FiscalNote Announces Third Quarter 2022 Financial Results
FiscalNote announced a strong third quarter for FY 2022, with revenue growth of 34% year-over-year, totaling $29.1 million. Non-GAAP adjusted revenue increased by 27%. The company reports a GAAP net loss of $109 million due to non-cash items from its public listing. Adjusted EBITDA loss stood at $7.4 million. FiscalNote anticipates 2022 GAAP revenue of $112-$114 million, marking a 36% growth forecast, and aims for positive adjusted EBITDA by Q4 2023. ARR reached $108 million, with net revenue retention at 99%.
- 34% revenue growth year-over-year to $29.1 million
- GAAP revenue guidance of $112-$114 million for FY 2022, equating to 36% growth
- ARR increased to $108 million, up 14% year-over-year
- 99% net revenue retention rate, indicating strong customer loyalty
- Successful acquisition of DT-Global for market expansion
- Plans to achieve positive adjusted EBITDA in Q4 2023
- GAAP net loss of $109 million, impacted by non-cash charges
- Adjusted EBITDA loss of $7.4 million
Initiates FY 2022 GAAP Revenue Guidance Indicating Revenue Growth of Approximately
Remains on Track for Positive Adjusted EBITDA in the Fourth Quarter of 2023 Reflecting the Company’s Ongoing Focus on Profitability
Third Quarter 2022 Financial Highlights
-
Revenue increased
34% to$29.1 million $21.8 million 27% to$29.2 million $22.9 million -
Gross profit was
$20.3 million 70% gross margin, and non-GAAP adjusted gross profit was$23.3 million 80% non-GAAP adjusted gross margin. -
GAAP net loss of
$109 million July 29, 2022 including a$45.2 million $32.1 million $28.9 million $21.9 million -
Adjusted EBITDA(1) loss of
$7.4 million -
Cash and cash equivalents of
$78.8 million $100 million
Third Quarter 2022 Business Metrics
-
Run-Rate Revenue: Run-rate revenue(2) increased to
$121 million September 30, 2022 inclusive of businesses acquired in 2022. Organic Run-Rate Revenue(3) increased to$120 million 14% increase from$105 million September 30, 2021 on a pro forma basis. -
Annual Recurring Revenue ("ARR"): ARR(2) rose to
$108 million September 30, 2022 inclusive of businesses acquired in 2022. Organic ARR(3) was$107 million September 30, 2022 compared to ARR of$94 million September 30, 2021 , representing a14% growth rate on a pro forma basis. -
Net Revenue Retention (“NRR”): NRR(2) was
99% , consistent with prior periods, underscoring the Company's ability to establish and maintain long-term recurring revenue relationships by serving as an essential partner for customers across both the commercial and public sectors.
"Our third quarter results reflect our continued market leadership and growth momentum, fueled by an expanding global customer base, subscription-based recurring revenue model and growing demand for our policy and market intelligence solutions around the world," said
Third Quarter and Recent Business Highlights
During the quarter,
-
Entered into new, renewed, or expanded relationships with leading global corporations and a number of leading
U.S. and global brand leaders. See separate press release issued today. -
Secured new public sector contract wins, expansions, and renewals of major departments and agencies across executive, legislative, and judicial branches of the
U.S. Government . -
Acquired the core operating assets and book of business of DT-Global, a
Vienna, Austria subscription-based market intelligence company which provides in-depth expertise and analysis for the Central &Eastern Europe (CEE), Commonwealth of Independent States (CIS), andMiddle East -Africa (MEA) geographies. DT Global brings a base of more than 350 global and regional customers - including many belonging to the Fortune 500. -
Amplified its Curate platform for civic intelligence and monitoring services by extending its state and local coverage to include hundreds of state boards across the
U.S. -
Secured two prestigious global awards recognizing the Company's SaaS leadership and innovation:
-
FiscalNote's Curate platform for civic intelligence and monitoring was declared the winner of the "Best Data Innovation in a SaaS Product" category at the 2022 SaaS Awards. Curate was recognized as the winner due to the platform's superior Natural Language Processing Al and its consistent positive customer feedback. -
FiscalNote's Equilibrium ESG platform was declared the winner of the "Best SaaS product for CSR or Sustainability" category at the 2022 SaaS Awards. Equilibrium is an Al-powered platform which helps organizations unify, manage, and benchmark carbon, climate and ESG data across their entire operations and supply chain.
