Summary
FiscalNote reported first quarter fiscal 2024 total revenues of $32.1 million, up 1.8% from the prior-year quarter. The company posted an operating loss of $11.4 million, narrower than the prior-year quarter. Net income was $50.6 million, a swing to profit from a loss in the prior-year quarter. Diluted EPS was $0.37. The bottom line leaned heavily on the gain from the Board.org divestiture. Adjusted EBITDA was $1.2 million. Operating cash flow was $2.7 million, up from negative operating cash flow in the prior-year quarter. Capital expenditures were $1.7 million, down 9.5%.
Board.org reshaped the quarter and the forward comparisons. FiscalNote completed the sale for total consideration of up to $103.0 million, including $95.0 million in cash at close. It put $65.7 million toward repaying senior debt and added about $15 million to cash. An amended credit agreement pushed the start of amortization payments to August 2026 while keeping the July 2027 maturity unchanged. Board.org represented about 10% of prior-year total revenue. Run-rate revenue was $122 million, down 9%, and annual recurring revenue was $110 million, down 8%. Excluding Board.org on a pro forma basis, run-rate revenue was $122 million, up 1%, and annual recurring revenue was $110 million, up 3%. Net revenue retention was 96%, level with the prior year.
The core metrics show both cost cuts and pressure on backlog. Deferred revenue was $45.4 million, down 8.9% from the prior-year quarter. Remaining performance obligations were $91.0 million, down 18.2%. Operating margin was negative 35.6% against negative 86.8% a year earlier, a 51.2 percentage point gain. Adjusted gross profit was $27.3 million, with an adjusted gross margin of 85% versus 80%. Adjusted EBITDA was $1.2 million against negative $7.0 million in the prior-year quarter, an $8.2 million improvement. Management called it the third straight quarter of adjusted EBITDA profitability.
Guidance covers both the full fiscal year and the next quarter. FiscalNote reaffirmed its full-year 2024 forecast and issued a second quarter 2024 forecast, with adjusted EBITDA of $7 million to $9 million for the full year and approximately $1 million for the second quarter. Management expects 2024 to be the company's first full year of adjusted EBITDA profitability and looks for a return to double-digit growth in 2025.
The product story centers on AI. FiscalNote launched the FiscalNote Global Intelligence Copilot and StressLens during the quarter and is building FiscalNoteGPT plus a Copilot Creator Reasoning Engine, drawing on partnerships with OpenAI, Google, and Microsoft. Management is also exploring data licensing deals with large language model companies. Risks remain. The board's Special Committee continues its strategic review, and the company says there is no assurance the review leads to a transaction or any other outcome, with no timetable set. Other named risks include competition and competitive pressures, reliance on third-party systems and data, potential technical disruptions and cyberattacks, and changes in AI, machine learning, and data privacy regulation. Customer retention and adoption of the new AI products will matter, especially with deferred revenue and remaining performance obligations both declining year over year. The Board.org sale lowers revenue and annual recurring revenue comparisons for the rest of the fiscal year, and execution on cost reduction and AI product sales will determine whether the full-year adjusted EBITDA target is reached.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $32.1M | $34.3M | -6.3% | $31.5M | +1.8% |
| Research & development | $3.5M | $4.0M | -13.3% | $5.1M | -32.0% |
| Sales & marketing | $9.4M | $10.5M | -10.3% | $12.3M | -23.4% |
| General & administrative | $16.1M | $16.7M | -3.9% | $18.2M | -11.8% |
| Total operating expenses | $43.6M | $74.2M | -41.3% | $58.9M | -26.1% |
| Operating income (loss) | -$11.4M | -$39.9M | +71.3% | -$27.4M | +58.2% |
| Operating margin | -35.6% | -116.5% | +80.9 pp | -86.8% | +51.2 pp |
| Net income (loss) | $50.6M | -$50.7M | +199.7% | -$19.3M | +362.5% |
| Net margin | 157.6% | -148.1% | +305.7 pp | -61.1% | +218.7 pp |
| Diluted EPS | $0.37 | -$0.39 | +$0.76 | -$0.14 | +$0.51 |
| Net retention rate | 96.0% | 94.0% | +2.0 pp | 96.0% | ±0.0 pp |
Risks
At March 31, 2024 the company had negative working capital of $38.5 million excluding cash and short-term investments, an accumulated deficit of $765.8 million, and management states that historically cash flows from operations have not been sufficient to fund its current operating model. The company is actively seeking additional sources of capital and may issue equity or debt on unfavorable terms, causing dilution.
The Senior Term Loan contains financial covenants including a minimum cash balance, minimum ARR, adjusted EBITDA, and capital expenditure limitation. Amendment No. 4 increased the minimum liquidity covenant to $22.5 million, and an event of default could allow lenders to declare amounts due or raise the interest rate by 5.0% per annum.
ARR decreased to $109.6 million at March 31, 2024 from $126.1 million at December 31, 2023, and Run-Rate Revenue decreased to $122.0 million from $139.7 million over the same dates, partly due to the March 11, 2024 sale of Board.org. Deferred revenue was down 8.9% and remaining performance obligations were down 18.2% versus the prior-year quarter.
The company recognized a $5.8 million goodwill impairment in the ESG reporting unit in Q1 2023. MD&A states that future sustained depression of the stock price or adverse changes in business or macroeconomic conditions could reduce cash flows and trigger additional impairment charges.
Interest expense, net increased 10.2% to $7.4 million for the quarter ended March 31, 2024 from $6.7 million in the prior-year quarter, primarily due to the new GPO note. Total principal plus PIK outstanding was $176.8 million at March 31, 2024.
Change in fair value of financial instruments was a $0.5 million loss for the quarter ended March 31, 2024 compared to a $14.7 million gain in the prior-year quarter, driven by warrant liabilities and convertible notes. These mark-to-market adjustments can cause significant swings in net income.
Strategic acquisitions remain a core component of the company's strategy, and past acquisitions have led to significant non-cash amortization expense that reduced operating income by approximately $1.0 million and $1.2 million during the quarters ended March 31, 2024 and 2023, respectively. The company may continue to incur upfront costs to obtain customers and integrate acquired businesses.
The company reduced full-time equivalent headcount by approximately 150 from the end of Q1 2023 through December 31, 2023 as part of product rationalization, business simplification, and cost takeout actions. An internal reorganization in Q1 2024 reclassified two executive officers as non-executive officers, which could affect management continuity.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Adjusted EBITDA
Adjusted Gross Profit
Annual Recurring Revenue (ARR)
Net Revenue Retention
Adjusted Gross Margin
Pro Forma Annual Recurring Revenue (ARR)
Subscription Revenue as % of Total Revenues
Summary, forecast, risks and KPIs are extracted from FiscalNote Holdings, Inc.'s SEC filings for Q1 FY2024 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.