FiscalNote Holdings (NOTE) Q2 2025 Earnings Call August 07, 2025 05:00 PM ET Speaker0Good evening. My name is Bob Burrows, Investor Relations for FiscalNotes, and we are pleased you all could join us. The purpose of today's call is to discuss FiscalNotes' second quarter twenty twenty five financial results and guidance for both the full year and 2025. Joining me with prepared comments are Josh Resnick, CEO and President and John Slabaugh, CFO and Chief Investment Officer. Other members of the senior managem ...

FiscalNote Powering Better Policy Decisions with AI-Driven Insights Safe Harbor Statement Safe Harbor Statement Certain statements herein may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or FiscalNote's future financial or operating performance. For example, statements regarding FiscalNote's financial outlook for future periods, expectations regarding profitability, capital re ...

Financial Performance & Outlook - FiscalNote's total revenues for Q1 2025 were $27.5 million, compared to $32.1 million in Q1 2024[59] - The company's gross profit for Q1 2025 was $20.5 million, with a gross margin of 75%, compared to $24.9 million and 77% respectively in Q1 2024[59] - Adjusted EBITDA for Q1 2025 was $2.8 million, representing a 10% margin, compared to $1.2 million and a 4% margin in Q1 2024[59] - FiscalNote reaffirms its full-year 2025 revenue forecast of $94 million to $100 million and adjusted EBITDA of $10 million to $12 million[68] - The company's annual recurring revenue (ARR) for Q1 2025 was $87.7 million, compared to $109.6 million in Q1 2024[59] Business Strategy & Focus - FiscalNote is transitioning towards product-led growth, focusing on product enhancements and launches to improve user experience and customer retention[48, 50] - The company is optimizing its product portfolio, sunsetting non-core products, and divesting non-core businesses to reduce complexity and drive profitable growth[45] - FiscalNote is leveraging AI technologies, such as Copilots for Policy and Global Intelligence, to enhance its core offerings and provide actionable insights to customers[45] Customer Base & Market - FiscalNote has over 4,100 customers, with 92% of total revenues derived from subscriptions[22] - The company serves over 50 of the Fortune 100 companies and monitors legislative and regulatory activities in over 80 countries[22] - FiscalNote targets customers in the private sector (~52%), public sector (~22%), and non-profit/NGO sector (~26%)[20]

FiscalNote Holdings (NOTE) Q1 2025 Earnings Call May 12, 2025 05:00 PM ET Company Participants Bob Burrows - Investor RelationsJosh Resnik - President & CEOJon Slabaugh - CFO & CIOJesse Sobelson - VP - Equity Research Conference Call Participants Glenn Mattson - AnalystMike Latimore - Managing Director & Senior Research AnalystZach Cummins - Senior Research Analyst Operator Evening. My name is Pam, and I will be your conference operator today. At this time, I would like to welcome everyone to the FiscalNote ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $2,800,000, exceeding expectations, with an adjusted EBITDA margin of 10%, up from 4% in the same period last year [6][7][28] - Total revenue for Q1 2025 was $27,500,000, above the forecast of $26,000,000 to $27,000,000, but $4,000,000 lower compared to the prior year due to divestitures [22][23] - Annual recurring revenue (ARR) was $88,000,000, down from $94,000,000 in 2024 on a pro forma basis [23][24] - Net revenue retention was 93%, down from 96% in the prior year [24] Business Line Data and Key Metrics Changes - Subscription revenue accounted for 92% of total revenue, consistent with historical trends [22] - Principal operating expenses decreased by $2,300,000 or 5% year-over-year, with significant reductions in R&D and sales and marketing expenses [25][26][27] Market Data and Key Metrics Changes - Inbound pipeline rose 20% compared to the same period last year, driven by regulatory complexity and interest in PolicyNote [12] - Strong traction in Europe, with pipeline creation doubling compared to the same period in 2024 [12] Company Strategy and Development Direction - The company is focused on three key objectives: expanding adjusted EBITDA margins, managing debt, and building a foundation for durable growth [6] - The launch of PolicyNote is expected to have a meaningful positive impact on 2025, with a commitment to product-led growth [13][23] - The company is committed to deleveraging, having reduced its senior term loan by $96,000,000 since December 31, 2023 [8][28] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed full-year revenue guidance despite a slow start to 2025, indicating confidence in future growth [10][21] - The company is encouraged by the engagement with PolicyNote and the positive impact of accelerated product innovation [19][30] Other Important Information - Cash and cash equivalents at the end of Q1 2025 were $46,900,000, an increase driven by divestiture cash inflows [28] - The company plans to further reduce its senior term loan with the sale of its Australian subsidiary, TymeBase [28][46] Q&A Session Summary Question: Sales force and market execution - Management noted that recent changes in management have led to improved execution and stronger pipeline development [32][33] Question: PolicyNote migration timeline - The company expects to migrate all core customers to the new platform by next year, with accelerated migration efforts underway [35][36] Question: Revenue guidance for Q2 - The decline in revenue guidance for Q2 is attributed to revenue recognized from divested businesses in Q1 [41][43] Question: Balance sheet and cash from transactions - The company announced a transaction to sell a division in Australia for approximately $6.5 million, with half expected to reduce debt [46] Question: Strategic options for maximizing shareholder value - The board is continuously considering ways to maximize company value, with potential future divestitures not ruled out [48][51] Question: Pipeline details - The increase in pipeline is primarily from new logos across various sectors, with strong interest noted in Europe [54][56] Question: Health of the federal vertical - The company sees opportunities in the federal sector despite volatility, emphasizing the efficiency gains their products provide [59][60] Question: Advisor from Palantir - The advisor was engaged to focus on federal government opportunities, leveraging AI platforms for federal contracting [61]