FiscalNote(US:NOTE)2025-03-13 23:45Financial 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]