Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- FiscalNote Holdings Inc (NOTE, Financial) achieved five consecutive quarters of positive adjusted EBITDA, indicating improved financial performance.
- The company announced an upward revision of its full-year 2024 adjusted EBITDA forecast to approximately $9 million, showcasing strong profitability.
- FiscalNote Holdings Inc (NOTE) has successfully optimized its cost structure, leading to significant reductions in operating expenses.
- The company has launched new AI-driven products, such as Co-pilots for Policy and Global Intelligence, which have been well-received by customers.
- FiscalNote Holdings Inc (NOTE) is focusing on international markets and corporate segments, where it sees significant growth opportunities.
Negative Points
- Total revenue for Q3 2024 was $29.4 million, lower than the prior year due to divestitures, indicating challenges in maintaining top-line growth.
- Net revenue retention was slightly lower at 99%, suggesting potential challenges in retaining existing customers.
- The company is undergoing a leadership transition, which may create uncertainty during the adjustment period.
- FiscalNote Holdings Inc (NOTE) has lowered its full-year revenue forecast to $120 million, reflecting divestitures and lower advisory revenue.
- The company is still evaluating its product portfolio, indicating potential instability or changes in its offerings.
Q & A Highlights
Q: What is the goal for FiscalNote's capital structure over the medium term, and how do you plan to achieve it?
A: John Slava, CFO and Chief Investment Officer, explained that the company is evaluating the right capital structure and strategic moves to reduce the overall cost of capital. They aim to service debt with future cash flow and continue to find ways to deleverage and reduce the debt profile, which will drive long-term equity value.
Q: Can you elaborate on the customer reception of the new AI Copilot technologies?
A: Josh Resnick, President and COO, stated that the Copilot for Global Intelligence has seen broad uptake among customers, with positive metrics in return visits and inquiries. The Copilot for Policy has provided valuable insights into user interactions, which are being integrated into core product initiatives to enhance customer experiences.
Q: Are the current gross margin levels sustainable?
A: John Slava, CFO and Chief Investment Officer, confirmed that the gross margins are sustainable. The increase is due to the divestiture of board.org and a focus on core subscription businesses with strong margin profiles.
Q: What are the key factors driving FiscalNote's return to growth in fiscal 2025?
A: Josh Resnick, President and COO, highlighted the focus on product improvements to drive customer engagement, retention, and cross-sell opportunities. Promising sectors include international markets and corporate segments, particularly large enterprises and mid-market.
Q: Why is now the right time for the leadership transition at FiscalNote?
A: Tim Hong, Chairman, CEO, and Co-founder, explained that after 12 years of leading the company, FiscalNote is well-positioned with new products, a strong customer base, and record profitability. The transition allows for fresh leadership while he continues to support the company as Executive Chairman.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
