FiscalNote (NYSE:NOTE) reported first-quarter 2026 revenue and adjusted EBITDA in line with its guidance, while management emphasized cost reductions, platform consolidation and new data-driven growth initiatives as it works toward positive free cash flow.
Chief Executive Officer and President Josh Resnik said the company is “more profitable” than a year ago and is on “a defined path to positive free cash flow,” citing market trends including artificial intelligence adoption, agentic enterprise workflows and political prediction markets as areas that align with FiscalNote’s strategy.
Revenue Declines, But Guidance Reaffirmed
Chief Financial Officer and Chief Investment Officer Jon Slabaugh said subscription revenue remained the core of the business, accounting for 95% of total revenue in the quarter. Non-subscription revenue was $1 million, lower than the prior year, primarily due to the timing of advisory engagements and a decline in advertising revenue.
ARR declined from $84.1 million at year-end to $75.7 million. Slabaugh attributed the decrease primarily to the loss of a small number of large customers that did not transition to the PolicyNote platform, federal spending headwinds related to DOGE and previously discussed timing dynamics. On an organic basis, excluding divested businesses and discontinued products, subscription revenue declined approximately 11% year over year.
Net revenue retention was 89% in the first quarter, down from 93% in the year-earlier period. Slabaugh said the retention challenges and federal headwinds were already incorporated into the company’s revenue guidance.
FiscalNote reaffirmed its full-year 2026 guidance for revenue of $80 million to $83 million and adjusted EBITDA of $14 million to $16 million. For the second quarter, the company expects GAAP revenue of $19.5 million to $20.5 million and adjusted EBITDA of approximately $2.5 million.
Impairment Charge Drives Net Loss
FiscalNote reported a GAAP net loss of $43.6 million for the first quarter, including a $35.6 million non-cash goodwill impairment charge. Excluding that charge, Slabaugh said the GAAP net loss was approximately $8 million.
Adjusted EBITDA margin was 5.1%, compared with 10.1% in the first quarter of 2025. Slabaugh said the year-over-year margin compression reflected revenue declines occurring before the full realization of cost savings from actions implemented near the end of the quarter.
The company reduced its workforce by a net 37 full-time equivalent employees during the quarter, bringing total headcount to approximately 370 as of March 31, 2026. Slabaugh said the cost initiatives are progressing as planned and are expected to more fully benefit margins in subsequent quarters.
Resnik said FiscalNote expects a “rapid step-up” in adjusted EBITDA in the second half of 2026, with the adjusted EBITDA margin profile approximately doubling compared with the same period in 2025 as restructuring actions are fully phased in.
PolicyNote and AI-Enabled Workflows
Management highlighted the migration of customers from FiscalNote’s largest legacy platform to PolicyNote as a major milestone. Resnik said early usage indicators are “highly encouraging,” with PolicyNote outperforming the legacy platform in both adoption and frequency across key user actions.
For contracts that have come up for renewal after migration, Resnik said PolicyNote’s net retention performance has exceeded that of the legacy platforms, though he noted the sample set remains limited.
Resnik said future product investment will focus on agentic workflows and the use of FiscalNote’s proprietary data within PolicyNote. He said the platform’s AI is grounded in data and analysis from sources including CQ, which he said has covered U.S. federal policy for 80 years.
The company is also expanding its PolicyNote API, including support for the Model Context Protocol, which Resnik described as an emerging standard in the agentic AI ecosystem. He said the API allows platforms built on Claude, OpenAI, Gemini and Microsoft to incorporate FiscalNote’s legislative, regulatory and stakeholder intelligence as a trusted data layer.
Resnik said more than one-third of website signups for the API are from outside the U.S., which he said reflects organic global demand. FiscalNote also plans to offer alternative pricing options, including consumption-based pricing.
Prediction Markets and New Revenue Initiatives
FiscalNote is also moving into political prediction markets, which Resnik described as a natural adjacency rather than a tangential bet. He said the company does not intend to build or operate an exchange, but instead aims to serve as a “trusted intelligence layer” for policy and political forecasting.
In March, FiscalNote entered a strategic partnership with Good Wolf Studios to develop and monetize political prediction content and interactive products. Resnik said the company expects to launch an initial offering around mid-year. He said these products are distinct from prediction markets themselves and do not carry the same regulatory requirements as exchange-operated prediction markets.
Delisting, Debt and Free Cash Flow Targets
Resnik addressed FiscalNote’s listing situation, noting that trading of the company’s Class A common stock was suspended from the New York Stock Exchange on March 25. Slabaugh said the company’s shares and warrants now trade on OTC Markets under the symbols NOTE and NOTEWS.
Resnik said the delisting has had no impact on day-to-day operations or the company’s ability to serve customers. He added that restoring a listing on a national exchange remains a priority and that FiscalNote has applied to uplist to the OTCQB venture market, subject to OTC Markets approval.
During the question-and-answer session, ROTH Capital analyst Richard Baldry asked about the company’s debt classification following the delisting. Slabaugh said the move off the NYSE created a non-compliance event with certain subordinated convertible note holders. He said FiscalNote has entered into arrangements that provide time to develop a longer-term solution, but because that solution is not finalized, the company must classify all debt as current.
At quarter-end, cash, restricted cash and short-term investments totaled $26.5 million, essentially flat with year-end. Operating cash flow was positive at $3 million, which Slabaugh said reflected normal first-quarter seasonality from renewal activity. Debt outstanding, excluding fair value adjustments, was $131.9 million, down from $136.2 million at year-end.
Both Resnik and Slabaugh said FiscalNote expects to achieve positive free cash flow on a trailing 12-month basis by the end of the first quarter of 2027 and to remain free cash flow positive thereafter, excluding one-time restructuring costs.
About FiscalNote (NYSE:NOTE)
FiscalNote is a technology and data services company specializing in government and regulatory intelligence. Founded in 2013 by Timothy Hwang, Gerald Yao and Jonathan Chen, the company is headquartered in Washington, DC, with additional offices in New York, Brussels, London, Singapore and Hong Kong. FiscalNote went public in March 2021 through a special-purpose acquisition company (SPAC) merger and is listed on the New York Stock Exchange under the ticker NOTE.
The company’s flagship software-as-a-service platform aggregates legislative and regulatory data from jurisdictions around the world, combining that information with AI-driven analytics and expert commentary.
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