CS Disco, Inc. (LAW): Business Model Canvas [Dec-2025 Updated]

You're digging into the engine room of CS Disco, Inc. (LAW), and honestly, the picture is a classic growth story: brilliant tech driving a 77% non-GAAP Gross Margin on software, but that innovation comes at a steep price, with Sales & Marketing at 36% and R&D at 31% of Q2 2025 revenue. We see this playing out in their guidance, projecting an Adjusted EBITDA loss between $(11.5) million and $(9.5) million for FY2025, even as they chase those big, multi-terabyte matters from their core customer base. So, the question isn't if the tech works-it clearly does-but whether they can scale efficiently enough to flip that profitability switch; let's break down exactly how they plan to do it below.

CS Disco, Inc. (LAW) - Canvas Business Model: Key Partnerships

You're looking at how CS Disco, Inc. builds its ecosystem through external relationships, which is critical for scaling a cloud-native platform in the legal tech space. These alliances help CS Disco, Inc. embed its technology deeper into client workflows, especially for those handling massive, complex matters.

The partnership with Mourant serves as a prime example of this strategy in action. CS Disco, Inc. announced the expansion of its strategic eDiscovery and technology partnership with Mourant, a law-firm led professional services firm boasting over 60 years' experience in the financial services sector. This collaboration, which initially started in 2022, was aimed at enhancing Mourant's capacity to manage complex digital data across its litigation and consulting teams, moving them away from relying solely on external providers.

The success in these deep integrations is reflected in the platform's adoption metrics, which are often tied to these strategic relationships. For instance, the number of customer databases leveraging CS Disco, Inc.'s Cecilia AI Platform has grown by over 300% since September 30, 2024. In one specific instance involving a key partner, the number of matters utilizing Cecilia AI grew 7x from the third quarter of 2024 to the third quarter of 2025, which corresponded to a more than 12x growth in revenue from that particular firm. This shows how a strong partnership drives significant usage and financial upside.

CS Disco, Inc. continues to focus on technology infrastructure partners to support its cloud-scale deployment and AI capabilities, even if specific contract values aren't public. The overall financial context shows the company is investing heavily to support this ecosystem, ending the third quarter of 2025 with $113.5 million in cash and short-term investments and no debt. This financial buffer supports the ongoing development and integration required by these key relationships, especially as the company targets fiscal year 2025 total revenue in the range of $154.4 million - $156.4 million.

Here's a breakdown of the types of partnerships CS Disco, Inc. relies on:

• Partnering with major cloud providers for infrastructure and generative AI deployment.
• Formalizing relationships with legal service providers and consulting firms for co-selling.
• Deepening technology alliances with firms like Mourant for specialized sector penetration.
• Securing contracts with law firms and corporations handling matters involving massive data volumes, such as cases exceeding 10 terabytes.
• Integrating with third-party tools for data security and compliance validation.

The focus on large, complex matters is a direct result of these partnerships, as evidenced by a customer win in Q3 2025 involving over 10 terabytes of data, where the client specifically valued CS Disco, Inc.'s end-to-end capabilities.

We can map the key partnership categories against tangible outcomes:

To be fair, while the Mourant partnership is public, the specific financial contribution of any single alliance to the total Q3 2025 revenue of $40.9 million isn't broken out. Still, the growth in software revenue, which hit $35.2 million in Q3 2025, suggests that these deep integrations are driving the core subscription business.

Finance: draft a sensitivity analysis on partnership renewal terms by next Tuesday.

CS Disco, Inc. (LAW) - Canvas Business Model: Key Activities

You're looking at the core engine driving CS Disco, Inc. (LAW) as they push hard into the second half of 2025. The key activities are all about fueling that AI platform and capturing the biggest, most complex legal matters. Here's the breakdown of what they are actively doing, grounded in the latest numbers.

Research and development of the Cecilia AI Platform and GenAI tools

CS Disco, Inc. (LAW) is pouring resources into its proprietary technology, which is the heart of its value proposition. This activity is focused on keeping Cecilia AI and Auto Review ahead of the curve. For the third quarter of 2025, Research and Development expense clocked in at $11.5 million, representing 28% of total revenue for that period. This investment is translating directly into customer adoption; the number of customer databases leveraging the Cecilia AI Platform has grown by over 300% since September 30, 2024. They are also executing on Auto Review, having completed its first auto review project in the United Kingdom during 2025. This R&D focus supports the full fiscal year 2025 total revenue guidance range of $154.4 million to $156.4 million, which is heavily reliant on software adoption.

