CS Disco, Inc.

Ladies and gentlemen, thank you for standing by and welcome to CS Disco's second quarter of fiscal year 2026 conference call. At this time, all participants are in a listen-only mode and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 again. I would now like to hand the conference over to your first speaker today, Head of Investor Relations, Aleksey Lakchakov. Please go ahead.

Good morning, and thank you for joining us on today's conference call to discuss the financial results for Disco's second quarter of fiscal year 2026. With me on today's call are Eric Friedrichsen, Disco's Chief Executive Officer, Aaron Barfoot, Disco's Chief Financial Officer, and Richard Crum, Disco's Chief Product Technology and Strategy Officer. Today's call will include forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding our financial outlook and future performance, our future capital expenditures, market opportunity, market position, product and go-to-market strategies, and growth opportunities, and the benefits of our product offerings and developments in the legal technology industry. In addition to our prepared remarks, our earnings press release, SEC filings and a replay of today's call can be found in our investor relations website at ir.csdisco.com. Forward-looking statements represent our management's beliefs and assumptions only as of the date made Information on factors that could affect the company's financial results is included in its filings with the SEC from time to time, including the section titled Risk Factors in the company's annual report on Form 10-K for the year ended December 31st, 2025, and the company's quarterly report on Form 10-Q for the quarter ended June 30th, 2026. In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures are in addition to and not a substitute for or superior to Disco delivered another strong performance in the second quarter.

