genuity. Please go head.

Yeah. Thanks T. J, let me tell you how I think about services, we're more specifically with you in every case because with every case is really about being able to support our customers with whatever they need for their largest and most complex cases.

Speaker #5: I think that's in the quarter. So I ow that there's been this push for the with you in every case and a sort of raising this awareness around, you know, the holistic offerings of the platform and service capabilities.

And when we really dug in and met with our customers over the last several quarters to try to determine.

Speaker #5: Are you thinking of, you ow, services and, you ow, kind of working with clients as like a tip of the spear for new customer acquisition or more expansion within the existing customers?

In situations, where they're not putting their largest cases into desk.

Why aren't they doing that and at the.

The most common reason that we heard was that they needed to leverage services are needed the access to services.

Speaker #6: Yeah, thanks, DJ. Let me tell you how I think services or we're more specifically with you in every case because with you in every case is really about being able to support our ustomers with whatever they need for their largest and most complex cases.

Typically it can be project management forensics ingestion type services.

And so we recognized that we needed to do a much better job educating the market that we have those types of services capabilities.

Speaker #6: And, you ow, when we really dug in and met with our customers over the last several quarters to try to determine in situations where they're putting their largest cases into Disco, why aren't they doing that?

We've seen great results, increasing our software revenue specifically related to doing better education around that exact topic last quarter I shared an example of a customer that I met with in the U K in February once we educated them about their services they tripled their software revenue with us.

Speaker #6: And the most common reason that we heard was that they needed to leverage services or they needed the access to services. And that, you know, typically could be project management, forensics, ingestion-type services, and so we recognized that we needed to do a much better job educating the market that we have those types of services capabilities.

In the first three months after that.

Since then they've doubled again.

And so that's just an example, and there's many examples across the board where by educating customers that we have these types of services available. They are more inclined to leverage us. So we're not trying to promote our services, we're not trying to drive up our services revenue that's not in the least that the point.

Speaker #6: And we've seen great results in increasing our software revenue, specifically related to doing better education around that exact topic. I, you know, last quarter, I shared an example of a customer that I met with in the UK in February where once we educated them about their services, they tripled their software revenue with us in the first three months after that.

<unk> is we're with them and whether they leverage our services, whether they leverage a partner's services or whether they leverage their internal services. Some of the bigger law firms have centralized medication support teams with centralized E. Discovery teams that can serve them really well and we can support those teams.

Speaker #6: Since then, they've ubled again. And so that's just an example and there's many examples across the board where by educating customers that we have these types of services available, they're more inclined to leverage us.

But again, it's not about driving up the software revenue its about driving up I'm, sorry, it's not about driving up the services revenue, it's about helping our customer and driving up our software revenues.

Speaker #6: So we're not trying to promote our services. We're not ying to drive up our services revenue. That's not in least bit the point. The point is we're with them.

Okay got you and then maybe a quick follow up for Michael.

So we have your target for.

Speaker #6: And whether they leverage our services, whether they leverage a partner's services, or whether they leverage their internal services, some of the bigger law firms have centralized litigation support teams or centralized e-discovery teams that can serve them really well, and we can support those teams.

I know there is still probably about six six quarters give or take away from the quarterly EBITDA targets you gave us.

But it still sounds like you guys are working to implement a couple changes operationally. So do you think achieving these targets is going to hinge more on an inflection in revenue growth or do you think the operational improvements so that's going to get us there.

Speaker #6: But again, it's not about driving up the software revenue. It's about driving up, 'm sorry, it's not about driving up the services revenue. It's helping our customer and driving up our software revenues.

So P. J that's a good question.

Speaker #5: Okay. Gotcha. And then maybe a quick follow-up for Michael. So, you know, we have your target for, you know, I know we're probably about six quarters, give take away from the quarterly EBITDA targets you ave us.

The guy that the feedback we've provided previously and we're standing by that feedback is.

Our goal is to be adjusted EBITDA positive or breakeven in Q4 of 2026 and we that.

Speaker #5: But it still sounds like you guys are working to implement a couple of es operationally. So do you think, you know, achieving these targets is going to hinge more on an inflection in revenue growth or do you think operational prudence is what's going to get us there?

