FiscalNote Holdings, Inc. (Q1 2026) Earnings Call Summary

1Key Financial Results and Metrics

GAAP Revenue: $20 million, consistent with guidance ($20-$21 million).

Adjusted EBITDA: $1 million, with a margin of 5.1% (down from 10.1% in Q1 2025).

Annual Recurring Revenue (ARR): $75.7 million, a decline from $84.1 million at year-end, attributed to customer attrition and procurement delays.

Net Revenue Retention (NRR): 89%, down from 93% in Q1 2025, reflecting retention challenges.

GAAP Net Loss: $43.6 million, including a non-cash goodwill impairment charge of $35.6 million.

Operating Cash Flow: Positive at $3 million for the quarter.

Debt: $131.9 million outstanding, with reclassification of debt to current due to delisting from NYSE.

2Strategic Updates and Business Highlights

Profitability Focus: The company is on a path to positive free cash flow, with expectations to achieve this by Q1 2027.

Platform Migration: Successful transition of customers to the PolicyNote platform, with positive early results in user engagement and retention.

Product Development: Continued investment in AI-driven workflows and the launch of an expanded API to enhance customer engagement and data integration.

Political Prediction Markets: Strategic entry into this market, leveraging existing data assets and expertise to create new revenue streams.

Operational Restructuring: Workforce reductions and cost-cutting measures are expected to improve margins in subsequent quarters.

3Forward Guidance and Outlook

2026 Revenue Guidance: Reaffirmed at $80 million to $83 million.

Adjusted EBITDA Guidance: Maintained at $14 million to $16 million for the year.

Q2 2026 Expectations: Projected GAAP revenue between $19.5 million and $20.5 million, with adjusted EBITDA of approximately $2.5 million.

Long-term Goals: Aim to achieve and maintain positive free cash flow on a trailing 12-month basis post-March 2027.

4Bad News, Challenges, or Points of Concern

Customer Attrition: Loss of several large customers negatively impacted ARR and NRR.

Delisting from NYSE: Trading of Class A common stock suspended, creating compliance issues with debt holders.

Revenue Decline: Organic subscription revenue decreased by approximately 11% year-over-year, indicating potential challenges in customer retention and market conditions.

Goodwill Impairment: Significant non-cash charge reflects underlying valuation concerns.

5Notable Q&A Insights

Debt Management: The transition to OTC markets is an interim step, and the company is working with creditors to resolve compliance issues.

Retention Trends: Early indicators for Q2 suggest potential stabilization in net retention, aided by customer migrations and new initiatives.

Revenue Visibility: Strong visibility into revenue due to recurring contracts, with optimism about stabilizing and potentially increasing revenue in the latter half of the year.

API Demand: Positive demand for the new API offerings, indicating a shift towards product-led growth and broader market engagement. Overall, FiscalNote is navigating a challenging environment with strategic initiatives aimed at improving profitability and market positioning, despite facing headwinds in customer retention and operational restructuring.