Financial Performance & Guidance - FiscalNote reaffirmed its FY2025 revenue guidance of $94 million to $100 million[58] - The company expects adjusted EBITDA for FY2025 to be between $10 million and $12 million[58] - Q2 2025 total revenue reached $233 million, exceeding guidance midpoint[65] - Q2 2025 adjusted EBITDA was $28 million, exceeding guidance[65] - Annual Recurring Revenue (ARR) for Q2 2025 was $859 million[65] Strategic Initiatives & Product Development - FiscalNote is shifting to a product-led growth strategy to improve key performance metrics[73] - The company launched PolicyNote, an AI-driven platform with global data and proprietary insights, in January 2025, and migration is ongoing[38] - Corporate new logo pipeline increased by 20% YoY, and corporate new logo pipeline up +45% vs 1Q25[46] - The company is focused on deleveraging its balance sheet and strengthening its capital structure to fund future growth[73] Market & Customer Dynamics - FiscalNote serves over 3,600 customers[22] - Subscription revenue accounts for 92% of total revenues[23] - The company monitors legislative and regulatory activity in over 100 countries[23]

Executive Summary & Q2 2025 Highlights [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) FiscalNote reported Q2 2025 financial results with total revenue exceeding guidance midpoint and adjusted EBITDA surpassing guidance, reflecting the impact of business divestitures, product sunsetting, and effective expense management. The company reaffirmed its full-year 2025 guidance and anticipates a return to ARR growth in the second half of 2025, driven by strong PolicyNote momentum and customer engagement - Total revenue for Q2 2025 was **$23.3 million**, exceeding the guidance midpoint[3](index=3&type=chunk) - Adjusted EBITDA for Q2 2025 was **$2.8 million**, surpassing guidance, and improved by **58% year-over-year**, with adjusted EBITDA margins doubling[3](index=3&type=chunk) - The company reaffirmed full-year 2025 guidance for total revenues of **$94-$100 million** and adjusted EBITDA of **$10-$12 million**, expecting a return to ARR growth in H2 2025[4](index=4&type=chunk) - CEO Josh Resnik highlighted progress in strengthening the business, positioning for profitable growth, and noted encouraging signals in product and customer metrics, particularly PolicyNote adoption and engagement[5](index=5&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) The table below summarizes FiscalNote's key financial performance indicators for the second quarter of 2025 compared to the same period in 2024, showing declines in total revenue and gross profit but significant improvements in adjusted EBITDA and adjusted EBITDA margin Key Financial Highlights ($ in millions) | ($ in millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $23.3 | $29.2 | (20)% | | Subscription Revenue as % of Total Revenues | 92% | 93% | (100) bps | | Gross Profit | $18.3 | $22.4 | (18)% | | Gross Margin | 79% | 77% | 200 bps | | Adjusted Gross Profit | $20.1 | $24.9 | (19)% | | Adjusted Gross Margin | 86% | 85% | 100 bps | | Net Loss | $(13.3) | $(12.8) | 4% | | Adjusted EBITDA | $2.8 | $1.8 | 58% | | Adjusted EBITDA Margin | 12% | 6% | 600 bps | | Cash and Cash Equivalents | $39.2 | $38.4 | | Second Quarter 2025 Financial Performance [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) In Q2 2025, total revenues decreased by 20% year-over-year to $23.3 million, primarily due to previously announced divestitures. Subscription revenue, which constitutes 92% of total revenues, declined by 21% (8% on a pro forma basis excluding divestitures), while advisory, advertising, and other revenue saw a 10% decline due to the discontinuation of non-strategic products Revenue Analysis ($ in millions) | ($ in millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Subscription revenue | $21.4 | $27.1 | (21)% | | Advisory, advertising, and other revenue | $1.9 | $2.1 | (10)% | | Total revenues | $23.3 | $29.2 | (20)% | - Subscription revenue declined **$5.7 million (21%) YoY**, primarily due to divestitures. On a pro forma basis, excluding divestitures, subscription revenue declined **$1.8 million (approximately 8%)**[9](index=9&type=chunk)[10](index=10&type=chunk) - Advisory, advertising, and other revenue declined **$0.2 million (10%) YoY**, mainly due to the discontinuation of certain non-strategic products[10](index=10&type=chunk) [Operating Expenses](index=3&type=section&id=Operating%20Expenses) Total operating expenses in Q2 2025 decreased by 18% year-over-year to $30.7 million, driven by divestitures, ongoing efficiency measures, and the elimination of costs associated with sunset products. On a pro forma basis, excluding certain non-cash and transaction-related charges, operating expenses declined by 15% Operating Expenses ($ in millions) | ($ in millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Cost of revenues, including amortization | $4.9 | $6.9 | (28)% | | Research and development | $2.3 | $3.2 | (29)% | | Sales and marketing | $6.7 | $9.0 | (26)% | | Editorial | $3.5 | $4.4 | (22)% | | General and administrative | $11.4 | $11.3 | 1% | | Amortization of intangible assets | $1.9 | $2.4 | (20)% | | Total operating expenses | $30.7 | $37.2 | (18)% | - Total operating expenses declined **$6.5 million (18%) YoY**, primarily due to divestitures, efficiency measures, and elimination of sunset product costs[16](index=16&type=chunk) - On a pro forma basis, excluding amortization, stock-based compensation, divestitures, transaction costs, severance, and