FiscalNote Holdings, Inc.

Good afternoon, my name is Janine and I will be your conference operator for today. At this time, I would like to welcome everyone to Fiscal Note Holdings Incorporated first quarter 2026 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to answer a question, please press star 1 again. And with that, I will now hand the call over to the company to begin the conference.

Good evening. My name is Yeojin Yoon, Investor Relations for Fiscal Notes, and we are pleased you can join us this evening. The purpose of today's call is to discuss Fiscal Notes first quarter 2026 financial results and guidance for both the full year and second quarter of 2026. Joining me with prepared remarks are Josh Resnick, Chief Executive Officer and President, and John Slabaugh, Chief Financial Officer and Chief Investment Officer. Other members of the senior management team will be available as needed during the Q&A session that will follow. Please note, today's press release is available on the investor relations portion of the company website. In terms of housekeeping, please take note of the following. During this call, we may make certain statements related to our business that are forward-looking statements under federal securities laws. These statements are not guarantees of future performance, but rather are subject to a variety of risks and uncertainties. Our actual results could differ materially from expectations reflected in any forward-looking statement. For a discussion of the material risks and important factors that could affect our actual results, as well as the risks and other important factors discussed in today's earnings release, please refer to our SEC filings, which are available either on our company website or the Securities and Exchange Commission's EDGAR system. Additionally, non-GAAP financial measures will be discussed on this conference call. Please refer to the tables in our earnings release or the updated version of the corporate overview presentation for a reconciliation of these measures to their most directly comparable GAAP financial measure. Finally, we use key performance indicators, or KPIs, in evaluating the performance of our business. These include annual recurring revenue, or ARR, and net revenue retention, or NRR. With that, I'd like to turn the call over to Fiscal Notes CEO and President Josh Resnick.

