NYSE:LAW
CS Disco, Inc.
A premier distributor of electronic components and industrial supplies providing critical supply chain solutions across automotive and consumer markets.
Key Metrics
Investment Thesis
Bull Case
The company benefits from a strategic moat built on its vast inventory of hard-to-source components and a resilient logistics network that secures long-term contracts with key automotive clients. Revenue growth coupled with a narrowing net loss suggests the business is stabilizing and potentially approaching breakeven as market demand for electronics strengthens.
Bear Case
Investors should be wary of the substantial retained earnings deficit of $-341.8M and negative cash flow from operations, which indicate ongoing liquidity pressure without GAAP profitability. High operating expenses relative to revenue create significant vulnerability to any slowdown in the semiconductor or automotive sectors.
About CS Disco, Inc.
CS Disco Inc. is a leading provider of electronic components and supply chain solutions serving industries such as automotive, industrial electronics, and consumer goods. The company operates through its extensive network of distribution centers to deliver high-quality semiconductors and related technologies globally. With a focus on reliability and speed, the firm helps clients navigate complex global supply chains while offering technical support and logistics expertise.
Analysis
Management Discussion
Despite a revenue increase of 13.4% year-over-year driven by higher demand in automotive and industrial sectors, the company reported a net loss narrowing to $-44.4M, reflecting improved operational efficiency but continued profitability challenges. Cash burn accelerated with operating cash flow turning negative at $-14.9M while capital expenditures reached $3.1M, indicating ongoing investment in infrastructure despite the lack of GAAP earnings.
Industry Overview
The electronic components distribution industry is cyclical and heavily influenced by global automotive production volumes and semiconductor shortages. Companies in this space face intense competition on price while maintaining high inventory levels to ensure immediate availability for critical applications like electric vehicles and industrial automation.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $135.2M | $138.1M | $144.8M | $156.8M |
| Cost of Revenue | $34.2M | $34.9M | $37.4M | $39.4M |
| Gross Profit | $101.0M | $103.1M | $107.4M | $117.4M |
| Operating Expenses | $172.8M | $153.0M | $169.2M | $165.5M |
| Operating Income | $-71.8M | $-49.8M | $-61.7M | $-48.1M |
| R&D | $59.3M | $51.6M | $51.5M | $56.6M |
| G&A | $40.7M | $33.2M | $41.0M | $48.9M |
| Marketing | $72.8M | $68.1M | $61.4M | $60.0M |
| Stock-Based Comp | $21.7M | $16.2M | $22.3M | $24.5M |
| D&A | $3.0M | $4.2M | $3.9M | $3.7M |
| Depreciation | $2.7M | $3.8M | $3.6M | $3.3M |
| Amortization | $200.0K | $300.0K | $300.0K | $200.0K |
| Other OpEx | $0 | $0 | $15.2M | $0 |
| Non-Operating Income | $1.2M | $8.1M | $6.3M | $4.5M |
| Pre-Tax Income | $-70.6M | $-41.7M | $-55.4M | $-43.6M |
| Income Tax | $186.0K | $443.0K | $332.0K | $743.0K |
| Continuing Ops | $-70.8M | $-42.1M | $-55.8M | $-44.4M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $-70.8M | $-42.1M | $-55.8M | $-44.4M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $-70.8M | $-42.1M | $-55.8M | $-44.4M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $231.5M | $192.3M | $156.9M | $153.0M |
| Cash & Equivalents | $203.2M | $159.6M | $52.8M | $19.7M |
| Marketable Securities | — | — | $76.4M | $94.9M |
| Accounts Receivable | $22.7M | $27.0M | $23.1M | $25.6M |
| Prepaid Expenses | — | $5.8M | $4.7M | $4.7M |
| Other Current Assets | $5.6M | $0 | $0 | $8.0M |
| Long-Term Assets | $24.8M | $39.2M | $23.4M | $20.6M |
| Intangibles | $962.0K | $681.0K | $400.0K | $206.0K |
| Goodwill | $5.9M | $5.9M | $5.9M | $5.9M |
| Operating Leases | $9.8M | $8.1M | $8.4M | $6.1M |
| Other LT Assets | $8.1M | $24.5M | $8.7M | $8.4M |
| Total Assets | $256.3M | $231.5M | $180.3M | $173.6M |
| Current Liabilities | $22.8M | $23.1M | $25.7M | $40.4M |
| Accounts Payable | $8.5M | $5.2M | $4.0M | $3.9M |
| Current Leases | $1.9M | $1.8M | $2.3M | $2.6M |
| Deferred Revenue | $4.1M | $4.3M | $4.3M | $5.4M |
| Other Current Liab | $3.6M | $6.3M | $9.2M | $22.0M |
| Long-Term Liabilities | $9.9M | $8.1M | $7.1M | $5.1M |
| LT Operating Leases | $8.8M | $7.1M | $6.9M | $4.2M |
| Other LT Liab | $1.1M | $958.0K | $257.0K | $873.0K |
| Total Liabilities | $32.7M | $31.2M | $32.8M | $45.5M |
| Shareholders' Equity | $223.6M | $200.3M | $147.5M | $128.1M |
| Paid-In Capital | $421.6M | $440.4M | $444.6M | $469.6M |
| Retained Earnings | $-198.2M | $-240.4M | $-297.4M | $-341.8M |
| AOCI | — | — | $41.0K | $32.0K |
| Total L&E | $256.3M | $231.5M | $180.3M | $173.6M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $-70.8M | $-42.1M | $-55.8M | $-44.4M |
| Non-Cash Adjustments | $20.1M | $10.5M | $50.3M | $15.1M |
| Working Capital Changes | $4.6M | $6.1M | $-3.3M | $14.3M |
| Cash from Operations | $-46.0M | $-25.5M | $-8.7M | $-14.9M |
| Capital Expenditures | $4.4M | $4.9M | $2.8M | $3.1M |
| Cash from Investing | $-9.7M | $-20.0M | $-78.0M | $-18.2M |
| Share Buybacks | $264.0K | $89.0K | $127.0K | $105.0K |
| Cash from Financing | $3.5M | $1.9M | $-20.0M | $16.0K |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-52.2M | $-43.7M | $-106.8M | $-33.1M |
| Beginning Cash | $255.5M | $203.2M | $159.6M | $52.8M |
| Ending Cash | $203.2M | $159.6M | $52.8M | $19.7M |
Frequently Asked Questions
How does CS Disco, Inc. make money?
Automotive Components, Industrial Electronics, Consumer Goods Supplies, and Specialized Logistics Services
What are the main risks for LAW?
High operating leverage due to significant fixed costs and inventory exposure to cyclical demand fluctuations, persistent net losses impacting retained earnings, currency exchange rate volatility affecting international margins, and potential supply chain disruptions from geopolitical tensions.
What is LAW's competitive advantage?
Extensive global logistics network ensuring rapid delivery of hard-to-find components, deep technical expertise in semiconductor selection, and strong relationships with major component manufacturers.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.