Maintaining and scaling the cloud-native eDiscovery platform

Keeping the platform running smoothly and ready for massive data loads is non-negotiable. This activity ensures the cloud-native architecture can handle the largest cases in the market. The focus is on multi-terabyte matters; for instance, in the first half of 2025, CS Disco, Inc. (LAW) saw a 150% increase in multi-terabyte matters leveraging Cecilia AI from where they ended 2024. The platform's high-margin nature is evident in the non-GAAP Gross Margin, which expanded to a strong 77% in Q3 2025. This scaling activity is what allows them to target the high end of their software revenue guidance for fiscal year 2025, set between $132.6 million and $133.6 million.

Here's a look at the operational spending supporting this scale in Q3 2025:

Sales and marketing to acquire large, multi-terabyte matters

The sales motion is clearly oriented toward landing customers with large eDiscovery wallets. This means targeting enterprise clients and Am Law 100 firms, as evidenced by securing an Am Law 100 firm expansion in Q2 2025 that launched several new matters leveraging AI capabilities. In Q3 2025, Sales and marketing expense was $13.6 million, or 33% of revenue. The success of this activity is measured by the growth in high-value customers; CS Disco, Inc. (LAW) ended Q2 2025 with 323 customers each contributing over $100,000 in total revenue over the trailing twelve months, up 6% year-over-year. A concrete example of the scale they are winning is a recent case involving over 10 terabytes of data and 43 million documents.

Delivering expert professional services and managed review

While the focus is on software, professional services remain a necessary component for complex implementations and managed review, though this area has seen softness. In Q3 2025, services revenue was approximately $5.7 million (Total Revenue of $40.9 million minus Software Revenue of $35.2 million). This represented a year-over-year decline of 7% compared to the same period in 2024, showing the ongoing transition as AI tools like Auto Review take over some of the manual review work. Still, the company recognized $0.1 million from a large contingent case within this services revenue in Q3 2025.

Ensuring data security, compliance, and legal defensibility

For a legal technology platform, trust and defensibility are key differentiators that must be actively maintained through security and compliance efforts. This activity underpins the value of the AI outputs. The need for this is underscored by external market data; for example, 68% of in-house legal teams cite privacy risks as a data security concern. CS Disco, Inc. (LAW) addresses this by emphasizing trust, such as providing document-grounded answers with citations within Cecilia's results, which aligns with legal defensibility standards. The company ended Q3 2025 with $113.5 million in cash and short-term investments and no debt, providing a strong balance sheet to fund ongoing security certifications and compliance infrastructure.

Finance: draft 13-week cash view by Friday.

CS Disco, Inc. (LAW) - Canvas Business Model: Key Resources

You're looking at the core assets CS Disco, Inc. (LAW) relies on to run its business, the stuff that really makes the engine go. First up is the financial foundation. As of the end of the third quarter of 2025, CS Disco, Inc. reported holding approximately $113.5 million in cash and short-term investments. That's a solid war chest, especially since the company reported having no debt at that same point in time. This liquidity helps fund the heavy, ongoing investment in developing their proprietary technology.

The most critical resource is definitely the proprietary Cecilia AI Platform and its machine learning algorithms. This isn't just abstract tech; it's delivering measurable results. For instance, the DISCO Auto Review feature, powered by this AI, can review an average of 32,000 documents per hour. To put that in perspective, that's the equivalent of a 640-person review team working at industry-standard speeds. Furthermore, the precision and recall metrics for this automated review frequently exceed 90 percent in many cases, which is better than the industry standard of 75 percent for human review. This platform underpins the software revenue, which hit $35.2 million in Q3 2025, marking a 17% year-over-year growth.

The advanced capabilities of the Cecilia AI Platform are what you're paying for when you buy software from CS Disco, Inc. These tools are designed to help legal professionals quickly analyze massive datasets. You'll find a suite of generative AI features that help streamline the entire ediscovery process. Honestly, the speed at which they are rolling out new features is impressive.

• Cecilia Q&A, an AI fact expert integrated into the database.
• Cecilia single doc Q&A for deep dives into specific files.
• Secure, generative AI document summaries.
• AI-generated deposition summaries by chronology and topic.
• Cecilia Auto Review for automated document tagging with narrative justifications.

The cloud-native, scalable technology infrastructure, running on AWS, supports this high-volume processing. Supporting this platform are the highly specialized software engineers and data scientists. Their work directly translates into the platform's performance and the growth in software revenue, which accounted for 76 percent of the total revenue of $40.9 million in Q3 2025. Then you have the world-class professional services and managed review teams. While software is the primary focus, these services are still a component, with services revenue at $5.7 million in Q3 2025. Remember, one large contingent-fee matter closed in Q3, contributing $1.3 million to revenue ($1.2 million software; $0.1 million services), showing the specialized nature of some of their service engagements, though management noted this was non-recurring.