-
-
Expanded its FiscalNote ESG Solutions platform with two key enhancements:
- The addition of the ESG360TM Benchmarking and Risk Intelligence solution that gives companies a holistic view of their ESG performance and perception across operations, suppliers, and competitors.
- A technology integration with Asana (NYSE: ASAN), a leading work management platform into the Equilibrium ESG platform. With this integration, FiscalNote Equilibrium customers and Asana customers gain one-click connection, decarbonization support, ESG disclosure and reporting, and curated ESG reporting playbooks from a single platform.
-
Announced significant improvements and upgrades to its industry-leading
European Union (EU) regulatory intelligence SaaS platform, EU Issue Tracker (EUIT), as well as a slate of new, tailored services, such as timely briefings on EU policy issues and stakeholder mapping to identify key policymakers and insiders involved in issues with a direct impact on corporations and organizations around the world. -
Published the inaugural overview of
FiscalNote's sustainability and social impact efforts for 2021, which details the Company's global sustainability and ESG efforts, and illustrates its commitment to a more sustainable future.
Financial Outlook 2022
-
GAAP revenue of
$112 million $114 million 36% year-over-year growth at the midpoint. The Company has not previously provided GAAP revenue guidance. -
Organic Run-Rate Revenue(3) of
$122 million $126 million 13% year-over-year at the midpoint on a pro forma basis. This new range better reflects a weakened macroeconomic environment and a commitment to capital efficient growth. -
Adjusted EBITDA loss of
$24 million $22 million $23 million - In addition, the Company reiterated that it remains on track to achieve positive Adjusted EBITDA in the fourth quarter of 2023(4), indicating its ongoing focus on profitability.
Additional information regarding the non-GAAP financial measures discussed in this release, including an explanation of these measures and how each is calculated, is included below under the heading "Non-GAAP Financial Measures." A reconciliation of GAAP to non-GAAP financial measures has also been provided in the financial tables included below. Information regarding our key performance indicators is included below under "Key Performance Indicators."
Quarterly Conference Call
* In connection with FiscalNote’s public listing, we entered into a 5-year senior secured term loan of up to |
(1) Non-GAAP measure. Please see "Non-GAAP Financial Measures" in this earnings release for definitions and important disclosures regarding these financial measures, including reconciliations to the most directly comparable GAAP measure. |
(2) “Run-Rate Revenue,” “Annual Recurring Revenue” or “ARR” and “Net Revenue Retention”, are key performance indicators (KPIs). Please see "Key Performance Indicators" in this earnings release for the definitions and important disclosures regarding these measures. |
(3) Organic run rate revenue and organic ARR for 2022 include businesses acquired as of |
(4) Because of the variability of items impacting net income and unpredictability of future events, management is unable to reconcile without unreasonable effort the Company's forecasted adjusted EBITDA to a comparable GAAP measure. |
About
Forward-Looking Statements
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
