Adjusted EBITDA Rises to $3.6 Million on Lower Costs; Reaffirms FY26 Guidance and Establishes Q4 2026 Forecast
WASHINGTON--(BUSINESS WIRE)--November 09, 2026--
FiscalNote Holdings, Inc. (OTCID: NOTE) ("FiscalNote" or the "Company"), a global leader in AI-driven policy and regulatory intelligence, today reported financial results for the third quarter ended September 30, 2026.
The Company reported Q3 2026 revenues of $18.7 million, within the guidance range of $19 to 20 million when adjusted for the in-quarter FrontierView divestiture, and adjusted EBITDA(1) of $3.6 million, in line with guidance of approximately $3.5 million and up from $2.2 million in the third quarter of 2025. Net loss was $5.9 million, compared with $24.9 million a year ago. Quarterly net revenue retention was 97%(3)(5) , compared with 98%(5) in the prior-year quarter.
During the third quarter, FiscalNote continued to execute against its operational priorities. Quarterly net revenue retention remained substantially improved from the first quarter, with strong contributions from the Company's Public Sector business. The Company completed the divestiture of FrontierView to Oxford Economics, reducing balance sheet debt and sharpening its focus on its core policy and regulatory intelligence offerings. FiscalNote also continued to advance PolicyNote as its core delivery platform and saw growing interest in its API and MCP offerings from organizations building AI workflows utilizing the Company's proprietary, verified policy data.
Commenting on the quarterly results, Key Compton, CEO and President of FiscalNote, said, "Our focus this quarter was on maturing product delivery while continuing to realize the cost efficiencies now showing up in our profitability. Our go-forward priority is on the assets our customers can't get anywhere else: our decades of policy journalism and our deep bank of proprietary legislative and regulatory data, delivered through PolicyNote and our PolicyNote APIs and MCP integrations which embed our intelligence directly into our customers' agentic workflows. As the midterm results reshape the agenda for 2027, that intelligence is how our customers will understand what comes next and what it means for them."
Third Quarter 2026 Financial Highlights(2)
(Unaudited)
For the three months ended
September 30,
----------------------------
($ in millions) 2026 2025 % Change
---------------- --- ----- ------ --------
Total Revenues $ 18.7 $ 22.4 (17) %
Subscription
Revenue as % of
Total Revenues 97 % 94 % 300 bps
Gross Profit $ 15.2 $ 17.7 (14) %
Gross Margin 82 % 79 % 300 bps
Adjusted Gross
Profit (1) $ 16.8 $ 19.4 (13) %
Adjusted Gross
Margin (1) 90 % 87 % 300 bps
Net Loss $ (5.9) $ (24.9) (76) %
Adjusted EBITDA
(1) $ 3.6 $ 2.2 65 %
Adjusted EBITDA
Margin (1) 19 % 10 % 900 bps
Cash and Cash
Equivalents $ 10.8 31.8
bps - Basis
Points
Note: All amounts for the three months ended September 30, 2026
and 2025 include contributions from FrontierView, divested on
August 27, 2026.
Third Quarter 2026 and Recent Operational Highlights
-- Delivered Public Sector new sales and renewals, reflecting the
mission-critical role of FiscalNote's demand for policy intelligence
solutions for government customers.
-- Deepened adoption of the PolicyNote API and its native support for the
Model Context Protocol (MCP), enabling enterprises to embed FiscalNote's
proprietary legislative and regulatory intelligence directly into their
AI agents and internal workflows and signed the first Public Sector
PolicyNote API / MCP client.
-- Published the PolicyNote MCP in Anthropic's Claude Connectors Directory
in August, adding a new discovery and distribution channel alongside the
existing OpenAI App Store listing and bringing PolicyNote intelligence
into both ChatGPT and Claude workflows.
-- Completed the divestiture of FrontierView, its market intelligence
business, which concentrates the Company's resources on the proprietary
legislative, regulatory and policy intelligence delivered through
PolicyNote, reduces complexity, and strengthens the balance sheet.
-- Consolidated the Company's CQ, Roll Call, EU Issue Tracker and
professional services content teams under unified leadership to enhance
delivery of proprietary content and better serve enterprise clients.
Third Quarter 2026 Financial Performance
Revenue(2)
For Q3 2026, subscription revenue declined $3.1 million, or 15%, versus prior year. On a pro forma basis(5) , excluding the sale of FrontierView, Q3 2026 subscription revenue declined $2.5 million, or 13%, reflecting the trends in ARR and NRR discussed under "Key Performance Indicators (KPIs)" below.
