diff --git a/backend/windmill-common/src/flows.rs b/backend/windmill-common/src/flows.rs
index 58a69c8fb9..093d4ccdad 100644
--- a/backend/windmill-common/src/flows.rs
+++ b/backend/windmill-common/src/flows.rs
@@ -196,6 +196,13 @@ pub struct FlowValue {
     pub notes: Option<Vec<FlowNote>>,
 }
 
+#[derive(Deserialize, Serialize, Debug, Clone)]
+#[serde(rename_all = "lowercase")]
+pub enum FlowNoteType {
+    Free,
+    Group,
+}
+
 #[derive(Deserialize, Serialize, Debug, Clone)]
 pub struct FlowNote {
     pub id: String,
@@ -203,6 +210,12 @@ pub struct FlowNote {
     pub position: FlowNotePosition,
     pub size: FlowNoteSize,
     pub color: String,
+    #[serde(rename = "type")]
+    pub note_type: FlowNoteType,
+    #[serde(default)]
+    pub locked: bool,
+    #[serde(skip_serializing_if = "Option::is_none")]
+    pub contained_node_ids: Option<Vec<String>>,
 }
 
 #[derive(Deserialize, Serialize, Debug, Clone)]
diff --git a/frontend/src/lib/components/graph/FlowGraphV2.svelte b/frontend/src/lib/components/graph/FlowGraphV2.svelte
index 7320b81f9a..acd4f04161 100644
--- a/frontend/src/lib/components/graph/FlowGraphV2.svelte
+++ b/frontend/src/lib/components/graph/FlowGraphV2.svelte
@@ -221,6 +221,9 @@
 	// Initialize note manager (now stateless)
 	const noteManager = new NoteManager()
 
+	// Runtime text height tracking for notes (not stored in FlowNote)
+	let noteTextHeights = $state<Record<string, number>>({})
+
 	// Selection manager - create one if not provided
 	let actualSelectionManager = selectionManager || new SelectionManager()
 
@@ -339,7 +342,8 @@
 			const groupNoteHeight = noteManager.getGroupNoteHeightForNode(
 				notes ?? [],
 				node.id,
-				initialNodes
+				initialNodes,
+				noteTextHeights
 			)
 			if (groupNoteHeight > 0) {
 				spacingMap.set(node.id, groupNoteHeight)
@@ -527,9 +531,17 @@
 
 		nodes = [
 			...finalNodes,
-			...noteManager.convertToNodes(notes ?? [], finalNodes, (newNotes) => {
-				notes = newNotes
-			})
+			...noteManager.convertToNodes(
+				notes ?? [],
+				finalNodes,
+				noteTextHeights,
+				(newNotes) => {
+					notes = newNotes
+				},
+				(noteId, height) => {
+					noteTextHeights[noteId] = height
+				}
+			)
 		]
 		edges = [
 			...(assetNodesResult?.newAssetEdges ?? []),
@@ -708,6 +720,7 @@
 	}
 
 	$inspect('dbg notes & nodes', notes, nodes)
+	$inspect('dbg noteTextHeights', noteTextHeights)
 </script>
 
 {#if insertable}
diff --git a/frontend/src/lib/components/graph/SelectionBoundingBox.svelte b/frontend/src/lib/components/graph/SelectionBoundingBox.svelte
index 32e3775fa1..ef0e708913 100644
--- a/frontend/src/lib/components/graph/SelectionBoundingBox.svelte
+++ b/frontend/src/lib/components/graph/SelectionBoundingBox.svelte
@@ -1,7 +1,7 @@
 <script lang="ts">
 	import type { Node } from '@xyflow/svelte'
 	import { useSvelteFlow } from '@xyflow/svelte'
-	import { NODE } from './util'
+	import { calculateNodesBounds } from './util'
 
 	interface Props {
 		selectedNodes: Node[]
@@ -17,17 +17,7 @@
 		}
 
 		// Calculate flow coordinates bounds
-		let minX = Infinity
-		let maxX = -Infinity
-		let minY = Infinity
-		let maxY = -Infinity
-
-		selectedNodes.forEach(node => {
-			minX = Math.min(minX, node.position.x)
-			maxX = Math.max(maxX, node.position.x + NODE.width)
-			minY = Math.min(minY, node.position.y)
-			maxY = Math.max(maxY, node.position.y + NODE.height)
-		})
+		const { minX, minY, maxX, maxY } = calculateNodesBounds(selectedNodes)
 
