FiscalNote Exceeds Expectations in Q1 Earnings Call

Fiscalnote Holdings Inc ((NOTE)) has held its Q1 earnings call. Read on for the main highlights of the call.

FiscalNote Holdings Inc. recently held its earnings call, revealing a strong financial performance that exceeded expectations in several areas. The company reported impressive revenue and adjusted EBITDA figures, alongside significant debt reduction and promising developments with its PolicyNote platform. Despite facing challenges such as a decline in annual recurring revenue (ARR) and net revenue retention, as well as a sequential revenue decline due to divestitures, the company remains optimistic about future growth, supported by reaffirmed guidance and a positive pipeline outlook.

Exceeding Financial Expectations

FiscalNote reported Q1 2025 revenue of $27.5 million, surpassing the forecasted range of $26 million to $27 million. The adjusted EBITDA also exceeded expectations, reaching $2.8 million compared to the guidance of approximately $2 million. This strong performance underscores the company’s ability to deliver beyond market predictions.

Improved Adjusted EBITDA Margin

The adjusted EBITDA margin for Q1 2025 stood at 10%, a significant improvement from the 4% margin reported in the same period last year. This increase reflects better operating leverage and efficiency within the company’s operations.

Significant Debt Reduction

FiscalNote has made substantial progress in reducing its debt, cutting its senior term loan by $96 million since December 31, 2023. This reduction has decreased the company’s cash interest expense from $5 million to $2 million per quarter, enhancing its financial stability.

Strong Pipeline Growth

The company reported a 20% increase in its inbound pipeline compared to the same period last year, with notable growth in Europe where pipeline creation doubled compared to 2024. This growth indicates strong market demand and potential for future revenue.

PolicyNote Platform Success

The new PolicyNote platform has significantly improved customer engagement, with 75% of migrated at-risk accounts now considered healthy. This success demonstrates the platform’s effectiveness in retaining and engaging customers.

Increased Multi-Year Agreements

FiscalNote has seen a rise in new corporate customers committing to multi-year agreements at more than double the rate of the previous year. This trend indicates growing trust in the platform and its future developments.

Decline in Annual Recurring Revenue

The company reported a decline in ARR, which was $88 million in Q1 2025, down from $94 million in 2024 on a pro forma basis. This decrease highlights the challenges FiscalNote faces in resuming growth.

Net Revenue Retention Decline

Net revenue retention fell to 93% in Q1 2025, down from 96% the previous year, influenced by underperformance at the end of 2024. This decline is a key area of concern for the company.

Sequential Decline in Revenue Expected

FiscalNote’s revenue guidance for Q2 2025 is between $22 million and $24 million, slightly below Q1 levels. This expected decline is primarily due to recent divestitures, which have impacted the company’s financials.

Forward-Looking Guidance

FiscalNote reaffirmed its full-year revenue forecast in the range of $94 million to $100 million, with adjusted EBITDA projected between $10 million and $12 million. For Q2 2025, the company expects revenues between $22 million and $24 million, and an adjusted EBITDA of approximately $2 million. The company remains focused on product-led growth, efficient pipeline management, and achieving positive free cash flow.

In summary, FiscalNote Holdings Inc. has demonstrated strong financial performance in its recent earnings call, with revenue and adjusted EBITDA exceeding expectations. Despite facing challenges such as declines in ARR and net revenue retention, the company is optimistic about future growth, supported by a strong pipeline and strategic focus on product development. The reaffirmed guidance further underscores the company’s confidence in achieving its financial targets.