CS Disco outlines how it will measure and report early adoption metrics for its new per-gigabyte pricing model during Q1 and Q2 2026 through usage, revenue growth, customer retention, and sales cycle indicators. The company plans detailed reporting via quarterly earnings and investor communications.
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How will you measure and report early adoption metrics for the new per‑gigabyte pricing within Q1 and Q2 2026?
Analysis of Measuring and Reporting Early Adoption Metrics for the New Per-Gigabyte Pricing in Q1 and Q2 2026
CS Disco, Inc. (ticker: LAW) announced in their Q4 2025 earnings call and accompanying commentary a strategic transition in their pricing model toward a per-gigabyte approach, reflecting industry-standard usage-based pricing for their AI-enabled e-discovery platform. This pricing model launch is aligned with their platform and contracting updates aimed at simplifying customer buying processes and driving greater adoption.
Metric Focus Areas:
Usage Growth in Gigabytes:
The company has emphasized that its pricing is now tied to the size of the customer data as it grows over time rather than initial data loads. Therefore, a primary early adoption metric will be the transaction gigabytes processed on the platform, with particular attention to multi-terabyte matters, which have shown strong growth historically 12.
Revenue Impact – Software Revenue Growth:
Software revenue growth acts as a proxy for adoption of new pricing. Candidly, they saw 12% year-over-year growth in software revenue in 2025 and expect this to accelerate with the new model 23. They provide quarterly guidance in software revenue ranges (e.g., $33.75M – $35.25M for Q1 2026). Tracking attainment of these ranges and upward trends will be key metrics.
Customer Composition and Dollar-Based Net Retention:
The company highlights a focus on increasing wallet share within large customers and strategic matter growth. Key metrics include:
Win Rates and Deal Cycle Impact:
Management expects that this simpler, clearer pricing will reduce sales friction and discounting, accelerating deal cycles and increasing win rates on large matters. Monitoring changes in deal cycle length and pricing discount levels early in 2026 will serve as adoption indicators 567.
Reporting Framework:
Quarterly Earnings and Guidance Disclosures:
Early adoption metrics will be indirectly reported through ongoing quarterly earnings updates, which include:
Customer Feedback and Sales Commentary:
Management disclosed that they have been testing the model with select customers for six months and will be broadly discussing it in customer events such as Legal Week NY. Early customer feedback and sales team reports on deal progress and client reactions are planned to be shared during earnings calls and investor updates 95.
Segmented Revenue Analysis:
Given the shift is from an initial data load pricing to usage growth based pricing, they will likely track the percentage of revenue attributable to committed multi-matter spend customers and the split between software and services revenue as an adoption signal 93.
Challenges in Early Measurement and Variability:
The CFO notes that with any usage-based model, early quarters show wide ranges in revenue guidance due to variability in usage patterns across customers and their matter timings. However, with scale, predictability will increase, improving metric precision over Q1 and Q2 2026 610.
The company plans to observe the evolving sales effectiveness and customer understanding of the model, which impacts discounting and win rates—early disruptions or accelerations in these metrics will be monitored closely 57.
Key early adoption metrics for Q1 and Q2 2026 will include:
Reporting will occur primarily through quarterly earnings commentary, financial disclosures, and management updates at investor events. The company’s prior six months of testing and positive customer feedback provide a foundation for refined measurement and communication in these two quarters.
Variability and cautious guidance ranges reflect the nature of adoption but management expects increasing predictability and clarity as the model scales and the benefits of simplified, comprehensive per-gigabyte pricing take hold 68.
In conclusion, CS Disco, Inc. will measure early adoption of the new per-gigabyte pricing model by tracking growth in gigabytes processed on the platform, software revenue growth within guided ranges, dollar-based net retention among large clients, and sales cycle dynamics. They will report these metrics alongside qualitative commentary in their quarterly earnings disclosures for Q1 and Q2 2026, leveraging learnings from the prior six-month pilot and ongoing customer engagement to assess adoption success and refine guidance accuracy.
This approach aligns with their strategy to use simplified, industry-standard usage-based pricing to accelerate adoption of their integrated e-discovery and AI platform and to expand wallet share efficiently.
Sources:
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