LegalZoom (NASDAQ:LZ) shares plummeted over 25% on Wednesday following the announcement of a new CEO and a downward revision of its full-year revenue forecast.
The company disclosed that Jeffrey Stibel, currently the Chairman of the Board of Directors, has been appointed as the new CEO effective immediately. Additionally, John Murphy has been named the Lead Independent Director of the Board.
Outgoing CEO Dan Wernikoff decided to leave the company and resign from the Board, stating that the transition is timely as LegalZoom shifts its focus towards subscription-based revenue to achieve long-term profitable growth.
For the second quarter, LegalZoom maintains its revenue projection between $172 million and $176 million, with adjusted EBITDA expected to be between $25 million and $27 million.
However, for the full year, the company revised its revenue forecast downward to a range of $675 million to $685 million and reduced its free cash flow expectation to between $75 million and $85 million.
Despite these adjustments, LegalZoom reiterated its full-year adjusted EBITDA guidance, which remains in the range of $135 million to $145 million.