(Unaudited)
For the three months ended
September 30,
------------------------------
($ in millions) 2026 2025 % Change
----------------- ----------- ----------------- ----------
Subscription
revenue $ 18.1 $ 21.2 (15) %
Non-subscription
revenue 0.6 1.2 (51) %
---- ----- ---- ----------- ------
Total revenues $ 18.7 $ 22.4 (17) %
---- ----- ---- ----------- ------
For Q3 2026, non-subscription revenue declined $0.6 million, or 51%, versus prior year, due primarily to a reduction in advertising and event revenue which is non-recurring in nature.
Key Performance Indicators (KPIs)(2)(3)(5)
As of September 30,
-------------------------
($ in millions) 2026 2025 % Change
---------------------- -------- ------- ----------
Annual Recurring
Revenue (ARR) $ 67.7 $ 84.8 (20) %
Pro Forma ARR(3)(5) $ 67.7 $ 78.8 (14) %
As of September 30, 2026 ARR declined $17.1 million, or approximately 20%, on an as reported basis(3) , and ARR declined $11.1 million, or approximately 14% on a pro forma basis.(5) Q3 2026 quarterly net revenue retention $(NRR)$ was 97% compared to 98% for Q3 2025(3)(5) ; on a trailing twelve month basis, NRR was 79%(3)(5) .
Quarterly NRR reflected continued customer retention challenges, partially offset by strong retention in the Public Sector. Broader macroeconomic and geopolitical pressures, continued to weigh on portions of the customer base, contributing to elongated sales cycles.
Operating Expenses(2)
(Unaudited)
Three months ended September
30,
----------------------------
($ in millions) 2026 2025 % Change
---------------- ---------- --- ----------- ----------
Cost of revenues,
including
amortization $ 3.4 $ 4.8 (28) %
Research and
development 1.7 2.1 (18) %
Sales and
marketing 3.9 6.3 (38) %
Editorial 2.5 3.2 (22) %
General and
administrative 6.3 13.9 (55) %
Amortization of
intangible
assets 1.9 1.9 (2) %
---------- --- -----------
Total
operating
expenses $ 19.7 $ 32.2 (39) %
---------- --- -----------
Total operating expenses decreased $12.5 million, or 39%, versus prior year, due primarily to a reduction in stock-based compensation, transaction costs related to our previously announced divestitures, non-capitalizable debt costs, and the impact of our ongoing efficiency measures and operating discipline initiatives, and the elimination of costs associated with sunset products.
Q3 2026 total operating expenses declined $4.5 million, or 24%, excluding amortization expense, stock-based compensation, the impact of the previously announced divestitures, transaction-related costs, severance, goodwill impairment, and other non-cash charges.
2026 Financial Guidance
The Company reaffirms its full year 2026 forecast of total revenues of $74 to $76 million and adjusted EBITDA(4) of $8 to $10 million, as updated on August 28, 2026 to reflect the sale of FrontierView.
4Q 2026
The Company forecasts Q4 2026 revenue of $17.0 to $17.5 million and adjusted EBITDA(4) of approximately $2.5 million.
Company Listing and Strategic Review
The Company's Board of Directors along with its advisors, is continuing to review the Company's ongoing plans and evaluate all strategic value-maximizing options available to the Company, including evaluation of potential further divestitures of non-core assets and other cost-savings measures. There can be no assurance that the strategic review will result in any transaction or other outcome. The Company has not set a timetable for completion of the review and does not intend to disclose developments or provide updates on the progress or status of the review unless and/or until it deems further disclosure is appropriate or required.
Footnotes
(1) Non-GAAP measure. See "Non-GAAP Financial Measures" and the
reconciliation tables for the definitions and reconciliations of these
non-GAAP financial measures to the most closely related GAAP financial
measures.
(2) All financial information incorporated within this press release is
unaudited.
(3) "Annual Recurring Revenue" and "Net Revenue Retention" are key
performance indicators (KPIs). See "Key Performance Indicators" for the
definitions and important disclosures related to these measures.
(4) Because of the variability of items impacting net income and the
unpredictability of future events, management is unable to reconcile
without unreasonable effort the Company's forecasted Adjusted EBITDA or
Free Cash Flow to a comparable GAAP measure. The unavailable
information could have a significant impact on the non-GAAP measures.