 		// Add padding in flow coordinates
 		const flowBounds = {
@@ -78,8 +68,10 @@
 			z-index: 10;
 		"
 	>
-		<div class="absolute -top-6 left-0 text-xs text-accent font-medium bg-surface px-2 py-1 rounded shadow pointer-events-none">
+		<div
+			class="absolute -top-6 left-0 text-xs text-accent font-medium bg-surface px-2 py-1 rounded shadow pointer-events-none"
+		>
 			{selectedNodes.length} nodes selected
 		</div>
 	</div>
-{/if}
\ No newline at end of file
+{/if}
diff --git a/frontend/src/lib/components/graph/groupNoteUtils.ts b/frontend/src/lib/components/graph/groupNoteUtils.ts
index 0a3ed7e1d7..d037d623e8 100644
--- a/frontend/src/lib/components/graph/groupNoteUtils.ts
+++ b/frontend/src/lib/components/graph/groupNoteUtils.ts
@@ -9,33 +9,6 @@ export interface GroupNoteBounds {
 	height: number
 }
 
-// Extended types for group notes
-export interface RegularNote extends FlowNote {
-	type: 'regular'
-}
-
-export interface GroupNote extends Omit<FlowNote, 'position' | 'size'> {
-	type: 'group'
-	containedNodeIds: string[]
-	// position and size will be calculated dynamically
-}
-
-export type ExtendedFlowNote = RegularNote | GroupNote
-
-/**
- * Type guard to check if a note is a group note
- */
-export function isGroupNote(note: ExtendedFlowNote): note is GroupNote {
-	return note.type === 'group'
-}
-
-/**
- * Type guard to check if a note is a regular note
- */
-export function isRegularNote(note: ExtendedFlowNote): note is RegularNote {
-	return note.type === 'regular'
-}
-
 /**
  * Computes the bounding box that wraps all contained nodes with padding
  * Uses the same calculation logic as SelectionBoundingBox for consistency
@@ -90,116 +63,19 @@ export function getTopMostNode(containedNodeIds: string[], nodes: Node[]): Node
 	)
 }
 
-/**
- * Calculates the dynamic bounds for a group note
- */
-export function calculateGroupNoteBounds(
-	groupNote: GroupNote,
-	nodes: Node[],
-	textHeight: number = 60
-): { position: { x: number; y: number }; size: { width: number; height: number } } {
-	const bounds = computeGroupNoteBounds(groupNote.containedNodeIds, nodes, textHeight)
-
-	return {
-		position: {
-			x: bounds.x,
-			y: bounds.y
-		},
-		size: {
-			width: bounds.width,
-			height: bounds.height
-		}
-	}
-}
-
-/**
- * Creates a new group note with contained node IDs instead of fixed bounds
- */
-export function createGroupNote(
-	selectedNodeIds: string[],
-	color: string = 'yellow'
-): GroupNote {
-	if (selectedNodeIds.length === 0) {
-		throw new Error('No nodes selected for group note')
-	}
-
-	return {
-		id: `group-note-${Date.now()}`,
-		type: 'group',
-		text: `Group note for ${selectedNodeIds.length} nodes`,
-		containedNodeIds: [...selectedNodeIds], // Copy array to avoid mutation
-		color
-	}
-}
-
-/**
- * Adds a node to an existing group note
- */
-export function addNodeToGroup(groupNote: GroupNote, nodeId: string): GroupNote {
-	if (groupNote.containedNodeIds.includes(nodeId)) {
-		return groupNote // Node already in group
-	}
-
-	return {
-		...groupNote,
-		containedNodeIds: [...groupNote.containedNodeIds, nodeId],
-		text: `Group note for ${groupNote.containedNodeIds.length + 1} nodes`
-	}
-}
-
-/**
- * Removes a node from an existing group note
- */
-export function removeNodeFromGroup(groupNote: GroupNote, nodeId: string): GroupNote | null {
-	const updatedNodeIds = groupNote.containedNodeIds.filter(id => id !== nodeId)
-
-	if (updatedNodeIds.length === 0) {
-		return null // Group note should be deleted if no nodes remain
-	}
-
-	return {
-		...groupNote,
-		containedNodeIds: updatedNodeIds,
-		text: `Group note for ${updatedNodeIds.length} nodes`
-	}
-}
-
 /**
  * Validates that all contained nodes exist in the provided nodes array
  */
-export function validateGroupNote(groupNote: GroupNote, nodes: Node[]): GroupNote {
+export function validateGroupNote(note: FlowNote, nodes: Node[]): FlowNote {
+	if (note.type !== 'group' || !note.contained_node_ids) {
+		return note
+	}
+
 	const validNodeIds = nodes.map(node => node.id)
-	const validContainedNodeIds = groupNote.containedNodeIds.filter(id => validNodeIds.includes(id))
+	const validContainedNodeIds = note.contained_node_ids.filter(id => validNodeIds.includes(id))
 
