Summary
FiscalNote's first quarter of fiscal 2025 was defined by shrinking revenue and a swing to a net loss, even as cost cuts lifted adjusted profitability. Total revenue for the quarter ended March 31, 2025 fell 14.3% to $27.5 million from $32.1 million in the prior-year quarter. Subscription revenue of $25.2 million dropped 15%, and advisory, advertising, and other revenue of $2.3 million slipped 8%. The company attributed most of the subscription decline to the Board.org and Aicel divestitures; excluding those two businesses, subscription revenue fell $1.1 million, or 4%. Management also pointed to customer retention challenges and the impact of federal government cuts on organic subscription revenue.
The bottom line deteriorated. Operating loss widened to $13.8 million from $11.4 million a year earlier, and the operating margin fell to negative 50.0% from negative 35.6%. Net loss was $4.3 million, compared with net income of $50.6 million in the prior-year quarter, a period that included a large gain on the sale of Board.org. Diluted EPS came in at -$0.03, compared with $0.37 a year earlier. The current quarter also carried a $15.7 million gain on the sale of Oxford Analytica and Dragonfly, which closed on March 31, 2025 for $40.0 million in cash.
Cost control was the brighter story. Total operating expenses fell 5% to $41.3 million, with sales and marketing down 18% to $7.8 million and research and development down 11% to $3.1 million. Adjusted EBITDA rose to $2.8 million from $1.2 million, and adjusted EBITDA margin expanded to 10.1% from 3.8%. Adjusted gross margin improved to 87% from 85%. Interest expense fell 30.4% to $5.1 million after debt repayment. Headcount dropped by roughly 115 from the start of the quarter through March 31, 2025, from about 571 employees.
Forward-looking indicators kept weakening. Annual recurring revenue was $87.7 million, down 20% from $109.6 million a year earlier, and down 7% on a pro forma basis to $87.7 million from $94.4 million. Net revenue retention slipped to 93% from 96%. Deferred revenue fell 19.5% to $36.6 million, and remaining performance obligations declined 11.6% to $80.4 million. Management said it expects ARR to return to growth in the second half of the year, helped by the PolicyNote platform, which launched in January and gained a presidential actions widget, an EU defense and space policy vertical, and a tariff tracker.
Guidance for the full fiscal year 2025 was reaffirmed at $94 million to $100 million of revenue and $10 million to $12 million of adjusted EBITDA, despite the pending TimeBase sale to Thomson Reuters for $6.5 million. For the second quarter of 2025, the company forecast revenue of $22 million to $24 million and adjusted EBITDA of about $2 million. The full-year outlook assumes roughly $4.0 million of revenue and $1.0 million of adjusted EBITDA from Oxford Analytica and Dragonfly in the first quarter, plus cost savings and lower debt service.
Risks are substantial. The company said its cash flows from operations will not be sufficient to fund cash requirements over the next 12 months and beyond, and it flagged negative working capital of $32.5 million excluding cash and short-term investments and an accumulated deficit of $811.1 million. It cited macroeconomic unpredictability in the private sector, potential public sector impacts from federal government changes, and covenant compliance under its senior term loan. The board continues to review all strategic options, with no timetable set. Operating cash flow was $3.3 million, up from $2.7 million, while capital expenditures rose to $2.0 million from $1.7 million.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $27.5M | $29.5M | -6.6% | $32.1M | -14.3% |
| Research & development | $3.1M | $2.9M | +7.3% | $3.5M | -10.8% |
| Sales & marketing | $7.8M | $7.6M | +2.5% | $9.4M | -17.6% |
| General & administrative | $16.3M | $12.3M | +32.7% | $16.1M | +1.4% |
| Total operating expenses | $41.3M | $35.2M | +17.3% | $43.6M | -5.2% |
| Operating income (loss) | -$13.8M | -$5.7M | -140.2% | -$11.4M | -20.3% |
| Operating margin | -50.0% | -19.4% | -30.6 pp | -35.6% | -14.4 pp |
| Net income (loss) | -$4.3M | -$13.4M | +68.2% | $50.6M | -108.4% |
| Net margin | -15.4% | -45.4% | +30.0 pp | 157.6% | -173.0 pp |
| Diluted EPS | -$0.03 | -$0.10 | +$0.07 | $0.37 | -$0.40 |
| Net retention rate | 93.0% | 99.0% | -6.0 pp | 96.0% | -3.0 pp |
Risks
Management states the Company does not expect cash flows from operations to be sufficient to fund its cash requirements in the next 12 months and beyond, and it may pursue further expense reductions, sale of all or portions of the business, corporate capital restructuring or formal reorganization, or liquidation of assets. At March 31, 2025, negative working capital was $32.5 million excluding cash and short-term investments, and accumulated deficit was $811.1 million.
Total revenue decreased 14.3% to $27.51 million for FY2025 Q1 from $32.11 million for FY2024 Q1; the MD&A attributes organic subscription softness to customer retention challenges and Federal government cuts. Deferred revenue decreased 19.5% and remaining performance obligations decreased 11.6% for FY2025 Q1 versus FY2024 Q1.
Operating loss widened 20.3% to $13.76 million for FY2025 Q1 from $11.44 million for FY2024 Q1, and operating margin fell 14.4 percentage points to -50.0%. Net income swung to a $4.25 million loss from $50.60 million income in FY2024 Q1, and diluted EPS swung to -$0.03 from $0.37.
ARR was $87.7 million at March 31, 2025 compared with $107.5 million at December 31, 2024. NRR, excluding divested products, was 93% for the three months ended March 31, 2025 versus 96% for the three months ended March 31, 2024, indicating pressure on retention and expansion.
The Senior Term Loan includes minimum cash, ARR, adjusted EBITDA, and capital expenditure covenants; Amendment No. 5 waived lender rights upon default retroactive to December 31, 2024, and modified the ARR and adjusted EBITDA covenants. Total principal plus PIK debt outstanding was $142.1 million at March 31, 2025.
The Legacy Notes amendment extends maturity to April 15, 2026 and permits conversions at market-based prices; if investor sales do not generate the Repayment Amount by the Original Maturity Date, the interest rate can increase to 25% and the outstanding principal plus PIK interest can be doubled. The Third Era Convertible Note issued March 17, 2025 remains outstanding and can convert into common stock.
MD&A states the decrease in organic subscription revenue is primarily the result of customer retention challenges combined with the impact of Federal government cuts. This exposes revenue to U.S. federal budget and policy changes.
The Company completed the sale of Dragonfly and Oxford Analytica on March 31, 2025 for $40.0 million and used $27.1 million to repay Senior Term Loan principal; prior sales include Board.org and Aicel. This reduces scale and makes comparability dependent on asset sales.
Headcount was reduced by approximately 115 from the beginning of Q1 2025 through March 31, 2025 through dispositions, product rationalization, business simplification, and cost takeout actions. Management continues to evaluate additional rationalization, which may disrupt operations or fail to achieve expected savings.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Adjusted EBITDA
Adjusted Gross Profit
Net Revenue Retention
Adjusted Gross Margin
Subscription Revenue as % of Total Revenues
ARR
Pro Forma ARR
Summary, forecast, risks and KPIs are extracted from FiscalNote Holdings, Inc.'s SEC filings for Q1 FY2025 (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.