(5) Pro forma subscription revenue, ARR and NRR adjusts the applicable
prior period to exclude the contribution of FrontierView which the
Company has divested, to the extent that business contributed to
consolidated results in such prior period.
About FiscalNote
FiscalNote (OTC: NOTE), the global leader in AI-driven policy intelligence, delivers its deep expertise in legislative tracking, regulatory analysis, and stakeholder engagement through PolicyNote, its flagship platform. Built to ensure the most complete, real-time view of the policy landscape, PolicyNote delivers synthesized, expert-driven analysis integrated with AI-powered monitoring, fueled by the trusted analysis and reporting of CQ and Roll Call, and the grassroots mobilization power of VoterVoice. From the committee room to the board room, FiscalNote's PolicyNote Suite ensures every user has the unmatched clarity and speed needed to understand and impact policy.
Safe Harbor Statement
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, capital resources 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:
-- risk of our creditors enforcing their respective rights to call an
event of default based on our existing defaults under our indebtedness;
-- FiscalNote's future capital requirements, as well as its ability to
service its repayment obligations and regain compliance with covenants
and restrictions under its existing debt agreements;
-- the possibility any exploration of strategic alternatives does not
result in any transaction or other outcome or that any outcome is
disruptive to operations and impacts financial performance;
-- FiscalNote's ability to successfully execute on its strategy to achieve
and sustain organic growth through a focus on its core Policy business,
including risks to FiscalNote's ability to develop, enhance, and
integrate its existing platforms, products, and services, bring highly
useful, reliable, secure and innovative products, product features and
services to market, attract new customers, retain existing customers,
expand its products and service offerings with existing customers, expand
into geographic markets or identify other opportunities for growth;
-- FiscalNote's ability to successfully launch new product and service
offerings or to achieve the expected benefits of such offerings,
including new sources of revenue;
-- demand for FiscalNote's services and the drivers of that demand;
-- the impact of cost reduction initiatives undertaken by FiscalNote;
-- risks associated with past and future strategic transactions, including
restructuring, divesting or selling our businesses, products or
technologies;
-- 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 introduce new features, integrations,
capabilities and enhancements to its products and services, as well as
obtain and maintain accurate, comprehensive and reliable data to support
its products, and services;
-- FiscalNote's reliance on third-party systems and data, its ability to
integrate such systems and data with its solutions and its potential
inability to continue to support integration;
-- 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;
-- 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;
-- competition and competitive pressures in the markets in which
FiscalNote operates, including larger well-funded companies shifting
their existing business models to become more competitive with
FiscalNote;
-- the risk that general purpose generative AI platforms and agentic AI
tools will directly compete with and reduce demand for custom-built SaaS
tools and subscription products;
-- the risk that a future U.S. government shutdown could negatively affect
FiscalNote's ability to enter into or renew public sector subscription
contracts and generate advertising and events revenue as anticipated;
-- concentration of revenues from U.S. government agencies, changes in the
U.S. government spending priorities, dependence on winning or renewing
U.S. government contracts, delay, disruption or unavailability of funding
on U.S. government contracts, and the U.S. government's right to modify,
delay, curtail or terminate contracts;
-- 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 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;
-- 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 maintain public company-quality internal
control over financial reporting; and
-- FiscalNote's ability to adequately protect and maintain its brands and
other intellectual property rights.
These and other important factors discussed in FiscalNote's SEC filings, including its most recent reports on Forms 10-K and 10-Q, particularly the "Risk Factors" sections of those reports, 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 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.
