NOTE earnings analysis
What we found in NOTE's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
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.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $-1.06
- Gross margin
- 79.7%
- Operating margin
- -123.0%
- 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 they said about what is next.
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.
The filing reads worse than the one before it.
What came before.
- 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…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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