 	return {
-		...groupNote,
-		containedNodeIds: validContainedNodeIds,
-		text: `Group note for ${validContainedNodeIds.length} nodes`
-	}
-}
-
-/**
- * Converts a legacy FlowNote to the new ExtendedFlowNote format
- */
-export function convertToExtendedNote(note: FlowNote & { isGroupNote?: boolean; containedNodeIds?: string[] }): ExtendedFlowNote {
-	if (note.isGroupNote && note.containedNodeIds) {
-		// Convert legacy group note
-		return {
-			id: note.id,
-			type: 'group',
-			text: note.text,
-			color: note.color,
-			containedNodeIds: note.containedNodeIds
-		}
-	} else {
-		// Convert regular note
-		return {
-			id: note.id,
-			type: 'regular',
-			text: note.text,
-			position: note.position,
-			size: note.size,
-			color: note.color
-		}
+		...note,
+		contained_node_ids: validContainedNodeIds
 	}
 }
\ No newline at end of file
diff --git a/frontend/src/lib/components/graph/noteManager.svelte.ts b/frontend/src/lib/components/graph/noteManager.svelte.ts
index 0063078252..5f9b886b09 100644
--- a/frontend/src/lib/components/graph/noteManager.svelte.ts
+++ b/frontend/src/lib/components/graph/noteManager.svelte.ts
@@ -1,12 +1,7 @@
 import type { FlowNote } from '$lib/gen'
 import type { Node } from '@xyflow/svelte'
 import type { NoteColor } from './noteColors'
-import {
-	createGroupNote,
-	isGroupNote,
-	calculateGroupNoteBounds,
-	convertToExtendedNote
-} from './groupNoteUtils'
+import { calculateNodesBounds } from './util'
 
 type NodeDep = { id: string; parentIds?: string[]; offset?: number }
 type NodePos = { position: { x: number; y: number } }
@@ -29,7 +24,9 @@ export class NoteManager {
 				text: newNoteFromTool.data?.text || '',
 				position: newNoteFromTool.position,
 				size: { width: newNoteFromTool.width || 300, height: newNoteFromTool.height || 100 },
-				color: newNoteFromTool.data?.color || 'yellow'
+				color: newNoteFromTool.data?.color || 'yellow',
+				type: 'free',
+				locked: false
 			}
 			return [...notes, newNote]
 		}
@@ -83,7 +80,7 @@ export class NoteManager {
 	 * Update note lock state
 	 */
 	updateLock(notes: FlowNote[], noteId: string, locked: boolean): FlowNote[] {
-		return notes.map((note) => (note.id === noteId ? ({ ...note, locked } as any) : note))
+		return notes.map((note) => (note.id === noteId ? { ...note, locked } : note))
 	}
 
 	/**
@@ -92,46 +89,70 @@ export class NoteManager {
 	createGroupNote(notes: FlowNote[], selectedNodeIds: string[]): FlowNote[] {
 		if (selectedNodeIds.length === 0) return notes
 