other non-cash charges, Q2 2025 total operating expenses declined **$3.6 million (15%)**[17](index=17&type=chunk) Key Performance Indicators (KPIs) [Annual Recurring Revenue (ARR)](index=3&type=section&id=Annual%20Recurring%20Revenue%20%28ARR%29) As of June 30, 2025, reported Annual Recurring Revenue (ARR) declined by 21% to $85.9 million. On a pro forma basis, excluding divested businesses, ARR declined by 8%. This decline is attributed to execution challenges, customer engagement issues in legacy products, and instability in the US federal sector. However, the company anticipates a return to ARR growth in the second half of 2025 due to operational improvements and the success of the new PolicyNote platform Annual Recurring Revenue (ARR) ($ in millions) | ($ in millions) | As of June 30, 2025 | As of June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Annual Recurring Revenue (ARR) | $85.9 | $109.0 | (21)% | | Pro Forma ARR** | $85.9 | $93.6 | (8)% | - The decline in ARR is primarily due to execution challenges, customer engagement issues in legacy products, and instability in the US federal sector[14](index=14&type=chunk) - FiscalNote expects a return to ARR growth in the second half of 2025, driven by improvements in sales pipeline, higher user engagement on PolicyNote, and increased multiyear commitments from new corporate customers[15](index=15&type=chunk) [Net Revenue Retention (NRR)](index=3&type=section&id=Net%20Revenue%20Retention%20%28NRR%29) Quarterly Net Revenue Retention (NRR) stood at 96% as of June 30, 2025, a decrease of 200 basis points from 98% in the prior year, both on an as-reported and pro forma basis Net Revenue Retention (NRR) | | As of June 30, 2025 | As of June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Quarterly Net Revenue Retention (NRR) | 96% | 98% | (200) bps | | Pro Forma NRR** | 96% | 98% | (200) bps | Operational Highlights [Operational Highlights](index=2&type=section&id=Operational%20Highlights) FiscalNote achieved several operational milestones in Q2 2025, focusing on enhancing its PolicyNote platform with AI-driven features, expanding its leadership team, and completing strategic divestitures. Key developments include the launch of a Tariff Tracker, AI-powered legislative forecasting and drafting capabilities, and a new social listening tool, alongside accelerated customer adoption of PolicyNote - Enhanced the PolicyNote platform with a dedicated Tariff Tracker in April to navigate global trade policies[12](index=12&type=chunk) - Expanded the leadership team with key technology appointments in April to drive product-led growth and AI innovation[12](index=12&type=chunk) - PolicyNote platform users surpassed legacy FiscalNote platform users in daily usage by June, indicating accelerating customer adoption[12](index=12&type=chunk) - Completed the sale of TimeBase, the Australia subsidiary, to Thomson Reuters for **$6.5 million** in July[12](index=12&type=chunk) - Unveiled AI-based enhancements to PolicyNote in June for legislative forecasting, alerts, and bill discovery, and launched AI-powered legislative drafting capabilities in July[12](index=12&type=chunk) - Launched a new AI-powered social listening capability in PolicyNote in August to surface early policy signals[12](index=12&type=chunk) Financial Guidance & Strategic Outlook [2025 Financial Guidance](index=3&type=section&id=2025%20Financial%20Guidance) FiscalNote reaffirmed its full-year 2025 financial guidance, projecting total revenues between $94 million and $100 million and adjusted EBITDA between $10 million and $12 million. For Q3 2025, the company anticipates total revenues of $22 million to $23 million and adjusted EBITDA of approximately $2 million. This guidance incorporates cost savings, product sunsetting, PolicyNote migration benefits, and market volatility considerations - Full Year 2025 guidance reaffirmed: Total revenues of **$94 to $100 million** and adjusted EBITDA of **$10 to $12 million**[19](index=19&type=chunk) - Q3 2025 guidance: Total revenues of **$22 to $23 million** and adjusted EBITDA of approximately **$2 million**[20](index=20&type=chunk) - Guidance considerations include incremental cost savings, sunsetting non-core products, PolicyNote migration benefits, current market volatility, and the impact of prior divestitures[18](index=18&type=chunk)[25](index=25&type=chunk) [Strategic Review](index=4&type=section&id=Strategic%20Review) FiscalNote's Board of Directors, with advisors, is conducting an ongoing strategic review to evaluate all value-maximizing options. The company has not set a timetable for completion and will only disclose developments if deemed appropriate or required - The Board of Directors is reviewing all strategic value-maximizing options[21](index=21&type=chunk) - There is no assurance that the strategic review will result in any transaction or outcome, and no timetable has been set[21](index=21&type=chunk) Corporate Information [Conference Call and Webcast](index=4&type=section&id=Conference%20Call%20and%20Webcast) FiscalNote hosted a conference call on August 7, 2025, at 5:00 PM EDT to discuss its financial results. Replay options were available by phone and webcast until August 14, 2025 - A conference call was held on Thursday, August 7, 2025, at 5:00 PM EDT[22](index=22&type=chunk) - Live access was available by phone (U.S./Canada: 1 (800) 715-9871, International: 1 (646) 307-1963, Conference ID: 7871199) or webcast via the Investor Relations section of the company's