That is that it continues to be the goal and it obviously there is revenue growth growth assumptions in that from an expense structure. We're planning on keeping our expenses relatively the same there might be a modest uptick in certain departments.

Speaker #6: So DJ, that's a good question. I, you know, the guy, the feedback we've provided previously and we're standing by that feedback is our goal is to be adjusted EBITDA positive or break even in Q4 of 2026.

But most of what we're doing on the expense side is primarily reallocation in areas of the business that will drive that we continue to believe will drive growth.

And that we've been doing over the last couple of quarters.

And just to add on to that I mean I'm extremely.

Speaker #6: And we that is that it continues to be the goal and it obviously there's revenue growth, growth assumptions in that from an expense structure.

Pleased that we were able to beat the high end of our.

Our EBIT guidance in Q2 pretty considerably.

Look I think this business can be at 20% plus grower.

Speaker #6: We're planning on keeping our expenses relatively the same. There might be a modest uptick in certain departments. But most of what 're doing on the expense side is primarily reallocation in areas of the business that will drive that we continue to believe will drive growth.

We're charting our path towards that.

Part of that is going to involve continuing with some of the investments that we have committed to around building out things like customer success.

Sales enablement, finishing.

Finishing up the implementation of our quote to cash system and these are just critical investments that need to be able to make to accelerate our growth to get to that 20% plus number over time and to take advantage of the huge market opportunity. So.

Speaker #6: And that we've been doing over the last couple of quarters.

Speaker #5: Yeah. And just to add on to that, I mean, ou know, I'm extremely pleased that we were able beat the high end of our EBITDA guidance in Q2 pretty considerably.

We're absolutely committed as Michael mentioned to being EBIT breakeven adjusted EBITDA breakeven in Q4 of 2026.

Speaker #5: Look, I think this business can be a 20% plus grower. We're charting our path towards that. Part that is going to involve continuing with some of the investments that we have committed to around building out things like customer success, sales enablement, finishing out the implementation of our quote-to-cash system.

And we've had some good success along the way at beating our expectations around EBITDA, but we're still are going to make some investments along the way.

Okay. Thanks, guys appreciate it.

<unk>.

Speaker #5: And these are just critical investments that need to be le to make to accelerate our growth, to get to that 20% plus number over time.

The next question comes from the line of Scott Berg with Needham <unk> Company. Please go ahead.

Speaker #5: And to take advantage of this huge market opportunity. So, you know, we're absolutely committed as Michael mentioned to being able to break even adjusted EBITDA break even in Q4 of 2026.

Hi, This is Ian black on for Scott Berg, Congratulations on the great quarter.

As you guys move up market into larger matters, how does that increase your revenue visibility and durability.

Speaker #5: And, you know, we've had some good success along the way at beating our expectations around EBITDA, but we still are going to make some investments along the way.

Yes, that's a great question Ian.

I think one important thing to point out obviously, we're a usage based business and as we've spoken as we have spoken about in the past.

Speaker #5: Okay. Thanks, guys. Appreciate it.

Speaker #6: You bet.

Matters begin and then revenue begins matters and in revenue and that's the vast majority of the revenue that comes in for disco one of the things not only our larger matters larger revenue, but they tend to last a lot longer as well, which gives us the opportunity to.

Speaker #1: Our next question comes from the line of Scott Burke with Native and Company. Please go head.

Speaker #7: Hi, this is Ian Black. I'm for Scott Berge. Congratulations on the great quarter. As you guys move up market into larger matters, how does that increase your revenue visibility and durability?

Have a little bit better I guess predictability from a revenue standpoint over time as well. The other thing is those larger matters oftentimes are coming from our larger customers and larger customers tend to have larger wallet. They tend to have more matters and the more traction we get with those customers. The more opportunity we have to expand even further within those customers.

Speaker #6: Yeah, that's a at question. Ian. I ink one important thing to point out, you know, obviously we're a usage-based business. And as we've oken as we have spoken about in the past, you know, matters begin and then revenue begins.

Speaker #6: Matters end and revenue ends. That's the vast majority of the revenue that comes in for Disco. One of the things, not only are larger matters larger revenue, but they tend to last a lot longer as well.

