FiscalNote Q2 2025 Earnings Report

FiscalNote EPS Results

• Actual EPS: -$0.08
• Consensus EPS: -$0.09
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: N/A

FiscalNote Revenue Results

• Actual Revenue: $23.26 million
• Expected Revenue: $22.83 million
• Beat/Miss: Beat by +$436.00 thousand
• YoY Revenue Growth: N/A

FiscalNote Announcement Details

• Quarter: Q2 2025
• Date: 8/7/2025
• Time: After Market Closes
• Conference Call Date: Thursday, August 7, 2025
• Conference Call Time: 5:00PM ET

FiscalNote (NYSE:NOTE) operates as technology company North America, Europe, Australia, and Asia. It combines artificial intelligence technology, machine learning, and other technologies with analytics, workflow tools, and expert research. The company also delivers that intelligence through its suite of public policy and issues management products, as well as powerful tools to manage workflows, advocacy campaigns, and constituent relationships. It serves a customer base that includes businesses comprising the Fortune 100 companies, government agencies, law firms, professional services organizations, trade groups, and non-profits. FiscalNote Holdings, Inc. is headquartered in Washington, District Of Columbia.

FiscalNote Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: We delivered adjusted EBITDA of $2.8 million in Q2, lifting our margin to 12% from 4% a year ago through disciplined cost management and improved operating leverage.
• Positive Sentiment: We secured a $75 million senior secured term loan with MGG Investment Group maturing in 2029, bolstering our balance sheet and advancing our path to positive free cash flow.
• Positive Sentiment: Q2 revenue of $23.3 million exceeded the guidance midpoint, and we reaffirmed full-year 2025 targets of $94 million–$100 million in revenue and $10 million–$12 million in adjusted EBITDA.
• Negative Sentiment: On a pro forma basis, ARR declined by $7.7 million year-over-year to $85.9 million, and net revenue retention slipped to 96%, reflecting legacy platform retention headwinds.
• Positive Sentiment: PolicyNote momentum is building: inbound policy leads are up 20% YoY, the corporate new-logo pipeline is 45% higher QoQ, daily active users now exceed the legacy platform, and usage grows ~30% over the first quarter.

Presentation

[Bob Burrows, Investor Relations at FiscalNote Holdings]

Good evening. My name is Bob Burrows, Investor Relations for FiscalNotes, and we are pleased you all could join us. The purpose of today's call is to discuss FiscalNotes' second quarter twenty twenty five financial results and guidance for both the full year and 2025. Joining me with prepared comments are Josh Resnick, CEO and President and John Slabaugh, CFO and Chief Investment Officer. Other members of the senior management team will be available as needed during the Q and A session that will follow these prepared comments.

[Bob Burrows, Investor Relations at FiscalNote Holdings]

Please note today's press release, related current report on Form eight ks and updated version of the corporate overview presentation are all available on the Investor Relations portion of the company website. In terms of important housekeeping, please take note of the following. During this call, we may make certain statements related to our business that are forward looking statements under federal securities laws. These statements are not guarantees of future performance, but rather are subject to a variety of risks and uncertainties. Our actual results could differ materially from expectations reflected in any forward looking statements.

[Bob Burrows, Investor Relations at FiscalNote Holdings]

For a discussion of the material risks and important factors that could affect our actual results as well as the risks and other important factors discussed in today's earnings release, please refer to our SEC filings, which are available either on our company website or the Securities and Exchange Commission's EDGAR system. Additionally, non GAAP financial measures will be discussed on this conference call. Please refer to the tables in our earnings release or the updated version of the corporate overview presentation for a reconciliation of these measures to their most directly comparable GAAP financial measure. Finally, we use key performance indicators or KPIs in evaluating the performance of our business. These include annual recurring revenue or ARR and net revenue retention or NRR. With that, I'd like to turn the call over to Fisco Note's CEO and President, Josh Resnick. Josh?

[Josh Resnik, President & CEO at FiscalNote Holdings]

Thank you, Bob, and thanks to everyone joining us today. I'm pleased to be here to share FiscalNotes' second quarter twenty twenty five results and update you on the progress we've made on our strategic priorities. We remain committed to the disciplined approach that has served us well, managing the business with rigor and focus.