CS Disco, Inc. (LAW) - Canvas Business Model: Value Propositions

AI-powered eDiscovery reduces document review time from days to minutes. For example, with DISCO Auto Review, clients are capable of reviewing up to 32,000 documents per hour. Precision and recall metrics in many cases exceed 90%, which is much better than the industry standard of 75% for recall.

Cloud-native platform offers speed, scalability, and near-instantaneous search. The platform has handled complex matters, including one involving 10-terabytes of data across 43 million documents. In a prior period, the average data upload speed reached 33 Mbps, equating to 2.75 terabytes per matter per day.

Combination of innovative software and expert professional services (With You in Every Case). The professional services organization earned a Net Promoter Score (NPS) of 88 in a prior period, with 83% of respondents ranking DISCO a 10 out of 10. For the third quarter of fiscal year 2025, Services Revenue was $5.7 million.

Automates complex legal tasks like deposition summaries and auto-review. Adoption of the Cecilia AI suite shows significant growth, with Cecilia databases using AI up >300% since September 30, 2024.

High non-GAAP Gross Margin of 77% for software, signaling efficiency. The non-GAAP gross margin expanded to 77% in the third quarter of 2025, up from 76% in the second quarter of 2025.

Key metrics supporting the value proposition include:

• Non-GAAP Gross Margin (Q3 2025): 77%
• Software Revenue (Q3 2025): $35.2 million
• Auto Review Recall Metric: Exceeds 90%
• Max Documents Reviewed per Hour via Auto Review: 32,000
• Largest Matter Size Handled: 10-terabytes

The platform's financial performance relative to its service components in Q3 2025 was:

CS Disco, Inc. (LAW) - Canvas Business Model: Customer Relationships

You're looking at how CS Disco, Inc. (LAW) keeps its customers engaged as they push hard into AI-driven eDiscovery. The relationship strategy is clearly bifurcated, balancing high-touch support for the biggest cases with the scalability of self-service software.

Dedicated account management for large enterprise and law firm clients

The focus on larger clients is a core driver of growth, showing up directly in the revenue metrics. This segment is where the deep, dedicated relationships are forged.

The company ended Q3 2025 with 326 customers who each contributed more than $100,000 in total revenue over the trailing twelve months. This is the cohort management is prioritizing. For context on the scale of these relationships, in the prior fiscal year 2024, 19 customers alone contributed over $1,000,000 in revenue. The strategy is clearly working to concentrate revenue among fewer, larger spenders, as evidenced by the 17% year-over-year growth in Software Revenue in Q3 2025, which hit $35.2 million.

The commitment to this segment is formalized through strategic alliances, such as the one announced with Mourant, a law-firm led professional services firm. Furthermore, management specifically cited the successful expansion into large law firms, referencing an Am Law 100 firm that expanded its use of the platform and its AI capabilities.

High-touch professional services and expert support for complex matters

When a matter is complex or involves unique data challenges, the high-touch support team steps in. This is where the company demonstrates its commitment to being with you in every case, even when the data is messy or the software needs expert guidance.

The financial contribution from this segment shows a transitionary phase, as the market shifts toward pure software usage. Services revenue for Q3 2025 was $5.7 million. While this is a component of the total $40.9 million in revenue for the quarter, the trend shows a move away from traditional review services. For the first half of 2025, revenue from services saw a 20% decline, though this softened to only a 7% year-over-year decline in Q3 2025. Still, user feedback validates the quality of this support; G2's 2025 Best Software Awards noted users consistently gave high scores for extensive professional services expertise and product support functions.

Here's a quick look at the revenue mix:

Self-service options for core eDiscovery platform usage

For standard usage, the platform is designed for direct use by legal teams, which is the engine for the high-margin software revenue. This is where the self-service model shines, especially when paired with their AI tools.

The core platform is the main relationship driver, responsible for the bulk of the revenue. The company's full fiscal year 2025 software revenue guidance is set between $132.6 million and $133.6 million. The self-service capability is heavily augmented by AI tools that drastically cut down manual work.

• Auto Review clients can process up to 32,000 documents per hour.
• Auto Review has delivered precision and recall metrics exceeding 90% in many cases.
• The industry standard recall for comparison is cited at 75%.

Community and user feedback loops for continuous AI product evolution

The rapid evolution of the AI products is directly tied to user adoption and feedback, creating a virtuous cycle. This is how CS Disco, Inc. (LAW) keeps its technology relevant against competitors.

