WASHINGTON, Aug. 15, 2022 - FiscalNote, a leading technology provider of global policy and market intelligence, today announced financial results for the second quarter ended June 30, 2022, which demonstrate the company's continued marketplace leadership and momentum, powered by customer wins, net retention, and strong results from M&A integrations.
"With FiscalNote's listing on August 1, 2022, we are excited to be a public company with the resources and capital needed to fuel our ongoing organic and inorganic growth, and execute on our long-term business strategy," stated Tim Hwang, FiscalNote's Chairman, CEO, and Co-founder. "FiscalNote enters the public markets with a strong, fully-funded balance sheet and capital availability, a growing base of recurring revenue, a suite of innovative product offerings which continue to expand our market leadership, a diverse and global blue chip client base across both public and private sectors, and a talented and growing team. We remain focused on sustainable growth, bolstered by our second quarter total GAAP revenue increasing 41%, and we reiterate achieving positive Adjusted EBITDA for the fourth quarter of 2023. We remain confident we will exit this year with run-rate revenue of $173 million through a combination of our organic growth and a robust and deep M&A pipeline during the remainder of 2022."
Second Quarter 2022 Financial Highlights
- Revenue: Total revenue for the second quarter of 2022 was $27.2 million, up 41% from the second quarter of 2021. Within total revenue, subscription revenue was $24.3 million and advisory, advertising, and other revenue was $2.8 million, up 40% and 50% respectively from the second quarter of 2021. Non-GAAP adjusted total revenue(2) for the second quarter of 2022 was $27.9 million, up 42% from the second quarter of 2021, and non-GAAP subscription revenue(2) was $25.1 million, up 42% from the second quarter of 2021.
- Gross Profit: Gross profit for the second quarter of 2022 was $19.5 million, compared to $14.3 million for the second quarter of 2021. Gross margin for the second quarter of 2022 was 72%, compared to 74% for the second quarter of 2021. Non-GAAP adjusted gross profit(2) for the second quarter of 2022 was $22.2 million, compared to $15.9 million for the second quarter of 2021. Non-GAAP adjusted gross margin(2) was 80% for the second quarter of 2022, compared to 81% for the second quarter of 2021.
- Net Loss: Net loss for the second quarter of 2022 was $38.4 million, compared to $34.1 million for the second quarter of 2021.
- Adjusted EBITDA(2): Adjusted EBITDA loss for the second quarter of 2022 was $5.0 million, compared to an Adjusted EBITDA loss of $6.6 million for the second quarter of 2021.
- Following the Company's successful business combination and listing - which resulted in approximately $92 million of cash on the balance sheet, $150 million of gross debt, and $100 million of additional debt capacity - ample funding is provided for organic and M&A opportunities.
Second Quarter 2022 Key Metrics
- Run-Rate Revenue: Run-rate revenue¹ rose to $115 million at June 30, 2022, from $100 million at June 30, 2021, representing a 15% increase on a pro forma basis after giving effect to the businesses acquired in 2021.
- Annual Recurring Revenue ("ARR"): ARR¹ rose to $103 million at June 30, 2022, from $89 million at June 30, 2021, representing a 16% increase on a pro forma basis after giving effect to the businesses acquired in 2021.
- Net Revenue Retention: Net revenue retention was 99%, an increase of 100 basis points from the prior quarter.
Second Quarter 2022 Key Business Highlights
- FiscalNote entered into new, renewed, or expanded relationships with leading global brands and government entities such as Nestle, Boeing, Paycom, and a number of leading U.S. and global government institutions.
- FiscalNote's VoterVoice advocacy platform launched Topics, an AI-powered feature that maps engagement to key issue areas for users, helping clients measure and improve campaign results.
- FiscalNote's Curate expanded the depth of coverage it provides to customers to include school boards. In addition to more than 12,000 local governments, Curate now monitors more than 4,000 school districts on a daily basis, providing coverage for approximately 98% of school districts with enrollment greater than 5,000 students.
- FiscalNote and its customers — Health Policy Advocates, Credit Union National Association, Cruise Lines International Association, and National Retail Federation — received top honors at the 2022 Reed Awards for excellence in grassroots advocacy.
Financial Outlook for 2022
FiscalNote is reaffirming its guidance(3) for full year 2022 as follows:
- Run-rate revenue of $173 million by end of year.
- Organic run-rate revenue to accelerate to $136 million by end of year, representing approximately 25% year over year growth.
- Adjusted EBITDA loss of approximately $23 million.
In addition, the company reiterates that it remains on track to achieve positive Adjusted EBITDA within the fourth quarter of 2023.
Additional information regarding the non-GAAP financial measures discussed in this release, including an explanation of these measures and how each is calculated, is included below under the heading "Non-GAAP Financial Measures." A reconciliation of GAAP to non-GAAP financial measures has also been provided in the financial tables included below. Information regarding our key performance indicators is included below under "Key Performance Indicators."
Quarterly Conference Call
FiscalNote will host a conference call today, Monday, August 15, 2022, at 5:00 p.m. Eastern Time (U.S.) to review the Company's financial results for the second quarter ended June 30, 2022. To access this call, dial 1 (888) 660-6510 for the U.S. or Canada, or 1 (929) 203-0882 for callers outside the U.S. or Canada with the conference ID 1271923. A live webcast of the conference call will be accessible from the Investor Relations section of FiscalNote's website at https://investors.fiscalnote.com/, and a recording will be archived and accessible at https://investors.fiscalnote.com/. An audio replay of this conference call will also be available through August 29, 2022, 11:59pm ET, by dialing 1-800-770-2030 for the U.S. or Canada, or 1-647-362-9199 for callers outside the U.S. or Canada, and entering 1271923.
