Item 2.02 Results of Operations and Financial Condition
As of January 19, 2023, CS Disco, Inc. (the "Company") expects to report revenue
for fiscal year 2022 of $132.0 million to $136.0 million, consistent with the
outlook provided on November 10, 2022. In addition, Adjusted EBITDA is expected
to be a loss less than the previously issued guidance range of ($54.0) million
to ($50.0) million. For more information on how the Company calculates Adjusted
EBITDA, please refer to the Company's November 10, 2022 press release, filed as
an exhibit to the Company's Current Report on Form 8-K, filed with the
Securities and Exchange Commission on November 10, 2022.
The Company's audited financial statements for the year ended December 31, 2022
are not yet available. Accordingly, these preliminary financial and operating
results are an estimate and subject to the completion of the Company's financial
closing and other procedures and finalization of the Company's consolidated
financial statements for the year ended December 31, 2022, including the
completion of the audit of the Company's financial statements. Accordingly,
actual financial and operating results that will be reflected in the Company's
Annual Report on Form 10-K for the year ended December 31, 2022, including its
audited financial statements, when they are completed and publicly disclosed may
differ from these preliminary results.
The information furnished with this Item 2.02 shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or otherwise subject to the liabilities of that section, nor
shall it be deemed incorporated by reference into any other filing under the
Securities Act of 1933, as amended, or the Exchange Act, except as expressly set
forth by specific reference in such a filing.
Item 2.05 Costs Associated with Exit or Disposal Activities
On January 19, 2023, the Company committed to a plan to reduce its workforce by
approximately 62 employees, representing approximately 9% of the Company's
current global workforce (the "Plan"). The Plan was based on cost-reduction
initiatives intended to reduce the Company's cost structure and accelerate its
path to profitability.
The Company estimates that it will incur non-recurring charges of approximately
$0.9 million to $1.1 million in connection with the Plan, consisting of cash
expenditures primarily for employee severance and other termination benefits.
The Company expects that the majority of these charges will be incurred in the
first quarter of 2023. The charges that the Company expects to incur are subject
to a number of assumptions, including local law requirements in various
jurisdictions. Actual expenses may differ from such estimates.
The Company may incur other one-time charges or cash expenditures not currently
contemplated due to unanticipated events that may occur as a result of or in
connection with the planned reduction in workforce. The Company intends to
exclude these charges from its non-GAAP financial measures, including Adjusted
EBITDA, Adjusted EBITDA margin, non-GAAP general and administrative expense,
non-GAAP general and administrative expense as a percentage of revenue, non-GAAP
loss from operations, non-GAAP operating margin, non-GAAP net loss attributable
to common stockholders, non-GAAP net loss per share, and non-GAAP net loss
attributable to common stockholders as a percentage of revenue. For more
information on how the Company calculates these non-GAAP financial measures,
please refer to the Company's November 10, 2022 press release, filed as an
exhibit to the Company's Current Report on Form 8-K, filed with the Securities
and Exchange Commission on November 10, 2022.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements including,
but not limited to, statements related to the Company's preliminary unaudited
financial and operating results for the year ended December 31, 2022, the number
of positions affected by the Plan, and the estimated restructuring charges
associated with, and the time frame for completion of and recognition of charges
associated with, the Plan. These forward-looking statements are based on
management's beliefs and assumptions and on information available to management
as of the date they are made. However, investors should not place undue reliance
on any such forward-looking statements because they speak only as of the date
they are made. The Company does not undertake any obligation to update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by law. In addition, forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results, events and developments to differ materially from the Company's
historical experience and its present expectations or projections. These risks
and uncertainties include, but are not necessarily limited to, those described
in the Company's filings with the Securities and Exchange Commission.
Investor Relations Contact
IR@csdisco.com
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