website[26](index=26&type=chunk) - Replay was available by phone (U.S./Canada: 1 (800) 770-2030, International: 1 (609) 800-9099, Conference ID: 7871199) or webcast until Thursday, August 14, 2025[26](index=26&type=chunk) [About FiscalNote](index=5&type=section&id=About%20FiscalNote) FiscalNote is a leading provider of AI-driven policy and regulatory intelligence solutions, combining proprietary AI, comprehensive data, and expert analysis to help customers manage political and business risk. Founded in 2013, the company offers critical insights through products like PolicyNote, CQ, Roll Call, and VoterVoice, serving thousands of customers globally - FiscalNote (NYSE: NOTE) is a leading provider of AI-driven policy and regulatory intelligence solutions[28](index=28&type=chunk) - The company combines proprietary AI technology, comprehensive data, and trusted analysis to help customers manage political and business risk[28](index=28&type=chunk) - Key products and brands include PolicyNote, CQ, Roll Call, and VoterVoice, serving thousands of customers worldwide[28](index=28&type=chunk) [Contacts](index=13&type=section&id=Contacts) Contact information for media and investor relations inquiries at FiscalNote - Media Contact: Yojin Yoon, press@fiscalnote.com[55](index=55&type=chunk) - Investor Relations Contact: Bob Burrows, IR@fiscalnote.com[55](index=55&type=chunk) Financial Statements [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=8&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) The unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2025, and 2024, detail FiscalNote's revenues, operating expenses, and net loss, showing a net loss of $(13.3) million for Q2 2025 and $(17.5) million for the six months ended June 30, 2025 Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenues:** | | | | | | Subscription | $21,380 | $27,151 | $46,612 | $56,777 | | Advisory, advertising, and other | 1,884 | 2,095 | 4,163 | 4,581 | | **Total revenues** | **23,264** | **29,246** | **50,775** | **61,358** | | **Operating expenses:** | | | | | | Cost of revenues, including amortization | 4,948 | 6,863 | 11,932 | 14,107 | | Research and development | 2,267 | 3,205 | 5,370 | 6,685 | | Sales and marketing | 6,692 | 9,001 | 14,451 | 18,416 | | Editorial | 3,472 | 4,453 | 8,270 | 9,113 | | General and administrative | 11,378 | 11,260 | 27,676 | 27,336 | | Amortization of intangible assets | 1,934 | 2,420 | 4,265 | 5,105 | | Transaction gains, net | - | - | - | (4) | | **Total operating expenses** | **30,691** | **37,202** | **71,964** | **80,758** | | Operating loss | (7,427) | (7,956) | (21,189) | (19,400) | | Loss (gain) on sale of businesses | 319 | - | (15,424) | (71,599) | | Interest expense, net | 4,338 | 5,320 | 9,465 | 12,682 | | Loss on debt extinguishment, net | - | - | 1,784 | - | | Change in fair value of financial instruments | 1,577 | (854) | 906 | (327) | | Other (income) expense, net | 405 | 18 | 435 | 259 | | Net (loss) income before income taxes | (14,066) | (12,440) | (18,355) | 39,585 | | (Benefit) provision from income taxes | (795) | 324 | (834) | 1,750 | | **Net (loss) income** | **(13,271)** | **(12,764)** | **(17,521)** | **37,835** | | Other comprehensive income | 50 | 55 | 351 | (61) | | **Total comprehensive (loss) income** | **$(13,221)** | **$(12,709)** | **$(17,170)** | **$37,774** | | Earnings (Loss) per share attributable to common shareholders: | | | | | | Basic and Diluted | $(0.08) | $(0.09) | $(0.11) | $0.28 | | Weighted average shares used in computing earnings (loss) per share attributable to common shareholders: | | | | | | Basic and Diluted | 160,000,492 | 134,407,109 | 155,668,949 | 132,763,763 | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) The unaudited Consolidated Balance Sheets as of June 30, 2025, and December 31, 2024, show FiscalNote's financial position, with total assets decreasing to $288.3 million from $326.2 million, and total liabilities decreasing to $190.5 million from $228.4 million Consolidated Balance Sheets (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Current assets: | | | | Cash and cash equivalents | $34,009 | $28,814 | | Restricted cash | 644 | 640 | | Short-term investments | 4,508 | 5,796 | | Accounts receivable, net | 9,357 | 13,465 | | Costs capitalized to obtain revenue contracts, net | 2,557 | 3,016 | | Prepaid expenses | 2,666 | 2,548 | | Other current assets | 2,931 | 2,908 | | **Total current assets** | **56,672** | **57,187** | | Property and equipment, net | 4,582 | 5,051 | | Capitalized software costs, net | 12,348 | 15,099 | | Noncurrent costs capitalized to obtain revenue contracts, net | 2,644 | 3,197 | | Operating lease assets | 14,580 | 15,620 | | Goodwill | 139,776 | 159,061 | | Customer relationships, net | 33,407 | 41,717 | | Database, net | 15,112 | 16,147 | | Other intangible assets, net | 9,177 | 13,018 | | Other non-current assets | 51 | 100 | | **Total assets** | **$288,349** | **$326,197** | | **Liabilities and Stockholders' Equity** | | | | Current liabilities: | | | | Current maturities of long-term debt | $6,525 | $36 | | Accounts payable and accrued expenses | 7,641 | 8,462 | | Deferred revenue, current portion | 32,729 | 35,253 | | Customer deposits | 1,089 | 1,850 | | Operating lease liabilities, current portion | 3,267 | 3,386 | | Other current liabilities | 706 | 2,266 | | **Total current liabilities** | **51,957** | **51,253** | | Long-term debt, net of current maturities | 110,223 | 147,041 | | Deferred tax liabilities | 615 | 1,934 | | Deferred revenue, net of