FiscalNote(US:NOTE)2024-11-12 21:23Financial Performance - Total revenues for the three months ended September 2024 were $29,439,000, a decrease of 13.5% compared to $34,009,000 for the same period in 2023[8] - Subscription revenues decreased to $27,238,000 from $30,057,000, reflecting a decline of 9.3% year-over-year[8] - Operating loss for the three months ended September 2024 was $(6,811,000), an improvement from $(13,461,000) in the same quarter of 2023[8] - Net loss for the three months ended September 2024 was $(14,935,000), compared to $(14,467,000) for the same period in 2023[8] - The company reported a comprehensive loss of $(13,812,000) for the three months ended September 2024, compared to $(15,473,000) in the same quarter of 2023[8] - The company reported a net loss of $14.9 million for Q3 2024, an increase in loss of $468,000 or 3.2% compared to a net loss of $14.4 million in Q3 2023[201] Expenses - Research and development expenses for the three months ended September 2024 were $3,250,000, down from $4,540,000, a decrease of 28.3%[8] - General and administrative expenses decreased to $10,622,000 from $14,418,000, a reduction of 26.4% year-over-year[8] - Interest expense for the three months ended September 2024 was $5,585,000, down from $8,018,000, a decrease of 30.1%[8] - Total operating expenses for Q3 2024 were $36.3 million, a decrease of $11.2 million or 23.5% from $47.5 million in Q3 2023[201] Equity and Stock - As of September 30, 2023, total stockholders' equity stands at $83,569,000, a decrease from $140,434,000 at March 31, 2023[10] - The weighted average shares used in computing earnings per share increased to 135,050,093 from 128,832,502 year-over-year[8] - The balance of common stock shares decreased to 128,895,749 as of September 30, 2023, from 133,866,990 at March 31, 2023[10] - The Company has authorized the issuance of 1,809,000,000 shares, including Class A common stock, Class B common stock, and preferred stock[98] - As of September 30, 2024, the Company had 132,584,083 shares of Class A common stock issued and outstanding[99] Cash and Debt - Cash, cash equivalents, and restricted cash totaled $26.4 million at the end of the period, up from $17.3 million at the end of September 2023[11] - The company had a negative working capital balance of $45.8 million (excluding cash and short-term investments) as of September 30, 2024[16] - As of September 30, 2024, the total gross debt of the company is $155,886, down from $225,513 as of December 31, 2023, indicating a reduction of approximately 30.8%[64] - The company incurred cash interest of $11,165 for the nine months ended September 30, 2024, compared to $15,341 for the same period in 2023, reflecting a decrease of approximately 27.5%[71] Revenue Sources - Revenue from the U.S. Federal Government accounted for 17% of total revenue for the nine months ended September 30, 2024, up from 15% in the same period of 2023[27] - Approximately 90% of total revenues were subscription-based for the nine months ended September 30, 2024[183] - Annual Recurring Revenue (ARR) as of September 30, 2024, was $109.5 million, down from $126.1 million at December 31, 2023[173] - Run-Rate Revenue at September 30, 2024, was approximately $119.4 million, compared to $139.7 million at December 31, 2023[174] - Net Revenue Retention (NRR) was 99% for the three months ended September 30, 2024, down from 100% in the same period of 2023[175] Acquisitions and Sales - The Company completed the sale of Board.org for a total value of up to $103 million, recording a gain on sale of business of $71.6 million during the three months ended March 31, 2024[162] - The acquisition of Dragonfly Eye Limited was completed for a total consideration of $25.236 million, including $5.6 million in cash, 1,885,149 shares of Class A Common Stock, and $11.1 million in subordinated convertible promissory notes[47][48] - The company raised approximately $18.1 million in net cash proceeds from the sale of Board.org, which was retained for operating matters[16] Future Outlook - The company anticipates continued focus on organic growth and market expansion strategies moving forward[5] - The company expects significant ongoing operating and capital expenditures to continue implementing its business plan, including entering new markets and product development[16] - The company is assessing opportunities to acquire complementary businesses to expand its market presence[169] - The company has observed slower client decision-making and softer renewal rates, impacting ARR growth and expected revenue for the coming fiscal year[168] Stock-Based Compensation - Stock-based compensation expense for the quarter ending June 30, 2024, amounted to $4,181,000[10] - The company recognized stock-based compensation expenses of $3,853 and $5,709 for the three months ended September 30, 2024 and 2023, respectively, and $13,092 and $15,772 for the nine months ended September 30, 2024 and 2023, respectively[119] - The company recognized $17,712 of share-based compensation expense for vested Earnout Awards upon closing, with additional expenses of $106 and $278 for the three and nine months ended September 30, 2024, respectively[107] Impairments and Losses - The company incurred an impairment charge of $5.837 million for goodwill in its ESG reporting unit during the first quarter of 2023[62] - The company recognized an impairment of goodwill during the three months ended March 31, 2023, with no additional impairments identified for the periods ended September 30, 2024 and 2023[146]