FiscalNote(US:NOTE)2026-03-19 22:02Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $22.2 million, within guidance range, with subscription revenue representing approximately 93% of total revenue for the full year [68][70] - Annual Recurring Revenue (ARR) at year-end for 2025 was $84.1 million, down from $107.5 million at the end of 2024, largely due to strategic divestitures [73][74] - GAAP net loss for Q4 was $22.9 million, including a non-cash goodwill impairment charge of $12.4 million [70] - Adjusted EBITDA for Q4 was $2.5 million, marking the 10th consecutive positive quarter for this metric [71] - Full year 2025 adjusted EBITDA totaled $10.3 million, with an adjusted EBITDA margin of 10.8%, up from 8.1% in 2024 [81][82] Business Line Data and Key Metrics Changes - The company completed the migration of customers from the legacy FiscalNote platform to the new PolicyNote platform, achieving a 235% increase in multi-year contracts among private sector customers [71][72] - The sales development efficiency doubled due to the integration of AI technology into daily workflows [72] Market Data and Key Metrics Changes - The prediction market volume in the U.S. expanded from approximately $9 billion in 2024 to roughly $44 billion in 2025, indicating a four-fold increase [52] - Current trends suggest the prediction market could approach a $150 billion annualized run rate in 2026 [52] Company Strategy and Development Direction - The company is focusing on driving adoption and deeper engagement with the PolicyNote platform, delivering proprietary datasets in new ways, and exploring new markets including prediction platforms and agentic APIs [85][86] - A significant workforce transformation program is being rolled out to enhance operational discipline and leverage AI for streamlining internal operations [86] - The company aims to achieve adjusted EBITDA margins exceeding 20% and generate positive free cash flow by the end of Q1 2027 [87][90] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive growth through a product-led approach and transition to usage-based pricing models [116] - The company is optimistic about the engagement levels on the PolicyNote platform and expects to see improved retention as customers become more accustomed to the platform [115] Other Important Information - The company has divested several non-core assets, generating $144.9 million in gross cash proceeds, which aligns with its strategy to simplify operations and focus on core business [73][74] - The company is exploring both consumption-based pricing models and hybrid structures to maintain pricing integrity across delivery models [49] Q&A Session Summary Question: Are gross margins sustainable? - Management indicated that technology is helping drive incremental savings, and they expect margin improvement to be driven by higher gross margins over time [95] Question: Any incremental savings from migrating all customers to PolicyNote? - Management confirmed that additional cost savings will come from deprecating the legacy platform's backend, which is included in the operating plan for the year [97] Question: Insights on enterprise versus government versus NGO pipeline health? - Management noted that agentic AI presents a significant opportunity across all sectors, with good success in mid-market and public sector after a rough 2025 [99] Question: Details on enterprise customers that chose not to migrate to PolicyNote? - Management explained that some large enterprises made decisions before migration timelines, influenced by macroeconomic factors [114] Question: Confidence in driving growth with a product-led approach? - Management expressed strong confidence in the value of their data and the potential for new consumption models, including volume-based and hybrid pricing [116]