10-Q · May 11, 2026
FiscalNote Holdings, Inc. reported Q1 2026 revenues of $20.0 million, down 27% from the prior year, with a larger net loss of $43.6 million due to increased operational costs and goodwill impairment. Despite…
Earnings analysis · 10-Q
NOTE earnings analysis
Filed August 10, 2026 · Our reading of the company's report
The latest report
FiscalNote’s second quarter showed a 15.8% year-over-year revenue decline and a wider $27.834 million net loss, with a $19.100 million goodwill impairment driving operating margin to approximately -123.0%. Cost…
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FiscalNote’s second quarter showed a 15.8% year-over-year revenue decline and a wider $27.834 million net loss, with a $19.100 million goodwill impairment driving operating margin to approximately -123.0%. Cost reductions and $0.9 million of six-month operating cash flow were positive, but ARR declined to $74.9 million and capital expenditures of $3.323 million exceeded operating cash generation. Liquidity and solvency are the dominant concerns: $106.815 million of debt is current, management disclosed substantial doubt about going concern, and debt-default forbearances expire in August 2026.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Reported figures
- Earnings per share
- $-1.06
- Segment
- Single operating segment: total revenue $19.581 million, including subscription revenue of $18.800 million and non-subscription revenue of $1.884 million.
What stood out
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Revenue declined 15.8% year over year
Second-quarter revenue was $19.581 million, down $3.683 million, or 15.8%, from $23.264 million a year earlier. Subscription revenue declined 12.1% to $18.800 million, while non-subscription revenue declined 58.5% to $1.884 million.
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Gross margin stable; impairment drove loss
GAAP gross margin improved to approximately 79.7% from 78.7% a year earlier, but operating margin deteriorated to approximately -123.0% from -31.9%, primarily due to a $19.100 million second-quarter goodwill impairment charge.
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EPS miss and materially wider net loss
Net loss increased to $27.834 million from $13.271 million, and diluted EPS worsened to -$1.06 from -$1.00. Six-month net loss was $71.447 million, including $54.700 million of goodwill impairment.
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Cost reductions are progressing
Management reduced operating costs: second-quarter research and development expense fell 30.3% to $1.580 million, sales and marketing fell 32.7% to $4.504 million, and general and administrative expense fell 18.9% to $9.231 million. Headcount declined to approximately 343 from 407 at December 31, 2025.
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Operating cash flow turned positive
Net cash provided by operating activities was $0.9 million for the six months ended June 30, 2026, versus cash used of $2.895 million in the comparable 2025 period. Capital expenditures were $3.323 million, primarily for software development.
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Retention improved despite ARR decline
Annual recurring revenue declined to $74.9 million from $84.1 million at December 31, 2025, while second-quarter net revenue retention was 98%, compared with 96% a year earlier excluding Oxford Analytica and Dragonfly.
What to watch
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Substantial doubt over going concern
Management concluded that substantial doubt exists regarding the Company’s ability to continue as a going concern. Cash, cash equivalents, restricted cash and short-term investments were $20.589 million, while current liabilities were $148.301 million and negative working capital excluding cash and short-term investments was $135.001 million.
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Debt defaults and near-term maturities
Forbearance agreements related to the NYSE-delisting defaults expire on August 21, 2026; absent an extension, the Company could be in default of its senior term loan on August 22, 2026. The Company also failed its Adjusted EBITDA covenant, with $70.313 million outstanding under the 2025 Senior Term Loan.
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Further impairment remains possible
The Company recorded $54.700 million of goodwill impairment in the first half of 2026, leaving goodwill of $68.251 million. Management stated that further impairment indicators could occur or intensify in the near term.
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Organic growth and government exposure
Organic subscription revenue decreased $4.689 million, or 11%, in the first half of 2026, which management attributed to customer retention challenges and federal government cuts. ARR also fell $9.2 million to $74.9 million from December 31, 2025.
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Material weakness remains unresolved
Disclosure controls and procedures were not effective as of June 30, 2026 due to a material weakness identified in the prior year. Management stated that remediation activities had begun in 2026.
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Debt classification and liquidity pressure
The Company has $106.815 million of debt classified as current at June 30, 2026, versus $2.813 million at December 31, 2025, reflecting defaults and forbearance-related presentation. Management stated it currently has no ability to satisfy the required $20.000 million senior-loan prepayment due no later than March 31, 2027.
Management's outlook
No numeric revenue or EPS guidance was provided. Management expects approximately $2.4 million of quarterly cash interest on the 2025 Senior Term Loan at current SOFR rates and expects ongoing operating and capital expenditures to support its business plan.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.