-		try {
-			const groupNote = createGroupNote(selectedNodeIds)
-			// For now, we need to store group notes as FlowNote format with additional properties
-			// We'll add dummy position/size that will be calculated dynamically in convertNotesToNodes
-			const newGroupNote = {
-				...groupNote,
-				position: { x: 0, y: 0 }, // Dummy values, will be calculated dynamically
-				size: { width: 300, height: 100 }, // Dummy values, will be calculated dynamically
-				locked: false, // Group notes are not locked, just not movable/resizable
-				isGroupNote: true,
-				containedNodeIds: groupNote.containedNodeIds,
-				type: 'group'
-			} as FlowNote & {
-				locked: boolean
-				isGroupNote: boolean
-				containedNodeIds: string[]
-				type: string
+		const newGroupNote: FlowNote = {
+			id: `group-${Date.now()}`,
+			text: '',
+			position: { x: 0, y: 0 }, // Will be calculated dynamically
+			size: { width: 300, height: 100 }, // Will be calculated dynamically
+			color: 'gray',
+			type: 'group',
+			locked: false,
+			contained_node_ids: selectedNodeIds
+		}
+		return [...notes, newGroupNote]
+	}
+
+	/**
+	 * Calculate position and size for group notes based on contained nodes
+	 */
+	calculateGroupNoteLayout(
+		note: FlowNote,
+		nodes: Node[],
+		textHeight: number = 60
+	): { position: { x: number; y: number }; size: { width: number; height: number } } {
+		if (note.type !== 'group' || !note.contained_node_ids?.length) {
+			return { position: note.position, size: note.size }
+		}
+
+		const containedNodes = nodes.filter((node) => note.contained_node_ids?.includes(node.id))
+
+		if (containedNodes.length === 0) {
+			return { position: note.position, size: note.size }
+		}
+
+		// Find bounds of all contained nodes
+		const bounds = calculateNodesBounds(containedNodes)
+
+		const padding = 20
+		return {
+			position: {
+				x: bounds.minX - padding,
+				y: bounds.minY - textHeight - padding
+			},
+			size: {
+				width: bounds.maxX - bounds.minX + 2 * padding,
+				height: bounds.maxY - bounds.minY + textHeight + 2 * padding
 			}
-			return [...notes, newGroupNote]
-		} catch (error) {
-			console.error('Failed to create group note:', error)
-			return notes
 		}
 	}
 
 	/**
 	 * Helper function to determine if a node needs additional spacing above it for group notes.
-	 * Returns the height needed above the node.
+	 * Returns the height needed above the node (text height + padding).
 	 */
 	getGroupNoteHeightForNode(
 		notes: FlowNote[],
 		nodeId: string,
-		layoutedNodes: (NodeDep & NodePos)[]
+		layoutedNodes: (NodeDep & NodePos)[],
+		noteTextHeights: Record<string, number>
 	): number {
+		const PADDING = 20 // Fixed padding above and below the note text
+
 		for (const note of notes) {
-			const extendedNote = convertToExtendedNote(note as any)
-			if (isGroupNote(extendedNote) && extendedNote.containedNodeIds.includes(nodeId)) {
+			if (note.type === 'group' && note.contained_node_ids?.includes(nodeId)) {
 				// Find the topmost node in this group by Y position
 				const containedNodes = layoutedNodes.filter((node) =>
-					extendedNote.containedNodeIds.includes(node.id)
+					note.contained_node_ids?.includes(node.id)
 				)
 
 				if (containedNodes.length > 0) {
@@ -141,7 +162,9 @@ export class NoteManager {
 
 					// If this is the topmost node in the group, return the needed height
 					if (topmostNode.id === nodeId) {
-						return 60 // Height for group note text
+						// Use actual text height if available, otherwise default to 60
+						const textHeight = noteTextHeights[note.id] || 60
+						return textHeight + PADDING
 					}
 				}
 			}
@@ -149,98 +172,77 @@ export class NoteManager {
 		return 0
 	}
 
+	/**
+	 * Create common data object for note nodes
+	 */
+	private createNoteData(
+		note: FlowNote,
+		notes: FlowNote[],
+		onNotesChange: (notes: FlowNote[]) => void,
+		onTextHeightChange: (noteId: string, height: number) => void,
+		isGroupNote: boolean
+	) {
+		return {
+			text: note.text,
+			color: note.color,
+			locked: note.locked || false,
+			isGroupNote,
+			...(isGroupNote && { containedNodeIds: note.contained_node_ids || [] }),
+			onUpdate: (text: string) => {
+				const newNotes = this.updateText(notes, note.id, text)
+				onNotesChange(newNotes)
+			},
+			onDelete: () => {
+				const newNotes = this.delete(notes, note.id)
+				onNotesChange(newNotes)
+			},
+			onColorChange: (color: NoteColor) => {
+				const newNotes = this.updateColor(notes, note.id, color)
+				onNotesChange(newNotes)
+			},
+			onSizeChange: (size: { width: number; height: number }) => {
+				const newNotes = this.updateSize(notes, note.id, size)
+				onNotesChange(newNotes)
+			},
+			onLockToggle: (locked: boolean) => {
+				const newNotes = this.updateLock(notes, note.id, locked)
+				onNotesChange(newNotes)
+			},
+			onTextHeightChange: (textHeight: number) => {
+				onTextHeightChange(note.id, textHeight)
+			}
+		}
+	}
+
 	/**
 	 * Convert notes to SvelteFlow nodes
 	 */
 	convertToNodes(
 		notes: FlowNote[],
 		currentNodes: Node[],
-		onNotesChange: (notes: FlowNote[]) => void
+		textHeights: Record<string, number>,
+		onNotesChange: (notes: FlowNote[]) => void,
+		onTextHeightChange: (noteId: string, height: number) => void
 	): Node[] {
 		return notes.map((note) => {
-			const extendedNote = convertToExtendedNote(note as any)
+			const isGroupNote = note.type === 'group'
 