current portion | 454 | 222 | | Operating lease liabilities, net of current portion | 20,948 | 22,490 | | Public and private warrant liabilities | 1,522 | 2,458 | | Other non-current liabilities | 4,816 | 2,968 | | **Total liabilities** | **190,535** | **228,366** | | Commitment and contingencies | | | | Temporary equity (2,596,050 Class A Common Stock issued and outstanding at June 30, 2025) | 2,719 | - | | **Stockholders' equity:** | | | | Class A Common stock ($0.0001 par value, 1,700,000,000 authorized, 155,049,637 and 142,794,386 issued and outstanding at June 30, 2025 and December 31, 2024, respectively) | 15 | 14 | | Class B Common stock ($0.0001 par value, 9,000,000 authorized, 8,290,921 issued and outstanding at June 30, 2025 and December 31, 2024, respectively) | 1 | 1 | | Additional paid-in capital | 914,362 | 899,929 | | Accumulated other comprehensive income | 5,137 | 4,786 | | Accumulated deficit | (824,420) | (806,899) | | **Total stockholders' equity** | **95,095** | **97,831** | | **Total liabilities, temporary equity and stockholders' equity** | **$288,349** | **$326,197** | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2025, and 2024, indicate net cash used in operating activities of $(2.9) million for the current period, a significant decrease from $(1.0) million in the prior year. Net cash provided by investing activities was $36.8 million, primarily from the sale of businesses, while net cash used in financing activities was $(28.8) million Consolidated Statements of Cash Flows (in thousands) | (in thousands) | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Operating Activities:** | | | | Net (loss) income | $(17,521) | $37,835 | | Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | | | | Depreciation | 502 | 603 | | Amortization of intangible assets and capitalized software development costs | 9,576 | 10,040 | | Amortization of deferred costs to obtain revenue contracts | 1,688 | 1,885 | | Gain on sale of businesses | (15,424) | (71,599) | | Non-cash operating lease expense | 1,015 | 1,147 | | Stock-based compensation | 7,339 | 9,704 | | Bad debt expense | 190 | 243 | | Change in fair value of acquisition contingent consideration | - | (4) | | Unrealized loss on securities | 71 | 80 | | Change in fair value of financial instruments | 906 | (327) | | Deferred income taxes | (61) | (561) | | Paid-in-kind interest, net | 3,739 | 3,964 | | Non-cash interest expense | 2,011 | 1,469 | | Loss on debt extinguishment, net | 1,784 | - | | Changes in operating assets and liabilities: | | | | Accounts receivable, net | 1,622 | 1,939 | | Prepaid expenses and other current assets | (1,111) | (1,628) | | Costs capitalized to obtain revenue contracts, net | (1,177) | (1,479) | | Other non-current assets | 42 | 183 | | Accounts payable and accrued expenses | (6) | (2,662) | | Deferred revenue | 5,298 | 8,974 | | Customer deposits | (572) | (774) | | Other current liabilities | (1,072) | 1,791 | | Contingent liabilities from acquisitions, net of current portion | - | (13) | | Operating lease liabilities | (1,541) | (1,737) | | Other non-current liabilities | (193) | (61) | | **Net cash used in operating activities** | **(2,895)** | **(988)** | | **Investing Activities:** | | | | Capital expenditures | (3,474) | (4,433) | | Cash proceeds from the sale of businesses, net | 40,269 | 91,384 | | **Net cash provided by investing activities** | **36,795** | **86,951** | | **Financing Activities:** | | | | Proceeds from long-term debt, net of issuance costs | - | 801 | | Principal payments of long-term debt | (27,172) | (65,754) | | Payment of deferred financing costs | (1,793) | (7,068) | | Proceeds from exercise of stock options and employee stock purchase plan purchases | 148 | 196 | | **Net cash used in financing activities** | **(28,817)** | **(71,825)** | | Effects of exchange rates on cash | 116 | (111) | | **Net change in cash, cash equivalents, and restricted cash** | **5,199** | **14,027** | | Cash, cash equivalents, and restricted cash, beginning of period | 29,454 | 17,300 | | **Cash, cash equivalents, and restricted cash, end of period** | **$34,653** | **$31,327** | | **Supplemental Noncash Investing and Financing Activities:** | | | | Issuance of common stock for conversion of debt and interest | $1,902 | $9,967 | | Amounts held in escrow related to the sale of businesses | $400 | $285 | | Property and equipment purchases in accounts payable | $67 | $121 | | **Supplemental Cash Flow Activities:** | | | | Cash paid for interest | $4,911 | $8,509 | | Cash paid for taxes | $834 | $172 | Non-GAAP Financial Measures & KPIs Definitions [Non-GAAP Financial Measures](index=11&type=section&id=Non-GAAP%20Financial%20Measures) FiscalNote utilizes non-GAAP financial measures such as Adjusted Gross Profit, Adjusted Gross Profit Margin, EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to provide a clearer understanding of its core operating performance and trends. These measures exclude certain non-cash and non-recurring items to offer consistency and comparability across periods, though they have limitations and should be considered alongside GAAP results - Non-GAAP financial measures are used to clarify and enhance understanding of performance and aid in period-to-period comparison[40](index=40&type=chunk) - These measures have limitations and should not be considered in isolation from, or as a substitute for, their most comparable GAAP measures[40](index=40&type=chunk) [Adjusted Gross Profit and