FiscalNote Holdings, Inc. Condensed Consolidated Statements of Operations
and Comprehensive Income (Loss) (in thousands, except shares and per share
data) (Unaudited)
Three Months Ended Nine Months Ended September
September 30, 30,
------------------------ ---------------------------
2026 2025 2026 2025
----------- ----------- ----------- --------------
Revenues:
Subscription $ 18,054 $ 21,182 $ 55,907 $ 67,794
Non-subscription 606 1,247 2,359 5,410
---------- ---------- ---------- -------------
Total revenues 18,660 22,429 58,266 73,204
---------- ---------- ---------- -------------
Operating expenses:
(1)
Cost of revenues,
including
amortization 3,442 4,774 11,571 16,706
Research and
development 1,698 2,081 5,320 7,451
Sales and
marketing 3,910 6,262 14,133 20,713
Editorial 2,521 3,247 9,532 11,517
General and
administrative 6,263 13,900 24,998 41,576
Amortization of
intangible
assets 1,863 1,904 5,645 6,169
Impairment of
goodwill - - 54,700 -
---------- ---------- ---------- -------------
Total operating
expenses 19,697 32,168 125,899 104,132
---------- ---------- ---------- -------------
Operating loss (1,037) (9,739) (67,633) (30,928)
Loss (gain) on sale
of businesses (Note
3) 920 (1,161) 920 (16,585)
Interest expense,
net 3,724 3,695 10,984 13,160
Change in fair value
of financial
instruments (150) 6,994 (2,105) 7,900
Loss on debt
extinguishment,
net 304 6,174 304 7,958
Other expense
(income), net 43 (349) (122) 86
---------- ---------- ---------- -------------
Loss before
income taxes (5,878) (25,092) (77,614) (43,447)
Provision (benefit)
from income taxes 3 (237) (286) (1,071)
---------- ---------- ---------- -------------
Net loss (5,881) (24,855) (77,328) (42,376)
Other comprehensive
income 1,737 667 2,624 1,030
---------- ---------- ---------- -------------
Total
comprehensive
loss $ (4,144) $ (24,188) $ (74,704) $ (41,346)
---------- ---------- ---------- -------------
Net loss used to
compute basic and
diluted loss per
share $ (5,881) $ (24,855) $ (77,328) $ (42,376)
Loss per share
attributable to
common shareholders
(Note 12):
Basic and Diluted $ (0.18) $ (1.73) $ (2.99) $ (3.20)
Weighted average
shares used in
computing loss per
share attributable
to common
shareholders:
Basic and Diluted 32,939,255 14,376,802 25,830,424 13,259,124
(1) Amounts include stock-based compensation expense, as
follows:
Three Months
Ended September Nine Months Ended
30, September 30,
----------------- ------------------------
2026 2025 2026 2025
----- ---------- ------ ----------------
Cost of
revenues,
including
amortization $ 18 $ 44 $ 85 $ 104
Research and
development 83 234 146 818
Sales and
marketing (38) 348 360 799
Editorial 26 157 239 373
General and
administrative 201 2,853 3,329 8,881
FiscalNote Holdings, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except shares, and par value)
(Unaudited)
September 30, 2026 December 31, 2025
-------------------- -------------------
Assets
Current assets:
Cash and cash equivalents $ 10,208 $ 24,319
Restricted cash 636 633
Short-term investments - 1,995
Accounts receivable, net 6,798 11,953
Costs capitalized to obtain
revenue contracts, net 1,701 2,304
Prepaid expenses 2,276 2,456
Other current assets 2,241 1,890
---------------- ---------------
Total current assets 23,860 45,550
Property and equipment, net 3,592 4,177
Capitalized software costs, net 13,129 12,585
Noncurrent costs capitalized to
obtain revenue contracts, net 1,670 2,479
Operating lease assets 12,185 13,646
Goodwill 63,882 122,984
Customer relationships, net 24,481 30,671
Database, net 12,525 14,077
Other intangible assets, net 6,108 8,208
Other non-current assets 875 761
---------------- ---------------
Total assets $ 162,307 $ 255,138
---------------- ---------------
Liabilities and Stockholders'
Equity
Current liabilities:
Current maturities of
long-term debt $ 98,749 $ 2,813
Accounts payable and accrued
expenses 5,614 7,257
Deferred revenue, current
portion 24,583 29,778
Customer deposits 457 1,067
Operating lease liabilities,
current portion 3,469 3,320
Other current liabilities 145 191
---------------- ---------------
Total current liabilities 133,017 44,426
Long-term debt, net of current
maturities 11,963 125,635
Deferred tax liabilities 76 476
Deferred revenue, net of
current portion 106 266
Operating lease liabilities,
net of current portion 16,669 19,312
Public and private warrant
liabilities 276 477
Other non-current liabilities 2,710 2,595
---------------- ---------------
Total liabilities 164,817 193,187
---------------- ---------------
Commitments and contingencies
(Note 16)
Stockholders' equity:
Class A Common stock ($0.0001
par value, 1,700,000,000
authorized, 38,137,877 and
15,557,379 issued and
outstanding at September 30,
2026 and December 31, 2025,
respectively) 4 2
Class B Common stock
($0.0001 par value,
9,000,000 authorized,
690,909 issued and
