It’s been a wild ride for CS Disco lately. If you've been following the ticker symbol LAW, you know the company has been through the wringer—shifting from a post-IPO darling to a cautionary tale about revenue transparency. But honestly, the cs disco news today looks a lot different than the headlines from a couple of years ago. We are seeing a company trying to pivot from survival mode into a "year of accountability" in 2026.
The Big Leadership Swap: Why Aaron Barfoot Matters
Let’s talk about the most recent bombshell. On January 12, 2026, Aaron Barfoot officially took over as the Executive Vice President and Chief Financial Officer. He’s stepping into the shoes of Michael Lafair, who stayed on just long enough to ensure the handoff didn't get messy.
Barfoot isn’t just some random suit. He comes from Socure and Forter, companies that live and breathe digital identity and fraud prevention. Why does that matter for a legal tech firm? Because the legal industry is currently obsessed with security and the integrity of AI-generated data.
His compensation package alone tells you how much DISCO is betting on him. We're looking at a $456,000 base salary plus a massive $2 million in Restricted Stock Units (RSUs). That's a huge "please stay and fix this" incentive. The board clearly wants someone who can handle the scale of a company that is finally creeping back toward profitability.
Financials: The Slow Climb to Break-Even
The numbers coming out of the late 2025 earnings calls were surprisingly decent. Better than expected, anyway. DISCO reported a total revenue of $40.9 million for Q3 2025. That was a 13% jump year-over-year.
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More importantly, the net loss per share was only -$0.01, which blew the doors off the analysts' predictions of -$0.06. People were expecting a disaster, and instead, they got a "not bad."
- Software Revenue: This is the heart of their business, hitting $35.2 million (up 17%).
- The Cash Hoard: They still have about $113.5 million in cash and zero debt. That gives them a lot of runway to experiment with Cecilia, their AI bot.
- The 2026 Goal: The internal target is to hit Adjusted EBITDA break-even by the end of 2026.
It’s an ambitious goal. Some analysts at Jefferies are feeling optimistic, recently bumping the price target to $8. Others are more cautious, keeping it in the $5 to $7 range. Basically, the market is in a "show me, don't tell me" phase with this stock.
The Ghost of 2022: Settlement News
You can’t talk about CS Disco without mentioning the massive class-action lawsuit that has been hanging over their heads like a dark cloud. If you bought stock between July 2021 and August 2022, you likely remember the day the price cratered by over 50%.
The news today is that a settlement has finally been reached. The company was accused of misleading investors about how much of their growth was "usage-driven" versus sustainable subscription revenue. When those massive legal projects ended, the revenue evaporated, and so did the stock price.
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Settling this is a huge relief for the new leadership. It allows the company to stop looking in the rearview mirror and start focusing on whether lawyers actually want to use their AI tools.
Cecilia and the AI "Year of Accountability"
DISCO is going all-in on Cecilia, their generative AI platform. But 2026 is the year they have to prove it actually works in the real world of billable hours and court filings.
They recently ran a study with Ari Kaplan Advisors that found 72% of legal teams plan to use GenAI in the next year. That's a massive market, but lawyers are notoriously skeptical. They don't just want a chatbot; they want a tool that can handle "Native Excel mass redactions" and provide "Scoped user visibility" for privacy.
DISCO has been rolling out these features in what they call their "crawl, walk, run" phases. In August 2025, they pushed out a bunch of updates for Cecilia, like a dedicated copy button for Q&A responses and better highlighting in PDF views. It sounds small, but if you’re a paralegal looking through 10,000 documents, those little things are the difference between going home at 5 PM or midnight.
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What This Actually Means for You
If you’re an investor or a legal pro, here is the ground reality. CS Disco is no longer the hyper-growth startup it claimed to be in 2021. It’s now a maturing SaaS company trying to find its footing in a crowded AI space.
The stock is volatile. It gaps down on small misses and jumps on slight beats. If you're looking at the cs disco news today for a quick win, you might be disappointed. This is a long-term play on whether generative AI can truly replace the manual labor of ediscovery.
Actionable Next Steps:
- Monitor the CFO's first 90 days: Watch for any changes in how Barfoot reports "usage-based" revenue versus "subscription" revenue. This was the sticking point in the lawsuit.
- Check the EBITDA updates: If DISCO doesn't show a clear path to being "in the black" by mid-2026, the stock might struggle to stay above that $8 price target.
- Watch the AI Governance webinars: DISCO is leaning hard into the "accountability" narrative. If their AI tools face any major hallucination scandals in high-profile cases, it could reset their progress.
The company is finally moving past its legal drama and focusing on the product. Whether that's enough to win back the trust of Wall Street remains to be seen.