Factors that may impact such forward-looking statements include, but are not limited to FiscalNote’s ability to effectively manage its growth; changes in FiscalNote’s strategy, future operations, financial position, estimated revenue and losses, forecasts, projected costs, prospects and plans; FiscalNote’s future capital requirements; demand for FiscalNote’s services and the drivers of that demand; FiscalNote’s ability to provide highly useful, reliable, secure and innovative products and services to its customers; FiscalNote’s ability to attract new customers, retain existing customers, expand its products and service offerings with existing customers, expand into geographic markets or identify areas of higher growth; 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 develop, enhance, and integrate its existing platforms, products, and services; FiscalNote’s ability to successfully identify acquisition opportunities, make acquisitions on terms that are commercially satisfactory, successfully integrate potential acquired businesses and services, and subsequently grow acquired businesses; FiscalNote’s estimated total addressable market and other industry and performance projections; FiscalNote’s reliance on third-party systems that it does not control to integrate with its systems and its potential inability to continue to support integration; 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; FiscalNote’s ability to obtain and maintain accurate, comprehensive, or reliable data to support its products and services; FiscalNote’s ability to introduce new features, integrations, capabilities, and enhancements to its products and services; 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; competition and competitive pressures in the markets in which
These and other important factors discussed under the caption "Risk Factors" in FiscalNote’s Current Report on Form 8-K filed with the
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except shares and per share data)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subscription |
|
$ |
26,075 |
|
|
$ |
20,139 |
|
|
$ |
73,186 |
|
|
$ |
53,098 |
|
Advisory, advertising, and other |
|
|
2,996 |
|
|
|
1,635 |
|
|
|
9,130 |
|
|
|
5,352 |
|
Total revenues |
|
|
29,071 |
|
|
|
21,774 |
|
|
|
82,316 |
|
|
|
58,450 |
|
Operating expenses: (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues |
|
|
8,699 |
|
|
|
5,412 |
|
|
|
23,581 |
|
|
|
14,664 |
|
Research and development |
|
|
5,629 |
|
|
|
6,433 |
|
|
|
15,438 |
|
|
|
17,671 |
|
Sales and marketing |
|
|
11,830 |
|
|
|
7,454 |
|
|
|
31,722 |
|
|
|
21,258 |
|
Editorial |
|
|
4,218 |
|
|
|
3,786 |
|
|
|
11,240 |
|
|
|
10,967 |
|
General and administrative |
|
|
38,945 |
|
|
|
9,337 |
|
|
|
59,535 |
|
|
|
22,199 |
|
Amortization of intangible assets |
|
|
2,601 |
|
|
|
2,512 |
|
|
|
7,818 |
|
|
|
6,651 |
|
Loss on sublease |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,362 |
|
Transaction costs, net |
|
|
1,275 |
|
|
|
2,127 |
|
|
|
1,257 |
|
|
|
2,985 |
|
Total operating expenses |
|
|
73,197 |
|
|
|
37,061 |
|
|
|
150,591 |
|
|
|
97,757 |
|
Operating loss |
|
|
(44,126 |
) |
|
|
(15,287 |
) |
|
|
(68,275 |
) |
|
|
(39,307 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
42,894 |
|
|
|
16,261 |
|
|
|
89,672 |
|
|
|
46,102 |
|
Change in fair value of warrant and derivative liabilities |
|
|
(21,910 |
) |
|
|
(2,839 |
) |
|
|
(18,524 |
) |
|
|
9,406 |
|
Gain on PPP loan upon extinguishment |
|
|
- |
|
|
|
- |
|
|
|
(7,667 |
) |
|
|
- |
|
Loss on debt extinguishment, net |
|
|
45,250 |
|
|
|
- |
|
|
|
45,250 |
|
|
|
- |
|
Other expense, net |
|
|
928 |
|
|
|
241 |
|
|
|
1,543 |
|
|
|
384 |
|
Net loss before income taxes |
|
|
(111,288 |
) |
|
|
(28,950 |
) |
|
|
(178,549 |
) |
|
|
(95,199 |
) |
Benefit from income taxes |
|
|
(2,286 |
) |
|
|
(992 |
) |
|
|
(2,836 |
) |
|
|
(6,737 |
) |
Net loss |
|
$ |
(109,002 |
) |
|
$ |
(27,958 |
) |
|
$ |
(175,713 |
) |
|
$ |
(88,462 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
(109,002 |
) |
|
$ |
(27,958 |
) |
|
$ |
(175,713 |
) |
|
$ |
(88,462 |
) |
Deemed dividend |
|
|
(24,351 |
) |
|
|
(78,037 |
) |
|
|
(26,570 |
) |
|
|
(218,250 |
) |
Net loss used to compute basic loss per share |
|
$ |
(133,353 |
) |
|
$ |
(105,995 |
) |
|
$ |
(202,283 |
) |
|
$ |
(306,712 |
) |
Marked-to-market fair value gain for private warrants |
|
|