It becomes a much more efficient cost of sale through that expansion. So as I mentioned in the past we've got well now we're up to we've actually just grew 6% but were up to 323 customers that spend over 100, K a year with us up 6% year over year and in many of those customers, who might only have 10 or 15% of.

Speaker #6: Which gives us the opportunity to have a little bit better I guess predictability from a revenue standpoint over time as well. The other thing is those larger matters oftentimes are coming from our larger customers.

Their wallet share and we're hyper focused on growing our wallet share within those customers. So larger matters equals more wallet share larger matters equals longer longer revenue streams.

Speaker #6: And larger customers tend to have larger wallets. They tend to have more matters. And the more traction that we get with those customers, the more opportunity we have to expand even further within those customers.

Speaker #6: And it becomes a much more efficient cost of sale through that expansion. So as I mentioned in the past, you know, we've got well, now we're up to we've actually just grew 6%, but we're up to 323 customers to spend over 100K a year with us, up 6% year over year.

Thank you and then one quick follow up you guys called out.

<unk> growth can celiac, what is the revenue uplift of that product.

So good question. So we're really really pleased with our overall software performance in Q2 and also coming in about 900 K above the guidance range. We've provided really really strong execution across the board in terms of this facility, we don't break out that actual number but we're really pleased with.

Speaker #6: And in many of those customers, we might only have 10 or 15% of their wallet share. And we're hyper-focused on growing our wallet share within those customers.

Speaker #6: So larger matters, equals more wallet share. Larger matters, equals longer revenue streams.

Number of databases, using Cecilia and the other thing that we're really pleased about is.

Speaker #7: Thank you. And then one quick follow-up. Are you guys called out a significant growth from Cecilia? What is the revenue uplift of that product?

A lot of our larger multi terabyte matters. They use force in facility has gone up a fair amount, we talk about that a little bit previously and that is really part of our overall strategy of driving larger matters and also focusing on our larger customers. So we're just overall really pleased with the adoption of Cecilia yeah.

Speaker #6: So good question. So we're really, really pleased with our overall software performance in Q2 and also coming in about 900K. Above the guidance range we had provided.

Speaker #6: Really, really strong execution across the board. In terms of Cecilia, we don't break out that actual number, but we're really pleased with the number of databases using Cecilia.

Just to add into that we're also pleased with the revenue that we're getting from Cecilia.

So it's great that we have 150% growth in the first half of the year and the number of large cases, but the revenue associated dose is great too, but equally important honestly is the value that the customers are getting from Cecilia that makes them want to keep using it. So many of our customers that use phacelia will use it again and again and that makes that core EDA.

Speaker #6: And the other thing that we're really pleased about is a lot of our larger multi-terabyte matters, the use for in Cecilia has gone up a fair ount.

Speaker #6: We talk about that a little bit. Previously, and that is really part of our overall strategy of driving larger matters and also focusing on our larger customers.

<unk> product that much stickier.

Speaker #6: So we're just overall really pleased with the adoption of Cecilia.

Thank you and congratulations on the good quarter.

Speaker #7: Yeah. And just to into that, you know, we're also pleased with the revenue that we're etting from Cecilia. So it's great that we have 150% growth in the first half of the year on the number of large cases, but the revenue associated with those is great too.

Great. Thanks, Ian.

Your next question comes from the line of Mark <unk> with loop capital. Please go ahead.

Hi, Thank you for taking my questions Eric a couple of questions around go to market with respect to the increasing focus on larger customers. I was wondering if you could just discuss the progress you've made just bringing in the right type of sales rep.

Speaker #7: But equally important honestly is the value that the customers are getting from Cecilia that makes them want to keep using it. So many of our customers that use Cecilia will use it again and again.

Speaker #7: And that makes our core e-discovery product that much stickier. Thank you. And congratulations on the good arter.

And then of course, the right shows up and has the capability to sell higher up into the organization.

Sure, Yes, I mean, I think you know we brought on Lauren Caruso as our Chief sales officer, it's been about six months ago. I think it was October of last year, you, obviously have a lot of enterprise experience that's been super helpful.

Speaker #6: Great. Thanks, Ian.

Speaker #1: Your next question comes from the line of Mark Chappelle with Loop Capital. Please go head.