[Josh Resnik, President & CEO at FiscalNote Holdings]

Our three core objectives remain the same: one, consistent expansion of adjusted EBITDA margin two, managing the company's balance sheet and achieving positive free cash flow three, building a durable foundation for profitable growth. As I've said on past calls, I'll walk you through where we stand on each, touching briefly on the first two and then focusing mainly on the company's growth. First, adjusted EBITDA. We delivered adjusted EBITDA of $2,800,000 in Q2, exceeding guidance. This represents an adjusted EBITDA margin of 12%, an increase compared to 4% on a pro form a basis in the same period last year.

[Josh Resnik, President & CEO at FiscalNote Holdings]

This improvement reflects the ongoing benefits of our cost discipline, sharper prioritization of core growth initiatives and improving operating leverage. We expect to continue to expand margins over the long term as these improvements compound. As adjusted EBITDA margins further expand, our path to positive free cash flow remains clear. So with that, I'll turn to our second core objective, management of the balance sheet and achieving positive free cash flow. Managing the company's indebtedness as well as achieving and sustaining positive free cash flow remain among our highest priorities.

[Josh Resnik, President & CEO at FiscalNote Holdings]

Yesterday, we announced a substantial refinancing of our senior term loan provided exclusively through funds managed by MGG Investment Group. Importantly, MGG is providing a new facility, which will not mature until 2029. MGG conducted thorough diligence before making its commitment, including a deep overview of fiscal note's operational performance, market position and strategic plan. And I'm especially pleased to welcome MGG as our new long term capital partner. Achieving positive free cash flow continues to be a primary focus of ours, and we are confident in our approach and our path.

[Josh Resnik, President & CEO at FiscalNote Holdings]

As a reminder, we have made significant progress towards positive free cash flow as we have rightsized the business. Over the trailing twelve months, we have improved free cash flow by more than $68,000,000 compared with the same period two years prior. Our cash interest expense will increase slightly with this refinance by less than $2,000,000 annually due to the higher balance on the new senior term loan. But because we continue to streamline our operations, this incremental interest expense is more than offset, and therefore, our accelerated path to positive free cash flow remains unchanged. Our third core objective relates to growth and commercial momentum, and I'll turn to that now.

[Josh Resnik, President & CEO at FiscalNote Holdings]

Revenue for the quarter came in at $23,300,000 above the guidance midpoint, and we are reaffirming our full year guidance. Our performance in Q2 reflects both the company's continued transition as well as encouraging signs of momentum. As expected, ARR growth has not yet resumed. This is consistent with what we've said to expect in the 2025. We've previously discussed the unacceptable execution challenges that impacted the start of the year, And in a moment, I'll discuss some of the improvements we're seeing in our pipeline and sales metrics following the swift operating changes we made as a result.

[Josh Resnik, President & CEO at FiscalNote Holdings]

Those challenges, together with the impact of the known customer retention and expansion issues in our legacy products, as well as atypical instability in The U. S. Federal sector, have contributed to the organic ARR and revenue declines. We expect better from the business in the future, and we continue to remain encouraged by the trajectory of our pipeline and the tangible progress in execution. What are we seeing that gives us that confidence?

[Josh Resnik, President & CEO at FiscalNote Holdings]

We continue to see strong demand for our products, and that demand is now translating into improvements in new logo sales. Our top of funnel metrics remain strong. Inbound leads for our policy products are up more than 20% year over year, and our corporate new logo pipeline was 45% higher at the end of Q2 than it was at the end of Q1. I spoke to some of these top of funnel trends at our last earnings call in May, and I noted it would take time to see these improvements reflected in new logo sales. Well, we're now seeing exactly that.

[Josh Resnik, President & CEO at FiscalNote Holdings]

Quarter over quarter, we saw an improvement of 400 basis points in corporate win rates from Q1 to Q2 as well as a significant increase in average contract value, especially with our largest corporate customers where we've seen high demand for our new global data packages. And we are continuing to see customers vote with their laws in the form of multiyear commitments. As was the case in Q1, in Q2, on a year over year basis, we more than doubled the rate at which our new private sector customers are signing on to multiyear commitments for our policy data. This demonstrates the confidence and conviction our customers have, and it should translate directly into gross retention improvements in 2026, cutting straight to the heart of our greatest growth challenge. In addition to strong commercial demand and multiyear commitments, we're seeing clear evidence that is driving the levels of engagement that we expect will fuel gross retention and net retention over time.

