On November 14, 2023, FiscalNote Holdings Inc (NOTE, Financial) released its 8-K filing, announcing its financial results for the third quarter ended September 30, 2023. The company, a leading AI-driven technology provider of policy and global intelligence, reported significant strides in its financial performance, including a 17% increase in revenue to $34.0 million compared to the same quarter in the previous year. This growth was driven by a robust demand for FiscalNote's AI-enabled global policy and market intelligence solutions.
Financial Performance Highlights
FiscalNote's third-quarter performance was marked by several financial achievements:
- Subscription revenue, accounting for approximately 89% of total revenue, grew by 15% year-over-year.
- Gross profit stood at $23.6 million, representing a 69% gross margin, while non-GAAP adjusted gross profit was $28.4 million, indicating an 83% non-GAAP adjusted gross margin.
- The company reported a GAAP net loss of ($14.5) million or $(0.11) per share.
- Adjusted EBITDA reached $0.7 million, an increase of approximately $8 million year-over-year and an annualized improvement of over $30 million in Adjusted EBITDA compared to Q1.
- Cash and cash equivalents totaled $24.4 million, with approximately $94 million of additional debt capacity available.
Operational Metrics and Strategic Developments
FiscalNote also highlighted several operational metrics and strategic initiatives:
- Run-Rate Revenue increased to $138 million, a 14% increase year-over-year.
- Annual Recurring Revenue (ARR) rose to $123 million, representing a 14% total growth year-over-year.
- Net Revenue Retention (NRR) was approximately 100%, with rates among the corporate large enterprise customer base trending above 100% on a quarterly basis.
- The announcement of the FiscalNote AI Co-pilot program, aimed at enhancing AI solutions for policy and risk management professionals.
- The formation of a Special Committee by the Board of Directors in response to the CEO's interest in exploring a potential go-private transaction.
FiscalNote's CEO, Tim Hwang, expressed satisfaction with the company's achievement of Adjusted EBITDA profitability ahead of schedule, attributing it to the durability of revenue streams and the team's efforts. Looking forward, the company is well-positioned with durable recurring revenue streams, high adjusted gross margins, and a leadership position in AI for the legal and policy sector.
Financial Outlook
For the fourth quarter of 2023, FiscalNote anticipates GAAP revenue of $34 million to $35 million and an Adjusted EBITDA of approximately $2.5 million. The full-year guidance for 2023 includes GAAP revenue of $132 million to $133 million and an adjusted EBITDA loss of approximately $8 million, marking a significant year-over-year improvement.
The company expects to increase its cash position in Q1 of 2024 through compounding increases to prepaid ARR and strong collections. Despite a challenging macro environment, FiscalNote remains confident in its momentum and ability to drive growth.
For more detailed financial information and disclosures, investors and interested parties are encouraged to review the full 8-K filing.
FiscalNote will host a conference call to discuss the Q3 2023 financial results and outlook, providing an opportunity for investors to gain further insights into the company's performance and strategies.
Note: The financial data provided in this summary is based on the unaudited financial statements included in FiscalNote's 8-K filing.
Explore the complete 8-K earnings release (here) from FiscalNote Holdings Inc for further details.