(23,310 |
) |
|
|
- |
|
|
|
(23,310 |
) |
|
|
- |
|
Net loss used to compute diluted loss per share |
|
$ |
(156,663 |
) |
|
$ |
(105,995 |
) |
|
$ |
(225,593 |
) |
|
$ |
(306,712 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per share attributable to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
(1.39 |
) |
|
$ |
(6.34 |
) |
|
$ |
(4.52 |
) |
|
$ |
(20.91 |
) |
Diluted |
|
$ |
(1.63 |
) |
|
$ |
(6.34 |
) |
|
$ |
(5.03 |
) |
|
$ |
(20.91 |
) |
Weighted average shares used in computing earnings per shares attributable to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
96,117,011 |
|
|
|
16,724,066 |
|
|
|
44,757,851 |
|
|
|
14,671,167 |
|
Diluted |
|
|
96,235,930 |
|
|
|
16,724,066 |
|
|
|
44,876,770 |
|
|
|
14,671,167 |
|
(1) Amounts include stock-based compensation expenses, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Cost of revenues |
|
$ |
13 |
|
|
$ |
4 |
|
|
$ |
36 |
|
|
$ |
9 |
|
Research and development |
|
|
504 |
|
|
|
55 |
|
|
|
609 |
|
|
|
216 |
|
Sales and marketing |
|
|
721 |
|
|
|
27 |
|
|
|
828 |
|
|
|
97 |
|
Editorial |
|
|
513 |
|
|
|
24 |
|
|
|
560 |
|
|
|
67 |
|
General and administrative |
|
|
28,292 |
|
|
|
77 |
|
|
|
28,835 |
|
|
|
158 |
|
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except shares, and par value)
|
|
As of |
|
|||||
|
|
|
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
78,010 |
|
|
$ |
32,168 |
|
Restricted cash |
|
|
830 |
|
|
|
841 |
|
Accounts receivable, net |
|
|
12,486 |
|
|
|
11,174 |
|
Costs capitalized to obtain revenue contracts, net |
|
|
2,575 |
|
|
|
2,787 |
|
Prepaid expenses |
|
|
5,285 |
|
|
|
1,803 |
|
Other current assets |
|
|
3,265 |
|
|
|
5,525 |
|
Total current assets |
|
|
102,451 |
|
|
|
54,298 |
|
|
|
|
|
|
|
|
||
Property and equipment, net |
|
|
7,368 |
|
|
|
7,509 |
|
Capitalized software costs, net |
|
|
12,673 |
|
|
|
7,480 |
|
Noncurrent costs capitalized to obtain revenue contracts, net |
|
|
3,729 |
|
|
|
2,709 |
|
Operating lease assets |
|
|
22,168 |
|
|
|
- |
|
|
|
|
192,462 |
|
|
|
188,768 |
|
Customer relationships, net |
|
|
58,006 |
|
|
|
61,644 |
|
Database, net |
|
|
21,471 |
|
|
|
22,357 |
|
Other intangible assets, net |
|
|
29,658 |
|
|
|
33,728 |
|
Other non-current assets |
|
|
395 |
|
|
|
- |
|
Total assets |
|
$ |
450,381 |
|
|
$ |
378,493 |
|
|
|
|
|
|
|
|
||
Liabilities, Temporary Equity and Stockholders' Equity (Deficit) |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Current maturities of long-term debt |
|
$ |
68 |
|
|
$ |
13,567 |
|
Accounts payable and accrued expenses |
|
|
11,204 |
|
|
|
15,796 |
|
Deferred revenue, current portion |
|
|
38,290 |
|
|
|
29,569 |
|
Customer deposits |
|
|
1,709 |
|
|
|
3,568 |
|
Contingent liabilities from acquisitions, current portion |
|
|
300 |
|
|
|
1,088 |
|
Operating lease liabilities, current portion |
|
|
7,940 |
|
|
|
- |
|
Other current liabilities |
|
|
2,288 |
|
|
|
5,880 |
|
Total current liabilities |
|
|
61,799 |
|
|
|
69,468 |
|
|
|
|
|
|
|
|
||
Long-term debt, net of current maturities |
|
|
160,047 |
|
|
|
299,318 |
|
Convertible notes - related parties |
|
|
- |
|
|
|
18,295 |
|
Deferred tax liabilities |
|
|
796 |
|
|
|
3,483 |
|
Deferred revenue, net of current portion |
|
|
952 |
|
|
|
528 |
|
Deferred rent |
|
|
- |
|
|
|
8,236 |
|
Contingent liabilities from acquisitions, net of current portion |
|
|
1,309 |
|
|
|
4,016 |
|
Sublease loss liability, net of current portion |
|
|
- |
|
|
|
2,090 |
|
Lease incentive liability, net of current portion |
|
|
- |
|
|
|
4,440 |
|
Operating lease liabilities, net of current portion |
|
|
29,577 |
|
|
|
- |
|
Warrant liabilities |
|
|
13,091 |
|
|
|
- |
|
Other non-current liabilities |
|
|
1,806 |
|
|
|
1,453 |
|
Total liabilities |
|
|
269,377 |
|
|
|
411,327 |
|
Commitment and contingencies (Note 17) |
|
|
|
|
|
|
||
Temporary equity: |
|
|
|
|
|
|
||
Redeemable, convertible preferred stock |