[Josh Resnik, President & CEO at FiscalNote Holdings]

In June, we announced that PolicyNote now has more daily active users than our legacy fiscal note platform, a major milestone in our transformation. Core engagement metrics, such as search frequency and use of the AI assistant, both of which I've discussed before, remain strong. And now that PolicyNote has been in market for just over six months, we can also begin looking at how usage trends develop over time. The pattern is encouraging. A few weeks into a new customer engagement, usage begins to rise steadily with the average customer using the platform roughly 30% more at the end of their first quarter than at the midpoint.

[Josh Resnik, President & CEO at FiscalNote Holdings]

This indicates that users are finding value in the platform, embedding Policy Note in their workflow, and becoming habitual users. This is a strong indicator of customer health and something that we expect will translate into improvements in gross retention over time. We're continuing to add new features and enhancements to PolicyNote at a rapid pace. In Q2 alone, we delivered more than 10 major updates, including AI powered capabilities for legislative drafting and bill outlooks, significant upgrades to our AI alerts and AI assistant, and a new onboarding flow designed to drive engagement from the very beginning of the user experience. These improvements are having tangible impact.

[Josh Resnik, President & CEO at FiscalNote Holdings]

For example, new policy note customers are now setting alerts, which we consider to be a high value customer activity, far sooner after account activation than on our legacy platform. So we believe that this consistent, visible investment in policy note inspires customer confidence and deepens customer engagement, which we expect will be the cornerstone for stronger customer retention and greater expansion opportunities through cross sell and upsell in the future. What does all this mean for FiskaMode's future growth? Top of funnel and new logo sales are trending well. The challenge continues to be gross and net retention on our legacy product suite for the reasons that I've discussed a number of times.

[Josh Resnik, President & CEO at FiscalNote Holdings]

But we believe we have the right solution, PolicyNotes, and we expect that over time, as we continue to add more datasets, features and customers to PolicyNotes, a process we've said would take time. We will see retention improve and ARR and revenues return to growth. Migration in PolicyNote continues to go well and is ahead of schedule, and we expect to deprecate at least one large legacy platform this calendar year. So we're on the right track. We're moving expeditiously, and we continue to believe that with continued progress, we will see ARR growth resume in the second half of this year and then accelerate further in 2026 and beyond.

[Josh Resnik, President & CEO at FiscalNote Holdings]

In summary, in Q2 and recent days, we have expanded adjusted EBITDA margin, announced the refinancing of our senior term loan and continued building path to sustained positive free cash flow and continued to strengthen policy note and accelerate product innovation, and we saw continued acceleration of key sales metrics. While the 2025 has been a period of transition, we are executing with focus and intensity. Our product led strategy is working, our operational discipline is holding, and the building blocks for long term profitable growth are firmly in place. We remain confident in our ability to deliver on our full year guidance and create meaningful shareholder value in the years ahead. With that, I'll turn it over to John to walk through the financials in more detail. John?

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

Thank you, Josh. Good evening, and thank you for joining FiscalNote's second quarter twenty twenty five conference call. We are pleased to announce that we came in above the midpoint of our guidance range on revenue and exceeded guidance on adjusted EBITDA for the quarter. We are also reaffirming our full year forecast, evidence that our product led growth strategy and disciplined operating approach is on track and gaining momentum. On top of that, our recent refinancing significantly expanded our runway and operational flexibility.

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

In that regard, yesterday, we announced that fiscal note entered into definitive agreements to refinance our senior debt and restructured substantially all of our subordinated debt. This series of transactions will provide fiscal note with a clear long term runway and operating flexibility to execute on driving efficient product led growth. These transactions are scheduled to close in mid August subject to customary closing conditions. Upon closing, we will replace our current senior credit facility with a new $75,000,000 senior secured term loan with the maturity extended to 2029. This new loan is supported exclusively by funds managed by NGG Investment Group.