Margin](index=11&type=section&id=Adjusted%20Gross%20Profit%20and%20Margin) Adjusted Gross Profit is defined as total revenues minus cost of revenues (excluding amortization of intangible assets included in cost of revenues), and Adjusted Gross Profit Margin is this figure divided by total revenues. These metrics are used to evaluate core operating performance by removing non-cash amortization effects - Adjusted Gross Profit is Total revenues minus cost of revenues, before amortization of intangible assets included in costs of revenues[41](index=41&type=chunk) - Adjusted Gross Profit Margin is Adjusted Gross Profit divided by Total Revenues[41](index=41&type=chunk) Adjusted Gross Profit and Margin (In thousands) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $23,264 | $29,246 | $50,775 | $61,358 | | Costs of revenues, including amortization of capitalized software development costs and acquired developed technology | (4,948) | (6,863) | (11,932) | (14,107) | | Gross Profit | $18,316 | $22,383 | $38,843 | $47,251 | | Gross Profit Margin | 79% | 77% | 77% | 77% | | Gross Profit | 18,316 | 22,383 | 38,843 | 47,251 | | Amortization of intangible assets | 1,779 | 2,507 | 5,311 | 4,935 | | Adjusted Gross Profit | $20,095 | $24,890 | $44,154 | $52,186 | | Adjusted Gross Profit Margin | 86% | 85% | 87% | 85% | [EBITDA, Adjusted EBITDA, and Margin](index=11&type=section&id=EBITDA%2C%20Adjusted%20EBITDA%2C%20and%20Margin) EBITDA represents earnings before interest, taxes, depreciation, and amortization. Adjusted EBITDA further excludes certain non-cash and non-operating items to reflect ongoing operations, with Adjusted EBITDA Margin calculated as Adjusted EBITDA divided by Total Revenues. These are key management metrics for evaluating business performance - EBITDA represents earnings before interest expense, income taxes, depreciation and amortization[44](index=44&type=chunk) - Adjusted EBITDA reflects further adjustments to EBITDA to exclude certain non-cash items and other items not indicative of ongoing operations[44](index=44&type=chunk) EBITDA, Adjusted EBITDA, and Margin (In thousands) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(13,271) | $(12,764) | $(17,521) | $37,835 | | Income tax (benefit) provision | (795) | 324 | (834) | 1,750 | | Depreciation and amortization | 3,960 | 5,226 | 10,078 | 10,643 | | Interest expense, net | 4,338 | 5,320 | 9,465 | 12,682 | | EBITDA | (5,768) | (1,894) | 1,188 | 62,910 | | Loss (Gain) on sale of businesses (a) | 319 | - | (15,424) | (71,599) | | Stock-based compensation | 3,964 | 3,529 | 7,339 | 9,704 | | Change in fair value of financial instruments (b) | 1,577 | (854) | 906 | (327) | | Other non-cash charges (c) | 662 | 31 | 2,801 | 76 | | Disposal related costs (d) | 971 | 394 | 5,945 | 1,098 | | Employee severance costs (e) | 800 | 91 | 2,144 | 198 | | Non-capitalizable debt costs | 337 | 224 | 744 | 478 | | Costs incurred related to the Special Committee (f) | 167 | 253 | 167 | 453 | | Non-operating income (g) | (228) | - | (228) | - | | Adjusted EBITDA | $2,801 | $1,774 | $5,582 | $2,991 | | Adjusted EBITDA Margin | 12.0% | 6.1% | 11.0% | 4.9% | [Key Performance Indicators Definitions](index=13&type=section&id=Key%20Performance%20Indicators%20Definitions) FiscalNote monitors key performance indicators (KPIs) like Annual Recurring Revenue (ARR) and Net Revenue Retention (NRR) to assess growth trends, prepare financial projections, and measure the effectiveness of sales and marketing efforts. These metrics reflect underlying business trends and ongoing operational performance - KPIs are monitored to evaluate growth trends, prepare financial projections, make strategic decisions, and measure sales and marketing effectiveness[52](index=52&type=chunk) [Annual Recurring Revenue (ARR)](index=13&type=section&id=Annual%20Recurring%20Revenue%20%28ARR%29) ARR is a measure of revenue trend and future revenue opportunity from existing recurring subscription customer contracts, calculated by annualizing contracted subscription revenue at the parent account level. It is not adjusted for future cancellations, upgrades, or price changes - ARR measures revenue trend and future revenue opportunity from existing recurring subscription customer contracts[53](index=53&type=chunk) - Calculated by annualizing contracted subscription revenue at the parent account level; not adjusted for future cancellations, upgrades, or price changes[53](index=53&type=chunk) [Net Revenue Retention (NRR)](index=13&type=section&id=Net%20Revenue%20Retention%20%28NRR%29) NRR measures success in retaining and growing recurring revenue from existing customers by comparing recognized recurring revenue across comparable periods. It includes positive impacts from selling additional licenses and services and negative impacts from contraction and attrition - NRR measures success in retaining and growing recurring revenue from existing customers[54](index=54&type=chunk) - Calculated as ARR at period end minus ARR from new clients, divided by beginning ARR, including impacts of additional sales, contraction, and attrition[54](index=54&type=chunk) Safe Harbor Statement & Risk Factors [Safe Harbor Statement & Risk Factors](index=5&type=section&id=Safe%20Harbor%20Statement%20%26%20Risk%20Factors) This section outlines forward-looking statements subject to risks and uncertainties that could materially alter actual results, cautioning against undue reliance and detailing key factors like debt financing, revenue concentration, and operational challenges - The press release contains forward-looking statements subject to risks, uncertainties, and important factors that could cause actual results to differ materially[29](index=29&type=chunk)[30](index=30&type=chunk) - Key risk factors include FiscalNote's ability to complete debt financing, concentration of revenues from U.S. government agencies, ability to execute its organic growth strategy, future capital requirements, and risks associated with international operations[31](index=31&type=chunk) - Additional risks include reliance on third-party systems, potential technical disruptions, competition, compliance with laws and regulations, ability to retain key personnel, and adverse economic conditions[33](index=33&type=chunk)