Speaker #8: Hi. Thank you for taking my questions. Eric, a couple of questions around go-to-market. With respect to the increasing focus on larger customers, I was wondering if you could just discuss the progress you've made just bringing in the right type of sales rep, bringing them in the at least the right sales rep that has the capability to sell higher up into the organization.

We have brought on several more enterprise grade salespeople, who have experience not just with large accounts, but also in the legal technology industry. So that's been extremely helpful.

And then a lot of it is about focus we've actually opened up more racks in that space.

We've got less people that are working on small accounts and more people that are working on large accounts and then it's the plays that we're running so for example, we've got a strategic account management program, where we have a set of accounts that we have multiple resources working on across the country or in some cases, even in the UK and Canada.

Speaker #6: Sure. Yeah. I mean, well, I ink, you know, we brought on Lauren Caruso as our ief sales officer. It's been about six months ago.

Speaker #6: I ink it was October of last year. She obviously has a lot of enterprise experience. That's been super helpful. We have brought on several more enterprise-grade salespeople who have experience not just with large accounts, but also in the legal technology industry.

Where it's not just one experienced enterprise sales person, it's multiple because theres a decentralized aspect in a centralized aspect to how we grow our share within these particular accounts. In addition to that we've got an account based marketing approach.

Speaker #6: So that's been extremely pful. And then a lot it is about focus. You know, we've actually opened up more reps in that space. We've, you know, we've got less people that are working on small accounts and more people that are working on large accounts.

So that.

We're putting again extra very focused resources on.

Speaker #6: And then it's the plays that we're ning. So for example, we've got a strategic account management program where we have a set of accounts that we have multiple resources working across the country or in some cases even in the UK and Canada.

Sharing the content the stories the value that we're getting are.

Our customers are getting within those accounts to try to work to expand so its a real cross functional approach between sales self development marketing and customer success.

Speaker #6: Where it's not just one experienced enterprise salesperson. It's multiple because there's a decentralized aspect and a centralized aspect to how we grow our share.

Yes.

Thanks, and then as a follow up I was wondering if you could just review some of the changes you've made to your lead.

Gen team.

Speaker #6: Within these particular accounts, in addition to that, we've got an account-based marketing approach. So that, you know, 're putting again extra very focused resources on sharing the content, the stories, the value that we're etting or that our customers getting within those accounts to try to work to expand it.

Yeah, well so the lead Gen team and if we just rewind all the way back to the time before I got here.

It is really just all about setting up meetings with customers and those meetings could be and they were incentivize that way and those meetings could be with small customers that could be with large customers. We've really changed if you think about the way I. Just described our go to market approach and how its integrated between sales sales development marketing and customer success sales.

Speaker #6: So it's a real cross-functional approach between sales, sales development, marketing, and customer success.

Speaker #8: Thanks. And then as a follow-up, I was wondering if you could just review some of changes you've to your lead gen team.

Rep now really orchestrates all of that so think of them as almost like kind of like a quarterback and away, making sure that they're taking the inputs for marketing and.

Speaker #6: Yeah. Well, so the lead gen team, and this if we just rewind all the way back to, you know, the time before I got here, was really just all about setting up meetings with customers.

Quantifying the opportunity and sending it along to the salesperson and the customer success person is working in coordination with them.

Speaker #6: And those meetings could be and they were incentivized that way. And those etings could be with small customers that could be with large customers.

Because again a lot of our focus is on these existing accounts, where we're expanding the wallet share. So it's very much more now of an orchestration type of an approach rather than just a prospecting type of an approach.

Speaker #6: We really changed if you think the way I just described our o-to-market approach and how it's integrated between sales, sales development, marketing, and customer success, the sales development rep now really orchestrates all of that.

Okay.

Thank you.

Yes, no problem. Thanks Mark.

Speaker #6: So think of them as almost like kind of like the quarterback in way, making sure that, you know, they're taking the inputs from marketing and and, you ow, qualifying the opportunity and sending it along to the salesperson and that the customer success person is working in coordination with them.

Again to ask a question. Please press star one on your telephone keypad again that is star one to ask a question.

Speaker #6: Because again, a lot of our focus is these existing accounts where we're expanding the wallet share. So it's very much more now of an orchestration type of an approach rather than just a prospecting type of an approach.

Okay.

And our next question comes from the line of Closeout Akita with Bank of America.