(1) "Run-Rate Revenue" and "Annual Recurring Revenue", or "ARR", are key performance indicators (KPIs). Please see "Key Performance Indicators" in this earnings release for the definitions and important disclosures regarding these measures.
(2) Non-GAAP measure. Please see "Non-GAAP Financial Measures" in this earnings release for definitions and important disclosures regarding these financial measures, including reconciliations to the most directly comparable GAAP measure.
(3) Because of the variability of items impacting net income and unpredictability of future events, management is unable to reconcile without unreasonable effort the company's forecasted adjusted EBITDA to a comparable GAAP measure.
About FiscalNote
FiscalNote (NYSE: NOTE) is a leading technology provider of global policy and market intelligence. By uniquely combining AI technology, actionable data, and expert and peer insights, FiscalNote empowers customers to manage policy, address regulatory developments, and mitigate global risk. Since 2013, FiscalNote has pioneered technology that delivers mission-critical insights and the tools to turn them into action. Home to CQ, Equilibrium, FrontierView, Oxford Analytica, VoterVoice, and many other industry-leading brands, FiscalNote serves more than 5,000 customers worldwide with global offices in North America, Europe, Asia, and Australia. To learn more about FiscalNote and its family of brands, visit FiscalNote.com and follow @FiscalNote.
Contacts:
Media
FiscalNote
Nicholas Graham
press@fiscalnote.com
Investors
ICR, Inc. for FiscalNote
Sean Hannan
IR@fiscalnote.com
Forward-Looking Statements
Certain statements in this press release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or FiscalNote's future financial or operating performance. For example, statements regarding FiscalNote's financial outlook for future periods, expectations regarding profitability and anticipated growth in the industry in which FiscalNote operates are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "pro forma," "may," "should," "could," "might," "plan," "possible," "project," "strive," "budget," "forecast," "expect," "intend," "will," "estimate," "anticipate," "believe," "predict," "potential" or "continue," or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
Factors that may impact such forward-looking statements include, but are not limited to:
- FiscalNote's ability to effectively manage its growth;
- changes in FiscalNote's strategy, future operations, financial position, estimated revenue and losses, forecasts, projected costs, prospects and plans;
- FiscalNote's future capital requirements;
- demand for FiscalNote's services and the drivers of that demand;
- FiscalNote's ability to provide highly useful, reliable, secure and innovative products and services to its customers;
- FiscalNote's ability to attract new customers, retain existing customers, expand its products and service offerings with existing customers, expand into geographic markets or identify areas of higher growth;
- risks associated with international operations, including compliance complexity and costs, increased exposure to fluctuations in currency exchange rates, political, social and economic instability, and supply chain disruptions;
- FiscalNote's ability to develop, enhance, and integrate its existing platforms, products, and services;
- FiscalNote's ability to successfully identify acquisition opportunities, make acquisitions on terms that are commercially satisfactory, successfully integrate potential acquired businesses and services, and subsequently grow acquired businesses;
- FiscalNote's estimated total addressable market and other industry and performance projections;
- FiscalNote's reliance on third-party systems that it does not control to integrate with its systems and its potential inability to continue to support integration;
- potential technical disruptions, cyberattacks, security, privacy or data breaches or other technical or security incidents that affect FiscalNote's networks or systems or those of its service providers;
- FiscalNote's ability to obtain and maintain accurate, comprehensive, or reliable data to support its products and services;
- FiscalNote's ability to introduce new features, integrations, capabilities, and enhancements to its products and services;
- FiscalNote's ability to maintain and improve its methods and technologies, and anticipate new methods or technologies, for data collection, organization, and analysis to support its products and services;
- competition and competitive pressures in the markets in which FiscalNote operates;
- larger well-funded companies shifting their existing business models to become more competitive with FiscalNote;
- FiscalNote's ability to protect and maintain its brands;
- FiscalNote's ability to comply with laws and regulations in connection with selling products and services to U.S. and foreign governments and other highly regulated industries;
- FiscalNote's ability to retain or recruit key personnel;
- FiscalNote's ability to effectively maintain and grow its research and development team and conduct research and development;
- FiscalNote's ability to adapt its products and services for changes in laws and regulations or public perception, or changes in the enforcement of such laws, relating to artificial intelligence, machine learning, data privacy and government contracts;
- the impact of the COVID-19 pandemic and other similar disruptions in the future;
- adverse general economic and market conditions reducing spending on our products and services;
- the outcome of any known and unknown litigation and regulatory proceedings;
- FiscalNote's ability to successfully establish and maintain public company-quality internal control over financial reporting;
- intense competition and competitive pressures from other companies worldwide in the industries in which the combined company will operate; and
- litigation and the ability to adequately protect FiscalNote's intellectual property rights.
These and other important factors discussed under the caption "Risk Factors" in FiscalNote's definitive proxy statement / prospectus and filed with the Securities and Exchange Commission on July 5, 2022 could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by FiscalNote and its management, are inherently uncertain. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. FiscalNote undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.