-			if (isGroupNote(extendedNote)) {
-				// Calculate dynamic bounds for group notes
-				const bounds = calculateGroupNoteBounds(extendedNote, currentNodes, 60)
+			// Calculate position and size based on note type
+			const { position, size } = isGroupNote
+				? this.calculateGroupNoteLayout(note, currentNodes, textHeights[note.id] || 60)
+				: { position: note.position, size: note.size }
 
-				return {
-					id: extendedNote.id,
-					type: 'note',
-					position: bounds.position,
-					data: {
-						text: extendedNote.text,
-						color: extendedNote.color,
-						locked: false, // Group notes are not locked - they can be edited
-						isGroupNote: true,
-						containedNodeIds: extendedNote.containedNodeIds,
-						onUpdate: (text: string) => {
-							const newNotes = this.updateText(notes, extendedNote.id, text)
-							onNotesChange(newNotes)
-						},
-						onDelete: () => {
-							const newNotes = this.delete(notes, extendedNote.id)
-							onNotesChange(newNotes)
-						},
-						onColorChange: (color: NoteColor) => {
-							const newNotes = this.updateColor(notes, extendedNote.id, color)
-							onNotesChange(newNotes)
-						},
-						onSizeChange: (size: { width: number; height: number }) => {
-							const newNotes = this.updateSize(notes, extendedNote.id, size)
-							onNotesChange(newNotes)
-						},
-						onLockToggle: (locked: boolean) => {
-							const newNotes = this.updateLock(notes, extendedNote.id, locked)
-							onNotesChange(newNotes)
-						}
-					},
-					style: `width: ${bounds.size.width}px; height: ${bounds.size.height}px;`,
-					width: bounds.size.width,
-					height: bounds.size.height,
-					zIndex: -2000,
-					draggable: false, // Group notes cannot be moved - position is determined by contained nodes
-					selectable: true
-				}
-			} else {
-				// Handle regular notes
-				return {
-					id: extendedNote.id,
-					type: 'note',
-					position: extendedNote.position,
-					data: {
-						text: extendedNote.text,
-						color: extendedNote.color,
-						locked: (note as any).locked || false,
-						isGroupNote: false,
-						onUpdate: (text: string) => {
-							const newNotes = this.updateText(notes, extendedNote.id, text)
-							onNotesChange(newNotes)
-						},
-						onDelete: () => {
-							const newNotes = this.delete(notes, extendedNote.id)
-							onNotesChange(newNotes)
-						},
-						onColorChange: (color: NoteColor) => {
-							const newNotes = this.updateColor(notes, extendedNote.id, color)
-							onNotesChange(newNotes)
-						},
-						onSizeChange: (size: { width: number; height: number }) => {
-							const newNotes = this.updateSize(notes, extendedNote.id, size)
-							onNotesChange(newNotes)
-						},
-						onLockToggle: (locked: boolean) => {
-							const newNotes = this.updateLock(notes, extendedNote.id, locked)
-							onNotesChange(newNotes)
-						}
-					},
-					style: `width: ${extendedNote.size.width}px; height: ${extendedNote.size.height}px;`,
-					width: extendedNote.size.width,
-					height: extendedNote.size.height,
-					zIndex: -2000,
-					draggable: !(note as any).locked, // Don't allow dragging locked notes
-					selectable: true
-				}
+			return {
+				id: note.id,
+				type: 'note',
+				position,
+				data: this.createNoteData(note, notes, onNotesChange, onTextHeightChange, isGroupNote),
+				style: `width: ${size.width}px; height: ${size.height}px;`,
+				width: size.width,
+				height: size.height,
+				zIndex: -2000,
+				draggable: isGroupNote ? false : !note.locked,
+				selectable: true
 			}
 		})
 	}
diff --git a/frontend/src/lib/components/graph/renderers/nodes/NoteNode.svelte b/frontend/src/lib/components/graph/renderers/nodes/NoteNode.svelte
index d003939abf..253d8f805b 100644
--- a/frontend/src/lib/components/graph/renderers/nodes/NoteNode.svelte
+++ b/frontend/src/lib/components/graph/renderers/nodes/NoteNode.svelte
@@ -19,6 +19,7 @@
 			onColorChange?: (color: NoteColor) => void
 			onSizeChange?: (size: { width: number; height: number }) => void
 			onLockToggle?: (locked: boolean) => void
+			onTextHeightChange?: (height: number) => void
 		}
 		selected?: boolean
 		dragging?: boolean
@@ -27,57 +28,14 @@
 	let { data, selected = false, dragging = false }: Props = $props()
 
