FiscalNote (NYSE:NOTE) reported second-quarter 2026 revenue within its guidance range, while adjusted EBITDA came in modestly below expectations, as the policy and regulatory intelligence company continued to contend with softer demand in federal and broader public-sector markets.
Revenue for the quarter was $19.6 million, down about 16% from the prior-year period and within the company’s guidance range of $19.5 million to $20.5 million. Adjusted EBITDA was $2.3 million, approximately $200,000 below guidance, while adjusted EBITDA margin improved to 11.9% from 5.1% in the first quarter and was roughly flat compared with a year earlier.
Revenue Declines, but Retention Improves
Subscription revenue totaled $18.8 million, representing approximately 96% of total revenue. It declined $2.6 million, or 12%, from the prior-year period. On a pro forma basis excluding TimeBase, which FiscalNote sold on Jan. 1, 2025, subscription revenue fell $2.3 million, or 11%.
Non-subscription revenue was $800,000, down $1.1 million, or 59%, primarily because of lower advertising and event revenue, Chief Financial Officer and Chief Investment Officer Jon Slabaugh said.
Annual recurring revenue as of June 30 was $74.9 million, compared with $85.9 million a year earlier. The company said ARR contracted by roughly $800,000 sequentially, a slower pace of decline than earlier in the year. Quarterly net revenue retention improved to 98% from 89% in the first quarter and compared with 96% in the prior-year quarter.
Compton attributed the improvement in retention to reduced client churn as the company’s platform consolidation and retention efforts began to take effect.
Cost Actions Support Margins
FiscalNote reported a GAAP net loss of $27.8 million for the second quarter, including a $19.1 million non-cash goodwill impairment charge. Excluding the impairment charge, GAAP net loss was approximately $8.7 million.
Cost of revenue declined $1 million, or 20%, year over year. Research and development expense decreased $700,000, or 30%, while sales and marketing expense declined $2.2 million, or 33%. General and administrative expense fell $2.1 million, or 19%, and editorial expense was flat at $3.4 million.
GAAP operating expenses rose $13 million, or 42%, due primarily to the goodwill impairment charge. Excluding the impairment and certain other items, including amortization, stock-based compensation, divestiture-related impacts, transaction costs, severance and other non-cash charges, operating expenses fell $2.4 million, or 12%.
GAAP gross margin was 80%, compared with 79% a year earlier, while adjusted gross margin increased to 88% from 86%. The company reduced its workforce by a net 27 full-time equivalent employees during the quarter, ending June with approximately 343 employees.
Capital Structure and Listing Status Remain Priorities
Slabaugh said FiscalNote is evaluating relisting options after its Class A common stock was delisted from the New York Stock Exchange. The company is also working with lenders through short-term forbearance agreements related to its debt arrangements and has hired an external adviser to help develop and evaluate alternatives.
“Stabilizing and strengthening our capital structure remains among our highest priorities,” Slabaugh said, adding that the discussions have been constructive.
Compton similarly said the company is engaged in cooperative and constructive conversations related to the delisting.
Company Highlights Proprietary Data and AI Opportunities
Compton emphasized FiscalNote’s proprietary policy, legislative and regulatory data, along with its Congressional Quarterly and Roll Call journalism operations. He said the company sees AI as an opportunity to expand distribution of its data through APIs and its Model Context Protocol, or MCP, server ecosystem.
He cited an unnamed major global technology company that had attempted to build a policy-data tool using publicly available information. Following a trial, the technology company selected FiscalNote’s PolicyNote, MCP and API offerings as its data source, according to Compton.
The company is also exploring opportunities to extend its policy and regulatory expertise into adjacent areas, including appropriations, government spending and areas that directly affect customer revenues. Compton said FiscalNote serves more than 3,300 customers and intends to focus on expanding relationships with existing clients in addition to pursuing new customer acquisition.
Full-Year Outlook Lowered
FiscalNote lowered its full-year 2026 outlook. The company now expects revenue of $75 million to $78 million, down from previous guidance of $80 million to $83 million. It forecasts adjusted EBITDA of $9 million to $11 million, compared with prior guidance of $14 million to $16 million.
The revised outlook reflects continued softness in federal and broader public-sector markets, cautious private-sector spending and lower non-subscription revenue. FiscalNote said those pressures are expected to be partly offset by cost discipline and operating efficiencies.
For the third quarter, FiscalNote expects revenue of $19 million to $20 million and adjusted EBITDA of approximately $3.5 million. Slabaugh said the anticipated EBITDA improvement reflects restructuring actions taken during the first half that are weighted toward the second half of the year.
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.
