Summary
FiscalNote reported second quarter 2024 total revenue of $29.25 million, down 10.9% from the prior-year quarter. Year-to-date revenue was $61.36 million, down 4.7%. The March 11, 2024 sale of Board.org distorts both comparisons, since the disposed business still contributed to the prior-year periods. Subscription revenue was about 93% of the total. The operating loss narrowed to $7.96 million for the quarter, a 53.1% improvement. Year to date, the operating loss narrowed to $19.40 million, up 56.3%.
The quarterly net loss was $12.76 million, narrowing 58.8% from the prior-year quarter. Year-to-date net income was $37.84 million, swinging to a profit, up 175.3%, lifted by the gain on the Board.org sale. Diluted loss per share was $0.09 for the quarter, up 60.9%, while year-to-date diluted earnings per share were $0.28, up 173.7%. Operating margin was -27.2% for the quarter, up 24.5 percentage points, and -31.6% year to date, up 37.3 percentage points.
Adjusted EBITDA was $1.8 million in the quarter compared with negative $4.3 million a year earlier, marking the fourth consecutive quarter of positive adjusted EBITDA and the company's first year of positive adjusted EBITDA on a trailing LTM basis. Adjusted EBITDA margin was 6%. Adjusted gross profit was $24.9 million and adjusted gross margin was 85%, compared with 80%. Annual recurring revenue was $109 million, down 9%, and pro forma ARR was $109 million, up 2%. Net revenue retention was 98%, level with the prior-year period. Operating cash flow was -$3.73 million for the quarter, an improvement of 49.5%, and -$0.99 million year to date, up 95.1%. Capital expenditures were $2.74 million, up 23.6%, and $4.43 million year to date, up 8.5%. Deferred revenue was $44.13 million, down 11.8%. Remaining performance obligations were $88.55 million, down 14.3%.
The company used its June AI Product Day to showcase an accelerated product roadmap. It introduced FiscalNote Copilot for Policy, announced partnerships with Creolytix and Empowered Systems, signed new and expanded large customer contracts across several sectors, and added AI enhancements to its Fireside constituent relationship management platform. It also launched the EU Transposition Tracker, expanded Roll Call with Factba.se data and StressLens analysis, and saw Dragonfly earn Band 1 recognition for global-wide political risk in the Chambers and Partners Crisis and Risk Management Guide 2024 for the third consecutive year. For the third quarter of 2024, management forecast total revenues of approximately $29 million and adjusted EBITDA of approximately $2 million. For the full year 2024, the company raised and tightened its adjusted EBITDA forecast to approximately $8 million and revised its total revenue forecast.
The Board of Directors and a Special Committee continue to review strategic options to maximize shareholder value. No timetable has been set for that review, and there is no assurance it will produce a transaction. Several pressures weigh on the outlook. Management points to slower than anticipated client decision-making on new logo sales, cross-sells, and upsells, softer than expected renewal rates, macroeconomic headwinds, competitive pressures, and delays in the launch of certain product enhancements. Those factors have slowed ARR growth, which is expected to affect revenue in the coming fiscal year. The company operates under debt covenants covering minimum liquidity, annual recurring revenue, and adjusted EBITDA, and it reported negative working capital when cash and short-term investments are excluded, along with an accumulated deficit. Headcount fell by roughly 145 full-time equivalents from the end of the second quarter of 2023 through June 30, 2024 as part of product rationalization and cost reduction actions. Management continues to evaluate additional product rationalization and opportunistic divestitures.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $29.2M | $32.1M | -8.9% | $32.8M | -10.9% |
| Research & development | $3.2M | $3.5M | -7.9% | $4.5M | -28.9% |
| Sales & marketing | $9.0M | $9.4M | -4.4% | $11.7M | -23.0% |
| General & administrative | $11.3M | $16.1M | -30.0% | $16.2M | -30.4% |
| Total operating expenses | $37.2M | $43.6M | -14.6% | $49.8M | -25.3% |
| Operating income (loss) | -$8.0M | -$11.4M | +30.5% | -$17.0M | +53.1% |
| Operating margin | -27.2% | -35.6% | +8.4 pp | -51.7% | +24.5 pp |
| Net income (loss) | -$12.8M | $50.6M | -125.2% | -$31.0M | +58.8% |
| Net margin | -43.6% | 157.6% | -201.2 pp | -94.3% | +50.7 pp |
| Diluted EPS | -$0.09 | $0.37 | -$0.46 | -$0.23 | +$0.14 |
| Net retention rate | 98.0% | 96.0% | +2.0 pp | 98.0% | ±0.0 pp |
Risks
The company concluded there is substantial doubt about its ability to continue as a going concern within one year from the filing date because it may not remain compliant with financial covenants under the Credit Agreement. If lenders declare outstanding amounts immediately due and payable, the company would not have sufficient liquidity to satisfy them.
If the strategic review does not result in a transaction or other outcome, the company may need to restructure or refinance debt, seek additional equity or debt financing, or pursue divestitures. Financing sources may be unwilling to provide funding on commercially reasonable terms, or at all, while going-concern doubt remains.
The company observed slower than anticipated client decision-making on new logo sales, cross-sells, and upsells, together with softer than expected renewal rates due to macroeconomic headwinds, competitive pressures, and delays in product enhancements. This has led to slower ARR growth and is expected to impact revenue in the coming fiscal year.
ARR at June 30, 2024 was $109.0 million, down from $126.1 million at December 31, 2023, and Run-Rate Revenue was approximately $120.6 million at June 30, 2024, down from $139.7 million at December 31, 2023. The decline reflects slower growth and the sale of Board.org.
Uncertainty regarding the company's ability to continue as a going concern may cause current and potential customers to review their business relationships and terms with the company, which could materially and adversely affect revenue and customer retention.
Future sustained depression of the company's stock price or adverse changes in operating plans or macroeconomic conditions could reduce cash flows and trigger future goodwill impairment charges. The company recognized a $5.8 million goodwill impairment in the first quarter of 2023.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Adjusted EBITDA
Annual Recurring Revenue (ARR)
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 Q2 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.