outstanding at September 30,
2026 and December 31, 2025,
respectively) - -
Additional paid-in capital 944,146 933,905
Accumulated other
comprehensive income 2,814 190
Accumulated deficit (949,474) (872,146)
---------------- ---------------
Total stockholders'
(deficit) equity (2,510) 61,951
---------------- ---------------
Total liabilities and
stockholders' equity $ 162,307 $ 255,138
---------------- ---------------
FiscalNote Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Nine Months Ended September 30,
-----------------------------------
2026 2025
------------------ ---------------
Operating Activities:
Net loss $ (77,328) $ (42,376)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation 704 790
Amortization of intangible assets
and capitalized software
development costs 10,497 13,251
Amortization of deferred costs to
obtain revenue contracts 1,880 2,471
Impairment of goodwill 54,700 -
Loss (gain) on sale of businesses
(Note 3) 920 (16,585)
Non-cash operating lease expense 1,457 1,470
Stock-based compensation 4,159 10,975
Bad debt expense 177 316
Unrealized loss on securities 3 67
Change in fair value of financial
instruments (2,105) 7,900
Deferred income tax benefit (399) (1,288)
Paid-in-kind interest, net 855 4,201
Non-cash interest expense 1,060 2,602
Loss on debt extinguishment, net 304 7,958
Other non-cash 14 -
Changes in operating assets and
liabilities:
Accounts receivable, net 4,063 1,072
Prepaid expenses and other
current assets 603 (1,384)
Costs capitalized to obtain
revenue contracts, net (632) (1,742)
Other non-current assets (7) (7)
Accounts payable and accrued
expenses (377) (74)
Deferred revenue (3,089) 3,510
Customer deposits (556) (772)
Other current liabilities 243 (999)
Lease liabilities (2,492) (2,327)
Other non-current liabilities - (193)
-------------- --------------
Net cash used in operating
activities (5,346) (11,164)
-------------- --------------
Investing Activities:
Capital expenditures (5,217) (5,561)
Cash proceeds from the sale of
businesses, net (Note 3) 5,201 46,913
Redemptions of investments 2,000 -
-------------- --------------
Net cash provided by investing
activities 1,984 41,352
-------------- --------------
Financing Activities:
Proceeds from long-term debt, net
of issuance costs - 100,985
Principal payments of long-term
debt (10,576) (128,353)
Payment of deferred financing costs - (5,273)
Proceeds from exercise of stock
options and employee stock
purchase plan purchases 45 275
-------------- --------------
Net cash used in financing
activities (10,531) (32,366)
-------------- --------------
Effects of exchange rates on cash (215) 52
-------------- --------------
Net change in cash, cash
equivalents, and restricted cash (14,108) (2,126)
Cash, cash equivalents, and
restricted cash, beginning of
period 24,952 29,454
-------------- --------------
Cash, cash equivalents, and
restricted cash, end of period $ 10,844 $ 27,328
-------------- --------------
Supplemental Noncash Investing and
Financing Activities:
Issuance of common stock for
conversion of debt and interest $ 7,516 $ 1,902
-------------- --------------
Amounts held in holdback/escrow
related to the sale of
businesses $ 1,759 $ 738
-------------- --------------
Property and equipment purchases
and capitalized software
included in accounts payable $ 99 $ 67
-------------- --------------
Supplemental Cash Flow Activities:
Cash paid for interest $ 6,905 $ 7,360
-------------- --------------
Cash paid for taxes $ 334 $ 999
-------------- --------------
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), we use certain non-GAAP financial measures to clarify and enhance our understanding, and aid in the period-to-period comparison, of our performance. Where applicable, we provide reconciliations of these non-GAAP measures to the corresponding most closely related GAAP measure. Investors are encouraged to review the reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure. While we believe that these non-GAAP financial measures provide useful supplemental information, non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, their most comparable GAAP measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be comparable to similarly titled measures of other companies due to potential differences in their financing and accounting methods, the book value of their assets, their capital structures, the method by which their assets were acquired and the manner in which they define non-GAAP measures.
Adjusted Gross Profit and Adjusted Gross Profit Margin
We define Adjusted Gross Profit as Total revenues minus cost of revenues, including amortization of capitalized software development costs and acquired developed technology, before amortization of intangible assets that are included in costs of revenues. We define Adjusted Gross Profit Margin as Adjusted Gross Profit divided by Total Revenues.