|
|
- |
|
|
|
449,211 |
|
Stockholders' equity (deficit): |
|
|
|
|
|
|
||
Class A Common stock ( |
|
|
13 |
|
|
|
- |
|
Class |
|
|
- |
|
|
|
- |
|
Additional paid-in capital |
|
|
841,598 |
|
|
|
- |
|
Accumulated other comprehensive loss |
|
|
(2,408 |
) |
|
|
(631 |
) |
Accumulated deficit |
|
|
(658,199 |
) |
|
|
(481,414 |
) |
Total stockholders' equity (deficit) |
|
|
181,004 |
|
|
|
(482,045 |
) |
Total liabilities, temporary equity and stockholders' deficit |
|
$ |
450,381 |
|
|
$ |
378,493 |
|
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
|
|
Nine Months Ended |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Operating Activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(175,713 |
) |
|
$ |
(88,462 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation |
|
|
892 |
|
|
|
870 |
|
Amortization of intangible assets and capitalized software development costs |
|
|
14,482 |
|
|
|
10,728 |
|
Amortization of deferred costs to obtain revenue contracts |
|
|
1,922 |
|
|
|
1,820 |
|
Non-cash operating lease expense |
|
|
4,856 |
|
|
|
- |
|
Stock-based compensation |
|
|
30,868 |
|
|
|
547 |
|
Operating lease asset impairment |
|
|
378 |
|
|
|
- |
|
Contingent compensation expense |
|
|
195 |
|
|
|
- |
|
Bad debt expense |
|
|
90 |
|
|
|
106 |
|
Change in fair value of acquisition contingent consideration |
|
|
(2,192 |
) |
|
|
1,045 |
|
Change in fair value of derivative liabilities |
|
|
3,090 |
|
|
|
9,406 |
|
Change in fair value of warrant liabilities |
|
|
(21,856 |
) |
|
|
- |
|
Deferred income tax benefit |
|
|
(2,708 |
) |
|
|
(5,299 |
) |
Paid-in-kind interest, net |
|
|
10,491 |
|
|
|
26,972 |
|
Net loss attributable to equity method investment |
|
|
23 |
|
|
|
- |
|
Non-cash interest expense |
|
|
50,512 |
|
|
|
15,126 |
|
Loss on debt extinguishment, net |
|
|
45,250 |
|
|
|
- |
|
Loss on sublease |
|
|
- |
|
|
|
1,362 |
|
Gain on PPP Loan forgiveness |
|
|
(7,667 |
) |
|
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
(4,211 |
) |
|
|
1,793 |
|
Prepaid expenses and other current assets |
|
|
(1,151 |
) |
|
|
(1,432 |
) |
Costs capitalized to obtain revenue contracts, net |
|
|
(2,808 |
) |
|
|
(2,140 |
) |
Other non-current assets |
|
|
(395 |
) |
|
|
- |
|
Accounts payable and accrued expenses |
|
|
3,566 |
|
|
|
236 |
|
Deferred revenue |
|
|
8,581 |
|
|
|
3,264 |
|
Customer deposits |
|
|
(1,917 |
) |
|
|
(386 |
) |
Other current liabilities |
|
|
(5,677 |
) |
|
|
604 |
|
Deferred rent |
|
|
- |
|
|
|
535 |
|
Contingent liabilities from acquisitions, net of current portion |
|
|
(1,267 |
) |
|
|
- |
|
Lease liabilities |
|
|
(6,296 |
) |
|
|
- |
|
Sublease loss liability, net of current portion |
|
|
- |
|
|
|
(458 |
) |
Lease incentive liability, net of current portion |
|
|
- |
|
|
|
(396 |
) |
Other non-current liabilities |
|
|
1,163 |
|
|
|
(20 |
) |
Net cash used in operating activities |
|
|
(57,499 |
) |
|
|
(24,179 |
) |
|
|
|
|
|
|
|
||
Investing Activities: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
(8,859 |
) |
|
|
(3,931 |
) |
Cash paid for business acquisitions, net of cash acquired |
|
|
1,125 |
|
|
|
(26,378 |
) |
Net cash used in investing activities |
|
|
(7,734 |
) |
|
|
(30,309 |
) |
|
|
|
|
|
|
|
||
Financing Activities: |
|
|
|
|
|
|
||
Proceeds from Business Combination |
|
|
175,000 |
|
|
|
- |
|
Issuance costs of common stock |
|
|
(45,242 |
) |
|
|
- |
|
Proceeds from long-term debt, net of issuance costs |
|
|
166,013 |
|
|
|
33,147 |
|
Principal payments of long-term debt |
|
|
(189,023 |
) |
|
|
- |
|
Proceeds from exercise of public warrants |
|
|
4,469 |
|
|
|
- |
|
Proceeds from exercise of stock options |
|
|
386 |
|
|
|
364 |
|
Repurchase of common stock |
|
|
(88 |
) |
|
|
- |
|
Net proceeds from issuance of preferred stock |
|
|
- |
|
|
|
12,481 |
|
Net cash provided by financing activities |
|
|
111,515 |
|
|
|
45,992 |
|
|
|