Summary of FiscalNote Holdings (NOTE) FY Conference Call - June 11, 2025 Company Overview - **Company**: FiscalNote Holdings (NOTE) - **Industry**: Policy and Regulatory Information Services - **Business Model**: Subscription-based access to policy and regulatory information through an AI-driven SaaS platform [4][39] Key Points and Arguments Business Model and Market Position - FiscalNote provides critical policy and regulatory information, proprietary insights, and workflow tools to organizations globally [4][6] - The complexity of regulations is increasing, leading to a growing demand for FiscalNote's services among various sectors, including corporate, public sector, and non-profits [5][6][8] - Approximately 50% of revenue comes from corporate clients, 25% from public sector organizations, and 25% from non-profits and NGOs [8][13] Financial Performance - Significant improvement in adjusted EBITDA from a loss of $24.5 million in 2022 to a profit of $9.8 million in 2024, with seven consecutive quarters of profitability [19][20] - Expected adjusted EBITDA margins for 2025 are double those of 2024 on a pro forma basis [20][39] - Focus on debt management, having reduced senior term loans by 60% over the past year and a half [21][46] Product Development and Innovation - Introduction of a new platform, Policy Note, aimed at consolidating data and improving user experience, which is AI-forward and intuitive [24][25] - Policy Note has shown positive engagement metrics, with 75% of at-risk customers becoming engaged after migration to the new platform [28][30] - Launched 15 major product features since the announcement of Policy Note, enhancing user engagement and driving growth [35] Competitive Landscape - Major competitors include Bloomberg and Politico, which focus primarily on U.S. federal content, and Quorum, which lacks the depth and breadth of FiscalNote's offerings [48][49][50] - FiscalNote differentiates itself through its comprehensive global-to-local data coverage and proprietary analysis, which adds significant value for end users [41][42][56] Future Outlook - Reaffirmed revenue guidance for 2025 between $94 million and $100 million, with expectations for ARR growth to resume in the latter half of the year as Policy Note gains traction [39][47] - AI is viewed as an accelerant for business growth, with plans to leverage generative AI to automate workflows and enhance service offerings [43][44] Additional Important Insights - The company emphasizes the importance of trust and accuracy in the information provided to clients, which is critical for decision-making in regulatory environments [40][41] - The transition to a product-led growth model is expected to enhance customer engagement and retention, addressing previous challenges related to legacy siloed platforms [45][51] - FiscalNote's proprietary insights and analysis are considered unique and valuable, providing a competitive edge in the market [56][58]

Financial Performance & Outlook - FiscalNote's total revenues for Q1 2025 were $27.5 million, compared to $32.1 million in Q1 2024[59] - The company's gross profit for Q1 2025 was $20.5 million, with a gross margin of 75%, compared to $24.9 million and 77% respectively in Q1 2024[59] - Adjusted EBITDA for Q1 2025 was $2.8 million, representing a 10% margin, compared to $1.2 million and a 4% margin in Q1 2024[59] - FiscalNote reaffirms its full-year 2025 revenue forecast of $94 million to $100 million and adjusted EBITDA of $10 million to $12 million[68] - The company's annual recurring revenue (ARR) for Q1 2025 was $87.7 million, compared to $109.6 million in Q1 2024[59] Business Strategy & Focus - FiscalNote is transitioning towards product-led growth, focusing on product enhancements and launches to improve user experience and customer retention[48, 50] - The company is optimizing its product portfolio, sunsetting non-core products, and divesting non-core businesses to reduce complexity and drive profitable growth[45] - FiscalNote is leveraging AI technologies, such as Copilots for Policy and Global Intelligence, to enhance its core offerings and provide actionable insights to customers[45] Customer Base & Market - FiscalNote has over 4,100 customers, with 92% of total revenues derived from subscriptions[22] - The company serves over 50 of the Fortune 100 companies and monitors legislative and regulatory activities in over 80 countries[22] - FiscalNote targets customers in the private sector (~52%), public sector (~22%), and non-profit/NGO sector (~26%)[20]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 FISCALNOTE HOLDINGS, INC. (Exact Name of Registrant as Specified in its Charter) | Delaware | 001-396972 | 88-3772307 | | --- | --- | --- | | (State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer | | incorporation or organization) | | Identi ...