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

Excess proceeds from the new facility together with new subordinated convertible debt will be used to pay off or refinance certain existing subordinated debt, including an amendment to our largest long term subordinated creditor to extend the maturity of its remaining balance to 2029. In aggregate, this transaction serves as an important step for fiscal note and for our ongoing efforts to stabilize and strengthen our capital structure, while we accelerate execution of the product led growth strategy. The transactions provide additional time to realize the full potential of the Policino platform and manage our capital structure, supporting management's commitment to generating sustainable levels of growth, profitability and positive free cash flow. In light of the timing of these transactions, there are a few customary additional disclosures required in our 10 Q filing. We plan to file a Form 12b-twenty five to extend the filing deadline for the second quarter twenty twenty five Form 10 Q.

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

This will give us time to finalize the additional disclosures. We plan to file our 10 Q by August 18. Absent this transaction, we otherwise would have filed on time. Recall that we took a similar step earlier this year upon the closing of the divestiture of Oxford Analytica and Dragonfly, and we successfully filed our Form 10 ks under similar circumstances. With that as a backdrop, let me dive into some of the key drivers behind our second quarter financial results.

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

Total revenue for Q2 twenty twenty five was $23,300,000 above the midpoint of our forecast of 21,000,000 to $23,000,000 When compared to the prior year, revenue was $6,000,000 lower due primarily to the divestiture of ASIL in October 2024 and Ochteranalytica in Dragonfly at the 2025. Subscription revenue, which remains the cornerstone of our business, was $21,400,000 for the quarter, dollars 5,700,000.0 lower again largely due to the divestitures. Subscription revenue accounted for 92% of total revenues consistent with our historical trend. On a pro form a basis, after adjusting for the impact of the AASL, Oxford Analytica and Dragonfly divestitures, Q2 twenty twenty five subscription revenue was $1,800,000 lower than the prior year, indicating that we are still working through our transition to policy note from the legacy fiscal note platform. As we roll out the new policy new note platform, we expect to return to stable consistent top line growth, something we anticipate starting over the next two quarters.

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

Turning to our key performance metrics, as of Q2 twenty twenty five, annual recurring revenue was $85,900,000 versus $93,600,000 in 2024 on a pro form a basis, a decline of $7,700,000 As you've heard from Josh earlier, this was expected and is unacceptable performance for the business. It reflects a combination of the underperformance of new logo and sales funnel execution in Q1, ongoing legacy platform retention issues and recent reported instability in the public sector. We are focused on improvement and remain very encouraged by the trajectory of our top line and the tangible progress and execution we are seeing. Looking ahead, and as you also heard from Josh, we anticipate ARR growth beginning in the 2025. For the second quarter twenty twenty five, net revenue retention was 96% versus 98% in the prior year, reflecting the underperformance at the 2024 that we have previously discussed and believe we have addressed going forward.

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

For both ARR and NRR, we expect most metrics to improve by year end 2025 driven by policy note and other clear signs of the cut in customer engagement that we are seeing. Principal operating expenses in Q2 twenty twenty five continued the trend of year over year decreases, reflecting the impact of ongoing efficiency measures initiated in 2023, advanced in 2024 and 2025. Such discipline is essential to our path to expanding operating margins and adjusted EBITDA going forward. As we simplified our business model, additional cost savings accrued from the divestitures of board.org, ASIL, Oxford Analytica and Dragonfly Intelligence, in addition to savings from sunsetting various non core products. Looking at expenses in more detail, Q2 twenty twenty five cost of revenues decreased by $2,000,000 or 28% versus prior year.

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

R and D decreased by $900,000 or 29% and the sales and marketing decreased by $2,300,000 or 26%. As for G and A, we saw a slight increase of $100,000 or 1%. Importantly, approximately $5,400,000 of non cash M and A and other non recurring costs were recorded in G and A during the quarter. Excluding these items, G and A would have declined year over year. Taken together, total Q2 twenty twenty five operating expense fell by $6,500,000 or 17% versus the prior year.