as we continue to deepen our relationships with our largest customers, secure large and complex matters, and extend our leadership in AI built specifically for litigators. We remain convinced that trust earned through deep litigation expertise, enterprise scale, and security is what determines who wins as AI reshapes this industry and Q2 gave us further evidence that Disco is earning that trust at scale. In Q2, total revenue was $43.1 million, up 13% year over year, and software revenue was $36.8 million, also up 13% year over year. Services revenue was $6.3 million, up 18% year over year. Adjusted EBITDA was negative $3.4 million. We remain on track to be adjusted EBITDA positive in Q4 of this year. It was a great quarter, and I'll come back to the highlights in a moment. But I want to start with something we announced today that represents an incredibly exciting new era for Disco, the launch of our unified litigation solution. This will take Disco well beyond eDiscovery and into serving the complete and unique needs of litigators with purpose-built AI capabilities. In the near term, we're uniting the facts of the matter with the controlling law alongside proprietary litigation-specific workflows, all through a single pane of glass. We are ultimately building a full suite of integrated litigation solutions that span the life of a matter from filing to verdict, handling everything from legal facts to drafting to case strategy to trial preparation. While companies like Harvey and Legora have approached legal with broad general tools, we are laser focused on litigators with a much deeper solution to meet the high bar set for scale, defensibility, and security. We've talked before about how litigators need purpose-built capabilities, how they want them in a single centralized interface, and how no one has successfully connected the facts and the law in a seamless way that unlocks real strategic advantage. Disco will change that. I'll let Richard get into the specifics a little later, but I want to tell you why we're excited about it at the highest level. It takes a litigator a decade or more to really master their craft. And even then, what one case team learns rarely carries over to the next matter or to the next team. Moreover, the tools are generally only as good as the lawyer behind the keyboard. We believe a platform that understands a case and carries that context forward can put winning outcomes in reach for a lot more people. and unlock a wealth of institutional knowledge and expertise that today sits siloed within individual lawyers and individual cases. This will mean greater ability to connect the dots both within and across cases. It will give litigators greater control over the matters by assembling the tools and knowledge that they need to be successful in a single place. Litigators will be able to focus on the things their clients value most, strategic advice built on deep insight, while Disco takes care of the surrounding chaos with an integrated and secure system tuned to the things that are most important for the success of the matter. For litigators, this is a significantly better and faster way to work. For firms and corporations, this is a force multiplier. that makes case teams more effective and more efficient with better access to information and applications built specifically for them. Our customers are already excited. As we're developing this solution, we're working closely with some of our largest and longest tenured customers, some of whom are participating in our pilot. One thing we hear time and time again during these pilots is that litigation is unique and the general purpose AI tools like Harvey and Legora provide only a fraction of the capabilities today's litigators need. This is particularly true when it comes to deep context, especially when it relates to facts and law. One leading national litigation boutique that is participating in our pilot program said, combining our evidence directly with relevant case law is the missing piece for us. Integrating the two would be a total game changer. Customer validation, even at this early stage, gives us confidence that the market is ready for this and that customers see the long-term vision of what we're developing. Building a solution for litigation intelligence and strategy unlocks a much more significant opportunity beyond eDiscovery. as we believe that any innovative law firm that is serious about tapping into the power of AI to enhance their litigation practice will want the most advanced capabilities in their arsenal. We've been building toward this for a decade. eDiscovery, Cecilia, Autoreview, and Advanced Research have all been steps along the way, and our unified litigation solution is the next and most ambitious one. As we're building for the future, the Disco team continues to deliver today. In Q2, we saw strong performance across the three areas that matter most to our near and medium-term growth strategy. First, continued growth in large matters. Second, continued growth in wallet share with large customers. And third, accelerating adoption of AI across our platform. Let's start with large matters because it's really the thread that connects everything else. We continue to see an increase in the size and complexity of the matters coming onto our platform. This quarter, we saw strong performance in both quantity of large matters and revenue generated from these matters. As we've discussed before, larger matters are simply worth more to us over their lifetime. They generate more revenue, They expand as the case develops and they stay on our platform longer. They also drive more AI adoption and usage on our platform. Alongside large matters, we also saw significant progress with large customers. The largest, most sophisticated firms not only have more large matters, they have significant litigation and frequent spending. So we believe growing this customer segment gives us a more efficient approach to a predictable and durable revenue base. The number of customers generating more than $100,000 over the last 12 months grew to 354, representing $128 million, or 77% of the last 12 months of total revenue. That equates to 15% year-on-year growth. We were also very pleased with customer adoption of our generative AI and agentic AI capabilities. This quarter, we saw continued growth in adoption such that revenue attributable to generative AI and agentic AI capabilities more than tripled year on year. Both Cecilia and AutoReview were drivers of growth in Q2, with AutoReview experiencing a material increase from Q1 driven by pipeline growth larger matters, higher matter count, and repeat usage. I'm excited for the traction that we're seeing and for what's ahead. We and our customers view our AI native capabilities as increasingly integral to how litigators actually run their matters rather than just a feature they tried once. The repeat use of auto review by customers is central to our strategy. In Q2, we began to roll out a significant enhancement to auto review that simplifies and accelerates the process of creating the inputs required for effective AI review. As we discussed last quarter, our customers have varying degrees of AI readiness. This enhancement helps lessen the learning curve, making auto review an even better option for more customers and more matters. Advanced research also continues to gain traction. The feedback from firms that have been piloting its capabilities has been unanimous in that it provides significantly deeper insights, reasoning, and recommendations, and it's particularly suited to complex matters where its ability to autonomously reason across large, intricate data sets adds another layer of intelligence to their workflows. We also saw a very strong adoption of the Disco platform, our new commercial model in the quarter, which continues to significantly outpace our internal goals. In fact, we hit our December 2026 year end run rate by June. The demand has been higher and adoption has been faster than we anticipated. We are seeing both more matters and larger matters coming on to Disco due to our more straightforward pricing and because Cecilia AI is included on every matter. The apples to apples pricing and reduced user friction for our adjacent products has resonated with customers and further driven our performance. All of this adds up to an incredibly exciting story for Disco. We continue to gain traction in our core business with larger matters larger customers and accelerating adoption of our AI capabilities. This gives us a strong foundation to rapidly scale our next generation unified litigation solution. Now, I'm going to turn it over to Richard, who will provide a deeper dive on those capabilities and the incredible work underway to bring them to life for our customers. Richard.