 	let textareaElement: HTMLTextAreaElement | undefined = $state(undefined)
-	let contentElement: HTMLDivElement | undefined = $state(undefined)
 	let editMode = $state(false)
 	let hovering = $state(false)
 	let textContent = $state(data.text ?? '')
-	let contentHeight = $state(0)
-
-	function calculateContentHeight() {
-		let calculatedHeight = 0
-		let currentWidth = 300 // Default width
-
-		if (editMode && textareaElement) {
-			// For textarea in edit mode
-			textareaElement.style.height = 'auto'
-			const scrollHeight = textareaElement.scrollHeight
-			const minHeight = 60 // Minimum height in pixels
-			const maxHeight = 400 // Maximum height in pixels
-			calculatedHeight = Math.max(minHeight, Math.min(maxHeight, scrollHeight))
-			textareaElement.style.height = `${calculatedHeight}px`
-
-			// Get current width from parent element
-			const parentElement = textareaElement.closest('.svelte-flow__node')
-			if (parentElement) {
-				currentWidth = parentElement.getBoundingClientRect().width
-			}
-		} else if (!editMode && contentElement) {
-			// For content in display mode
-			const scrollHeight = contentElement.scrollHeight
-			const minHeight = 60
-			const maxHeight = 400
-			calculatedHeight = Math.max(minHeight, Math.min(maxHeight, scrollHeight))
-
-			// Get current width from parent element
-			const parentElement = contentElement.closest('.svelte-flow__node')
-			if (parentElement) {
-				currentWidth = parentElement.getBoundingClientRect().width
-			}
-		}
-
-		contentHeight = calculatedHeight
-
-		// Update note size if handler is available
-		if (data.onSizeChange && contentHeight > 0) {
-			data.onSizeChange({ width: currentWidth, height: contentHeight + 40 }) // Add extra padding for note UI
-		}
-	}
+	let containerHeight = $state(0)
 
 	function handleTextSave() {
 		// Only update parent when done editing
 		data.onUpdate?.(textContent)
-		// Recalculate height after saving
-		setTimeout(calculateContentHeight, 0)
 	}
 
 	function handleDelete(event?: Event) {
@@ -101,7 +59,6 @@
 	const colorConfig = $derived(NOTE_COLORS[data.color] || NOTE_COLORS[DEFAULT_NOTE_COLOR])
 
 	function handleDoubleClick(event: Event) {
-		console.log('Double click detected', { editMode, selected, dragging })
 		event.preventDefault()
 		event.stopPropagation()
 
@@ -115,7 +72,6 @@
 		// Focus the textarea after a short delay to ensure it's rendered
 		setTimeout(() => {
 			textareaElement?.focus()
-			calculateContentHeight()
 		}, 0)
 	}
 
@@ -135,18 +91,10 @@
 		}
 	})
 
-	// Auto-resize when content changes
+	// Track content height and notify parent
 	$effect(() => {
-		textContent // Track textContent changes
-		if (editMode || contentElement) {
-			setTimeout(calculateContentHeight, 0)
-		}
-	})
-
-	// Calculate initial content height
-	$effect(() => {
-		if (data.text && !editMode && contentElement) {
-			setTimeout(calculateContentHeight, 0)
+		if (containerHeight > 0) {
+			data.onTextHeightChange?.(containerHeight)
 		}
 	})
 
