Summary
FiscalNote reported total revenues of $29.44 million for the third quarter of 2024, down 13.4% from the prior-year quarter. Year-to-date revenue was $90.80 million, down 7.7%. The operating loss was $6.81 million, up 49.4% from the prior-year quarter as the loss narrowed. Operating margin was negative 23.1%, up 16.4 percentage points. Net loss widened 3.2% to $14.94 million, and diluted loss per share was negative $0.11, flat with the prior-year quarter. The nine-month view looks different. Net income was $22.90 million, a swing to a profit, and diluted earnings per share was $0.17, up 134.7%. That profit depends on the gain recorded on the sale of Board.org, which closed on March 11, 2024.
The adjusted profitability line kept improving. Adjusted EBITDA was $3.4 million for the quarter, with adjusted EBITDA margin of 12%. A year earlier adjusted EBITDA was $0.7 million and margin was 2%. FiscalNote described the period as its fifth straight quarter of positive adjusted EBITDA. Cash generation is still negative on a GAAP basis, though much less so. Operating cash flow was negative $2.96 million, up 74.8% from the prior-year quarter, and year-to-date operating cash flow was negative $3.95 million, up 87.6%. Capital expenditures were $2.44 million for the quarter, up 30.5%, and $6.88 million year to date, up 15.4%. Backlog fell. Deferred revenue was $40.39 million, down 13.5% from the prior-year quarter, and remaining performance obligations were $81.75 million, down 18.8%.
Management spent the quarter simplifying the portfolio and cutting debt. FiscalNote announced the divestiture of its South Korea subsidiary, Aicel Technologies, for total consideration of $9.65 million, and said net proceeds would prepay senior debt. The earlier Board.org sale carried a total value of up to $103.0 million. Staffing fell as well: full-time equivalent headcount dropped by approximately 175 from the start of the third quarter of 2023 through September 30, 2024. The company appointed Can Babaoglu as Chief Product Officer and continued building FiscalNote Copilot for Global Intelligence, which draws on more than 50,000 reports. Era Global Technologies agreed to invest $5.5 million through a convertible subordinated promissory note.
Customer metrics were mixed. Annual recurring revenue was $109 million at September 30, 2024, down 11%, while pro forma ARR was $109 million and flat. Net revenue retention was 99%, against 100% a year earlier. Renewals have softened, and the company said slower client decision-making is holding back growth. Leadership is changing too. Tim Hwang moves from Chief Executive Officer to Executive Chairman, and Josh Resnik, now President and Chief Operating Officer, becomes Chief Executive Officer on January 1, 2025. The board continues to review strategic alternatives and cautioned that the review may not produce a transaction.
Guidance moved in two directions. For the full year 2024, the company revised total revenue guidance to approximately $120 million from approximately $121 million and raised adjusted EBITDA guidance to approximately $9 million from approximately $8 million. For the fourth quarter of 2024, management also issued a forecast for total revenues and adjusted EBITDA. The revenue revision follows slower non-subscription growth and the Aicel divestiture, while the adjusted EBITDA increase rests on further operating efficiencies. Risks are plain. The company cited slower client decision-making on new logo sales, cross-sells and upsells, softer renewal rates, macroeconomic headwinds, competitive pressures, and delays in launching product enhancements. Slower ARR growth is expected to weigh on revenue in the coming fiscal year. FiscalNote said it was in compliance with all debt covenants at September 30, 2024.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2024 | Q2 FY2024 | QoQ | Q3 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $29.4M | $29.2M | +0.7% | $34.0M | -13.4% |
| Research & development | $3.3M | $3.2M | +1.4% | $4.5M | -28.4% |
| Sales & marketing | $9.1M | $9.0M | +0.7% | $11.2M | -19.3% |
| General & administrative | $10.6M | $11.3M | -5.7% | $14.4M | -26.3% |
| Total operating expenses | $36.3M | $37.2M | -2.6% | $47.5M | -23.6% |
| Operating income (loss) | -$6.8M | -$8.0M | +14.4% | -$13.5M | +49.4% |
| Operating margin | -23.1% | -27.2% | +4.1 pp | -39.6% | +16.4 pp |
| Net income (loss) | -$14.9M | -$12.8M | -17.0% | -$14.5M | -3.2% |
| Net margin | -50.7% | -43.6% | -7.1 pp | -42.5% | -8.2 pp |
| Diluted EPS | -$0.11 | -$0.09 | -$0.02 | -$0.11 | ±$0.00 |
| Net retention rate | 99.0% | 98.0% | +1.0 pp | 100.0% | -1.0 pp |
Risks
MD&A states 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 enhancement launches. These issues led to slower ARR growth and are expected to impact revenue in the coming fiscal year; total revenue was down 13.4% for FY2024 Q3 versus FY2023 Q3 and down 7.7% for FY2024 year to date versus FY2023 year to date.
Total revenue was down 13.4% for FY2024 Q3 versus FY2023 Q3 and down 7.7% for FY2024 year to date versus FY2023 year to date. Deferred revenue was down 13.5% versus the prior-year quarter and RPO was down 18.8%; ARR was $109.5 million at September 30, 2024 compared to $126.1 million at December 31, 2023, and NRR was 99% for the three months ended September 30, 2024.
At September 30, 2024, cash, cash equivalents, restricted cash, and short-term investments was $33.4 million, negative working capital was $45.8 million excluding cash and short-term investments, and accumulated deficit was $793.5 million. Net losses excluding the gain on sale of business were $48.7 million for the nine months ended September 30, 2024; the Company may need additional capital, which could cause significant dilution or unfavorable terms.
Total principal plus paid-in-kind debt outstanding was $174.2 million at September 30, 2024, including a $93.4 million Senior Term Loan. The Senior Term Loan has four financial covenants covering minimum cash balance, minimum ARR, adjusted EBITDA, and a capital expenditure limitation, and upon an event of default the lenders can elect to increase the interest rate by 5.0% per annum.
The Company reduced full-time equivalent headcount by approximately 175 from the beginning of the third quarter of 2023 through September 30, 2024, sunset certain non-core products, sold Board.org on March 11, 2024, and sold Aicel on October 31, 2024. Continued product rationalization and opportunistic divestitures may affect revenue, operating complexity, and execution of growth initiatives.
Net loss for FY2024 Q3 was down 3.2% versus FY2023 Q3, or widened, even as operating loss narrowed 49.4%, partly because change in fair value of financial instruments was a $3.5 million loss in FY2024 Q3 versus a $7.2 million gain in FY2023 Q3, a $10.7 million change. Mark-to-market adjustments on warrants and convertible notes can continue to cause earnings volatility.
MD&A states that future sustained depression of the Company's stock price may indicate a triggering event requiring reassessment of goodwill for impairment, and changes in business plans or macroeconomic conditions could reduce cash flows and trigger future impairment charges. A $5.8 million non-cash goodwill impairment was recognized in the first quarter of 2023 in the ESG reporting unit, with no impairment recorded in the three or nine months ended September 30, 2024.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Adjusted EBITDA
Adjusted Gross Profit
Annual Recurring Revenue (ARR)
Run-Rate Revenue
Adjusted Gross Profit Margin
Net Revenue Retention (NRR)
Subscription Revenue as % of Total Revenues
Pro Forma ARR
Summary, forecast, risks and KPIs are extracted from FiscalNote Holdings, Inc.'s SEC filings for Q3 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.