Hey, guys. Thanks, so much for taking the questions Michael.

Speaker #8: Thank ou.

<unk> been awesome working with you over the years and that's it.

Speaker #6: Yeah, no problem. Thanks, Mark.

Good luck with whatever journey you have next coming for you.

Speaker #1: Again, to ask a question, please press star one on your telephone keypad. Again, that is star one to ask a estion. And our next question comes from the line of Koja Akita.

I have a question on maybe go to market and any sort of additional pieces that.

You may need to bring into the into the company to kind of execute the long term growth strategy, either from additional executives or regions or capacity.

Figure out is there more to go or is it team here in place to really drive the kind of the next story of growth here for for disco.

Speaker #1: With Bank of America.

Speaker #9: Hey, guys. Thanks so much for taking the questions. Michael, it's been awesome working with you over the years and best of luck with whatever journey you have next coming for you.

Yeah, Thanks, Koji I mean.

If I think about the story of the transformation journey that we're on I guess I would I would really sort of phase it out and I would say the first phase started when I got here 15 months ago and it was really about digging in deep learning the business meeting with our customers and I met with over 100 customers that first year, but many many in the first.

Speaker #9: I have a question on maybe go-to-market and any sort of additional pieces that you may need to bring into the into the company to kind of execute the long-term growth strategy.

Speaker #9: Either from, you know, additional executives or regions or capacity? I mean, just trying to figure out is there more to go or is the team here in place to really drive, you ow, the kind of the next story of growth here for Disco?

A couple of quarters.

Digging in deep on our ideal customer profile understanding exactly where we can add the most value to customers and where we can generate significant revenue improvement from customers looking at the types of matters that we should focus on so really digging deep learning the business. The next phase was all about developing the strategy and developing a very very clear.

Speaker #6: Yeah, thanks, Koji. I mean, you ow, if I think about the story the transformation journey that we're on, I guess I would I would really sort of phase it out.

Speaker #6: And I would say, you know, the first phase started when I got here 15 months ago. And it was really about digging in deep, learning the business, meeting with our ustomers.

Our strategy, where we knew exactly who we were going to focus on how we were going to go after them.

So we're going to drive efficiency into the operations of the business. The third phase was really about team development.

Speaker #6: And I met with over 100 customers that first year. But many, many in the first couple of quarters. Digging in deep on our ideal customer profile, understanding exactly where we can add the most value to customers and where we can generate significant revenue rovement from customers.

The biggest phase of building out the senior leadership team, which was sort of a combination of taking the extremely talented people that we have on staff and adding some more been there done that executives who have help scale organizations in the past. So so that was the next phase and then the next phase was really about alignment, making sure that everybody in the company is 100%.

Speaker #6: Looking at the types of matters that we should focus on. So really, you know, digging deep and learning the business. The next phase was all about developing the strategy and developing a very, very clear strategy where we knew exactly who we were going to focus on, how we were going to go after them, how we were going to rive efficiency into the operations of the business.

And our strategy.

And that's what we went through and then there's a lot of phases, but those all happened.

Quite quickly in succession, and when we launched into 2025 at our company kickoff meeting in January.

Speaker #6: The third phase was really about team development. know, the biggest phase of, ou know, building out the senior leadership team, which was sort of a combination of taking the, ou know, extremely talented people that we have on staff and adding some more been there, done that executives who have helped scale organizations in the past.

I told the company that are rally Cry for 2025 is it's go time.

And it's all about execution and I acknowledge the fact that we have more transformation to do and frankly.

Speaker #6: So that was the next phase. And then the next phase was really about alignment, making sure that everybody in the company is 100% aligned on our strategy and that's what we went through.

Koji, we still do we still do have more transformation to do but just because we are still doing transformation doesn't mean that we can't execute it doesn't mean that we can't start getting results and starting to perform and so.

Speaker #6: And then there's a lot of phases, but those all happened, you ow, quite quickly in succession. And when we launched into 2025, at our company kickoff meeting in January, I told the company that our rally cry for 2025 is it's go time.

Look I think what I would say is.

There is still more to go but I consider that a good thing.

In fact, there probably always will be something to go we're an innovative company right there'll always be some transformation, but theres still some more to go we are rolling out new plays there is some more that we can do around specific matter types that we're starting to execute on where I think we can perform even better.