@@ -239,34 +187,40 @@
 	{/if}
 
 	<!-- Note content -->
-	<div class="w-full min-h-[60px] max-h-[400px] rounded-md">
+	<div
+		bind:clientHeight={containerHeight}
+		class="w-full min-h-[60px] max-h-[400px] h-fit rounded-md"
+	>
 		{#if editMode}
 			<!-- Edit mode: show textarea -->
 			<textarea
 				bind:this={textareaElement}
 				bind:value={textContent}
 				class={twMerge(
-					'windmillapp w-full min-h-[60px] max-h-[400px] shadow-none resize-none text-xs overflow-y-auto border-none rounded-md bg-transparent transition-colors p-4',
+					'windmillapp w-full h-auto min-h-[60px] max-h-[400px] shadow-none resize-none text-xs overflow-y-auto border-none rounded-md bg-transparent transition-colors p-4',
 					colorConfig.text
 				)}
 				placeholder="Add your note here... (Markdown supported)"
 				onblur={handleTextSave}
-				oninput={calculateContentHeight}
 				spellcheck="false"
-				style="height: auto;"
+				style="field-sizing: content;"
 			></textarea>
 		{:else}
 			<!-- Render mode: show markdown or empty state -->
 			<!-- svelte-ignore a11y_no_static_element_interactions -->
 			<div
-				bind:this={contentElement}
 				class={twMerge(
-					'w-full min-h-[60px] max-h-[400px] overflow-auto cursor-pointer flex items-start justify-start rounded-md p-4'
+					'w-full h-fit min-h-[60px] max-h-[400px] overflow-auto cursor-pointer flex items-start justify-start rounded-md p-4'
 				)}
 				ondblclick={handleDoubleClick}
 			>
 				{#if data.text}
-					<div class={twMerge('w-full text-xs rounded-md', colorConfig.text)}>
+					<div
+						class={twMerge(
+							'w-full text-xs rounded-md break-words overflow-hidden',
+							colorConfig.text
+						)}
+					>
 						<GfmMarkdown md={data.text} noPadding />
 					</div>
 				{:else}
diff --git a/frontend/src/lib/components/graph/util.ts b/frontend/src/lib/components/graph/util.ts
index e32df15abd..d9050c0a68 100644
--- a/frontend/src/lib/components/graph/util.ts
+++ b/frontend/src/lib/components/graph/util.ts
@@ -126,3 +126,27 @@ export function getNodeColorClasses(state: FlowNodeState, selected: boolean): Fl
 
 	return r
 }
+
+/**
+ * Calculate the bounding box for a collection of nodes
+ * @param nodes - Array of nodes with position.x and position.y properties
+ * @returns The bounds { minX, minY, maxX, maxY }
+ */
+export function calculateNodesBounds(
+	nodes: Array<{ position: { x: number; y: number } }>
+): { minX: number; minY: number; maxX: number; maxY: number } {
+	return nodes.reduce(
+		(acc, node) => ({
+			minX: Math.min(acc.minX, node.position.x),
+			minY: Math.min(acc.minY, node.position.y),
+			maxX: Math.max(acc.maxX, node.position.x + NODE.width),
+			maxY: Math.max(acc.maxY, node.position.y + NODE.height)
+		}),
+		{
+			minX: Infinity,
+			minY: Infinity,
+			maxX: -Infinity,
+			maxY: -Infinity
+		}
+	)
+}
diff --git a/openflow.openapi.yaml b/openflow.openapi.yaml
index 519e08961b..85430224a4 100644
--- a/openflow.openapi.yaml
+++ b/openflow.openapi.yaml
@@ -143,12 +143,26 @@ components:
         color:
           type: string
           description: Color of the note (e.g., "yellow", "#ffff00")
+        type:
+          type: string
+          enum: [free, group]
+          description: Type of note - 'free' for standalone notes, 'group' for notes that group other nodes
+        locked:
+          type: boolean
+          default: false
+          description: Whether the note is locked and cannot be edited or moved
+        contained_node_ids:
+          type: array
+          items:
+            type: string
+          description: For group notes, the IDs of nodes contained within this group
       required:
         - id
         - text
         - position
         - size
         - color
+        - type
 
     RetryIf:
       type: object