Thank you, Eric. As Eric said, the new Disco Unified litigation solution is not a new product. It is the most important investment we're making as a company. So let me build on that and get into the specifics, what the solution actually does today and where we're taking it. Let's start with today. Litigation is fundamentally different from the transactional and advisory work most legal AI has focused on. It's adversarial and winning hinges on the litigation team ability to master the facts and the law. The facts that decide a case are often buried across millions of documents and not just the so-called hot docs that surface through the initial e-discovery processes. Winning strategy requires mastering a client's entire evidentiary record leveraging all of the relevant governing law and reasoning across both together. And that is what this solution is built to do. The Disco Unified Litigation Solution unites two things, your evidence and the law. It has native access to the eDiscovery database, not just the text of a document, but its metadata and the work product our customers have already built on top of it. and it's paired with Disco's license to the full corpus of U.S. case law, court rules, statutes and regulations. Concretely, that means a case team can get a live view of where a matter stands today, the claims at issue, the elements that still need to be proven, the evidence gaps and the key dates all in one place. Underneath that view, the system reasons the way a litigator does. It maps each claim to the legal elements required to prove it and evaluates whether the evidence in the matter actually satisfies each one, rather than just surfacing documents that might mention the right words. That's the difference between a general AI legal tool and a system with the native contextual intelligence to tell you whether your case holds up. Disco doesn't build technology for lawyers. We build solutions for litigators. The opportunity Eric described earlier, putting better outcomes within reach for many more people, really has two dimensions, and we're addressing both. Within a single case, it takes significant time for someone new joining a matter, a new associate, a partner stepping in, to get up to speed because case knowledge tends to live in people's heads and scattered files rather than in a single system anyone on the team can query. And the strategies and playbooks that were successful on prior matters mostly stayed with the people who worked it rather than compounding across the rest of a firm's docket. Ultimately, our solution is designed to close both gaps. Surfacing what a case team needs now on a given matter and over time helping the patterns from one case inform the next. Specifically, customers will create custom workflows, agents and tools that ensure their own best practices drive how our solution supports their work, both within and across matters. We believe this requires deep integration, not simple connectivity. And that's true for both the law and the evidence. General Purpose AI tools and even other legal AI providers are largely reaching the law and the evidence through outside connections. An API call to a research service or a read-only link into someone else's e-discovery platform. Or even suggesting that lawyers make a second copy of the documents in their platform and leave behind all of the rich context present in the source systems. These approaches can be useful for task productivity, but they stop short of the kind of litigation intelligence substantive case work requires. Our solution is different because it holds both directly, the case law itself and the full e-discovery record metadata and work product included and reasons across them. The same is true of how litigation teams work day to day. Legal research, the document record, work product, and the docket typically sit in separate systems today, so any question that touches more than one of them becomes a manual exercise. Pull the law here, pull the documents there, stitch them together by hand, and do it again each time. That's exactly why Eric described this as Disco building a single pane of glass for the litigation team. Bringing all of it into one place means that Stitching happens once, and the context built answering one question carries straight into the next, instead of every person on the case team rebuilding the same connections over and over. The same logic is why persistent context matters so much. Litigation is not a single question and answer exchange. It's a matter that evolves over months or years through new productions, depositions, and rulings. Disco carries that context forward automatically, so its understanding of a matter compounds as the case develops. And this memory is what makes our solution so valuable, because it drives better outcomes, not a faster answer to one question, but an answer that reflects everything the case has taught the system so far. Right now, we're in a pilot learning phase. We're running the pilot with a small, hand-selected group of customers on live matters. Because what matters to us right now is depth of engagement, understanding usage patterns, how capabilities resonate, and what to prioritize on our roadmap. Here's where we think it goes. Right out of the gate, our unified litigation solution helps the case team answer important legal questions and develop case strategy, leveraging deep integration to both the facts and the law. This is backed by proprietary workflows that we've built specifically for litigators, and we've filed three provisional patents that demonstrate the novel and innovative approach we've taken in building this solution. Based on our roadmap, we intend to iteratively add new capabilities, such as the ability to maintain live case artifacts such as proof tables, witness materials, motion outlines, and discovery plans, that update automatically as a matter progresses. This supports the full case team working together, including outside counsel and in-house counsel in the same shared workspace. This will move quickly. Our vision is ambitious, and the customers and partners we have engaged are excited about what we are building, and that is why we are treating this as one of the most important long-term investments we can make as a company. We'll share more on timing and availability as our plans evolve. This same learn first, scale fast approach is exactly how we approached advanced research, which will roll out to all customers in the next few weeks. Advanced research is an agentic AI capability built deeply into our eDiscovery products that goes well beyond simple question and answer. It performs multi-step reasoning across a matter's full evidentiary record to help litigators develop a deep understanding of their evidence. The customer response during testing has been powerful, as Eric noted, and we are excited to be ready to roll this out to customers. None of this happens without the work we've done for a decade on the eDiscovery platform itself. Just as important, our own engineering organization has been shifting to an AI-first way of building software over the past several quarters. And that shift in velocity is part of what has let us move as quickly as we have on the new unified litigation solution, advanced research, and auto review all at once. And underneath all of it, we keep investing in our ability to ingest and structure increasingly complex and modern data types because none of this works, including our new solution, If the data processing platform can't turn raw data into something a litigator or an AI system reasoning on their behalf can actually use. Taken together, we believe this is the clearest evidence yet that our AI native stack is compounding. The solutions we've built, the customers who trust us with their largest and most complex matters, and the data that flows through Disco every day are what gives us confidence in the future. With that, I'll hand it over to Aaron.

