FiscalNote (NOTE) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $27.5M, down 14% year-over-year, mainly due to divestitures, but exceeded internal expectations.

• Adjusted EBITDA reached $2.8M (10–10.1% margin), up from $1.2M (3.8–4%) in Q1 2024, marking the seventh consecutive positive quarter.

• Net loss for Q1 2025 was $4.3M, compared to net income of $50.6M in Q1 2024, which included significant one-time gains.

• Product innovation, especially with the launch of the AI-driven PolicyNote platform, is driving customer engagement and multi-year deal growth.

• Focus remains on expanding adjusted EBITDA margins, accelerating toward positive free cash flow, and building a foundation for durable growth.

Financial highlights

• Q1 2025 subscription revenue was $25.2M, down 15% year-over-year, with over 90% of total revenue from subscriptions.

• Adjusted gross profit was $24.1M (87% margin), up from 85% in Q1 2024; GAAP gross margin was 75%.

• Cash and equivalents at March 31, 2025, were $46.9M, up from $44.5M a year earlier.

• Operating expenses fell by $2.3M (5%) year-over-year; pro forma OPEX down $4M (14%).

• Negative working capital (excluding cash and short-term investments) was $32.5M at quarter end.

Outlook and guidance

• Full-year 2025 revenue guidance reaffirmed at $94–$100M, with adjusted EBITDA guidance at $10–$12M.

• Q2 2025 revenue expected at $22–$24M, with adjusted EBITDA of approximately $2M.

• Management expects ARR growth to resume in the second half of 2025, driven by PolicyNote adoption and operational improvements.

• Significant ongoing operating and capital expenditures are expected to implement business plans and enter new markets.

• The company does not expect cash flows from operations to fund requirements over the next 12 months and is evaluating further cost savings and capital sources.