8-K: FiscalNote Reports Q2 2026 Results, Cuts Guidance

FiscalNote Holdings, Inc. announced its second quarter 2026 financial results, reporting total revenue in line with guidance but adjusted EBITDA slightly below, alongside a significant goodwill impairment and revised full-year financial forecasts.

Summary

• FiscalNote Holdings, Inc. reported Q2 2026 revenues of $19.6 million, meeting guidance, but adjusted EBITDA was $2.3 million, $0.2 million below guidance.
• The company experienced a 16% year-over-year decline in total revenues to $19.6 million for the quarter ended June 30, 2026.
• Subscription revenue decreased by 12% to $18.8 million, while advisory, advertising, and other revenue fell by 58% to $0.8 million.
• A significant goodwill impairment charge of $19.1 million was recorded in Q2 2026, contributing to a total operating expense increase of 42% to $43.7 million.
• The company revised its full-year 2026 revenue guidance to $75-$78 million (from $80-$83 million) and adjusted EBITDA to $9-$11 million (from $14-$16 million).
• A new forecast for Q3 2026 projects total revenues of $19-$20 million and adjusted EBITDA of approximately $3.5 million.
• Quarterly net revenue retention improved to 98% from 89% in Q1 2026, indicating stabilization in the core business.
• Key Compton was appointed CEO in June 2026 to lead the company's return to growth.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a negative sentiment due to declining revenues, a significant goodwill impairment, and reduced full-year guidance, despite some operational improvements.

Positives

• Total revenue for Q2 2026 was $19.6 million, which was in line with the company's guidance of $19.5 to $20.5 million.
• Quarterly net revenue retention improved significantly to 98% from 89% in the first quarter, indicating stabilization and improved customer retention post-migration.
• The company continues to strengthen its operating model by reducing its cost base and improving operating leverage.
• Early adoption of agentic API product offerings is being seen, with new licenses for PolicyNote MCP APIs secured from Siemens and a global technology company.
• Key Compton, a board member since 2021, was appointed President and CEO in June 2026, signaling a focus on returning to growth.

Negatives

• Total revenues for Q2 2026 decreased by 16% year-over-year to $19.6 million.
• Adjusted EBITDA for Q2 2026 was $2.3 million, which was $0.2 million below the guided range.
• Subscription revenue declined 12% year-over-year to $18.8 million.
• Non-subscription revenue declined 58% year-over-year to $0.8 million.
• A substantial goodwill impairment charge of $19.1 million was recorded in Q2 2026.
• Total operating expenses increased by 42% to $43.7 million, largely due to the goodwill impairment.
• Full-year 2026 revenue guidance was reduced to $75-$78 million from $80-$83 million.
• Full-year 2026 adjusted EBITDA guidance was reduced to $9-$11 million from $14-$16 million.

Risks

• Risk of creditors enforcing rights if Class A Common Stock is no longer listed on NYSE.
• Challenges in achieving and sustaining organic growth, including developing and integrating platforms, attracting and retaining customers.
• Risks associated with launching new product offerings and achieving expected benefits.
• Future capital requirements and ability to service debt obligations and comply with covenants.
• Impact of macroeconomic and geopolitical pressures, and continued caution in federal and public sector spending.
• Risks associated with past and future strategic transactions, including divestitures.
• Competition from larger, well-funded companies and general purpose generative AI platforms.
• Potential for U.S. government shutdowns to negatively affect contract renewals and revenue.

Future Outlook

The company has revised its full-year 2026 guidance downwards, projecting total revenues between $75-$78 million and adjusted EBITDA between $9-$11 million. For the third quarter of 2026, FiscalNote forecasts total revenues of $19-$20 million and adjusted EBITDA of approximately $3.5 million. Management expects restructuring actions to benefit the second half of the year, driving an EBITDA ramp and supporting full-year expectations, with a focus on capital discipline to return to growth and achieve free cash flow positivity.

Management Comments

• "We came in $0.2 million light on adjusted EBITDA, but net revenue retention improved nine points sequentially to 98%, marking an important stabilization in our core business. We also continued to improve our operating efficiency. Looking forward, we will continue to hold the line on operating discipline while also investing behind the products our customers are pulling us toward, including the agentic PolicyNote MCP API solutions that Siemens and other global enterprises licensed this quarter."
• "We welcome the arrival of Key Compton and with this we have reset our full year outlook this quarter to reflect the current revenue environment, while continuing to operate from a leaner cost structure that strengthens our operating leverage. Our immediate priorities are maintaining capital discipline as we work to return the Company to growth and reach free cash flow positive."

Industry Context

StockSavvy.ai notes that FiscalNote operates in the AI-driven policy and regulatory intelligence sector, a growing but competitive space. The company's focus on agentic API solutions and AI deployment aligns with broader industry trends towards integrating AI into enterprise workflows. However, the reported decline in revenue and the significant goodwill impairment suggest challenges in translating market trends into financial performance, potentially exacerbated by broader economic caution impacting public sector spending.

Comparison to Industry Standards

• The reported 16% year-over-year revenue decline for Q2 2026 is a significant negative compared to growth expectations in the broader AI and SaaS sectors.
• While net revenue retention improved to 98% sequentially, the trailing twelve-month NRR of 81% is below the benchmark of 100%+ often seen in healthy SaaS businesses, indicating ongoing churn or contraction.
• The significant goodwill impairment of $19.1 million suggests that previous acquisitions or investments have not performed as expected, a risk that can be more pronounced in rapidly evolving technology sectors.
• Competitors in the regulatory intelligence space, such as Thomson Reuters or LexisNexis, may have more diversified revenue streams and greater scale, potentially allowing them to weather economic downturns more effectively.

Management Changes

Stakeholder Impact

• Shareholders: Reduced full-year guidance and a significant goodwill impairment may negatively impact share price and investor confidence.
• Creditors: Potential risk of creditors enforcing rights if the company's stock is delisted.
• Employees: Ongoing operational transformation, workforce changes, and cost-saving measures may impact morale and job security.
• Customers: Continued focus on AI-driven solutions and API adoption may benefit customers seeking advanced policy intelligence, but revenue declines could signal potential service impacts in the long term.

Next Steps

• Continue to hold the line on operating discipline.
• Invest behind products customers are pulling towards, including agentic PolicyNote MCP API solutions.
• Maintain capital discipline to return the company to growth.
• Work towards reaching free cash flow positive.
• Continue to execute on operational transformation through AI deployment, team structure changes, and streamlining initiatives.
• The Board of Directors is continuing to review the company's plans and evaluate all strategic value-maximizing options, including potential further divestitures of non-core assets.

Key Dates

Recommendation

The significant year-over-year revenue decline, missed adjusted EBITDA guidance, substantial goodwill impairment, and downward revision of full-year financial forecasts indicate worsening financial performance and increased uncertainty. While there are positive signs in sequential NRR improvement and API adoption, these are overshadowed by the overall negative financial trajectory and strategic review, suggesting a cautious approach is warranted.

Keywords

AI-driven policy intelligence, regulatory intelligence, PolicyNote API, Adjusted EBITDA, Annual Recurring Revenue, Net Revenue Retention, Goodwill impairment, Financial Results