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

On a pro form a basis, excluding non cash and other non recurring charges, the impact of the 2024 divestitures, OpEx decreased by approximately 4,000,000 or 15%. The gross margin in Q2 twenty twenty five was 79%, 200 basis points higher than prior year on a GAAP basis, primarily due to the impact of divested businesses in Sunset Products. Adjusted gross margin was 86% in Q2 twenty twenty five as compared to 85% in the prior year, Both reflect the impact of our disciplined cost management. Adjusted EBITDA was a positive $2,800,000 higher than the prior year above our guidance of approximately $2,000,000 in the eighth consecutive quarter of positive performance on this important profitability metric. Sustained positive adjusted EBITDA even after the pro form a impact of the divestitures through June 30 is the direct result of actions that we've taken to improve our operating efficiency, streamline the product portfolio and reduce the overall cost structure of the business.

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

And as you've heard me say before in past calls, we will drive increasing operating leverage across the business while steadily expanding our top line through product led growth. Cash and cash equivalents, including short term investments at the 2025 were $39,200,000 an increase over both the prior year period and the year end 2024 balance driven primarily by the influx of cash due to seasonality in the Oxford Analytic and Dragonfly divestitures, which closed on March 31. Finally, let me talk about guidance. We are reaffirming our full year 2025 revenue forecast in the range of 94,000,000 to $100,000,000 and adjusted EBITDA in the range of 10,000,000 to $12,000,000 We are forecasting third quarter twenty twenty five revenues in the range of 22,000,000 to $23,000,000 and adjusted EBITDA of approximately $2,000,000 Josh referenced this affirmation speaks to the resilience of our streamlined and effective operating model and the momentum building is a direct result of our product led growth strategy. In summary, fiscal note reflects increasing strength and resilience.

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

Our streamlined and disciplined operating plan is focused on innovation that is becoming increasingly valuable to our customers, helping them navigate today's increasingly complex political landscape. As we continue to drive to stabilize the business and return to a path of sustainable growth and customer retention, we are also working to expand operating leverage and therefore adjusted EBITDA both in absolute dollars and on a margin basis. Finally, we prudently manage our cash by controlling CapEx, cash interest expense and managing our operating expenses, all in the pursuit of accelerating the path to positive free cash flow and therefore sustainable growth. 2025 is an important year for this company. And as we move into the 2025, we are encouraged by the clear positive trends we are seeing across our product and customer metrics, which drive everything.

[Jon Slabaugh, CFO & CIO at FiscalNote Holdings]

And we remain confident that we are making significant process in reestablishing a clear, definitive path for durable growth and sustainable profitability. That concludes my prepared remarks. I'll turn it over to the operator to begin the question and answer session. Operator?

[Operator]

Our first question will come from the line of Mike Latimore with Northland Capital Markets. Please go ahead.

[Mike Latimore, MD & Senior Research Analyst at Northland Capital Markets]

Excellent. Thanks very much. Congrats on all the progress this year. Looks good. You talked about returning to ARR growth, in the second half.

[Mike Latimore, MD & Senior Research Analyst at Northland Capital Markets]

Is is the do you assume a similar contribution from, you know, new logo improvement and NRR improvement, or is one or two of those variables more important to return to ARR growth?

[Josh Resnik, President & CEO at FiscalNote Holdings]

Hey. Thanks, Mike, for the comment and the question. Appreciate it. So, we're seeing good success, with new logo, as I discussed just a few moments ago. We're seeing a lot of improvements in pipeline.

[Josh Resnik, President & CEO at FiscalNote Holdings]

We're seeing increased win rates. We're seeing ACVs go higher. So we're pleased with progress on new logo. You know, of course, we'd like to see continued progress from here as well and continuing to grow those ACVs, improve win rates, etcetera. The the difference really will come from, our retention and expansion.

[Josh Resnik, President & CEO at FiscalNote Holdings]

So that's where, you we're still seeing those challenges with existing relationships on the legacy platforms, and we expect to see, gross and net retention improve, both as a result of policy note as we migrate more customers on the policy note, and also, with some of the offerings that we have in market. So we've also put out some revamped global data packages as well, which we think will help with expansion revenue too. We're seeing great success with those, and those are helpful drivers when it comes to ACDs. We're seeing very good healthy demand for that global data, which is really a strong differentiator for us in market. So long story short, we wanna see continued progress on new logo, but the biggest difference maker going forward will be those improvements to gross and net retention that we expect to see.

[Mike Latimore, MD & Senior Research Analyst at Northland Capital Markets]

Got it. Got it. Got it. Makes sense. And then I think you've, in terms of additional product enhancements, I think you're planning on some enterprise level features, I believe, and also integrating the last couple of datasets here.

