CS Disco, Inc.

What they do

DISCO provides cloud-native, artificial intelligence-powered legal product offerings that simplify legal hold, legal request, ediscovery, legal document review and case management. Its platform lets legal departments collect, process and review enterprise data relevant to legal matters, with AI models that identify legally relevant documents and are reused across matters. Revenue is generated substantially from customers' actual usage of the product offerings, supplemented by professional services and, to a lesser extent, committed-minimum subscriptions.

Revenue drivers

• Software revenue — Usage-based software revenue from the company's ediscovery and legal document review platform; was $36.8 million in Q2 2026, up 13% year over year, and the large majority of total revenue.
• Professional services — Revenue from a range of professional services aimed at accelerating customers' time-to-value; in the latest quarter total revenue was $43.1 million versus $36.8 million of software revenue, with the balance largely services.
• Committed-minimum subscriptions — Optional subscriptions based on committed minimum usage on an annual or multi-year basis represented 8% of revenue for the three and six months ended June 30, 2026, down from 10% and 11% in the prior-year periods.

Recent performance

For the second quarter ended June 30, 2026, DISCO reported total revenue of $43.1 million, up 13% year over year, with software revenue of $36.8 million, also up 13%. GAAP net loss was $8.7 million, compared with $10.8 million in the second quarter of 2025. Adjusted EBITDA was $(3.4) million, compared with $(2.7) million in the prior-year quarter. As of June 30, 2026, the company had 354 customers with revenue in excess of $100,000 over the previous 12-month period, a 10% increase compared with June 30, 2025.

Strategy

DISCO's go-to-market strategy focuses on acquiring new customers and driving increased usage among existing customers, primarily through a direct sales force organized into sales development, field sales, inside sales and customer success. The platform is designed so customers can grant access to third parties such as law firms and legal services providers, which the company says facilitates adoption and word-of-mouth expansion. In August 2026 the company announced a new unified litigation solution combining matter facts with relevant U.S. case law in a single AI-native application, which it describes as moving beyond traditional ediscovery into full-stack litigation capabilities. The company also appointed information security expert and former Meta senior executive Andre Mintz to its Board of Directors in July 2026.

Risks

• Usage-based revenue variability — Substantially all revenue comes from customers' actual usage, which fluctuates with the number, timing, duration and scope of legal matters and can cause results to vary period to period.
• Persistent GAAP losses — DISCO has reported annual net losses each year from 2021 through 2025, including a $44.4 million net loss in 2025, and a $8.7 million GAAP net loss in Q2 2026.
• Data privacy and security obligations — The company processes personal, client and other sensitive information and is subject to evolving U.S. and foreign privacy and security laws; actual or perceived noncompliance could lead to investigations, litigation, fines and loss of customers.
• Dependence on legal industry conditions — The company's own risk factors cite unfavorable conditions in the legal industry, including decreased regulatory enforcement and future U.S. government shutdowns, as capable of affecting business growth and usage.

Outlook

As of August 5, 2026, DISCO guided third quarter 2026 software revenue to $38.1 million-$39.1 million, total revenue to $43.75 million-$45.75 million, and Adjusted EBITDA to $(1.75) million-$(0.25) million. For fiscal year 2026, the company guided software revenue to $147.5 million-$152.5 million, total revenue to $172.0 million-$179.0 million, and Adjusted EBITDA to $(8.0) million-$(5.0) million. Management states the outlook is based on assumptions subject to change and that there can be no assurance the results will be achieved; a forward-looking reconciliation of Adjusted EBITDA to net loss is not available without unreasonable efforts.