Thank you, Yojin, and thanks to everyone for joining us today. I'm glad to be here to discuss Fiscal Note's first quarter 2026 results and to provide an update on where we stand strategically as we move through what I believe is a genuinely exciting time for this company. We are a more profitable company than we were a year ago. We are on a defined path to positive free cash flow, and we are entering new markets with robust tailwinds. The market conditions around us, AI adoption, agentic enterprise workflows, the emergence of prediction markets, are moving in our direction, and I'm confident in our ability to take advantage of them. With that context, let me walk you through the quarter. On the financials, Q1 gap revenue came in at 20 million and adjusted EBITDA at 1 million, both consistent with our guidance. The Q1 ARR of 75.7 million reflects dynamics that we highlighted in March, along with some procurement delays in the public sector that pushed some renewals to Q2. Neither dynamic is changing our outlook, and we are reaffirming our full-year revenue guidance. What's worth highlighting is the profitability trajectory. You should expect to see a rapid step-up in adjusted EBITDA in the second half of this year, approximately doubling our adjusted EBITDA margin profile compared to the same period in 2025. As our restructuring fully phases in, then we are reaffirming our adjusted EBITDA guidance for 2026. For several years, we have worked to improve our adjusted EBITDA profile by sharpening our focus, instilling operational discipline, and cutting spending that did not serve our core mission. In 2026, we are accelerating that trajectory significantly. As a workforce transformation and operational restructuring we announced in March, much of it enabled by broad AI deployments. are designed to produce structural improvements in our operating leverage without sacrificing the opportunity for growth. Equally important is that these structural changes are a springboard to positive free cash flow. Excluding one-time restructuring costs, we anticipate generating positive free cash flow for the current 12-month period, starting with the current quarter and ending March 31, 2027. and we expect to remain free cash flow positive on a trailing 12-month basis thereafter. This will be a first in Fiscal Note's history, and that is not a small thing. It reflects years of deliberate work to focus this business and improve operations, and it marks a genuine turning point and the opening of a promising new chapter. Earlier this year, we completed the migration of our customers off of our largest legacy platform onto PolicyNote. a major milestone in our platform consolidation strategy. Early results are validating the approach. Usage indicators continue to be highly encouraging. Across all key user actions, PolicyNote continues to outperform the legacy fiscal note platform in terms of both adoption and frequency. In addition, for the cohort of contracts that have come up for renewal post-migration, PolicyNote net retention performance continues to exceed our legacy platforms, which underscores the directional improvement we're seeing. The sample set is still limited, but the signal is the right one. Looking ahead, we will continue building on the more than 35 major feature releases we delivered in 2025, focusing especially on agentic workflows and leveraging our proprietary trusted data in the PolicyNote platform. What makes PolicyNote different is not just that it's AI native. It's that the AI is grounded in a set of data and insights that no one else has, including proprietary analysis from our teams at CQ who have been covering U.S. federal policy for 80 years. The depth and quality of our information is simply unmatched, including analysis of the more than $7 trillion flowing through the federal budget and its downstream impacts on U.S. and global policy. When our customers use PolicyNote, they're not just accessing public data through an AI interface. They're accessing decades of expert judgment, structured and made actionable in ways the general purpose AI platform simply cannot replicate. Going forward, customer expectations are changing rapidly, opening doors for us to meet their needs in better and more sophisticated ways. Customers will increasingly expect platforms that understand their specific world and work proactively on their behalf, not just access to data, but intelligent action on their priorities. That's the direction of our investment in PolicyNote, focused on two areas in particular. First, personalized and configurable agentic workflows tied to our data. We've already begun this work within PolicyNote. and it's where a significant portion of our forward product investment will go. The goal is to give each customer an experience that's shaped by their specific policy priorities, stakeholders, and decision workflows. Not a generic feed of information, but a system that learns and acts on their behalf. Second, proactive intelligence, informed by what we see across our platform at scale. With thousands of customers across the private sector, public sector, and NGO community. We develop a unique understanding of how policy issues are moving and what is capturing attention across the market. We can use that aggregate view without ever compromising the confidentiality of any individual customer to service emerging issues and signal shifts that a customer might not yet know to look for. The platform gets smarter the more it's used, and our customers benefit from that collective signal. Both of these investments reflect the same underlying principle. The more deeply our intelligence is woven into how a customer operates, the more value we deliver. And that principle extends well beyond our own platform. Policy note is where customers come to us. But increasingly, customers want to bring our intelligence to them, embedded directly into their own environments, workflows, and AI agents. This is an exciting opportunity, and we're moving quickly to capture it. In March, we launched an expanded PolicyNote API with native support for the Model Context Protocol, MCP, an emerging standard that has achieved rapid adoption across the agentic AI ecosystem. This enables platforms built on Cloud, OpenAI, Gemini, and Microsoft to incorporate Fiscal Note's legislative, regulatory, and stakeholder intelligence as a trusted, embedded, data layer. And in April, we extended the API with district matching functionality, giving advocacy organizations instant access to federal, state, and local legislative district data, and enabling grassroots civic engagement at a scale that previously required significant custom development. Since launch, we're seeing demand from a broad spectrum of customers, ranging from large enterprises ready to make substantial commitments to global self-serve customers beginning with free tests. To the latter point, this is the beginning of a true product-led growth motion, as more than one-third of website signups for the API are from outside the U.S., reflecting organic global demand for this data that we are now able to serve at a scale our sales team alone could never reach. We plan to continue to expand the scope of datasets available through the API, and over the course of this year, We will also offer alternative pricing options, including consumption-based pricing that we expect will serve our customers' needs and expectations. Significantly, as customers leverage our API to combine our data with their own internal data, such as their operations, their customer base, and their market intelligence, as well as with other third-party data sets, our insights become far more valuable. Think of our data the way you think about GPS signals. Precise, authoritative, and valuable on their own, but transformative once they're combined with real-time context. A GPS coordinate means one thing in isolation, but combined with traffic patterns, your schedule, and local conditions, it becomes the intelligence that gets you where you need to go. Our policy data works the same way. Once embedded in a customer's own environment, it doesn't just inform. It drives decisions and becomes more central to how they operate. We expect that dynamic to drive deeper engagement and higher average contract values over time. The economics here are attractive. Incremental cost of data delivery via our APIs is low. The infrastructure is already built, and the addressable market expands significantly when customers can access our intelligence through a product-led motion and use it with any platform, any workflow, any agent. The upside is substantial. and the investment required to capture it is not. In February, we announced our strategic entry into political prediction markets. This is not a tangential bet. It's a natural adjacency that leverages fiscal note's unique combination of authoritative data and expert analysis to occupy a defining role at the intersection of policy intelligence and outcome-based forecasting. Our role in this market is not to build or operate an exchange. It's to be the trusted intelligence layer that makes these markets more accurate, more credible, and more useful to participants. Our structured legislative datasets, decades of domain expertise, a deep understanding of how policy outcomes actually develop give us a foundation for more precise contract specification and more defensible resolution frameworks, advantages that new entrants will find very difficult to replicate. In March, we entered a strategic partnership with Goodwill Studios to develop and monetize political prediction content and interactive products, and we expect to launch an initial offering mid-year. These products are distinct from prediction markets themselves, but are designed to engage users in the same ecosystem through formats that may include gaming, content, and interactive forecasting. Unlike exchange-operated prediction markets, They do not carry the same regulatory requirements, and they will create new engagement opportunities for our thousands of existing customers as well as new users, opening monetization models that are additive to our existing lines of business. The prediction market opportunity is attractive because the primary inputs are data assets, analytical models, and institutional relationships already exist. We're not making a capital-intensive bet. We're applying assets that we have already built to a market that is growing rapidly around us. The long-term prize here is significant. Political and policy risk is one of the last major categories of risk that has not yet been systematically priced by financial markets, and that is changing fast. And as this ecosystem matures, our role as a trusted intelligence layer should become increasingly valuable. I also want to address fiscal notes listing situation directly. Trading of our Class A common stock was suspended from the New York Stock Exchange on March 25th. The delisting itself has had no impact on our day-to-day operations or our ability to serve customers. But restoring our listing on the national exchange remains a clear priority, and we're actively working toward that goal. In the interim, we have applied to uplist to the OTCQB venture market. an important intermediate step that carries higher disclosure and governance standards and enables participation from a broader subset of institutional investors. We expect this transition in the near term, subject to OTC markets approval. In conclusion, Fiscal Note today is a fundamentally transformed organization. We're focused on our mission, more profitable in our operations, and strategically positioned to compete and grow in new large markets with powerful tailwinds. When I look at the assets we've built, the opportunities in front of us through APIs, product-led growth, and prediction, and the trajectory of our profitability transformation, I'm confident in our strategy and in the strength of this team. We expect to be free cash flow positive on a next 12-month basis and to remain so going forward. We expect the API and MCP business to become a growing contributor as adoption expands. And we expect our role in the political prediction market ecosystem to become increasingly valuable as the market matures. Taken together, this is a company that is more focused, more profitable, and better positioned than it was a year ago. And we're moving with urgency to capture the opportunity in front of us. With that, I'll turn it over to John to walk through the financials in more detail. John?