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FiscalNote(NOTE) - 2024 Q1 - Earnings Call Transcript
NOTEFiscalNote(NOTE)2024-05-12 04:26
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Financial Data and Key Metrics Changes - Total revenues for Q1 2024 were 32.1million,slightlyhigherthantheprior−yearperiod,withsubscriptionrevenueaccountingfor9232.1 million, slightly higher than the prior-year period, with subscription revenue accounting for 92% of total revenue [127] - Adjusted EBITDA was over 1 million, marking the third consecutive quarter of positive performance for this key profitability metric [100][127] - GAAP net income for Q1 2024 was 50million,reflectingasubstantialpositiveimpactfromthegainonthesaleofBoard.org[131]−Run−raterevenuewas50 million, reflecting a substantial positive impact from the gain on the sale of Board.org [131] - Run-rate revenue was 122 million, and annual recurring revenue was 110million[128]BusinessLineDataandKeyMetricsChanges−TheEuropeanbusinessnowconstitutes15110 million [128] Business Line Data and Key Metrics Changes - The European business now constitutes 15% of total revenues, with growth rates exceeding 20% annually in the European policy and security intelligence sectors [92] - Sales and marketing expenses decreased by approximately 3 million or 23%, while G&A expenses decreased by approximately 2millionor122 million or 12% due to cost control measures [130] Market Data and Key Metrics Changes - The company operates in a 40 billion addressable market, driven by increasing global uncertainty and operational complexity [55] - Net dollar retention remained in the high 90s, with approximately 90% of revenue being recurring in nature [57] Company Strategy and Development Direction - The company is focused on leveraging its decade-long investment in artificial intelligence to enhance its product offerings and drive growth [27][29] - A strategic divestiture of Board.org was completed, reducing debt by 65millionandstrengtheningcashpositionbyapproximately65 million and strengthening cash position by approximately 15 million [63] - The company aims to deepen and widen its penetration across core customers with its core offerings, translating into higher revenues and accelerating adjusted EBITDA margins [126] Management's Comments on Operating Environment and Future Outlook - Management believes the current generation of AI tools will help unlock faster and more scalable access to unique data assets [61] - The company expects to return to a run-rate revenue growth of low to mid-teens as it capitalizes on operational improvements and new AI product launches [117] - Management remains focused on driving shareholder value by building a durable and profitable business for the long term [124] Other Important Information - The company has a clear AI leadership position in its industry, generating consistent recurring revenues from a premier base of global customers [97] - The divestiture of Board.org has materially improved the capital structure and cash position [156] Q&A Session Summary Question: Can you disclose the revenue contribution from Board.org during its time in the business? - The revenue contribution will be disclosed when the Q is filed [136] Question: How is the company balancing the go-to-market approach with a reduced workforce? - The company views generative AI as essential for delivering ongoing value to customers and expects all customers to use some form of generative AI [139] Question: What opportunities exist for a partner model or embedded channel in larger technology stacks? - The company is exploring partnerships with various players in the market to embed its solutions into other technology partners [165]