Thank you, Richard. Q2 results reflected continued progress in the areas Eric and Richard just walked through. Total revenue was $43.1 million, up 13% year over year, and software revenue was $36.8 million, up 13% year over year. Services revenue was $6.3 million, up 18% year over year, driven primarily by strength in professional services and auto review related managed review work tied to our largest matters. I want to touch on some of what Eric mentioned in more detail. First, Disco Platform was our biggest driver of quarter over quarter software growth. Customer adoption is strong, matter count is growing rapidly, and our pricing is helping increase the lifetime value of each matter. Second, auto review had a strong quarter. In Q1, we mentioned that some customers evaluating Autoreview were choosing the traditional route instead based on their AI readiness and comfort level. In Q2, that trend reversed. Autoreview set a new revenue record driven by both record number of Autoreviews executed and a growth in the average size of Autoreview to date. We are delighted by this result, but We are still in the very early stages of adoption. Turning to profitability metrics. As a reminder, unless otherwise specified, references to gross margin, operating expenses, and net loss are on a non-GAAP basis. And adjusted EBITDA is also a non-GAAP financial measure. Gross margin in Q2 was 76% compared to 76% in the prior year. Sales and marketing expense was $15.7 million or 36% of revenue compared to 36% of revenue in the prior year. Research and development expense was $13.4 million or 31% of revenue compared to 31% in the prior year. The dollar increase reflects continued investment in our unified litigation solution, advanced research, and Autoreview to capitalize on the legal industry's AI transformation. General and administrative expense was $7.7 million or 18% of revenue compared to 19% in the prior year. Adjusted EBITDA was negative $3.4 million in Q2 representing an adjusted EBITDA margin of negative 8% compared to negative 7% in Q2 of the prior year. Net loss in Q2 was $3.6 million or 8% of revenue compared to a net loss of $2.8 million or 7% of revenue in Q2 of the prior year. Net loss per share was $0.06 compared to $0.04 in Q2 of the prior year. Turning to the balance sheet and cash flow statement. We ended Q2 with $101.4 million in cash and short-term investments and no debt, maintaining our strong financial position. Operating cash flow in Q2 was negative $1.1 million compared to negative $4.2 million in Q2 of the prior year. I also want to reiterate a dynamic that I mentioned last quarter. If Disco Platform continues to perform above our expectations, we may see some short-term revenue impacts from lower ingest fees. We expect it will be more than offset over time by the Disco Platform's ongoing fees and by larger and longer and more complex matters that come with it. We believe this will be a positive trade for the long-term revenue profile of our business. We have not seen a meaningful drag on our results related to this new dynamic to date, but we may in the future. Turning to guidance, for the third quarter of fiscal year 2026, we are providing total revenue guidance in the range of $43.75 million to $45.75 million and software revenue guidance in the range of $38.1 million to $39.1 million. We expect adjusted EBITDA to be in the range of negative 1.75 million to negative 0.25 million. For the fiscal year 2026, we are raising our total revenue guidance to a range of 172 million to 179 million and software revenue guidance to a range of 147.5 million to 152.5 million. reflecting an increased confidence in the second half of the year. We're updating full-year adjusted EBITDA guidance to a range of negative 8 million to negative 5 million. We continue to expect to be adjusted EBITDA positive in Q4.

