FiscalNote Holdings 2025 Q1 Earnings Misses Targets as Net Income Drops 108%

FiscalNote Holdings (NOTE) reported its fiscal 2025 Q1 earnings on May 13th, 2025. FiscalNote Holdings experienced a challenging first quarter, with total revenue falling short of expectations, decreasing by 14.3% to $27.51 million compared to the previous year. The company reaffirmed its full-year 2025 guidance, projecting total revenues between $94 million and $100 million and adjusted EBITDA in the range of $10 million to $12 million, indicating confidence in its strategic initiatives. Despite revenue declines, FiscalNote is optimistic about accelerating performance in the latter half of the year due to recent investments in its core policy offerings, including the new PolicyNote platform.

Revenue

FiscalNote Holdings saw a decline in total revenue to $27.51 million for Q1 2025, down from $32.11 million in Q1 2024. Subscription services contributed $25.23 million, showcasing its core business strength. The advisory segment added $1.06 million, while advertising generated $455,000. The books segment contributed a modest $2,000, with other revenue streams bringing in $759,000. The cumulative revenue performance underscores the company's focus on maintaining subscription-driven growth amid challenging market conditions.

Earnings/Net Income

FiscalNote Holdings reported a net loss of $0.03 per share for Q1 2025, a stark contrast from the profit of $0.39 per share in Q1 2024, reflecting a negative change of 107.7%. The company recorded a net loss of $4.25 million, a significant deterioration from a net income of $50.60 million in the same quarter last year. This sharp decline indicates challenges in maintaining profitability amidst a shifting market landscape.

Post-Earnings Price Action Review

The strategy of purchasing stocks following a revenue beat and holding for 30 days seeks to exploit short-term momentum from positive earnings surprises. While promising in specific market conditions, this approach doesn't guarantee outperformance compared to a long-term buy-and-hold strategy. The method relies heavily on short-term events like earnings beats, which come with inherent risks such as market volatility and unexpected reactions that can result in swift losses. Backtesting shows that the strategy often parallels buy-and-hold results in the long term, highlighting its potential for occasional success but lack of consistent superiority. Also, the market's efficiency may diminish the effectiveness of well-known strategies. While holding for 30 days may offer diversification benefits, it doesn't address comprehensive diversification needs, such as managing overall market risk. In summary, while buying on earnings beats can be effective in certain situations, it's crucial to recognize the risks and maintain a diversified portfolio aligned with broader market conditions.

CEO Commentary

Josh Resnik, CEO and President of FiscalNote, emphasized that the strong performance in the first quarter reflects disciplined execution focused on product-led growth and organizational streamlining. He noted that the company’s numerous product launches and enhancements, combined with improved team execution, serve as solid foundations for long-term sustainable growth. Resnik highlighted the importance of expanding adjusted EBITDA margins and continuing debt reduction, expressing confidence that these efforts will drive accelerating and durable growth in the future.

Guidance

FiscalNote reaffirms its full-year 2025 guidance, projecting total revenues between $94 million and $100 million, along with adjusted EBITDA in the range of $10 million to $12 million. The company anticipates accelerating performance in the second half of the year, primarily due to investments in its core policy offerings, including the new PolicyNote platform. Overall, FiscalNote’s outlook remains optimistic, supported by recent operational streamlining and management restructuring.

Additional News

In recent weeks, FiscalNote Holdings has made notable strategic moves. The company announced the sale of its Australian subsidiary, TimeBase, to Thomson Reuters for $6.5 million. This divestiture aligns with FiscalNote's strategy to streamline operations and focus on core strengths, including the enhanced PolicyNote platform. Additionally, FiscalNote completed the divestiture of Oxford Analytica and Dragonfly Intelligence to Dow Jones for $40 million, further strengthening its balance sheet and accelerating its path to positive free cash flow. These transactions reflect FiscalNote’s proactive approach to refining its business model and achieving financial stability.