[Mike Latimore, MD & Senior Research Analyst at Northland Capital Markets]

Guess one is or is that is that is that a correct assertion? And then second, if so, is that something planned for this year, is that kind of going to next year?

[Josh Resnik, President & CEO at FiscalNote Holdings]

Sure. So, yeah. We so we are still continuing to enhance policy. You know? And you can think of it, in a couple different ways.

[Josh Resnik, President & CEO at FiscalNote Holdings]

So one is continuing to add core datasets and enterprise features. When we first launched policy note, it was designed for, you know, the most straightforward use cases, and so we're continuing to add some of the more complex enterprise grade features, you know, as we speak. And as we do that, we're migrating more and more enterprise customers, onto the platform. So we're gonna continue that work to build that out so that we can accelerate the migrations, and those migrations are going well and are actually ahead of schedule. We're also continuing to implement new, new kind of incremental features, things like, you know, our tariff tracker, things like, some of our more advanced AI features, like we have with now the ability to actually write draft legislations for you in the platform, and so features that are really accelerating the platform forward, leapfrogging the competition.

[Josh Resnik, President & CEO at FiscalNote Holdings]

So we're continuing to build those out as well, from an innovation perspective. We're gonna continue the migration over the course of this year and next year. So, you you know, that's about what you can expect in terms of migrating all of our customers onto new platform. And like I said, what we're doing in parallel is both, some of those core features to facilitate, and accelerate those migrations, but also, at the same time, launching new innovations to make sure that we're propelling policy note forward in parallel.

[Mike Latimore, MD & Senior Research Analyst at Northland Capital Markets]

Great. Great. And then I guess just last one for me. In terms of the federal and NGO verticals, can you just give a, know, just a little more color on how they're behaving and, you know, has there been any change during the year?

[Josh Resnik, President & CEO at FiscalNote Holdings]

Sure. So on federal, you know, as we noted, in our comments, we are seeing, you know, atypical instability in federal this year, which we've spoken to before, just given all the changes in the federal government. That continues to be something that that we monitor. You know, it's it's kind of a a continually shifting landscape. Even you know, you had earlier in the year heavy activity from Doge, which created a lot of volatility, and you still now are seeing just some shifts within federal, both in terms of some areas where there's increased stability and, continuing to see relationships and contracts return, but also as there's just continued shifts within the government in terms of their own staffing and how that translates into their needs, licenses, and so on.

[Josh Resnik, President & CEO at FiscalNote Holdings]

And as we've said before, you know, the instability, you know, has obviously introduced some challenges. It also introduces opportunities for us as well. You know, our solutions, we believe, drive great efficiencies for all our customers, including federal. And so we think that there's a lot of need for, for our platforms. We offer unique proprietary content that's very informative for policymakers.

[Josh Resnik, President & CEO at FiscalNote Holdings]

So, again, a need there as well. And so that's something we're just continuing to monitor the progress, with the federal government throughout the year. So no significant changes from what we've spoken about about before. It's just something that's continuing. NGOs, I would say the same.

[Josh Resnik, President & CEO at FiscalNote Holdings]

You know, I assume your question kind of relates to how does, you know, federal funding change impact NGOs. And I would say kind of same thing there where, we're still seeing, NGOs be actually, you know, fairly active with things like advocacy, in this type of environment. And, you know, again, we have a very strong advocacy platform for them to use as well. And so, you know, there's still, we still see opportunity in that sector.

[Mike Latimore, MD & Senior Research Analyst at Northland Capital Markets]

Yep. Okay. Great. Great. Thanks very much. Best of luck.

[Josh Resnik, President & CEO at FiscalNote Holdings]

Thanks, Mike. Appreciate it.

[Operator]

And our next question will come from the line of Zach Cummins with B. Riley Securities. Please go ahead.

[Ethan Widell, Senior Equity Research Associate at B. Riley Securities]

Hi there. This is Ethan Widell calling in for Zach Cummins. Thanks for taking my questions. I think, to to start with, you know, it it sounds like, your retention metrics are, kind of starting to trend well. I I guess, what levers do you think you need to pull there from here to, continue to improve retention?