Thank you. We will now begin the question and answer session. Please limit yourself to three questions. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality, and if muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Scott Berg with Needham. Your line is open. Please go ahead.

Hi, everyone. Nice quarter, and thanks for taking my questions. I guess we have a couple. Let's start on unified litigation solution that you all are seemingly quite excited about. I guess, what does the customer adoption cycle of this platform look like? Is this an add-on to maybe an already existing e-discovery customer or Can you sell this net new? Do you have to have e-discovery maybe implemented first since it's kind of leveraging that data? And then how do you think about pricing for that solution? Because off the top of my head, it sounds like maybe a consumption-based pricing model, which is the primary mechanism for your e-discovery solution, might not be the right pricing model for this, but would love to hear if that's maybe accurate or not accurate.

Yeah, let me get started on that question. I can tell you a little bit more about how we're thinking about the new solution commercially. As I mentioned in the prepared remarks, we are deliberately in a learning phase, right? And that's the way you should think about where we are today. We're running this pilot. We've got a small hand-selected group of customers, and they're deeply engaged on live matters, right? This isn't a proof of concept or something that people are just playing around with a demo. This is a real product. But we're intentionally right now not putting a firm pricing or monetization or timing plan in the marketplace because we want to learn, right? We want to see how what we've developed and that we are excited about really plays out like how the capabilities resonate, how the customer's commercial needs and their business models should shape the way we should think about the best way to engage them commercially before we lock anything in. This is an ambitious multi-year bet and you should definitely hear today's announcement as the first step of a larger vision, not the complete answer ready today. As we get further into the pilot and subsequent calls, we'll have much more to share on packaging and timing and and certainly up to you. But I wouldn't build revenue from the solution into your models yet.

Yeah, certainly not for 2026. But Scott, I think the other thing I would just say is that this isn't something we're building because we think it's cool. This is something that our customers want. You know, we're in a situation where our law firm customers, corporate clients are demanding that they get more value from their outside counsel spend. And they want to understand how the outside counsel can differentiate themselves. Disco is in a unique position to truly change the legal industry like no other AI company can. There's all this interest right now in legal AI, but nobody else in the market has the combination of the facts, the case law, the deep litigation experience, and then the agentic AI capabilities that we've got here at Disco. All the other AI companies in the legal space are trying to help lawyers become more efficient. We're doing that too. But in addition to that, we're helping litigators win. And we're incredibly excited about it. So we're being very thoughtful about the way we build out this capability with our customers and the way we're going to commercialize it. But we think this is an enormous opportunity for Disco. And it's really the evolution of the company moving forward.

Got it. Helpful. And then for my follow-up question on your Thank you for the question on it too, but when you look

at our guide, you are correct. We're raising the guide for the year, and the confidence in raising that guide really comes from three things. The first thing is execution. Year-to-date, our execution against the strategy around more large matters from our largest customers, we're seeing the success in that. We're expecting that to continue. The second piece is Disco Platform. We talk about how we're excited with the trends we've seen, the adoption we've seen of Disco Platform on not just it's exceeded our expectations, but it's exceeded our expectations from a pricing, a volume. And so all the elements that we're expecting, we're seeing the positives come through there. And then on the third piece is auto review. We talked about that as well. We're seeing positive traction there. It seems like AI readiness for our customers. is improving. And we're also building new capabilities that make it easier for them to do an auto review. And we're going to continue to make those investments as well. But I think the combination of the three things is what's driving our confidence in the guide.