|
|
|
|
|
||
Effects of exchange rates on cash |
|
|
(451 |
) |
|
|
40 |
|
|
|
|
|
|
|
|
||
Net change in cash, cash equivalents, and restricted cash |
|
|
45,831 |
|
|
|
(8,456 |
) |
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
33,009 |
|
|
|
45,020 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
78,840 |
|
|
$ |
36,564 |
|
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with
Adjusted Revenue
Adjusted revenue represents revenue adjusted to include amounts that would have been recognized if deferred revenue was not adjusted to fair value in connection with the businesses we acquired in 2021. Adjusted revenue is presented because we use this measure to evaluate performance of our business against prior periods and believe it is a useful indicator of the underlying performance of our business. Adjusted revenue is not a recognized term under GAAP. Adjusted revenue does not represent revenues, as that term is defined under GAAP, and should not be considered as an alternative to revenues as an indicator of our operating performance. Adjusted revenue as presented herein is not necessarily comparable to similarly titled measures presented by other companies.
Adjusted Gross Profit and Adjusted Gross Profit Margin
We define Adjusted Gross Profit as Adjusted Revenue minus cost of revenues, before amortization of intangible assets that are included in costs of revenues. We define Adjusted Gross Profit Margin as Adjusted Gross Profit divided by Adjusted 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 it provides 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 and deferred revenue, which are non-cash impacts 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 and 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 is 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 Adjusted Revenue.
We disclose EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin because they 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 should not be considered as substitutes for net loss, net 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 Revenues
The following table presents our calculation of Adjusted Revenues for the periods presented, and a reconciliation of this measure to our GAAP revenues for the same periods:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(In thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Subscription revenue |
|
$ |
26,075 |
|
|
$ |
20,139 |
|
|
$ |
73,186 |
|
|
$ |
53,098 |
|
Deferred revenue adjustment |
|
|
123 |
|
|
|
1,161 |
|
|
|
1,853 |
|
|
|
1,533 |
|
Adjusted subscription revenue |
|
|
26,198 |
|
|
|
21,300 |
|
|
|
75,039 |
|
|
|
54,631 |
|
Advisory, advertising, and other revenue |
|
|
2,996 |
|
|
|
1,635 |
|
|
|
9,130 |
|
|
|
5,352 |
|
Adjusted Revenues |
|
$ |
29,194 |
|
|
$ |
22,935 |
|
|
$ |
84,169 |
|
|
$ |
59,983 |
|
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 |
|
||||||||||
(In thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Adjusted Revenues |
|
$ |
29,194 |
|
|
$ |
22,935 |
|
|
$ |
84,169 |
|
|
$ |
59,983 |
|
Costs of revenue |
|
|
(8,699 |
) |
|
|
(5,412 |
) |
|
|
(23,581 |
) |
|
|
(14,664 |
) |
Amortization of intangible assets |
|
|
2,832 |
|
|
|
1,569 |
|
|
|
6,664 |
|
|
|
4,077 |
|
Adjusted Gross Profit |
|
$ |
23,327 |
|
|
$ |
19,092 |
|
|
$ |
67,252 |
|
|
$ |
49,396 |
|
Adjusted Gross Profit Margin |
|
|
80 |
% |
|
|
83 |
% |
|
|
80 |
% |
|
|
82 |
% |
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 |
|
||||||||||
(In thousands) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Net loss |
|
$ |
(109,002 |
) |
|
$ |
(27,958 |
) |
|
$ |
(175,713 |
) |
|
$ |
(88,462 |
) |
Benefit from income taxes |
|
|
(2,286 |
) |
|
|
(992 |
) |
|
|
(2,836 |
) |
|
|
(6,737 |
) |
Depreciation and amortization |
|
|
5,743 |
|
|
|
4,378 |
|
|
|
15,374 |
|
|
|
11,598 |
|
Interest expense, net |
|
|
42,894 |
|
|
|
16,261 |
|
|
|
89,672 |
|
|
|
