How close is CS Disco (LAW) to breaking even?

Sonal Goyal

28 October 2026 05:40 PM AEDT

How close is CS Disco (LAW) to breaking even?

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Key Highlights

Second-quarter 2026 Revenue was $43.1 million, up 13%, and the GAAP net loss narrowed to $8.7 million from $10.8 million.
Adjusted EBITDA was a loss of $3.4 million.
Cash and short-term investments totalled $101.4 million at 30 June 2026.

The latest reported quarter

CS Disco, Inc. (NYSE:LAW), which trades as DISCO, reported second-quarter 2026 results on 5 August 2026. Total revenue was $43.1 million, up 13% from $38.1 million a year earlier. Software revenue was $36.8 million, also up 13%.

Non-GAAP gross Margin was 76%, and GAAP Gross Profit was $32.1 million, or about 74 per cent of revenue. The company reported a GAAP net loss of $8.7 million, narrower than the $10.8 million loss in the second quarter of 2025.

Revenue outside the software line was therefore about $6.3 million, or roughly 15 per cent of the total. The Earnings release does not break that portion down.

Losses and liquidity

Adjusted EBITDA was a loss of $3.4 million, compared with a loss of $2.7 million a year earlier. The GAAP loss therefore narrowed while the adjusted measure widened slightly, a divergence that reflects what each measure excludes.

At 30 June 2026 the company held $10.9 million in cash and equivalents and $90.5 million in short-term investments, a total of $101.4 million. The release does not report subscription revenue or annual recurring revenue.

Adjusted EBITDA is not a cash-flow measure, so the comparison is only indicative. The company's filings carry the full cash-flow detail.

Guidance for the third quarter and full year

For the third quarter, DISCO guided to total revenue of $43.75 million to $45.75 million, software revenue of $38.1 million to $39.1 million, and adjusted EBITDA of negative $1.75 million to negative $0.25 million.

For 2026 as a whole, it guided to total revenue of $172.0 million to $179.0 million, software revenue of $147.5 million to $152.5 million, and adjusted EBITDA of negative $8.0 million to negative $5.0 million. These are management forecasts rather than reported results.

Whether that happens depends on revenue and costs that have yet to be reported.

Product and customer signals

DISCO said it had 354 customers with more than $100,000 of trailing twelve-month revenue, up 10% year on year. It also announced a unified litigation solution that combines case facts with relevant United States case law in one AI-native application.

Chief Executive Eric Friedrichsen said the product would build on the company's AI built specifically for litigators. The company gave no usage or revenue figures for the new product, so its commercial effect cannot yet be assessed.

What to watch

DISCO announced on 14 October 2026 that it will report third-quarter results before the market opens on 4 November 2026, with a call at 8:30 a.m. Eastern. Items to watch include revenue against the guided range, the path of adjusted EBITDA towards break-even, the count of larger customers, and uptake of the new product.

FAQs

Q: What was DISCO's second-quarter 2026 revenue?

A: Total revenue was $43.1 million, up 13% from $38.1 million a year earlier, and software revenue was $36.8 million.

Q: What is DISCO's full-year 2026 guidance?

A: It guided to total revenue of $172.0 million to $179.0 million and adjusted EBITDA of negative $8.0 million to negative $5.0 million.

Q: When does DISCO report third-quarter results?

A: It will report before the market opens on 4 November 2026, with a call at 8:30 a.m. Eastern.

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