The adoption of the proprietary Cecilia AI Platform is a key indicator of this feedback loop in action. Since September 30, 2024, the number of customer databases leveraging the Cecilia AI Platform has grown by over 300%. Furthermore, the growth in the most data-intensive cases is also accelerating; multi-terabyte matters leveraging Cecilia AI grew 150% from December 2024 to June 2025. The company has also expanded its self-service AI offerings internationally, completing its first Auto Review project in the United Kingdom.

Focus on deep, trusted partnerships for high-stakes litigation

The ultimate goal in customer relationships for high-stakes matters is establishing a trusted partnership, moving beyond a simple vendor transaction. This is where the platform's ability to handle massive data volumes becomes critical.

The strategy is clearly targeting these high-stakes, large-data matters. The company highlighted a significant case involving a 10-terabyte, 43 million document matter. The success in these complex scenarios is what drives the dollar-based net retention (DNR), which improved to 96% overall in FY 2024, with software DNR hitting 100% that year. This suggests that once a client is deeply embedded, they are not only staying but increasing their software usage. The non-GAAP Gross Margin of 77% in Q3 2025 shows that the high-value software usage is highly profitable when it occurs.

CS Disco, Inc. (LAW) - Canvas Business Model: Channels

You're looking at how CS Disco, Inc. (LAW) gets its product and services to the market as of late 2025. The numbers show a clear pivot toward high-value software contracts, even as the services arm transitions.

Direct sales team targeting large law firms and corporate legal departments

The direct sales effort is heavily weighted toward the top tier of the market. As of the end of the third quarter of 2025, CS Disco, Inc. (LAW) reported having 326 customers, each generating over $100,000 in revenue over the trailing 12 months. These high-value accounts represented 76% of the total revenue for that quarter. The customer base spans enterprises, law firms, legal services providers, and governments. As of December 31, 2024, the total customer count stood at 1,478.

Here's a look at the revenue concentration from these key direct sales targets:

Online platform access and self-service portal for software

The software channel, which is the primary driver of growth, is accessed directly through the platform. Software revenue for the third quarter of 2025 hit $35.2 million, marking a 17% year-over-year increase. The full fiscal year 2025 software revenue guidance is projected to be between $132.6 million and $133.6 million. A key indicator of platform adoption is the growth in the use of the Cecilia AI Platform; the number of customer databases leveraging this AI capability more than tripled since September 30, 2024.

The software revenue performance versus total revenue in Q3 2025 was:

• Software Revenue: $35.2 million
• Total Revenue: $40.9 million

Professional Services team delivering managed review and forensics

The Professional Services team offers a continuum of support, including Managed Ediscovery, Managed Review, and Digital Forensics. Services revenue for Q3 2025 was reported at $5.7 million, though this segment saw a 7% decline compared to the same period in 2024. This follows a 20% decline in services revenue reported for both Q1 and Q2 of 2025 year-over-year. The team is focused on leveraging AI for efficiency, having completed its first auto review project in the United Kingdom. For context on the efficiency of such teams, the industry Goldilocks Zone for billable utilization is generally considered to be between 70% and 80%.

Strategic channel partners and legal technology consultants

CS Disco, Inc. (LAW) actively builds strategic alliances. In Q3 2025, the company announced a strategic eDiscovery and technology partnership with Mourant, a professional services firm with over 60 years of experience in the financial services sector. This type of partnership acts as an extension of the direct sales force, bringing established relationships into the CS Disco, Inc. (LAW) ecosystem.

Investor Relations website for financial and product updates

The Investor Relations website, located at ir.csdisco.com, serves as the channel for official financial disclosures and product roadmap communication. The Q3 2025 financial results were announced on November 5, 2025. The company's financial outlook for the full fiscal year 2025 projects total revenue in the range of $154.4 million to $156.4 million. Furthermore, management has set a target for achieving Adjusted EBITDA breakeven by Q4 2026.

Key financial guidance points for the end of 2025:

• FY 2025 Total Revenue Guidance Midpoint: Approximately $155.4 million
• Q4 2025 Adjusted EBITDA Range: Negative $3.5 million to negative $1.5 million

Finance: draft 13-week cash view by Friday.

CS Disco, Inc. (LAW) - Canvas Business Model: Customer Segments

You're looking at the core of CS Disco, Inc. (LAW)'s revenue engine, which is heavily weighted toward the largest legal players in the market.

The strategy clearly hinges on capturing complex, data-intensive matters that require significant processing power, which naturally points to the largest firms and departments.

Here's a quick look at the financial concentration as of the third quarter of 2025, which shows just how critical these high-value customers are to the top line:

The customer base is segmented by the scale and complexity of the legal work they handle, aligning directly with the platform's capabilities in handling massive datasets, especially with the adoption of generative AI tools like the Cecilia AI Platform.

