Summary
FiscalNote opened fiscal 2026 with a steeper decline than the prior-year quarter. Total revenue fell 27.2% to $20.02 million. The net loss widened to $43.61 million, and diluted loss per share was $2.39. Operating loss widened to $42.51 million, and operating margin was negative 212.3%. The quarter absorbed a non-cash goodwill impairment charge, which management tied to the broader reset of the business. Operating cash flow was $3.02 million, down 8.1%, while capital expenditures were $1.65 million, down 16.6%. Deferred revenue was $34.72 million, down 5.0%, and remaining performance obligations were $68.68 million, down 14.6%. Those trailing indicators point to a smaller contracted base entering the rest of the year.
Operationally, FiscalNote completed the migration of all customers from legacy FiscalNote products to PolicyNote in January. The company launched an expanded PolicyNote API with native Model Context Protocol support in March. It also placed the PolicyNote MCP in the OpenAI App Store and added district matching in April. Management said PolicyNote customer engagement and retention metrics continue to exceed the legacy platforms. Early enterprise wins and a growing global pipeline for agentic API products give the company a new growth channel. FiscalNote also moved into political prediction markets, formed a partnership with Good Wolf Studios, and struck an alliance with D A LLC to expand U.S. policy intelligence in Asian markets.
The core subscription trends remain under pressure. ARR was $75.7 million at March 31, 2026, down 14% from a year earlier. Pro forma ARR was $75.7 million, down 12%. Pro forma NRR was 89%. Management attributed the decline to a small number of large enterprise customers that did not migrate to PolicyNote before leaving, along with macroeconomic and geopolitical pressures, elongated sales cycles, and tighter discretionary technology budgets. Federal government cuts also weighed on results. The company described cancellations as higher than normal in the quarter. These retention issues are the main brake on the revenue story, even as new products gain traction.
Guidance for the full fiscal year stays where management put it in the prior outlook. The full year 2026 forecast, covering the twelve months to December 31, 2026, calls for $80 million to $83 million of total revenues and $14 million to $16 million of adjusted EBITDA. For the second quarter of 2026, the forecast is $19.5 million to $20.5 million of revenue and adjusted EBITDA of approximately $2.5 million. Management expects restructuring actions taken in the first half to benefit the back half and drive a meaningful EBITDA ramp. It also expects positive free cash flow on a next-twelve-month basis starting April 1, 2026, after one-time restructuring charges. Adjusted EBITDA was $1.0 million in the first quarter. The company said its workforce transformation, AI automation, and insourcing efforts should support that cash flow target.
The balance sheet and legal risks are more urgent. FiscalNote's Class A common stock was delisted from the New York Stock Exchange on April 13, 2026. The delisting triggered events of default under subordinated convertible notes. The company entered forbearance agreements with GPO and YA that run until May 21, 2026. If the forbearance is not extended, FiscalNote said it would also be in default of its 2025 Senior Term Loan on May 22, 2026 because of a cross-default provision. Lenders could then demand immediate repayment. The board is reviewing strategic options, including a possible re-listing on a national securities exchange and further divestitures of non-core assets. Management gave no timetable for that review. The combination of retention pressure, a heavy debt load, and the listing overhang leaves little room for execution error.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $20.0M | $22.2M | -9.8% | $27.5M | -27.2% |
| Research & development | $2.0M | $2.1M | -3.7% | $3.1M | -34.2% |
| Sales & marketing | $5.7M | $5.9M | -3.2% | $7.8M | -26.3% |
| General & administrative | $9.5M | $10.6M | -10.0% | $16.3M | -41.7% |
| Total operating expenses | $62.5M | $40.8M | +53.3% | $41.3M | +51.5% |
| Operating income (loss) | -$42.5M | -$18.6M | -128.8% | -$13.8M | -208.9% |
| Operating margin | -212.3% | -83.7% | -128.6 pp | -50.0% | -162.2 pp |
| Net income (loss) | -$43.6M | -$22.9M | -90.7% | -$4.3M | -926.2% |
| Net margin | -217.8% | -103.0% | -114.8 pp | -15.4% | -202.3 pp |
| Diluted EPS | -$2.39 | -$1.63 | -$0.76 | -$0.03 | -$2.36 |
| Net retention rate | 89.0% | 96.0% | -7.0 pp | 93.0% | -4.0 pp |
Risks
The Class A common stock was delisted from the NYSE on April 13, 2026, causing events of default under the YA Convertible Notes and the 2025 GPO Convertible Note. Forbearance agreements expire May 21, 2026; if not extended, the company would cross-default on the 2025 Senior Term Loan on May 22, 2026, and lenders could seek immediate repayment.
The March 23, 2026 amendment to the 2025 Senior Term Loan waived a minimum ARR covenant default, amended financial covenants through March 31, 2027, and increased the interest rate to SOFR plus 9.50%. Total indebtedness was $131.98 million at March 31, 2026, including $72.19 million under the 2025 Senior Term Loan.
Total revenue decreased 27.2% to $20.02 million for FY2026 Q1 from $27.51 million for FY2025 Q1, while subscription revenue decreased 24% to $19.1 million from $25.2 million. The organic subscription revenue decline of $2.4 million, or 11%, was primarily due to customer retention challenges and Federal government cuts.
Net revenue retention was 89% for the three months ended March 31, 2026 compared with 93% for the three months ended March 31, 2025 excluding Oxford Analytica and Dragonfly. The lower NRR reflects reduced expansion and retention within the existing customer base.
Annual recurring revenue was $75.7 million at March 31, 2026 compared with $84.1 million at December 31, 2025. A lower ARR base may pressure future subscription revenue and compliance with the ARR-based financial covenant in the 2025 Senior Term Loan.
Goodwill impairment of $35.6 million was recorded in FY2026 Q1, with operating loss widening to $42.51 million from $13.76 million in FY2025 Q1 and net loss widening to $43.61 million from $4.25 million. Further deterioration in market conditions or cash flow forecasts could trigger additional impairment charges.
At March 31, 2026 the company had negative working capital of $139.0 million excluding cash and short-term investments, an accumulated deficit of $915.8 million, and a net loss of $43.6 million for the three months ended March 31, 2026. Operating cash flow also decreased 8.1% to $3.02 million in FY2026 Q1 from $3.29 million in FY2025 Q1.
Remaining performance obligations were $68.68 million at March 31, 2026 compared with $80.42 million at March 31, 2025, down 14.6%, and deferred revenue was $34.72 million compared with $36.56 million, down 5.0%. These decreases suggest lower contracted backlog entering future periods.
Headcount was approximately 370 employees at March 31, 2026 compared with approximately 407 at December 31, 2025 as part of a plan to streamline operations and drive cash generation through AI deployment and other cost savings. If these savings do not materialize, the path to positive cash flows from operations could be delayed.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Adjusted EBITDA
Adjusted Gross Profit
Annual Recurring Revenue (ARR)
Adjusted Gross Margin
Net Revenue Retention (NRR)
Pro Forma Annual Recurring Revenue (ARR)
Summary, forecast, risks and KPIs are extracted from FiscalNote Holdings, Inc.'s SEC filings for Q1 FY2026 (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.