Understood. Helpful. Thanks for taking my questions. Thanks, Scott.

Your next question comes from the line of DJ Hines with Canaccord Genuity. Your line is open. Please go ahead.

Hey guys, this is Ryan for DJI. Thanks for taking my question. So I understand the difference between the transactional legal work that you see with some of these legal AI startups and the more privacy concerns with e-discovery solutions. But a trend we've been seeing across software is this general openness with these platforms. Do you foresee As they expand their platform, you expand yours, and customers adopt these platforms more, you will have to open up your platform to them.

Let me try to answer that for you. I think it's important I focus on why it's important, particularly for our customers, that we go deep and that we have comprehensive access to the information that matters to them. Litigation is just fundamentally more complex than all of the other transactional advisory legal work that is often the focus of general legal AI tools. It's adversarial. And as I said in the prepared remarks, the facts could be buried across millions of documents, not just in a small subset of some hot documents that might have been identified. And so you need to be able to have the depth of the facts. You also need to have that deep access to the legal corpus we have, right? And the ability to build on it and train across it, not just access it one legal decision at a time, one statute at a time. And when you couple those two things, the real deep depth and the focus that we're putting on litigation and our ability and our proven leadership in developing AI over the last decade, that's what Eric was talking about. You have the formula that differentiates this for litigation teams, right? litigation teams need something different and it's going to be Disco that delivers the thing that is most fit for their needs and why we're so excited about how impactful it will be for the litigation professionals that are going to use it.

Yeah, let me just add into that too real quick. Look, there's technology opportunities and limitations, but then there's also just business strategy opportunities and limitations. And the reality is the companies that own data aren't always extremely willing to give up that data. And one of the general AI companies in the legal space has a partnership with one of the big data providers for case law. And the CEO for the case law company was interviewed last week and said that they've only got access to 1% of the data. I think that's what you have to think about. The reality here is we've got access to all of the data, and we've got control over how to use that data, which is a big, big differentiator for us.

Okay, gotcha. And then a quick follow-up. So you guys have spoken before about how law firms are a channel into corporate legal department customers. So obviously large matters are growing, but Can you maybe just describe what that expansion motion into those corporate legal departments looks like compared to maybe your more traditional MLAW customers?

Sure. Yeah. I mean, look, I think, as you know, we think there's tremendous upside opportunity within our customer base. And if you think about our law firm customers, you know, we talked about, well, overall, our large customers, we've now got 354 customers that spend over $100,000 with us over the last 12 months. That's up 15% in terms of the revenue. It's up to 77% of our total revenue. It's significant. We continue to improve in that customer base, and yet we've got these very large customers where we might still only have 15% to 20% of their wallet share. What we've done is we've created an integrated go-to-market approach where sales, marketing, sales development, customer success, really every piece of our go-to-market team is focused on helping enable our law firm customers to market Disco internally to their case teams and then also engineered so that those case teams can market both Disco and their law firm services together to their corporate customers. You know, honestly, we've made great traction, but I think there's an incredibly there's an incredible upside that we haven't even really seen flourish yet. We're making progress, but there's much, much more upside really through enabling these law firms to sell on our behalf. And the great news is, you know, I was in London last week. I met with seven different clients and I had several of them talk about how they want Disco to help them market to their customers because their corporate clients are asking how they're going to differentiate themselves. How are they going to leverage AI to be more efficient and deliver better outcomes? And like I've never seen before, law firms can tend to be really conservative, particularly from a marketing standpoint, but that's changing. They want us to help them market them because they need to differentiate themselves and show value to their corporate clients.

Your next question comes from the line of Marc Chappell with Loop Capital Markets. Your line is open. Please go ahead.

