Good evening. My name is Holly and I will be your conference operator today. At this time, I would like to welcome everyone to the Fiscal Note Holdings Incorporated Second 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 withdraw your question, please press star followed by the number one again. Thank you. With that, I would now like to turn the call over to the company to begin the conference.

Good evening. My name is Yeojin Yoon, Investor Relations for Fiscal Note, and we are pleased you could join us. The purpose of today's call is to discuss Fiscal Note's second quarter 2026 financial results and guidance for both the full year and third quarter of 2026. Joining me with prepared remarks are Key Compton, 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 statements. 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 used 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 T. Compton.

Thank you, Yeojin, and thank you to everyone who has joined this call today. This is my first earnings call as CEO, so I'll begin with some brief context. I was first introduced to Fiscal Note seven years ago in 2019 when the company was still operating as a private business. I became an investor the following year and joined the board in 2021. So I stepped into this role with real conviction about what this company is and what it can become. I am roughly 30 days in, so rather than present a sweeping new strategy today, I want to share my observations about the opportunities I see here, as well as some of the challenges that we are working to solve. Let me begin with the quarterly financials. Q2 landed within the guidance range for revenue and below guidance for adjusted EBITDA. Revenue was approximately $19.6 million versus guidance of $19.5 to $20.5 million, which is down approximately 16% year-over-year. That year-over-year decline reflects the headwinds discussed before, including pressure in the federal and broader public sector, a cautious macro environment, and the churn we absorbed earlier in the year. Adjusted EBITDA was approximately $2.3 million, which was $200,000 below guidance. Our adjusted EBITDA margin was 11.9 percent compared with 5.1 percent in the first quarter, approximately flat from where we were a year ago. Our ARR was $74.9 million. This represents contraction of roughly $800,000 quarter over quarter and is a meaningful deceleration from the ARR decline earlier in the year. Quarterly net revenue retention improved to 98% from 89% in the first quarter. These results reflect a notable reduction in client churn, attributable to our platform consolidation and retention efforts, which are beginning to take effect. Our current focus is on continued stabilization of our core business, prioritizing capital discipline and returning to growth. We are also navigating conversations related to the recent delisting from the New York Stock Exchange. These conversations are cooperative and progressing constructively. Now, let me say a few words about my first few weeks as CEO. The foundation of this business is the high quality of our client base, combined with our unmatched ability to deliver legislative, regulatory, and policy intelligence from truly unique sources. Our combination of proprietary data and content underpins an ability to provide outcomes that no competitor can match. Our content team at Congressional Quarterly have covered U.S. federal policy for 80 years, a heritage that our longtime customers, including former and current Hill staff, regard as the definitive source of information on Capitol Hill. Additionally, our roll call business has reported from inside Washington for decades, and our journalists produce content that is consistently syndicated on a national and global basis on the data side of our business we aggregate structure and verify the corpus of rules laws and regulations that originate from all levels of government including municipal state federal and international And we deliver this data with speed, veracity, and accuracy that truly matters to our client base. These two pillars, comprehensive verified data and unsurpassed human-generated intelligence, reinforce each other. Our expert journalism and analysis provide meaning to the data, and the data provides scale and structure. Together, they produce the intelligence our customers rely on to run their businesses and do their jobs. All of this is proprietary to us. It is end-to-end, and it is not replicated by our competitors. Importantly, our products and services cannot be produced by general-purpose AI. To make the depth concrete, consider federal spending. We cover all 12 annual appropriation bills and the roughly $7 trillion of federal budget they direct, tracking them as they move through each and every markup. That tracking includes every vote and every amendment, from discussion drafts to subcommittee meetings to floor action to the President's desk. We have maintained this definitive record for decades. anchoring our analytical insights in deep and historical data and this is the kind of depth that lets customers see precisely where a decision that affects them is heading or may be heading our industry leadership inclusive of congressional quarterly and roll call drives our value proposition and is central to our ability to timely policy and regulatory intelligence for our customers. Now let me help you understand why this differentiates us and why AI makes it even more valuable. There is considerable discussion about how AI is disrupting business models that are SaaS-based. Much of this discussion is about how AI can better write code or rapidly process large amounts of publicly available information. What AI cannot do is anticipate legislation that has not yet been written. The same goes for data that has not been verified, sits behind a firewall, or requires human reporting and analysis. Fiscal Note provides new data and analysis each and every day. We continuously aggregate, synthesize, verify, and make it available, actionable, and effective. And our business model enables us to deliver this through multiple channels, including our subscription-based software platform and our AI-accessible APIs. Consider what we saw this past quarter. A major global technology company had been building its own policy data tool by scraping publicly available data. In an extended head-to-head trial, our data proved superior, delivering far more complete and far more reliable results than what they could produce on their own. The end result was that this company selected us and they are now using our policy note MCP APIs as their trusted source. As for where we see growth, we are building organically on the core assets that we own today. Our people, our culture, and a client base of more than 3,300 customers. historically the company has grown through acquisition today we are focused on a renewed growth of our core foundational operations and our unrivaled domain expertise the clearest opportunity is to serve our existing customers more deeply extending beyond new customer acquisition and supporting growth opportunities for our clients We deliver today into government affairs across both public and private sectors. Looking forward, we are exploring how our policy and regulatory expertise can extend into adjacent areas such as appropriations, government spending, and areas that directly impact our client revenues. Rules, laws, and regulations are a global phenomenon, and they are expanding, not contracting, providing durable tailwinds for our products and services. We are also continuing to lean into our API and MCP server ecosystem, the same channel through which that previously mentioned global technology customer selected us. This expansion allows organizations to embed our trusted data directly into their own AI workflows. The most advanced deployments may replace or evolve our daily use software dashboards, but most uses will augment what we already provide today. The demand for this is global, can be self-serviced, and is growing rapidly. Facilitating the deployment of AI is also a growth opportunity for our professional services, where there is a clear demand to help our customers adopt AI-driven workflows. Policy and government affairs teams are focused on policy, not building AI systems, so they are increasingly looking to us to be their trusted partner and to help them put these tools to work. And that is the opportunity. Let me close by saying that I am particularly excited to be leading such an exceptional organization of highly skilled and motivated employees. Most of my time and energy is being spent on growing the core business, and I will have a lot more to share in the quarters ahead. Thankfully, the environment we operate in, while complex, is shifting in ways that favor us. As the worlds of Washington, D.C. and Silicon Valley become increasingly entangled, our business will see more tailwinds, and the demand for our products and services will continue to grow. We own and operate highly differentiated proprietary assets. We have large and loyal customers who depend on the intelligence we provide. And we have a go-forward operating model that is sharper and more focused. This is a company with a unique heritage, strong foundation, and a clear set of opportunities, and I am consequently very confident in the path ahead. With that, I will turn it over to John to walk through the financials. John?

