FiscalNote (NOTE) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $20.0 million, meeting guidance but down 27% year-over-year due to divestitures and customer retention challenges; 95% of revenue came from subscriptions, with a global customer base spanning over 100 countries.

• Adjusted EBITDA was $1.0 million (5.1% margin), and net loss widened to $43.6 million, primarily due to a $35.6 million goodwill impairment.

• Major operational transformation included a 25% headcount reduction, rapid AI deployment, and cost streamlining to drive margin expansion and positive free cash flow.

• Completed migration to the AI-native PolicyNote platform, which outperformed legacy platforms in engagement and retention; early traction for agentic API products and expansion into political prediction markets.

• Delisting from NYSE triggered debt defaults and forbearance agreements, with shares now trading OTC and the Board reviewing all strategic options.

Financial highlights

• Q1 2026 total revenue was $20.0 million, down from $27.5 million in Q1 2025; subscription revenue was $19.1 million (95% of total), non-subscription revenue was $1.0 million.

• Adjusted Gross Profit was $17.5 million (87% margin), and GAAP gross margin was 79%.

• Adjusted EBITDA margin was 5.1%, down from 10.1% in Q1 2025.

• Net loss was $43.6 million, including a $35.6 million goodwill impairment.

• Cash and cash equivalents stood at $26.5 million at quarter-end.

Outlook and guidance

• Full-year 2026 revenue guidance reaffirmed at $80–$83 million, with adjusted EBITDA guidance at $14–$16 million.

• Q2 2026 revenue expected between $19.5–$20.5 million; adjusted EBITDA of ~$2.5 million.

• Positive free cash flow expected on a trailing 12-month basis by end of Q1 2027, driven by operational transformation.

• Management expects restructuring actions to benefit results in the second half of 2026; ongoing strategic review may lead to further divestitures.

• Substantial doubt remains about ability to continue as a going concern due to liquidity constraints and debt covenant risks.