FiscalNote(NOTE) - 2024 Q3 - Quarterly Results

Financial Performance - Q3 2024 total revenues reached $29.4 million, with adjusted EBITDA of$ 3.4 million, both exceeding previous forecasts[1] - Adjusted EBITDA for the full year 2024 is raised to approximately $9 million, up from$ 8 million, while total revenues are revised to approximately $120 million, down from$ 121 million[1] - Total revenues for Q3 2024 were $29.439 million, a decrease of 13.5% compared to$ 34.009 million in Q3 2023[22] - Operating loss for Q3 2024 was $6.811 million, an improvement from a loss of$ 13.461 million in Q3 2023[22] - Net loss for Q3 2024 was $14.935 million, compared to a net loss of$ 14.467 million in Q3 2023[22] - The company reported a net income of $22,900,000 for the nine months ended September 30, 2024, compared to a net loss of$ 64,713,000 for the same period in 2023[25] Revenue Breakdown - Subscription revenue for Q3 2024 was $27.2 million, a decline of$ 2.8 million or 9% year-over-year, primarily due to the impact of the Board.org sale[8] - Subscription revenues amounted to $27.238 million in Q3 2024, down from$ 30.057 million in Q3 2023, reflecting a decline of 9.3%[22] - Approximately 90% of the company's revenues are subscription-based, contributing to high revenue predictability[36] Operating Expenses and Efficiency - Operating expenses decreased by 24% year-over-year to $36.3 million, driven by the sale of Board.org and ongoing efficiency measures[12] - Total operating expenses decreased to$ 36.250 million in Q3 2024 from $47.470 million in Q3 2023, a reduction of 23.5%[22] - Research and development expenses were$ 3.250 million in Q3 2024, down from $4.540 million in Q3 2023, a decrease of 28.3%[22] - General and administrative expenses decreased to$ 10.622 million in Q3 2024 from $14.418 million in Q3 2023, a decline of 26.5%[22] Strategic Initiatives - The recent divestiture of Aicel Technologies for$ 9.65 million is part of the strategy to reduce business complexity and improve operating efficiency[5] - Era Global Technologies is investing $5.5 million in FiscalNote through a convertible subordinated promissory note, supporting the company's AI initiatives[15] - The company has appointed Can Babaoglu as Chief Product Officer to enhance product strategy and drive profitable growth[5] Cash Flow and Balance Sheet - Cash and cash equivalents increased to$ 25,688,000 from $16,451,000, marking a growth of approximately 56.5%[24] - Total liabilities decreased significantly from$ 327,102,000 to $239,432,000, a reduction of about 26.8%[24] - Long-term debt decreased from$ 222,310,000 to $142,152,000, a reduction of approximately 36.1%[24] - The total stockholders' equity increased to$ 98,517,000 from $43,459,000, representing a growth of approximately 126.5%[24] Performance Metrics - Adjusted Gross Profit and Adjusted Gross Profit Margin metrics are utilized to evaluate core operating performance, excluding non-cash effects of amortization[27][28] - Adjusted Gross Profit for the three months ended September 30, 2024, was$ 25,428,000, compared to $28,364,000 in 2023, reflecting a decrease of about 10.5%[33] - Adjusted Gross Profit Margin improved to 86% for the three months ended September 30, 2024, up from 83% in 2023[33] - Adjusted EBITDA for the three months ended September 30, 2024, was$ 3,444,000, up from $736,000 in 2023, marking an increase of approximately 369.4%[34] - Adjusted EBITDA Margin for the three months ended September 30, 2024, was 11.7%, significantly higher than 2.2% in 2023[34] Customer Retention and Growth - The company monitors Net Revenue Retention (NRR) to assess success in retaining and growing recurring revenue from existing customers[38] - Run-Rate Revenue, defined as ARR plus non-subscription revenue, is used to gauge total revenue growth[37] - The company emphasizes the importance of retaining existing subscription customers as a key performance indicator for future revenue opportunities[36]