Core Insights - FiscalNote Holdings, Inc. reported a quarterly loss of $0.12 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.10, marking an earnings surprise of -20% [1] - The company generated revenues of $27.51 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 4.21%, but down from $32.11 million year-over-year [2] - The stock has declined approximately 37.6% since the beginning of the year, contrasting with the S&P 500's decline of -3.8% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.09 on revenues of $22.64 million, and for the current fiscal year, it is -$0.26 on revenues of $96.22 million [7] - The estimate revisions trend for FiscalNote Holdings, Inc. is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Technology Services industry, to which FiscalNote belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8] - Another company in the same industry, Knightscope, Inc., is expected to report a quarterly loss of $1.47 per share, reflecting a year-over-year change of +63.3%, with revenues projected at $2.68 million, up 19.1% from the previous year [9]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $2,800,000, exceeding expectations, with an adjusted EBITDA margin of 10%, up from 4% in the same period last year [7][8] - Total revenue for Q1 2025 was $27,500,000, above the forecast of $26,000,000 to $27,000,000, but $4,000,000 lower compared to the prior year due to divestitures [23][24] - Annual recurring revenue (ARR) was $88,000,000, down from $94,000,000 in 2024 on a pro forma basis [24][25] - Net revenue retention was 93%, down from 96% in the prior year [25] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 92% of total revenue, consistent with historical trends [24] - Principal operating expenses decreased by $2,300,000 or 5% year-over-year, with significant reductions in R&D and sales and marketing expenses [26][27] - Gross margins for Q1 2025 were 75%, down 200 basis points from the prior year, while adjusted gross margins improved to 87% [27] Market Data and Key Metrics Changes - Inbound pipeline rose 20% compared to the same period last year, driven by regulatory complexity and interest in PolicyNotes [12] - Strong traction in Europe, with pipeline creation doubling in Q1 compared to the same period in 2024 [12] Company Strategy and Development Direction - The company is focused on three key objectives: expanding adjusted EBITDA margins, managing debt, and building a foundation for durable growth [6][22] - The launch of PolicyNotes is expected to have a meaningful positive impact on 2025, with a commitment to product-led growth [13][24] - The company is committed to deleveraging, having reduced its senior term loan by $96,000,000 since December 31, 2023 [8][28] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed full-year revenue guidance despite challenges, indicating confidence in execution and progress [22][29] - The company is optimistic about future growth, citing strong demand and engagement metrics [20][22] Other Important Information - Cash and cash equivalents at the end of Q1 2025 were $46,900,000, an increase driven by divestiture cash inflows [28] - The company plans to further reduce its senior term loan with the sale of its Australian subsidiary [28] Q&A Session Summary Question: Sales force and market execution - Management acknowledged previous execution issues and noted improvements in sales force effectiveness and pipeline development [32][33] Question: PolicyNotes migration timeline - Management expects to migrate all core customers to the new platform by next year, with accelerated migration efforts underway [35][36] Question: Revenue guidance for Q2 - The decline in revenue guidance for Q2 is attributed to revenue recognized from divested businesses in Q1 [42][44] Question: Balance sheet and cash from transactions - The sale of a division in Australia is expected to generate approximately $6.5 million, with half allocated to debt reduction [47] Question: Federal vertical health - Management noted volatility in the federal market but sees opportunities for efficiency and value creation [58][59] Question: New adviser from Palantir - The adviser was engaged to focus on federal government opportunities and provide insights to the commercial teams [60]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $2,800,000, exceeding expectations, with an adjusted EBITDA margin of 10%, up from 4% in the same period last year [6][7][28] - Total revenue for Q1 2025 was $27,500,000, above the forecast of $26,000,000 to $27,000,000, but $4,000,000 lower compared to the prior year due to divestitures [22][23] - Annual recurring revenue (ARR) was $88,000,000, down from $94,000,000 in 2024 on a pro forma basis [23][24] - Net revenue retention was 93%, down from 96% in the prior year [24] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 92% of total revenue, consistent with historical trends [22] - Principal operating expenses decreased by $2,300,000 or 5% year-over-year, with significant reductions in R&D and sales and marketing expenses [25][26][27] Market Data and Key Metrics Changes - Inbound pipeline rose 20% compared to the same period last year, driven by regulatory complexity and interest in PolicyNote [12] - Strong traction in Europe, with pipeline creation doubling compared to the same period in 2024 [12] Company Strategy and Development Direction - The company is focused on three key objectives: expanding adjusted EBITDA margins, managing debt, and building a foundation for durable growth [6] - The launch of PolicyNote is expected to have a meaningful positive impact on 2025, with a commitment to product-led growth [13][23] - The company is committed to deleveraging, having reduced its senior term loan by $96,000,000 since December 31, 2023 [8][28] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed full-year revenue guidance despite a slow start to 2025, indicating confidence in future growth [10][21] - The company is encouraged by the engagement with PolicyNote and the positive impact of accelerated product innovation [19][30] Other Important Information - Cash and cash equivalents at the end of Q1 2025 were $46,900,000, an increase driven by divestiture cash inflows [28] - The company plans to further reduce its senior term loan with the sale of its Australian subsidiary, TymeBase [28][46] Q&A Session Summary Question: Sales force and market execution - Management noted that recent changes in management have led to improved execution and stronger pipeline development [32][33] Question: PolicyNote migration timeline - The company expects to migrate all core customers to the new platform by next year, with accelerated migration efforts underway [35][36] Question: Revenue guidance for Q2 - The decline in revenue guidance for Q2 is attributed to revenue recognized from divested businesses in Q1 [41][43] Question: Balance sheet and cash from transactions - The company announced a transaction to sell a division in Australia for approximately $6.5 million, with half expected to reduce debt [46] Question: Strategic options for maximizing shareholder value - The board is continuously considering ways to maximize company value, with potential future divestitures not ruled out [48][51] Question: Pipeline details - The increase in pipeline is primarily from new logos across various sectors, with strong interest noted in Europe [54][56] Question: Health of the federal vertical - The company sees opportunities in the federal sector despite volatility, emphasizing the efficiency gains their products provide [59][60] Question: Advisor from Palantir - The advisor was engaged to focus on federal government opportunities, leveraging AI platforms for federal contracting [61]

Exhibit 99.1 FiscalNote Reports First Quarter 2025 Financial Results First Quarter 2025 Revenue and Adjusted EBITDA Exceed Forecasts, Reflecting Continued Progress on Path to Sustained Growth and Profitability Continues Business Streamlining; Closes Divestiture of Oxford Analytica and Dragonfly Intelligence and Announces Agreement to Sell TimeBase, Enabling Further Strengthening of Balance Sheet Board of Directors Continues to Review All Strategic Options Available to the Company to Maximize Shareholder Val ...