[Ethan Widell, Senior Equity Research Associate at B. Riley Securities]

Is that primarily product led as as you've discussed on the call so far, or is there anything else?

[Josh Resnik, President & CEO at FiscalNote Holdings]

Sure, Ethan. Thanks for the question. So, you know, of course, from from a long term training perspective, we've talked mostly about the product and the introduction of policy note. And we are seeing really strong engagement metrics there, which give us a tremendous amount of confidence in how policy note will impact retention, in the future. And one of the more interesting things now that policy note has been out in market for six months now is we're able to look at some of that usage, not just as snapshot moment, but over time.

[Josh Resnik, President & CEO at FiscalNote Holdings]

And so that's where, you know, I spoke earlier about how we're seeing, user engagement increase as the relationship continues. That's a very strong sign and something that bodes very well for how policy note will impact, our retention going forward. But there's more, but there's definitely more to it as well. So, you know, as I mentioned, there's also the opportunity we've we've introduced new, global data packages, which help with expansion revenue, and it's something that we're seeing great success with, especially within our enterprise segment. And so that's something that, we see as something that's connecting very well with customers.

[Josh Resnik, President & CEO at FiscalNote Holdings]

We're also seeing great confidence from customers when they buy. So we've talked about multi years. So, again, for the second quarter in a row, we've more than doubled the pace at which we're signing new corporate customers to multi years for our policy data. That's significant in part because the indicator of confidence that it gives, but also because that will translate directly into gross retention improvements in 2026. So we know, you know, just mathematically that that will have an impact as well.

[Josh Resnik, President & CEO at FiscalNote Holdings]

And then we've also talked about, some of the changes that we've made operationally as well. So as John and I both mentioned in our remarks, you know, the level of performance that we saw at the end of last year and heading into q one was just not acceptable. And so we've made operational changes as well, and that includes in areas that directly impact retention and cross sell, upsell. And so we're excited with the progress we're making operationally there, and we believe that that will have an impact on all of our customer relationships and our ability to retain and grow those relationships over time. So product is, certainly important, and it's certainly very encouraging what we're seeing there, but it's far from the only thing that we're seeing that will help drive improvements in gross and net retention.

[Ethan Widell, Senior Equity Research Associate at B. Riley Securities]

Got it. That's super helpful. Thank you. And then, maybe to double click on on one of those points. You mentioned doubling the rate of, signing multiyear commitments.

[Ethan Widell, Senior Equity Research Associate at B. Riley Securities]

I guess, how do you view this as impacting the slope of of of revenue growth ultimately going forward?

[Josh Resnik, President & CEO at FiscalNote Holdings]

So, the increase in multi years, as I said, will, will impact gross retention, over time. Right? So it's just, less of that business coming up for renewal in any given quarter. You know, what's most important to me when I think about long term health is really, like I said, fundamentally, the product and the engagement that we have with our users on a day to day basis. That's why I focus so much on that, and I'm so encouraged by it.

[Josh Resnik, President & CEO at FiscalNote Holdings]

But, obviously, with multi years, the more we can decrease that frequency at which those relationships are coming up for renewal, the more we'll have stability in that business. And our success in new logo will then be additive to what we have instead of, you know, essentially replacing what we lose when retention isn't where it should be.

[Ethan Widell, Senior Equity Research Associate at B. Riley Securities]

Understood. Well, I appreciate all the extra color. Thank you.

[Josh Resnik, President & CEO at FiscalNote Holdings]

Sure. Thank you.

[Operator]

And we have no further questions at this time. I'll hand the call back to Bob Burrows for any closing comments.

[Bob Burrows, Investor Relations at FiscalNote Holdings]

Thank you, Regina. That concludes our call this evening. We appreciate everyone's participation on the call, and we look forward to speaking with all of you again in the future. Goodbye.

[Operator]

This concludes today's conference call. Thank you for joining. You may now disconnect.

Participants

Executives

• Bob Burrows, Investor Relations
• Josh Resnik, President & CEO
• Jon Slabaugh, CFO & CIO

Analysts

• Mike Latimore, MD & Senior Research Analyst at Northland Capital Markets
• Ethan Widell, Senior Equity Research Associate at B. Riley Securities