FiscalNote(US:NOTE)2025-11-10 22:12Financial Performance - Total revenues for Q3 2025 were $22,429,000, a decrease of 23.8% compared to $29,439,000 in Q3 2024[14] - Subscription revenues decreased to $21,182,000 in Q3 2025 from $27,238,000 in Q3 2024, representing a decline of 22.3%[14] - Operating loss for Q3 2025 was $9,739,000, compared to a loss of $6,811,000 in Q3 2024, indicating a worsening of 42.5%[14] - Net loss for Q3 2025 was $24,855,000, compared to a net loss of $14,935,000 in Q3 2024, reflecting an increase in losses of 66.5%[14] - The company reported a net loss of $42.376 million for the nine months ended September 30, 2025, compared to a net income of $22.9 million for the same period in 2024[21] - For the nine months ended September 30, 2025, the company incurred net losses of $59.0 million, compared to $48.7 million for the same period in 2024[31] - The company reported a net loss of $24,855,000 for the three months ended September 30, 2025, resulting in a basic and diluted loss per share of $(1.73)[164] Assets and Liabilities - Total assets decreased to $273,866,000 as of September 30, 2025, down from $326,197,000 at the end of 2024, a reduction of 16.0%[12] - Current liabilities decreased slightly to $48,547,000 from $51,253,000, a decline of 5.3%[12] - Long-term debt decreased to $125,160,000 from $147,041,000, a reduction of 14.9%[12] - The company’s accumulated deficit increased to $849,275,000 as of September 30, 2025, compared to $806,899,000 at the end of 2024[12] - The company reported a negative working capital balance of $31.3 million (excluding cash and short-term investments) as of September 30, 2025, and an accumulated deficit of $849.3 million[31] Cash Flow and Expenditures - Total cash used in operating activities was $11.164 million for the nine months ended September 30, 2025, compared to $3.950 million for the same period in 2024[21] - The company had capital expenditures of $5.561 million for the nine months ended September 30, 2025, compared to $6.875 million in 2024[21] - The cash, cash equivalents, and restricted cash at the end of the period was $27.328 million, compared to $26.371 million at the end of the same period in 2024[21] - The company improved its cash used in operations by approximately $35.0 million when comparing the twelve months ended September 30, 2025, to the same period in 2023[33] Revenue Sources - Revenues derived from the U.S. Federal Government accounted for 17% of total revenues for the nine months ended September 30, 2025[48] - Subscription revenue for the nine months ended September 30, 2025, was $67,794, down 19% from $84,015 in 2024[56] - North America generated $21,083 in revenue for the three months ended September 30, 2025, compared to $23,073 in 2024, representing a decline of 9%[57] Gains and Losses - The company reported a gain on the sale of businesses amounting to $1,161,000 in Q3 2025[14] - The company recorded a pre-tax gain on the sale of Oxford Analytica and Dragonfly of $15,260, with total cash received of $40,000[63] - The sale of Board.org resulted in a pre-tax gain of $71,599, with cash proceeds of $90,905 received[67] - The company recognized a gain of $634 from the extinguishment of the Third Era Convertible Note during the three and nine months ended September 30, 2025[134] Debt and Financing - The company completed the refinancing of a substantial amount of legacy indebtedness, including the 2025 Senior Term Loan, which contains four financial covenants[34] - The company incurred principal payments of long-term debt totaling $128.353 million for the nine months ended September 30, 2025, compared to $65.781 million in 2024[21] - The company has a minimum cash balance requirement and a minimum adjusted EBITDA requirement as part of the financial covenants for the 2025 Senior Term Loan[82] - As of September 30, 2025, the company had outstanding borrowings on its 2025 Senior Term Loan amounting to $74.5 million, with an interest rate of 12.23% based on SOFR plus 8%[310] Stock and Compensation - The company recognized share-based compensation expenses of $43,000 and $108,000 for the three and nine months ended September 30, 2025, respectively[148] - The company recognized stock-based compensation expenses of $3,599,000 and $10,648,000 for the three and nine months ended September 30, 2025, respectively[156] - The 2022 Employee Stock Purchase Plan allows eligible employees to purchase shares at a discount, with 37,231 shares issued under the plan for the nine months ended September 30, 2025[157] Tax and Regulatory Matters - The effective tax rate for the three months ended September 30, 2025, was (0.94) percent, with a tax benefit of $237 on a pre-tax loss of $25,092[167] - As of September 30, 2025, the Company reported an uncertain tax position totaling $832 related to a deduction for shares distributed for services associated with the payment of convertible debt[169] - The Company recorded an income tax benefit of $46 for the three and nine months ended September 30, 2025, due to changes in U.S. tax law[170] Market and Economic Conditions - The company is exposed to inflation risk, although it does not believe inflation has had a material impact on its financial condition to date[311] - The company's results of operations and cash flows may be adversely affected by fluctuations in foreign currency exchange rates, particularly the Euro and British Pound Sterling[307] - A hypothetical 10% change in foreign currency exchange rates would not have a material impact on the company's cash denominated in foreign currency[307]