• Large Law Firms handling complex, multi-terabyte litigation
• Corporate Legal Departments and in-house counsel (e.g., Fortune 500)
• Government Agencies requiring large-scale data investigations
• Legal Service Providers who use DISCO as their core technology

The focus on large matters is paying off in terms of revenue quality; for example, at one firm, the number of matters utilizing Cecilia AI grew 7x from Q3 2024 to Q3 2025, corresponding to a more than 12x growth in revenue from that specific firm in the quarter ending September 30, 2025.

The company is actively driving adoption in specific high-stakes areas, such as launching a new initiative focusing on intellectual property (IP) litigation cases.

The revenue mix remains heavily skewed toward the software component, which is the primary driver for these large customers:

• Software revenue growth in Q3 2025 was up 17% year-over-year.
• The number of customer databases leveraging the Cecilia AI Platform has grown by over 300% since September 30, 2024.

Finance: review the cash flow impact of servicing the 326 large customers against the Q3 2025 operating cash flow of $(15.7) million for the first nine months.

CS Disco, Inc. (LAW) - Canvas Business Model: Cost Structure

You're looking at the core spending areas for CS Disco, Inc. as of late 2025. The company is clearly prioritizing product innovation and market penetration, which shows up directly in the operating expense structure. Honestly, for a growth-stage SaaS business, this expense profile isn't surprising, but the scale matters for cash runway.

The largest operational costs are concentrated in driving the platform forward and acquiring/retaining customers. For the second quarter of 2025, the spending looked like this:

The Costs of Revenue are directly tied to running the cloud-native platform and supporting professional services personnel. This cost base directly impacts the non-GAAP gross margin, which was a healthy 76% in Q2 2025, improving to 77% by Q3 2025. The Cost of Revenue itself is comprised of expenses related to cloud infrastructure usage and the personnel delivering professional services, like managed review.

General and Administrative (G&A) costs are a significant line item, and you need to watch the components closely. For instance, in Q3 2025, the GAAP net loss widened to $13.7 million, up from $9.2 million the prior year, with higher G&A costs being a primary driver. This includes specific, non-recurring expenses.

• Litigation-related expenses were noted as a $7,023 thousand (or $7.023 million) non-GAAP adjustment in Q3 2025.
• Q3 2025 G&A expense was $7.7 million, representing 19% of Q3 revenue.

The overall profitability outlook remains focused on achieving breakeven, but the current burn rate is material. For the full fiscal year 2025, CS Disco, Inc. projects the Adjusted EBITDA loss to fall between $(11.5) million to $(9.5) million. Finance: draft 13-week cash view by Friday.

CS Disco, Inc. (LAW) - Canvas Business Model: Revenue Streams

CS Disco, Inc. (LAW) generates revenue primarily through its cloud-native, AI-powered legal solutions, which are structured around two main streams: Software and Services.

The primary driver is Software Revenue from usage-based and subscription fees. The guidance for the full fiscal year 2025 projects this segment to be between $132.6 million to $133.6 million. This revenue is directly tied to the Usage-based pricing model tied to data volume and processing needs within their eDiscovery platform and advanced tools like the Cecilia AI Platform.

For context, in the third quarter of fiscal year 2025, Software Revenue reached $35.2 million, representing an acceleration of 17% year-over-year. The non-GAAP Gross Margin for that quarter stood at a strong 77%.

The second stream is Services Revenue from Managed Review, forensics, and professional services. This segment is significantly smaller. In the third quarter of 2025, Services Revenue was approximately $5.7 million, contributing to the total Q3 revenue of $40.9 million.

The revenue mix is heavily skewed toward the high-margin software component. The company also recognizes revenue from Contingent fee arrangements for certain large, favorable case outcomes. For instance, the third quarter of 2025 included $1.3 million of contingent revenue recognized upon case resolution, broken down into $1.2 million from software and $0.1 million from services.

The overall financial expectation for the full fiscal year 2025 is captured in the updated guidance for the top line, which is set between $154.4 million to $156.4 million in total revenue.

The customer base contributing to these streams shows a concentration in larger engagements:

• Number of customers generating over $100,000 in annual revenue as of Q3 2025: 326
• Percentage of revenue derived from this cohort as of Q3 2025: 76%
• Year-over-year growth in the >$100K customer cohort: 76%

Here is a summary of the key financial figures related to the revenue streams as of the latest guidance and Q3 2025 performance:

The business model relies on scaling the software usage, which is evident in the structure of the revenue guidance. Finance: draft 13-week cash view by Friday.