CS Disco, Inc. (LAW)
NYSEInformation TechnologySoftware - ApplicationSnapshot 2026-09-04
$4.24-2.97%
Close 2026-09-04 · 1-day change
NYSEInformation TechnologySoftware - ApplicationSnapshot 2026-09-04
Broken: Primary pillar broken — Adjusted EBITDA improves towards positive but remains negative in 2026: FY26 EBITDA guidance -$5.0M to -$8.0M vs target -$4.5M.
CS Disco aims to grow software revenue to about $152.5 million in 2026. Total revenue is expected near $178.75 million next year. The company plans to improve costs but still expects a small loss. Recent earnings beats show some progress.
The company is still losing money and may not reach profit soon. Revenue growth could slow below 13%. Cost cuts may not be enough to stop losses.
The market expects about 13% revenue growth and some improvement. Our fair value is near $22.81, reflecting cautious optimism. The recent selloff shows investors doubt the turnaround.
Breaks if: adjusted EBITDA loss worsens beyond -$4.5 million in FY26
Improve profitability by reducing losses and targeting positive adjusted EBITDA margins.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a turnaround story, as LAW is currently loss-making but is working on improving its revenue and customer base. The current thesis state reflects a cautious watch due to recent earnings misses and a shift in confidence levels.
The market seems to have priced in a low level of fragility, indicating that expectations are somewhat justified. LAW is viewed as cheap compared to its peers, but there is a significant gap in expectations, suggesting that the market anticipates challenges ahead.
Management is focused on increasing software revenue and total revenue, showing some positive growth trends. However, adjusted EBITDA remains negative, indicating that while there is progress, the company still faces hurdles in achieving profitability.
The future performance of LAW hinges on management's ability to meet revenue guidance and improve adjusted EBITDA. Additionally, external factors such as potential interest rate cuts and performance from sector leaders will play a crucial role in shaping investor sentiment.
The most important moves since the prior daily snapshot.
Our read on the company is unchanged since the prior snapshot.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Stated as a priority in 3 of last 3 quarters. Adjusted EBITDA was $(3.5) million in 2026-Q1 improving 32% from $(5.1) million in 2025-Q1, but worsened slightly to $(3.4) million in 2026-Q2 from $(2.7) million in 2025-Q2. Fiscal year 2026 guidance targets adjusted EBITDA between $(8.0) million and $(5.0) million. The trajectory shows mixed progress with some improvement but adjusted EBITDA remains negative.
“Adjusted EBITDA was $(3.4) million, compared to $(2.7) million in the second quarter of 2025.”
“Adjusted EBITDA was $(3.5) million, an improvement of 32% compared to $(5.1) million in the first quarter of 2025.”
“Fiscal year 2026 adjusted EBITDA guidance in the range of $(8.0) million - $(5.0) million.”
Breaks if: software revenue falls below $146 million in FY26
Grow software revenue by expanding customer base and usage of AI-driven litigation solutions.
Stated as a priority in 3 of last 3 quarters. Software revenue grew from $34.7 million in 2026-Q1 to $36.8 million in 2026-Q2, representing 12-13% year-over-year growth. Customer count with revenue over $100,000 increased 9-10% year over year. The trajectory is delivering consistent growth in software revenue and customer expansion.
“Software revenue was $36.8 million, up 13% compared to the second quarter of 2025.”
“Software revenue was $34.7 million, up 12% compared to the first quarter of 2025.”
“Large Customers: DISCO grew to 347 customers with revenue in excess of $100,000, a 9% increase compared to prior year.”
Breaks if: total revenue falls below $169.25 million in FY26
Increase total revenue through growth in software sales and new litigation solutions.
Stated as a priority in 3 of last 3 quarters. Total revenue increased from $41.9 million in 2026-Q1 to $43.1 million in 2026-Q2, up 13-14% year over year. Fiscal year 2025 revenue guidance ranged $154.4 million to $156.4 million, with 2026 guidance higher, indicating management is delivering on revenue expansion.
“Total revenue was $43.1 million, up 13% compared to the second quarter of 2025.”
“Total revenue was $41.9 million, up 14% compared to the first quarter of 2025.”
“Fiscal year 2025: Total revenue in the range of $154.4 million - $156.4 million.”
In the next 1 to 3 years, LAW's trajectory will depend on its execution of growth strategies and external market conditions. Not investment advice.