FiscalNote Advances AI Strategy and Restructuring Efforts Following 2025 Financial Results
FiscalNote has reported its fourth quarter and full-year 2025 financial results, outlining a year marked by significant transformation, operational restructuring, and a sharpened focus on artificial intelligence-driven growth. While the company faced revenue headwinds tied to divestitures and macroeconomic pressures, it also made measurable progress in improving operational efficiency, strengthening its core platform, and positioning itself for long-term, AI-led expansion.
The results reflect a company actively transitioning from a diversified portfolio of acquired businesses toward a more streamlined, platform-centric model built around its flagship PolicyNote solution. This shift is accompanied by a disciplined cost structure, strategic workforce realignment, and targeted investments in scalable technologies.
Financial Performance Reflects Transition Year
In the fourth quarter of 2025, FiscalNote reported total revenue of $22.2 million, representing a decline of 25% compared to the same period in 2024. The decrease was largely driven by the company’s divestiture of several non-core assets, including Aicel, Oxford Analytica, Dragonfly Intelligence, and TimeBase, as well as the discontinuation of certain legacy offerings.
Despite the revenue contraction, the company maintained a strong subscription-driven business model. Subscription revenue accounted for approximately 95% of total revenue in the quarter, underscoring the recurring nature of its core offerings. However, subscription revenue itself declined year-over-year due to the divestitures and lingering challenges associated with legacy product engagement.
Gross profit for the quarter totaled $17.7 million, with a gross margin of 80%. Adjusted gross margin improved slightly to 88%, indicating ongoing efficiency gains in delivering the company’s services. Adjusted EBITDA reached $2.5 million, exceeding internal guidance and demonstrating progress toward profitability, even as the company continues to navigate a complex transition.
For the full year, FiscalNote reported total revenue of $95.4 million, down 21% from 2024. Gross profit declined to $74.2 million, while adjusted EBITDA increased modestly to $10.3 million, reflecting improved cost management and operational leverage. The company reported a net loss of $65.2 million, compared to net income in the prior year, primarily due to restructuring costs, impairments, and the impact of divestitures.
Strategic Transformation and Cost Optimization
A central component of FiscalNote’s strategy is a comprehensive organizational transformation aimed at significantly reducing operating expenses and improving long-term financial sustainability. The company announced plans to reduce its workforce by approximately 25%, alongside broader initiatives to streamline operations, leverage AI-driven automation, and optimize resource allocation.
These measures are expected to lower cash operating expenses by more than 19%, creating a structurally leaner organization. By reallocating resources toward high-impact product development and growth initiatives, FiscalNote aims to enhance its operating leverage and accelerate its path to positive free cash flow.
Management has set a clear target of achieving positive free cash flow on a trailing twelve-month basis by the end of the first quarter of 2027. This objective reflects a combination of cost discipline, improved platform adoption, and more efficient go-to-market execution.
Strengthening the PolicyNote Platform
At the core of FiscalNote’s transformation is its PolicyNote platform, which serves as the foundation for its AI-driven policy and regulatory intelligence offerings. During 2025, the company completed the migration of all customers from its legacy systems to PolicyNote—a critical milestone in its product-led growth strategy.
The platform has demonstrated stronger user engagement and retention metrics compared to previous solutions, supporting the company’s efforts to stabilize and grow its customer base. Enhancements introduced throughout the year have further expanded its capabilities, including AI-powered tools designed to improve productivity and decision-making for policy professionals.
Among the key innovations are features such as bill comparison functionality, which enables users to analyze legislative changes in real time, and personalized impact summaries that provide tailored insights based on organizational priorities. These capabilities highlight FiscalNote’s focus on embedding intelligence directly into user workflows.
Expanding into AI Infrastructure and Developer Ecosystems
FiscalNote is increasingly positioning its data and analytics capabilities as foundational infrastructure for AI-driven applications. A major step in this direction is the expansion of its PolicyNote API, which now includes native support for Model Context Protocol (MCP).
This enhancement allows organizations to integrate FiscalNote’s policy intelligence directly into enterprise systems, developer tools, and AI agents. By enabling programmatic access to its datasets—spanning legislative, regulatory, and stakeholder information across multiple jurisdictions—the company is extending its reach beyond traditional subscription models.
Early adopters of the expanded API include major enterprise clients such as Lumen Technologies and Intercontinental Exchange (through its subsidiary ICE Data Services). These partnerships illustrate growing demand for trusted, structured data that can power AI-driven decision-making in production environments.
Entering the Political Prediction Market
In addition to strengthening its core platform, FiscalNote is exploring new growth avenues in adjacent markets. One of the most notable initiatives is its entry into the emerging political prediction market ecosystem.
By leveraging its proprietary datasets and domain expertise, FiscalNote aims to develop new monetization models centered on engagement-driven and transactional use cases. The company has already taken initial steps, including launching a preview platform and forming a strategic partnership with a prediction market technology provider.
To support this initiative, FiscalNote has also engaged industry expertise, bringing on a specialist in prediction market design and regulation. This move signals the company’s intent to play a leading role in shaping how policy intelligence intersects with outcome-based forecasting.
Addressing Challenges in Customer Retention and ARR
FiscalNote’s annual recurring revenue (ARR) declined to $84.1 million at the end of 2025, representing a 21% year-over-year decrease. On a pro forma basis, excluding the impact of divestitures, ARR declined by approximately 9%.
The decline was attributed to a combination of factors, including execution challenges earlier in the year, reduced engagement with legacy products, and instability in the U.S. federal sector. Additionally, some large enterprise customers delayed renewals or reduced spending due to broader macroeconomic conditions.
However, the company has taken steps to address these issues, including improvements in its sales and customer success functions, as well as continued enhancements to the PolicyNote platform. Net revenue retention (NRR) reached 96% in the fourth quarter on a pro forma basis, indicating relative stability among existing customers.
Operating Discipline and Expense Management
FiscalNote has made significant progress in managing its cost structure. While total operating expenses increased in the fourth quarter due to a goodwill impairment charge, underlying expenses declined when excluding non-cash and one-time items.
Reductions were observed across multiple categories, including research and development, sales and marketing, editorial, and general administrative functions. These improvements reflect the company’s ongoing efforts to streamline operations and eliminate costs associated with non-strategic products.
Looking ahead, FiscalNote expects continued volatility in both private and public sector markets, driven by macroeconomic uncertainty and shifting budget priorities. The company’s guidance for 2026 reflects these challenges, with projected revenue in the range of $80 million to $83 million.
Despite the anticipated revenue pressures, FiscalNote expects to improve profitability, with adjusted EBITDA projected to increase to between $14 million and $16 million. This outlook is supported by the company’s cost reduction initiatives, increased adoption of its core platform, and continued investment in AI-driven capabilities.
Management remains focused on achieving sustainable free cash flow and building a more resilient business model. By combining operational discipline with strategic innovation, FiscalNote aims to navigate current challenges while positioning itself for long-term growth.
The 2025 results mark a turning point for FiscalNote as it transitions toward a more focused, AI-centric business model. While the company continues to face near-term headwinds, its progress in restructuring, platform development, and market expansion highlights a clear path forward.
With a stronger operational foundation, enhanced product capabilities, and new growth initiatives in emerging markets, FiscalNote is positioning itself as a key provider of policy intelligence in an increasingly data-driven and AI-powered world.
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