46,102 |
|
EBITDA |
|
|
(62,651 |
) |
|
|
(8,311 |
) |
|
|
(73,503 |
) |
|
|
(37,499 |
) |
Deferred revenue adjustment (a) |
|
|
123 |
|
|
|
1,161 |
|
|
|
1,853 |
|
|
|
1,533 |
|
Stock-based compensation |
|
|
30,043 |
|
|
|
187 |
|
|
|
30,868 |
|
|
|
547 |
|
Change in fair value of warrant and derivative liabilities (b) |
|
|
(21,910 |
) |
|
|
(2,839 |
) |
|
|
(18,524 |
) |
|
|
9,406 |
|
Loss on debt extinguishment, net |
|
|
45,250 |
|
|
|
- |
|
|
|
45,250 |
|
|
|
- |
|
Other non-cash (gains) charges (c) |
|
|
(948 |
) |
|
|
1,045 |
|
|
|
(9,286 |
) |
|
|
2,407 |
|
Acquisition related costs (d) |
|
|
431 |
|
|
|
561 |
|
|
|
1,003 |
|
|
|
1,051 |
|
Other infrequent costs (e) |
|
|
435 |
|
|
|
1,049 |
|
|
|
858 |
|
|
|
2,736 |
|
Costs incurred related to the transaction (f) |
|
|
1,791 |
|
|
|
521 |
|
|
|
2,250 |
|
|
|
889 |
|
Adjusted EBITDA |
|
$ |
(7,436 |
) |
|
$ |
(6,626 |
) |
|
$ |
(19,231 |
) |
|
$ |
(18,930 |
) |
Adjusted EBITDA Margin |
|
|
(25.5 |
)% |
|
|
(28.9 |
)% |
|
|
(22.8 |
)% |
|
|
(31.6 |
)% |
(a) |
|
Reflects deferred revenue fair value adjustments arising from the purchase price allocation in connection with the 2021 Acquisitions. |
(b) |
|
Reflects the non-cash impact from the mark to market adjustments on our warrant and derivative liabilities. |
(c) |
|
Reflects the non-cash impact of the following: (i) gain of |
(d) |
|
Reflects the costs incurred to identify, consider, and complete business combination transactions consisting of advisory, legal, and other professional and consulting costs. Includes a |
(e) |
|
Reflects the following infrequent charges: (i) costs incurred related to potential acquisitions and other capital markets related activities totaling |
(f) |
|
Includes non-capitalizable transaction costs associated with the Business Combination. |
Key Performance Indicators
We also 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 and indicators of our business and serve as meaningful indicators of our continuous operational performance.
Annual Recurring Revenue (“ARR”)
Approximately
Run-Rate Revenue
Management also monitors run-rate revenue, which we define as ARR plus non-subscription revenue earned during the last twelve months. We believe run-rate revenue is an indicator of our total revenue growth, incorporating the non-subscription revenue that we believe is a meaningful contribution to our business as a whole. Although our non-subscription business is non-recurring, we regularly sell different advisory services to repeat customers. The amount of actual subscription and non-subscription revenue that we recognize over any 12-month period is likely to differ from run-rate revenue at the beginning of that period, sometimes significantly.
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. For our federal government clients, we consider subdivisions of the same executive branch department or independent agency (for example, divisions of a single federal department or agency) to be a single customer for purposes of calculating our account-level ARR and NRR. For our commercial clients, we consider subdivisions of the same legal entity as separate customers. Customers from acquisitions are not included in NRR until they have been part of our condensed consolidated results for 12 months. 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 growing level of our revenue base, the level of penetration within our customer base, expansion of products and features, 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/20221114005367/en/
Media
press@fiscalnote.com
Investors
IR@fiscalnote.com
Source:
FAQ
What was FiscalNote's revenue growth in Q3 2022?
What is the GAAP revenue guidance for FiscalNote in FY 2022?
When does FiscalNote expect to achieve positive adjusted EBITDA?
What is the annual recurring revenue (ARR) for FiscalNote?
What was the adjusted EBITDA loss for FiscalNote in Q3 2022?