Thank you, Key. Good evening, and thank you for joining Fiscal Notes' second quarter 2026 conference call. For the quarter, revenue came in within our guidance range, while adjusted EBITDA was slightly below our guidance. We are also updating our full-year outlook, which I will cover in guidance. Let me start with our capital structure and then turn to the quarter's financial results. Following the delisting of our Class A common stock from the New York Stock Exchange, we are evaluating various paths, including relisting options while also working with our lenders through short-term forbearance agreements related to our debt agreements. We have engaged an external advisor to help us develop and evaluate alternatives. These discussions have been constructive. Stabilizing and strengthening our capital structure remains among our highest priorities. With that as a backdrop, let me turn to the key drivers behind our second quarter financial results. Total revenue for Q2 2026 was $19.6 million. dollars within our guidance range of 19.5 to 20.5 million dollars. Compared with the prior year period, revenue was 3.7 million dollars lower, reflecting continued softness in subscription revenue and a decline in our non-subscription revenue. Subscription revenue, which remains the cornerstone of our business, was 18.8 million dollars and accounted for approximately 96 percent of total revenue, consistent with our historical trend. Subscription revenue declined by $2.6 million, or 12%, versus the prior year. On a pro forma basis, excluding the impact of time base, which we sold on January 1st of 2025, subscription revenue declined by $2.3 million, or 11%. Non-subscription revenue was $800,000, a decline of $1.1 million, or 59%, driven primarily by lower advertising and event revenue. Turning to our key performance metrics, as of June 30th, 2026, annual recurring revenue was $74.9 million versus $85.9 million in the prior year. On an as-reported basis, ARR declined $11 million or approximately 13%. On a pro forma basis, ARR declined by $9.8 million or approximately 12%. Quarterly net revenue retention was 98%, up from 89% in the first quarter, and compared with 96% in the prior year period, reflecting a reduction in our client churn as our platform consolidation and retention efforts take hold. Looking at expenses in more detail, Q2 2026 cost of revenue decreased by $1 million, or 20% versus prior year. Research and development decreased by $700,000, or 30%, and sales and marketing decreased by $2.2 million, or 33%. Editorial remained flat at $3.4 million, and general and administrative decreased by $2.1 million, or 19%. On a gap basis, total operating expense increased by $13 million, or 42%, versus prior year, due primarily to the non-cash goodwill impairment charge recorded in the second quarter, excluding the goodwill impairment, amortization, stock-based compensation, and the impact of divestitures, transaction-related costs, severance, and other non-cash charges. Operating expenses declined by $2.4 million, or 12%. Gross margin in Q2 2026 was 80% on a gap basis compared with 79%. in the prior year, and adjusted gross margin was 88% compared with 86% in the prior year, both reflecting our continued cost discipline. The gap net loss for the second quarter was $27.8 million, which includes a non-cash goodwill impairment charge of $19.1 million. Excluding this charge, gap net loss was approximately $8.7 million. Adjusted EBITDA was $2.3 million. approximately $200,000 below our guidance of approximately $2.5 million. Adjusted EBITDA margin was 11.9% compared with 5.1% in the first quarter and approximately flat with the 12% adjusted EBITDA margin in the prior year period. Our cost actions continue to benefit our operating structure, including a net reduction of approximately 27 full-time equivalent employees during the quarter, bringing the total headcount to approximately 343 as of June 30, 2026. Finally, let me speak to guidance. We have updated our full year 2026 forecast and issued our forecast for the third quarter. We are lowering our full year forecast to revenue of $75 to $78 million, down from our prior guidance of $80 to $83 million, and adjusted EBITDA of $9 to $11 million, down from our prior guidance of $14 to $16 million. This revision reflects continued softness in the federal and broader public sector, a cautious private sector spending environment, and lower non-subscription revenue, partially offset by continued cost discipline and operating efficiencies. For the third quarter of 2026, we expect revenue of $19 to $20 million and adjusted EBITDA of approximately $3.5 million, with the benefit of first half restructuring actions weighted towards the second half. Overall, we remain focused on disciplined cost management, stabilizing the core business, and managing our capital structure as we work to return the company to growth. That concludes my prepared remarks. I'll turn it over to the operator to begin the question and answer session. Operator.

At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Again, if you would like to ask a question, press star, then the number one on your telephone keypad. There are no further questions at this time. This concludes today's conference call. Thank you for your participation. You may now disconnect. Have a good evening.