Speaker #6: And it's all about execution. And, you know, I acknowledged the fact that we have more transformation to do. And frankly, Koji, we still do.

Speaker #6: We still do have more transformation to do. But just because we are still doing transformation doesn't mean that we can't execute. It doesn't mean that we can't start getting results and starting to perform.

So there is some more to go there, but we're a good chunk of the way through.

The transformation is such that we can start executing getting results.

Thank you.

Speaker #6: And so, look, I think what I would say is there is still more to go, but I consider that a good thing. In fact, you know, there will probably always be something to go.

Yeah, you bet.

Okay.

And with no further questions in queue I will now hand, the call back over to Eric Friedrichsen.

Speaker #6: We're an novative company, right? There'll always some transformation. But there's still some more to go. We're olling out new plays. There's I think some more that we can do around specific matter types that we're starting to execute on where I think we can perform even better.

CEO for closing remarks.

Yes, Thank you very much and thanks really for everybody for joining us today.

<unk> team just continues to make strong progress I'm really encouraged by the momentum that we're seeing across the entire business.

Speaker #6: So there's more to go there, but, you ow, we're a good chunk of the way through the transformation such that we can start executing and getting ults.

I'm, especially pleased that this has enabled us to beat the high end of our guidance for both software and adjusted EBITDA in Q2 and to lift our guidance for the full year as I mentioned earlier right now its all about execution I believe that this business can be a 20% plus grower, we're really just getting started.

Speaker #9: Thank ou.

Speaker #6: Yeah, you bet.

Speaker #1: And with no further questions in queue, I will now hand the call back over to Eric Fredriksen. CEO for Closing Remarks.

Speaker #6: Yeah, thank you very much. And thanks really for everybody for joining us today. You know, the Disco team just continues to make strong progress.

There is there is much more progress that we can make.

At the same time I'm, just incredibly proud of the talented teammates that we have throughout the entire organization.

Speaker #6: I'm really encouraged by the momentum that we're seeing across the entire business. I'm especially pleased that this has enabled us to beat the high end of our guidance for both software and adjusted EBITDA.

Optimistic about the road ahead I believe that the initiatives that we've already launched are just starting to show that early impact and they will serve as long term drivers of our performance.

Speaker #6: In Q2 and to lift our guidance for the full year. As I mentioned earlier, you know, right now it's all about execution. I believe that this business could be a 20% plus grower.

Even even though I'm proud of the fact that we had 12% software growth and that we're able to raise the midpoint of our guidance by $2 $5 million on software for the year, It's really more about how we got there. We said we were going to go focus on expansion within our large customers and acquiring larger.

Speaker #6: We're really just getting started. There's much more progress that we can make. At the same time, I'm just incredibly proud of the talented Disco teammates that we have throughout the entire organization.

Speaker #6: I'm optimistic about the road ahead. I believe that the initiatives that we've already launched are just starting to show that early impact. And they will serve as long-term drivers of our performance.

Customers with larger wallets, we said it was going to be about I'm, starting to work on the larger and more strategic matters.

From our customers and we saw incredible strides there in terms of both revenue and quantity for those areas, which gives me more and more confidence about the future and gives me that much more confidence to be able to raise the guidance. So while I'm proud of what will be accomplished so far we're really just getting started we have got the right people. We've got the right strategy, we're starting to see.

Speaker #6: You know, even though I'm proud of the fact that we had 12% software growth and we're able to raise the midpoint of our guidance by two and a half dollars on software, for the year, it's really more about how we got there.

Speaker #6: It's, you know, we said we were going to go focus expansion within our large customers and acquiring larger customers with larger wallets. We said it was going to be starting to work on the most the larger and more strategic matters from our customers.

Some early results, but really now it's about execution. So thank you all for your time I really appreciate it.

Speaker #6: And we saw, you know, incredible strides there in terms of both revenue and quantity. For those areas, which gives me more and more confidence about the future and gives that much more confidence to be able to ise the guidance.

Speaker #6: So while I'm proud of what we complished so far, we're really just getting started. We've got the right people. We've got the right strategy.

Speaker #6: We're starting to see some early results. But really now it's about execution. So thank you all for your time. I really appreciate .