Financial Performance - Total revenues for the years ended December 31, 2024 and 2023 were 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 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 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 88.6 million under a senior term loan secured by substantially all assets and 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].
FiscalNote(NOTE) - 2024 Q4 - Annual Report