Summary
FiscalNote reported second quarter 2026 revenue of $19.6 million, down 15.8% from the prior-year quarter. Year-to-date revenue was $39.6 million, down 22.0% from the prior-year period. The top line remains under pressure from customer retention challenges, federal government cuts, and the loss of divested businesses. Subscription revenue made up most of the mix, and the company said subscription revenue was 96% of total revenue in the quarter. Non-subscription revenue fell sharply as advertising and events revenue declined. Management also pointed to a cautious federal and public sector spending environment and elongated sales cycles. The company launched an expansion of its PolicyNote API to add district matching capability, and it signed new licenses for PolicyNote MCP APIs with Siemens and a globally recognized U.S. technology and cloud infrastructure company.
FiscalNote reported an operating loss of $24.1 million for the quarter, widened from the prior-year quarter. Net loss widened to $27.8 million. Diluted loss per share was $1.06. Operating margin was negative 123.0%. The quarter included a non-cash goodwill impairment charge, which the company said was the main driver of higher operating expenses. Excluding that charge and other items, adjusted EBITDA was $2.3 million, compared with guidance of $2.5 million. Adjusted gross margin was 88%, up from 86% a year earlier. The company continued to cut costs. Headcount was 343 employees at June 30, 2026, down from 407 at December 31, 2025, as the workforce transformation initiated in March took effect. Key Compton was appointed President and CEO in June 2026 to lead the return to growth.
Cash generation improved. Operating cash flow was negative $2.1 million in the quarter, but positive $0.9 million for the first half. Capital expenditures were $1.7 million in the quarter and $3.3 million year to date. Deferred revenue was $30.8 million, down 7.1% from a year earlier. Remaining performance obligations were $62.3 million, down 17.1% from a year earlier. Both metrics declined from a year earlier. The company reported annual recurring revenue of $74.9 million, down about 13% from $85.9 million a year earlier. Quarterly net revenue retention improved to 98% from 89% in the first quarter, while trailing twelve month NRR was 81%. Management expects trailing retention metrics to improve as recent quarterly trends carry forward.
Guidance was reset. For the full year 2026, management now forecasts revenue of $75 million to $78 million and adjusted EBITDA of $9 million to $11 million. The previous full-year forecast, provided on May 5, 2026, called for $80 million to $83 million in revenue. For the third quarter of 2026, the company issued an initial forecast of $19 million to $20 million in revenue. Management expects restructuring actions taken in the first half to benefit results in the back half and said it expects an adjusted EBITDA ramp. The revision reflects continued softness in the federal and broader public sector, a cautious private-sector spending environment, and lower non-subscription revenue, partially offset by cost discipline.
The main risks are balance sheet and liquidity related. The NYSE delisted the Class A common stock on April 13, 2026, triggering events of default under subordinated convertible notes. Forbearance agreements with the subordinated creditors run until August 21, 2026. If they are not extended, the company could face a cross-default on its 2025 Senior Term Loan on August 22, 2026. The company also did not meet the minimum Adjusted EBITDA covenant under that loan for the twelve months ended June 30, 2026, and that default has not been waived. A strategic review is ongoing, including potential further divestitures of non-core assets, but the company gave no timetable and said there can be no assurance of any outcome. The company reported negative working capital and an accumulated deficit, and management said significant ongoing operating and capital expenditures will be necessary.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2026 | Q1 FY2026 | QoQ | Q2 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $19.6M | $20.0M | -2.2% | $23.3M | -15.8% |
| Research & development | $1.6M | $2.0M | -22.6% | $2.3M | -30.3% |
| Sales & marketing | $4.5M | $5.7M | -21.2% | $6.7M | -32.7% |
| General & administrative | $9.2M | $9.5M | -2.9% | $11.4M | -18.9% |
| Total operating expenses | $43.7M | $62.5M | -30.2% | $30.7M | +42.3% |
| Operating income (loss) | -$24.1M | -$42.5M | +43.3% | -$7.4M | -224.4% |
| Operating margin | -123.0% | -212.3% | +89.2 pp | -31.9% | -91.1 pp |
| Net income (loss) | -$27.8M | -$43.6M | +36.2% | -$13.3M | -109.7% |
| Net margin | -142.2% | -217.8% | +75.6 pp | -57.0% | -85.1 pp |
| Diluted EPS | -$1.06 | -$2.39 | +$1.33 | -$0.08 | -$0.98 |
| Net retention rate | 98.0% | 89.0% | +9.0 pp | 96.0% | +2.0 pp |
Risks
At June 30, 2026 cash, cash equivalents, restricted cash, and short-term investments were $20.6 million, down from $26.9 million at December 31, 2025, and the Company had a negative working capital balance of $135.0 million excluding cash and short-term investments plus an accumulated deficit of $943.6 million. The net loss for the six months ended June 30, 2026 was $71.4 million, and management states continued significant operating and capital expenditures will be necessary.
The April 13, 2026 NYSE delisting caused events of default under the YA Convertible Notes and the 2025 GPO Convertible Note; the Subordinated Creditors agreed to forbear only until August 21, 2026, and if the agreements are not extended the Company will be in cross-default of its 2025 Senior Term Loan on August 22, 2026. The Company also missed its 2025 Senior Term Loan minimum Adjusted EBITDA covenant for the twelve months ended June 30, 2026, which has not been waived and could result in immediate repayment of the 2025 Senior Term Loan.
Total revenue fell 15.8% in the quarter and 22.0% year to date, with organic subscription revenue down 11% in both periods driven by customer retention challenges. ARR declined to $74.9 million at June 30, 2026 from $84.1 million at December 31, 2025, while deferred revenue was down 7.1% and RPO down 17.1% versus the prior-year quarter.
The Company recorded a goodwill impairment of $19.1 million in the quarter and $54.7 million for the six months ended June 30, 2026, which drove operating loss to widen to $24.09 million in the quarter and $66.60 million year to date. The charge signals a deterioration in the carrying value of the business.
Management attributes part of the decline in organic subscription revenue to the impact of Federal government cuts, in addition to customer retention challenges. This policy-driven demand exposure is outside the Company's control and affects a core government customer base.
The prior CEO resigned on June 26, 2026, resulting in $1.8 million of severance, and headcount fell from approximately 407 employees at December 31, 2025 to approximately 343 at June 30, 2026 as part of cost reduction and AI deployment initiatives. Continued headcount reduction and leadership turnover could disrupt operations and go-to-market execution.
The Company is expanding into political prediction markets and enhancing agentic API offerings as new growth levers, areas subject to evolving regulatory and compliance scrutiny. These new initiatives require upfront investment and carry execution and regulatory uncertainty.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Adjusted EBITDA
Adjusted Gross Profit
Annual Recurring Revenue (ARR)
Net Revenue Retention
Adjusted Gross Margin
Pro Forma ARR
Summary, forecast, risks and KPIs are extracted from FiscalNote Holdings, Inc.'s SEC filings for Q2 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.