Summary of FiscalNote Conference Call Company Overview - **Company**: FiscalNote - **Industry**: AI-driven SaaS platform providing policy data insights and workflow tools - **Core Offering**: Subscription-based access to proprietary policy data and insights to help organizations navigate regulatory changes [4][6][22] Key Points and Arguments Market Context - Increasing complexity in policy and regulation impacts a wide range of organizations globally, making it essential for them to navigate these changes effectively [5][6][8] - Organizations are becoming more reliant on technology and AI to manage regulatory risks, moving away from traditional methods like spreadsheets [9][10] Customer Base - FiscalNote serves approximately 3,600 customers, including private sector companies, public sector entities, and NGOs [11][13] - Major clients include large organizations like Nestle, which face complex regulatory challenges in sourcing and distribution [12] Financial Performance - FiscalNote transitioned from a $24.5 million adjusted EBITDA loss in 2022 to achieving eight consecutive quarters of adjusted EBITDA profitability, with a profit of $9.8 million in 2024 [22][23] - The company aims to reduce debt and improve free cash flow, having increased free cash flow by $69 million over the past two years [25][26] Product Development - The launch of a new consolidated platform, PolicyNote, aims to replace legacy siloed products, enhancing user experience and engagement [30][32] - PolicyNote integrates various data sets into a single platform, improving customer engagement and retention [34][35] Innovation and AI Integration - FiscalNote emphasizes the importance of AI in enhancing its offerings, with AI-driven features expected to improve user experience and operational efficiency [53][58] - The company has launched 25 major enhancements to PolicyNote since its launch, indicating a strong focus on product innovation [41] Sales and Growth Strategy - The company anticipates a return to sequential ARR growth in the second half of the year, supported by a strong customer base and brand recognition [28][65] - Inbound leads have increased by 20% year-over-year, and the corporate new logo pipeline grew by 45% from Q1 to Q2 [47][48] Future Outlook - FiscalNote reaffirms its revenue guidance for the year, projecting revenues between $94 million and $100 million, with adjusted EBITDA between $10 million and $12 million [52] - The company is focused on product-led growth and operational discipline to ensure sustainable, durable positive free cash flow [64][65] Additional Important Insights - The migration of customers to the new PolicyNote platform is ahead of schedule, with plans to deprecate legacy platforms by the end of the year [68] - The company is not aggressively pushing prices during the transition to retain customers, which is expected to drive higher growth rates [71] - The share of ARR from multi-year agreements has doubled compared to the previous year, indicating increased customer confidence [50]

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 Data and Key Metrics Changes - Total revenue for Q4 2024 was $29.5 million, lower than the prior year period primarily due to the divestiture of Board.org [37] - Annual recurring revenue (ARR) was $107 million in Q4 2024, down from $109 million in 2023 on a pro forma basis [38] - Adjusted EBITDA for 2024 was $9.8 million, a year-over-year improvement of more than $17 million and 1,400 basis points [12][46] - GAAP net loss for Q4 2024 was $13.4 million, significantly lower than the prior year period due to a large non-cash goodwill impairment charge recorded in Q4 2023 [42] Business Line Data and Key Metrics Changes - Subscription revenue remained flat on a sequential basis, indicating stability in core business operations [37] - Net revenue retention was 98% in Q4 2024, down from 99% in the prior year, reflecting a focus on improving this metric through product innovation [38] Market Data and Key Metrics Changes - The company has a diverse base of over 4,000 customers across various industries, indicating a broad market presence [32] - The share of new logo ARR on multiyear contracts in the corporate sector is almost double compared to a year ago, demonstrating increased market confidence [27] Company Strategy and Development Direction - The company is focused on three pillars: expanding adjusted EBITDA margin, managing debt, and building a foundation for long-term sustainable growth [11] - The launch of the Policy Note platform is expected to drive customer engagement and retention, with a focus on product-led sales and growth [23][24] - The company plans to simplify its product portfolio and reduce organizational complexity to enhance operational efficiency [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the typical end-of-year ARR uptick did not materialize at the end of 2024, prompting key management changes to improve execution [21] - The company anticipates a return to ARR growth in the second half of 2025, which should support GAAP revenue growth in 2026 and beyond [22] - Management is monitoring market volatility, particularly in the private sector, and does not expect significant negative impacts from changes in federal government spending [29][30] Other Important Information - Cash flow from operations improved significantly by more than $30 million in 2024, indicating progress towards positive operating cash flow [48] - The company reduced its senior debt by more than 60% over the past year, demonstrating a commitment to improving its capital structure [16][47] Q&A Session Summary Question: Adoption and feedback on the new Policy Note platform - Management is not disclosing specific customer adoption numbers but reports high engagement levels and positive feedback on AI features [60][64] Question: Target leverage ratio post-asset sale - The company aims to bring leverage down to a more conventional range of two to three times relative to EBITDA over the next few years [68] Question: Balance sheet profile after divestments - The anticipated reduction in senior debt will lower cash interest expense to around $2 million per quarter, contributing to long-term financial health [72] Question: Pro forma expectations for upcoming guidance - The Q1 guidance reflects GAAP revenue, with approximately $3 million of revenue from divested businesses not included in subsequent quarters [76]