Key Takeaways:
FiscalNote Holdings reported a Q2 net loss of $1.06 a share, missing the $0.44 consensus estimate, as revenue fell 15.8 percent to $19.6 million.
"This is my first earnings call as CEO," President and Chief Executive Key Compton said, adding that the decline reflects "pressure in the federal and broader public sector, a cautious macro environment and the churn we absorbed earlier in the year."
Revenue of $19.581 million missed the $19.852 million consensus by 1.37 percent and fell from $23.264 million a year earlier. Subscription revenue totaled $18.8 million, about 96 percent of the total, while non-subscription revenue was $800,000. The GAAP net loss widened to $27.8 million, including a $19.1 million noncash goodwill impairment charge, from $0.96 a share a year earlier. Adjusted EBITDA was $2.3 million.
The company cut its full-year 2026 sales outlook to $75 million-$78 million from $80 million-$83 million, below the $80.83 million consensus, and guided adjusted EBITDA to $9 million-$11 million. For the third quarter, management expects revenue of $19 million-$20 million and adjusted EBITDA of about $3.5 million, citing restructuring benefits weighted to the second half.
Compton, roughly 30 days into the role, said quarterly net revenue retention improved to 98 percent from 89 percent in the first quarter, attributing the gain to platform consolidation and retention efforts. Headcount fell by 27 full-time equivalents to about 343 as of June 30, with gross margin at 80 percent on a GAAP basis and 88 percent adjusted.
The company is navigating its recent delisting from the New York Stock Exchange, with Chief Financial Officer Jon Slabaugh saying management is "evaluating various paths, including relisting options while also working with our lenders through short-term forbearance agreements related to our debt agreements." An external adviser has been engaged to develop alternatives.
The guidance cut shows management expects demand softness in the federal and public sector to persist through the year. Investors will watch the third-quarter results for evidence that retention gains and restructuring savings can lift adjusted EBITDA toward the $3.5 million target.
This article is for informational purposes only and does not constitute investment advice.