Financial Performance - Total revenues for the years ended December 31, 2024 and 2023 were $120.3 million and $132.6 million, respectively, reflecting a year-over-year decline primarily due to the divestiture of Board.org in March 2024[22]. - As of December 31, 2024, the company's annual recurring revenue (ARR) was $107.5 million, with an adjusted ARR of $93.3 million after excluding discontinued products and divested businesses[43]. - The net retention revenue (NRR) for subscription customers was approximately 98% for Q4 2024, indicating strong customer retention[46]. - The company incurred net losses of $62.5 million in 2024 and $115.5 million in 2023, highlighting ongoing challenges in achieving profitability[66]. - Approximately 90% of the company's revenues are subscription-based, making high renewal rates critical for financial stability[67]. - A significant portion of revenue is derived from government contracts, which are subject to unpredictable demand and budgetary cycles[106]. Customer Base and Market Presence - The company serves a diverse customer base, including 40 of the Fortune 100, across more than 40 countries, providing stability and growth opportunities[22][36]. - The company serves a diverse customer base, including 40 of the Fortune 100, indicating a strong market presence[42]. - For the years ended December 31, 2024 and 2023, approximately 21% and 19% of revenues were derived from outside the United States, indicating a growing international presence[85]. Product Development and Innovation - The launch of the new core product, PolicyNote, is expected in January 2025, aimed at improving customer experience and retention through enhanced AI features[29]. - Investments in research and development focus on consolidating product portfolios and enhancing data integration capabilities, with a strong emphasis on AI-driven technology[31][33]. - The company is focused on innovation, having launched new products like PolicyNote and plans to continue enhancing its technology platform[55]. - The company leverages AI-driven analytical solutions to provide clients with insights on legal and regulatory developments, enhancing its service offerings[48]. Competition and Market Risks - The company faces competition from traditional information services and emerging startups, necessitating continuous improvement and innovation in its product offerings[50]. - The introduction of competitors' offerings and fluctuations in customer satisfaction could lead to declines in subscriptions, impacting future revenues[69]. - The company faces intense competition for skilled personnel, particularly in AI and data science, which could hinder its ability to innovate and maintain customer relationships[111]. - The company faces risks associated with international operations, including compliance with foreign laws and potential economic instability in those regions[84]. Operational Challenges - The company has implemented a cost reduction plan in 2023 to align operations and reduce future operating expenses[66]. - The sales cycles for the company's products and services are lengthy and unpredictable, requiring significant time and resources without guaranteed revenue[88]. - The company acknowledges the difficulty in accurately estimating the size of its total addressable market, which could limit future growth rates[89]. - The company must navigate challenges in selling to government entities, including competitive bidding processes and compliance with stringent regulations[105]. Intellectual Property and Compliance - The company owns 47 registered trademarks, 14 patents, and has 373 domain names, indicating a strong intellectual property portfolio[53]. - The company may not be able to adequately protect its intellectual property rights, which could harm its business and financial condition[136]. - The company must comply with various lobbying laws, which could result in penalties if not adhered to[108]. - The company is subject to various legal and regulatory risks that could adversely impact its financial condition and operating results[121]. Financial Management and Capital Structure - As of December 31, 2024, the company had $168.2 million in total indebtedness, with $88.6 million under a senior term loan secured by substantially all assets and $79.6 million unsecured[122]. - The company plans to retire $27.1 million of term loans under the senior term loan in connection with the sale of Oxford Analytica and Dragonfly[123]. - The company incurs increased costs due to public company compliance requirements, which may affect profitability[193]. - The company may need to hire additional accounting staff or engage outside consultants, increasing operating expenses[194]. Cybersecurity and Risk Management - The company has a cybersecurity risk management program led by a Vice President with over 15 years of experience in the field[204]. - The company has faced cybersecurity threats, including malware and computer virus attacks, but these have not materially affected its business strategy or financial condition[208]. - The company's Board has delegated responsibility for oversight of the Enterprise Risk Management program and cybersecurity risk to the Audit Committee[207]. - Cybersecurity threats are constantly evolving, and the company may be vulnerable to data breaches that could harm its reputation and financial condition[170].