We use Adjusted Gross Profit and Adjusted Gross Profit Margin to understand and evaluate our core operating performance and trends. We believe these metrics are useful measures to us and to our investors to assist in evaluating our core operating performance because they provide consistency and direct comparability with our past financial performance and between fiscal periods, as the metrics eliminate the non-cash effects of amortization of intangible assets that may fluctuate for reasons unrelated to overall operating performance.
Adjusted Gross Profit and Adjusted Gross Profit Margin have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. They should not be considered as replacements for gross profit and gross profit margin, as determined by GAAP, or as measures of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes. Adjusted Gross Profit and Adjusted Gross Profit Margin as presented herein are not necessarily comparable to similarly titled measures presented by other companies.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA reflects further adjustments to EBITDA to exclude certain non-cash items and other items that management believes are not indicative of ongoing operations. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by Total Revenues.
We disclose EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin herein because these non-GAAP measures are key measures used by management to evaluate our business, measure our operating performance and make strategic decisions. We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are useful for investors and others in understanding and evaluating our operating results in the same manner as management. EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are not financial measures calculated in accordance with GAAP and should not be considered as substitutes for net income (loss), net income (loss) before income taxes, or any other operating performance measure calculated in accordance with GAAP. Using these non-GAAP financial measures to analyze our business would have material limitations because the calculations are based on the subjective determination of management regarding the nature and classification of events and circumstances that investors may find significant. In addition, although other companies in our industry may report measures titled EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin or similar measures, such non-GAAP financial measures may be calculated differently from how we calculate non-GAAP financial measures, which reduces their comparability. Because of these limitations, you should consider EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin alongside other financial performance measures, including net income and our other financial results presented in accordance with GAAP.
Adjusted Gross Profit and Adjusted Gross Profit Margin
The following table presents our calculation of Adjusted Gross Profit and Adjusted Gross Profit Margin for the periods presented:
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- ------------------------
(In thousands) 2026 2025 2026 2025
--------------- ------- ---------- -------- ----------
Total revenues $18,660 $ 22,429 $ 58,266 $ 73,204
Cost of
revenues,
including
amortization of
capitalized
software
development
costs and
acquired
developed
technology (3,442) (4,774) (11,571) (16,706)
------ --------- ------- ---------
Gross Profit $15,218 $ 17,655 $ 46,695 $ 56,498
------ --------- ------- ---------
Gross Profit
Margin 82% 79% 80% 77%
Gross Profit 15,218 17,655 46,695 56,498
Amortization of
intangible
assets 1,603 1,770 4,852 7,081
------ --------- ------- ---------
Adjusted Gross
Profit $16,821 $ 19,425 $ 51,547 $ 63,579
------ --------- ------- ---------
Adjusted Gross
Profit Margin 90% 87% 88% 87%
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
The following table presents our calculation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the periods presented:
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
(In thousands) 2026 2025 2026 2025
------------------ ------- --------- -------- ---------
Net loss $(5,881) $ (24,855) $(77,328) $ (42,376)
Provision (benefit)
from income taxes 3 (237) (286) (1,071)
Depreciation and
amortization 3,698 3,962 11,201 14,040
Interest expense,
net 3,724 3,695 10,984 13,160
------- --------- -------- ---------
EBITDA 1,544 (17,435) (55,429) (16,247)
Loss (gain) on sale
of businesses (a) 920 (1,161) 920 (16,585)
Stock-based
compensation 290 3,636 4,159 10,975
Change in fair
value of financial
instruments (b) (150) 6,994 (2,105) 7,900
Other non-cash
charges (c) 106 (158) 54,650 859
Loss on debt
extinguishment 304 6,174 304 7,958
Disposal related
costs (d) 210 1,423 475 7,368
Employee severance
costs (e) 22 211 951 2,355
CEO transition (f) 164 - 1,976 -
Non-capitalizable
debt costs 264 2,506 1,095 3,250
Costs incurred
related to the
Special Committee - 171 45 338
Non-operating
income (g) (71) (181) (91) (409)
------- --------- -------- ---------
Adjusted EBITDA $ 3,603 $ 2,180 $ 6,950 $ 7,762
------- --------- -------- ---------
Adjusted EBITDA
Margin 19.3% 9.7% 11.9% 10.6%
(a) Reflects the loss on disposal of FrontierView on August 27, 2026, gain
on disposal of TimeBase on July 1, 2025, and gain on disposal of
Dragonfly and Oxford Analytica on March 31, 2025.
