FiscalNote (NOTE) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $29.4 million, down 13–14% year-over-year, mainly due to the divestiture of Board.org and discontinued products.

• Adjusted EBITDA for Q3 2024 was $3.4 million, up from $0.7 million in Q3 2023, marking the fifth consecutive quarter of positive adjusted EBITDA.

• Net loss for Q3 2024 was $14.9 million, similar to the prior year.

• Leadership transition announced: Tim Hwang to become Executive Chairman, Josh Resnik to assume CEO role effective January 1, 2025.

• Ongoing product innovation, portfolio rationalization, and divestitures (including Aicel Technologies) to drive profitable growth.

Financial highlights

• Q3 2024 gross margin was 79% GAAP and 86% adjusted, both up from the prior year.

• Subscription revenue accounted for 93% of total revenue, with Q3 2024 subscription revenue at $27.2 million, down 9% year-over-year.

• Cash and equivalents at quarter end were $33.4 million; total debt was $168 million, down from $172 million in Q2.

• Operating expenses in Q3 2024 fell $11 million year-over-year (24% decrease).

• Interest expense for Q3 2024 was $5.6 million, down from $8.0 million in Q3 2023 due to debt repayments.

Outlook and guidance

• Full-year 2024 adjusted EBITDA guidance raised to ~$9 million (from ~$8 million); revenue guidance revised to ~$120 million (from ~$121 million) due to divestitures.

• Q4 2024 guidance: $29 million in revenue and $2.5 million adjusted EBITDA.

• Management expects continued deleveraging, product simplification, and improved customer retention into 2025.

• Slower client decision-making and renewal softness are expected to impact revenue growth into 2025.

• Management is actively seeking additional capital sources.