Hi, thank you for taking my question. Eric, you called out the strong adoption of the Disco platform in your prepared remarks. I was wondering if you could just talk a little bit more about how much of that traction you're seeing is coming from new logo wins versus, say, expansion with existing customers.

Yeah, I mean, look, we're seeing it's a combination with Disco Platform. Again, the performance has been incredible. We hit our internal goals by June. So we're obviously, you know, really excited. As you know, when we put out the new platform and pricing approach, there were multiple goals behind it. So one of them was to improve our consideration. And that's both for new customers, but also for new large matters within our existing customer base. There were many times in the past where customers wouldn't even consider us because they found our pricing seemed so much more expensive than our competitors, even if it wasn't. It's just that our model was one that they couldn't understand very well. So we're seeing improved consideration. And then another goal was better close rates because customers are electing to go with Disco because they understand that our pricing is competitive. And then the third thing is you know preserving our margins. There's been you know the theory was we were having to over discount because customers because they couldn't understand our pricing were needed to discount more and so we're very excited that all three of those goals so far for Disco platform are coming through and we're really excited about what we're seeing there but it's actually for new customers and for existing customers.

Okay great and you may have Just to answer at least part of my next question here, but in the preparative marks, a lot of discussion around products. That's understandable given the aggressive rollout over the past year. But on the go-to-market front, maybe you could just give us an update on what you're seeing sales productivity-wise and whether you're seeing, for example, new sales reps kind of reaching productivity faster as your AI capabilities are just easier to demonstrate.

Sure. Yeah. You know, look, it's been a great several quarters here in terms of seeing sales efficiency improve. And some of it is the dynamic that I spoke about earlier, that we're doing a much better job with integrated go-to-market in terms of enabling our law firm customers to sell on our behalf, which allows us to get much more efficient. But another thing that allows us to get more efficient is large matters. We've spoken about this in the past, but what's great about selling larger in strategic matters Not only is it more revenue, but they stay on our platform a lot longer, which creates a lot of downstream opportunity for us. And we've had a lot better success with selling large matters because of a few different dynamics. One is with you in every case. We've spoken about this before, but making sure that our customers, these very large matters, if they need services help, they understand that Disco can help them from a services standpoint, whether it's ingesting data or managing a project. that were with them in every case. That has made a big difference. Another one is our ideal matter profile approach. So going after certain practice areas within law firms or certain industries within corporates where we know Disco delivers unique value and where the matters are bigger. So that's been a big boom for us. And the other one is just innovation around our AI capabilities. are agentic AI with Cecilia Advanced Research and Cecilia and Autoreview. All of those together, our gen AI capabilities have allowed us to win larger matters within our existing large customers. And then the last one, as Aaron noted earlier, with the Disco pricing approach, the new Disco platform, we rolled this out in January and the uptake has been fantastic, which has allowed us to be much more efficient. All of this combined has allowed our salespeople to be much more productive. Thank you.

There are no further questions at this time. I will now turn the call back to Eric Friedrichsen, CEO, for closing remarks.

Yeah, thank you very much. Look, I am extremely proud of the Disco team. for their excellent execution in Q2, and also for our customers for trusting us with their most important legal matters. I've said before that I think Disco can be a 20% plus annual grower over time, and Q2 reinforced that. We continue to make progress on the drivers that are going to help us get there, deepening our relationships with our largest customers, continuing to win the largest and most complex matters, and driving broader adoption of our AI capabilities. The solid execution that we've seen over the last several quarters has put Disco in a position of strength. And we believe that that strength, along with a tremendous set of assets, an established and growing AI platform, access to a comprehensive body of US case law, and a decade of experience creating innovative tools for litigators positions Disco to define AI for litigation. I can't possibly be more excited and proud of our team for both executing on our core strategy and for innovating around AI for litigation. So really, really excited. I appreciate everyone's time today and the great questions and we look forward to seeing you all next quarter.

This concludes today's call. Thank you for attending. You may now disconnect.