(b) Reflects the non-cash impact from the mark to market adjustments on our
financial instruments.
(c) Reflects the non-cash impact of the following: (a) (i) gain of $177 in
the first quarter of 2026, a charge of $21 in the second quarter of
2026, and a charge of $106 in the third quarter of 2026, related to
foreign currency exchange principally arising from converting a GBP
denominated convertible note into USD; (ii) goodwill impairment charge
of $35,600 in the first quarter of 2026 and $19,100 in the second
quarter of 2026, (iii) charge of $40 in the first quarter of 2025,
charge of $30 in the second quarter of 2025, and a charge of $9 in the
third quarter of 2025 related to the unrealized loss on investments;
(iv) charge of $315 for fees satisfied with Common Stock of the Company
during the first quarter of 2025; (v); and (vi) charge of $632 in the
second quarter of 2025 and a gain of $167 in the third quarter related
to foreign currency translation losses, principally arising from
converting a GBP denominated convertible note into USD.
(d) Reflects the costs incurred related to the sale of Oxford Analytica and
Dragonfly in the first quarter of 2025, the sale of TimeBase in the
third quarter of 2025, and sale of FrontierView in the third quarter of
2026, principally consisting of transaction advisory, accounting, tax,
and legal fees.
(e) Severance costs associated with workforce changes related to business
realignment actions.
(f) Reflects (a) severance costs totaling $1,812 incurred during the second
quarter of 2026 related to the resignation of our prior CEO on June 26,
2026, and (b) one-time transition costs related to the appointment of
our new CEO during the third quarter of 2026 totaling $164.
(g) Reflects non-operating income from the Transition Services Agreement
that was entered into with the acquirer of Dragonfly and Oxford
Analytica on March 31, 2025 and FrontierView on August 27, 2026.
Key Performance Indicators
We monitor the following key performance indicators to evaluate growth trends, prepare financial projections, make strategic decisions, and measure the effectiveness of our sales and marketing efforts. Our management team assesses our performance based on these key performance indicators because it believes they reflect the underlying trends of our business and serve as meaningful measures of our ongoing operational performance.
Annual Recurring Revenue ("ARR")
Over 90% of our revenues are subscription based, which leads to high revenue predictability. We use ARR as a measure of our revenue trend and an indicator of our future revenue opportunity from existing recurring subscription customer contracts. We calculate ARR on a parent account level by annualizing the contracted subscription revenue, and our total ARR as of the end of a period is the aggregate thereof. ARR is not adjusted for the impact of any known or projected future customer cancellations, upgrades or downgrades, or price increases or decreases. The amount of actual revenue that we recognize over any 12-month period is likely to differ from ARR at the beginning of that period, sometimes significantly. This may occur due to timing of the revenue bookings during the period, cancellations, upgrades, or downgrades and pending renewals. ARR should be viewed independently of revenue as it is an operating metric and is not intended to be a replacement or forecast of revenue. Our calculation of ARR may differ from similarly titled metrics presented by other companies.
Net Revenue Retention ("NRR")
Our NRR, which we use to measure our success in retaining and growing recurring revenue from our existing customers, compares our recognized recurring revenue from a set of customers across comparable periods. We calculate our NRR for a given period as ARR at the end of the period minus ARR contracted from new clients for which there is no historical revenue booked during the period, divided by the beginning ARR for the period. We calculate NRR at our parent account level. Our calculation of NRR for any fiscal period includes the positive recurring revenue impacts of selling additional licenses and services to existing customers and the negative recognized recurring revenue impacts of contraction and attrition among this set of customers. Our NRR may fluctuate as a result of a number of factors, including the level of our revenue base, the level of penetration within our customer base, expansion of products and features, the timing of renewals, and our ability to retain our customers. Our calculation of NRR may differ from similarly titled metrics presented by other companies.
View source version on businesswire.com: https://www.businesswire.com/news/home/20261109013047/en/
CONTACT: Media
Yojin Yoon
FiscalNote
press@fiscalnote.com
Investor Relations
Jon Slabaugh
FiscalNote
ir@fiscalnote.com
Comments