CS Disco (LAW) Stock Forecast & Price Target

CS Disco Inc is projecting a robust growth in software revenue, with expectations of an increase of 6.9% to reach between $125.5 million and $131.5 million, surpassing earlier forecasts. Additionally, the company has seen a notable 8% year-over-year increase in the number of customers contributing over $100,000 in trailing twelve-month (TTM) revenue, totaling 318 customers. Despite a deceleration in total revenue growth to 3.0% year-over-year, the stability in software revenue growth at 3.3% year-over-year alongside positive customer expansion signals a favorable outlook for the company's financial performance.

CS Disco Inc reported a decline in gross margin of 80 basis points year-over-year, indicating potential challenges in profitability despite aligning with forecasted expectations. Additionally, the company experienced a significant decrease in operating cash flow, falling by $3.2 million year-over-year to a negative $10.5 million, which reflects a worsening margin of (28.6%) compared to (20.6%) in the previous quarter. Operating expenses, while lower than estimates at $33.8 million, highlighted a mixed cost structure influenced by reduced selling and marketing expenditures, offset by an increase in general and administrative costs, suggesting inefficiencies in operational management.